<PAGE>
 
                                                                   EXHIBIT 10.36




                              EXECUTIVE ORIGINAL
                              ------------------



================================================================================



                                                        SAN GERONIMO GOLF COURSE
                                                        SAN GERONIMO
                                                        MARIN COUNTY
                                                        CALIFORNIA


                                   L E A S E


                   NATIONAL GOLF OPERATING PARTNERSHIP, L.P.

                                   Landlord


                                      and


                        EVERGREEN ALLIANCE GOLF LIMITED


                                  Tenant     


                         Dated as of December 17, 1996



================================================================================
<PAGE>
 


                                                        SAN GERONIMO GOLF COURSE
                                                        SAN GERONIMO
                                                        MARIN COUNTY
                                                        CALIFORNIA

                                     LEASE
                                     -----

          THIS LEASE ("Lease"), dated for reference purposes only December 17, 
                       -----
1996 is entered into by and between NATIONAL GOLF OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership ("Landlord"), and EVERGREEN ALLIANCE GOLF LIMITED, 
                               --------
a Texas limited partnership ("Tenant"). This Lease consists of the Basic Lease 
                              ------
Provisions, the Detailed Lease Provisions and Exhibits A through H, all of which
                                              --------------------
are incorporated herein by this reference. Capitalized terms used herein have 
the meanings assigned to such terms in Exhibit A.
                                       ---------

                            BASIC LEASE PROVISIONS

1.   Facility: Means the Leased Property consisting of an 18-hole golf course,
     clubhouse, driving range and related facilities located on the Land. The
     Facility may also be referred to herein as the "Golf Club" or "Golf
                                                     ---------      ----
     Course".
     ------

2.   Commencement Date: Means December 18, 1996.

3.   Term: Twenty (20) years commencing on the Commencement Date.

4.   Initial Base Rent: Means $624,691.

5.   Fiscal Year: Means the 12-month period from January 1 through December 31
     of each year of the Term, or the applicable portions of the first and last
     Fiscal Years.

6.   Annual Base Rent: Means, with respect to the Fiscal Year commencing on the
     Commencement Date, the Initial Base Rent. On January 1, 1998, and on
     January 1 of each following Fiscal Year through and including January 1,
     2002, the Annual Base Rent shall be equal to the Annual Base Rent
     applicable to the immediately preceding Fiscal Year multiplied by the
     annual percentage increase in the Consumer Price Index ("CPI") from the
                                                              ---
     immediately preceding Fiscal Year; provided, however, the CPI increase in
     Annual Base Rent for any Fiscal Year pursuant to the terms of this Section
                                                                        -------
     7 shall not exceed five percent per annum. The Annual Base Rent for the
     -
     Fiscal Year commencing on January 1, 2003, and continuing for each Fiscal
     Year for the balance of the Term of this Lease shall be the amount of the
     Annual Base Rent for Fiscal Year ending December 31, 2002, with no CPI
     increase.

                                       i

<PAGE>
 
7.   Applicable Percentages:

          With respect to Course Revenue, means:

               For the first Fiscal Year (1996):  30%
               For the second Fiscal Year (1997): 30%
               For the third Fiscal Year (1998):  31%
               For the fourth Fiscal Year (1999): 32%
               For the fifth Fiscal Year (2000):  33%
               For the sixth Fiscal Year (2001) and for each Fiscal Year 
               throughout the Term:  34%

          With respect to Other Revenue, means 8% for each Fiscal Year 
          throughout the Term:

8.   Additional Rent: Means the amount, if any, by which (a) the sum of:

          (i) all Course Revenue for any Fiscal Year multiplied by the 
          Applicable Percentage of Course Revenue; plus

          (ii) all Other Revenue for any Fiscal Year multiplied by the 
          Applicable Percentage of Other Revenue

     exceeds (b) the Annual Base Rent for such Fiscal Year. (See Section 3.3 of 
                                                                 -----------
     the Detailed Lease Provisions.)

9.   Address for Payments:

               Landlord:
                         National Golf Operating Partnership, L.P.
                         c/o National Golf Properties, Inc.
                         1448 15th Street, Suite 200
                         Santa Monica, California 90404

     (See Section 3.1 of the Detailed Lease Provisions.)
          -----------

10.  Addresses for Notices:

               Tenant:
                         Evergreen Alliance Golf Limited
                         8505 Freeport Parkway, Suite 380
                         Irving, Texas 75063
                         Attention:  Michael D. Lohner
                                     Chairman and CEO

                                      ii
<PAGE>
 
               Landlord:
                         National Golf Operating Partnership, L.P.
                         c/o National Golf Properties, Inc.
                         1448 15th Street, Suite 200
                         Santa Monica, California 90404
                         Attn: Scott S. Thompson, Esq.
                                  General Counsel

     (See Section 26.8 of the Detailed Lease Provisions.)
          ------------

11.  Within 45 days after the end of the third Fiscal Year of the Term and
     within 45 days after the end of each Fiscal Year thereafter, Tenant shall
     fund the Capital Improvement Account by an amount calculated as 2% of the
     Total Revenue for such Fiscal Year. Tenant hereby grants to Landlord a
     security interest in the Capital Improvement Account. Tenant shall keep the
     Capital Improvement Account and all funds therein separate from Tenant's
     other accounts and funds. Tenant and Landlord shall enter into a separate
     agreement between themselves and the depository bank to effectuate such
     security interest. Tenant may submit an annual detailed budget for capital
     improvements or capital replacements (collectively, "Capital Expenditures")
                                                          --------------------
     it proposes to make to the Leased Property, which budget will be subject to
     approval by Landlord not to be unreasonably withheld or delayed (the
     "Approved Cap Ex Budget"). Tenant shall only use funds from the Capital
      ----------------------
     Improvement Account to fund Capital Expenditures to the Facility. Tenant
     may withdraw funds from the Capital Improvement Account only: (i) to the
     extent consistent with the Approved Cap Ex Budget preserving line item
     integrity on a per project basis within 110% of the amount specified or
     (ii) as otherwise approved in writing by Landlord, which approval shall not
     to be unreasonably withheld or delayed. Tenant shall provide Landlord with
     such information as Landlord may reasonably request to confirm the
     application of funds as provided in this Section 11. Tenant shall cause all
                                              ----------
     amounts in the Capital Improvement Account to be expended prior to the
     expiration of the Term or the earlier termination of this Lease. Tenant
     shall pay to Landlord any unused amounts remaining in the Capital
     Improvement Account upon the expiration of the Term or earlier termination
     of this Lease.

12.  Reference is made to that certain Purchase and Sale Agreement by and
     between Landlord (as successor-in-interest to Tenant) and C&N Corporation,
     a California corporation ("Seller"), dated as of August 19, 1996, as
                                ------
     amended (the "Purchase Agreement"). Landlord agrees to reasonably enforce
                   ------------------
     on Tenant's behalf the indemnities, covenants, representations and
     warranties made by Seller in favor of Landlord under the Purchase
     Agreement. Tenant and Landlord acknowledge that Tenant negotiated the
     material terms and conditions of the Purchase Agreement and, except with
     respect to the structural engineering condition of the improvements
     located at the Leased Property, Tenant has conducted its own due diligence
     in connection with the ownership and operation of the Leased Property and
     that Landlord is relying on Tenant's due diligence and investigations with
     respect to the ownership and operation of the Leased Property. Tenant
     hereby represents and warrants to Landlord that Tenant has disclosed to
     Landlord all material

                                      iii
<PAGE>
 
     reports, analyses, reports, studies and information obtained by Tenant in 
     connection with its due diligence investigations of the Leased Property.

13.  Title Policy:  Shall mean that certain ALTA Owner's Policy of Title
     Insurance (Reference No. 216444) ("Title Policy") issued by Old Republic
                                        ------------
     Title Company ("Title Company") in connection with Landlord's purchase of
                     -------------
     the Leased Property from Seller. Tenant may elect to cause the Title
     Company to issue, at Tenant's cost, a leasehold policy of title insurance
     in a form substantially similar to the Title Policy insuring Tenant's
     interest in the leasehold estate created by this Lease.

14.  Notwithstanding any other provision in this Lease to the contrary, Tenant
     shall complete those certain initial capital improvements listed on Exhibit
                                                                         -------
     "F" attached hereto ("Initial Capital Improvements") in accordance with the
      -                    ----------------------------
     "Budget" set forth on Exhibit "F." The Budget shall not exceed the amounts
      ------               ----------
     set forth on Exhibit "F" and the Budget shall not include any overhead
                  ----------
     fees, general and administrative costs, nor any other similar fees, costs
     or charges payable to Tenant or any of its Affiliates in connection with
     the completion of the Initial Capital Improvements. Upon Tenant submitting
     to Landlord invoices, receipts or other documents evidencing costs and
     expenditures in accordance with the Budget and accompanied by appropriate
     waivers or releases of mechanics' and materialmen's liens, Landlord shall
     pay to Tenant the amount of such costs and expenditures. As of the date of
     such payment by Landlord, the Annual Base Rent then in effect shall be
     increased by an amount equal to ten percent (10%) of the amount of such
     payment by Landlord, and Landlord shall deliver to Tenant written notice of
     this increased amount of the Annual Base Rent.

15.  Notwithstanding any provision set forth in this Lease and any Exhibits
     hereto, Tenant hereby expressly recognizes and agrees to assume all
     obligations to hold the tournaments, banquets, meetings and other functions
     scheduled to take place at the Leased Property after the Commencement
     Date, as listed on Exhibit "G" attached hereto and incorporated herein by
                        ----------
     this reference (the "Booked Contracts"). Tenant agrees to execute any
                          ----------------
     customary assignment or assumption instrument to evidence Tenant's
     assumption of the Booked Contracts and all deposits and advance payments
     for the Booked Contracts shall be paid to Tenant upon the Closing (as
     defined in this Purchase Agreement).

16.  Tenant hereby expressly assumes all of the obligations of the Golf Course
     under the contracts and agreements set forth on Exhibit "H" attached hereto
                                                     ----------
     and incorporated herein by this reference.

17.  Upon the Commencement Date, Landlord shall sell and convey to Tenant the
     professional shop merchandise, food and beverage and consummables
     (collectively, the "Inventories") purchased by Landlord from Seller in
                         -----------
     connection with Landlord's purchase of the Leased Property. Tenant shall
     pay to Landlord upon the Commencement Date an amount for the conveyance of
     the Inventories to Tenant, which amount (the "Inventory Payment Amount")
                                                   ------------------------
     shall be determined on the Closing. For purposes of calculating the Initial
     Base Rent. Landlord's investment in acquiring the Leased Property shall be
     reduced by the Inventory Payment Amount.


                                      iv
<PAGE>
 
18.  Tenant acknowledges that prior to the Commencement Date, a 550-gallon
     gasoline underground storage tank was removed ("Tank Removal") from an area
                                                     ------------
     adjacent to the maintenance facility located on the Leased Property. In
     connection with the Tank Removal, a closure permit and approval ("Closure
                                                                       -------
     Permit") was required to be issued by the Marin County Health and Human
     ------
     Services Department ("Health Department") but that as of the Commencement
                           -----------------
     Date, the Closure Permit has not been issued by the Health Department.
     Tenant agrees that obtaining the Closure Permit is the obligation of Tenant
     and not Landlord, and Tenant shall expeditiously and at its sole cost and
     expense obtain the Closure Permit and otherwise comply with all other Legal
     Requirements in connection with the Tank Removal. Tenant shall provide
     Landlord with quarterly written updates as to the progress in obtaining the
     closure Permit. Notwithstanding Section 8.3 of the Detailed Lease
                                     -----------
     Provisions, Tenant shall indemnify and hold harmless Landlord from any
     claims, costs, expenses or actions in connection with the Tank Removal and
     in obtaining the Closure Permit. Landlord's obligations under Section 8.6
                                                                   -----------
     of the Detailed Leased Provisions shall not apply to any matters related to
     the Tank Removal or the Closure Permit.

19.  Reference is made to the title insurance exception under Schedule B to the
     Title Policy (the "Tunnel Exception") with respect to the golf cart tunnel
                        ----------------
     located beneath Sir Francis Drake Boulevard ("Tunnel"). The purpose of the
                                                   ------
     Tunnel is to provide access for golf carts between the clubhouse and the
     first nine holes at the Leased Property. As referenced in the Tunnel
     Exception, the Tunnel is subject to that certain Encroachment Permit
     pursuant to which the County of Marin may cause the removal or relocation
     of the Tunnel upon notice to the owner of the Leased Property. Tenant
     acknowledges that the effect of the Tunnel Exception is that the Title
     Company will not provide affirmative title insurance coverage under the
     Title Policy in the event that the Tunnel is removed or relocated or if the
     Tenant is otherwise prevented from using the Tunnel. If the Tunnel is
     required to be removed or relocated or if Tenant is otherwise prevented
     from using the Tunnel, as between Landlord and Tenant, Tenant shall bear
     all costs and expenses associated with the relocation of the Tunnel and the
     design, approval and construction of a new tunnel or overhead bridge
     necessary or required to provide reasonable access between the clubhouse
     and the first nine holes at the Leased Property (collectively, "Tunnel
                                                                     ------
     Relocation Costs"). Tenant may use the funds held in the Capital
     ----------------
     Improvement Account in accordance with the provisions of Section 11 of
                                                              ----------
     these Basic Lease Provisions for the payment of Tunnel Relocation Costs
     provided that the aggregate of such costs paid with funds held in the
     Capital Improvement Account shall not exceed $50,000. Landlord shall
     reasonably cooperate with Tenant in exercising any rights or remedies of
     Landlord or Tenant with respect to the relocation of such Tunnel.

20.  Reference is made to Appropriative Application 29905 ("Application 29905")
                                                            -----------------
     filed with the California State Water Resources Control Board ("Water
                                                                     -----
     Board") on January 19, 1991 with respect to the diversion of water flow
     -----
     from Larson Creek onto a portion of the Leased Property. Tenant
     acknowledges and agrees that Application 29905 was recommended for approval
     subject to certain conditions imposed by the Water Board. Tenant agrees
     that complying with the conditions imposed by the Water Board in connection
     with the approval of Application 29905 ("Water Board Conditions") is the
                                              ----------------------

                                       v
<PAGE>
 
     obligation of Tenant and not Landlord, and Tenant shall expeditiously and
     at its sole cost and expense satisfy the Water Board Conditions and
     otherwise comply with all other Legal Requirements in connection with
     Application 29905. Tenant may use the funds held in the Capital Improvement
     Account in accordance with the provisions of Section 11 of these Basic
                                                  ----------
     Lease Provisions for the payment of the costs and expenses to satisfy the
     Water Board Conditions and otherwise comply with the Legal Requirements in
     connection with Application 29905 provided that the aggregate of such costs
     paid with funds held in the Capital Improvement Account shall not exceed
     $50,000. Landlord shall reasonably cooperate with Tenant in exercising any
     rights or remedies of Landlord or Tenant with respect to satisfying the
     Water Board Conditions.

21.  Landlord acknowledges that Tenant periodically makes distributions of its
     consolidated net income to Tenant's limited partners ("Partner
                                                            -------
     Distributions"). Tenant agrees that Tenant's obligation to pay Rent (as
     -------------
     defined in Exhibit "A") and all other obligations hereunder shall be fully
                ----------
     satisfied on a current basis in accordance with the terms of this Lease
     prior to the payment of any Partner Distributions other than the payment of
     sums necessary for its limited partners to pay federal and state income
     taxes on Tenant's consolidated net income.

22.  As a condition to the Closing of Escrow (as defined in the Purchase
     Agreement), Seller is obligated to obtain from at least 80% of the existing
     members at the Golf Club executed releases in order to terminate such
     memberships on or prior to the Close of Escrow. In addition, Seller is
     obligated to deposit in the Holdback Account (as defined in Section 15 of
     the Purchase Agreement) that was established in connection with the
     Holdback Agreement (the form of which is set forth as Exhibit "K" to the
     Purchase Agreement) an amount equal to the refundable portion of the
     membership deposits paid by each member whose membership is not terminated
     as of the Close of Escrow. The primary purpose of the Holdback Agreement is
     for Seller to establish a source of funds available for the payment of
     membership deposit refunds in connection with the termination of
     memberships after the Close of Escrow. Landlord hereby assigns its interest
     under the Holdback Agreement to Tenant in order for Tenant to have an
     available source of funds for the payment of refundable membership deposits
     in connection with the termination of memberships after the Close of
     Escrow. Tenant hereby assumes Landlord's obligations under the Holdback
     Agreement and shall otherwise satisfy the obligations of the "Buyer" under
     the Holdback Agreement. All funds released from the Holdback Account and
     paid to Tenant under the Holdback Agreement and not to a resigning member
     shall be included within the definition of "Course Revenue" under this
     Lease.

23.  Tenant acknowledges that up to approximately 20% of the existing members at
     the Golf Club may remain members at the Golf Club after the Commencement
     Date. Tenant shall assume all of the obligations of the Golf Club under the
     terms and conditions of the membership agreements and documents pursuant to
     which any memberships were created ("Membership Agreements"), including
                                          ---------------------
     without limitation, the obligation to pay all membership deposit and
     initiation fee refunds due and payable to all members at the Golf Club in
     accordance with the terms and conditions of the respective Membership

                                      vi
<PAGE>
 
     Agreements. Upon the Commencement Date, Tenant shall discontinue the sale
     of memberships at the Golf Club pursuant to which a member would be
     entitled to a refund of his or her membership deposit or initiation fee.

          IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date first above written.

"LANDLORD"                              "TENANT"

NATIONAL GOLF OPERATING                 EVERGREEN ALLIANCE GOLF
PARTNERSHIP, L.P.,                      LIMITED,
a Delaware limited partnership          a Texas limited partnership

By: NATIONAL GOLF PROPERTIES, INC.,     By: EVERGREEN ALLIANCE GOLF
    a Maryland corporation                  MANAGEMENT, INC.,
    Its General Partner                     a Texas corporation
                                            Its General Partner


    By: /s/ Scott S. Thompson                By: /s/ Michael D. Lohner
        ---------------------                    ---------------------
        Scott S. Thompson                        Michael D. Lohner
        General Counsel                          Chairman and CEO


LIST OF ATTACHMENTS AND EXHIBITS:
--------------------------------

Detailed Lease Provisions

Exhibit A      Defined Terms; Interpretation

Exhibit B      Legal Description of the Land

Exhibit C      Other Leased Properties

Exhibit D      Operating Standards

Exhibit E      Landlord's Personal Property

Exhibit F      Initial Capital Improvements

Exhibit G      Booked Contracts

Exhibit H      Contracts to be Assumed by Tenant

                                      vii
<PAGE>
 
                           DETAILED LEASE PROVISIONS

                               TABLE OF CONTENTS
                               -----------------


<TABLE> 
<CAPTION> 
                                                                               PAGE 
                                                                               ----
<S>                                                                            <C> 
ARTICLE 1 - LEASED PROPERTY..................................................   -1-
---------------------------                                                       
                                                                                  
ARTICLE 2- TERM..............................................................   -1-
---------------                                                                   
                                                                                  
ARTICLE 3- RENT..............................................................   -1-
---------------                                                                   
     3.1 Rent................................................................   -1-
         ----                                                                     
     3.2 Base Rent...........................................................   -1-
         ---------                                                                
     3.3 Additional Rent.....................................................   -2-
         ---------------                                                          
     3.4 Additional Charges..................................................   -3-
         ------------------                                                       
     3.5 Late Payment of Rent................................................   -3-
         --------------------                                                     
     3.6 Net Lease...........................................................   -4-
         ---------                                                                
     3.7 Marketing Programs..................................................   -4-
         ------------------                                                       
     3.8 Income/Expense Prorations...........................................   -5-
         -------------------------                                                
                                                                                  
ARTICLE 4 - IMPOSITIONS......................................................   -5-
     4.1 Payment of Impositions..............................................   -5-
         ----------------------                                                   
     4.2 Information and Reporting...........................................   -5-
         -------------------------                                                
     4.3 Assessment Challenges...............................................   -5-
         --------------------                                                     
     4.4 Prorations..........................................................   -6-
         ----------                                                               
     4.5 Refunds.............................................................   -6-
         -------                                                                  
     4.6 Utility Charges.....................................................   -6-
         ---------------                                                          
     4.7 Reassessments Upon Transfer.........................................   -6-
         ---------------------------                                              
     4.8 Assessment Districts................................................   -6-
         --------------------                                                     
                                                                                  
ARTICLE 5 - TENANT WAIVERS...................................................   -6-
     5.1 No Termination, Abatement, Etc. ....................................   -6-
         -------------------------------                                          
     5.2 Condition of the Leased Property....................................   -7-
         --------------------------------                                         
                                                                                  
ARTICLE 6 - OWNERSHIP OF PROPERTY............................................   -8-
     6.1 Leased Property.....................................................   -8-
         ---------------                                                          
     6.2 Landlord's Personal Property........................................   -8-
         ----------------------------                                             
     6.3 Tenant's Personal Property..........................................   -9-
         --------------------------                                               
     6.4 Purchase of Tenant's Personal Property..............................   -9-
         --------------------------------------
     6.5 Removal of Personal Property........................................  -10-
         ----------------------------                                            
     6.6 Landlord's Waivers..................................................  -10-
         ------------------                                                      
     6.7 Water Rights........................................................  -10-
         ------------                                                            
     6.8 Liquor License......................................................  -11-
         --------------                                                          
                                                                                 
ARTICLE 7 - USE OF LEASED PROPERTY...........................................  -11-
     7.1 Use.................................................................  -11-
         ---                                                                     
     7.2 Specific Prohibited Uses............................................  -12-
         ------------------------
</TABLE> 

                                       i

<PAGE>
 
<TABLE> 
<CAPTION> 
                                                                              PAGE
                                                                              ----
<S>                                                                           <C> 
     7.3 Membership Matters, Fees and Charges...............................  -12-
         ------------------------------------                                    
                                                                                 
ARTICLE 8 - HAZARDOUS MATERIALS.............................................  -13-
     8.1 Representations....................................................  -13-
         ---------------                                                         
     8.2 Remediation........................................................  -13-
         -----------                                                             
     8.3 Tenant's Indemnification of Landlord...............................  -13-
         ------------------------------------                                    
     8.4 Survival of Indemnification Obligations............................  -14-
         ---------------------------------------                                 
     8.5 Environmental Violations at Expiration or Termination of Lease.....  -14-
         --------------------------------------------------------------          
     8.6 Landlord's Indemnification of Tenant...............................  -14-
         ------------------------------------                                    
                                                                                 
ARTICLE 9 - MAINTENANCE AND REPAIR..........................................  -15-
     9.1 Tenant's Sole Obligation...........................................  -15-
         ------------------------                                                
     9.2 Waiver of Statutory Obligations....................................  -15-
         -------------------------------                                         
     9.3 Mechanic's Liens...................................................  -16-
         ----------------                                                        
     9.4 Surrender of Leased Property.......................................  -16-
         ----------------------------                                            
                                                                                 
ARTICLE 10- TENANT'S IMPROVEMENTS...........................................  -16-
     10.1 Tenant's Right to Construct.......................................  -16-
          ---------------------------                                            
     10.2 Scope of Right....................................................  -16-
          --------------                                                         
     10.3 Cooperation of Landlord...........................................  -17-
          -----------------------                                                
     10.4 Commencement of Construction......................................  -17-
          ----------------------------                                           
     10.5 Rights in Tenant Improvements.....................................  -18-
          -----------------------------                                          
                                                                                 
ARTICLE 11 - LIENS, ENCROACHMENTS AND OTHER TITLE MATTERS...................  -18-
     11.1 Liens.............................................................  -18-
          -----                                                                  
     11.2 Encroachments and Other Title Matters.............................  -19-
          -------------------------------------                                  
                                                                                 
ARTICLE 12 - PERMITTED CONTESTS.............................................  -20-
                                                                                 
ARTICLE 13 - INSURANCE......................................................  -21-
     13.1 General Insurance Requirements....................................  -21-
          ------------------------------                                         
     13.2 Replacement Cost..................................................  -22-
          ----------------                                                       
     13.3 Waiver of Subrogation.............................................  -22-
          ---------------------                                                  
     13.4 Form Satisfactory, Etc. ..........................................  -22-
          -----------------------                                                
     13.5 Change in Limits..................................................  -23-
          ----------------                                                       
     13.6 Blanket Policy....................................................  -23-
          --------------                                                         
                                                                                 
ARTICLE 14 - APPLICATION OF INSURANCE PROCEEDS..............................  -24-
     14.1 Insurance Proceeds................................................  -24-
          ------------------                                                     
     14.2 Reconstruction Covered by Insurance...............................  -25-
          -----------------------------------                                    
     14.3 Reconstruction Not Covered by Insurance...........................  -27-
          ---------------------------------------                                
     14.4 Waiver............................................................  -27-
          ------                                                                 
     14.5 Damage Near End of Term...........................................  -28-
          -----------------------
</TABLE> 

                                      ii
<PAGE>
 
<TABLE> 
<CAPTION> 
                                                                              PAGE
                                                                              ----
<S>                                                                           <C> 
ARTICLE 15 - CONDEMNATION...................................................  -28-
     15.1 Total Taking......................................................  -28-
          ------------                                                           
     15.2 Partial Taking....................................................  -28-
          --------------                                                         
     15.3 Restoration.......................................................  -28-
          -----------                                                            
     15.4 Award-Distribution................................................  -28-
          ------------------                                                     
     15.5 Temporary Taking..................................................  -29-
          ----------------                                                       
                                                                                 
ARTICLE 16 - EVENTS OF DEFAULT..............................................  -29-
     16.1 Events of Default.................................................  -29-
          -----------------                                                      
     16.2 Payment of Costs..................................................  -31-
          ----------------                                                       
     16.3 Exceptions........................................................  -31-
          ----------                                                             
     16.4 Certain Remedies..................................................  -31-
          ----------------                                                       
     16.5 Damages...........................................................  -32-
          -------                                                                
     16.6 Additional Remedies...............................................  -33-
          -------------------                                                    
     16.7 Appointment of Receiver...........................................  -33-
          -----------------------                                                
     16.8 Waiver............................................................  -33-
          ------                                                                 
     16.9 Application of Funds..............................................  -33-
          --------------------                                                   
     16.10 Impounds.........................................................  -33-
           --------                                                              
                                                                                 
ARTICLE 17 - LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT......................  -34-
                                                                                 
ARTICLE 18 - LEGAL REQUIREMENTS.............................................  -34-
                                                                                 
ARTICLE 19 - HOLDING OVER...................................................  -34-
                                                                                 
ARTICLE 20 - RISK OF LOSS...................................................  -35-
                                                                                 
ARTICLE 21 - INDEMNIFICATION................................................  -35-
     21.1 Tenant's Indemnification of Landlord..............................  -35-
          ------------------------------------                                   
     21.2 Landlord's Indemnification of Tenant..............................  -36-
          ------------------------------------                                   
     21.3 Mechanics of Indemnification......................................  -36-
          ----------------------------                                           
     21.4 Survival of Indemnification Obligations...........................  -37-
          ---------------------------------------                                
                                                                                 
ARTICLE 22 - SUBLETTING AND ASSIGNMENT......................................  -37-
     22.1 Prohibition Against Subletting and Assignment.....................  -37-
          ---------------------------------------------                          
     22.2 Changes of Control................................................  -37-
          ------------------                                                     
     22.3 Subleases.........................................................  -38-
          ---------                                                              
     22.4 Assignment........................................................  -39-
          ----------                                                             
     22.5 REIT Limitations..................................................  -39-
          ----------------                                                       
                                                                                 
ARTICLE 23 - OFFICER'S CERTIFICATES AND OTHER STATEMENTS....................  -40-
     23.1 Officer's Certificates............................................  -40-
          ----------------------                                                 
     23.2 Annual Financial Statements of Tenant.............................  -40-
          -------------------------------------                                  
     23.3 Quarterly Financial Statements of Tenant..........................  -41-
          ----------------------------------------
</TABLE> 

                                      iii
<PAGE>
 
<TABLE> 
<CAPTION> 
                                                                              PAGE
                                                                              ----
<S>                                                                           <C> 
     23.4 Monthly Course Statements.........................................  -41-
          -------------------------                                              
     23.5 Annual Course Statements..........................................  -41-
          ------------------------                                               
     23.6 Budgets...........................................................  -42-
          -------                                                                
     23.7 Environmental Statements..........................................  -42-
          ------------------------                                               
     23.8 Confidential Information..........................................  -42-
          ------------------------                                               
                                                                                 
ARTICLE 24 - LANDLORD MORTGAGES.............................................  -43-
     24.1 Landlord May Grant Liens..........................................  -43-
          ------------------------                                               
     24.2 Tenant's Non-Disturbance Rights...................................  -43-
          -------------------------------                                        
     24.3 Breach by Landlord................................................  -44-
          ------------------                                                     
     24.4 Facility Mortgage Protection......................................  -44-
          ----------------------------                                           
                                                                                 
ARTICLE 25 - FINANCIAL COVENANTS............................................  -44-
     25.1 Financial Covenants...............................................  -44-
          -------------------                                                    
     25.2 Provision of Letter of Credit.....................................  -45-
          -----------------------------                                          
     25.3 Terms of Letters of Credit........................................  -45-
          --------------------------                                             
     25.4 Draws Against Letters of Credit; Application of Proceeds..........  -46-
          --------------------------------------------------------               
     25.5 Renewals of Letter of Credit......................................  -46-
          ----------------------------                                           
     25.6 Distributions by Tenant and Other Credit Impairments..............  -46-
          ----------------------------------------------------                   
     25.7 Liquidated Damages................................................  -47-
          ------------------                                                     
     25.8 Letters of Credit Not Additive....................................  -48-
          ------------------------------                                         
                                                                                 
ARTICLE 26 - MISCELLANEOUS..................................................  -48-
     26.1 Landlord's Right to Inspect.......................................  -48-
          ---------------------------                                            
     26.2 No Waiver.........................................................  -48-
          ---------                                                              
     26.3 Remedies Cumulative...............................................  -48-
          -------------------                                                    
     26.4 Acceptance of Surrender...........................................  -48-
          -----------------------                                                
     26.5 No Merger of Title................................................  -49-
          ------------------                                                     
     26.6 Convevance by Landlord............................................  -49-
          ----------------------                                                 
     26.7 Quiet Enjoyment...................................................  -49-
          ---------------                                                        
     26.8 Notices...........................................................  -49-
          -------                                                                
     26.9 Survival of Claims................................................  -49-
          ------------------                                                     
     26.10 Invalidity of Terms or Provisions................................  -49-
           ---------------------------------                                     
     26.11 Prohibition Against Usury........................................  -49-
           -------------------------                                             
     26.12 Amendments to Lease..............................................  -50-
           -------------------                                                   
     26.13 Successors and Assigns...........................................  -50-
           ----------------------                                                
     26.14 Titles...........................................................  -50-
           ------                                                                
     26.15 Governing Law....................................................  -50-
           -------------                                                         
     26.16 Memorandum of Lease..............................................  -50-
           -------------------                                                   
     26.17 Attorneys' Fees..................................................  -50-
           ---------------                                                       
     26.18 Non-Recourse as to Landlord......................................  -50-
           ---------------------------                                           
     26.19 No Relationship..................................................  -50-
           ---------------                                                       
     26.20 Signs; Reletting.................................................  -51-
           ----------------
</TABLE> 

                                      iv
<PAGE>
 
<TABLE> 
<CAPTION> 
                                                                            PAGE
                                                                            ----
     <S>                                                                    <C> 
     26.21 Golf Course Name.................................................-51-
           ----------------
     26.22 Judicial Reference...............................................-51-
           ------------------
</TABLE> 

                                       v
<PAGE>
 
                           DETAILED LEASE PROVISIONS

                          ARTICLE 1 - LEASED PROPERTY
                          ---------------------------

          Upon and subject to the terms and conditions set forth in this Lease, 
Landlord leases to Tenant and Tenant rents from Landlord the following real 
property, improvements and related rights (collectively the "Leased Property"):
                                                             ---------------

          (a)  the land described in Exhibit B attached hereto (collectively, 
                                     ---------                  
          the "Land");
               ----

          (b)  all buildings, structures, Fixtures and other improvements of
          every kind including, but not limited to, alleyways and connecting
          tunnels, sidewalks, utility pipes, conduits and lines (on site and off
          site), parking areas, driving ranges, roadways, cart paths, bridges,
          lakes, irrigation systems, and course markers presently situated upon
          the Land, but not including any Tenant Improvements (collectively, the
                    -----------------
          "Leased Improvements");
           -------------------

          (c)  all easements, rights and appurtenances relating to the Land and 
          the Leased Improvements (collectively, the "Related Rights"); and
                                                      --------------

          (d)  all personal property, if any, owned by Landlord and located on
          the Leased Property, which personal property is described in Exhibit E
                                                                       ---------
          attached hereto ("Landlord's Personal Property").
                            ----------------------------

          (e)  any other property conveyed to Landlord pursuant to the terms of
          the Purchase Agreement, including, but not limited to, all property,
          included in the term "Property" as defined therein (but excluding the
          Inventory).

                               ARTICLE 2 - TERM
                               ----------------

          The Term of this Lease shall commence on the Commencement Date.

                               ARTICLE 3 - RENT
                               ----------------

          3.1  Rent.  Tenant will pay to Landlord in lawful money of the United 
               ----
States of America the Base Rent and Additional Rent during the Term. Payments of
Base Rent and Additional Rent shall be paid at Landlord's address set forth in 
the Basic Lease Provisions or at such other place or to such other Person as 
Landlord from time to time may designate in writing. If any payment owing 
hereunder shall otherwise be due on a day that is not a Business Day, such 
payment shall be due on the next succeeding Business Day.

          3.2  Base Rent.  Tenant shall pay Base Rent to Landlord in advance on 
               ---------
the first day of each calendar month; provided, however, that the first monthly 
                                      -----------------
installment shall be payable on the Commencement Date and the first and last 
month's payments shall be prorated as to any partial month.

                                       1
<PAGE>
 
          3.3  Additional Rent.  In addition to the Base Rent, Tenant shall pay 
               ---------------
to Landlord Additional Rent in quarterly installments as provided in 
Section 3.3.1.
-------------

               3.3.1  Quarterly Calculation and Payment of Additional Rent.  
                      ----------------------------------------------------
     Tenant shall calculate and pay Additional Rent for each Fiscal Quarter. The
     amount of the Additional Rent for the Second, Third and Fourth Fiscal
     Quarters shall account for any interim reconciliations made with respect to
     prior Fiscal Quarters in such Fiscal Year as certified by Tenant to
     Landlord as provided by this Section 3.3.1, but subject to a final
                                  -------------
     reconciliation as provided by Section 3.3.2. Such Additional Rent shall be
                                   -------------
     paid to Landlord, together with an Officer's Certificate setting forth the
     calculation thereof, within 30 days after the end of each Fiscal Quarter.

               3.3.2  Annual Reconciliation.  Within 60 days after the end of
                      ---------------------
     each Fiscal Year, or after the expiration or termination of the Lease,
     Tenant shall deliver to Landlord an Officer's Certificate setting forth (i)
     the Course Revenue and the Other Revenue for the Fiscal Year just ended,
     and (ii) a comparison of the amount of Additional Rent actually paid during
     such Fiscal Year versus the amount of Additional Rent actually owing on the
     basis of the annual calculation of the Course Revenue and the Other
     Revenue. If the Additional Rent for such Fiscal Year exceeds the sum of the
     quarterly payments previously paid by Tenant, Tenant shall pay such
     deficiency to Landlord along with such Officer's Certificate. If the
     Additional Rent for such Fiscal Year is less than the amount previously
     paid by Tenant, Landlord shall, at Tenant's option, either (i) remit to
     Tenant its check in an amount equal to such difference, or (ii) grant
     Tenant a credit against the payment of Additional Rent next coming due. The
     amount of the reconciliation payment, whether in favor of Landlord or
     Tenant, shall bear interest from the date of such overpayment or
     underpayment at a rate equal to the rate payable on 90-day U.S. Treasury
     Bills as of January 1 of the year following the close of such Fiscal Year
     until the amount of such difference shall be paid or otherwise discharged.
     If the timing of the annual reconciliation as set forth in this Section
                                                                     -------
     3.3.2 presents an unreasonable burden on Tenant, Landlord shall consider
     -----
     reasonable modifications to the provisions of this Section 3.3.2 in order
                                                        -------------
     to reduce such burden.

               3.3.3  Record-keeping.  Tenant shall utilize an accounting system
                      --------------
     for the Leased Property in accordance with its usual and customary
     practices and in accordance with accrual basis accounting principles
     (applied on a basis consistent with the Other Leased Properties, if any)
     which will accurately record all Course Revenue and Other Revenue. Tenant
     shall utilize cash basis accounting principles in accounting for the
     amounts to be deposited into the Capital Improvement Account. Tenant shall
     retain reasonably adequate records for each Fiscal Year conforming to such
     accounting system until at least five years after the expiration of such
     Fiscal Year (and in any event until the reconciliation described in Section
                                                                         -------
     3.3.2 above for such Fiscal Year has been made).
     -----

               3.3.4  Audits.  Landlord, at its own expense except as provided
                      ------
     hereinbelow, shall have the right from time to time directly or through its
     accountants to audit the information set forth in the Officer's Certificate
     referred to in Section 3.3.2 and in connection with such audits to examine
                    -------------
     Tenant's books and records with respect thereto (including supporting data,
     sales tax returns and Tenant's work papers). If any

                                       2
<PAGE>
 
     such audit discloses a deficiency in the payment of Additional Rent, Tenant
     shall forthwith pay to Landlord the amount of the deficiency, as finally
     agreed or determined, together with interest at the Overdue Rate from the
     date when said payment should have been made to the date of payment
     thereof; provided, however, that as to any audit that is commenced more
              -----------------
     than 12 months after the date Course Revenue or Other Revenue for any
     Fiscal Year is reported by Tenant to Landlord, the deficiency, if any, with
     respect to such Course Revenue or Other Revenue shall bear interest as
     permitted herein only from the date such determination of deficiency is
     made unless such deficiency is the result of gross negligence or willful
     misconduct on the part of Tenant. If any such audit discloses that the
     Course Revenue or Other Revenue actually received by Tenant for any Fiscal
     Year exceeds the Course Revenue or Other Revenue reported by Tenant by more
     than five percent, Tenant shall pay the reasonable cost of such audit and
     examination. Landlord shall not conduct more than two audits in any
     calendar year; provided that for purposes of such limitation any audit in
     which there were discrepancies in excess of $5,000 shall not count towards
     such limitation.

          3.4  Additional Charges.  In addition to the Base Rent and Additional 
               ------------------
Rent, (1) Tenant shall also pay and discharge when due and payable all other 
amounts, liabilities, obligations and Impositions which Tenant assumes or agrees
to pay under this Lease, and (2) in the event of any failure on the part of 
Tenant to pay any of those items referred to in clause (1) above, Tenant shall 
also pay and discharge every fine, penalty, interest and cost which may be added
for non-payment or late payment of such items (the items referred to in clauses 
(1) and (2) above being referred to herein collectively as the "Additional 
                                                                ----------
Charges"). Except as otherwise provided in this Lease, including Article 12, all
-------
Additional Charges shall be due and payable 30 days after either Landlord or the
applicable third party who may be billing Tenant therefor shall deliver an 
invoice to Tenant therefor. To the extent that Tenant pays any Additional 
Charges to Landlord pursuant to any requirement of this Lease, Tenant shall be 
relieved of its obligation to pay such Additional Charges to the entity to which
they would otherwise be due.

          3.5  Late Payment of Rent.  Tenant hereby acknowledges that late 
               --------------------
payment by Tenant to Landlord of Base Rent, Additional Rent or Additional 
Charges will cause Landlord to incur costs not contemplated under the terms of 
this Lease, the exact amount of which is presently anticipated to be extremely 
difficult to ascertain. Such costs may include processing and accounting charges
and late charges which may be imposed on Landlord by the terms of any mortgage 
or deed of trust covering the Leased Property and other expenses of a similar or
dissimilar nature. Accordingly, if any installment of Base Rent, Additional Rent
or Additional Charges (but only as to those Additional Charges which are payable
directly to Landlord) shall not be paid within five Business Days after this due
date, Tenant will pay Landlord on demand, as Additional Charges, a late charge
equal to the lesser of five percent of such installment or $1,000. The parties
agree that this late charge represents a fair and reasonable estimate of the
costs that Landlord will incur by reason of late payment by Tenant. In addition,
if any installment of Base Rent, Additional Rent or Additional Charges (but only
as to those Additional Charges which are payable directly to Landlord) shall not
be paid on its due date, the amount unpaid shall bear interest, from the due
date of such installment to the date of payment thereof, computed at the Overdue
Rate on the amount of such installment, and Tenant will pay such interest to
Landlord on demand, as Additional Charges. The payment of said late charge or
such

                                       3
<PAGE>
 
interest shall not constitute a waiver, nor excuse or cure, of any default under
this Lease, nor prevent Landlord from exercising any other rights and remedies 
available to Landlord.

          3.6  Net Lease.  The Rent shall be paid absolutely net to Landlord 
               ---------
and, except as expressly provided in Section 4.7, Article 14 and Article 15, 
                                     -----------  ----------     ----------
without notice or demand and without set-off, counterclaim, recoupment, 
abatement, suspension, deferment, deduction or defense, so that this Lease shall
yield to Landlord the full amount of the installments of Base Rent, Additional
Rent and Additional Charges throughout the Term, all as more fully set forth in
Article 5.
---------

          3.7  Marketing Programs.
               ------------------

               3.7.1  Tenant Conflicts.  Landlord and Tenant recognize that
                      ----------------
     Tenant or its affiliates may in the future acquire the ownership or
     operation of other courses which compete with the Leased Property. Subject
     to Tenant's compliance with this Section 3.7, Landlord acknowledges this
                                      -----------
     potential conflict of interest and agrees that it does not constitute a
     breach or default of any term, condition, representation or warranty under
     the Lease. Provided, however, Tenant agrees that it shall operate the
     Leased Property on an arm's-length and non-discriminatory basis with
     respect to other courses owned or operated by Tenant or its affiliates
     ("Tenant's Properties").
       -------------------

               3.7.2  Approval of Joint Usage Programs.  Subject to Landlord's
                      --------------------------------
     prior written approval and the provisions of this Section 3.7, Tenant may
                                                       -----------
     have the Leased Property participate in joint usage programs involving the
     Leased Property and properties of the Tenant other than the Leased Property
     (collectively, "Programs") that Tenant may sponsor from time to time.
                     --------
     Landlord agrees that it will not unreasonably withhold or delay its consent
     to such Programs if Landlord is satisfied that such Programs would not
     adversely affect the amount of Additional Rent to be payable hereunder nor
     otherwise adversely affect the Leased Property relative to Tenant's
     Properties. Tenant agrees as a condition to any such consent by Landlord to
     such Programs, that Landlord may require Tenant to provide to Landlord
     during the duration of such Programs such information (including rounds
     played and average green fees) regarding the Tenant Properties included in
     such Programs as Landlord may request to monitor that there are no
     discriminatory impacts of the Programs approved.

          3.8  Income/Expense Prorations.  Income and expense items received or 
               -------------------------
paid with respect to the period in which the Term commences or terminates shall 
be adjusted and prorated between Landlord and Tenant as of the date of the 
commencement or expiration of the Term or earlier termination of this Lease, as 
applicable.

                            ARTICLE 4 - IMPOSITIONS
                            -----------------------

          4.1  Payment of Impositions.  Subject to Section 4.7 and Section 
               ----------------------              -----------     -------
16.10, Tenant will pay, or cause to be paid, all Impositions before any fine, 
-----
penalty, interest or cost may be added for non-payment, such payments to be made
directly to the taxing authorities where feasible. All payments of Impositions
shall be subject to Tenant's right of contest pursuant to the provisions of
Article 12.  Upon request, Tenant shall promptly furnish to Landlord copies
----------

                                       4
<PAGE>
 
of official receipts, if available, or other satisfactory proof evidencing such 
payments, such as cancelled checks.

          4.2  Information and Reporting.  Landlord shall give prompt notice to 
               -------------------------
Tenant of all Impositions payable by Tenant hereunder of which Landlord at any 
time has knowledge, but Landlord's failure to give any such notice shall in no 
way diminish Tenant's obligations hereunder to pay such Impositions. Landlord 
and Tenant shall, upon request of the other, provide such data as is maintained
by the party to whom the request is made with respect to the Leased Property as 
may be necessary to prepare any required returns and reports. In the event any 
applicable governmental authorities classify any property covered by this Lease 
as personal property, Tenant shall file all personal property tax returns in 
such jurisdictions where it must legally so file. Each party, to the extent it 
possesses the same, will provide the other party, upon request, with cost and 
depreciation records necessary for filing returns for any property so classified
as personal property.

          4.3  Assessment Challenges.  In addition to Tenant's rights under 
               ---------------------
Article 12, Tenant may, upon notice to Landlord, at Tenant's option and at 
----------
Tenant's sole cost and expense, protest, appeal, or institute such other 
proceedings as Tenant may deem appropriate to effect a reduction of real estate 
or personal property assessments and Landlord, at Tenant's expense as aforesaid,
shall fully cooperate with Tenant in such protest, appeal, or other action.

          4.4  Prorations.  Impositions imposed in respect of the tax-fiscal 
               ----------
period during which the Term commences or terminates shall be adjusted and 
prorated between Landlord and Tenant, whether or not such Imposition is imposed 
before or after such termination, and Tenant's obligation to pay its prorated 
share thereof shall survive such termination. If any Imposition may, at the 
option of the taxpayer, lawfully be paid in installments (whether or not 
interest shall accrue on the unpaid balance of such Imposition), Tenant may 
elect to pay in installments, in which event Tenant shall pay all installments 
(and any accrued interest on the unpaid balance of the Imposition) that are due 
during the Term hereof before any fine, penalty, premium, further interest or 
cost may be added thereto.

          4.5  Refunds.  If any refund shall be due from any taxing authority in
               -------
respect of any Imposition paid by Tenant, the same shall be paid over to or 
retained by Tenant if no Event of Default shall have occurred hereunder and be 
continuing. Any such funds retained by Landlord due to an Event of Default shall
be applied as provided in Article 16.
                          ----------

          4.6  Utility Charges.  Tenant shall pay or cause to be paid prior to 
               ---------------
delinquency charges for all utilities and services, including, without 
limitation, electricity, telephone, trash disposal, gas, oil, water, sewer, 
communication and all other utilities used in the Leased Property during the 
Term.

          4.7  Reassessments Upon Transfer.  Notwithstanding any other provision
               ---------------------------
in this Lease to the contrary. Landlord shall pay all incremental increases in 
the Impositions under this Lease arising solely from (a) Landlord's sale, 
disposition or other transfer of the Leased Property after the date of this
Lease or (b) a change of control or ownership in Landlord after the date of this
Lease.

                                       5
<PAGE>
 
          4.8  Assessment Districts.  Neither party shall voluntarily consent to
               --------------------
or agree in writing to (i) any special assessment or (ii) the inclusion of any 
material portion of the Leased Premises into a special assessment district or 
other taxing jurisdiction unless the other party shall have consented thereto, 
which consent shall not be unreasonably withheld.

                          ARTICLE 5 - TENANT WAIVERS
                          --------------------------

          5.1  No Termination, Abatement, Etc.  Except as otherwise specifically
               ------------------------------
provided in this Lease, (i) Tenant, to the extent permitted by law, shall remain
bound by this Lease in accordance with its terms and shall neither take any 
action without the consent of Landlord to modify, surrender or terminate the 
same, nor be entitled to any abatement, deduction, deferment or reduction of 
Rent, or set-off against the Rent by reason of, and (ii) the respective 
obligations of Landlord and Tenant shall not be otherwise affected by reason of:

          (a)  any damage to, or destruction of, any Leased Property or any 
portion thereof from whatever cause or any taking of the Leased Property or any 
portion thereof;

          (b)  the lawful or unlawful prohibition of, or restriction upon, 
Tenant's use of the Leased Property, or any portion thereof, the interference 
with such use by any Person or by reason of eviction by paramount title (other 
than as provided in Section 5.3);
                    -----------

          (c)  any claim which Tenant has or might have against Landlord or by 
reason of any default or breach of any warranty by Landlord under this Lease or 
any other agreement between Landlord and Tenant;

          (d)  any bankruptcy, insolvency, reorganization, composition, 
readjustment, liquidation, dissolution, winding up or other proceedings 
affecting Landlord or any assignee or transferee of Landlord; or

          (e)  for any other cause whether similar or dissimilar to any of the 
foregoing other than a discharge of Tenant from any such obligations as a matter
of law.

Except as otherwise specifically provided in this Lease, Tenant hereby 
specifically waives all rights, arising from any occurrence whatsoever, which 
may now or hereafter be conferred upon it by law (i) to modify, surrender or 
terminate this Lease or quit or surrender the Leased Property or any portion 
thereof, or (ii) to entitle Tenant to any abatement, reduction, suspension or 
deferment of the Rent or other sums payable by Tenant hereunder. The obligations
of Landlord and Tenant hereunder shall be separate and independent covenants and
agreements and the Rent and all other sums payable by Tenant hereunder shall 
continue to be payable in all events unless the obligations to pay the same 
shall be terminated pursuant to the express provisions of this Lease or by 
termination of this Lease other than by reason of an Event of Default.

          5.2  Condition of the Leased Property.  Tenant acknowledges receipt 
               --------------------------------
and delivery of possession of the Leased Property and that Tenant has examined 
or otherwise has knowledge of the condition of the Leased Property prior to the 
execution and delivery of this Lease. Regardless, however, of any inspection 
made by Tenant of the Leased Property and 

                                       6
<PAGE>
 
whether or not any patent or latent defect or condition was revealed or 
discovered thereby, Tenant is leasing the Leased Property "as is" in its present
condition. Tenant waives and releases any claim or action against Landlord in 
respect of the condition of the Leased Property including any defects or adverse
conditions latent or patent, matured or unmatured, known or unknown by Tenant or
Landlord as of the date hereof. TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER 
ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT
MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PROPERTY, INCLUDING ANY WARRANTY 
OR REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR 
USE OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) 
THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) VALUE, (v) COMPLIANCE WITH 
SPECIFICATIONS, (vi) LOCATION, (vii) USE, (viii) CONDITION, (ix)
MERCHANTABILITY, (xii) QUALITY, (xiii) DESCRIPTION, (xiv) DURABILITY, (xv)
OPERATION, (xvi) THE EXISTENCE OF ANY HAZARDOUS MATERIAL, (xvii) COMPLIANCE OF
THE LEASED PROPERTY WITH ANY LAW (INCLUDING ENVIRONMENTAL LAWS) OR LEGAL
REQUIREMENTS OR (xviii) LANDLORD'S TITLE THERETO. TENANT ACKNOWLEDGES THAT THE
LEASED PROPERTY HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT. IN THE
EVENT OF ANY DEFECT OR DEFICIENCY IN THE LEASED PROPERTY OF ANY NATURE, WHETHER
LATENT OR PATENT, AS BETWEEN LANDLORD AND TENANT, LANDLORD SHALL NOT HAVE ANY
RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF
THIS SECTION 5.2 HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE
     -----------
EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH 
RESPECT TO THE LEASED PROPERTY. ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE 
OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.

                       ARTICLE 6 - OWNERSHIP OF PROPERTY
                       ---------------------------------

          6.1  Leased Property.  Tenant acknowledges that the Leased Property is
               ---------------
the property of Landlord and that Tenant has only the right to the exclusive 
possession and use of the Leased Property during the Term of and upon the terms 
and conditions of this Lease. Tenant acknowledges that the Leased Property is 
subject to certain exceptions as referenced in the Title Policy.

          6.2  Landlord's Personal Property.  If Landlord has provided any 
               ----------------------------
Landlord's Personal Property (as described in Exhibit E), Tenant shall maintain 
                                              ---------
such Property in the same manner as Tenant maintains Tenant's Personal Property.
Upon the loss, destruction, or obsolescence of any of the Landlord's Personal 
Property, Tenant shall replace such property with Tenant's Personal Property, 
which such property shall be owned by Tenant during the remainder of the Term. 
Upon the expiration or sooner termination of this Lease, Tenant shall be 
obligated to leave at the Facility at no cost to Landlord and free of any liens 
or encumbrances: (i) any Landlord's Personal Property: and (ii) any replacements
of Landlord's Personal Property (the "Replacement Property"), provided that the 
Replacement Property shall be high-quality

                                       7
<PAGE>
 
equipment in good working order and condition and shall be reasonably comparable
in quality and quantity to the property provided to Tenant by Landlord at the 
Commencement Date. Notwithstanding Section 6.4, at the expiration or sooner 
                                   -----------
termination of this Lease, Landlord shall not be obligated to purchase from
Tenant the Replacement Property and the Replacement Property shall be conveyed 
to Landlord by Tenant at no cost to Landlord.

          6.3  Tenant's Personal Property.  Tenant may (and shall as provided 
               --------------------------
below), at its expense, install, affix or assemble or place on any parcels of 
the Land or in any of the Leased Improvements, any items of Tenant's Personal 
Property, and Tenant may, subject to the conditions set forth below, remove the 
same upon the expiration or any prior termination of the Term. Tenant shall 
provide and maintain during the entire Lease Term all such Tenant's Personal 
Property as shall be necessary in order to operate the Facility in compliance 
with all applicable Legal Requirements and Insurance Requirements and otherwise 
in accordance with customary practice in the industry for the Primary Intended 
Use and in accordance with its past practices.

          6.4  Purchase of Tenant's Personal Property.  Subject to Section 6.2, 
               --------------------------------------              -----------
upon the expiration or sooner termination of this Lease, Landlord shall have the
right (but not the obligation) to purchase from Tenant all, but not less than 
all, of tangible Tenant's Personal Property (which shall not include software):

          (i)  if owned by Tenant and not subject to any secured financing
          entered into in good faith by Tenant with an unaffiliated Person, at
          the fair market value thereof (subject to Section 6.2);
                                                    -----------

          (ii)  if owned by Tenant, but subject to such secured financing, at
          the greater of the fair market value thereof or the amount of the debt
          owing under such financing (subject to Section 6.2); and
                                                 -----------

          (iii)  if leased by Tenant in good faith from an unaffiliated Person,
          and the applicable lease provides for termination of the lease as to
          such Property upon the payment of a given sum, at the greater of the
          fair market value thereof or the amount of the payment so provided;
          provided, however, that at Landlord's option and if the lessor will
          -----------------
          permit Landlord to assume the obligations under the applicable lease
          with respect to such property (separate from the obligations under a
          master lease if in effect). Tenant shall, upon the request of
          Landlord, assign the applicable lease (or portion thereof) to Landlord
          upon Landlord's payment in cash to Tenant of any equity value under
          the applicable lease (or portion thereof);
          
provided, further, however, that if Landlord's purchase right arises because of 
--------------------------
a termination of this Lease as a result of an Event of Default, the fair market 
value under clauses (i) through (iii) above shall be deemed to be the 
depreciated net book value of Tenant's Personal Property. Landlord may elect to 
purchase Tenant's Personal Property by giving notice to Tenant not later than, 
as the case may be, 60 days prior to the expiration of this Lease or 60 days 
after the termination of this Lease upon any Event of Default. Tenant shall 
transfer title to such property by a bill of sale without warranty (except as to
ownership free of liens) upon concurrent payment in cash by Landlord; provided, 
                                                                      ---------
however, if Landlord has any unpaid damages resulting from any
-------

                                       8
<PAGE>
 
Event of Default, Landlord may make payment by delivery of a receipt for an 
offset against such damages to the extent of any cash payment otherwise owed by 
Tenant to Landlord.

          6.5  Removal of Personal Property.  Subject to applicable law: (i) all
               ----------------------------
items of Tenant's Personal Property not removed by Tenant within 14 days 
following the expiration or earlier termination of this Lease shall be 
considered abandoned by Tenant and may, at Landlord's discretion and without any
obligation, be appropriated, sold, destroyed or otherwise disposed of by 
Landlord without first giving notice thereof to Tenant and without any payment 
to Tenant and without any obligation to account therefor; (ii) Tenant shall, at 
its expense, restore the Leased Property to the condition required by Section
                                                                      -------
9.1, including repair of all damage to the Leased Property caused by the removal
---
of Tenant's Personal Property, whether effected by Tenant or Landlord; and (iii)
Landlord shall not be responsible for any loss or damage to Tenant's Personal
Property, or any other property of Tenant, by virtue of Landlord's removal
thereof at any time subsequent to the 14-day period provided for herein.

          6.6  Landlord's Waivers.  Any lessor Tenant's Personal Property may, 
               ------------------
upon notice to Landlord and during reasonable hours, enter the Facility and take
possession of any of Tenant's Personal Property without liability for trespass
or conversion. Landlord shall, upon the request of Tenant, execute and deliver
to Tenant "landlord's waivers" as may be reasonable and customary in connection
with the financing or leasing of personal property. Such "landlord's waiver"
shall limit to 30 days the amount of time the lessor or lender has to enter upon
the Leased Premises after notice from Landlord that the Term has expired or
otherwise terminated. If Tenant requests a "landlord's waiver," Tenant shall
attempt to secure from any financing source or lessor the right on the part of
Landlord to cure the defaults of Tenant and to use any such Property upon
providing such cure.

          6.7  Water Rights
               ------------

               6.7.1  Landlord Rights.  To the extent Landlord has any Water 
                      ---------------
Rights by virtue of its ownership of the Leased Property or to the extent 
Landlord otherwise acquires Water Rights specifically for use by the Leased 
Property, Landlord agrees to make such Water Rights available to Tenant at 
Landlord's cost for Tenant to fulfill its obligations hereunder. Landlord makes 
no assurances whatsoever as to the existence, quantity, priority or price of any
Water Rights owned by Landlord. Landlord shall have no obligation to acquire or 
expend funds to maintain the ownership of any Water Rights.

               6.7.2  Tenant Rights.  To the extent as of the Commencement Date,
                      -------------
Tenant owns any rights for the supply or transportation of water to the Leased 
Property (the "Tenant's Original Water Rights"), Tenant shall, through the Term 
               ------------------------------
and subject to the provisions of this Section 6.7, maintain and hold Tenant's 
                                      -----------
Original Water Rights on a first priority basis for the benefit of the Leased 
Property. If and solely to the extent that Tenant's Original Water Rights
provide resources in excess of what is needed to properly serve the Leased
Property, Tenant may use Tenant's Original Water Rights for other purposes as it
determines consistent with any restrictions under applicable law or the terms of
Tenant's Original Water Rights. During the Term, Tenant may sell or exchange
Tenant's Original Water Rights if, prior to doing so, Tenant secures Replacement
Water Rights. Upon the expiration or sooner termination of this Lease, Tenant
shall, within 10 days after request made by Landlord, transfer to Landlord or
its

                                       9
<PAGE>
 
designee for no consideration Tenant's Original Water Rights (to the extent 
still owned by Tenant) and all Replacement Water Rights. Upon the expiration or 
sooner termination of this Lease, to the extent Tenant had sold or exchanged 
Tenant's Original Water Rights during the Term, Tenant shall deliver to Landlord
or its designee Replacement Water Rights that are not less favorable in any 
material respect to the holder of such Water Rights than the quantity, price and
priority of Tenant's Original Water Rights.

          6.8  Liquor License.  Tenant shall take whatever steps are 
               --------------
commercially necessary to obtain a license for serving liquor at the Facility 
("Liquor License") and shall keep the Liquor License in effect during the Term. 
  --------------
Upon the expiration of the Term or earlier termination of this Lease, Tenant 
shall transfer the Liquor License to Landlord (or its designee), subject to 
applicable law, for a purchase price of $1.00; provided, however, Landlord shall
pay all costs and expenses with respect to the transfer of the Liquor License to
Landlord. Tenant shall cooperate in all respects with Landlord (and its 
designee) in order to effect an orderly transfer of the Liquor License to 
Landlord (or its designee) including, without limitation, completing all 
application forms, providing such information and documents as may be required 
by applicable governmental agencies, and appearing and testifying at any public 
hearings in connection with the transfer of the Liquor License to Landlord (or 
its designee).

                      ARTICLE 7 - USE OF LEASED PROPERTY
                      ----------------------------------

          7.1  Use.  After the Commencement Date and during the Term, Tenant 
               ---
shall use or cause to be used the Leased Property and the improvements thereon 
for its Primary Intended Use and for such other uses as may be necessary or 
incidental to such use. Tenant shall not use the Leased Property or any portion
thereof for any other use without the prior written consent of Landlord, which 
consent shall not be unreasonably withheld. No use shall be made or permitted to
be made of the Leased Property, and no acts shall be done, which will cause the 
cancellation of any insurance policy covering the Leased Property or any part 
thereof, nor shall Tenant sell or otherwise provide to patrons, or permit to be
kept, used or sold in or about the Leased Property any article which may be 
prohibited by law or by the standard form of fire insurance policies, or any 
other insurance policies required to be carried hereunder, or fire underwriters 
regulations. Tenant shall, at its sole cost, comply with all of the requirements
pertaining to the Leased Property or other improvements of any insurance board, 
association, organization or company necessary for the maintenance of insurance,
as herein provided, covering the Leased Property and Tenant's Personal Property.
Landlord and Tenant acknowledge that Landlord has acquired the Leased Property 
subject to the terms of the Existing Instruments and that Tenant will be 
obligated to perform all obligations under the Existing Instruments during the 
Term.

          7.2  Specific Prohibited Uses.  Tenant shall not use or occupy or
               ------------------------
permit the Leased Property to be used or occupied, nor do or permit anything to
be done in or on the Leased Property, in a manner which would (i) violate or
fail to comply with any law, rule or regulation or Legal Requirement or the
Existing Instruments, (ii) subject to Article 10, cause structural injury to any
                                      ----------  
of the Improvements or (iii) constitute a public or private nuisance or waste.
Tenant shall not allow any Hazardous Material to be located in, on or under the
Leased Property, or any adjacent property, or incorporated in the Facility or
any improvements thereon except in compliance with applicable law (including any
Environmental Law). Tenant shall not

                                      10
<PAGE>
 
allow the Leased Property to be used as a landfill or a waste disposal site, or 
a manufacturing, distribution or disposal facility for any Hazardous Materials. 
Tenant shall neither suffer nor permit the Leased Property or any portion 
thereof, including Tenant's Personal Property, to be used in such a manner as 
(i) might reasonably tend to impair Landlord's title thereto or to any portion 
thereof, or (ii) may reasonably make possible a claim or claims of adverse usage
or adverse possession by the public, as such, or of implied dedication of the
Leased Property or any portion thereof, or (iii) is in material violation of any
applicable Environmental Law.

          7.3   Membership Matters, Fees and Charges.  The Leased Property shall
                ------------------------------------
be operated as a "daily fee" golf course and not as a non-equity membership 
country club. Subject to the limitations of this Section 7.3, (i) Tenant shall 
                                                 ----------- 
have the right to convert the operation of the Leased Property to a non-equity 
membership country club without the prior approval of Landlord and (ii) Tenant 
shall have the right to determine all matters relating to the sale and 
classification of memberships, including the right to set initiation fees, dues,
and other charges, the number of memberships sold, and the rules, regulations, 
policies, and procedures pertaining to memberships. Prior to the sale of any 
memberships (other than annual memberships), Tenant shall notify Landlord about 
its plans to adopt a membership program and shall, if requested by Landlord, 
meet with Landlord to provide any information reasonably requested by Landlord 
about the proposed membership program and Tenant's reasons for so doing. 
Notwithstanding any other provision of this Section 7, (i) no membership shall 
                                            --------- 
extend beyond the expiration of the Term without Landlord's prior written 
approval, which approval may be withheld at Landlord's sole and absolute 
discretion and (ii) the membership applications (or other appropriate 
documentation) to be signed by the members must disclose in writing the 
limitation on the duration of the membership interest and of Tenant's interest 
in the Leased Premises, the form of which disclosure shall be subject to the 
approval of Landlord, which approval shall not be unreasonably withheld or 
delayed. Tenant shall have the right to determine all fees, rates and other 
charges relating to the goods and services provided by Tenant at the Leased 
Premises and the use of the Leased Premises by patrons, customers and members.

                        ARTICLE 8 - HAZARDOUS MATERIALS
                        -------------------------------

          8.1   Representations.  Tenant hereby represents and warrants to 
                ---------------
Landlord that it has disclosed to Landlord all material information with respect
to the environmental conditions of the Leased Property that Tenant obtained
prior to the Commencement Date. Landlord hereby represents and warrants to 
Tenant that it has disclosed to Tenant all material information with respect to 
the environmental conditions of the Leased Property that Landlord obtained prior
to the Commencement Date.

          8.2  Remediation. If Tenant becomes aware of the presence of any 
               -----------
Hazardous Material in a quantity sufficient to require remediation or reporting 
under any Environmental Law in, on or under the Leased Property or if Tenant, 
Landlord, or the Leased Property becomes subject to any order of any federal, 
state or local agency to investigate, remove, remediate, repair, close, 
detoxify, decontaminate or otherwise clean up the Leased Property, Tenant shall,
at its sole expense, carry out and complete any required investigation, removal,
remediation, repair, closure, detoxification, decontamination or other cleanup 
of the Leased Property. If Tenant fails to implement and diligently pursue any 
such repair, closure, detoxification, decontamination or other cleanup of the 
Leased Property in a timely manner, Landlord

                                      11
<PAGE>
 
shall have the right, but not the obligation after written notification to 
Tenant and Tenant's failure to cure as provided herein to carry out such action
and to recover all of the reasonable costs and expenses from Tenant as
Additional Charges.

          8.3 Tenant's Indemnification of Landlord. Tenant shall pay, protect, 
              ------------------------------------
indemnify, save, hold harmless and defend Landlord and any Facility Mortgagee 
from and against all liabilities, obligations, claims, damages (including 
punitive damages), penalties, causes of action, demands, judgments, costs and 
expenses (including reasonable attorneys' fees and expenses), to the extent 
permitted by law, imposed upon or incurred by or asserted against Landlord or 
the Leased Property by reason of any Environmental Law (irrespective of whether 
there has occurred any violation of any Environmental Law) in respect of the 
Leased Property howsoever arising, without regard to fault on the part of 
Tenant, including (a) liability for response costs and for costs of removal and 
remedial action incurred by the United States Government, any state or local 
governmental unit to any other Person, or damages from injury to or destruction 
or loss of natural resources, including the reasonable costs of assessing such 
injury, destruction or loss, incurred pursuant to any Environmental Law, (b) 
liability for costs and expenses of abatement, investigation, removal, 
remediation, correction or clean-up, fines, damages, response costs or penalties
which arise from the provisions of any Environmental Law, or (c) liability for
personal injury or property damage arising under any statutory or common-law
tort theory, including damages assessed for the maintenance of a public
or private nuisance or for carrying on of a dangerous activity, or (d) by reason
of a breach of the representation and warranty in Section 8.1. Notwithstanding
                                                  -----------
the foregoing or any other provision of this Lease (including, without
limitation, Section 5.2, Section 8.4 and Article 21), Tenant shall not be
            -----------  -----------     ----------   
liable, or otherwise be required to indemnify Landlord (or any Facility
Mortgagee) from and against any matters, conditions or events that arose,
existed or occurred prior to the Commencement Date; provided, that this sentence
shall not relieve Tenant of its obligation to operate the Leased Property in
compliance with Environmental Laws including Tenant's obligation to maintain,
repair, remove or replace any underground storage tanks.

          8.4 Survival of Indemnification Obligations. Tenant's obligations
              ---------------------------------------
and/or liability under this Article 8 arising during the Term hereof shall
                            ---------
survive any termination of this Lease.

          8.5 Environmental Violations at Expiration or Termination of Lease.
              --------------------------------------------------------------
Notwithstanding any other provision of this Lease, if, at a time when the Term
would otherwise terminate or expire, a violation of any Environmental Law has
been asserted by Landlord and has not been resolved in a manner reasonably
satisfactory to Landlord, or has been acknowledged by Tenant to exist or has
been found to exist at the Leased Property or has been asserted by any
governmental authority and failure to have completed all action required to
correct, abate or remediate such a violation of any Environmental Law materially
impairs the leasability of the Leased Property upon the expiration of the Term,
then, at the option of Landlord, the Term shall be automatically extended with
respect to the Leased Property beyond the date of termination or expiration and
this Lease shall remain in full force and effect under the same terms and
conditions beyond such date with respect to the Leased Property until the
earlier to occur of (i) the completion of all remedial action in accordance with
applicable Environmental Laws or (ii) 12 months beyond such expiration or
termination date; provided, that Tenant may, upon any such extension of the
                  --------  
Term, terminate the Term by paying to the 

                                      12
<PAGE>
 
Landlord such amount as is necessary in the reasonable judgment of Landlord to 
complete or perform such remedial action.

          8.6 Landlord's Indemnification of Tenant. Landlord shall pay, protect,
              ------------------------------------
indemnify, save, hold harmless and defend Tenant from and against all 
liabilities, obligations, claims, damages (including punitive damages), 
penalties, causes of action, demands, judgments, costs and expenses (including 
reasonable attorneys' fees and expenses), to the extent permitted by law, 
imposed upon or incurred by or asserted against Tenant or the Leased Property by
reason of any Environmental Law (irrespective of whether there has occurred any 
violation of any Environmental Law) in respect of any matter, condition, or 
event that arose, existed or occurred prior to the Commencement Date, without 
regard to fault on the part of Landlord, including (a) liability for response 
costs and for costs of removal and remedial action incurred by the United States
Government, any state or local governmental unit to any other Person, or damages
from injury to or destruction or loss of natural resources, including the
reasonable costs of assessing such injury, destruction or loss, incurred
pursuant to any Environmental Law, (b) liability for costs and expenses of
abatement, investigation, removal, remediation, correction or clean-up, fines,
damages, response costs or penalties which arise from the provisions of any
Environmental Law, or (c) liability for personal injury or property damage
arising under any statutory or common-law tort theory, including damages
assessed for the maintenance of a public or private nuisance or for carrying on
of a dangerous activity; provided, however: (i) the foregoing shall not relieve
Tenant of its obligation to operate the Leased Property in compliance with
Environmental Laws including Tenant's obligation to maintain, repair, remove or
replace any underground storage tanks installed by Tenant or at the direction of
Tenant; and (ii) nothing herein shall create in favor of Tenant a right of 
set-off to be applied against the payment of Rent hereunder. Notwithstanding the
foregoing or any other provision of this Lease (including, without limitation,
Section 8.2 and Article 21), Landlord shall not be liable, or otherwise be
-----------     ----------
required to indemnify Tenant from and against any matters, conditions or events 
that arose, existed or occurred on or after the Commencement Date unless such 
matters, conditions or events are caused by Landlord.

                      ARTICLE 9 - MAINTENANCE AND REPAIR
                      ----------------------------------

          9.1 Tenant's Sole Obligation. Subject to Unavoidable Delays, Tenant, 
              ------------------------
at its expense, will keep the Leased Property and Tenant's Personal Property in 
good order, repair and appearance (whether or not the need for such repairs 
occurs as a result of Tenant's use, any prior use, the elements or the age of 
the Leased Property, or any portion thereof) and maintain the Leased Property in
accordance with any applicable Legal Requirements, and, except as otherwise
provided in Article 14, with reasonable promptness, make all necessary and 
            ----------
appropriate repairs thereto of every kind and nature, whether interior or 
exterior, structural or non-structural, ordinary or extraordinary, foreseen or 
unforseen or arising by reason of a condition existing prior to the commencement
of the Term of this Lease (concealed or otherwise). Subject to Unavoidable 
Delays, Tenant shall maintain the Leased Premises in accordance with the 
Operating Standards set forth in Exhibit D; provided, however that Tenant may 
                                 ---------  -----------------
make such modifications to such Operating Standards as Tenant may reasonably 
determine to be appropriate for the prudent management of the Leased Property or
as may be appropriate to comply with Legal Requirements. Nothing in this Article
                                                                         -------
9 shall obligate Tenant to make any
-

                                      13
<PAGE>
 
capital improvements or replacements to the Leased property if the Leased 
Property can be repaired to the standard required by this Section 9.1.
                                                          -----------

          9.2 Waiver of Statutory Obligations. Landlord shall not under any 
              -------------------------------
circumstances be required to build or rebuild any improvements on the Leased 
Property, or to make any repairs, replacement, alterations, restorations or 
renewals of any nature or description to the Leased Property, whether ordinary 
or extraordinary, structural or non-structural, foreseen or unforeseen, or to 
make any expenditure whatsoever with respect thereto, in connection with this 
Leased, or to maintain the Leased Property in any way. Tenant hereby waives, to 
the extent permitted by law, the right to make repairs at the expense of 
Landlord pursuant to any law in effect at the time of the execution of this
Leased or hereafter enacted.

          9.3 Mechanic's Liens. Nothing contained in this Leased and no action 
              ----------------
or inaction by Landlord shall be construed as (i) constituting the consent or
request of Landlord expressed or implied, to any contractor, subcontractor,
laborer, materialman or vendor to or for the performance of any labor or
services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to the Leased
Property or any part thereof; or (ii) giving Tenant any right, power or
permission to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property, in either case, in such
fashions as would permit the making of any claim against Landlord in respect
thereof or to make any agreement that may create, or in any way be the basis
for, any right, title, interest, lien, claim or other encumbrance upon the
estate of Landlord in the Leased Property, or any portion thereof.

          9.4  Surrender of Leased Property. Unless the Lease shall have been 
               ----------------------------
terminated pursuant to the provisions of Article 14, Tenant shall, upon the 
                                         ----------
expiration or prior termination of the Term, vacate and surrender the Leased 
Property to Landlord in the condition in which the Leased Property was 
originally received from Landlord, except as repaired, rebuilt, restored, 
altered or added to as permitted or required by the provisions of this Lease and
except for ordinary wear and tear (subject to the obligation of Tenant to 
maintain the Leased Property in good order and repair during the entire Term of 
the Lease).

                      ARTICLE 10 - TENANT'S IMPROVEMENTS
                      ----------------------------------

          10.1 Tenant's Right to Construct. During the Term of this Lease,
               ---------------------------
Tenant may make alterations, additions, changes and/or improvements to the
Leased Property (individually a "Tenant Improvement," and collectively, "Tenant
                                 ------------------                      ------
Improvements"). Except as otherwise agreed to be Landlord in writing, any such
------------
Tenant Improvement shall be made at Tenant's sole expense and shall become the
property of Landlord upon termination of this Lease. Unless made on an emergency
basis to prevent injury to Person or property, Tenant will submit plans for any
Tenant Improvement with a value of more than $100,000 in the first Fiscal Year
(and increased by three percent per annum for each subsequent Fiscal Year) to
Landlord for Landlord's prior approval, such approval not to be unreasonably
withheld or delayed. The construction and installation of any Tenant
Improvements shall be subject to the terms and conditions set forth in the
Existing Instruments.

                                      14

<PAGE>
 
          10.2 Scope of Right. Subject to Section 10.1 and the terms and 
               --------------             ------------
conditions set forth in the Existing Instruments, at Tenant's cost and expense, 
Tenant shall have the right to:

          (a)  seek any governmental approvals, including building permits,
          licenses, conditional use permits and any certificates of need that
          Tenant requires to construct any Tenant Improvement;

          (b)  demolish, remove or otherwise dispose of any of the Leased 
          Improvements;

          (c)  erect upon the Leased Property such Tenant Improvements as Tenant
          deems desirable;

          (d)  make additions, alterations, changes and improvements in any 
          Tenant Improvement so erected;

          (e)  raze and demolish any Tenant Improvement together with the right 
          to salvage therefrom; and

          (f)  engage in any other lawful activities that Tenant determines are
          necessary or desirable for the development of the Leased Property in
          accordance with its Primary Intended Use;

provided, however, Tenant shall not make any Tenant Improvement which would,in
-----------------
Landlords's reasonable judgment, impair in any material respect the value or
Primary Intended Use of the Leased Property without Landlord's prior written
consent.

          10.3 Cooperation of Landlord. Landlord shall cooperate with Tenant and
               -----------------------
take such actions, including the execution and delivery to Tenant of any 
applications or other documents, reasonably requested by Tenant in order to
obtain any governmental approvals sought by Tenant to construct any Tenant
Improvement within 10 Business Days following the later of (a) the date Landlord
receives Tenant's request, or (b) the date of delivery of any such application
or document to Landlord, so long as the taking of such action, including the
execution of said applications or documents, shall be without cost to Landlord
(or if there is a cost to Landlord, such cost shall be reimbursed by Tenant),
and will not cause Landlord to be in violation of any law, ordinance or
regulation.

          10.4 Commencement of Construction. Tenant agrees that:
               ----------------------------

          (a)  Tenant shall diligently seek all governmental approvals relating 
          to the construction of any Tenant Improvement;

          (b)  Once Tenant begins the construction of any Tenant Improvement,
          Tenant shall diligently prosecute any such construction to completion
          in accordance with applicable insurance requirements and the laws,
          rules and regulations of all governmental bodies or agencies having
          jurisdiction over the Leased Property;

                                      15
<PAGE>
 
          (c)    Landlord shall have the right at any time from time to time to
          post and maintain upon the Leased Property such notices as may be
          necessary to protect Landlord's interest from mechanics' liens,
          materialmen's liens or liens of a similar nature;

          (d)    Tenant shall not suffer or permit any mechanics' liens or any
          other claims or demands arising from the work of construction of any
          Tenant Improvement to be enforced against the Leased Property or any
          part thereof, and Tenant agrees to hold Landlord and said Leased
          Property free and harmless from all liability from any such liens,
          claims or demands, together with all costs and expenses in connection
          therewith; and

          (e)    All work shall be performed in a good and workmanlike manner.

          10.5   Rights in Tenant Improvements.  Notwithstanding anything to the
                 -----------------------------
contrary in this Lease, all Tenant Improvements constructed pursuant to Section
                                                                        -------
10.1, and any and all subsequent additions thereto and alterations and
----     
replacements thereof, shall be the sole and absolute property of Tenant during
the Term of this Lease. Upon the expiration or early termination of this Lease,
all such Tenant Improvements shall become the property of Landlord. Without
limiting the generality of the foregoing, Tenant shall be entitled to all
federal and state income tax benefits associated with any Tenant Improvement
during the Term of this Lease.

           ARTICLE 11 - LIENS, ENCROACHMENTS AND OTHER TITLE MATTERS
           ---------------------------------------------------------

          11.1   Liens.  Subject to the provisions of Article 12 relating to 
                 -----                                ----------
permitted contests, Tenant will not directly or indirectly create or allow to
remain, and will promptly discharge at its expense any lien, encumbrance,
attachment, title retention agreement or claim upon the Leased Property or any
attachment, levy, claim or encumbrance in respect of the Rent, not including,
however:

          (a)    this Lease;

          (b)    the matters, if any, that existed as of the Commencement Date
          or which are consented to in writing by Landlord;

          (c)    restrictions, liens and other encumbrances which are consented
          to in writing by Landlord, or any easements granted pursuant to the
          provisions of Section 7.4 of this Lease;
                        -----------

          (d)    liens for those taxes of Landlord, if any, which Tenant is not
           required to pay hereunder;

          (e)    subleases permitted by Article 24;
                                        ----------

          (f)    liens for Impositions or for sums resulting from noncompliance
          with Legal Requirements so long as (1) the same are not yet payable or
          payable without
 
                                      16
<PAGE>
 
          the addition of any fine or penalty or (2) such liens are in the
          process of being contested as permitted by Article 12;
                                                     ----------

          (g)    liens of mechanics, laborers, materialmen, suppliers or vendors
          for sums either disputed (provided that such liens are in the process
                                    -------------
          of being contested as permitted by Article 12) or not yet due; and
                                             ----------

          (h)    any liens which are the responsibility of Landlord pursuant to
          the provisions of Article 24 or liens arising from the acts of
                            ----------
          Landlord's employees or authorized agents or any Person (other than
          Tenant) whose claim arose under Landlord.

          11.2   Encroachments and Other Title Matters.  Excepting any matters 
                 -------------------------------------
granted or created by Landlord, if any of the Leased Improvements shall, at any 
time, encroach upon any property, street or right-of-way adjacent to the Leased 
Property, or shall violate the agreements or conditions contained in any lawful 
restrictive covenant or other agreement affecting the Leased Property, or any 
part thereof, or shall impair the rights of others under any easement or right-
of-way to which the Leased Property is subject, or the use of the Leased 
Property is impaired, limited or interfered with by reason of the exercise of 
the right of surface entry or any other rights under a lease or reservation of 
any oil, gas, water or other minerals, then promptly upon the request of 
Landlord or at the behest of any Person affected by any such encroachment, 
violation or impairment, Tenant, at its sole cost and expense (subject to its 
right to contest the existence of any such encroachment, violation or 
impairment), shall protect, indemnify, save harmless and defend Landlord from
and against all losses, liabilities, obligations, claims, damages, penalties,
causes of action, costs and expenses (including reasonable attorneys' fees and
expenses) based on or arising by reason of any such encroachment, violation or
impairment and in such case, in the event of any adverse final determination,
either (i) obtain valid and effective waivers or settlements of all claims,
liabilities and damages resulting from each such encroachment, violation or
impairment, whether the same shall affect Landlord or Tenant; or (ii) make such
changes in the Leased Improvements, and take such other actions, as Tenant in
the good faith exercise of its judgement deems reasonably practicable, to remove
such encroachment, and to end such violation or impairment, including, if
necessary, the alteration of any of the Leased Improvements, and in any event
take all such actions as may be necessary in order to be able to continue the
operation of the Leased Improvements for the Primary Intended Use substantially
in the manner and to the extent the Leased Improvements were operated prior to
the assertion of such violation or encroachment. Tenant's obligations under this
Section 11.2 shall be in addition to and shall in no way discharge or diminish
------------
any obligation of any insurer under any policy of title or other insurance and
Tenant shall be entitled to a credit for any sums recovered by Landlord under
(i) any such policy of title or other insurance, or (ii) any suit or action
against any Person involved in said matter. If Landlord is a necessary party to
any such action, Tenant shall, at Tenant's expense and with such indemnification
as Landlord shall reasonably request, have the right to pursue claims against
Landlord's title insurance or any other Person involved in said matter.

                                      17


<PAGE>
 
                        ARTICLE 12 - PERMITTED CONTESTS
                        -------------------------------

          Tenant, on its own or on Landlord's behalf (or in Landlord's name) but
at Tenant's expense, may contest, by appropriate legal proceedings conducted in 
good faith and with due diligence, the amount or validity or application, in 
whole or in part, of any Imposition or any legal Requirement or Insurance 
Requirement or any lien, attachment, levy, encumbrance, charge or claim not 
otherwise permitted by Section 11.1, provided that:
                      ------------  -------------

          (a)  in the case of unpaid Imposition, lien, attachment, levy,
          encumbrance, charge or claim, the commencement and continuation of
          such proceedings shall suspend the collection thereof from Landlord
          and from the Leased Property, and neither the Leased property nor any
          Rent therefrom nor any part thereof or interest therein would be in
          any danger of being sold, forfeited, attached or lost pending the
          outcome of such proceedings;

          (b)  in the case of a Legal Requirement, Landlord would not be subject
          to criminal or material civil liability for failure to comply
          therewith pending the outcome of such proceedings. Nothing in this
          Section 12(b), however, shall permit Tenant to delay compliance with
          -------------
          any requirement of an Environmental Law to the extent such non-
          compliance poses an immediate threat of injury to any Person or to the
          public health or safety or of material damage to any real or personal
          property;

          (c)  in the case of a Legal Requirement and/or an Imposition, lien,
          encumbrance or charge, Tenant shall give such reasonable security, if
          any, as may be demanded by Landlord to insure ultimate payment of the
          same and to prevent any sale or forfeiture of the affected Leased
          Property or the Rent by reason of such non-payment or noncompliance,
          provided however, the provisions of this Article 12 shall not be
          ----------------                         ----------
          construed to permit Tenant to contest the payment of Rent (except as
          to contests concerning the method of computation or the basis of levy
          of any Imposition or the basis for the assertion of any other claim)
          or any other sums payable by Tenant to Landlord hereunder;
          
          (d)  no such contest shall interfere in any material respect with the 
          use or occupancy of the Leased Property;

          (e) in the case of an Insurance Requirement, the coverage required by
          Article 13 shall be maintained; and
          ----------

          (f) if such contest be finally resolved against Landlord or Tenant,
          Tenant shall, as Additional Charges due hereunder, promptly pay the
          amount required to be paid together with all interest and penalties
          accrued thereon, or comply with the applicable Legal Requirement or
          Insurance Requirement.

Landlord, at Tenant's expense, shall execute and deliver to Tenant such
authorizations and other documents as may reasonably be required in any such
contest, and, if reasonably requested by Tenant or if Landlord so
desires, Landlord shall join as a party therein. Tenant shall indemnify

                                      18
<PAGE>
 
and save Landlord harmless against any liability, cost or expense of any kind
that may be imposed upon Landlord in connection with any such contest and any
loss resulting therefrom

                            ARTICLE 13 - INSURANCE
                            ----------------------

          13.1   General Insurance Requirements. During the Term of this Lease, 
                 ------------------------------
Tenant shall at all times keep the Leased Property, and all property located in 
or on the Leased Property, including all Tenant's Personal Property and any 
Tenant Improvements, insured with the kinds and amounts of insurance described 
below. This insurance shall be written by companies authorized to do insurance 
business in the State in which the Leased Property is located. The policies must
name Landlord as an "Additional Insured." Losses shall be payable to Landlord 
and/or Tenant as provided in Article 14. In addition, the policies shall name as
                             ----------
an additional insured the holder of any mortgage, deed of trust or other 
security agreement securing any indebtedness or any other Landlord's Encumbrance
placed on the Leased Property in accordance with the provisions of Article 24 ("
                                                                   ----------
Facility Mortgage") by way of a standard form of mortgagee's loss payable 
-----------------
endorsement. Any loss adjustment shall require the written consent of Landlord, 
Tenant, and each Facility Mortgagee, not to be unreasonably withheld. Evidence 
of insurance shall be deposited with Landlord and, if requested, with any 
Facility Mortgagee(s). The policies on the Leased Property, including the Leased
Improvements, Fixtures, Tenant's Personal Property and any Tenant Improvements, 
shall insure against the following risks:

                 13.1.1  All Risk. Loss or damage by all risks perils including 
                         --------
     but not limited to, fire, vandalism, malicious mischief and extended
     coverages, including but not limited to, sprinkler leakage, in an amount
     not less than 100% of the then Full Replacement Cost thereof.

                 13.1.2  Liability. Claims for personal injury or property 
                         ---------
     damage under a policy of comprehensive general liability insurance with
     amounts not less than $10,000,000 per occurrence and in the aggregate.

                 13.1.3  Flood. Flood and such other hazards and in such amounts
                         -----
     as may be customary for comparable properties in the area; provided
                                                                --------
     however, that Tenant shall not be required to participate in the National
     -------
     Flood Insurance Program.

                 13.1.4  Worker's Compensation. Adequate worker's compensation 
                         ---------------------
     insurance coverage for all Persons employed by Tenant on the Leased
     Property in accordance with the requirements of applicable federal, state
     and local laws.

                 13.1.5  Other Insurance. Such other insurance on or in 
                         ---------------
     connection with any of the Leased Property as Landlord or any Facility
     Mortgagee may reasonably require, which at the time is usual and commonly
     obtained in connection with properties similar in type of building size and
     use to the Leased Property and located in the geographic area where the
     Leased Property is located; provided however, that Landlord shall bear the
                                 -------- -------
     cost of any such coverage requested under this Section 13.1.5.
                                                    --------------

          13.2   Replacement Cost. In the event either party believes that the 
                 ----------------
     Full Replacement Cost of the insured property has increased or decreased at
     any time during the

                                      19
<PAGE>
 
Term, it shall have the right to have such Full Replacement Cost redetermined by
the fire insurance company which is then carrying the largest amount of fire 
insurance carried on the Leased Property (the "Impartial Appraiser"). The party 
                                               -------------------
desiring to have the Full Replacement Cost so redetermined shall forthwith, on 
receipt of such determination by such Impartial Appraiser, give written notice 
thereof to the other party hereto. The determination of such Impartial Appraiser
shall be final and binding on the parties hereto, and Tenant shall forthwith 
increase, or may decrease, the amount of the insurance carried pursuant to this 
Section 13.2, as the case may be, to the amount so determined by the Impartial 
------------
Appraiser. Each party shall pay one-half of the fee, if any, of the Impartial 
Appraiser.

          13.3 Waiver of Subrogation. Landlord and Tenant waive their respective
               ---------------------
right of recovery against the other to the extent damage or liability is insured
against under a policy or policies or insurance. All insurance policies carried 
by either party covering the Leased Property including contents, fire and 
casualty insurance, shall expressly waive any right of subrogation on the part 
of the insurer against the other party (including any Facility Mortgagee). The 
parties hereto agree that their policies will include such waiver clause or 
endorsement so long as the same are obtainable without extra cost, and in the 
event of such an extra charge the  other party, at its election, may pay the 
same, but shall not be obligated to do so.

          13.4 Form Satisfactory, Etc. All of the policies of insurance referred
               ----------------------
to in Section 13.1 shall be written in a form reasonably satisfactory to 
      ------------
Landlord and by insurance companies rated not less than A-X by A.M. Best's
Insurance Guide. In addition, all insurance carried by Tenant hereunder shall
have deductible amounts which are reasonably acceptable to Landlord. Tenant
shall pay all premiums for the policies or insurance referred to in Section 13.1
                                                                     -----------
and shall deliver certificates thereof to Landlord prior to their effective date
(and with respect to any renewal policy, at least 10 days prior to the
expiration of the existing policy). In the event Tenant fails to satisfy its
obligations under this Section 13.4, Landlord shall be entitled, but shall have
                       ------------
no obligation, to effect such insurance and pay the premiums therefor, which
premiums shall be repayable to Landlord upon written demand as Additional
Charges. Each insurer mentioned in Section 13.1 shall agree, by endorsement on
                                   ------------
the policy or policies issued by it, or by independent instrument furnished to
Landlord, that it will give to Landlord 30 days' written notice before the
policy or policies in question shall be altered, allowed to expire or cancelled.
Each such policy shall also provide that any loss otherwise payable thereunder
shall be payable notwithstanding (i) any act or omission of Landlord or Tenant
which might, absent such provision, result in a forfeiture of all or a part of
such insurance payment, (ii) the occupation or use of the Leased Property for
purposes more hazardous than those permitted by the provisions of such policy,
(iii) any foreclosure or other action or proceeding taken by any Facility
Mortgagee pursuant to any provision of a mortgage, note, assignment or other
document evidencing or securing a loan upon the happening of an event of default
therein or (iv) any change in title to or ownership of the Leased Property.

          13.5 Change in Limits. In the event that Landlord shall at any time
               ----------------
reasonably determine on the basis of prudent industry practice that the 
liability insurance carried by Tenant pursuant to Section 13.1.2 is either 
                                                  --------------
excessive or insufficient (but only if the liability insurance limit is not 
less than $3,000,000 per person or per occurrence). the parties shall endeavor 
to agree on the proper and reasonable limits for such insurance to be carried; 
and such insurance shall thereafter be carried with the limits thus agreed on 
until further changed pursuant to the 

                                      20







<PAGE>
 
provisions of this Section 13.5. Notwithstanding the foregoing, the deductibles 
                   ------------
for such insurance or the amount of such insurance which is self-retained by 
Tenant shall be as reasonably determined by Tenant so long as Tenant can 
reasonably demonstrate to Landlord its ability to satisfy such deductible or 
amount of such self-retained insurance.

          13.6   Blanket Policy.  Notwithstanding anything to the contrary 
                 --------------
contained in this Article 13, Tenant's obligations to carry the insurance 
                  ----------    
provided for herein may be brought within the coverage of a so-called blanket 
policy or policies of insurance carried and maintained by Tenant; provided, 
                                                                  --------
however, that the coverage afforded Landlord will not be reduced or diminished 
-------
or otherwise be different from that which would exist under a separate policy 
meeting all other requirements of this Lease by reason of the use of such 
blanket policy of insurance, and provided further that the requirements of this 
Article 13 are otherwise satisfied. The amount of the total insurance shall be 
----------
specified either (i) in each such "blanket" or umbrella policy or (ii) in a 
written statement, which Tenant shall deliver to Landlord and Facility 
Mortgagee, from the insurer thereunder. A certificate of each such "blanket" or 
umbrella policy shall promptly be delivered to Landlord and Facility Mortgagee. 
If requested by Landlord, Tenant shall provide Landlord with a certified copy of
the "blanket" or umbrella insurance policy.

                ARTICLE 14 - APPLICATION OF INSURANCE PROCEEDS
                ----------------------------------------------

          14.1   Insurance Proceeds.  All proceeds of insurance payable by 
                 ------------------
reason of any loss or damage to the Leased Property, or any portion thereof, and
insured under any policy of insurance required by Article 13 shall (i) if 
                                                  ----------
greater than $100,000, be paid to Landlord and held by Landlord and (ii) if less
than such amount, be paid to Tenant and held by Tenant. All such proceeds shall 
be held in trust and shall be made available for reconstruction or repair, as 
the case may be, of any damage to or destruction of the Leased Property, or any 
portion thereof.

                 14.1.1  Disbursement of Proceeds.  Any proceeds held by 
                         ------------------------
     Landlord or Tenant shall be paid out by Landlord or Tenant from time to
     time for the reasonable costs of such reconstruction or repair; provided,
                                                                     --------
     however, that Landlord shall disburse proceeds subject to the following
     -------
     requirements:

          (i)    prior to commencement of restoration, (A) the architects, 
          contracts, contractors, plans and specifications for the restoration
          shall have been approved by Landlord, which approval shall not be
          unreasonably withheld or delayed and (B) appropriate waivers of
          mechanics' and materialmen's liens shall have been filed;

          (ii)   at the time of any disbursement, subject to Article 12, no 
                                                             ----------
          mechanics' or materialmen's liens shall have been filed against any of
          the Leased Property and remain undischarged, unless a satisfactory
          bond shall have been posted in accordance with the laws of the State;

          (iii)  disbursements shall be made as requested by Tenant, not more 
          frequently than monthly, upon not less than 15 days' notice in an
          amount not exceeding the cost of the work completed since the last
          disbursement, upon receipt of (A)

                                      21
<PAGE>
 
          satisfactory evidence of the stage of completion, the estimated total
          cost of completion and performance of the work to date in a good and
          workmanlike manner in accordance with the contracts, plans and
          specifications, (B) waivers of liens, (C) a satisfactory bringdown of
          title insurance and (D) other evidence of cost and payment so that
          Landlord and Facility Mortgagee can verify that the amounts disbursed
          from time to time are represented by work that is completed, in place
          and free and clear of mechanics' and materialmen's lien claims;

          (iv)   each request for disbursement shall be accompanied by a 
          certificate of Tenant, signed by the president or a vice president of
          Tenant, describing the work for which payment is requested, stating
          the cost incurred in connection therewith, stating that Tenant has not
          previously received payment for such work and, upon completion of the
          work, also stating that the work has been fully completed and complies
          with the applicable requirements of this Lease; and

          (v)    to the extent actually held by Landlord and not by a Facility 
          Mortgagee, (1) the proceeds shall be held in a separate account and
          shall not be commingled with Landlord's other funds, and (2) interest
          shall accrue on funds so held at the money market rate of interest and
          such interest shall constitute part of the proceeds.

                 14.1.2  Excess Proceeds.  Any excess proceeds of insurance 
                         ---------------
     remaining after the completion of the restoration or reconstruction of the
     Leased Property (or in the event neither Landlord nor Tenant is required or
     elects to repair and restore) shall be paid to Landlord and Tenant in like
     proportions to the value of Landlord's interests in the Leased Property and
     Tenant's interest in Tenant's Personal Property and the Tenant
     Improvements, or any portion thereof, as determined under Article 13, upon
                                                               ----------
     completion of any such repair and restoration except as otherwise
     specifically provided below in this Article 14. All salvage resulting from
                                         ----------
     any risk covered by insurance shall belong to Landlord.

          14.2   Reconstruction Covered by Insurance.
                 -----------------------------------

                 14.2.1  Destruction Rendering Facility Unsuitable for its 
                         -------------------------------------------------
     Primary Use. If during the Term the Leased Property is totally or partially
     -----------
     destroyed from a risk covered by the insurance described in Article 13 and
                                                                 ---------- 
     the Facility thereby is rendered Unsuitable For Its Primary Intended Use,
     Tenant shall diligently restore the Facility to substantially the same
     condition as existed immediately before the damage or destruction;
     provided, however, if the Facility cannot be fully repaired or restored
     within a 12-month period from the date of the damage or destruction to
     substantially the same condition as existed immediately before the damage
     or destruction, then Tenant may terminate this Lease by giving Landlord
     written notice of such termination within 60 days after the date of such
     damage or destruction, and the effective date of such termination shall be
     30 days following such notice of termination; provided, however, if
     Landlord notifies Tenant in writing within 15 days of Landlord's receipt of
     Tenant's notice of termination that Landlord intends to restore the
     Facility to substantially the same condition as existed immediately before
     the damage and destruction and Landlord diligently commences and

                                      22
<PAGE>
 
     prosecutes such restoration and completes such restoration within 12 months
     after the date of the damage or destruction, then Tenant's election to
     terminate the Lease shall be deemed rescinded and the Lease shall remain in
     full force and effect. Notwithstanding Section 14.4 below, in the event
                                            ------------
     Landlord elects to restore the Facility as provided in the immediately
     preceding sentence, during the period from the date of Tenant's notice of
     termination through the date the restoration of the Facility is completed,
     the Base Rent shall be deemed to be zero and Tenant's payment of Rent shall
     consist only of the payment of Additional Rent in accordance with Section 9
                                                                       ---------
     of the Basic Lease Provisions and the Additional Charges as required by the
     Detailed Lease Provisions. Upon any such termination of the Lease by Tenant
     or upon Landlord's election to restore the Facility as provided in this
     section, Landlord shall be entitled to retain all insurance proceeds,
     grossed up by Tenant to account for the deductible or any self-insured
     retention; provided, further, that Tenant shall be entitled to retain or
     receive all insurance proceeds relating to Tenant's Personal Property and
     the Tenant Improvements.

                 14.2.2  Destruction Not Rendering Facility Unsuitable for its 
                         -----------------------------------------------------
     Primary Use.  If during the Term, the Leased Property is totally or
     -----------
     partially destroyed from a risk covered by the insurance described in
     Article 13, but the Facility is not thereby rendered Unsuitable For Its
     ----------
     Primary Intended Use, Tenant shall diligently restore the Facility to
     substantially the same condition as existed immediately before the damage
     or destruction; provided, however, Tenant shall not be required to restore
                     -----------------
     Tenant's Personal Property and/or any Tenant Improvements if failure to do
     so does not adversely affect the amount of Additional Rent payable
     hereunder. Such damage or destruction shall not terminate this Lease;
     provided further, however, if Tenant and Landlord cannot within 12 months
     -------------------------
     after said damage obtain all necessary governmental approvals, including
     building permits, licenses, conditional use permits and any certificates of
     need, after diligent efforts to do so in order to be able to perform all
     required repair and restoration work and to operate the Facility for its
     Primary Intended Use in substantially the same manner as immediately prior
     to such damage or destruction, Tenant may terminate this Lease upon 30 days
     prior written notice to Landlord; provided further, however, if Landlord
                                       ------------------------- 
     notifies Tenant in writing within 15 days of Landlord's receipt of Tenant's
     notice of termination that Landlord intends to restore the Facility to
     substantially the same condition as existed immediately before the damage
     and destruction and Landlord diligently commences and prosecutes such
     restoration and completes such restoration within 90 days after the date of
     Tenant's notice of termination, then Tenant's election to terminate the
     Lease shall be deemed rescinded and the Lease shall remain in full force
     and effect. Notwithstanding Section 14.4 below, in the event Landlord
                                 ------------
     elects to restore the Facility as provided in the immediately preceding
     sentence, during the period from the date of Tenant's notice of termination
     through the date the restoration of the Facility is completed, the Base
     Rent shall be deemed to be zero and Tenant's payment of Rent shall consist
     only of the payment of Additional Rent in accordance with Section 9 of the
                                                               ---------
     Basic Lease Provisions and the Additional Charges as required by the
     Detailed Lease Provisions. Upon any such termination of the Lease by Tenant
     or upon Landlord's election to restore the Facility as provided in this
     section, Landlord shall be entitled to retain all insurance proceeds,
     grossed up by Tenant to account for the deductible or any self-insured
     retention; provided, further, that Tenant shall be entitled to retain or
     receive all insurance proceeds relating to (i) Tenant's Personal Property
     (ii) the Tenant

                                      23

<PAGE>
 
     Improvements and (iii) subject to inclusion in Course Revenue, Tenant's 
     business interruption insurance.

                 14.2.3  Costs of Repair.  If Tenant restores the Facility as 
                         ---------------
     provided in Sections 14.2.1 and 14.2.2 above and the cost of the repair or
                 ---------------     ------
     restoration exceeds the amount of proceeds received by Landlord or Tenant
     from the insurance required under Article 13, Tenant shall pay for such
                                       ----------
     excess cost of repair or restoration. If Landlord restores the Facility as
     provided in Sections 14.2.1 and 14.2.2 above and the cost of the repair or
                 ---------------     ------
     restoration exceeds the amount of proceeds received by Landlord as provided
     in those sections, Landlord shall pay for such excess cost of repair or
     restoration.

          14.3   Reconstruction Not Covered by Insurance.  If during the Term, 
                 ---------------------------------------
the Facility is totally or materially destroyed from a risk not covered by the 
insurance described in Article 13, whether or not such damage or destruction 
                       ----------
renders the Facility Unsuitable For Its Primary Intended Use, Tenant shall 
either (A) restore the Facility, at Tenant's cost, to substantially the same 
condition as existed immediately before the damage or destruction, or (B) elect 
to terminate this Lease upon 60 days prior written notice to Landlord; provided,
however, if Landlord notifies Tenant in writing within 15 days of Landlord's 
receipt of Tenant's notice of termination that Landlord intends to restore the 
Facility, at Landlord's cost, to substantially the same condition as existed 
immediately before the damage and destruction and Landlord diligently commences 
and prosecutes such restoration and completes such restoration within 90 days 
after the date of Tenant's notice of termination, then Tenant's election to 
terminate the Lease shall be deemed rescinded and the Lease shall remain in full
force and effect. In the event Landlord elects to restore the Facility as 
provided in the immediately preceding sentence, during the period from the date 
of Tenant's notice of termination through the date the restoration of the 
Facility is completed, the Base Rent shall be deemed to be zero and Tenant's 
payment of Rent shall consist only of the payment of Additional Rent in 
accordance with Section 9 of the Basic Lease Provisions and the Additional 
                ---------
Charges as required by the Detailed Lease Provisions.

          14.4   Waiver.  Tenant hereby waives any statutory rights of 
                 ------
termination which may arise by reason of any damage or destruction of the 
Facility which Landlord or Tenant is obligated to restore or may restore under 
any of the provisions of this Lease.

          14.5   Damage Near End of Term.  Notwithstanding any other provision 
                 -----------------------
to the contrary in this Article 14, if damage to or destruction of the Leased 
                        ----------
Property occurs during the last 24 months of the Term of this Lease, and if such
damage or destruction cannot reasonably be expected to be fully repaired or 
restored prior to the date that is 12 months prior to the end of the 
then-applicable Term, then Tenant shall have the right to terminate the Lease on
30 days' prior notice to Landlord by giving notice thereof to Landlord within 60
days after the date of such damage or destruction. Upon any such termination, 
Landlord shall be entitled to retain all insurance proceeds, grossed up by 
Tenant to account for the deductible or any self-insured retention; provided, 
                                                                    ---------
however, that, Tenant shall be entitled to retain or receive all insurance 
-------
proceeds relating to (i) Tenant's Personal Property, (ii) Tenant Improvements 
and (iii) subject to the inclusion in Course Revenue. Tenant's business 
interruption insurance.

                                      24
<PAGE>
 
                           ARTICLE 15 - CONDEMNATION
                           -------------------------

          15.1   Total Taking.  If at any time during the Term the Leased 
                 ------------
Property is totally and permanently taken by Condemnation, this Lease shall 
terminate on the Date of Taking and Tenant shall promptly pay all outstanding 
rent and other charges through the date of termination.

          15.2   Partial Taking.  If a portion of the Leased Property is taken 
                 --------------
by Condemnation, this Lease shall remain in effect if the Facility is not 
thereby rendered Unsuitable For Its Primary Intended Use, but if the Facility is
thereby rendered Unsuitable For Its Primary Intended Use, this Lease shall 
terminate on the Date of Taking.

          15.3   Restoration.  If there is a partial taking of the Leased 
                 -----------
Property and this Lease remains in full force and effect pursuant to Section 
                                                                     -------
15.2, Landlord at its cost shall accomplish all necessary restoration up to but 
----
not exceeding the amount of the Award payable to Landlord, as provided herein. 
If Tenant receives an Award under Section 15.4, Tenant shall repair or restore 
                                  ------------ 
any Tenant Improvements up to but not exceeding the amount of the Award payable 
to Tenant therefor.

          15.4   Award Distribution.  To entire Award shall belong to and be 
                 ------------------
paid to Landlord, except that, subject to the rights of the Facility Mortgagee, 
Tenant shall be entitled to receive from the Award, if and to the extent such 
Award specifically includes such items, a sum attributable to the value, if any,
of: (i) any Tenant Improvements and (ii) the leasehold interest of Tenant under 
this Lease; provided, however, that if the amount received by Landlord and the 
            ------------------
Facility Mortgagee is less than the Condemnation Threshold, then the amount of 
the Award otherwise payable to Tenant for the value of its leasehold interest 
under this Lease (and not any other funds of Tenant) shall instead be paid over 
to Landlord up to the amount of the shortfall.

          15.5   Temporary Taking.  The taking of the Leased Property, or any 
                 ----------------
part thereof, by military or other public authority shall constitute a taking by
Condemnation only when the use and occupancy by the taking authority has 
continued for longer than six months. During any such six month period, which 
shall be a temporary taking, all the provisions of this Lease shall remain in 
full force and effect with no abatement of rent payable by Tenant hereunder. In 
the event of any such temporary taking, the entire amount of any such Award made
for such temporary taking allocable to the Term of this Lease, whether paid by 
way of damages, rent or otherwise, shall be paid to Tenant, provided however 
that notwithstanding the preceding, to the extent that Tenant successfully 
prevails against the condemning authority on a claim that the Leased Property 
would have generated a given level of revenues which would have produced 
Additional Rent during the period of such taking, then the appropriate portion 
of the Award which is attributable to revenue that would have generated 
Additional Rent for said period shall be paid to Landlord, if due and payable, 
as Additional Rent.

                                      25
<PAGE>
 
                 (vi)   file a petition or answer seeking reorganization or 
                 arrangement under the Federal bankruptcy laws or any other
                 applicable law or statute of the United States of America or
                 any state thereof;

          (e)    if Tenant shall, on a petition in bankruptcy filed against it, 
          be adjudicated as bankrupt or a court of competent jurisdiction shall
          enter an order or decree appointing, without the consent of Tenant, a
          receiver of Tenant or of the whole or substantially all of its
          property, or approving a petition filed against it seeking
          reorganization or arrangement of Tenant under the federal bankruptcy
          laws or any other applicable law or statute of the United States of
          America or any state thereof, and such judgment, order or decree shall
          not be vacated or set aside or stayed within 60 days from the date of
          the entry thereof;

          (f)    if Tenant shall be liquidated or dissolved, or shall begin 
          proceedings toward such liquidation or dissolution;
          
          (g)    if the estate or interest of Tenant in the Leased Property or 
          any part thereof shall be levied upon or attached in any proceeding
          and the same shall not be vacated or discharged within the later of 90
          days after commencement thereof or 30 days after receipt by Tenant of
          notice thereof from Landlord (unless Tenant shall be contesting such
          lien or attachment in accordance with Article 12); provided, however,
                                                ----------   ------------------
          that such notice shall be in lieu of and not in addition to any notice
          required under applicable law;

          (h)    if, except as a result of damage, destruction or partial or 
          complete Condemnation or other Unavoidable Delays, Tenant voluntarily
          ceases operations on the Leased Property for a period in excess of 45
          consecutive days other than relating to the closure of up to nine
          holes at a time or the clubhouse in order for Tenant to carry out
          renovations so long as Tenant is diligently performing such
          renovations:

          (i)    any representation or warranty made by Tenant herein or in any 
          certificate, demand or request made pursuant hereto proves to be
          incorrect, now or hereafter, in any material respect and any adverse
          effect on Landlord of any such misrepresentation or breach of warranty
          has not been corrected to Landlord's satisfaction within 30 days after
          Tenant becomes aware of, or is notified by Landlord of the fact of,
          such misrepresentation or breach of warranty;

          (j)    with respect to any of the Other Property Leases, either an 
          Event of Default has occurred and is continuing or such leases have
          been terminated by reason of an Event of Default;

          (k)    if Tenant shall make a Distribution and shall have failed to 
          post the Distribution Letter of Credit if and as required by Section
                                                                       -------
          25.6 and such default continues for five days after written notice to
          ----
          Tenant; or

                                      27

<PAGE>
 
                        ARTICLE 16 - EVENTS OF DEFAULT
                        ------------------------------

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

          (a)    if Tenant shall fail to make payment of the Rent payable by 
          Tenant under this Lease when the same becomes due and payable and such
          failure is not cured by Tenant within a period of seven days after
          receipt by Tenant of notice thereof from Landlord; provided, however,
                                                             -----------------
          that such notice shall be in lieu of and not in addition to any
          notice required under applicable law;

          (b)    if Tenant shall fail to obtain, maintain or replace a Letter of
          Credit or a Distribution Letter of Credit as required by Article 25
                                                                   ----------
          and such default continues for three business days after written
          notice to Tenant;

          (c)    if, other than as a result of Unavoidable Delays, Tenant shall 
          fail to observe or perform any material term, covenant or condition of
          this Lease and such failure is not cured by Tenant within a period of
          30 days after receipt by Tenant of written notice thereof from
          Landlord, unless such failure cannot with due diligence be cured
          within a period of 30 days, in which case such failure shall not be
          deemed to continue if Tenant proceeds promptly and with due diligence
          to cure the failure and diligently completes the curing thereof;
          provided, however, that such notice shall be in lieu of and not in
          -----------------
          addition to any notice required under applicable law; provided
          further, however, that the cure period shall not extend beyond 30 days
          as otherwise provided by this Section 16.1(c) if the facts or
                                        ---------------
          circumstances giving rise to the default are creating a further harm
          to Landlord or the Leased Property and Landlord makes a good faith
          determination that Tenant is not undertaking remedial steps that
          Landlord would cause to be taken if this Lease were then to terminate.

          (d)    if Tenant shall:

                 (i)    admit in writing its inability to pay its debts 
                 generally as they become due,

                 (ii)   file a petition in bankruptcy or a petition to take 
                 advantage of any insolvency act,
          
                 (iii)  make an assignment for the benefit of its creditors,
               
                 (iv)   be unable to pay its debts as they mature.

                 (v)    consent to the appointment of a receiver of itself or of
                 the whole or any substantial part of its property, or

                                      26
<PAGE>
 
          (l)    if Tenant pays any Partner Distributions prior to the payment 
          of Rent currently owing under this Lease.

          THEN, Landlord may terminate this Lease by giving Tenant not less than
10 days' written notice (or no notice for clauses (d), (e) and (f) with respect 
to Tenant) of such termination and upon the expiration of the time fixed in such
notice, the Term shall terminate and all rights of Tenant under this Lease shall
cease. Landlord shall have all rights at law and in equity available to Landlord
as a result of Tenant's breach of this Lease.

          16.2   Payment of Costs.  Tenant shall, to the extent permitted by 
                 ----------------
law, pay as Additional Charges all costs and expenses incurred by or on behalf 
of Landlord, including reasonable attorneys' fees and expenses, as a result of 
any Event of Default hereunder.

          16.3   Exceptions.  No Event of Default (other than a failure to make 
                 ----------
payment of money or post a Letter of Credit, if required hereunder) shall be 
deemed to exist under clause (c) or clause (j) of Section 16.1 during any time 
                                                  ------------
the curing thereof is prevented by an Unavoidable Delay; provided that, upon the
                                                         -------------
cessation of such Unavoidable Delay, Tenant shall remedy such default without 
further delay.

          16.4   Certain Remedies.  If an Event of Default shall have occurred 
                 ----------------
(and the event giving rise to such Event of Default has not been cured within 
the curative period relating thereto as set forth in Section 16.1) and be 
                                                     ------------
continuing, whether or not this Lease has been terminated pursuant to Section 
                                                                      -------
16.1, Tenant shall, to the extent permitted by law, if required by Landlord so 
----
to do, immediately surrender to Landlord the Leased Property pursuant to the 
provisions of Section 16.1 and quit the same and Landlord may enter upon and 
              ------------
repossess the Leased Property by reasonable force, summary proceedings, 
ejectment or otherwise, and may remove Tenant and all other Persons and any and 
all Tenant's Personal Property from the Leased Property subject to any 
requirement of law.

          16.5   Damages.  None of (a) the termination of this Lease pursuant to
                 -------
Section 16.1, (b) the repossession of the Leased Property, (c) the failure of 
------------
Landlord, notwithstanding reasonable good faith efforts, to relet the Leased 
Property, (d) the reletting of all or any portion thereof, nor (e) the failure 
of Landlord to collect or receive any rentals due upon any such reletting, shall
relieve Tenant of its liability and obligations hereunder, all of which shall 
survive any such termination, repossession or reletting. In the event of any 
such termination, Tenant shall forthwith pay to Landlord all Rent due and 
payable with respect to the Leased Property to, and including, the date of such 
termination. Thereafter, Tenant shall forthwith pay to Landlord, at Landlord's 
option, as and for liquidated and agreed current damages for Tenant's default, 
either:

          (a)    the sum of:

                 (i)    the worth at the time of award of the unpaid Rent which 
                 had been earned at the time of termination,

                 (ii)   the worth at the time of award of the amount by which 
                 the unpaid Rent which would have been earned after termination
                 until the time of

                                      28
<PAGE>
 
               award exceeds the amount of such rental loss that Tenant proves
               could have been reasonably avoided,

               (iii)  the worth at the time of award of the amount by which the 
               unpaid Rent for the balance of the Term after the time of award
               exceeds the amount of such rental loss that Tenant proves could
               be reasonably avoided, and

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

          In making the above determinations, the worth at the time of the award
          shall be determined by the court having jurisdiction thereof using the
          San Francisco Federal Funds Rate plus one percent and the Additional
          Rent shall be deemed to be the same as for the then-current Fiscal
          Year or, if not determinable, the immediately preceding Fiscal Year,
          for the remainder of the Term, or such other amount as either party
          shall prove reasonably could have been earned during the remainder of
          the Term or any portion thereof; or

          (b)    without termination of Tenant's right to possession of the 
          Leased Property, each installment of said Rent and other sums payable
          by Tenant to Landlord under the Lease as the same becomes due and
          payable, which Rent and other sums shall bear interest at the Overdue
          Rate from the date when due until paid, and Landlord may enforce, by
          action or otherwise, any other term or covenant of this Lease.

          16.6   Additional Remedies.  Landlord has all other remedies that may 
                 -------------------
be available under applicable law.

          16.7   Appointment of Receiver.  Upon the entry of a court order that 
                 -----------------------
an Event of Default has occurred, Landlord shall be entitled, as a matter of 
right, to the appointment of a receiver or receivers acceptable to Landlord of 
the Leased Property and the Facility and of the revenues, earnings, income, 
products and profits thereof, pending such proceedings, with such powers as the 
court making such appointment shall confer.

          16.8   Waiver.  If this Lease is terminated pursuant to Section 16.1, 
                 ------                                           ------------ 
Tenant waives, to the extent permitted by applicable law (a) any right of 
redemption, re-entry or repossession and (b) any right to a trial by jury in the
event of summary proceedings to enforce the remedies set forth in this Article 
                                                                       -------
16.
--

          16.9   Application of Funds.  Any payments received by Landlord under 
                 --------------------
any of the provisions of this Lease during the existence or continuance of any 
Event of Default (and such payment is made to Landlord rather than Tenant due to
the existence of an Event of Default) shall be applied to Tenant's obligations 
in the order which Landlord may determine or as may be prescribed by the laws of
the State.

                                      29
<PAGE>
 
          16.10  Impounds.  Landlord shall have the right during the continuance
                 --------
of an Event of Default to require Tenant to pay to Landlord an additional 
monthly sum (each an "Impound Payment") sufficient to pay the Impound Charges 
                      ---------------
(as hereinafter defined) as they become due. As used herein, "Impound Charges" 
                                                              ---------------
shall mean real estate taxes on the Leased Property or payments in lieu thereof 
and premiums on any insurance required by this Lease. Landlord shall determine 
the amount of the Impound Charges and of each Impound Payment. The Impound 
Payments shall be held in a separate account and shall not be commingled with 
other funds of Landlord and interest thereon shall be held for the account of 
Tenant. Landlord shall apply the Impound Payments to the payment of the Impound 
Charges on their respective due dates. Any Impound Payments which have not been 
applied to Impound Charges shall be released to Tenant six months after the
Event of Default is cured without any reoccurring Event of Default. If at any
time the Impound Payments theretofore paid to Landlord shall be insufficient for
the payment of the Impound Charges, Tenant, within 10 days after Landlord's
demand therefor, shall pay the amount of the deficiency to Landlord.

            ARTICLE 17 - LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT
            ------------------------------------------------------

          If Tenant shall fail to make any payment or to perform any act 
required to be made or performed under this Lease, and to cure the same within 
the relevant time periods provided in Section 16.1, Landlord, after notice to 
                                      ------------  
and demand upon Tenant, and without waiving or releasing any obligation or 
default, may (but shall be under no obligation to) at any time thereafter make 
such payment or perform such act for the account and at the expense of Tenant. 
Landlord may, to the extent permitted by law, enter upon the Leased Property for
such purpose and take all such action thereon as, in Landlord's opinion, may be 
necessary or appropriate therefor. No such entry shall be deemed an eviction of 
Tenant. All sums so paid by Landlord and all costs and expenses (including 
reasonable attorneys' fees and expenses, to the extent permitted by law) so 
incurred, together with a late charge thereon at the Overdue Rate from the date 
on which such sums or expenses are paid or incurred by Landlord, shall be paid 
by Tenant to Landlord on demand. The obligations of Tenant and rights of 
Landlord contained in this Article 17 shall survive the expiration or earlier 
                           ---------- 
termination of this Lease.

                        ARTICLE 18 - LEGAL REQUIREMENTS
                        -------------------------------

          Subject to Article 12 regarding permitted contests, Tenant, at its 
                     ----------
expense, shall promptly (a) comply with all Legal Requirements and Insurance 
Requirements in respect of the use, operation, maintenance, repair and 
restoration of the Leased Property, whether or not compliance therewith shall 
require structural changes in any of the Leased Improvements or interfere with 
the use and enjoyment of the Leased Property; and (b) procure, maintain and 
comply with all licenses and other authorizations required for any use of the
Leased Property then being made, and for the proper erection, installation,
operation and maintenance of the Leased Property or any part thereof.

                           ARTICLE 19 - HOLDING OVER
                           -------------------------

          If Tenant shall for any reason remain in possession of the Leased 
Property after the expiration of the Term or earlier termination of the Term 
hereof, such possession shall be as a month-to-month tenant during which time 
Tenant shall pay as rental each month. 150% of

                                      30
<PAGE>
 
the aggregate of (i) one-twelfth of the aggregate Base Rent and Additional Rent
payable with respect to the last Fiscal Year of the preceding Term; (ii) all 
Additional Charges accruing during the month; and (iii) all other sums, if any, 
payable by Tenant pursuant to the provisions of this Lease with respect to the 
Leased Property. During such period of month-to-month tenancy, Tenant shall be 
obligated to perform and observe all of the terms, covenants and conditions of 
this Lease, but shall have no rights hereunder other than the right, to the 
extent given by law to month-to-month tenancies, to continue its occupancy and 
use of the Leased Property. Nothing contained herein shall constitute the 
consent, express or implied, of Landlord to the holding over of Tenant after the
expiration or earlier termination of this Lease.

                           ARTICLE 20 - RISK OF LOSS
                           -------------------------

          During the Term of this Lease, the risk of loss or of decrease in the 
enjoyment and beneficial use of the Leased Property as a consequence of the 
damage or destruction thereof by fire, the elements, casualties, thefts, riots, 
wars or otherwise, or in consequence of foreclosures, attachments, levies or 
executions (other than by Landlord or Landlord's employees, authorized agents or
contractors, and those claiming from, through or under Landlord) is assumed by 
Tenant. In the absence of Landlord's negligence (and subject to Article 8), acts
                                                                --------- 
of Landlord or Landlord's employees, authorized agents or contractors, or those 
claiming from, through or under Landlord, or breach of this Lease by Landlord, 
which in any of the foregoing cases causes such loss or decrease in the 
enjoyment and beneficial use of the Leased Property, (i) Landlord shall in no 
event be answerable or accountable for any of the events mentioned in the first 
sentence of this Article 20 and (ii) none of such events shall entitle Tenant 
                 ----------
to any abatement of Rent except as otherwise provided in the Lease.

                         ARTICLE 21 - INDEMNIFICATION
                         ----------------------------

          21.1   Tenant's Indemnification of Landlord.  Subject to Article 8, 
                 ------------------------------------              ---------   
Tenant will protect, indemnify, save harmless and defend Landlord from and 
against all liabilities, obligations, claims, damages, penalties, causes of 
action, costs and expenses (including reasonable attorneys' fees and expenses) 
(collectively, "Claims"), to the extent permitted by law, imposed upon or 
                ------
incurred by or asserted against Landlord by reason of:

          (a)  any accident, injury to or death of Persons or loss of or damage 
          to property occurring on or about the Leased Property or adjoining
          sidewalks during the Term of this Lease, including, but not limited
          to, any accident, injury to or death of Person or loss of or damage to
          property resulting from golf balls, golf clubs, golf shoes, lawn
          mowers or other gardening devices, golf carts, tractors or other
          motorized vehicles present on or adjacent to the Leased Property;

          (b)  any use, misuse, non-use, condition, maintenance or repair by 
          Tenant of the Leased Property;

          (c)  any Impositions (which are the obligations of Tenant to pay 
          pursuant to the applicable provisions of this Lease):

                                      31
<PAGE>
 
          (d)  any failure on the part of Tenant to perform or comply with any 
          of the terms of this Lease;

          (e)  the non-performance of any of the terms and provisions of any and
          all existing and future subleases of the Leased Property to be
          performed by the landlord (Tenant) thereunder;

          (f)  any Claims Landlord may incur or suffer as a result of any 
          permitted contest by Tenant pursuant to Article 12; and
                                                  ----------

          (g)  any Claims Landlord may incur or suffer in connection with the 
          Existing Instruments.

          21.2   Landlord's Indemnification of Tenant.  Subject to Article 8, 
                 ------------------------------------              ---------
Landlord shall protect, indemnify, save harmless and defend Tenant from and 
against all Claims imposed upon or incurred by, or asserted against Tenant as a 
result of (i) Landlord's or Landlord's employees, authorized agents' or 
contractors' negligence, or (ii) any acts of Landlord or Landlord's employees, 
authorized agents or contractors, or those claiming from, through or under 
Landlord (other than such acts which are authorized under the Lease or 
applicable law), or (iii) breach of this Lease by Landlord, including any Claims
Tenant may incur or suffer in connection with the Existing Instruments as a 
result of any breach of this Lease by Landlord.

          21.3   Mechanics of Indemnification.  As soon as reasonably 
                 ----------------------------
practicable after receipt by the indemnified party of notice of any liability or
claim incurred by or asserted against the indemnified party that is subject to 
indemnification under this Article 21, the indemnified party shall give notice 
                           ----------
thereof to the indemnifying party. The indemnified party may at its option 
demand indemnity under this Article 21 as soon as a claim has been made in 
                            ----------
writing by a third party, regardless of whether an actual loss has been 
suffered, so long as the indemnified party shall in good faith determine that 
such claim is not frivolous and that the indemnified party may be liable for, or
otherwise incur, a loss as a result thereof and shall give notice of such 
determination to the indemnifying party. The indemnified party shall permit the
indemnifying party, at its option and expense, to assume the defense of any such
claim by counsel selected by the indemnifying party and reasonably satisfactory 
to the indemnified party, and to settle or otherwise dispose of the same; 
provided, however, that the indemnified party may at all times participate in 
--------  -------
such defense at its expense; and provided further, however, that the 
                                 -------- -------  -------
indemnifying party shall not, in defense of any such claim, except with the
prior written consent of the indemnified party, consent to the entry of any
judgment or to enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff in question
to the indemnified party and its affiliates a release of all liabilities in
respect of such claims, or that does not result only in the payment of money
damages by the indemnifying party. If the indemnifying party shall fail to
undertake such defense within 30 days after such notice, or within such shorter
time as may be reasonable under the circumstances, then the indemnified party
shall have the right to undertake the defense, compromise or settlement of such
liability or claim on behalf of and for the account of the indemnifying party.

                                      32
<PAGE>
 
          21.4   Survival of Indemnification Obligations.  Tenant's or 
                 ---------------------------------------
Landlord's liability for a breach of the provisions of this Article 21 arising 
                                                            ----------     
during the Term hereof shall survive any termination of this Lease.

                    ARTICLE 22 - SUBLETTING AND ASSIGNMENT
                    --------------------------------------

          22.1   Prohibition Against Subletting and Assignment.  Subject to 
                 ---------------------------------------------
Section 22.3, Tenant shall not, without the prior written consent of Landlord 
------------
(which consent Landlord may grant or withhold in its sole and absolute 
discretion), assign, mortgage, pledge, hypothecate, encumber or otherwise 
transfer (except to an Affiliate of Tenant) the Lease or any interest therein, 
all or any part of the Leased Property or suffer or permit the Lease or the 
leasehold estate created hereby or thereby or any other rights arising under the
Lease to be assigned, transferred, mortgaged, pledged, hypothecated or 
encumbered, in whole or in part, whether voluntarily, involuntarily or by 
operation of law. For purposes of this Section 22.1, an assignment of the Lease 
                                       ------------ 
shall be deemed to include any Change of Control of Tenant, as if such Change of
Control were an assignment of the Lease. Notwithstanding the first sentence of
this Section 22.1, an assignment of this Lease in connection with the sale,
     ------------     
conveyance or other transfer of all or substantially all of the assets of Tenant
(whether by operation of law or otherwise) shall be treated as a Change in
Control (and therefore will be permitted if the requirements of Section 22.2.1
                                                                -------------- 
through Section 22.2.3 hereof are met).
        --------------

          22.2   Changes of Control.  A Control of Control requiring the consent
                 ------------------
of Landlord shall mean:

          (a)    the issuance and/or sale by Tenant or the sale by any 
          stockholder of Tenant of a Controlling interest in Tenant to a Person
          other than an Affiliate of Tenant, other than in either case a
          distribution to the public pursuant to an effective registration
          statement under the Securities Act of 1933, as amended (a "Registered
                                                                     ---------- 
          Offering");
          --------

          (b)    the sale, conveyance or other transfer of all or substantially 
          all of the assets of Tenant (whether by operation of law or
          otherwise), which may include a transfer of assignment of this Lease;

          (c)    any transaction pursuant to which Tenant is merged with or 
          consolidated into another entity (other than an entity owned and
          Controlled by an Affiliate of Tenant), and Tenant is not the surviving
          entity;

provided, however, that notwithstanding the foregoing any such transaction shall
-----------------
not be deemed a Change of Control if each of the following conditions are met:

                 22.2.1  Financial Covenants.  Unless a Distribution Letter of 
                         -------------------
     Credit in an amount specified in Section 25.6 is posted in favor of
                                      ------------
     Landlord concurrently with any such consolidation, merger, sale or
     conveyance, the Person formed by or surviving such transaction shall have
     (i) a Tangible Net Worth not less than $4,000.000 and (ii) a Fixed Charge
     Coverage Ratio of not less than 1.3 to 1.0 for four consecutive Fiscal
     Quarters.

                                      33
<PAGE>
 
                 22.2.2  Operating Standards.  The surviving entity shall 
                         -------------------
operate the Leased Property at a standard at least as high as that operated by 
Tenant prior to the Change of Control.

                 22.2.3  Commitment to the Golf Industry.  Immediately after 
                         -------------------------------
such consolidation, merger, sale or conveyance, the surviving entity and its 
Affiliates shall have not less than 20 total golf courses (or less if acceptable
to Landlord) under management or lease, which number shall be maintained for not
less than three years after the Change of Control.

          22.3   Subleases.
                 ---------

                 22.3.1  Permitted Subleases.  Tenant shall, without Landlord's 
                         -------------------
prior approval, be permitted to sublease portions of the Leased Property to 
concessionaires or licensees to:

          (a)    operate golf professionals' shops;

          (b)    operate golf driving ranges;

          (c)    provide golf lessons;

          (d)    operate restaurants;

          (e)    operate bars; and

          (f)    operate any other portions (but not the entirety) of the Leased
          Property customarily associated with or incidental to the operation of
          the Golf Course.

                 22.3.2  Terms of Sublease.  Each sublease of any of the Leased 
                         -----------------
     Property shall be subject and subordinate to the provisions of this Lease.
     No sublease made as permitted by Section 22.3.1 shall affect or reduce any
                                      --------------
     of the obligations of Tenant hereunder, and all such obligations shall
     continue in full force and effect as if no sublease had been made. No
     sublease shall impose any additional obligations on Landlord under this
     Lease.

                 22.3.3  Copies.  Tenant shall, within 10 days after the 
                         ------
     execution and delivery of any sublease permitted by Section 22.3.1, deliver
                                                         --------------
     a duplicate original thereof to Landlord.

                 22.3.4  Assignment of Rights in Subleases.  As security for 
                         ---------------------------------
     performance of its obligations under this Lease, Tenant hereby grants,
     conveys and assigns to Landlord all right, title and interest of Tenant in
     and to all subleases now in existence or hereinafter entered into for any
     or all of the Leased Property, and all extensions, modifications and
     renewals thereof and all rents, issues and profits therefrom. Landlord
     hereby grants to Tenant a license to collect and enjoy all rents and other
     sums of money payable under any sublease of any of the Leased Property;
     provided, however, that Landlord shall have the absolute right at any time
     after the occurrence and continuance

                                      34
<PAGE>
 
     of an Event of Default upon notice to Tenant and any subtenants to revoke
     said license and to collect such rents and sums of money and to retain the
     same. Tenant shall not (i) after the occurrence and continuance of an Event
     of Default, consent to, cause to allow any material modification or
     alteration of any of the terms, conditions or covenants of any of the
     subleases or the termination thereof, without the prior written approval of
     Landlord nor (ii) accept any rents (other than customary security deposits)
     more than 90 days in advance of the accrual thereof nor permit anything to
     be done, the doing of which, nor omit or refrain from doing anything, the
     omission of which, will or could be a breach of or default in the terms of
     any of the subleases.

                 22.3.5  Licenses, Etc.  For purposes of Sections 22.1, 22.3 and
                         -------------                   -----------------------
     22.5, subleases shall be deemed to include any licenses, concession
     ----
     arrangements, management contracts or other arrangements relating to the
     possession or use of all or any part of the Leased Property.

          22.4   Assignment.  No assignment shall in any way impair the 
                 ----------
continuing primary liability of Tenant hereunder, and no consent to any 
assignment in a particular instance shall be deemed to be a waiver of the 
prohibition set forth in Article 22. Any assignment shall be solely of Tenant's 
                         ----------
entire interest in this Lease. Any assignment or other transfer of all or any 
portion of Tenant's interest in the Lease in contravention of Article 22 shall 
                                                              ----------
be voidable at Landlord's option.

          22.5   REIT Limitations.  Anything contained in this Lease to the 
                 ----------------
contrary notwithstanding, Tenant shall not (i) sublet or assign the Leased 
Property or this Lease on any basis such that the rental or other amounts to be 
paid by the sublessee or assignee thereunder would be based, in whole or in 
part, on the income or profits derived by the business activities of the 
sublessee or assignee; (ii) sublet or assign the Leased Property or this Lease 
to any person that Landlord owns, directly or indirectly (by applying 
constructive ownership rules set forth in Section 856(d)(5) of the Code), a 10% 
or greater interest in; or (iii) sublet or assign the Leased Property or this 
Lease in any other manner or otherwise derive any income which could cause any 
portion of the amounts received by Landlord pursuant to this Lease or any 
sublease to fail to qualify as "rents from real property" within the meaning of 
Section 856(d) of the Code, or which could cause any other income received by 
Landlord to fail to qualify as income described in Section 856(c)(2) of the 
Code. The requirements of this Section 22.5 shall likewise apply to any further 
                               ------------
subleasing by any subtenant.

           ARTICLE 23 - OFFICER'S CERTIFICATES AND OTHER STATEMENTS
           --------------------------------------------------------

          23.1   Officer's Certificates.  At any time, and from time to time 
                 ----------------------
upon Tenant's receipt of not less than 10 days' prior written request by 
Landlord, Tenant will furnish to Landlord an Officer's Certificate certifying 
that:

          (a)    this Lease is unmodified and in full force and effect (or that 
          this Lease is in full force and effect as modified and setting forth
          the modifications);

          (b)    the dates to which the Rent has been paid:

                                      35
<PAGE>
 
                 22.2.2  Operating Standards.  The surviving entity shall
                         -------------------
     operate the Leased Property at a standard at least as high as that operated
     by Tenant prior to the Change of Control.

                 22.2.3  Commitment to the Golf Industry. Immediately after such
                         -------------------------------
     consolidation, merger, sale or conveyance, the surviving entity and its
     Affiliates shall have not less than 20 total golf courses (or less if
     acceptable to Landlord) under management or lease, which number shall be
     maintained for not less than three years after the Change of Control.

          22.3   Subleases.  
                 ---------

                 22.3.1  Permitted Subleases.  Tenant shall, without Landlord's 
                         -------------------
     prior approval, be permitted to sublease portions of the Leased Property to
     concessionaires or licensees to:

          (a)    operate golf professionals' shops;

          (b)    operate golf driving ranges;

          (c)    provide golf lessons;

          (d)    operate restaurants;

          (e)    operate bars; and

          (f)    operate any other portions (but not the entirety) of the Leased
          Property customarily associated with or incidental to the operation of
          the Golf Course.

                 22.3.2  Terms of Sublease.  Each sublease of any of the Leased 
                         -----------------
     Property shall be subject and subordinate to the provisions of this Lease.
     No sublease made as permitted by Section 22.3.1 shall affect or reduce any
                                      --------------
     of the obligations of Tenant hereunder, and all such obligations shall
     continue in full force and effect as if no sublease had been made. No
     sublease shall impose any additional obligations on Landlord under this
     Lease.

                 22.3.3  Copies.  Tenant shall, within 10 days after the 
                         ------
     execution and delivery of any sublease permitted by Section 22.3.1, deliver
                                                         --------------
     a duplicate original thereof to Landlord.
 
                 22.3.4  Assignment of Rights in Sublease.  As security for 
                         --------------------------------
     performance of its obligations under this Lease, Tenant hereby grants,
     conveys and assigns to Landlord all right, title and interest of Tenant in
     and to all subleases now in existence or hereinafter entered into for any
     or all of the Leased Property, and all extensions, modifications and
     renewals thereof and all rents, issues and profits therefrom. Landlord
     hereby grants to Tenant a license to collect and enjoy all rents and other
     sums of money payable under any sublease of any of the Leased Property;
     provided, however, that Landlord shall have the absolute right at any time
     after the occurrence and continuance

                                      34

<PAGE>
 
     of an Event of Default upon notice to Tenant and any subtenants to revoke
     said license and to collect such rents and sums of money and to retain the
     same. Tenant shall not (i) after the occurrence and continuance of an Event
     of Default, consent to, cause or allow any material modification or
     alteration of any of the terms, conditions or covenants of any of the
     subleases or the termination thereof, without the prior written approval of
     Landlord nor (ii) accept any rents (other than customary security deposits)
     more than 90 days in advance of the accrual thereof nor permit anything to
     be done, the doing of which, nor omit or refrain from doing anything, the
     omission of which, will or could be a breach of or default in the terms of
     any of the subleases.

               22.3.5  Licenses, Etc.  For purposes of Sections 22.1, 22.3 and
                       -------------                   -----------------------
     22.5, subleases shall be deemed to include any licenses, concession
     ----
     arrangements, management contracts or other arrangements relating to the
     possession or use of all or any part of the Leased Property.

          22.4 Assignment.  No assignment shall in any way impair the continuing
               ----------
primary liability of Tenant hereunder, and no consent to any assignment in a 
particular instance shall be deemed to be a waiver of the prohibition set forth 
in Article 22. Any assignment shall be solely of Tenant's entire interest in 
   ----------
this Lease. Any assignment or other transfer of all or any portion of Tenant's 
interest in the Lease in contravention of Article 22 shall be voidable at 
                                          ----------
Landlord's option.

          22.5 REIT Limitations.  Anything contained in this Lease to the 
               ----------------
contrary notwithstanding, Tenant shall not (i) sublet or assign the Leased 
Property or this Lease on any basis such that the rental or other amounts to be 
paid by the sublessee or assignee thereunder would be based, in whole or in 
part, on the income or profits derived by the business activities of the 
sublessee or assignee; (ii) sublet or assign the Leased Property or this Lease 
to any person that Landlord owns, directly or indirectly (by applying 
constructive ownership rules set forth in Section 856(d)(5) of the Code), a 10% 
or greater interest in; or (iii) sublet or assign the Leased Property or this 
Lease in any other manner or otherwise derive any income which could cause any 
portion of the amounts received by Landlord pursuant to this Lease or any 
sublease to fail to qualify as "rents from real property" within the meaning of 
Section 856(d) of the Code, or which could cause any other income received by 
Landlord to fail to qualify as income described in Section 856(c)(2) of the 
Code. The requirements of this Section 22.5 shall likewise apply to any further 
                               ------------
subleasing by any subtenant.

           ARTICLE 23 - OFFICER'S CERTIFICATES AND OTHER STATEMENTS
           --------------------------------------------------------

          23.1 Officer's Certificates.  At any time, and from time to time upon 
               ----------------------
Tenant's receipt of not less than 10 days' prior written request by Landlord, 
Tenant will furnish to Landlord an Officer's Certificate certifying that:

          (a)  this Lease is unmodified and in full force and effect (or that
          this Lease is in full force and effect as modified and setting forth
          the modifications);

          (b)  the dates to which the Rent has been paid;

                                      35
<PAGE>
 
          (c)  whether or not to the best knowledge of Tenant, Landlord is in
          default in the performance of any covenant, agreement or condition
          contained in this Lease and, if so, specifying each such default of
          which Tenant may have knowledge;

          (d)  that, except as otherwise specified, there are no proceedings
          pending or, to the knowledge of the signatory, threatened, against
          Tenant before or by any court or administrative agency which, if
          adversely decided, would materially and adversely affect the financial
          condition and operations of Tenant; and

          (e)  responding to such other questions or statements of fact as 
          Landlord shall reasonably request.

          Tenant's failure to deliver such statement within such time shall 
constitute an acknowledgment by Tenant that this Lease is unmodified and in full
force and effect except as may be represented to the contrary by Landlord, 
Landlord is not in default in the performance of any covenant, agreement or 
condition contained in this Lease and the other matters set forth in such 
request, if any, are true and correct. Any such certificate furnished pursuant 
to this Section 23.1 may be relied upon by Landlord.
        ------------

          23.2 Annual Financial Statements of Tenant.  Tenant will furnish to 
               -------------------------------------
Landlord, within 90 days after the end of Tenant's fiscal year, a copy of its 
audited consolidated balance sheet as of the end of such fiscal year, and
related audited consolidated statement of income and statement of cash flows for
such fiscal year (each with footnotes), prepared by a regional recognized
accounting firm approved by Landlord, provided that Landlord's approval shall
not be unreasonably withheld or delayed. The financial statements shall be
prepared in accordance with generally accepted accounting principles applied on
a basis consistently maintained throughout the period involved, except with
respect to such deviations as indicated in the notations to the financial
statements. All annual financial statements shall be accompanied by a
certificate of the Chief Financial Officer (or equivalent officer) of Tenant
delivered with such statements, stating (i) that the officer knows of no Event
of Default, or event which, upon notice or the passage of time or both, would
become an Event of Default, which has occurred and is continuing under this
Lease or, if any such event has occurred or is continuing, specifying the nature
and period of existence thereof and what action Tenant has taken or proposes to
take with respect thereto, and (ii) except as otherwise specified in such
certificate, that to the best of such officer's knowledge, Tenant has fulfilled
all of its obligations under this Lease which are required to be fulfilled on a
prior date to such certificate.

          23.3 Quarterly Financial Statements of Tenant.  Tenant will furnish to
               ----------------------------------------
Landlord, within 45 days after the end of each of the first three fiscal 
quarters of Tenant's fiscal year, a copy of its unaudited consolidated balance 
sheet as of the end of such fiscal quarter, and related unaudited consolidated 
statement of income and statement of cash flows for such fiscal quarter (each 
with footnotes), prepared in accordance with generally accepted accounting 
principles applied on a basis consistently maintained throughout the period 
involved (except with respect to such deviations as indicated in the notations 
to the financial statements) and certified as true and correct by the Chief 
Financial Officer (or equivalent officer) of Tenant. All quarterly financial 
statements shall be accompanied by a certificate of the Chief Financial Officer 
(or equivalent officer) of Tenant, delivered with such statements, stating (i) 
that the officer knows of no Event of Default, or event which, upon notice or 
the passage of time or both, would

                                      36
<PAGE>
 
become an Event of Default, which as occurred and is continuing under the Lease 
or, if any such event has occurred or is continuing, specifying the nature and 
period of existence thereof and what action Tenant has taken or proposes to take
with respect thereto, (ii) except as otherwise specified in such certificate, 
that to the best of such officer's knowledge. Tenant has fulfilled all of its 
obligations under the Lease which are required to be fulfilled on a prior date 
to such certificate, and (iii) Tenant's Tangible Net Worth and supporting
calculations.

          23.4 Monthly Course Statements.  Tenant will furnish to Landlord, 
               -------------------------
within 20 days after the end of each month during each fiscal year, a copy of 
its operating statements for the Property and each of the Other Leased
Properties which shall include, without limitation, profit and loss statements,
including departmental revenue and expense analysis including rounds data and
membership data prepared on a modified accrual basis in accordance with
generally accepted accounting principles, except for depreciation, taxes,
capitalized interest and corporate and certain expense allocations, applied on a
basis consistently maintained throughout the period involved. Significant
departures from modified accrual basis will be identified in balance sheet
analysis (i.e., accounts receivable, property, plant and equipment, capital
spending and capitalized interest).

          23.5 Annual Course Statements.  Tenant will furnish to Landlord within
               ------------------------
90 days after the end of its fiscal year a copy of its operating statements for 
the Property and each of the Other Leased Properties which shall include, 
without limitation, profit and loss statements, including departmental revenue 
and expense analysis including rounds data and membership data prepared on a 
modified accrual basis in accordance with generally accepted accounting 
principles, except for depreciation, taxes, capitalized interest and corporate 
and certain expense allocations, applied on a basis consistently maintained 
throughout the period involved. Significant departures from modified accrual 
basis will be identified in balance sheet analysis (i.e., accounts receivable, 
property, plant and equipment, capital spending and capitalized interest).

          23.6 Budgets.  Tenant shall furnish to Landlord copies of annual 
               -------
budgets, including monthly breakdowns for the Property and each of the Other 
Leased Properties no later than 30 days prior to the applicable fiscal year of 
Tenant. Such annual budgets shall include, without limitation, repairs, capital 
budgets and marketing plans for each of the Properties. If prepared by Tenant, 
Tenant shall also promptly deliver to Landlord any quarterly and annual 
reforecasts of the budgets.

          23.7 Environmental Statements.  Immediately upon Tenant's learning, or
               ------------------------
having reasonable cause to believe, that any Hazardous Material in a quantity 
sufficient to require remediation or reporting under applicable law is located 
in, on or under the Leased Property or any adjacent property, Tenant shall 
notify Landlord in writing of (a) any enforcement, cleanup, removal, or other 
governmental or regulatory action instituted, completed or threatened; (b) any 
claim made or threatened by any Person against Tenant or the Leased Property 
relating to damage, contribution, cost recovery, compensation, loss, or injury 
resulting from or claimed to result from any Hazardous Material; and (c) any 
reports made to any federal, state or local environmental agency arising out of 
or in connection with any Hazardous Material in or removed from the Leased 
Property, including any complaints, notices, warnings or asserted violations in 
connection therewith.

                                      37
<PAGE>
 
          23.8   Confidential Information.
                 ------------------------

          (a)  Except as otherwise provided in this Section 23.8, Landlord 
                                                    ------------   
agrees that all financial statements, budgets, reports, and business plans 
relating to Tenant (as opposed to golf course level information) (collectively, 
the "Information") shall be kept confidential and shall not be disclosed by 
     -----------     
Landlord to any other party (including without limitation, any affiliate of 
Landlord) without Tenant's prior written consent, which consent may be withheld 
at Tenant's sole discretion. Landlord agrees that (i) the Information shall be 
disclosed only to the officers, employees, authorized representatives of 
Landlord, prospective bona fide purchasers of the Leased Property and their 
authorized representatives who need access to the Information (all such persons 
hereinafter referred to as the "Authorized Representatives"), (ii) all of the 
                                --------------------------
Authorized Representatives shall be informed of the confidential nature of the 
Information and shall maintain the confidentiality of the Information as 
provided herein, and (iii) Landlord shall exercise the same degree of care to 
preserve the confidentiality of Information as Landlord and a reasonable prudent
person would to protect its own confidential information.

          (b)  If Landlord receives a request to disclose any Information
under subpoena or order, it shall (i) promptly notify Tenant thereof, (ii)
consult with Tenant on the advisability of taking steps to resist or narrow such
request, and (iii) if disclosure is required or deemed advisable, cooperate with
Tenant in any attempt that Tenant may make to obtain an order or other reliable 
assurance that confidential treatment will be accorded to designated portions of
the Information. Landlord shall be entitled to reimbursement for its expenses, 
including the fees and expenses of its counsel, in connection with action taken 
pursuant to this Section 23.8(b). If Landlord is required (by oral 
                 --------------
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar legal process) to disclose any Information
supplied to it in the course of its dealing with Tenant or its representatives.
Landlord shall provide Tenant with prompt notice of such request(s) so Tenant
may seek an appropriate protective order and/or waive Landlord's compliance with
the provisions of this Lease. If in the absence of a protective order or the
receipt of a waiver hereunder, Landlord is nonetheless, in the opinion of
Landlord's counsel, compelled to disclose any Information to any tribunal or
else stand liable for contempt or to suffer other censure or penalty, Landlord
may disclose such Information pursuant to such legal process without liability
hereunder.

          (c)  This Section 23.8 shall not apply to: (i) disclosures which legal
                    ------------
counsel for Landlord advises are reasonably necessary to meet reporting or 
disclosure requirements to which Landlord or its affiliates are subject, 
including reporting obligations under the Securities Exchange Act of 1934, as 
amended, (ii) Information which is publicly available or which is obtained by 
Landlord from third party sources other any person who Landlord would have 
reasonable basis to believe is bound by a confidentiality agreement with Tenant 
and (iii) disclosures in connection with an exercise by Landlord of remedies 
hereunder.


                       ARTICLE 24 - LANDLORD MORTGAGES 
                       -------------------------------

          24.1   Landlord may Grant Liens. Subject to Section 24.2, without the 
                 ------------------------             ------------    
consent of Tenant. Landlord may, from time to time, directly or indirectly, 
create or otherwise cause to exist any lien, encumbrance or title retention 
agreement ("Landlord's Encumbrance") upon the Leased Property, or any portion 
            ----------------------   
thereof or interest therein, whether to secure any borrowing

                                      38
     
<PAGE>
 
or other means of financing or refinancing. This Lease is and at all times shall
be subject and subordinate to any ground or underlying leases, mortgages, trust 
deeds or like encumbrances, which may now or hereafter affect the Leased 
Property and to all renewals, modifications, consolidations, replacements and 
extensions of any such lease, mortgage, trust deed or like encumbrance. This 
clause shall be self-operative and no further instrument of subordination shall 
be required by any ground or underlying lessor or by any mortgagee or 
beneficiary, affecting any lease or the Leased Property. In confirmation of such
subordination, Tenant shall execute promptly any certificate that Landlord may 
request for such purposes.

          24.2  Tenant's Non-Disturbance Rights. So long as Tenant shall pay all
                -------------------------------
Rent as the same becomes due and shall fully comply with all of the terms of 
this Lease and fully perform its obligations hereunder, none of Tenant's rights 
under this Lease shall be disturbed by the holder of any Landlord's Encumbrance 
which is created or otherwise comes into existence after the Commencement Date. 
Landlord shall obtain from any holder of a Landlord Encumbrance a nondisturbance
agreement in a form reasonably acceptable to such holder and shall deliver such 
nondisturbance agreement to Tenant. The nondisturbance agreement shall protect 
Tenant's possession and other rights under this Lease absent an Event of Default
by Tenant hereunder.

          24.3  Breach by Landlord. It shall be a breach of this Lease if 
                ------------------
Landlord shall fail to observe or perform any material term, covenant or 
condition of this Lease on its part to be performed or if Landlord shall have 
breached any material representation or warranty made by Landlord and such 
failure or beach shall continue for a period of 30 days after notice thereof 
from Tenant, unless such failure or breach cannot with due diligence be cured 
within a period of 30 days, in which case such failure or breach shall not be 
deemed to continue if Landlord, within said 30-day period, proceeds promptly and
with due diligence to cure the failure and diligently completes the curing 
thereof. The time within which Landlord shall be obligated to cure any such 
failure shall also be subject to extension of time due to the occurrence of any 
Unavoidable Delay.

          24.4  Facility Mortgage Protection. Tenant agrees that the holder of 
                ----------------------------
any Landlord Encumbrance shall have no duty, liability or obligation to perform 
any of the obligations of Landlord under this Lease, but that in the event of 
Landlord's default with respect to any such obligation, Tenant will give any 
such holder whose name and address have been furnished to Tenant in writing for 
such purpose notice of Landlord's default and allow such holder 30 days 
following receipt of such notice for the cure of said default before invoking 
any remedies Tenant may have by reason thereof.

                       ARTICLE 25 - FINANCIAL COVENANTS
                       --------------------------------

          25.1  Financial Covenants. Tenant shall post and maintain a Letter of 
                -------------------
Credit unless and until Tenant: (a) maintains a minimum Tangible Net Worth of at
least $4,000,000 or, following a Change in Control, $4,000.000 increased by the 
annual increase in the CPI (not to exceed four percent per annum) compounded 
annually from the Commencement Date to the date of such Change in Control; (b) 
maintains a Rent Coverage Ratio of not less than 1.25 to 1.0 for any period 
encompassing four consecutive Fiscal Quarters; (c) maintains a Fixed Charge 
Coverage Ratio of not less than 1.3 to 1.0  for any period encompassing four 
consecutive Fiscal Quarters; and (d) increases for the second Fiscal Year 
through and including the eighth Fiscal

                                      39
<PAGE>
 
Year the Tangible Net Worth (including within such definition for purposes of 
this Section 25.1(d) any loans to affiliates of Tenant) by an amount equal to at
     ---------------
least fifty percent (50%) of Tenant's positive net income on a consolidated 
basis after making distributions to Tenant's limited partners for the payment of
federal and state income taxes (collectively, the "Financial Covenants") in the 
                                                   -------------------
Letter of Credit Amount as provided in this Article 25 and subject to the 
                                            ----------
provisions set forth in the definition of "Letter of Credit Amount" in Exhibit A
                                           -----------------------     ---------
attached hereto. Tenant shall provide an Officer's Certificate to Landlord not 
later than 30 days after the end of each Fiscal Quarter of Tenant as to Tenant's
compliance or noncompliance with the Financial Covenants, which certificate 
shall include a calculation in reasonable detail of such compliance or 
noncompliance. In addition, Tenant shall set forth any Distribution or Partner 
Distribution to be made by Tenant.

          25.2  Provision of Letter of Credit. If any certificate delivered 
                -----------------------------
pursuant to Section 25.1 shall disclose that Tenant is not in compliance with 
            ------------
the Financial Covenants, Tenant shall deliver to Landlord a Letter of Credit 
within 30 days after the date of such certificate, but in no event after the end
of Tenant's subsequent Fiscal Quarter. Upon delivery of such new Letter of 
Credit to Landlord, no breach or default under this Lease shall arise as a 
result of Tenant's failure to meet the Financial Covenants. The Letter of Credit
shall be maintained and delivered to Landlord until such date as: (i) Tenant 
shall be in compliance with the Financial Covenants set forth in Section 25.1; 
                                                                 ------------
and (ii) there shall be no Event of Default hereunder.

          25.3  Terms of Letters of Credit. The Letter of Credit or Distribution
                --------------------------
Letter of Credit shall:

          (i) be an irrevocable standby letter of credit from a bank with a 
     long-term debt rating from each of Standard & Poor's and Moody's of
     investment grade naming Landlord (and/or any Facility Mortgagee if
     requested by Landlord) as beneficiary to secure Tenant's obligations
     hereunder and Tenant's or an Affiliate of Tenant's obligations under the
     Other Property Leases;

          (ii) have a stated amount equal to the Letter of Credit Amount or 
     Distribution LC Amount plus, if such letters of credit are intended to 
     satisfy Tenant's obligations under the Other Property Leases with Landlord,
     the amounts required under such other leases;

          (iii) have a term of not less than one year;

          (iv) provide that it will be honored upon a signed statement by 
     Landlord that Landlord is entitled to draw upon the letter of credit under 
     this Lease as a result of an Event of Default, and shall require no 
     signature or statement from any party other than Landlord;

          (v) provide that Landlord had given not less than three Business Day's
     notice to Tenant prior to submitting the Letter of Credit to the bank for 
     presentation; and

          (vi) permit multiple draws by providing that following the honor of 
     any drafts in an amount less than the aggregate stated amount of the Letter
     of Credit, the issuing 

                                      40
<PAGE>
 
     bank shall return the original letter of credit to Landlord and that 
     Landlord's rights as to the remaining stated amount of the Letter of Credit
     will not be extinguished.

          25.4  Draws Against Letters of Credit: Application of Proceeds. 
                --------------------------------------------------------
Landlord may draw against the Letter of Credit or the Distribution Letter of 
Credit upon any Event of Default in an amount equal to Landlord's reasonable 
estimate of its damages at the time of the draw, with a right to make future 
draws if such estimate proves to be inadequate. Landlord may apply any amounts 
drawn under such letters of credit to the satisfaction of any obligations owed 
to Landlord under this Lease or the Other Property Leases. Any proceeds from 
such letters of credit drawn but not so applied shall be held by Landlord as a 
security deposit and if not utilized to satisfy obligations owed to Landlord 
under the Lease or Other Property Leases shall be released to Tenant six months 
after the Event of Default is cured without any reoccurring Event of Default.

          25.5  Renewal of Letter of Credit. If the Letter of Credit shall 
                ---------------------------
expire at a time when the Letter of Credit is still required under Section 25.2,
                                                                   ------------
Tenant shall renew the Letter of Credit at least 30 days prior to its 
expiration. If Tenant shall fail to renew the Letter of Credit prior to such 
time, Landlord may draw against the same and hold the proceeds thereof as a 
security deposit until such time as Tenant shall renew the Letter of Credit. 
Landlord shall hold such security deposit in a separate account in trust for 
Tenant and shall account to Tenant for any interest earned thereon.

          25.6  Distributions by Tenant and
                 Other Credit Impairments
                 ---------------------------

                25.6.1 Posting of Distribution Letter of Credit. In addition to 
                       ----------------------------------------
     Tenant's obligation to post the Letter of Credit under Section 25.2 (but 
                                                            ------------
     subject to Section 25.8), if during the Term any of the following occurs:
                ------------

          (i) Tenant makes a Distribution and after giving effect to the 
          Distribution the Tangible Net Worth is less than $4,000,000; or

          (ii) a default by Tenant in any payment of principal or interest on 
          any obligations for borrowed money having a principal balance of 
          $250,000 or more in the aggregate (excluding obligations which are 
          limited in recourse to specific property of Tenant provided that such 
          property is not a substantial portion of the assets of Tenant), or in 
          the performance of any other provision contained in any instrument 
          under which any such obligation is created or secured (including the 
          breach of any covenant thereunder), if an effect of such default is 
          that the holder(s) of such obligation cause such obligation to become 
          due prior to its stated maturity; or

          (iii) a final, non-appealable judgment or judgments for the payment of
          money in excess of $250.000 in the aggregate not fully covered
          (excluding deductibles) by insurance shall be rendered against Tenant
          and the same shall remain undischarged, unvacated, unbounded, or
          unstayed for a period of 60 consecutive days; or

                                      41
<PAGE>
 
          (iv) if Tenant elects to post a Distribution Letter of Credit in lieu 
          of satisfying the financial covenants set forth in Section 22.2.1.
                                                             --------------

     THEN Tenant shall deliver to Landlord a Distribution Letter of Credit in a 
     stated amount equal to the Distribution LC Amount. Tenant shall deliver to 
     Landlord the Distribution Letter of Credit as required by clause (i) no 
     later than 10 Business Days prior to making such Distribution and as 
     required by clause (ii) or (iii) immediately upon the occurrence thereof.

                25.6.2 Cancellation or Reduction of Distribution Letter of 
                       ---------------------------------------------------
     Credit. The Distribution Letter of Credit shall be:
     ------

          (i)   surrendered to the issuing bank for cancellation upon such date 
                that (a) the Tangible Net Worth for two consecutive Fiscal
                Quarters exceeds $4,000,000, (b) no Event of Default shall have
                occurred during such Fiscal Quarters and (c) neither of the
                events set forth in clauses (ii) or (iii) of Section 25.6.1
                                                             --------------
                shall have occurred during such Fiscal Quarters.

          (ii)  surrendered to the issuing bank for adjustment to the 
                Distribution LC Amount which would then be applicable under 
                Section 25.6.1 upon such date that (a) the Tangible Net Worth 
                --------------
                equals an amount for two consecutive Fiscal Quarters such that a
                higher or lower Distribution LC Amount would then be applicable
                pursuant to Section 25.6.1; provided however that such
                            --------------
                Distribution LC Amount shall only be adjusted downward if (b) no
                Event of Default shall have occurred during such Fiscal Quarters
                and (c) neither of the events set forth in clauses (ii) or (iii)
                of Section 25.6.1 shall have occurred during such Fiscal
                   --------------
                Quarters.

                25.6.3 Renewal of Distribution Letter of Credit. If the 
                       ----------------------------------------
     Distribution Letter of Credit shall expire at a time when the Distribution 
     Letter of Credit is still required under Section 25.6, Tenant shall renew 
                                              ------------
     the Distribution Letter of Credit at least 30 days prior to its expiration.
     If Tenant shall fail to renew the Distribution Letter of Credit prior to 
     such time, Landlord may draw against the same and hold the proceeds thereof
     as a security deposit until such time as Tenant shall renew the 
     Distribution Letter of Credit. Landlord shall hold such security deposit in
     a separate account in trust for Tenant and shall account to Tenant for any 
     interest earned thereon.

          25.7  Liquidated Damages. The requirement for the delivery of a Letter
                ------------------
of Credit or Distribution Letter of Credit as required by Tenant under this 
Article 25 herein shall not create liquidated damages on behalf of Landlord for 
----------
a default by Tenant under this Article 25. Tenant shall be liable for Landlord's
                               ----------
actual damages calculated as of the time of the default caused by Tenant's 
failure to deliver and maintain the Letter of Credit or Distribution Letter of 
Credit as required under this Article 25.
                              ----------

          25.8  Letters of Credit Not Additive. Notwithstanding the other 
                ------------------------------
provisions of this Article 25, if Tenant is required by the terms of this Lease 
                   ----------
to provide and maintain a Letter of Credit and a Distribution Letter of Credit. 
Tenant will only be obligated to provide and 

                                      42
<PAGE>
 
maintain a letter of credit in the stated amount equal to the greater of the two
requirements and not the sum of the two requirements.

                          ARTICLE 26 - MISCELLANEOUS
                          --------------------------

          26.1  Landlord's Right to Inspect. Upon reasonable prior notice to 
                ---------------------------
Tenant, Tenant shall permit Landlord and its authorized representatives to 
inspect the Leased Property during usual business hours subject to any security,
health, safety or confidentiality requirements of Tenant or any governmental 
agency or insurance requirement relating to the Leased Property, or imposed by 
law or applicable regulations. Notwithstanding the foregoing, no prior notice to
Tenant shall be required for casual Landlord visits not imposing any 
unreasonable burdens upon Tenant. Landlord shall indemnify Tenant for all 
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be 
imposed on, incurred by, or asserted against Tenant by reason of Landlord's 
inspection pursuant to this Section 26.1.
                            ------------

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

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

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

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

          26.6  Conveyance by Landlord. If Landlord shall convey the Leased 
                ---------------------
Property in accordance with the terms hereof other than as security for a debt. 
Landlord shall, upon the written assumption by the transferee of the Leased 
Property of all liabilities and obligations of the Lease by released from all 
future liabilities and obligations under this Lease arising or accruing from and
after the date of such conveyance or other transfer as to the Leased Property. 
All such future liabilities and obligations shall thereupon be binding upon the 
new owner.

                                      43
<PAGE>
 
          26.7   Quiet Enjoyment. So long as Tenant shall pay all Rent as the 
                 ---------------
same becomes due and shall fully comply with all of the terms of this Lease and 
fully perform its obligations hereunder, Tenant shall peaceably and quietly 
have, hold and enjoy the Leased Property for the Term hereof, free of any claim 
or other action by Landlord or anyone claiming by, through or under Landlord, 
but subject to all liens and encumbrances contained in the title policy as of
the date hereof.

          26.8   Notices. All notices, demands, requests, consents, approvals 
                 -------
and other communications hereunder shall be in writing and delivered or mailed 
(by registered or certified mail, return receipt requested and postage prepaid),
addressed to the respective parties, as provided in the Basic Lease Provisions.

          26.9   Survival of Claims. Anything contained in this Lease to the 
                 ------------------
contrary notwithstanding, all claims against, and liabilities of, Tenant or 
Landlord arising prior to any date of termination of this Lease shall survive 
such termination.

          26.10  Invalidity of Terms of Provisions. If any term or provision of 
                 ---------------------------------
this Lease or any application thereof shall be invalid or unenforceable, the 
remainder of this Lease and any other application of such term or provision 
shall not be affected thereby.

          26.11  Prohibition Against Usury. If any late charges provided for in 
                 -------------------------
any provision of this Lease are based upon a rate in excess of the maximum rate 
permitted by applicable law, the parties agree that such charges shall be fixed 
at the maximum permissible rate.

          26.12  Amendments to Lease. Neither this Lease nor any provision 
                 -------------------
hereof may be changed, waived, discharged or terminated except by an instrument 
in writing and in recordable form signed by Landlord and Tenant.

          26.13  Successors and Assigns. All the terms and provisions of this 
                 ----------------------
Lease shall be binding upon and inure to the benefit of the parties hereto. All 
permitted assignees or sublessees shall be subject to the terms and provisions 
of this Lease.

          26.14  Titles. The headings in this Lease are for convenience of 
                 ------
reference only and shall not limit or otherwise affect the meaning hereof.

          26.15  Governing Law. This Lease shall be governed by and construed in
                 -------------
accordance with the internal laws of the State of California (but not including 
its conflict of laws rules).

          26.16  Memorandum of Lease. Landlord and Tenant shall, promptly upon 
                 -------------------
the request of either, enter into a short form memorandum of this Lease, in form
and substance satisfactory to Landlord and suitable for recording under the 
State, in which reference to this Lease, and all options contained herein, shall
be made. Tenant shall pay all costs and expenses of recording such Memorandum of
Lease.

          26.17  Attorneys' Fees. In the event of any dispute between the 
                 ---------------
parties hereto involving the covenants or conditions contained in this Lease or 
arising out of the subject matter

                                      44
<PAGE>
 
of this Lease, the prevailing party shall be entitled to recover against the 
other party reasonable attorneys' fees and court costs.

          26.18  Non-Resource as to Landlord. Anything contained herein to the 
                 ---------------------------
contrary notwithstanding, any claim based on or in respect of any liability of 
Landlord under this Lease shall be enforced only against the Leased Property and
not against any other assets, properties or funds of (a) Landlord, (b) any 
director, officer, general partner, limited partner, employee or agent of 
Landlord, or with respect to any general partner of Landlord, any of their 
respective general partners or stockholders (or legal representative, heir, 
estate, successor or assign of any thereof), (c) any predecessor or successor 
partnership or corporation (or other entity) of Landlord, or any of their 
respective general partners, either directly or through either Landlord or 
their respective general partners or any predecessor or successor partnership or
corporation or their stockholders, officers, directors, employees or agents (or 
other entity), or (d) any other Person affiliated with any of the foregoing, or 
any director, officer, employee or agent of any thereof.

          26.19  No Relationship. Landlord shall in no event be construed for 
                 ---------------
any purpose to be a partner, joint venture or associate of Tenant or of any 
subtenant, operator, concessionaire or licensee of Tenant with respect to the 
Leased Property or any of the Other Leased Properties or otherwise in the 
conduct of the respective business.

          26.20  Signs; Relating. During the last two (2) years of the Term, 
                 ---------------
Landlord shall have the right (i) to advertise the availability of the Leased 
Property for sale or reletting and to erect upon the Leased Property signs 
indicating such availability and (ii) to show the Leased Property to prospective
purchasers or tenants or their agents at such reasonable times as Landlord may 
elect.

          26.21  Golf Course Name. The Leased Property shall be known by such 
                 ----------------
trade name and/or trademark or logo as may from time to time be determined by 
Tenant, subject to Landlord's approval which shall not be unreasonably withheld.
Tenant may identify the Leased Property as a golf course managed and operated by
Tenant and may use Tenant's logo alone or in conjunction with other words or 
names or designs owned by Tenant or any of its Affiliates ("Tenant-Owned 
                                                            ------------ 
Names").                                                    
-----

          26.22  Judicial Reference. Landlord and Tenant agree to waive and give
                 ------------------
up the right to a jury trial and to submit all disputes, controversies,
differences, claims or demands, whether of fact or of law or both, relating to
or arising out of this contract, to be resolved at the request of any party, by
a trial on Order of Reference conducted by a retired judge or justice from the
panel of Judicial Arbitration & Medication Services, Inc. (JAMS) appointed
pursuant to the provisions of CCP (S) 638(1) or any amendment, addition or
successor section thereto to hear the case and report a statement of decision
thereon. The parties intend this general reference agreement to be specifically
enforceable in accordance with said section. The following procedures shall be
followed in any such reference:

                 26.22.1  Petition to Compel Reference. Any party seeking to 
                          ----------------------------
enforce the provision for reference contained in this agreement shall file a 
petition to enforce the reference agreement in any court of competent 
jurisdiction, or if an action has already been commenced

                                      45
<PAGE>
 
respecting any dispute covered by this reference agreement, a motion for 
reference pursuant to the provisions of CCP (S) 638.

                 26.22.2  Selection of Referee. The parties will attempt to 
                          --------------------
agree on a retired judge from the JAMS panel. If they are unable to agree, JAMS 
will provide a list of three available judges and each party may strike one 
name from the list. The remaining judge will serve as the referee (unless he or 
she is disqualified after appropriate objection pursuant to CCP (S)(S) 641 and 
642). If the parties strike the same judge, leaving two remaining judges, the 
parties will flip a coin. The winner of such coin flip shall strike one 
additional judge, leaving one remaining judge who will serve as the referee 
(unless he or she is disqualified after appropriate objection pursuant to CCP 
(S)(S) 641 and 642). If any referee is disqualified under CCP (S)(S) 641 and 
642, the foregoing process shall be repeated to select a new referee.

                 26.22.3  Prehearing Conference. The referee shall schedule a 
                          ---------------------
prehearing conference to reach agreement on procedural matters, arrange for the 
exchange of information, obtain stipulations, and attempt to narrow the issues.

                 26.22.4  Discovery. The parties will submit a proposed 
                          ---------
discovery schedule to the referee at the prehearing conference. All discovery 
methods (and sanctions and other remedies for noncompliance with same) available
to litigants under the Civil Discovery Act (CCP (S) 2016, et seq.) and means of 
production permitted under CCP (S) 1985, et seq. shall be available to parties
in such reference. Such discovery may include exchanges to expert trial witness
information pursuant to CCP (S) 2034. Absent other agreement by the parties, the
parties shall be afforded not less than two months and not more than four months
to complete discovery.

                 26.22.5  The Hearing.
                          -----------

                 (a)     Unless otherwise agreed by the parties, the hearing
                 shall commence within six months if the court's order for
                 reference.

                 (b)     The parties shall file briefs with the referee at least
                 three days before the hearing, specifying the facts each
                 intends to prove and analyzing the applicable law.

                 (c)     The parties shall have the right to representation by 
                 legal counsel throughout the reference proceedings.

                 (d)     California Evidence Code rules of evidence and 
                 procedure relating to the conduct of the hearing, examination
                 of witnesses, and presentation of evidence shall apply.

                 (e)     Any party desiring a stenographic record may secure a 
                 court reporter to attend the proceedings. The requesting party
                 must notify the other parties of the arrangements in advance of
                 the hearing and must pay for the cost incurred.

                                      46



<PAGE>
 
                 (f)     Any party may request oral evidence to be given under 
                 oath.

                 26.22.6  The Decision.
                          ------------

                 (a)     The referee shall issue a written statement of decision
                 which shall be reported to the court in accordance with CCP (S)
                 643 and mailed promptly to the parties.

                 (b)     Judgment may be entered on the decision of the referee 
                 in accordance with CCP (S) 644, and the decision may be
                 expected to, challenged and appealed according to law.

                 26.22.7  Fees and Expenses. The referee must award costs, 
                          -----------------
including reasonable attorneys fees, to the prevailing party, if any, and may 
order the referee's fees to be paid or shared by the parties in such manner as 
the referee deems just.

                 26.22.8  Extraordinary and Interim Relief. Notwithstanding the 
                          --------------------------------
foregoing, in the event that extraordinary or interim relief is necessary and no
referee has been appointed, Landlord or Tenant may resort to any court of 
competent jurisdiction for purposes of seeking such extraordinary or interim 
relief including an injunction. In the event it becomes necessary to file a 
legal action or proceeding to enforce this agreement, the prevailing party in 
such action or proceeding shall be entitled to recover all costs and expenses 
incurred in connection with such action or proceeding, including reasonable 
attorneys fees and courts costs.

                                      47
<PAGE>
 
                                   EXHIBIT A
                                   ---------

                         Defined Terms; Interpretation
                         -----------------------------

Defined Terms. For all purposes of this Lease, except as otherwise expressly 
-------------
provided or unless the context otherwise requires, the terms defined below have 
the meanings assigned to them below.

               Additional Charges: As defined in Section 3.4.
               ------------------                -----------

               Additional Rent: As defined in Basic Lease Provisions.
               ---------------

               Affiliate: As applied to any Person, means any other Person 
directly or indirectly controlling, controlled by, or under common control with,
that Person.

               Annual Base Rent: As defined in the Basic Lease Provisions.
               ----------------

               Applicable Percentage: As defined in the Basic Lease Provisions.
               ---------------------

               Award: Means all compensation, sums or anything of value awarded,
               -----
paid or received on a total or partial Condemnation.

               Base Rent: Means one-twelfth of the Annual Base Rent.
               ---------

               Basic Lease Provisions: The provisions so labelled starting on 
               ----------------------
page (i) of this Lease.

               Business Day: Each Monday, Tuesday, Wednesday, Thursday and 
               ------------
Friday which is not a day on which national banks in the City of New York, New 
York, are authorized, or obligated, by law or executive order, to close.

               Capital Improvement Account: Means a deposit account in the name 
               ---------------------------
of Tenant maintained in Texas with a major bank selected by Tenant.

               Change of Control: As defined in Section 22.2.
               -----------------                ------------

               Code: The Internal Revenue Code of 1986, as amended.
               ----

               Commencement Date: As defined in the Basic Lease Provisions.
               -----------------

               Condemnation: Means (a) the exercise of any governmental power, 
               ------------
whether by legal proceedings or otherwise, by a Condemnor, and (b) a voluntary 
sale or transfer by Landlord to any Condemnor, either under threat of 
condemnation or while legal proceedings for condemnation are pending.

               Condemnation Threshold. Means $6,700,00.
               ----------------------

                                      A-1




          
<PAGE>
 
          Condemnor:  Means any public or quasi-public authority, or private 
          ---------
corporation or individual, having the power of condemnation.

          Consumer Price Index:  Means the Consumer Price Index for all Urban 
          --------------------
Consumers for U.S. City Average.

          Control:  Means (including, with correlative meanings, the terms 
          -------
"controlling" and "controlled by"), as applied to any Person, the possession, 
directly or indirectly, of the power to direct or cause the direction of the 
management and policies of that Person, whether through the ownership of voting 
securities, by contract or otherwise.

          Course Cash Flow:  Means for any trailing twelve-month period, Total 
          ----------------     
Revenue minus the sum of: (a) the cost of goods sold, (b) all operating expenses
(including an administrative fee equal to 3% of Total Revenue, all lease costs 
and property taxes but excluding depreciation and amortization), (c) an amount 
for capital improvement reserves equal to 2% of Total Revenue and (d) a 
management fee/lease payment to an operator of the Facility equal to the 
following amounts for the respective Fiscal Year:

<TABLE> 
               <S>                                     <C> 
               first Fiscal Year (1996):               $ 50,000
               second Fiscal Year (1997):              $ 50,000
               third Fiscal Year (1998):               $100,000
               fourth Fiscal Year (1999):              $150,000
               fifth Fiscal Year (2000):               $175,000
               sixth Fiscal Year (2001) and each
                 Fiscal Year thereafter:               $225,000
</TABLE> 

provided that for the first 12 months after the Commencement Date, the "trailing
twelve-month period" shall be deemed to be the projections set forth in the
column "1997" in the final pro forma signed by Landlord and Tenant, a copy of
which is attached hereto as Exhibit I.
                            ---------

          Course Revenue:  Means all revenues received (whether by Tenant or any
          --------------
subtenants, concessionaires or licensees) from or by reason of the operation of 
the Facility, or any other use of the Leased Property, including revenues from 
memberships (to the extent the membership was sold on or after the Commencement 
Date), initiation fees (to the extent the membership was sold on or after the 
Commencement Date), dues, greens fees, fees to reserve a tee time, golf-related 
guest fees or golf cart rentals, golf-related surcharges, fees or other charges 
paid to Tenant by sponsors of golf tournaments at the Leased Property (unless 
the terms under which Tenant is paid by such sponsor do not comply with Section 
                                                                        -------
22.5. in which event the gross revenues received by such sponsor for the 
----
tournament shall be included in Course Revenue), proceeds released from the 
Holdback Account and paid to Tenant under the Holdback Agreement (as defined in 
Section 23 of the Basic Lease Provisions) and proceeds of any business 
----------
interruption or similar insurance actually received by Tenant; provided, 
                                                               --------
however, that Course Revenues shall not include:
-------

                                      A-2
<PAGE>
 
               (a)  Other Revenue;

               (b)  Cash refunds or credits allowed on returns by customers;

               (c)  The amount of any city, county, state or federal sales or
               excise tax on sales, which is both added to the selling price and
               paid to the taxing authority by Tenant; and the amount of any
               city, county, state, or federal admission tax or use tax, which
               is paid to the relevant taxing authority by Tenant;

               (d)  The actual uncollectible amount of any check or bank draft
               received by Tenant as payment for goods or services and returned
               to Tenant from a customer's bank as being uncollectible, but only
               after Tenant has made reasonable efforts to collect on the check;

               (e)  The actual uncollectible amount of any charge or credit
               account incurred by Tenant for the sale of merchandise or
               services; provided, however, that the credit was extended to the
                         --------  -------
               customer by Tenant, and that reasonable efforts to collect said
               account have been made;

               (f)  The actual uncollectible amount of any sale of merchandise
               or services for which Tenant accepted a credit card; provided,
                                                                    ---------
               however, that Tenant has made reasonable efforts to collect the
               -------
               debt after being notified by the issuing bank of the invalidity
               or uncollectibility of the charge;

               (g)  Interest or other charges paid by customers for extension of
               credit;

               (h)  Revenue or proceeds from sales or trade-ins of machinery,
               vehicles, trade fixtures or personal property used in connection
               with Tenant's operation of the Leased Property;

               (i)  The value of any merchandise, supplies or equipment
               exchanged or transferred from or to other locations or businesses
               of Tenant where such exchange or transfer is not made for the
               purpose of avoiding a sale which would otherwise be made from or
               at the Leased Property;

               (j)  Revenue, if any, from receipts in the form of refunds from
               or the value of merchandise, supplies or equipment returned to
               shippers, suppliers or manufacturers;

               (k)  Revenue, if any, from the amount of any cash or quantity 
               discounts received from sellers, suppliers or manufacturers;

               (l)  The amount of any gratuities paid or given by customers to
               or for employees of Tenant;

                                      A-3
<PAGE>
 
               (m)  Receipts from the sales of uniforms or clothing required to 
               be worn by employees;

               (n)  Revenues from charging employees for meals served or 
               provided to employees of Tenant;

               (o)  Receipts from the sale of waste or scrap materials resulting
               from Tenant's operations;

               (p)  Revenue received from any subtenant, concessionaire or
               licensee, inasmuch as the gross revenue received by such
               subtenant, concessionaire or licensee is otherwise included in
               the definition of Course Revenue or Other Revenue;

               (q)  Gross revenue received by any sponsor of a golf tournament
               at the Leased Property, provided that the terms under which
               Tenant is paid surcharges, fees or other charges by such sponsor
               comply with Section 22.5;
                           ------------

               (r)  Receipts from the sales of supplies or inventory by Tenant
               to subtenants, concessionaires, or licensees provided that such
               sales are at Tenant's cost of such supplies or inventories with
               no mark-up or premium; and

               (s)  Revenue received by any golf professional who is an employee
               at the Facility for golf instruction services at the Facility
               (excluding any golf school or golf seminar activities) provided
               that Tenant receives no fee, mark-up or premium for such 
               services.

          For purposes of this definition of Course Revenue, all references to 
Tenant in clauses (a) through (s) above shall also include any subtenants, 
concessionaires and licensees.

          Course Value:  Means Course Cash Flow multiplied by the following 
          ------------
multiples depending on the respective Fiscal Year:

               first Fiscal Year (1996):           10 X
               second Fiscal Year (1997):          10 X
               third Fiscal Year (1998):            9 X
               fourth Fiscal Year (1999):           8 X
               fifth Fiscal Year (2000):           7.5X
               sixth Fiscal Year (2001) and 
                 each Fiscal Year thereafter:      7  X

          Date of Taking:  Means the date the Condemnor has the right to 
          --------------
possession of the property being condemned.

                                     A-4

<PAGE>
 
          Distribution:  Means any dividend, distribution, stock repurchase, 
          ------------
recapitalization, affiliate loan or other similar transaction, other than 
payment of sums necessary for Tenant's limited partners to pay federal and state
income taxes on Tenant's consolidated net income as permitted under Section 21 
                                                                    ----------
of the Basic Lease Provisions, the effect of which is to reduce the Tangible Net
Worth.

          Distribution Letter of Credit:  Means a letter of credit which 
          -----------------------------
satisfies the requirements of Section 25.6.
                              ------------

          Distribution LC Amount:  Means the amount, if any, by which the Course
          ---------------------- 
Value is less than $6,700,000, but in any event the Distribution LC Amount shall
be not less than 12 months of Base Rent.

          Escalated:   Means, as to any dollar amount and any date of
          ----------
determination, such amount as increased annually by the annual increase in the
Customer Price Index from the month in which the Commencement Date occurs to
the month in which the date of determination occurs.

          Environmental Law:  Means all applicable statutes, regulations, rules,
          -----------------
ordinances, codes, licenses, permits, orders, demands, approvals, authorizations
and similar items of all governmental agencies, departments, commissions, 
boards, bureaus or instrumentalities of the United States, states and political 
subdivisions thereof and all applicable judicial, administrative and regulatory 
decrees, judgments and orders relating to the protection of human health or the 
environment as in effect on the Commencement Date or as thereafter amended, 
including but not limited to those pertaining to reporting, licensing, 
permitting, investigation, removal and remediation of emissions, discharges, 
releases or threatened releases of "Hazardous Materials," substances, 
pollutants, contaminants or hazardous or toxic substances, materials or wastes 
whether solid, liquid or gaseous in nature, into the air, surface water, ground 
water or land, or relating to the manufacture, processing, distribution, use, 
treatment, storage, disposal, transport or handling of substances, pollutants, 
contaminants or hazardous or toxic substances, materials, or wastes, whether 
solid, liquid or gaseous in nature, including: (x) the Comprehensive 
Environmental Response, Compensation and Liability Act (42 U.S.C. (S)(S) 9601 et
                                                                              --
seq.), the Resource Conservation and Recovery Act (42 U.S.C. (S)(S) 6901 et 
---                                                                      --
seq.), the Clean Air Act (42 U.S.C. (S)(S) 7401 et seq.), the Federal Water 
---                                             ------ 
Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Safe Drinking Water Act 
                                          ------  
(42 U.S.C. (S)(S) 300f et seq.), the Toxic Substances Control Act (15 U.S.C. 
                       ------
(S)(S) 2601 et seq.), the Endangered Species Act (16 U.S.C. (S)(S) 1531 et 
            ------                                                      --
seq.), the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.
---
(S)(S) 11001 et seq.), and (y) analogous state and local provisions.
             ------  

          Event of Default: As defined in Section 16.1.
          ----------------                ------------

          Existing Instruments:  Means: (i) the easements and other matters of 
          --------------------
record referenced in Schedule B to the Title Policy: (ii) the Holdback 
Agreement: and (iii) the Membership Agreements.

          Facility: As defined in the Basic Lease Provisions.
          --------

                                      A-5

<PAGE>
 
          Facility Mortgage:  As defined in Section 13.1.
          -----------------                 ------------

          Facility Mortgagee:  Means the holder or beneficiary of a Facility 
          ------------------
Mortgage, if any, and only to the extent Landlord gives Tenant notice of the 
identity and address of the Person.

          Financial Covenants: As defined in Section 25.1.
          -------------------                ------------

          Financial Quarter: The three-month periods (or applicable portions 
          -----------------
thereof) in any Fiscal Year from January 1 through March 31, April 1 through
June 30, July 1 through September 30 and October 1 through December 31.

          Fiscal Year: As defined in the Basic Lease Provisions.
          -----------

          Fixed Charge Coverage Ratio:  Means, for any period, the ratio of (A) 
          ---------------------------
the sum of, without duplication (i) consolidated net income of Tenant excluding 
any gains or losses in respect of dispositions plus (ii) provision for taxes 
plus (iii) consolidated interest expense (including non-cash interest payments 
or accruals and the interest component, if any, of lease obligations of Tenant 
and its subsidiaries) plus (iv) all lease and rent obligations (including 
percentage rent obligations) of Tenant and its subsidiaries plus (v) other 
non-cash charges deducted from consolidated revenues in determining net income 
for such period including depreciation and amortization (including amortization 
of intangibles), over (B) the sum of (i) consolidated interest expenses of 
Tenant and its subsidiaries for such period plus (ii) all lease and rent 
obligations (including percentage rent obligations) of Tenant and its 
subsidiaries for such period.

          Fixtures:  Means all permanently affixed equipment, machinery, 
          --------   
fixtures, and other items of real and/or personal property, including all 
components thereof, now and hereafter local in, on or used in connection with 
and permanently affixed to or incorporated into the Leased Improvements, 
including all furnaces, boilers, heaters, electrical equipment, heating, 
plumbing, lighting, ventilating, refrigerating, air and water pollution 
control, waste disposal, air-cooling and air-conditioning systems and apparatus,
sprinkler systems and fire and theft protection equipment, all of which, to the 
greatest extent permitted by law, are hereby deemed by the parties hereto to
constitute real estate, together with all replacements, modifications,
alterations and additions thereto, but specifically excluding all items included
within the category of Tenant's Personal Property and any Tenant Improvements.

          Full Replacement Cost: Means the actual replacement cost thereof from 
          ---------------------
time to time including increased cost of construction endorsement, less 
exclusions provided in the normal fire insurance policy.

          Hazardous Material:  Means any chemical substance.
          ------------------

               (i)  the presence of which requires investigation or remediation 
               under any federal, state or local statute, regulation, ordinance,
               order, action or policy, administrative request or civil
               complaint under any of the foregoing or under common law;

                                      A-6

<PAGE>
 
                (ii) which is defined as a "hazardous waste" or "hazardous
                substance" under any federal, state or local statute, regulation
                or ordinance or amendments thereto as in effect as of the
                Commencement Date, or as thereafter amended, including the
                Comprehensive Environmental Response, Compensation and Liability
                Act (42 U.S.C. (S)(S) 9601 et seq.) and/or the Resource
                                           ------
                Conservation and Recovery Act (42 U.S.C. (S)(S) 6901 et seq.);
                                                                     ------

                (iii) which is toxic, explosive, corrosive, flammable,
                infectious, radioactive, carcinogenic, mutagenic or otherwise
                hazardous and as of the Commencement Date, or as thereafter
                amended, is regulated by any governmental authority, agency,
                department, commission, board, or instrumentality of the United
                States, or any state or any political subdivision thereof having
                or asserting jurisdiction over the Leased Property;

                (iv) the presence of which on any of the Leased Property causes
                a nuisance upon such Leased Property or to adjacent properties
                or poses a hazard to the health or safety of persons on or about
                any of the Leased Property;

                (v) which, except as contained in building materials, contains
                gasoline, diesel fuel or other petroleum hydrocarbons,
                polychlorinated biphenyls (PCBs) or friable asbestos or friable
                asbestos-containing materials or urea formaldehyde foam
                insulation; or

                (vi) radon gas.

          Holdback Agreement: As defined in the Basic Lease Provisions.
          ------------------

          Impartial Appraiser: As defined in Section 13.2.
          -------------------                ------------

          Impositions: Means collectively:
          -----------

                (a)  all taxes (including all real and personal property, ad
                valorem, sales and use, single business, gross receipts,
                transaction privilege, rent or similar taxes);

                (b)  assessments and levies (including all assessments for
                public improvements or benefits, whether or not commenced or
                completed prior to the date hereof and whether or not to be
                completed within the Term);

                (c)  excises:

                (d)  fees (including license, permit, inspection, authorization
                and similar fees): and

                                      A-7
<PAGE>
 
                (e)  all other governmental charges;

          in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Leased Property 
and/or the Rent (including all interest and penalties thereon due to any failure
in payment by Tenant), which at any time during or in respect of the Term hereof
may be assessed or imposed on or in respect of or be a lien upon (i) Landlord or
Landlord's interest in the Leased Property; (ii) the Leased Property or any part
thereof or any rent therefrom or any estate, right, title or interest therein; 
or (iii) any operation, use or possession of, or sales from or activity 
conducted on or in connection with the Leased Property or the leasing or use of 
the Leased Property or any part thereof; provided, however, that Impositions 
                                         --------  -------
shall not include:

                (aa) any tax based on net income (whether denominated as an 
                income, franchise, capital stock or other tax) imposed 
                on Landlord or any other Person other than Tenant;

                (bb) any transfer, or net revenue tax of Landlord or any other 
                Person other than Tenant;

                (cc) any tax imposed solely with respect to the sale, exchange 
                or other disposition by Landlord of any Leased Property or the 
                proceeds thereof; or

                (dd) any tax imposed with respect to any principal or interest 
                on any indebtedness on the Leased Property.

          Impound Charges: As defined in Section 16.10.
          ---------------                -------------

          Impound Payment: As defined in Section 16.10.
          ---------------                -------------

          Initial Base Rent: As defined in the Basic Lease Provisions.
          -----------------

          Insurance Requirements: All terms of any insurance policy required by 
          ----------------------
this Lease and all requirements of the issuer of any such policy.

          Land: As defined in Article 1.
          ----                ---------

          Landlord: As defined in the preamble.
          --------

          Landlord's Encumbrance: As defined in Section 24.1.
          ----------------------                ------------

          Landlord's Personal Property: As defined in Article 1.
          ----------------------------                ---------

          Lease: As defined in the preamble.
          -----

          Leased Improvements: As defined in Article 1.
          -------------------                ---------

                                      A-8
<PAGE>
 
          Leased Property: As defined in Article 1.
          ---------------                ---------

          Legal Requirements: All federal, state, county, municipal and other 
          ------------------
governmental statutes, laws (including the Americans with Disabilities Act and 
any Environmental Laws), rules, orders, regulations, ordinances, judgments, 
decrees and injunctions affecting either the Leased Property or the 
construction, use or alteration thereof, whether now or hereafter enacted and in
force, including any which may (i) require repairs, modifications or alterations
in or to the Leased Property; (ii) in any way adversely affect the use and 
enjoyment thereof, and all permits, licenses and authorizations and regulations
relating thereto, and all covenants, agreements, restrictions and encumbrances 
contained in any instruments, either of record or known to Tenant (other than 
encumbrances created by Landlord without the consent of Tenant), at any time in 
force affecting the Leased Property; or (iii) require the cleanup or other 
treatment of any Hazardous Material.

          Letter of Credit: Means a letter of credit which satisfies the 
          ----------------
requirements of Section 25.3 and 25.4.
                ------------     ----

          Letter of Credit Amount: Means, for any Fiscal Year, an amount equal 
          -----------------------
to one year of Base Rent for such Fiscal Year. Notwithstanding the previous 
sentence, if Tenant is not required to post the Letter of Credit because Tenant 
has satisfied the Financial Covenants in accordance with Section 25.1, and 
                                                         ------------
thereafter Tenant fails to satisfy the Financial Covenants in accordance with 
Section 25.1 such that Tenant is required to re-post the Letter of Credit, the 
------------
Letter of Credit Amount shall be reduced from an amount equal to one year of 
Base Rent to an amount equal to six months of Base Rent as long as: (i) the Rent
Coverage Ratio is not less than 1.25 to 1.0: and (ii) the Fixed Charge Coverage 
Ratio is greater than 1.1 to 1.0.

          Membership Agreements: As defined in the Basic Lease Provision.
          ---------------------

          Net From Operations: Means, for any period, Total Revenue minus the 
          -------------------
sum of: (a) the cost of goods sold at the Leased Property, plus (b) all 
operating expenses (including all equipment and capital lease costs, property
taxes and corporate administrative expenses of Tenant in an amount equal to four
percent of the Total Revenue, but excluding Rent, Capital Expenditures and
depreciation) associated with the operation of the Leased Property.

          Officer's Certificate: A certificate of Tenant signed by an officer 
          ---------------------
authorized to so sign by the board of directors or by-laws.

          Other Leased Properties: Mean the properties leased to Tenant or an 
          -----------------------
Affiliate of Tenant by Landlord or an Affiliate of Landlord, and listed on 
Exhibit C attached hereto.
---------

          Other Property Leases: Mean the other leases entered into between 
          ---------------------
Landlord or an Affiliate of Landlord and Tenant or an Affiliate of Tenant 
relating to Tenant's use of the Other Leased Properties.

          Other Revenue: Means all revenue received (whether by Tenant or any 
          -------------
subtenants, concessionaires or licensees) from or by reason of the Leased 
Property relating to (i) the operation of snack bars, restaurants, bars and 
banquet operations, (ii) golf and tennis 

                                      A-9
<PAGE>
 
professionals' shops on the Leased Property, (iii) parking, (iv) fitness 
centers, (v) tennis facilities, (vi) day care, (vii) non-golf related guest fees
and related surcharges, (viii) locker rentals, (ix) bag storage, (x) video 
games, (xi) vending machines and (xii) fees or other charges paid to Tenant by 
providers of golf lessons (unless the terms under which Tenant is paid by such 
provider do not comply with Section 22.5, in which event the gross revenue 
                            ------------
received by such provider shall be included in Other Revenue); but excluding: 
                                                               -------------
(1) the items described in clauses (b) through (s) of the definition of Course 
Revenue (for purposes of this definition of Other Revenue, all references to
Tenant in clauses (a) through (s) of the definition of Course Revenue shall also
include any subtenants, concessionaires and licensees) and (2) gross revenue
received by any provider of golf lessons, provided that the terms under which
Tenant is paid fees or other charges by such provider comply with Section 22.5.
                                                                  ------------

          Overdue Rate: On any date, a rate equal to 2 1/2% above the Prime
          ------------
Rate, but in no event greater than the maximum rate then permitted under
applicable law.

          Partner Distributions: As defined in the Basic Lease Provision.
          ---------------------

          Person: Means and includes natural persons, corporations, limited 
          ------
partnerships, general partnerships, joint stock companies, joint ventures, 
associations, companies, trusts, banks, trust companies, land trusts, business 
trusts, Indian tribes or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.

          Primary Intended Use: Means the operation of a public golf course, 
          --------------------
consisting of the Facility, and other activities customarily associated with or 
incidental to the operation of the Facility, including, without limitation, sale
or rental of golf-related merchandise at a golf professional's shop, furnishing 
of lessons by a golf professional, operation of a driving range, operation of a 
clubhouse and restaurant, and sale of food and beverages, including liquor 
sales.

          Prime Rate: On any date, a rate equal to the annual rate on such date 
          ----------
announced by Citibank, N.A. to be its prime rate or base rate for 90-day
unsecured loans to its corporate borrowers of the highest credit standing but in
no event greater than the maximum rate then permitted under applicable law.

          Programs: As defined in Section 3.7.2.
          --------                -------------

          Purchase Agreement: As defined in the Basic Lease Provisions.
          ------------------

          Related Rights: As defined in Article 1.
          --------------                ---------

          Rent: Collectively, the Base Rent, Additional Rent and Additional 
          ----
Charges, as defined in Article 3.
                       ---------

          Rent Coverage Ratio: Means, for any period, the ratio of (A) Net From 
          -------------------
Operations over (B) Rent for such period.

          Replacement Water Rights: Means Water Rights that provide water supply
          ------------------------
and transportation at a quantity, price and priority which at the time of their 
acquisition are not less 

                                     A-10

<PAGE>
 
favorable in any material respect to the holder of the Water Rights than the 
quantity, price and priority of the Water Rights which will be replaced by such 
Replacement Water Rights.

          State: The State or Commonwealth in which the Leased Property is 
          -----
located.

          Tangible Net Worth: Means the total book value of the assets of Tenant
          ------------------
(on a consolidated basis) (excluding intangibles, goodwill, patents, trademarks,
trade names, organizational expense and loans to affiliates) less all 
liabilities.

          Tenant: As defined in the preamble.
          ------

          Tenant Improvement: As defined in Section 10.1
          ------------------                ------------

          Tenant's Original Water Rights: As defined in Section 6.7.2.
          ------------------------------                -------------

          Tenant-Owned Names: As defined in Section 26.21.
          ------------------                -------------

          Tenant's Personal Property: All machinery, equipment, furniture, 
          --------------------------
furnishings, movable walls or partitions, phone system, computers or trade 
fixtures or other personal property, and consumable inventory and supplies, 
owned by Tenant and used or useful in Tenant's business on the Leased Property, 
including all items of furniture, furnishings, equipment, supplies and 
inventory, kitchen fixtures, bar equipment, flatware, lawn mowers and other 
gardening tools, tractors and other motorized vehicles and golf carts.

          Tenant's Properties: As defined in Section 3.7.1.
          -------------------                -------------

          Term: As defined in the Basic Lease Provisions.
          ----

          Title Policy: As defined in the Basic Lease Provisions.
          ------------

          Total Revenue: Course Revenue plus Other Revenue.
          -------------

          Unavoidable Delays: Delays due to strikes, lockouts, inability to 
          ------------------
procure materials, power failure, acts of God, earthquake, governmental 
restrictions, enemy action, civil commotion, fire, unavoidable casualty or other
causes beyond the control of the party responsible for performing an obligation 
hereunder, provided that lack of funds shall not be deemed a cause beyond the 
           -------------
control of either party hereto unless such lack of funds is caused by the 
failure of the other party hereto to perform any obligations of such party, 
under this Lease.

          Unsuitable For Its Primary Intended Use: A state or condition of the 
          ---------------------------------------
Facility such that in the good faith judgment of Tenant, reasonably exercised, 
the Facility cannot be operated on a commercially practicable basis for its 
Primary Intended Use.

          Water Rights: Means any rights for the supply or transportation of 
          ------------
water to the Leased Property owned from time to time by Landlord or Tenant, 
including Tenant's Original Water Rights and the Replacement Water Rights.

                                     A-11
<PAGE>
 
          Interpretation. The foregoing defined terms include the plural as well
          --------------
as the singular. "Including" and variants thereof shall be deemed to mean 
"including without limitation."  All accounting terms not otherwise defined 
herein have the meanings assigned to them in accordance with generally accepted 
accounting principles as at the time applicable. All references in this Lease to
designated "Articles," "Sections" and other subdivisions are to the designated 
Articles, Sections and other subdivisions of the Detailed Lease Provisions 
unless otherwise indicated. The words "herein," "hereof" and "hereunder" and 
other words of similar import refer to this Lease as a whole and not to any 
particular Article, Section or other subdivision.

                                     A-12