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                                                                   EXHIBIT 10.26


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                                LEASE AGREEMENT



                                    BETWEEN



                 CANYON RANCH - BELLEFONTAINE ASSOCIATES, L.P.,
                         A DELAWARE LIMITED PARTNERSHIP



                                      AND



                              VINTAGE RESORTS, LLC



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                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                                     Page
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<S>                                                                                                                    <C>
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         Demise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

ARTICLE II  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         Leased Property.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4

ARTICLE IV  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         4.1     Base Rent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         4.2     Percentage Rent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         4.3     Additional Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
         4.4     Net Lease Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
         4.5     Place and Manner of Payment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         4.6     Late Charge  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8

ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         Quiet Enjoyment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8

ARTICLE VI  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         6.1     Payment of Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         6.2     Notice of Impositions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         6.3     Adjustment of Impositions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         6.4     Utility Charges  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         6.5     Insurance Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         6.6     Definition of Impositions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9

ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
         7.1     Condition of the Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
         7.2     Use of the Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         7.3     Lessor to Grant Easements, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         7.4     Operating Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         7.5     FF&E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         7.6     Lessee's Obligation to Manage  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         7.7     Net Worth  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         7.8     Ownership  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         7.9     Limitation on Distributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
</TABLE>





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<TABLE>
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         7.10    Working Capital  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         7.11    Use of Facilities by Lessor  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

ARTICLE VIII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         8.1     Compliance with Legal and Insurance Requirements, Etc  . . . . . . . . . . . . . . . . . . . . . . .  14
         8.2     Legal Requirement Covenants  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         8.3     Environmental Matters and Indemnities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

ARTICLE IX  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         9.1     Maintenance and Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         9.2     Encroachments, Restrictions, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

ARTICLE X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         Alterations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

ARTICLE XI  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         Liens  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

ARTICLE XII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         Permitted Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

ARTICLE XIII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         13.1    General Insurance Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         13.2    Replacement Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         13.3    Worker's Compensation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         13.4    Waiver of Subrogation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         13.5    Form Satisfactory, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         13.6    Increase in Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

ARTICLE XIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         14.1    Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         14.2    No Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         14.3    Damage During Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

ARTICLE XV  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         15.1    Definitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         15.2    Parties' Rights and Obligations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         15.3    Total Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         15.4    Allocation of Award  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         15.5    Partial Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         15.6    Temporary Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
</TABLE>





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<TABLE>
<CAPTION>
                                                                                                                     Page
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<S>                                                                                                                    <C>
ARTICLE XVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         16.1    Events of Default  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         16.2    Surrender  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         16.3    Damages  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         16.4    Application of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

ARTICLE XVII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
         Lessor's Right to Cure Lessee's Default  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

ARTICLE XVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27

ARTICLE XIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27

ARTICLE XX  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         Indemnification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27

ARTICLE XXI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
         Subletting and Assignment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28

ARTICLE XXII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
         Officer's Certificates; Financial Statements; Lessor's Estoppel
         Certificates and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29

ARTICLE XXIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
         Lessor's Right to Inspect  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29

ARTICLE XXIV  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         No Waiver  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30

ARTICLE XXV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         Remedies Cumulative  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30

ARTICLE XXVI  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         Acceptance of Surrender  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30

ARTICLE XXVII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         No Merger of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30

ARTICLE XXVIII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         Conveyance by Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
</TABLE>





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ARTICLE XXIX  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
         Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31

ARTICLE XXX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
         Appraisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31

ARTICLE XXXI  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         31.1    Lessor May Grant Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         31.2    Breach by Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32

ARTICLE XXXII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         32.1    Miscellaneous  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         32.2    Transfer of Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         32.3    Waiver of Presentment, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33

ARTICLE XXXIII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         Memorandum of Lease  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33

ARTICLE XXXIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         Compliance with Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34

ARTICLE XXXV  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34

ARTICLE XXXVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         36.1    REIT Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         36.2    Personal Property Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         36.3    Sublease Rent Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
         36.4    Sublease Tenant Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
         36.5    Lessee Ownership Limitation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35

ARTICLE XXXVII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
         Lessor's Option to Terminate Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
</TABLE>


SIGNATURES

EXHIBIT "A"      Legal Description of Leased Property

EXHIBIT "B"





                                      (iv)
<PAGE>   6
                                LEASE AGREEMENT


         THIS LEASE AGREEMENT (this "Lease") is made and entered into as of the
11th day of December, 1996, by and between CANYON RANCH - BELLEFONTAINE
ASSOCIATES, L.P., a Delaware limited partnership ("Lessor"), and VINTAGE
RESORTS, LLC ("Lessee").


                              W I T N E S S E T H:

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

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

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


                                   ARTICLE I

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


                                   ARTICLE II

         Leased Property.  The Leased Property is comprised of those certain
tracts or parcels of land situated in Lenox, Massachusetts, which are more
particularly described in Exhibit "A" attached hereto and made a part hereof
for all purposes, together with all and singular the rights and appurtenances
pertaining to such tracts and parcels, including any right, title and interest
of Lessor in and to adjacent strips or gores, streets, alleys or rights-of-way
and all rights of ingress and egress thereto (the foregoing properties are
hereinafter referred to collectively as the "Land").  The Leased Property shall
also include all buildings, fixtures and other improvements on the Land,
including specifically, without limitation, various guest and spa facilities,
and such other buildings and improvements as are located thereon, all of which
are commonly known as "Canyon Ranch in the Berkshires."  The Land, together
with the foregoing improvements, is hereinafter referred to as the "Resort."
The Leased Property shall also include all personal property, tangible or
intangible, of any kind whatsoever owned by Lessor and used in connection with
the operation of the Resort, including, but not limited to the following items:
<PAGE>   7
                 (a)      All engineering, maintenance and housekeeping
         supplies, including soap, cleaning materials and matches;  stationary
         and printing; and other supplies of all kinds, whether used, unused or
         held in reserve storage for future use in connection with the
         maintenance and operation of the Resort;

                 (b)      All food and beverage located at the Resort, whether
         issued to the food and beverage department or held in reserve storage;

                 (c)      All brochures, literature and other materials used in
         connection with the marketing of the Resort;

                 (d)      Any names, logos and designs used in the ownership or
         operation of the Hotel including, without limitation, the names, logos
         and designs now used in connection with the restaurants, cocktail
         lounges, night clubs, banquet rooms and meeting rooms in and/or about
         the Hotel, together with the goodwill appurtenant to each of such
         names, logos and designs/Lessee's right to use the foregoing names,
         logos, designs, etc. shall be subject to the terms of that certain 
         License Agreement between Crescent Real Estate Equities Limited 
         Partnership and Canyon Ranch, Inc. of even date herewith;

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

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

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

                 (b)      All service, maintenance, purchase orders and other
         contracts pertaining to the ownership, maintenance, operation,
         provisioning or equipping of the Resort, including warranties and
         guaranties relating thereto (excluding, however, (i) any employment
         agreements, (ii) any contracts with independent contractors who
         perform medical, behavioral, spiritual, wellness or similar





                                      -2-
<PAGE>   8
         health-related services at the Resort, and (iii) any other
         employee-related contract or medical-related contract);

                 (c)      Lessor's interest as "Owner" under that certain
         Management Agreement (the "Management Agreement") dated of even date
         herewith, executed by and between Lessor, as owner, and Canyon Ranch
         Management, L.L.C., an Arizona limited liability company, as Manager
         (the "Manager");

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

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

                 (f)      All construction, development and design contracts
         entered into in connection with the construction of the Resort and all
         transferable warranties, guaranties and bonds relating to the Resort
         or the acquisition, construction, fabrication or installation thereof;

                 (g)      All membership agreements (including Centennial and
         Charter program memberships) which entitle third-parties to use the
         Resort;

                 (h)      All oral or written agreements pursuant to which any
         portion of the Land or Resort is used or occupied by anyone other than
         Lessor (the property described in this clause does not include guest
         occupancy agreements or membership agreements and is herein referred
         to collectively as the "Leases");

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

                 (j)      Any accounts or notes receivable pertaining to the
Centennial or Charter programs.

All of Lessor's rights, benefits, and privileges with respect to the foregoing
items shall be vested in Lessee throughout the term of this Lease and, upon
termination of this Lease, for whatever reason, shall automatically revert to
Lessor without the necessity of any action on the part of Lessor hereunder.

         This Lease is executed by Lessor and accepted by Lessee on the
understanding that Lessee will and does hereby assume and agree to perform all
of Lessor's obligations as owner under the Management Agreement.





                                      -3-
<PAGE>   9
                                  ARTICLE III

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


                                   ARTICLE IV

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

         4.1     Base Rent.  The base rent (the "Base Rent") payable during the
term of this Lease shall be $200,000 per month.  Base Rent shall be payable in
equal monthly installments in arrears with the first monthly installment due
and payable on or before the last day of January 1997, and a monthly
installment to be due and payable on the last day of each and every month
thereafter through and including December 31, 2006.  Base Rent for any period
during the term of this Lease which is less than one (1) month shall be a
pro-rata portion of the applicable monthly installment.  All payments by or on
behalf of Manager into the Debt Service Subaccount or Replacement Escrow
Subaccount during the term of this Lease shall be deemed payments of Base Rent.
The Debt Service Subaccount and Replacement Escrow Subaccount shall mean those
bank accounts established for the benefit of Nomura Asset Capital Corporation
("Nomura") pursuant to that certain Security and Disbursement Agreement,
entered into by and among Nomura, The First National Bank of Boston, Lessor,
and Bellefontaine Management Associates, dated June 28, 1995.  Notwithstanding
anything to the contrary contained herein, if Lessee does not have sufficient
funds from operations to pay Base Rent accrued during the month of December
1996 by its due date (January 31, 1997), Lessee shall have until April 30,
1997, to make such rent payment; provided, however, Lessee shall pay such rent
beforehand as soon as funds are available if Lessee has sufficient funds from
operations prior to April 30, 1997 to pay such rent and its other obligations
hereunder.

         4.2     Percentage Rent.

                 (a)      Pursuant to the terms and conditions of this Section
         4.2, Lessee shall also pay Lessor Percentage Rent for each calendar
         year.  The term "Percentage Rent," as used herein, shall mean the sum
         of:

                          (i)  the product determined by multiplying (x) 28%,
                 by (y) the amount, if any, by which the Gross Receipts for the
                 calendar year exceed $20,000,000.00 (provided, however, in no
                 event shall the amount determined under this subparagraph (y)
                 exceed $7,000,000.00);

                          (ii)  the product determined by multiplying (x) 21%,
                 by (y) the amount, if any, by which the Gross Receipts for the
                 calendar year exceed





                                      -4-
<PAGE>   10
         $27,000,000.00 (provided, however, in no event shall the amount
         determined under this subparagraph (y) exceed $8,000,000.00); and

                          (iii)  the product determined by multiplying (x) 15%,
                 by (y) the amount, if any, by which the Gross Receipts for the
                 calendar year exceed $35,000,000.00.

                 (b)      For any calendar year which has less than twelve (12)
         full months, the Percentage Rent for such partial year shall be
         computed in the following manner:

                          (i)  the Gross Receipts for such partial year shall
                 be multiplied by twelve (12), and such product shall be
                 divided by the actual number of calendar months (including a
                 fraction for any partial month) in said year in which this
                 Lease was in effect;

                          (ii)  using the formula set forth in paragraph (a)
                 above, Percentage Rent shall be calculated on the amount
                 determined in subparagraph (i) of this paragraph (b); and

                          (iii)  the amount determined in subparagraph (ii) of
                 this paragraph (b) shall be multiplied by the actual number of
                 calendar months (including a fraction for any partial month)
                 in such year in which this Lease was in effect, and such
                 product shall be divided by twelve (12).

                 (c)      To the extent the Owner's Remittance Amounts received
         by Lessee with respect to any calendar quarter exceed the Base Rent
         paid or payable by Lessee to Lessor for such quarter, Lessee shall
         remit and pay such amount to Lessor as an advance payment of
         Percentage Rent; provided, however, in no event shall such payment
         exceed the Ceiling Amount.  Such advance payments, if any, of
         Percentage Rent shall be paid to Lessor on a quarterly basis on the
         last day of the month following each calendar quarter.  The first such
         advance payment of Percentage Rent shall be due on or before January
         31, 1997, and each succeeding payment shall be due on the last day of
         each and every April, July, October, and January thereafter, with the
         final payment due on December 31, 2006.

                 (d)      For any given quarter, the Ceiling Amount shall be
         the amount determined by

                          (i)  dividing Gross Receipts for the quarter in
                 question, by estimated annual Gross Receipts for the current
                 calendar year;

                          (ii)  by multiplying the result in (i) by the Floor;
                 and

                          (iii)  subtracting $12,500.00 from the product in
                 (ii), but in no event shall the Ceiling Amount be a negative
                 number.





                                      -5-
<PAGE>   11
         The estimated annual Gross Receipts for any calendar year shall be
         determined by adding (i) the actual cumulative Gross Receipts for any
         previous quarters in such year as reported by the Manager; (ii) the
         actual Gross Receipts for the quarter in question; and (iii) the
         Manager's most current estimate of Gross Receipts for the remaining
         quarters in the current year.

                 (e)      (i)     The term "Floor" shall mean the amount of
                 Percentage Rent as calculated pursuant to paragraph (a) above
                 based on the estimated annual Gross Receipts for the current
                 calendar year.

                          (ii)    The term "Gross Receipts" shall have the same
                 meaning as set forth in the Management Agreement.

                          (iii)   The term "Owner's Remittance Amount" shall
                 have the same meaning as set forth in the Management
                 Agreement.

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

                 (g)      Lessee shall maintain in a manner and form
         satisfactory to Lessor, during the term of this Lease, and for a
         period of three (3) consecutive years thereafter, complete and
         accurate general books of account, which shall reflect Gross Receipts,
         and which shall include, if used by Lessee, without limitation,
         original invoices, sales records, sales slips, sales checks, sales
         reports, cash register tapes, records of bank deposits, inventory
         records prepared as of the close of the Lessee's accounting period,
         sales and occupation tax returns and all other original records and
         other pertinent papers which will enable Lessor to





                                      -6-
<PAGE>   12
         determine the Gross Receipts derived by Lessee during the term of this
         Lease.  Such records for the three (3) most recent years shall be
         maintained at the Leased Property or Lessee's corporate headquarters.

                 (h)      The acceptance by Lessor of the advance payments of
         Percentage Rent (pursuant to paragraph (c) above) or any additional
         payment of Percentage Rent (pursuant to paragraph (f) above) shall not
         prejudice Lessor's right to an examination of Lessee's records of
         Gross Receipts for any period for which Lessee is required to maintain
         records to verify Gross Receipts.  Lessor shall have the right to
         examine Lessee's records during all regular business hours upon
         reasonable prior notice.  Lessee, upon reasonable prior notice, shall
         make available to Lessor for examination any other records required to
         be maintained hereunder.  If the audit of the books and records by
         Lessor discloses that Gross Receipts were underreported by Lessee by
         two and one-half percent (2.5%) or more for any period covered by the
         audit, Lessee shall promptly pay to Lessor, as Additional Rent, the
         cost of the audit, in addition to any deficiency in Percentage Rent
         that may be due.  If the audit discloses that Gross Receipts were
         underreported by Lessee by less than two and one-half percent (2.5%)
         for such period, Lessee shall promptly pay to Lessor the deficiency,
         and Lessor shall pay the cost of the audit.  If the audit discloses
         that Gross Receipts were underreported by Lessee by five percent (5%)
         or more for such period, Lessor shall have the option, exercisable
         within sixty (60) days of its discovery of the discrepancy, to
         consider such event as an Event of Default.  The provisions of this
         Section shall survive the expiration of the term of this Lease or the
         earlier termination hereof for a period of one (1) year thereafter.

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

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





                                      -7-
<PAGE>   13
         4.5     Place and Manner of Payment.  Subject to the further
provisions hereof, the rent hereunder shall be payable to Lessor at the
original or changed address of Lessor set forth in Article XXIX hereof or to
such other person at such address as Lessor may designate from time to time in
writing.

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


                                   ARTICLE V

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


                                   ARTICLE VI

         6.1     Payment of Impositions.  Subject to Article XII relating to
permitted contests, Lessee will pay, or cause to be paid, all Impositions (as
defined hereinbelow) before any fine,





                                      -8-
<PAGE>   14
penalty, interest or cost may be added for non-payment, such payments to be
made directly to the taxing or other authorities where feasible, and will
promptly furnish to Lessor copies of official receipts or other satisfactory
proof evidencing such payments.  If any such Imposition may, at the option of
the obligor, lawfully be paid in installments (whether or not interest shall
accrue on the unpaid balance of such Imposition), Lessee may exercise the
option to pay the same (and any accrued interest on the unpaid balance of such
Imposition) in installments and in such event, shall pay such installments
during the term hereof (subject to Lessee's right of contest pursuant to the
provisions of Article XII) as the same respectively become due and before any
fine, penalty, premium, further interest or cost may be added thereto.  If any
refund shall be due in respect of any Imposition paid by Lessee, the same shall
be paid over to or retained by Lessee if no Event of Default shall have
occurred hereunder and be continuing.  If an Event of Default shall have
occurred and be continuing, any such refund shall be paid over to or retained
by Lessor.  Any such funds retained by Lessor due to an Event of Default shall
be applied as provided in Article XVI.  Lessor and Lessee shall, upon request
of the other, provide such data as is maintained by the party to whom the
request is made with respect to the Leased Property as may be necessary to
prepare any required returns and reports.

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

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

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

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

         6.6     Definition of Impositions.  The term "Impositions," as used
herein, means, collectively, all taxes (including, without limitation, all ad
valorem, sales and use, single business, gross receipts, transaction privilege,
rent or similar taxes as the same relate to or are imposed upon Lessee or its
business conducted upon the Leased Property), assessments (including, without
limitation, all assessments for public improvements or benefit, whether or not
commenced or completed prior to the date hereof and whether or not to be
completed within the term and also any assessments imposed on the Leased
Property by any property owners' association, condominium association or other
such private association, or otherwise as a result of private deed restrictions
affecting the Leased Property), ground rents, water, sewer or other rents and
charges, excises, tax inspection, authorization and similar fees and all other
such





                                      -9-
<PAGE>   15
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Leased Property or
the business conducted thereon by Lessee (including all interest and penalties
thereon caused by any failure in payment by Lessee), which at any time prior
to, during or with respect to the term hereof may be assessed or imposed on the
Leased Property, or any part thereof or any rent therefrom or any estate,
right, title or interests therein, or (c) any occupancy, operation, use or
possession of, or sales from, or activity conducted on or in connection with
the Leased Property, or the leasing or use of the Leased Property or any part
thereof by Lessee.  Nothing contained in this definition of Impositions shall
be construed to require Lessee to pay (1) any tax based on net income (whether
denominated as a franchise or capital stock or other tax) imposed on Lessor or
any other person, or (2) any net revenue tax of Lessor or any other person, or
(3) any tax imposed with respect to the sale, exchange or other disposition by
Lessor of any Leased Property or the proceeds thereof, or (4) any single
business, gross receipts (other than tax on any rent received by Lessor from
Lessee), transaction, privilege or similar taxes as the same relate to or are
imposed upon Lessor, except to the extent that any tax, assessment, tax levy or
charge that Lessee is obligated to pay pursuant to the first sentence of the
definition and that is in effect at any time during the term hereof is totally
or partially repealed, and a tax, assessment, tax levy or charge set forth in
clause (1) or (2) is levied, assessed or imposed expressly in lieu thereof.


                                  ARTICLE VII

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





                                      -10-
<PAGE>   16
         7.2     Use of the Leased Property.

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

                 (b)      Lessee shall use or cause to be used the Leased
         Property only as a health and fitness resort, and for such other uses
         as may be necessary or incidental to such use or such other use as
         otherwise approved by Lessor (the "Primary Intended Use").  Lessee
         shall not use the Leased Property or any portion thereof for any other
         use without the prior written consent of Lessor, which consent may be
         granted, denied or conditioned in Lessor's sole discretion.  No use
         shall be made or permitted to be made of the Leased Property, and no
         acts shall be done, which will cause the cancellation or increase the
         premium of any insurance policy covering the Leased Property or any
         part thereof (unless another adequate policy satisfactory to Lessor is
         available and Lessee pays any premium increase), nor shall Lessee sell
         or permit to be kept, used or sold in or about the Leased Property any
         article which may be prohibited by law or fire underwriter's
         regulations.  Lessee shall, at its sole cost, comply with all of the
         requirements pertaining to the Leased Property of any insurance board,
         association, organization or company necessary for the maintenance of
         insurance, as herein provided, covering the Leased Property.

                 (c)      Subject to the provisions of Articles XIV, XV, and
         XXI, Lessee covenants and agrees that during the term of this Lease it
         will (1) operate continuously the Leased Property as a health and
         fitness resort, (2) keep in full force and effect and comply with all
         the provisions of the Management Agreement, (3) not terminate or amend
         the Management Agreement without the consent of Lessor, and (4)
         maintain appropriate certifications and licenses for such use.

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

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

         7.3     Lessor to Grant Easements, Etc.  Lessor will, from time to
time, so long as no Event of Default has occurred and is continuing, at the
request of Lessee and at Lessee's cost and expense (but subject to the approval
of Lessor, which approval shall not be unreasonably withheld or delayed), (a)
grant easements and other rights in the nature of easements with





                                      -11-
<PAGE>   17
respect to the Leased Property to third parties, (b) release existing easements
or other rights in the nature of easements which are for the benefit of the
Leased Property, (c) dedicate or transfer unimproved portions of the Leased
Property for road, highway or other public purposes, (d) execute petitions to
have the Leased Property annexed to any municipal corporation or utility
district, (e) execute amendments to any covenants and restrictions affecting
the Leased Property and (f) execute and deliver to any person any instrument
appropriate to confirm or effect such grants, releases, dedications, transfers,
petitions and amendments (to the extent of its  interests in the Leased
Property), but only upon delivery to Lessor of a certificate from Lessee
stating that such grant, release, dedication, transfer, petition or amendment
is not detrimental to the proper conduct of the business of Lessee on the
Leased Property and does not materially reduce the value of the Leased
Property.

         7.4     Operating Supplies.  On the Commencement Date, all Operating
Supplies (as defined below) shall be transferred from Lessor to Lessee so that
they accompany the Leased Property.  During the term of this Lease, Lessee, at
its sole cost and expense, shall furnish and maintain at the Leased Property
all Operating Supplies necessary or desirable for the operation of the Leased
Property in accordance with the provisions of this Lease and the Management
Agreement.  Lessee, at its sole cost and expense, shall maintain and replace
the Operating Supplies so that substantially the same quantities of such items
that existed on the Commencement Date shall be available to Lessor on the
termination of this Lease.  Upon the termination of this Lease, the Operating
Supplies shall be transferred from Lessee to Lessor so that they accompany the
Leased Property.  The term "Operating Supplies," as used herein, shall mean all
food, beverages and other consumable items used in the operation of the Resort
such as fuel, engineering, maintenance and housekeeping supplies, soap,
cleaning materials, matches, stationery and printing, brochures, literature,
folios and all other similar items, together with all substitutions and
replacements thereto.

         7.5     FF&E.  Throughout the term of this Lease, and subject to the
rights of the first lienholder of the Leased Property, Lessor shall establish
and maintain a reserve account (the "FFE Reserve") which at all times will have
in it sufficient funds to satisfy the reserve requirements set forth in Article
5.4 of the Management Agreement.  All payments by or on behalf of Manager into
the Replacement Escrow Account during the term of this Lease shall be deemed
contributions by Lessor to the FFE Reserve.  If at any time during the term of
the Lease, any item of FFE requires replacement, upon a written request
therefor from Lessee (and the consent of Nomura with respect to funds in the
Replacement Escrow Account), Lessor shall promptly advance sufficient funds
from the FFE Reserve to enable either Manager or Lessee to purchase the
required replacements.  Lessee shall make no expenditure for replacement of FFE
in excess of the amounts in the FFE Reserve without first obtaining the
approval of Lessor.  Any additions to or replacements of furnitures, fixtures,
and equipment located at the Leased Property shall become part of the FFE,
which is owned by Lessor.  Throughout the term of this Lease, Lessee shall, at
its sole cost and expense and in accordance with the requirements of the
Management Agreement, cause all of the items of FFE to be in proper working
order and in good condition (ordinary wear and tear excepted).  The term "FFE"
shall mean all vehicles, furniture and furnishings, hotel equipment (including
office equipment, exercise equipment, medical and/or health equipment, and
property management equipment as necessary).





                                      -12-
<PAGE>   18
         7.6     Lessee's Obligation to Manage.  At all times during the term
hereof, Lessee shall be responsible for the management and operation of the
Leased Property, and in no event shall Lessor have any obligation with respect
to the management or operation of the Leased Property.

         7.7     Net Worth.  Lessee covenants that it shall at all times during
the term of this Lease maintain a "net worth" which shall be equal to no less
than $200,000.00.  For purposes hereof, "net worth" shall mean the sum of (i)
the aggregate cash and fair market value of any property (other than cash)
contributed to the capital of Lessee by its owners (net of amounts distributed
other than distributions out of earnings of Lessee), and (ii) the aggregate
balances of any loan (A) obtained by Lessee and guaranteed by one or more of
the owners of Lessee or (B) obtained by the owners of Lessee to fund capital
contributions to the Lessee (to the extent not already included in (i)), to the
extent such funds may be utilized by Lessee to perform its obligations under
the Lease, to comply with the terms of the Management Agreement, or to comply
with the terms of any other lease between Lessor (or a substitute lessor) or an
entity affiliated with Lessor (or a substitute lessor) and Lessee or an entity
owned substantially all by Lessee, and (iii) any commitments of the members of
Lessee to make additional capital contributions to Lessee, and (iv) the
guaranty by the members of Lessee of the obligations of Lessee under the Lease
or any other lease between Lessor (or a substitute lessor) or an entity
affiliated with Lessor (or a substitute lessor) and Lessee or an entity owned
substantially all by Lessee.  Lessee shall provide Lessor with an annual
written certification of its compliance with the foregoing requirement on the
Commencement Date and the first day of each subsequent year of this Lease
hereunder; provided, however, that Lessor may, in addition, request more than
once during any year of this Lease that Lessee provide Lessor with a
certification as of the date of such request of its compliance with the
foregoing requirement.  Such certifications must be reasonably satisfactory to
Lessor as to matters certified therein and shall be accompanied by such
supporting financial information as Lessor may reasonably request.

         7.8     Ownership.  Lessee covenants that neither it nor any person
owning any interest (or fraction thereof) in Lessee will acquire a greater than
6% ownership interest in Lessor (or any affiliate thereof), or any person
holding an ownership interest in Lessor (including by reason of the
constructive ownership rules described below), without Lessor's prior written
consent.  For purposes of determining under this Section 7.8 ownership in
Lessor, in Lessee or in any other person, the constructive ownership rules
specified in Section 856(d)(5) of the Internal Revenue Code of 1986, as
amended, shall apply.

         7.9     Limitation on Distributions.  Lessee covenants that, until
such time as (i) Lessee has accumulated and is holding in reserve funds which
are sufficient in an amount to enable Lessee to pay (A) at least one (1) month
of Base Rent based on the average monthly payment of Base Rent applicable to
such year as set forth in Article 4.1 hereof, plus (B) at least one (1) month
of Base Rent based on the average monthly payment of Base Rent applicable to
such lease year under that certain Lease Agreement, dated November 18, 1996,
between Crescent Real Estate Equities Limited Partnership and Lessee, regarding
the Sonoma Mission Inn & Spa in Sonoma County, California, plus (C) at least
one (1) monthly payment of Base Rent based on the average monthly payment of
Base Rent for such lease year under all other leases between Lessor (or a
substitute lessor) or an entity affiliated with Lessor (or a substitute lessor)
and Lessee; provided, however, the sum of the amounts set forth in (A) and (B)
need not exceed $500,000.00, and (ii) any entity owned substantially all by
Lessee which has entered into a





                                      -13-
<PAGE>   19
long-term lease of a hotel either with Lessor (or a substitute lessor) or an
affiliate of Lessor (or a substitute lessor) has accumulated and is holding in
reserve funds which are sufficient in an amount to enable such entity to pay at
least one (1) monthly payment of base rent based on the largest monthly payment
of base rent for such lease year under all leases between such entity and such
lessor, Lessee shall retain all income generated by the Leased Property and
shall not distribute any earnings to its beneficial owners except as needed for
federal and state income taxes payable on taxable income from the Leased
Property.  In no event, however, shall any amounts be payable to the beneficial
owners of Lessee if any such payment would result in a violation of Lessee's
net worth covenants set forth in Article 7.7 hereinabove.

         7.10    Working Capital.  On the Commencement Date, Lessor shall
transfer to Lessee cash and funds deposited in banks ("Cash") in the amount set
forth on a Statement of Working Capital (the "Statement") to be initialed by
Lessor and Lessee and appended to this Lease as Exhibit "B" subsequent to the
execution of this Lease, which amount is advanced by Lessor to the Leased
Property in accordance with Sections 3.3 and 7.1 of the Management Agreement.
The Statement shall show the items of working capital ("Working Capital")
pertaining to the Leased Property.  Upon the expiration or early termination of
this Lease, Lessee shall pay over to Lessor the same amount of Cash that
existed on the Commencement Date.  Upon the expiration or early termination of
this Lease, Lessee shall return to Lessor approximately the same amount of
Working Capital that existed on the Commencement Date after taking into account
the Cash paid by Lessee to Lessor pursuant to this Section 7.10.

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


                                  ARTICLE VIII

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

         8.2     Legal Requirement Covenants.  Lessee covenants and agrees that
the Leased Property shall not be used for any unlawful purpose, and that Lessee
shall not permit or suffer to exist any unlawful use of the Leased Property by
others.  Lessee shall acquire and maintain all appropriate licenses,
certifications, permits and other authorizations and approvals needed to
operate the Leased Property in its customary manner for the Primary Intended
Use, and any other lawful use conducted on the Leased Property as may be
permitted from time to time hereunder.  Lessee further covenants and agrees
that Lessee's use of the Leased Property and maintenance, alteration, and
operation of the same, and all parts thereof, shall at all times conform to all
legal requirements, unless the same are finally determined by a court of





                                      -14-
<PAGE>   20
competent jurisdiction to be unlawful (and Lessee shall cause all sub-tenants,
invitees or others to so comply with all legal requirements).  Lessee may,
however, upon prior Notice to Lessor, contest the legality or applicability of
any such legal requirement or any licensure or certification decision if Lessee
maintains such action in good faith, with due diligence, without prejudice to
Lessor's rights hereunder, and at Lessee's sole expense.  If by the terms of
any such legal requirement compliance therewith pending the prosecution of any
such proceeding may legally be delayed without the incurrence of any lien,
charge or liability of any kind against the Leased Property or Lessee's
leasehold interest therein and without subjecting Lessee or Lessor to any
liability, civil or criminal, for failure so to comply therewith, Lessee may
delay compliance therewith until the final determination of such proceeding.
If any lien, charge or civil or criminal liability would be incurred by reason
of any such delay, Lessee, on the prior written consent of Lessor, which
consent shall not be unreasonably withheld, may nonetheless contest as
aforesaid and delay as aforesaid provided that such delay would not subject
Lessor to criminal liability and Lessee both (a) furnishes to Lessor security
reasonably satisfactory to Lessor against any loss or injury by reason of such
contest or delay and (b) prosecutes the contest with due diligence and in good
faith.

         8.3     Environmental Matters and Indemnities.  Lessee must, at its
sole cost and expense, keep and maintain the Leased Property in compliance
with, and must not cause the Leased Property to be in violation of, any
federal, state, and local laws, regulations, rules, and orders including
without limitation those relating to zoning, health, safety, noise,
environmental protection, water quality, air quality, or the generation,
processing, storage, or disposal of any Hazardous Materials excluding any
conditions existing prior to the Commencement Date of this Lease or violations
caused by Lessor.  Moreover, Lessee will not intentionally cause or permit the
storage, use, disposal, manufacture, discharge, leakage, spillage or emission
of any Hazardous Materials on, in, or about the Leased Property.  Lessee must
immediately notify Lessor in writing of its actual knowledge of:  (a) any
enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened in connection with the Leased Property and
any Hazardous Materials; or (b) any claim made or threatened by any third party
against Lessee or the Leased Property relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from any Hazardous Materials
that could cause all or any portion of the Leased Property to be subject to any
restrictions on the ownership, occupancy, transferability or use of the Leased
Property under Hazardous Materials Law (as hereinafter defined).
Notwithstanding the foregoing, Lessee is not required by Lessor to remove any
Hazardous Materials located on, in, under or about the Leased Premises prior to
the Commencement Date of this Lease.  Without Lessor's prior written consent,
which consent must not be unreasonably withheld or delayed, Lessee will not
take any remedial action in response to the presence of any Hazardous Materials
on, in, or under or about the Leased Property, nor enter into any settlement
agreement, consent decree or other compromise in respect to any Hazardous
Materials except as may be necessary to comply with all laws, rules,
regulations or orders of any applicable governmental authorities.

         Lessee indemnifies and holds Lessor, its employees, agents, officers
and directors, harmless from and against any claim, action, suit, proceeding,
loss, cost, damage, liability, deficiency, fine, penalty, punitive damage or
expense (including, without limitation, attorneys' and consultant fees),
directly or indirectly resulting from, arising out of, or based upon (a) the
presence, release, use, manufacture, generation, discharge, storage or disposal
by Lessee (or its





                                      -15-
<PAGE>   21
sublessee, contractors, licensees, concessionaires, guests, invitees,
employees, agents or representatives) of any Hazardous Material on, under, in
or about, or the transportation of any such materials to or from the Leased
Property occurring from and after the Commencement Date, or (b) the violation,
or alleged violation by Lessee (or its sublessee, contractors, licensees,
concessionaires, guests, invitees, employees, agents or representatives) of any
Hazardous Materials Law affecting the Leased Property, or the transportation by
Lessee (or its sublessees, contractors, licensees, concessionaires, guests,
invitees, employees, agents or representatives) of Hazardous Materials to or
from the Leased Property, save and except to the extent that such violations,
alleged violations or transportation of Hazardous Materials occurred prior to
the Commencement Date of this Lease, or were not caused by Lessee (or its
sublessees, contractors, licensees, concessionaires, guests, invitees,
employees, agents or representatives).

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

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


                                   ARTICLE IX

         9.1     Maintenance and Repair.

                 (a)      Lessee, at its sole expense, will keep the Leased
         Property in good order and repair, except for ordinary wear and tear
         (whether or not the need for such repairs occurred as a result of
         Lessee's use, any prior use, the elements or the age of the Leased
         Property, or any portion thereof), and, except as otherwise provided
         in Article XIV or Article XV, with reasonable promptness, make all
         necessary and appropriate repairs, replacements, and improvements
         thereto of every kind and nature, whether interior or exterior,
         ordinary or extraordinary, foreseen or unforeseen or arising by reason
         of a condition existing prior to the





                                      -16-
<PAGE>   22
         commencement of the term of this Lease (concealed or otherwise), or
         required by any governmental agency having jurisdiction over the
         Leased Property.  Lessee, however, shall be permitted to prosecute
         claims against Lessor's predecessors-in-title, contractors,
         subcontractors and suppliers for breach of any representation or
         warranty or for any latent defects in the Leased Property to be
         maintained by Lessee unless Lessor is already diligently pursuing such
         a claim.  All repairs shall, to the extent reasonably achievable, be
         at least equivalent in quality to the original work.  Lessee will not
         take or omit to take any action, the taking or omission of which might
         materially impair the value or the usefulness of the Leased Property
         or any part thereof for its Primary Intended Use.

                 (b)      Notwithstanding Lessee's obligations under Article
         9.1(a) hereinabove, in the event that (i) repairs, replacements and/or
         improvements of the Leased Property become necessary in order to
         maintain the Resort in the same quality and condition as it currently
         exists, (ii) such repairs, replacements and/or improvements are under
         generally accepted accounting principles considered to be capital in
         nature, (iii) the funds then available to Lessee at the Leased
         Property, either in the form of reserves (including without limitation
         the FFE Reserve), insurance proceeds, or other income generated by the
         Leased Property and available to Lessee or Manager under the terms of
         the Management Agreement, are insufficient to enable Lessee to pay the
         costs of making any such repairs, replacements and/or improvements,
         and (iv) Nomura consents to such repairs, replacements, and/or
         improvements (if such consent is required under the terms of the loan
         documents with Nomura), then Lessor shall be required to bear the cost
         of making such repairs, replacements and/or improvements.
         Additionally, notwithstanding anything to the contrary contained in
         Article 9.1(a) above, Lessor agrees to pay the costs of the
         Anticipated Improvements (as defined in the Management Agreement)
         pursuant to the terms of the Management Agreement, provided that such
         costs are within the budget for the Anticipated Improvements; further
         provided that all contracts, plans, specifications, and change orders
         for the Anticipated Improvements must be submitted to Lessor in
         advance for Lessor's approval.  Except as set forth in the preceding
         two sentences, Lessor shall not under any circumstances be required to
         build or rebuild any improvements on the Leased Property, to make any
         repairs, replacements, alterations, restorations or renewals of any
         nature or description to the Leased Property, whether ordinary or
         extraordinary, foreseen or unforeseen, or to make any expenditure
         whatsoever with respect thereto, in connection with this Lease, or to
         maintain the Leased Property in any way.  Lessee hereby waives, to the
         extent permitted by law, the right to make repairs at the expense of
         Lessor pursuant to any law in effect at the time of the execution of
         this Lease or hereafter enacted.  Lessor shall have the right to give,
         record and post, as appropriate, notices of nonresponsibility under
         any mechanic's lien laws now or hereafter existing.

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





                                      -17-
<PAGE>   23
         performance of any labor or services or the furnishing of any
         materials or other property for the construction, alteration,
         addition, repair or demolition of or to the Leased Property or any
         part thereof, or (2) giving Lessee any right, power or permission to
         contract for or permit the performance of any labor or services or the
         furnishing of any materials or other property in such fashion as would
         permit the making of any claim against Lessor in respect thereof or to
         make any agreement that may create, or in any way be the basis of any
         right, title, interest, lien, claim or other encumbrance upon the
         estate of Lessor in the Leased Property, or any portion thereof.

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

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





                                      -18-
<PAGE>   24
                                   ARTICLE X

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


                                   ARTICLE XI

         Liens.  Subject to the provision of Article XII relating to permitted
contests, Lessee will not directly or indirectly create or allow to remain and
will promptly discharge at its expense any lien, encumbrance, attachment, title
retention agreement or claim upon the Leased Property or any attachment, levy,
claim or encumbrance in respect of the rent payable hereunder, not including,
however, (a) this Lease, (b) the matters, if any, included as exceptions in the
title policy insuring Lessor's interest in the Leased Property, (c)
restrictions, liens and other encumbrances which are consented to in writing by
Lessor or any easements granted pursuant to the provisions of Section 7.3 of
this Lease, (d) liens for those taxes upon Lessor which Lessee is not required
to pay hereunder, (e) subleases permitted by Article XXI hereof, (f) liens for
Impositions or for sums resulting from noncompliance with legal requirements so
long as (1) the same are not yet payable or are payable without the addition of
any fine or penalty or (2) such liens are in the process of being contested as
permitted by Article XII, (g) liens of mechanics, laborers, materialmen,
suppliers or vendors for sums either disputed or not yet due provided that (1)
the payment of such sums shall not be postponed under any related contract for
more than 60 days after the completion of the action giving rise to such lien
and such reserve or other appropriate provisions as shall be required by law or
generally accepted accounting principles shall have been made therefor or (2)
any such liens are in the process of being contested as permitted by Article
XII hereof, and (h) any liens which are the responsibility of Lessor pursuant
to the provisions of Article XXXI of this Lease.


                                  ARTICLE XII

         Permitted Contests.  Lessee shall have the right to contest the amount
or validity of any Imposition to be paid by Lessee or any legal requirement or
insurance requirement or any lien, attachment, levy, encumbrance, charge or
claim ("Claims") not otherwise permitted by Article XI, by appropriate legal
proceedings in good faith and with due diligence (but this shall not be





                                      -19-
<PAGE>   25
deemed or construed in any way to relieve, modify or extend Lessee's covenants
to pay or its covenants to cause to be paid any such charges at the time and in
the manner as in this Article provided), on condition, however, that such legal
proceedings shall not operate to relieve Lessee from its obligations hereunder
and shall not cause the sale or risk the loss of the Leased Property, or any
part thereof, or cause Lessor or Lessee to be in default under any mortgage,
deed of trust or security deed encumbering the Leased Property or any interest
therein.  Upon the request of Lessor, Lessee shall either (a) provide a bond or
other assurance reasonably satisfactory to Lessor that all Claims which may be
assessed against the Leased Property together with interest and penalties, if
any, thereon will be paid, or (b) deposit within the time otherwise required
for payment with a bank or trust company as trustee upon terms reasonably
satisfactory to Lessor, as security for the payment of such Claims, money in an
amount sufficient to pay the same, together with interest and penalties in
connection therewith, as to all Claims which may be assessed against or become
a Claim on the Leased Property, or any part thereof, in said legal proceedings.
Lessee shall furnish Lessor and any lender of Lessor with reasonable evidence
of such deposit within five days of the same.  Lessor agrees to join in any
such proceedings if the same be required to legally prosecute such contest of
the validity of such Claims; provided, however, that Lessor shall not thereby
be subjected to any liability for the payment of any costs or expenses in
connection with any proceedings brought by Lessee; and Lessee covenants to
indemnify and save harmless Lessor from any such costs or expenses.  Lessee
shall be entitled to any refund of any Claims and such charges and penalties or
interest thereon which have been paid by Lessee or paid by Lessor and for which
Lessor has been fully reimbursed.  In the event that Lessee fails to pay any
Claims when due or to provide the security therefor as provided in this
paragraph and to diligently prosecute any contest of the same, Lessor may, upon
ten days advance written notice to Lessee, pay such charges together with any
interest and penalties and the same shall be repayable by Lessee to Lessor at
the next rent payment date provided for in this Lease.  Provided, however, that
should Lessor reasonably determine that the giving of such notice would risk
loss to the Leased Property or cause damage to Lessor, then Lessor shall give
such notice as is practical under the circumstances.  Lessor reserves the right
to contest at its expense any of the  Claims not pursued by Lessee.  Lessor and
Lessee agree to cooperate in coordinating the contest of any Claims.


                                  ARTICLE XIII

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

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





                                      -20-
<PAGE>   26
                 (b)      Loss of income insurance on the "Special Form", in
         the amount of one year of Base Rent and Percentage Rent for the
         benefit of Lessor;

                 (c)      Commercial general liability insurance, with amounts
         not less than $10,000,000 covering each of the following:  bodily
         injury, death, or property damage liability per occurrence, personal
         and advertising injury, general aggregate, products and completed
         operations, with respect to Lessor, and "all risk legal liability"
         (including liquor law or "dram shop" liability) with respect to Lessor
         and Lessee;

                 (d)      Insurance covering such other hazards and in such
         amounts as may be customary for comparable properties in the area of
         the Leased Property  and is available from insurance companies,
         insurance pools or other appropriate companies authorized to do
         business in the State of Massachusetts at rates which are economically
         practicable in relation to the risks covered as may be reasonably
         requested by Lessor;

                 (e)      Fidelity bonds with limits and deductions as may be
         reasonably requested by Lessor, covering Lessee's employees in job
         classifications normally bonded under prudent resort management
         practices in the United States or otherwise required by law; and

                 (f)      Such other insurance as Lessor may reasonably request
         for facilities such as the Leased Property and the operation thereof.

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

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

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

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

         13.5    Form Satisfactory, Etc.  All of the policies of insurance
referred to in this Article XIII shall be written in a form, with deductibles
and by insurance companies reasonably





                                      -21-
<PAGE>   27
satisfactory to Lessor.  Lessee shall pay all of the premiums therefor, and
deliver such policies or certificates thereof to Lessor prior to their
effective date (and, with respect to any renewal policy, 30 days prior to the
expiration of the existing policy), and in the event of the failure of Lessee
either to effect such insurance as herein called for or to pay the premiums
therefor, or to deliver such policies or certificates thereof to Lessor at the
times required, Lessor shall be entitled, but shall have no obligation, to
effect such insurance and pay the premiums therefor, and Lessee shall reimburse
Lessor for any premium or premiums paid by Lessor for the coverages required
under Section 13.1 upon written demand therefor, and Lessee's failure to repay
the same within 30 days after notice of such failure from Lessor shall
constitute an Event of Default within the meaning of Section 16.1(b).  Each
insurer mentioned in this Article XIII shall agree, by endorsement to the
policy or policies issued by it, or by independent instrument furnished to
Lessor, that it will give to Lessor 30 days written notice before the policy or
policies in question shall be materially altered, allowed to expire or
canceled.

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


                                  ARTICLE XIV

         14.1    Insurance Proceeds.  Subject to the provisions of Section
14.3, all proceeds 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 XIII of this Lease, shall be paid to Lessor and held in
trust by Lessor in an interest-bearing account, shall be made available, if
applicable, for replacement or repair, as the case may be, of any damage to or
destruction of the Leased Property, or any portion thereof, and, if applicable,
shall be paid out by Lessor from time to time for the reasonable costs of such
replacement or repair upon satisfaction of reasonable terms and conditions
specified by Lessor.  Any excess proceeds of insurance remaining after
completion of the replacement or repair of the Leased Property shall be
retained by Lessor.  All salvage resulting from any risk covered by insurance
shall belong to Lessor.

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

         14.3    Damage During Term.  Notwithstanding any provisions of Section
14.1 appearing to the contrary, if damage to or destruction of the Leased
Property occurring during the term of this Lease renders the Leased Property
unsuitable for its Primary Intended Use, then either Lessor or Lessee (but in
Lessee's case only if the Leased Property is rendered unsuitable for its
Primary Intended Use for a period in excess of one (1) year), shall have the
right to terminate this Lease by giving written notice to the other party, in
Lessor's case at any time after the occurrence of such damage or destruction,
or in Lessee's case within thirty (30) days after the





                                      -22-
<PAGE>   28
expiration of such year, whereupon all accrued rent shall be paid immediately,
and this Lease shall automatically terminate.


                                   ARTICLE XV

         15.1    Definitions.

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

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

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

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

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

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

         15.4    Allocation of Award.  The total Award made with respect to the
Leased Property or for loss of rent, or for Lessor's loss of business beyond
the term, shall be solely the property of and payable to Lessor.  Any Award
made for loss of business during the remaining term, if any, or for removal and
relocation expenses of Lessee in any such proceedings shall be the sole
property of and payable to Lessee.  In any Condemnation proceedings Lessor and
Lessee shall each seek its Award in conformity herewith, at its respective
expense; provided, however, Lessee shall not initiate, prosecute or acquiesce
in any proceedings that may result in a diminution of any Award payable to
Lessor.





                                      -23-
<PAGE>   29
         15.5    Partial Taking.  If title to less than the whole of or
substantially all of the Leased Property is condemned, and the Leased Property
is still suitable for its Primary Intended Use, and not uneconomic for its
Primary Intended Use, or if Lessee or Lessor is entitled but neither elects to
terminate this Lease as provided in Section 15.3, Lessee at its cost shall with
all reasonable dispatch restore the untaken portion of the Leased Property so
that such Leased Property contains the same architectural units of the same
general character and condition (as nearly as may be possible under the
circumstances) as the Leased Property existing immediately prior to the
Condemnation.  Lessor shall contribute to the cost of restoration that part of
its Award specifically allocated to such restoration, if any, together with
severance and other damages awarded for the taken Leased Property; provided,
however, that the amount of such contributions shall not exceed such cost.

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


                                  ARTICLE XVI

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

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

                 (b)      if Lessee fails to observe or perform any other term,
         covenant or condition of this Lease and such failure is not cured by
         Lessee within a period of 30 days after receipt by the Lessee of
         notice thereof from Lessor, unless such





                                      -24-
<PAGE>   30
         failure cannot with due diligence be cured within a period of 30 days,
         in which case it shall not be deemed an Event of Default if Lessee
         proceeds promptly and with due diligence to cure the failure and
         diligently completes the curing thereof provided, however, in no event
         shall such cure period extend beyond 90 days after notice of such
         failure has been provided to Lessee by Lessor; or

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

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

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

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

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

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

                 (1)      Without termination of Lessee's right to possession
of the Leased Property, each installment of rent and other sums payable by
Lessee to Lessor under the Lease as the same becomes due and payable, which
rent and other sums shall bear interest at the rate of 12% per





                                      -25-
<PAGE>   31
annum until paid, and Lessor may enforce, by action or otherwise, any other
term or covenant of this Lease; or

                 (2)      the sum of:

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

                                  (B)      the worth at the time of
                          termination, repossession or reletting of the amount
                          by which the unpaid rent for the balance of the term
                          of this Lease after the time of termination,
                          repossession or reletting, exceeds the amount of such
                          rental loss that Lessee proves could be reasonably
                          avoided, and

                                  (C)      any other amount necessary to
                          compensate Lessor for all the detriment proximately
                          caused by Lessee's failure to perform its obligations
                          under this Lease or which in the ordinary course of
                          things would be likely to result therefrom.  The
                          worth at the time of termination, repossession or
                          reletting of the amount referred to in subparagraph
                          (B) is computed by discounting such amount at the
                          discount rate of the Federal Reserve Bank of New York
                          at the time of award plus 1%.

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

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


                                  ARTICLE XVII

         Lessor's Right to Cure Lessee's Default.  If Lessee fails to make any
payment or to perform any act required to be made or performed under this Lease
including, without limitation, Lessee's failure to comply with the terms of any
Management Agreement, and fails to cure the same within the relevant time
periods provided in Section 16.1, Lessor, without waiving or releasing any
obligation of Lessee, and without waiving or releasing any obligation or
default, may (but shall be under no obligation to) at any time thereafter make
such payment or perform such act for the account and at the expense of Lessee,
and may, to the extent permitted by law, enter upon the Leased Property for
such purpose and take all such action thereon as, in Lessor's opinion, may be
necessary or appropriate therefor.  No such entry shall be deemed an eviction
of Lessee.  All sums so paid by Lessor and all costs and expenses





                                      -26-
<PAGE>   32
(including, without limitation, reasonable attorneys' fees and expenses, in
each case to the extent permitted by law) so incurred, together with a late
charge thereon (to the extent permitted by law) at the rate of 12% per annum
from the date on which such sums or expenses are paid or incurred by Lessor,
shall be paid by Lessee to Lessor on demand.  The obligations of Lessee and
rights of Lessor contained in this Article shall survive the expiration or
earlier termination of this Lease.


                                 ARTICLE XVIII

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


                                  ARTICLE XIX

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


                                   ARTICLE XX

         Indemnification.  Notwithstanding the existence of any insurance, and
without regard to the policy limits of any such insurance or self-insurance,
Lessee will protect, indemnify, hold harmless and defend Lessor from and
against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses), to the extent permitted by law, imposed upon or
incurred by or asserted against Lessor by reason of:  (a) any accident, injury
to or death of persons or loss of or damage to property occurring on or about
the Leased Property or adjoining sidewalks, including without limitation any
claims under liquor liability, "dram shop" or similar laws, (b)





                                      -27-
<PAGE>   33
any past, present or future use, misuse, non-use, condition, management,
maintenance or repair by Lessee or any of its agents, employees or invitees of
the Leased Property or any litigation, proceeding or claim by governmental
entities or other third parties to which Lessor is made a party or participant
related to such use, misuse, non-use, condition, management, maintenance, or
repair thereof by Lessee or any of its agents, employees or invitees, including
any failure of Lessee or any of its agents, employees or invitees to perform
any obligations under this Lease or imposed by applicable law (other than
arising out of condemnation proceedings), (c) any Impositions that are the
obligations of Lessee pursuant to the applicable provisions of this Lease, (d)
any failure on the part of Lessee to perform or comply with any of the terms of
this Lease, and (e) the non-performance of any of the terms and provisions of
any and all existing and future subleases of the Leased Property to be
performed by the landlord thereunder.

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

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

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


                                  ARTICLE XXI

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





                                      -28-
<PAGE>   34
                                  ARTICLE XXII

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

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

         (b)     Lessee will furnish the following statements to Lessor:

                          (1)     with reasonable promptness, such information
                 respecting the financial condition and affairs of Lessee
                 including financial statements prepared by Lessee as Lessor
                 may reasonably request from time to time; and

                          (2)     the most recent financial statements of
                 Lessee within 60 days after each quarter of any fiscal year
                 (or, in the case of the final quarter in any fiscal year, the
                 most recent financial statements of Lessee within 120 days);
                 and

                          (3)     on or about the 30th day of each month, a
                 detailed profit and loss statement of the Leased Property for
                 the preceding month, a balance sheet for the Leased Property
                 as of the end of the preceding month, and a detailed
                 accounting of revenues for the Leased Property for the
                 preceding month, each in form reasonably acceptable to Lessor.

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


                                 ARTICLE XXIII

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





                                      -29-
<PAGE>   35
                                  ARTICLE XXIV

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


                                  ARTICLE XXV

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


                                  ARTICLE XXVI

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


                                 ARTICLE XXVII

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


                                 ARTICLE XXVIII

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





                                      -30-
<PAGE>   36
of such conveyance or other transfer as to the Leased Property and all such
future liabilities and obligations shall thereupon be binding upon the new
owners.


                                  ARTICLE XXIX

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

         Lessor:                        Canyon Ranch - Bellefontaine
                                        Associates, L.P.
                                        8600 E. Rockcliff Road
                                        Tucson, Arizona  85750
                                        Attn:  Jerrold Cohen, President
                                        Telephone No.:  (520) 749-9655, Ext. 335
                                        Facsimile No.:  (520) 749-0662

         with a copy to:                W.J. Harrison & Associates, P.C.
                                        3561 E. Sunrise Drive, Suite 201
                                        Tucson, Arizona  85718
                                        Attn:  W. James Harrison, Esq.
                                        Telephone No.: (520) 529-3700
                                        Facsimile No.: (520) 529-8977

         Lessee:                        Vintage Resorts, LLC
                                        East West Properties, Ltd.
                                        100 Thomas
                                        Drawer 2770
                                        Beaver Creek, Colorado  81620
                                        Attn:  Harry Frampton
                                        Telephone No.:  (970) 845-9200
                                        Facsimile No.:  (970) 845-7205


                                  ARTICLE XXX

         Appraisers.  If it becomes necessary to determine the fair market
value of the Leased Property for any purpose of this Lease, the party required
or permitted to give Notice of such required determination shall include in the
Notice the name of a person selected to act as appraiser on its behalf.  Within
10 days after Notice, Lessor (or Lessee, as the case may be) shall by Notice to
Lessee (or Lessor, as the case may be) appoint a second person as appraiser





                                      -31-
<PAGE>   37
on its behalf.  The appraisers thus appointed, each of whom must be a member of
the American Institute of Real Estate Appraisers (or any successor organization
thereto) with at least five years experience in the State of Massachusetts
appraising property similar to the Leased Property, shall, within 45 days after
the date of the Notice appointing the first appraiser, proceed to appraise the
Leased Property to determine the fair market value thereof as of the relevant
date (giving effect to the impact, if any, of inflation from the date of their
decision to the relevant date); provided, however, that if only one appraiser
shall have been so appointed, then the determination of such appraiser shall be
final and binding upon the parties.  If two appraisers are appointed and if the
difference between the amounts so determined does not exceed 5% of the lesser
of such amounts, then the fair market value shall be an amount equal to 50% of
the sum of the amounts so determined.  If the difference between the amounts so
determined exceeds 5% of the lesser of such amounts, then such two appraisers
shall have 20 days to appoint a third appraiser.  If no such appraiser shall
have been appointed within such 20 days or within 90 days of the original
request for a determination of fair market value, whichever is earlier, either
Lessor or Lessee may apply to any court having jurisdiction to have such
appointment made by such court.  Any appraiser appointed by the original
appraisers or by such court shall be instructed to determine the fair market
value or fair market rental within 45 days after appointment of such appraiser.
The determination of the appraiser which differs most in the terms of dollar
amount from the determinations of the other two appraisers shall be excluded,
and 50% of the sum of the remaining two determinations shall be final and
binding upon Lessor and Lessee as the fair market value or fair market rental
of the Leased Property, as the case may be.  This provision for determining by
appraisal shall be specifically enforceable to the extent such remedy is
available under applicable law, and any determination hereunder shall be final
and binding upon the parties except as otherwise provided by applicable law.
Lessor and Lessee shall each pay the fees and expenses of the appraiser
appointed by it and each shall pay one-half of the fees and expenses of the
third appraiser and one-half of all other costs and expenses incurred in
connection with each appraisal.


                                  ARTICLE XXXI

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

         31.2    Breach by Lessor.  It shall be a breach of this Lease if
Lessor fails to observe or perform any term, covenant or condition of this
Lease on its part to be performed and such





                                      -32-
<PAGE>   38
failure continues for a period of 30 days after Notice thereof from Lessee,
unless such failure cannot with due diligence be cured within a period of 30
days, in which case such failure shall not be deemed to continue if Lessor,
within such 30-day period, proceeds promptly and with due diligence to cure the
failure and diligently completes the curing thereof.


                                 ARTICLE XXXII

         32.1    Miscellaneous.  Anything contained in this Lease to the
contrary notwithstanding, all claims against, and liabilities of, Lessee or
Lessor arising prior to any date of termination of this Lease shall survive
such termination.  If any term or provision of this Lease or any application
thereof is invalid or unenforceable, the remainder of this Lease and any other
application of such term or provisions shall not be affected thereby.  If any
late charges or any interest rate provided for in any provision of this Lease
are based upon a rate in excess of the maximum rate permitted by applicable
law, the parties agree that such charges shall be fixed at the maximum
permissible rate.  Neither this Lease nor any provision hereof may be changed,
waived, discharged or terminated except by a written instrument in recordable
form signed by Lessor and Lessee.   All the terms and provisions of this Lease
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.  The headings in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.  This Lease shall be governed by and construed in accordance
with the laws of the State of Massachusetts, but not including its conflicts of
laws rules.

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

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


                                 ARTICLE XXXIII

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





                                      -33-
<PAGE>   39
                                 ARTICLE XXXIV

         Compliance with Management Agreement.  To the extent any of the
provisions of the Management Agreement impose a greater obligation on Lessee
than the corresponding provisions of the Lease, then Lessee shall be obligated
to comply with the provisions of the Management Agreement, it being the intent
of the parties hereto that Lessee comply in every respect with the provisions
of the Management Agreement so as to avoid any default thereunder.


                                  ARTICLE XXXV

         Financial Statements.  Lessee shall deliver to Lessor (a) within 120
days after the end of each calendar year annual operating statements for
Lessee's business at the Leased Property and a copy of the balance sheet of
Lessee as of the end of such year, and related statements of income and
retained earnings and changes in financial position for such year, (b) within
30 days after the end of each month monthly operating statements for Lessee's
business at the Leased Property and a copy of the balance sheet of Lessee as of
the end of such month, and (c) such other information as Lessor may from time
to time reasonably request.  The foregoing financial statements shall be
certified by a member or an authorized officer (as the case may be) of Lessee.
All financial statements of Lessee delivered to Lessor shall be true and
correct in all respects, shall be prepared in accordance with generally
accepted accounting principles, consistently applied, and fairly present the
financial condition of the subject thereof as of the dates thereof.  Any
materially adverse change that occurs in the financial condition reflected
therein after the date thereof shall be reported to Lessor promptly.  None of
the aforesaid financial statements, or any certificate or statement furnished
to Lessor by or on behalf of Lessee in connection with the transactions
contemplated hereby, shall contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein or herein not misleading.


                                 ARTICLE XXXVI

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

         36.2    Personal Property Limitation.  Anything contained in this
Lease to the contrary notwithstanding, the average of the adjusted tax bases of
the items of personal property that are leased to the Lessee under this Lease
at the beginning and at the end of any calendar year shall not exceed fifteen
percent (15%) of the average of the aggregate adjusted tax bases of the Leased
Property at the beginning and at the end of each such calendar year.  This
Section 36.2 is intended to insure that the rent payable hereunder qualifies as
"rents from real property," within the meaning of Section 856(d) of the
Internal Revenue Code of 1986, or any similar or successor provisions thereto,
and shall be interpreted in a manner consistent with such intent.





                                      -34-
<PAGE>   40
         36.3    Sublease Rent Limitation.  Anything contained in this Lease to
the contrary notwithstanding, Lessee shall not sublet the Leased Property on
any basis such that the rental to be paid by the sublessee thereunder would be
based, in whole or in part, on either (a) the income of profits derived by the
business activities of the sublessee, or (b) any other formula such that any
portion of the rent payable hereunder would fail to qualify as "rents from real
property" within the meaning of Section 856(d) of the Internal Revenue Code of
1986, or any similar or successor provisions thereto.

         36.4    Sublease Tenant Limitation.  Anything contained in this Lease
to the contrary notwithstanding, Lessee shall not sublease the Leased Property
to any person or entity in which Lessor owns, directly or indirectly, a ten
percent (10%) or more interest, within the meaning of Section 856(d)(2)(B) of
the Internal Revenue Code of 1986, or any similar or successor provisions
thereto.

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


                                 ARTICLE XXXVII

         Lessor's Option to Terminate Lease.  In the event Lessor enters into a
bonafide contract to sell the Leased Property to a non-affiliated party, Lessor
may terminate the Lease by giving not less than thirty (30) days prior Notice
to Lessee of Lessor's election to terminate the Lease effective upon the
closing of such contract.  Effective upon such closing, this Lease shall
terminate and be of no further force and effect except as to any obligations of
the parties existing as of such date that survive termination of this Lease.
As compensation for the early termination of its leasehold estate under this
Article XXXVII, Lessor shall within ninety (90) days of such closing pay to
Lessee the fair market value of Lessee's leasehold estate hereunder as of the
closing of the sale of the Leased Property.  In the event Lessor and Lessee are
unable to agree upon the fair market value of an original or replacement
leasehold estate, it shall be determined by appraisal using the appraisal
procedures set forth in Article XXX.

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





                                      -35-
<PAGE>   41
         IN WITNESS WHEREOF, the parties have executed this Lease by their duly
authorized officers as of the date first above written.

                                        LESSOR:

                                        CANYON RANCH - BELLEFONTAINE
                                        ASSOCIATES, L.P., a Delaware limited 
                                        partnership

                                        BY:     Canyon Ranch Associates, a
                                                Delaware general partnership, 
                                                its general partner

                                        BY:      JCBF, Inc., a Delaware
                                                 corporation, its general 
                                                 partner


                                                 By: /s/JERROLD COHEN
                                                    ----------------------------
                                                 Name: Jerrold Cohen
                                                      --------------------------
                                                 Its: President
                                                     ---------------------------




                                        LESSEE:

                                        VINTAGE RESORTS, LLC



                                        By: /s/HARRY FRAMPTON
                                           -------------------------------------
                                              Harry Frampton, Manager





                                      -36-
<PAGE>   42
                        EXHIBIT A - LEGAL DESCRIPTION

                              OF LEASED PROPERTY




                          [Exhibit has been omitted]



<PAGE>   43
                            EXHIBIT B - STATEMENT

                              OF WORKING CAPITAL




                          [Exhibit has been omitted]