
<PAGE>
 
                                                                  Exhibit 10.10

                                 LEASE AGREEMENT

                           DATED AS OF JUNE ___, 1997

                                     BETWEEN

              EDWARD H. LINDE AND MORTIMER B. ZUCKERMAN AS TRUSTEES
                       OF DOWNTOWN BOSTON PROPERTIES TRUST

                                    AS LESSOR

                                       AND

                                  ZL HOTEL LLC

                                    AS LESSEE
<PAGE>
 
<TABLE> 
                                TABLE OF CONTENTS


                                                                           Page
                                                                           ----
<S>                                                                       <C>  
ARTICLE I

     LEASE.................................................................... 1
     1.1     Leased Property.................................................. 1
     1.2     Term............................................................. 2
     1.3     Initial Transition............................................... 2
                                                                               
ARTICLE II                                                                     
                                                                               
     DEFINITIONS.............................................................. 2
     2.1     Definitions...................................................... 2
                                                                              
ARTICLE III                                                                   
                                                                              
     RENT.................................................................... 15
     3.1     Rent............................................................ 15
     3.2     Confirmation of Percentage Rent................................. 22
     3.3     Additional Charges.............................................. 23
     3.4     No Set Off...................................................... 24
     3.5     Annual Operating Projection..................................... 24
     3.6     Books and Records............................................... 24
     3.7     Intentionally Omitted........................................... 24
     3.8     Changes in Operations........................................... 24
     3.9     Allocation of Revenues.......................................... 24
                                                                              
ARTICLE IV                                                                    
                                                                              
     IMPOSITIONS............................................................. 25
     4.1     Payment of Impositions.......................................... 25
     4.2     Notice of Impositions........................................... 26
     4.3     Adjustment of Impositions....................................... 26
     4.4     Utility Charges................................................. 26
                                                                              
ARTICLE V                                                                     
                                                                              
     NO TERMINATION, ABATEMENT............................................... 26
     5.1     No Termination, Abatement....................................... 26
                                                                              
ARTICLE VI                                                                    
                                                                              
     PROPERTY OWNERSHIP...................................................... 27
     6.1     Ownership of the Leased Property................................ 27
</TABLE> 
                                       (i)
<PAGE>
 
<TABLE> 

<S>                                                                       <C>  
     6.2     Lessee's Personal Property....................................... 27
     6.3     Lessor's Lien.................................................... 28
     6.4     Equipment Lease Property......................................... 28

ARTICLE VII

     CONDITION, USE........................................................... 29
     7.1     Condition of the Leased Property................................. 29
     7.2     Use of the Leased Property....................................... 29

ARTICLE VIII

     LEGAL REQUIREMENTS....................................................... 31
     8.1     Compliance with Legal and Insurance Requirements................. 31
     8.2     Legal Requirement Covenants...................................... 31
     8.3     Environmental Covenants.......................................... 31

ARTICLE IX

     MAINTENANCE AND REPAIRS.................................................. 33
     9.1     Maintenance and Repair........................................... 33

ARTICLE X

     ALTERATIONS.............................................................. 35
     10.1    Alterations...................................................... 35
     10.2    Salvage.......................................................... 35
     10.3    Lessor Alterations............................................... 35

ARTICLE XI

     LIENS.................................................................... 35
     11.1    Liens............................................................ 35

ARTICLE XII

     PERMITTED CONTESTS....................................................... 36
     12.1    Permitted Contests............................................... 36

ARTICLE XIII

     INSURANCE................................................................ 37
     13.1    General Insurance Requirements................................... 37
     13.2    Replacement Cost................................................. 39
     13.3    (Intentionally deleted).......................................... 39
     13.4    Waiver of Subrogation............................................ 39
     13.5    Form Satisfactory, etc........................................... 40
</TABLE> 
                                      (ii)
<PAGE>
 
<TABLE> 

<S>                                                                       <C>  
     13.6    Increase in Limits............................................... 40
     13.7    Blanket Policy................................................... 40
     13.8    Separate Insurance............................................... 40
     13.9    Reports On Insurance Claims...................................... 41

ARTICLE XIV

     DAMAGE AND RECONSTRUCTION................................................ 41
     14.1    Insurance Proceeds............................................... 41
     14.2    Reconstruction in the Event of Damage or Destruction 
             Covered by Insurance............................................. 41
     14.3    Reconstruction in the Event of Damage or Destruction 
             Not Covered by Insurance......................................... 42
     14.4    Lessee's Property and Business Interruption Insurance............ 42
     14.5    Abatement of Rent................................................ 42

ARTICLE XV

     CONDEMNATION............................................................. 43
     15.1    Definitions...................................................... 43
     15.2    Parties' Rights and Obligations.................................. 43
     15.3    Total Taking..................................................... 43
     15.4    Allocation of Award.............................................. 43
     15.5    Partial Taking................................................... 44
     15.6    Temporary Taking................................................. 44

ARTICLE XVI

     DEFAULTS................................................................. 45
     16.1    Events of Default................................................ 45
     16.2    Remedies......................................................... 47
     16.3    Waiver........................................................... 48
     16.4    Application of Funds............................................. 48

ARTICLE XVII

     LESSOR'S RIGHT TO CURE................................................... 48
     17.1    Lessor's Right to Cure Lessee's Default.......................... 48

ARTICLE XVIII

     LIMITATIONS.............................................................. 48
     18.1    Personal Property Limitation..................................... 48
     18.2    Sublease Rent Limitation......................................... 49
     18.3    Sublease Lessee Limitation....................................... 49
     18.4    Lessee Ownership Limitation...................................... 49
</TABLE> 
                                      (iii)
<PAGE>
 
<TABLE> 
<S>                                                                       <C>  
ARTICLE XIX

     HOLDING OVER............................................................ 50
     19.1    Holding Over.................................................... 50

ARTICLE XX

     INDEMNITIES............................................................. 50
     20.1    Indemnification................................................. 50

ARTICLE XXI

      SUBLETTING AND ASSIGNMENT.............................................. 52
      21.1   Subletting and Assignment....................................... 52
      21.2   Attornment...................................................... 53
      21.3   Management Agreement............................................ 54

ARTICLE XXII

     ESTOPPEL CERTIFICATES................................................... 54
     22.1    Officer's Certificates; Financial Statements; Lessor's 
             Estoppel Certificates and Covenants............................. 54

ARTICLE XXIII

     INSPECTIONS............................................................. 56
     23.1    Regular Meetings; Lessor's Right to Inspect..................... 56

ARTICLE XXIV

     NO WAIVER............................................................... 56
     24.1    No Waiver....................................................... 56

ARTICLE XXV

     CUMULATIVE REMEDIES..................................................... 57
     25.1    Remedies Cumulative............................................. 57

ARTICLE XXVI

     SURRENDER............................................................... 57
     26.1    Acceptance of Surrender......................................... 57

ARTICLE XXVII

     NO MERGER............................................................... 57
     27.1    No Merger of Title.............................................. 57
</TABLE> 
                                      (iv)
<PAGE>
 
<TABLE> 

<S>                                                                       <C>  
ARTICLE XXVIII

     CONVEYANCE BY LESSOR.................................................... 57
     28.1    Conveyance by Lessor............................................ 57
     28.2    Lessor May Grant Liens.......................................... 58
                                                                              
ARTICLE XXIX                                                                  
                                                                              
     QUIET ENJOYMENT......................................................... 59
     29.1    Quiet Enjoyment................................................. 59
                                                                              
ARTICLE XXX                                                                   
                                                                              
     NOTICES................................................................. 60
     30.1    Notices......................................................... 60
                                                                              
ARTICLE XXXI                                                                  
                                                                              
     APPRAISALS.............................................................. 60
     31.1    Appraisers...................................................... 60
                                                                              
ARTICLE XXXII                                                                 
                                                                              
     (Intentionally Deleted)................................................. 61
                                                                              
ARTICLE XXXIII                                                                
                                                                              
     (Intentionally Deleted)................................................. 61
                                                                              
ARTICLE XXXIV                                                                 
                                                                              
     (Intentionally Deleted)................................................. 61
                                                                              
ARTICLE XXXV                                                                  
                                                                              
     LESSEE CAPITALIZATION REQUIREMENTS...................................... 61
     35.1    Lessee's Net Worth.............................................. 61
     35.2    Lessee's Cash................................................... 62
     35.3    Verification of Net Worth....................................... 62
     35.4    Change of Control............................................... 62
     35.5    Other Business Activities....................................... 63
     35.6    Non-Competition................................................. 63
                                                                              
ARTICLE XXXVI                                                                 
                                                                              
     LESSOR'S OPTION TO TERMINATE............................................ 63
</TABLE> 
                                       (v)
<PAGE>
 
<TABLE> 

<S>                                                                       <C>  
     36.1    Lessor's Option to Terminate Lease...............................63

ARTICLE XXXVII

     LESSOR'S RIGHTS..........................................................64
     37.1    Lessor's Rights..................................................64

ARTICLE XXXVIII

     CAPITAL EXPENDITURES.....................................................64
     38.1    Capital Expenditures.............................................64

ARTICLE XXXIX

     LESSOR'S DEFAULT.........................................................65
     39.1    Lessor's Default.................................................65

ARTICLE XL

     ARBITRATION..............................................................66
     40.1    Arbitration......................................................66
     40.2    Alternative Arbitration..........................................66
     40.3    Arbitration Procedures...........................................66

ARTICLE XLI

     TRADE-OUTS...............................................................67
     41.1    Trade-outs.......................................................67

ARTICLE XLII

     MISCELLANEOUS............................................................68
     42.1    Miscellaneous....................................................68
     42.2    Transition Procedures............................................68
     42.3    Waiver of Presentment, etc.......................................69
     42.4    Standard of Discretion...........................................69
     42.5    Action for Damages...............................................69
</TABLE> 

                                      (vi)
<PAGE>
 
<TABLE> 
<CAPTION> 

EXHIBITS
- --------
<S>               <C> 
Exhibit A -       Property Description
Exhibit B -       Revenue Percentages and Breakdowns
Exhibit B-1-      Base Rate Payments
Exhibit B-2-      Percentage Rental Adjustments to Second Break Points
Exhibit C -       Equipment Leases
</TABLE> 

                                     (vii)
<PAGE>
 
                                LEASE AGREEMENT
                                ---------------


     THIS LEASE AGREEMENT (hereinafter called "Lease"), made as of the _____ day
                                               -----                            
of June, 1997, by and between EDWARD H. LINDE AND MORTIMER B. ZUCKERMAN, as
TRUSTEES OF DOWNTOWN BOSTON PROPERTIES TRUST u/t/d May 11, 1979 and recorded
with the Suffolk County Registry of Deeds in Book 9351, Page 70, and filed with
the Suffolk County Registry District of the Land Court as Document No. 348533
and noted on Certificate of Title No. 92381, as amended (hereinafter called
"Lessor"), and ZL HOTEL LLC, a Delaware limited liability company (hereinafter
 ------                                                                       
called "Lessee"), provides as follows:
        ------                        

     Lessor, in consideration of the payment of rent by Lessee to Lessor, the
covenants and agreements to be performed by Lessee, and upon the terms and
conditions hereinafter stated, does hereby rent and lease unto Lessee, and
Lessee does hereby rent and lease from Lessor, the Leased Property (as
hereinafter defined).


                                   ARTICLE I
                                   ---------

                                     LEASE
                                     -----

      1.1  Leased Property.  The Leased Property (herein so called) is comprised
           ---------------                                                      
of Lessor's interest in the following:

           (a) the land described in Exhibit A attached hereto and by reference
                                     ---------
incorporated herein (the "Land");
                          ----

           (b) all buildings, structures and other improvements of every kind
including, but not limited to, alleyways and connecting tunnels, sidewalks,
utility pipes, conduits and lines (on-site and off-site), parking areas and
roadways appurtenant to such buildings and structures presently or hereafter
situated upon the Land (collectively, the "Leased Improvements");
                                           -------------------

           (c) all easements, rights and appurtenances relating to the Land and
the Leased Improvements;

           (d) all equipment, machinery, fixtures, and other items of property
required for or incidental to the use of the Leased Improvements as a hotel,
including all components thereof, now and hereafter permanently affixed to or
incorporated into the Leased Improvements, including, without limitation, all
furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution control, waste
disposal, air-cooling and air-conditioning systems and apparatus, sprinkler
systems and fire and theft protection equipment, all of which to the greatest
extent permitted by law are hereby deemed by the parties hereto to constitute
real estate, together with all replacements, modifications, alterations and
additions thereto (collectively, the "Fixtures");
                                      --------

                                       1
<PAGE>
 
           (e) all furniture and furnishings and all other items of personal
property (excluding Inventory and personal property owned by Lessee) located on,
and used in connection with, the operation of the Leased Improvements as a
hotel, together with all replacements, modifications, alterations and additions
thereto; and

           (f) all existing occupancy leases of the Leased Property (including
any security deposits or collateral held by Lessor pursuant thereto).

THE LEASED PROPERTY IS DEMISED IN ITS PRESENT CONDITION WITHOUT REPRESENTATION
OR WARRANTY (EXPRESSED OR IMPLIED) BY LESSOR AND SUBJECT TO THE RIGHTS OF
PARTIES IN POSSESSION, AND TO THE EXISTING STATE OF TITLE INCLUDING ALL
COVENANTS, CONDITIONS, RESTRICTIONS, EASEMENTS AND OTHER MATTERS OF RECORD
INCLUDING ALL APPLICABLE LEGAL REQUIREMENTS AND MATTERS WHICH WOULD BE DISCLOSED
BY AN INSPECTION OF THE LEASED PROPERTY OR BY AN ACCURATE SURVEY THEREOF.

      1.2  Term.  The term of this Lease (the "Term") shall commence, if at all,
           ----                                ----                             
on the date of Lessor's acquisition (the "Acquisition") of the Leased Property
                                          -----------                         
(the "Commencement Date") and shall end on the fifth (5th) anniversary of the
      -----------------                                                      
last day of the month in which the Commencement Date occurs, unless sooner
terminated in accordance with the provisions hereof. In the event the
Acquisition does not occur by October 31, 1997, this Lease shall terminate and
be of no further force and effect.

      1.3  Initial Transition.
           ------------------ 

           (a) Upon the Commencement Date and pursuant to a separate Assignment
and Assumption Agreement, Lessor or the prior owner of the Leased Property shall
transfer and assign to Lessee, and Lessee shall assume, all occupancy agreements
and operating agreements to which the Leased Property remains subject on the
Commencement Date.

           (b) As between Lessor and Lessee, Lessor shall be entitled to all
income and shall be responsible for the payment or settlement of all expenses of
the Leased Property accruing prior to the Commencement Date. Lessee shall act as
Lessor's agent for the collection of all such income and shall remit the same to
Lessor promptly upon Lessee's receipt thereof. Lessee shall notify Lessor of all
such expenses and shall act as Lessor's payment agent for such expenses using
funds provided by Lessor from time to time. On the Commencement Date, Lessee
shall be entitled to receive all cash, working capital funds, bank accounts,
house banks and similar accounts existing at or with respect to the Leased
Property as of the Commencement Date and, as between Lessor and Lessee, Lessee
shall be entitled to retain all such cash and other accounts for its own use.

                                       2
<PAGE>
 
                                  ARTICLE II
                                  ----------

                                  DEFINITIONS
                                  -----------

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

     Acquisition:  As defined in Section 1.2.
     -----------                 ----------- 

     Accounting Period:  As used in this Lease, the term "Accounting Period"
     -----------------                                                      
shall have the meaning set forth in Section 2.01(O) of the Management Agreement.
                                    ---------------                             

     Additional Charges:  As defined in Section 3.3.
     ------------------                 ----------- 

     Affiliate:  As used in this Lease the term "Affiliate" of a person shall
     ---------                                                               
mean (a) any person that, directly or indirectly, controls or is controlled by
or is under common control with such person, (b) any other person that owns,
beneficially, directly or indirectly, ten percent or more of the outstanding
capital stock, shares or equity interests of such person, or (c) any officer,
director, employee, partner or trustee of such person or any person controlling,
controlled by or under common control with such person (excluding trustees and
persons serving in similar capacities who are not otherwise an Affiliate of such
person).  The term "person" means and includes individuals, corporations,
general and limited partnerships, limited liability companies, stock companies
or associations, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts, or other entities and governments and
agencies and political subdivisions thereof.  For the purposes of this
definition (a) "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such person,
through the ownership of voting securities, partnership interests or other
equity interests, by contract or otherwise and (b) it is acknowledged and agreed
that Lessor and Lessee are not Affiliates of each other.

     Annual Food Sales Break Point(s):  As used in this Lease, the term Annual
     --------------------------------                                         
Food Sales Break Point(s) shall mean the Annual Food Sales First Break Point and
the Annual Food Sales Second Break Point, in accordance with Section 3.1(b)(ii)
                                                             ------------------
and Exhibit B.
    --------- 

     Annual Food Sales First Break Point:  As defined in Section 3.1(b)(ii) and
     -----------------------------------                 ------------------    
Exhibit B.
- --------- 

     Annual Food Sales Second Break Point:  As defined in Section 3.1(b)(ii) and
     ------------------------------------                 ------------------    
Exhibit B.
- --------- 

                                       3
<PAGE>
 
     Annual Operating Projection:  As used in this Lease, the term "Annual
     ---------------------------                                          
Operating Projection" shall have the meaning set forth in Section 9.04 of the
                                                          ------------       
Management Agreement.

     Annual Room Revenues Break Point(s):  As used in this Lease, the term
     -----------------------------------                                  
"Annual Room Revenues Break Point(s)" shall mean the Annual Room Revenues First
Break Point and the Annual Room Revenues Second Break Point, in accordance with
                                                                               
Section 3.1(b)(ii) and Exhibit B.
- ------------------     --------- 

     Annual Room Revenues First Break Point:  As defined in Section 3.1(b)(ii)
     --------------------------------------                 ------------------
and Exhibit B.
    --------- 

     Annual Room Revenues Second Break Point:  As defined in Section 3.1(b)(ii)
     ---------------------------------------                 ------------------
and Exhibit B.
    --------- 

     Approval:  As defined in Section 42.4.
     --------                 ------------ 

     Approved Financial Institution:  As defined in Section 35.2.
     ------------------------------                 ------------ 

     Award:  As defined in Section 15.1(c).
     -----                 --------------- 

     Base Rent:  As defined in Section 3.1(a).
     ---------                 -------------- 

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

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

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

           (b) Credits, rebates or refunds; and

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

     Break Points:  As defined in Section 3.1(b).
     ------------                 -------------- 

                                       4
<PAGE>
 
     Business Day:  Each Monday, Tuesday, Wednesday, Thursday and Friday that is
     ------------                                                               
not a day on which national banks in the City of Boston, Massachusetts or in the
municipality wherein the Leased Property is located are closed.

     Capital Expenditures:  Amounts advanced to pay the costs of Capital
     --------------------                                               
Improvements.

     Capital Expenditures Reserve:  An amount equal to 5% of Gross Revenues for
     ----------------------------                                              
each Lease Year (or such greater amount as contemplated in Article 8 of the
                                                           ---------       
Management Agreement), to be accrued by Lessor in accordance with the provisions
of Article XXXVIII hereof.
   ---------------

     Capital Impositions:  Taxes, assessments or similar charges imposed upon or
     -------------------                                                        
levied against the Leased Property for the costs of public improvements,
including, without limitation, roads, sidewalks, public lighting fixtures,
utility lines, storm sewers drainage facilities, and similar improvements.

     Capital Improvements: Improvements to (a) the external walls and internal
     --------------------                                                     
load bearing walls (other than windows and plate glass), (b) the roof of the
Facility, (c) private roadways, parking areas, sidewalks and curbs appurtenant
thereto that are under Lessee's control (other than cleaning, patching and
striping) and (d) mechanical, electrical and plumbing systems that service
common areas, entire wings of the Facility or the entire Facility, including
conduit and ductware connected thereto.  Any dispute as to whether an
improvement is a capital or non-capital improvement shall be resolved by
arbitration pursuant to Section 40.2, it being the intent of Lessor and Lessee
                        ------------                                          
that "capital" obligations of the Lessee pursuant to Section 8.03(B) of the
                                                     ---------------       
Management Agreement are intended to be included herein.

     Capital Inventory Budget: As used in this Lease, the term "Capital
     ------------------------                                          
Inventory Budget" shall mean the estimate of expenditures for repairs or
replacement of furniture, fixtures and equipment and building repairs, prepared
and delivered to Lessee by Manager pursuant to Section 8.04 of the Management
                                               ------------                  
Agreement.

     Cash:  As defined in Section 35.2.
     ----                 ------------ 

     CERCLA:  The Comprehensive Environmental Response, Compensation and
     ------                                                             
Liability Act of 1980, as amended.

     Change Percentage: Means the applicable percentage identified on 
     -----------------
Exhibit B-2 by which the Annual Room Revenues Second Break Point and the Annual
- -----------
Food Sales Second Break Point shall be adjusted based upon the applicable REVPAR
Change.

     Claims:  As defined in Section 12.1.
     ------                 ------------ 

     COBRA:  The Consolidated Omnibus Budget Reconciliation Act of 1985, as
     -----                                                                 
amended.

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

                                       5
<PAGE>
 
     Commencement Date:  As defined in Section 1.2.
     -----------------                 ----------- 

     Company: Boston Properties, Inc., a Delaware corporation.
     -------                                                  

     Comparable Lease:  As defined in Section 36.1.
     ----------------                 ------------ 

     Cumulative Monthly Portion:  As defined in Section 3.1(b)(ii).
     --------------------------                 ------------------ 

     Condemnation, Condemnor:  As defined in Section 15.1.
     -----------------------                 ------------ 

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

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

     Consumer Price Index:  The "Consumer Price Index" published by the Bureau
     --------------------                                                     
of Labor Statistics of the United States Department of Labor, U.S. City Average,
All Item for Urban Wage Earners and Clerical Workers (1982-1984 = 100).

     Date of Taking:  As defined in Section 15.1(b).
     --------------                 --------------- 

     Emergency Expenditures:  Expenditures required to take necessary or
     ----------------------                                             
appropriate actions to respond to Emergency Situations.

     Emergency Situations:  Fire, any other casualty, or any other events,
     --------------------                                                 
circumstances or conditions (including, without limitation, those involving
Hazardous Materials) which threaten the safety or physical well-being of the
Facility's guests or employees or which involve the risk of material property
damage or material loss to the Facility.

     Environmental Authority:  Any department, agency or other body or component
     -----------------------                                                    
of any Government that exercises any form of jurisdiction or authority under any
Environmental Law.

                                       6
<PAGE>
 
     Environmental Authorization:  Any license, permit, order, approval,
     ---------------------------                                        
consent, notice, registration, filing or other form of permission or
authorization required under any Environmental Law.

     Environmental Laws:  All applicable federal, state, local and foreign laws
     ------------------                                                        
and regulations relating to pollution of the environment (including without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata), including without limitation laws and regulations relating to
emissions, discharges, Releases or threatened Releases of Hazardous Materials or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials.  Environmental
Laws include but are not limited to CERCLA, FIFRA, RCRA, SARA and TSCA.

     Environmental Liabilities:  Any and all actual or potential obligations to
     -------------------------                                                 
pay the amount of any judgment or settlement, the cost of complying with any
settlement, judgment or order for injunctive or other equitable relief, the cost
of compliance or corrective action in response to any notice, demand or request
from an Environmental Authority, the amount of any civil penalty or criminal
fine, and any court costs and reasonable amounts for attorney's fees, fees for
witnesses and experts, and costs of investigation and preparation for defense of
any claim or any Proceeding, regardless of whether such Proceeding is
threatened, pending or completed, that may be or have been asserted against or
imposed upon Lessor, Lessee, any Predecessor, the Leased Property or any
property used therein and arising out of:

           (a) the failure to comply at any time with all Environmental Laws
applicable to the Leased Property;

           (b) the presence of any Hazardous Materials on, in, under, at or in
any way affecting the Leased Property;

           (c) a Release or threatened Release of any Hazardous Materials on,
in, at, under or in any way affecting the Leased Property;

           (d) the identification of Lessee, Lessor or any Predecessor as a
potentially responsible party under CERCLA or under any other Environmental Law;

           (e) the presence at any time of any above-ground and/or underground
storage tanks, as defined in RCRA or in any applicable Environmental Law on, in,
at or under the Leased Property or any adjacent site or facility; or

           (f) any and all claims for injury or damage to persons or property
arising out of exposure to Hazardous Materials originating or located at the
Leased Property, or resulting from operation thereof or any adjoining property.

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

     Existing Condition:  As defined in Section 8.3(b).
     ------------------                 -------------- 

                                       7
<PAGE>
 
     Facility:  The hotel and/or other facility offering lodging and other
     --------                                                             
services or amenities being operated or proposed to be operated on the Leased
Property.

     FIFRA:  The Federal Insecticide, Fungicide, and Rodenticide Act, as
     -----                                                              
amended.

     First Tier Food Sales Percentage:  As defined in Section 3.1(b)(ii) and
     --------------------------------                 ------------------    
Exhibit B.
- --------- 

     First Tier Room Revenue Percentage:  As defined in Section 3.1(b)(ii) and
     ----------------------------------                 ------------------    
Exhibit B.
- --------- 

     Fixtures:  As defined in Section 1.1.
     --------                 ----------- 

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

           (a)  Vending machine sales;

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

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

           (d) Credits, rebates or refunds; and

           (e) Sales taxes or taxes of any other kind imposed on the sale of
food or non-alcoholic beverages.

     Furniture and Equipment:  For purposes of this Lease, the terms "furniture
     -----------------------                                                   
and equipment" shall mean collectively all furniture, furnishings, wall
coverings, fixtures and hotel equipment and systems owned by Lessor and located
at, or used in connection with, the Facility, together with all replacements
therefor and additions thereto, including, without limitation, (i) all equipment
and systems required for the operation of kitchens, bars and restaurants, and
laundry and dry cleaning facilities, (ii) office equipment, (iii) dining room
wagons, materials handling equipment, and cleaning and engineering equipment,
(iv) telephone and computerized accounting systems, and (v) vehicles.

     GAAP:  Generally accepted accounting principles as are at the time
     ----                                                              
applicable and otherwise consistently applied.

                                       8
<PAGE>
 
     Government:  The United States of America, any city, county, state,
     ----------                                                         
district or territory thereof, any foreign nation, any city, county, state,
district, department, territory or other political division thereof, or any
political subdivision of any of the foregoing.

     Gross Revenues:  All revenues, receipts, and income of any kind derived
     --------------                                                         
directly or indirectly by Lessee from or in connection with the Facility whether
on a cash basis or credit, paid or collected, determined in accordance with GAAP
and the Uniform System, but excluding, however:  (i) funds furnished by Lessor,
(ii) federal, state and municipal excise, sales, and use taxes collected
directly from patrons and guests or as a part of the sales price of any goods,
services or displays, such as gross receipts, admissions, cabaret or similar or
equivalent taxes and paid over to federal, state or municipal governments, (iii)
gratuities, (iv) proceeds of insurance and condemnation, (v) proceeds from sales
other than sales in the ordinary course of business, (vi) all loan proceeds from
financing or refinancings of the Facility or interests therein or components
thereof, (vii) judgments and awards, except any portion thereof arising from
normal business operations of the Facility, and (viii) items constituting
"allowances" under the Uniform System.

     Hazardous Materials:  All chemicals, pollutants, contaminants, wastes and
     -------------------                                                      
toxic substances, including without limitation:

           (a) Solid or hazardous waste, as defined in RCRA or in any
Environmental Law;

           (b) Hazardous substances, as defined in CERCLA or in any
Environmental Law;

           (c) Toxic substances, as defined in TSCA or in any Environmental Law;

           (d) Insecticides, fungicides, or rodenticides, as defined in FIFRA or
in any Environmental Law;

           (e) Gasoline or any other petroleum product or byproduct,
polychlorinated biphenyls, asbestos and urea formaldehyde;

           (f) Asbestos or asbestos containing materials;

           (g) Urea Formaldehyde foam insulation; and

           (h)  Radon gas.

     Holder:  Any holder of any indebtedness of the Lessor or any of its
     ------                                                             
Affiliates, any holder of a Mortgage, any purchaser of the Leased Property or
any portion thereof at a foreclosure sale or any sale in lieu thereof, or any
designee of any of the foregoing.

                                       9
<PAGE>
 
     Impositions:  Collectively, all taxes (including, without limitation, all
     -----------                                                              
ad valorem, sales and use, occupancy, single business, gross receipts,
transaction privilege, rent or similar taxes as the same relate to or are
imposed upon Lessee or Lessor or Lessee's 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), ground
rents, water, sewer or other rents and charges, excises, tax inspection,
authorization and similar fees and all other governmental charges, in each case
whether general or special, ordinary or extraordinary, or foreseen or
unforeseen, of every character in respect of the Leased Property 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 or with respect to or
be a lien upon (a) Lessor's interest in the Leased Property, (b) the Leased
Property, or any part thereof or any rent therefrom or any estate, right, title
or interest 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.

     Indemnified Party:  Either of a Lessee Indemnified Party or a Lessor
     -----------------                                                   
Indemnified Party.

     Indemnifying Party:  Any party obligated to indemnify an Indemnified Party
     ------------------                                                        
pursuant to any provision of this Lease.

     Initial Nonconsumable Inventory:  As defined in Section 6.2(a).
     -------------------------------                 -------------- 

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

     Inventory:  All "Inventories of Merchandise" and "Inventories of Supplies"
     ---------                                                                 
as defined in the Uniform System, including, but not limited to, linens, china,
silver, glassware and other non-depreciable personal property, and any property
of the type described in Section 1221(1) of the Code.

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

     Lease:  This Lease.
     -----              

     Lease Year:  Any twelve-month period from January 1 to December 31 during
     ----------                                                               
the Term; provided that the initial Lease Year shall be the period beginning on
the Commencement Date and ending on December 31, 1997, and the last Lease Year
shall be the period beginning on January 1 of the calendar year in which the
Term expires and ending on the last day of the month in which the Commencement
Date occurs (to the extent any computation or other provision hereof provides

                                       10
<PAGE>
 
for an action to be taken on a Lease Year basis, an appropriate proration or
other adjustment shall be made in respect of the initial and final Lease Years
to reflect that such periods are less than full calendar year periods).

     Leased Improvements; Leased Property:  Each as defined in Article I.
     ------------------------------------                      --------- 

     Legal Requirements:  All federal, state, county, municipal and other
     ------------------                                                  
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting either the Leased Property or the maintenance,
construction, use, operation or alteration thereof (whether by Lessee or
otherwise), now or hereafter enacted and in force, including (a) all laws, rules
or regulations pertaining to the environment, occupational health and safety and
public health, safety or welfare, and (b) any laws, rules or regulations that
may (1) require repairs, modifications or alterations in or to the Leased
Property or (2) in any way adversely affect the use and enjoyment thereof; and
all permits, licenses and authorizations necessary or appropriate to operate the
Leased Property for its Primary Intended Use; and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record or
known to Lessee (other than encumbrances hereafter created by Lessor without the
consent of Lessee), at any time in force affecting the Leased Property.

     Lessee:  The Lessee designated on this Lease and its permitted successors
     ------                                                                   
and assigns.

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

     Lessee's Personal Property:  As defined in Section 6.2.
     --------------------------                 ----------- 

     Lessor:  The Lessor designated on this Lease and its respective successors
     ------                                                                    
and assigns. As of the date of this Lease the sole beneficiary of Lessor is
Boston Properties Limited Partnership, a Delaware limited partnership.

     Lessor Impositions:  With respect to each Lease Year, an amount equal to
     ------------------                                                      
the aggregate amount of Capital Impositions, Real Estate Taxes and Personal
Property Taxes due and payable for such Lease Year.

     Lessor Indemnified Party:  Lessor, any Affiliate of Lessor, including the
     ------------------------                                                 
Company, any other Person against whom any claim for indemnification may be
asserted hereunder as a result of a direct or indirect ownership interest in
Lessor, the officers, directors, stockholders, partners, members, employees,
agents and representatives of any of the foregoing Persons and of any
stockholder, partner, member, agent, or representative of any of the foregoing
Persons, and the 

                                       11
<PAGE>
 
respective heirs, personal representatives, successors and
assigns of any such officer, director, partner, stockholder, employee, agent or
representative.

     Lessor Insurance Costs:  The costs to be borne by Lessor for insurance
     ----------------------                                                
coverages contemplated by Article XIII hereof.
                          ------------        

     Lessor Obligations:  An amount equal to (a) the aggregate amount that
     ------------------                                                   
Lessor is obligated to pay for the Lease Year in question under the terms of
this Lease for Lessor Impositions and Lessor Insurance Costs plus (b) the amount
to be accrued by Lessor in the Capital Expenditures Reserve for the Lease Year
in question.

     Lessor's Audit:  An audit by Lessor's independent certified public
     --------------                                                    
accountants of the operation of the Leased Property during any Lease Year, which
audit may, at Lessor's election, be either a complete audit of the Leased
Property's operations or an audit of Room Revenues, Food Sales and/or Beverage
Sales realized from the operation of the Leased Property during such Lease Year.

     Licenses:  As defined in Section 42.2.
     --------                 ------------ 

     Management Agreement:  Any management agreement and/or development
     --------------------                                              
agreement with a manager under which the Facility is operated, including without
limitation, that certain Management Agreement dated March 30, 1979, as amended
successively on March 30, 1979, April 9, 1979, December 27, 1979, April 2, 1980,
March 10, 1982, January 20, 1989, June 28, 1990 and June ___, 1997, and that
certain Development Agreement dated January 10, 1979, as amended successively on
March 30, 1979, December 27, 1979, June 28, 1990 and June ___, 1997, each
between Manager and Lessee, and each as the same may be further amended or
modified after the date hereof, with the prior written consent of Lessor.

     Manager: As used in this Agreement, shall mean Marriott International, Inc.
     -------                                                                    
or any permitted successor or assign.

     Migration:  As defined in Section 8.3(b).
     ---------                 -------------- 

     Minimum Net Worth:  As defined in Section 35.1.
     -----------------                 ------------ 

     Monthly Revenues Computation:  As defined in Section 3.1(b).
     ----------------------------                 -------------- 

     Mortgage:  As defined in Section 28.2.
     --------                 ------------ 

     Net Worth:  As defined in Section 35.1.
     ---------                 ------------ 

     Nonconsumable Inventory:  Inventory exclusive of Consumable Supplies.
     -----------------------                                              

     Notice:  A notice given pursuant to Article XXX.
     ------                              ----------- 

                                       12
<PAGE>
 
     Officer's Certificate:  A certificate of Lessee reasonably acceptable to
     ---------------------                                                   
Lessor, signed by the chief financial officer or another officer duly authorized
so to sign by Lessee or a managing member of Lessee, or any other person whose
power and authority to act has been authorized by delegation in writing by any
such officer.

     Other Leased Properties:  Shall mean any other hotels, in addition to the
     -----------------------                                                  
Leased Property, which at the time are the subject of leases in which Lessor or
an Affiliate of Lessor is the landlord and Lessee or an Affiliate of Lessee is
the tenant.

     Other Leases:  Shall mean the leases in effect at the time of applicable
     ------------                                                            
determination pursuant to which Lessor or an Affiliate of Lessor leases to
Lessee or an Affiliate of Lessee the Other Leased Properties.

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

     Payment Date:  Any due date for the payment of any installment of Rent.
     ------------                                                           

     Percentage Rent:  As defined in Section 3.1(b).
     ---------------                 -------------- 

     Person:  Any Government, natural person, corporation, partnership or other
     ------                                                                    
legal entity.

     Personal Property Limitation:  As defined in Section 18.1.
     ----------------------------                 ------------ 

     Personal Property Taxes:  All personal property taxes imposed on the
     -----------------------                                             
furniture, furnishings or other items of personal property located on, and used
in connection with, the operation of the Leased Improvements as a hotel (other
than Inventory and other personal property owned by the Lessee and/or its
tenants, licensees, concessionaires, agents or contractors (including Manager)),
together with all replacements, modifications, alterations and additions
thereto.

     Predecessor:  Any Person whose liabilities arising under any Environmental
     -----------                                                               
Law have or may have been retained or assumed by Lessor or Lessee pursuant to
the provisions of this Lease.

     Primary Intended Use:  As defined in Section 7.2(b).
     --------------------                 -------------- 

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

     RCRA:  The Resource Conservation and Recovery Act, as amended.
     ----                                                          

     Real Estate Taxes:  All real estate taxes, including general and special
     -----------------                                                       
assessments, if any, which are imposed upon the Land and any improvements
thereon.

                                       13
<PAGE>
 
     Release:  A "Release" as defined in CERCLA or in any Environmental Law,
     -------                                                                
unless such Release has been properly authorized and permitted in writing by all
applicable Environmental Authorities or is allowed by such Environmental Law
without authorizations or permits.

     Rent:  Collectively, the Base Rent, Percentage Rent and Additional Charges.
     ----                                                                       

     Revenue Audit:  As defined in Section 3.2(b).
     -------------                 -------------- 

     Revenues Computation:  As defined in Section 3.1(b).
     --------------------                 -------------- 

     REVPAR: Means the revenue per available room of the Leased Property,
     ------                                                              
determined by dividing Room Revenues by available rooms for the applicable
period.

     REVPAR Change: As defined in Section 3.1(d)(ii).
     -------------                ------------------ 

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

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

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

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

     SARA:  The Superfund Amendments and Reauthorization Act of 1986, as
     ----                                                               
amended.

     SEC:  The U.S. Securities and Exchange Commission or any successor agency.
     ---                                                                       

     Second Tier Food Sales Percentage:  As defined in Section 3.1(b)(ii) and
     ---------------------------------                 ------------------    
Exhibit B.
- --------- 

     Second Tier Room Revenue Percentage:  As defined in Section 3.1(b)(ii) and
     -----------------------------------                 ------------------    
Exhibit B.
- --------- 

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

     STR Reports:  Reports compiled by Smith Travel Research which contain
     -----------                                                          
historical supply and demand, occupancy, and average rate information for the
Facility and hotels with which it competes.

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

                                       14
<PAGE>
 
     Taking:  A permanent or temporary taking or voluntary conveyance during the
     ------                                                                     
Term hereof of all or part of the Leased Property, or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of,
any Condemnation or other eminent domain proceeding affecting the Leased
Property whether or not the same shall have actually been commenced.

     Tax Law Change:  A change in the Code (including, without limitation, a
     --------------                                                         
change in the Treasury regulations promulgated thereunder) or in the judicial or
administrative interpretations of the Code, which in Lessor's determination will
permit Lessor or an Affiliate thereof to operate the Facility as a hotel without
adversely affecting the Company's qualification for taxation as a real estate
investment trust under the applicable provisions of the Code.

     Tax Structure Change:  A change in the corporate structure of the Company
     --------------------                                                     
and its Affiliates which in the Lessor's determination will permit an Affiliate
of the Company to lease the Leased Property from Lessor or another Affiliate of
the Company without adversely affecting the Company's qualification for taxation
as a real estate investment trust under the applicable provisions of the Code.

     Term:  As defined in Section 1.2.
     ----                 ----------- 

     Third Tier Food Revenue Percentage:  As defined in Section 3.1(b)(ii) and
     ----------------------------------                 ------------------    
Exhibit B.
- --------- 

     Third Tier Room Revenue Percentage:  As defined in Section 3.1(b)(ii) and
     ----------------------------------                 ------------------    
Exhibit B.
- --------- 

     TSCA:  The Toxic Substances Control Act, as amended.
     ----                                                

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

     Uneconomic for its Primary Intended Use:  A state or condition of the
     ---------------------------------------                              
Facility such that in the judgment of Lessor the Facility cannot be operated on
a commercially practicable basis for its Primary Intended Use, such that Lessor
intends to, and shall, complete the cessation of operations from the Leased
Facility, if and to the extent permitted under the Management Agreement.

     Uniform System:  Shall mean the Uniform System of Accounts for Hotels (8th
     --------------                                                            
Revised Edition, 1986) as published by the Hotel Association of New York City,
Inc., as the same may hereafter be revised, and as the same is interpreted and
applied by the Lessor's independent certified public accountants in connection
with any Lessor's Audit.

                                       15
<PAGE>
 
     Unsuitable for its Primary Intended Use:  A state or condition of the
     ---------------------------------------                              
Facility such that in the judgment of Lessor to the extent such judgment is not
prohibited under the Management Agreement, the Facility cannot function as an
integrated hotel facility consistent with standards applicable to a well
maintained and operated hotel comparable in quality and function to that of the
Facility prior to the damage or loss.

                                  ARTICLE III
                                  -----------

                                      RENT
                                      ----

      3.1  Rent.  Lessee will 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, at Lessor's address set forth in Article XXX hereof or at such other
                                        -----------                        
place or to such other Person, as Lessor from time to time may designate in a
Notice, all Rent contemplated hereby during the Term on the basis hereinafter
set forth.  If there is a dispute as to the amount of Rent to be paid by Lessee,
either party may submit the dispute to arbitration pursuant to Section 40.2.
                                                               ------------  
However, Lessee shall be required to pay, as and when Rent is due and payable
hereunder, the amount of Rent calculated by Lessor to be due and payable until
such time as the dispute is resolved by agreement between the parties or by
arbitration pursuant to Section 40.2:
                        ------------ 

           (a) Base Rent: During the Term, Lessee shall pay to Lessor as Base
               ---------
Rent (herein so called and subject to increase as set forth in Subparagraph (d)
below) the annual sum of Eight Million Nine Hundred Thirty Three Thousand Nine
Hundred Ninety Dollars ($8,933,990), which shall be payable in arrears in
periodic installments on or before the earlier of (i) the twenty-fifth day after
the end of each Accounting Period or (ii) the fifth day after Lessee's receipt
of amounts relating to each Accounting Period pursuant to Section 5.02 of the
                                                          ------------
Management Agreement, in the amount for each such Accounting Period as set forth
on the attached Exhibit B-1, provided, however, the monthly payment of Base Rent
shall be prorated as to any partial month.

           (b) Percentage Rent:  In addition to the sums payable pursuant to
               ---------------                                              
subparagraph (a) above, Lessee shall, on the date of each payment of Base Rent
pursuant to subparagraph (a) above during the Term hereof, pay to Lessor an
amount equal to the Percentage Rent (herein so called and subject to increase
(or decrease) as set forth in Subparagraph (d) below) payable in accordance with
the provisions of this subparagraph (b).  Percentage Rent shall be calculated by
the following formula (the "Revenues Computation"):
                            --------------------   

               (i) For any calendar month, Percentage Rent shall equal:

                   (1) An amount equal to the Monthly Revenues Computation
                       (defined below), for the Lease Year in question

                                      less

                                       16
<PAGE>
 
           (2) An amount equal to the Base Rent paid by Lessee to Lessor for the
               Lease Year to date

                                      less

           (3) An amount equal to the Percentage Rent theretofore paid for the
               Lease Year in question to date.

     (ii)  "Monthly Revenues Computation" shall be computed utilizing the
            ----------------------------                                 
following definitions:

           (1) "Cumulative Monthly Portion" shall mean a fraction having as its
               --------------------------                                     
     numerator the total number of calendar months (including partial months) in
     a Lease Year which have elapsed prior to the month in which a monthly
     payment of Percentage Rent is due, and having as its denominator the total
     number of calendar months (including partial months) in the Lease Year. For
     example, the Cumulative Monthly Portion in a 12-month Lease Year for the
     January Percentage Rent payment due in February will be 1/12 and for the
     February Percentage Rent payment due in March will be 2/12, and such
     progression shall continue for each successive calendar month so that the
     Cumulative Monthly Portion for the December Percentage Rent payment due in
     January of the next Lease Year will be 12/12 or 100%.

           (2) "First Tier Room Revenue Percentage," "Second Tier Room Revenue
                ----------------------------------    ------------------------
     Percentage," "Third Tier Room Revenue Percentage," "First Tier Food Sales
     ----------    ----------------------------------    ---------------------
     Percentage," "Second Tier Food Sales Percentage" and "Third Tier Food Sales
     ----------    ---------------------------------       ---------------------
     Percentage" shall mean the percentages corresponding to each of such terms
     ----------  
     as set forth on Exhibit B.
                     --------- 

           (3) "Annual Room Revenues First Break Point" and "Annual Room
                --------------------------------------       -----------
     Revenues Second Break Point" shall mean the amount of annual Room Revenues
     ---------------------------
     corresponding to each of such terms as set forth on Exhibit B.
                                                         ---------

           (4) "Annual Food Sales First Break Point" and "Annual Foods Sales
                -----------------------------------       ------------------
     Second Break Point" shall mean the amount of annual Food Sales and Beverage
     ------------------
     Sales corresponding to each of such terms as set forth on Exhibit B.
                                                               --------- 

     (iii) The Monthly Revenues Computation shall be the amount obtained by
adding, for the applicable Lease Year the following sums:

           (1) an amount equal to the First Tier Room Revenue Percentage of all
     year to date Room Revenues up to (but not exceeding) the Cumulative Monthly
     Portion of the Annual Room Revenues First Break Point,

                                       17
<PAGE>
 
           (2) an amount equal to the Second Tier Room Revenue Percentage of all
     year to date Room Revenues in excess of the Cumulative Monthly Portion of
     the Annual Room Revenues First Break Point up to (but not exceeding) the
     Cumulative Monthly Portion of the Annual Room Revenues Second Break Point,

           (3) an amount equal to the Third Tier Room Revenue Percentage of all
     year to date Room Revenues in excess of the Cumulative Monthly Portion of
     the Annual Room Revenues Second Break Point,

           (4) an amount equal to the First Tier Food Sales Percentage of all
     year to date Food Sales and Beverage Sales up to (but not exceeding) the
     Cumulative Monthly Portion of the Annual Food Sales First Break Point,

           (5) an amount equal to the Second Tier Food Sales Percentage of all
     year to date Food Sales and Beverage Sales in excess of the Cumulative
     Monthly Portion of the Annual Food Sales First Break Point up to (but not
     exceeding) the Cumulative Monthly Portion of the Annual Food Sales Second
     Break Point, and

           (6) an amount equal to the Third Tier Food Sales Percentage of all
     year to date Food Sales and Beverage Sales in excess of the Cumulative
     Monthly Portion of the Annual Food Sales Second Break Point.

     (iv)  If the Term begins or ends in the middle of a calendar year, then the
   number of months falling within the Term during such calendar year shall
   constitute a separate Lease Year. In that event, the Annual Room Revenues
   First Break Point, the Annual Room Revenues Second Break Point, the Annual
   Food Sales First Break Point and the Annual Food Sales Second Break Point
   (collectively, the "Break Points") shall each be multiplied by a fraction
                       ------------    
   equal to (A) the number of months (including partial months) in the Lease
   Year divided by (B) twelve (12), and the Cumulative Monthly Portion for each
        ----------    
   of the months in such Lease Year shall be determined as set forth in the
   definition of Cumulative Monthly Portion above.

     (v)   The obligation to pay Percentage Rent shall survive the expiration or
   earlier termination of the Term, and a final reconciliation, taking into
   account, among other relevant adjustments, any adjustments which are accrued
   after such expiration or termination date but which related to Percentage
   Rent accrued prior to such termination date, shall be made not later than
   sixty (60) days after such expiration or termination date.

     (c) Officer's Certificates.  An Officer's Certificate shall be delivered to
         ----------------------                                                 
Lessor monthly setting forth the calculation of the Percentage Rent payment for
the most recently completed month within 10 days after each month of each Lease
Year during the Term.  There shall be no reduction in Base Rent regardless of
the results of the Monthly or Annual Revenues Computation.  Percentage Rent
shall be subject to confirmation and adjustment, if applicable, as 

                                       18
<PAGE>
 
set forth in Section 3.2. Notwithstanding the amounts of Percentage Rent paid
             -----------
monthly pursuant to the formula set forth above, for each Lease Year during the
Term commencing with the Lease Year in which the Commencement Date occurs, the
Percentage Rent payable under this Lease shall be equal to the amount determined
by the following formula:

        The amount equal to the Annual Revenues Computation (as defined below)
        for the Lease Year in question

                                      less

        An amount equal to the Base Rent paid for the applicable Lease Year

                                     equals

        Percentage Rent for the applicable Lease Year.

The Annual Revenues Computation (herein so called) shall be the amount obtained
by adding, for the applicable Lease Year, the following sums:

           (1) an amount equal to the First Tier Room Revenue Percentage of Room
     Revenues for the applicable Lease Year up to (but not exceeding) the Annual
     Room Revenues First Break Point,

           (2) an amount equal to the Second Tier Room Revenue Percentage of
     Room Revenues for the applicable Lease Year in excess of the Annual Room
     Revenues First Break Point up to (but not exceeding) the Annual Room
     Revenues Second Break Point,

           (3) an amount equal to the Third Tier Room Revenue Percentage of Room
     Revenues for the applicable Lease Year in excess of the Annual Room
     Revenues Second Break Point,

           (4) an amount equal to the First Tier Food Sales Percentage of Food
     Sales and Beverage Sales for the applicable Lease Year up to (but not
     exceeding) the Annual Food Sales First Break Point,

           (5) an amount equal to the Second Tier Food Sales Percentage of Food
     Sales and Beverage Sales for the applicable Lease Year in excess of the
     Annual Food Sales First Break Point up to (but not exceeding) the Annual
     Food Sales Second Break Point, and

           (6) an amount equal to the Third Tier Food Sales Percentage of Food
     Sales and Beverage Sales for the applicable Lease Year in excess of the
     Annual Food Sales Second Break Point.

                                       19
<PAGE>
 
If the annual Percentage Rent due and payable for any Lease Year (as shown in
the applicable Officer's Certificate) exceeds the amount actually paid as
Percentage Rent by Lessee for such year, Lessee also shall pay such excess to
Lessor within sixty (60) days after the end of the applicable Lease Year.  If
the Percentage Rent actually due and payable for such Lease Year is shown by
such certificate to be less than the amount actually paid as Percentage Rent for
the applicable Lease Year, Lessee shall be entitled to a credit in the amount of
such overpayment against the next ensuing payment of Base Rent and/or Percentage
Rent, provided, however, if such overpayment is greater than a monthly payment
of Base Rent, Lessor shall pay the amount which is over and above the monthly
payment of Base Rent to Lessee within thirty (30) days of such determination.
Notwithstanding the foregoing, if the Annual Revenues Computation is less than
the Base Rent for the applicable Lease Year, Lessee shall not be entitled to any
credit or refund.

     (d) CPI Adjustments/REVPAR Adjustments.
         ---------------------------------- 

     (i) For each Lease Year during the Term beginning with the Lease Year
commencing January 1, 1998, the Base Rent then in effect, the Annual Room
Revenues First Break Point and the Annual Food Sales First Break Point then
included in the Revenues Computation set forth in Section 3.1(b), shall be
increased or, with respect to the Annual Room Revenues First Break Point and the
Annual Food Sales First Break Point only, decreased as follows:

           (1) For the Lease Year commencing January 1, 1998 and for each Lease
Year thereafter during the Term, the Consumer Price Index for the day before the
day that the new Lease Year commences ("Measurement Date") shall be divided by
the Consumer Price Index for the day that is twelve months preceding the
Measurement Date;

           (2) The new Base Rent for the then current Lease Year shall be the
product of the Base Rent in effect in the most recently ended Lease Year and the
quotient obtained under subparagraph (1) above;

           (3) The new Annual Room Revenues First Break Point in the Revenues
Computation described in Section 3.1(b) above for the Lease Year commencing
January 1, 1998 shall be the sum of (a) the Annual Room Revenues First Break
Point in effect in the Lease Year ending December 31, 1997 plus or minus, as
applicable, (b) the product of such Annual Room Revenues First Break Point
multiplied by the quotient obtained in subparagraph (1) above; and the new
Annual Room Revenues First Break Point in the Revenue Computation for the Lease
Year beginning with the Lease Year commencing January 1, 1999 and for each Lease
Year thereafter during the Term, shall be the sum of (a) the Annual Room
Revenues First Break Point in effect in the most recently ended Lease Year plus
or minus, as applicable, (b) the product of such Annual Room Revenues First
Break Point multiplied by the quotient obtained in subparagraph (1) above; and

          (4) The new Annual Food Sales First Break Point in the Revenues
Computation described in Section 3.1(b) above for the Lease Year commencing
January 1, 1998 shall be the sum of (a) the Annual Food Sales First Break Point
in effect in the Lease Year 

                                       20
<PAGE>
 
ending December 31, 1997 plus or minus, as applicable, (b) the product of such
Annual Food Sales First Break Point multiplied by the quotient obtained in
subparagraph (1) above; and the new Annual Food Sales Break Point in the
Revenues Computation for the Lease Year beginning with the Lease Year commencing
January 1, 1999 and for each Lease Year thereafter during the Term, shall be the
sum of (a) the Annual Food Sales First Break Point in effect in the most
recently ended Lease Year plus or minus, as applicable, (b) the product of such
Annual Food Sales First Break Point multiplied by the quotient obtained in
subparagraph (1) above.

     In no event shall the Base Rent be reduced as a result of any changes in
the Consumer Price Index.

     If (1) a significant change is made in the number or nature (or both) of
items used in determining the Consumer Price Index, or (2) the Consumer Price
Index shall be discontinued for any reason, the Bureau of Labor Statistics shall
be requested to furnish a new index comparable to the Consumer Price Index,
together with information which will make possible a conversion to the new index
in computing the adjusted Base Rent, Annual Room Revenues First Break Point, and
Annual Food Sales First Break Point hereunder.  If for any reason the Bureau of
Labor Statistics does not furnish such an index and such information, the
parties will instead mutually select, accept and use such other index or
comparable statistics on the cost of living in various U.S. cities that is
computed and published by an agency of the United States or a responsible
financial periodical of recognized authority.

     (ii) For each Accounting Period ending during each Lease Year during the
Term, beginning with the Lease Year commencing January 1, 1998, the Annual Room
Revenues Second Break Point and the Annual Food Sales Second Break Point then
included in the Revenues Computations set forth in Section 3.1(b), shall be
increased or decreased as follows (provided, however, that in no event shall the
                                   --------  -------                            
Annual Room Revenues Second Break Point or the Annual Food Sales Second Break
Point be adjusted during the first two (2) Accounting Periods ending during a
Lease Year):

          1.  For each Accounting Period during the Lease Year commencing
              January 1, 1998 and for each Accounting Period during each Lease
              Year thereafter during the Term (other than the first two (2)
              Accounting Periods ending during a Lease Year, as noted above) the
              "REVPAR Change" for each such Accounting Period shall be computed
              by dividing (x) the REVPAR for the period commencing on the first
              day of the first Accounting Period ending during such Lease Year
              and ending on the last day of the applicable Accounting Period of
              the termination, by (y) the REVPAR for the period commencing on
              the first day of the first Accounting Period ending during the
              prior Lease Year and ending on the last day of the corresponding
              Accounting Period during the prior Lease Year. For example, the
              REVPAR Change for the third Accounting Period ending during a
              Lease Year shall be determined by dividing REVPAR for the first
              three Accounting Periods of such Lease Year 

                                       21
<PAGE>
 
              by REVPAR for the first three Accounting Periods of the prior
              Lease Year. Similarly, the REVPAR Change for the fourth Accounting
              Period ending during a Lease Year shall be determined by dividing
              REVPAR for the first four Accounting Periods of such Lease Year by
              REVPAR for the first four Accounting Periods of the prior Lease
              Year. Such progression shall continue for each successive
              Accounting Period during each Lease Year such that the REVPAR
              Change for the thirteenth Accounting Period ending during a Lease
              Year shall be determined by dividing REVPAR for the thirteen
              Accounting Periods of such Lease Year by REVPAR for the thirteen
              Accounting Periods of the prior Lease Year;

          2.  The new Annual Rooms Revenue Second Break Point in the Revenues
              Computation described in Section 3.1(b) above for each Accounting
              Period ending during the Lease Year commencing January 1, 1998
              shall be the sum of (a) the Annual Room Revenues Second Break
              Point in effect in the Lease Year ending January 31, 1997 plus or
              minus, as applicable, (b) the product of such Annual Room Revenues
              Second Break Point multiplied by the applicable Change Percentage
              for each Accounting Period ending during such Lease Year set forth
              on the attached Exhibit B-2; and the new Annual Rooms Revenue
                              -----------      
              Second Break Point in the Revenues Computation for each Accounting
              Period ending during the Lease Year beginning with the Lease Year
              commencing January 1, 1999 and for each Lease Year thereafter
              during the Term, shall be the sum of (a) the Annual Room Revenues
              Second Break Point in effect in the most recently ended Lease Year
              plus or minus, as applicable, (b) the product of such Annual Room
              Revenues Second Break Point multiplied by the applicable Change
              Percentage for each Accounting Period ending during such Lease
              Year set forth on the attached Exhibit B-2; and
                                             -----------     

          3.  The new Annual Food Sales Second Break Point in the Revenues
              Computation described in Section 3.1(b) above for each Accounting
              Period ending during the Lease Year commencing January 1, 1998
              shall be the sum of (a) the Annual Food Sales Second Break Point
              in effect in the Lease Year ending January 31, 1997 plus or minus,
              as applicable, (b) the product of such Annual Food Sales Second
              Break Point multiplied by the applicable Change Percentage for
              each Accounting Period ending during such Lease Year set forth on
              the attached Exhibit B-2; and the new Annual Food Sales Second
                           -----------
              Break Point in the Revenues Computation for each Accounting Period
              ending during the Lease Year beginning with the Lease Year
              commencing January 1, 1999 and for each Lease Year thereafter
              during the Term, shall be the sum of (a) the Annual Food Sales

                                       22
<PAGE>
 
              Second Break Point in effect in the most recently ended Lease Year
              plus or minus, as applicable, (b) the product of such Annual Food
              Sales Second Break Point multiplied by the applicable Change
              Percentage for each Accounting Period ending during such Lease
              Year set forth on the attached Exhibit B-2.
                                             ----------- 

           (iii)  Adjustments calculated as set forth above in the Base Rent,
the Annual Room Revenues Break Point(s) and the Annual Food Sales Break Point(s)
shall be effective on the first day of each calendar Lease Year (or each
Accounting Period, as applicable) to which such adjusted amounts apply. If Rent
is paid prior to the determination of the amount of any adjustment to Base Rent,
the Annual Room Revenues Break Point(s) or the Annual Foods Sales Break Point(s)
applicable for such period, whether because of a delay in the publication of the
Consumer Price Index or the determination of applicable REVPAR or because of any
other reason, payment adjustments for any shortfall in or overpayment of Rent
paid shall be made with the first Base Rent and Percentage Rent payments due
after the amount of the adjustments are determined.

      3.2  Confirmation of Percentage Rent.
           ------------------------------- 

           (a) Lessee shall utilize, or cause to be utilized, an accounting
system for the Leased Property in accordance with GAAP and the Uniform System,
that will accurately record all data necessary to compute Percentage Rent, and
Lessee shall retain, for at least five (5) years after the expiration of each
Lease Year, reasonably adequate records conforming to such accounting system
showing all data necessary to conduct Lessor's Audit and to compute Percentage
Rent for the applicable Lease Years.

           (b) Lessor shall have the right from time to time by its accountants
or representatives to audit such information in connection with Lessor's Audit,
and to examine all Lessee's records (including supporting data and sales and
excise tax returns) reasonably required to complete Lessor's Audit and to verify
Percentage Rent, subject to any prohibitions or limitations on disclosure of any
such data under Legal Requirements. If any Lessor's Audit discloses a deficiency
in the payment of Percentage Rent, and either Lessee agrees with the result of
Lessor's Audit or the matter is otherwise determined or compromised, Lessee
shall forthwith pay to Lessor the amount of the deficiency, as finally agreed or
determined, together with interest at the Overdue Rate from the date when said
payment should have been made to the date of payment thereof; provided, however,
that as to any Lessor's Audit that is commenced more than one (1) year after the
end of any Lease Year, the deficiency, if any, with respect to such Percentage
Rent shall bear interest at the Overdue Rate only from the date such
determination of deficiency is made unless such deficiency is the result of
gross negligence or willful misconduct on the part of Lessee, in which case
interest at the Overdue Rate will accrue from the date such payment should have
been made to the date of payment thereof. In addition to the amounts described
above in this Section 3.2(b), if any Lessor's Audit discloses a deficiency in
              --------------                             
the payment of Percentage Rent which, as finally agreed or determined, exceeds
3%, Lessee shall pay the costs of the portion of Lessor's Audit allocable to the
determination of Gross Revenues (the "Revenue Audit"). In no event shall Lessor
                                      -------------                             
undertake a Lessor's Audit more than five (5) years after the last day of the
Lease Year for which such audit is requested.

                                       23
<PAGE>
 
           (c) Any proprietary information obtained by Lessor pursuant to the
provisions of this Section shall be treated as confidential, except that such
information may be used, subject to appropriate confidentiality safeguards, in
any litigation between the parties and except further that Lessor may disclose
such information to prospective lenders and investors and to any other persons
to whom disclosure is necessary or appropriate to comply with applicable laws,
regulations and government requirements.

           (d) The obligations of Lessee and Lessor contained in this Section
shall survive the expiration or earlier termination of this Lease. Any dispute
as to the existence or amount of any deficiency in the payment of Percentage
Rent as disclosed by Lessor's Audit shall, if not otherwise settled by the
parties, be submitted to arbitration pursuant to the provisions of Section 40.2.
                                                                   ------------ 

      3.3  Additional Charges.  In addition to the Base Rent and Percentage
           ------------------                                              
Rent, Lessee also will pay and discharge as and when due and payable the
following:  (a) all other amounts, liabilities, obligations and Impositions 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 3.3, 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 3.3
                                                                 -----------
shall be additional rent hereunder and shall be referred to herein collectively
as the "Additional Charges".  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 in
the case of non-payment of the Base Rent.  If any installment of Base Rent,
Percentage Rent or Additional Charges (but only as to those Additional Charges
that are payable directly to Lessor) shall not be paid on its due date,  Lessee
will pay Lessor within ten (10) days of demand, as Additional Charges, a late
charge (to the extent permitted by law) equal to the greater of (i) interest
computed at the Overdue Rate on the amount of such installment, from the due
date of such installment to the date of payment thereof, or (b) five percent
(5%) of such amount.  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 the same from monies received from Lessee.

      3.4  No Set Off.  Rent shall be paid to Lessor without set off, deduction
           ----------                                                          
or counterclaim; provided, however, that Lessee shall have the right of offset
to the extent specifically provided in Section 39.1 and the right to assert any
                                       ------------                            
claim or counterclaim in a separate action brought by Lessee under this Lease or
to assert any mandatory counterclaim in any action brought by Lessor under this
Lease.

      3.5  Annual Operating Projection.  Not later than twenty-five (25) days
           ---------------------------                                       
prior to the commencement of each Lease Year, Lessee shall submit to Lessor an
Annual Operating Projection and a Capital Inventory Budget prepared in
accordance with the requirements of Section 8.04 and Section 9.04 of the
Management Agreement.

                                       24
<PAGE>
 
      3.6  Books and Records.  Lessee shall keep and shall cause Manager to
           -----------------                                               
keep, full and adequate books of account and other records reflecting the
results of operation of the Facility on an accrual basis, all in accordance with
the Uniform System and GAAP and the obligations of Lessee under this Lease.  The
books of account and all other records relating to or reflecting the operation
of the Facility shall be kept either at the Facility or at Lessee's offices in
Boston, Massachusetts and shall be available to Lessor and its representatives
and its auditors or accountants, at all reasonable times for examination, audit,
inspection, and transcription.  All of such books and records pertaining to the
Facility including, without limitation, books of account, guest records and
front office records, at all times shall be the property of Lessor and shall not
be removed from the Facility or Lessee's offices without Lessor's prior written
approval.  Lessee shall be entitled to make copies of any or all such books and
records for its own files.  Lessee's obligations under this Section 3.6 shall
                                                            -----------      
survive termination of this Lease for any reason.

      3.7  Intentionally Omitted.
           --------------------- 

      3.8  Changes in Operations.  Without Lessor's prior written consent,
           ---------------------                                          
Lessee shall not (i) provide food and/or beverage operations at the Facility if
not presently provided, (ii) discontinue any food and/or beverage operations
which are presently provided, or (iii) convert a subtenant, licensee or
concessionaire to an operating department of the Facility or vice-versa.

      3.9  Allocation of Revenues.  In the event that individuals or groups
           ----------------------                                          
purchase rooms, food and beverage and/or the use of other hotel facilities or
services together or as part of a package, Lessee agrees that revenues shall be
allocated among Room Revenues, Food Sales, Beverage Sales and/or other revenue
categories, as applicable, in a reasonably manner consistent with the historical
allocation of such revenues.


                                   ARTICLE IV
                                  -----------

                                  IMPOSITIONS
                                  -----------

      4.1  Payment of Impositions.
           ---------------------- 

          (a) Subject to Article XII relating to permitted contests, Lessee will
                         -----------                                            
pay, or cause to be paid, all Impositions (other than Lessor Impositions, which
shall be paid by Lessor) before any fine, penalty, interest or cost may be added
for non-payment, such payments to be made directly to the taxing or other
authorities where feasible, and will promptly furnish to Lessor copies of
official receipts or other satisfactory proof evidencing such payments.
Lessee's obligation to pay such Impositions shall be deemed absolutely fixed
upon the date such Impositions become a lien upon the Leased Property or any
part thereof, subject to Lessee's right of contest pursuant to the provisions of
Article XII.  If any such Imposition may, at the option of the taxpayer,
- -----------                                                             
lawfully be paid in installments (whether or not interest shall accrue on the
unpaid balance of such Imposition), Lessee may exercise the option to pay the
same (and any accrued interest on the unpaid balance of such Imposition) in
installments payable during the Term and in such event, shall pay such
installments and any unpaid balance of such Impositions prior to the 

                                       25
<PAGE>
 
expiration or earlier termination of the Term hereof and before any fine,
penalty, premium, further interest or cost may be added thereto.

          (b) Lessor, at its expense, shall, to the extent required or permitted
by applicable law, prepare and file all tax returns in respect of Lessor's net
income, gross receipts, sales and use, single business, transaction privilege,
rent, ad valorem, franchise taxes, Real Estate Taxes, Personal Property Taxes
and taxes on its capital stock, and Lessee, at its expense, shall, to the extent
required or permitted by applicable laws and regulations, prepare and file all
other tax returns and reports in respect of any Imposition as may be required by
governmental authorities.

          (c) If any refund shall be due from any taxing authority 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 been declared by Lessor 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.
- ----------- 

          (d) Lessor and Lessee shall, upon request of the other, cooperate with
the other party and otherwise 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.  Lessee shall file all Personal
Property Tax returns in such jurisdictions where it is legally required to so
file.  Lessor, to the extent it possesses the same, and Lessee, to the extent it
possesses the same, will provide the other party, upon request, with cost and
depreciation records necessary for filing returns for any property classified as
personal property. Where Lessor is legally required to file Personal Property
Tax returns, Lessee shall provide Lessor with copies of assessment notices in
sufficient time for Lessor to file a protest.

          (e) Lessor may, upon notice to Lessee and to the extent not prohibited
by the Management Agreement, at Lessor's option and at Lessor's sole expense,
protest, appeal, or institute such other proceedings (in its or Lessee's name)
as Lessor may deem appropriate to effect a reduction of real estate or personal
property assessments for those Impositions to be paid by Lessor, and Lessee, at
Lessor's expense as aforesaid, shall fully cooperate with Lessor in such
protest, appeal, or other action.  Lessor hereby agrees to indemnify, defend,
and hold harmless Lessee from and against any claims, obligations, and
liabilities against or incurred by Lessee in connection with such cooperation.
Billings for reimbursement of Personal Property Taxes by Lessee to Lessor shall
be accompanied by copies of a bill therefor and payments thereof which identify
the personal property with respect to which such payments are made. Lessor,
however, reserves the right to effect any such protest, appeal or other action
and, upon notice to Lessee, shall control any such activity, which shall then
proceed at Lessor's sole expense.  Upon such notice, Lessee, at Lessor's
expense, shall cooperate fully with such activities.

          (f) To the extent received by it, Lessee shall furnish Lessor with
copies of all assessment notices for Real Estate Taxes and Personal Property
Taxes in sufficient time for Lessor to file a protest and pay such taxes without
penalty.  Lessor shall within thirty (30) days after 

                                       26
<PAGE>
 
making such payment furnish Lessee with evidence of payment of Capital
Impositions, Real Estate Taxes and Personal Property Taxes.

          4.2  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 if
Lessee did not otherwise have knowledge of such Imposition sufficient to permit
it to pay same, such failure shall obviate any default hereunder for a
reasonable time after Lessee receives Notice of any Imposition which it is
obligated to pay during the first taxing period applicable thereto.

          4.3  Adjustment of Impositions.  Impositions payable by Lessee which
               -------------------------                                      
are imposed in respect of the tax-fiscal period during which the Term 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.

          4.4  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.

                                   ARTICLE V
                                   ---------

                           NO TERMINATION, ABATEMENT
                           -------------------------

          5.1  No Termination, Abatement.  Except as otherwise specifically
               -------------------------                                   
provided in this Lease, Lessee, to the extent permitted by law, shall remain
bound by this Lease in accordance with its terms and shall neither take any
action without the 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,
any Leased Property or any portion thereof from whatever cause or any Taking of
the Leased Property or any portion thereof, (b) any bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding up
or other proceedings affecting Lessor or any assignee or transferee of Lessor,
or (c) 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 default under
this Lease by Lessor which may now or hereafter be conferred upon it by law to
(1) modify, surrender or terminate this Lease or quit or surrender the Leased
Property or any portion thereof, or (2) entitle Lessee to any abatement,
reduction, suspension or deferment of or set off against 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 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.

                                       27
<PAGE>
 
                                  ARTICLE VI
                                  ----------

                              PROPERTY OWNERSHIP
                              ------------------

          6.1  Ownership of the Leased Property.  Lessee acknowledges that the
               --------------------------------                               
Leased Property is the property of Lessor and that Lessee has only the right to
the possession and use of the Leased Property upon the terms and conditions of
this Lease.

          6.2  Lessee's Personal Property.
               -------------------------- 

               (a)  Upon commencement of the Term, (i) Lessor shall transfer (to
the extent owned by Lessor) to Lessee all Consumable Supplies at the Facility
for their fair market value, and (ii) Lessor shall transfer (to the extent owned
by Lessor) to Lessee all Nonconsumable Inventory located at the Facility on the
Commencement Date (the "Initial Nonconsumable Inventory"). At all times during
                        -------------------------------
the Term, Lessee shall maintain, or cause Manager to maintain, Inventory
consistent with the amount of inventory which is customarily maintained in a
hotel of the type and character of the Facility and is otherwise required to
operate the Leased Property in the manner contemplated by this Lease and in
compliance with the Management Agreement and all Legal Requirements. All
Inventory, to the extent not owned by the Manager pursuant to the Management
Agreement, shall be the property of Lessee, subject to Lessee's obligations
under Section 6.2(b). Lessee may (and shall as provided hereinbelow), at its
      --------------
expense, but subject to the Management Agreement, install, affix or assemble or
place on any parcels of the Land or in any of the Leased Improvements, any items
of personal property (including Inventory) owned by Lessee (collectively, the
"Lessee's Personal Property"). Lessee may, subject to the second sentence of
 --------------------------
this Section 6.2(a) and the conditions set forth in Section 6.2(b) below, remove
     --------------                                 --------------
any of Lessee's Personal Property set forth on such list at any time during the
Term or upon the expiration or any prior termination of the Term. All of
Lessee's Personal Property, other than Inventory, not removed by Lessee within
thirty (30) days following the expiration or earlier termination of the Term
shall be considered abandoned by Lessee and may be appropriated, sold, destroyed
or otherwise disposed of by Lessor without first giving Notice thereof to
Lessee, without any payment to Lessee and without any obligation to account
therefor. Lessee will, at its expense, restore the Leased Property to the
condition required by Section 9.1(d), including repair of all damage to the
                      --------------
Leased Property caused by the removal of Lessee's Personal Property, whether
effected by Lessee or Lessor.

               (b)  Lessor and Lessee agree that the transfer of Consumable
Supplies and Initial Nonconsumable Inventory from Lessor to Lessee upon
commencement of the Term shall be treated as a sale of the Initial Nonconsumable
Inventory for the fair market value thereof (the "Purchase Price"). The Purchase
                                                  --------------
Price, plus interest thereon at the applicable federal rate published pursuant
to Section 1274(d) of the Internal Revenue Code of 1986, as amended, shall be
payable in equal monthly installments over the Term and shall be credited
against amounts of Base Rent and Percentage Rent payable under this Lease.
Nothing in this Section 6.2(b) shall be interpreted to give rise to any
                --------------
obligation of Lessee to make any payment to Lessor, but instead this Section
                                                                     -------
6.2(b) is intended to characterize payments otherwise denominated as Rent as
- ------
payments

                                       28
<PAGE>
 
of the Purchase Price and interest thereon. Lessor and Lessee shall determine
the Purchase Price in their joint inventory of the Facility to be conducted
within fifteen (15) days of the date hereof.

          6.3  Lessor's Lien.  To the fullest extent permitted by applicable
               -------------                                                
law, Lessor is granted a lien and security interest on all Lessee's Personal
Property now or hereinafter placed in or upon the Leased Property, and such lien
and security interest shall remain attached to such Lessee's Personal Property
until payment in full of all Rent and satisfaction of all of Lessee's
obligations hereunder; provided, however, Lessor shall subordinate its lien and
security interest only to that of any non-Affiliate of Lessee which finances
such Lessee's Personal Property or any non-Affiliate conditional seller of such
Lessee's Personal Property, the terms and conditions of such subordination to be
satisfactory to Lessor in the exercise of reasonable discretion. Lessee shall,
upon the request of Lessor, execute such financing statements or other documents
or instruments reasonably requested by Lessor to perfect the lien and security
interests herein granted.

          6.4  Equipment Lease Property.  Personal property utilized at the
               ------------------------                                    
Facility which is leased pursuant to the equipment leases listed on Exhibit C
                                                                    ---------
and which expire on or before the termination of this Lease shall, at the option
of Lessor, become the property of Lessor without the payment of additional
consideration by Lessor except for any consideration which must be paid to the
equipment lessor on expiration of the equipment lease to acquire title thereto.
Lessee shall cooperate with Lessor to assume the transfer of title to such
leased property to Lessor and shall give Notice to Lessor of any such leases and
of the expiration dates thereof.  Lessor shall, at Lessor's cost, acquire title
to or replace such leased property with funds other than the Capital
Expenditures Reserve when the leases for such leased property expire and make
such property or replacement property available to Lessee hereunder during the
Term of this Lease.

                                  ARTICLE VII
                                  -----------

                                CONDITION, USE
                                --------------

          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", "with all faults", and in its present condition.
Except as otherwise specifically provided herein, 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.

                                       29
<PAGE>
 
          7.2  Use of the Leased Property.
               -------------------------- 

               (a)  Lessee covenants that it will, or will cause Manager to,
obtain and maintain, all permits, licenses and approvals, including, without
limitation, liquor licenses, needed to use and operate the Leased Property and
the Facility under applicable local, state and federal law, the Management
Agreement.

               (b)  Lessee shall use or cause to be used the Leased Property
only as a hotel facility, 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. No use
shall be made or permitted to be made of the Leased Property, and no acts shall
be done, which will cause the cancellation of any insurance policy covering the
Leased Property or any part thereof (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 is prohibited by law or fire underwriter's regulations. Lessee
shall comply, and shall cause Manager to 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 and Lessee's Personal Property, which
compliance shall be performed at Lessee's sole cost except to the extent that
such compliance requires the performance of a Capital Improvement or the payment
of a Capital Imposition which are not the Manager's obligation under the
Management Agreement.

               (c)  Subject to the provisions of Articles XIV and XV, Lessee
                                                 ------------     --
covenants and agrees that during the Term it will (1) continuously operate and
cause the Manager to continuously operate the Leased Property as a hotel
facility, (2) keep in full force and effect and comply in all material respects
with all the provisions of the Management Agreement and cause the Manager to
comply in all material respects with all of the provisions of the Management
Agreement, (3) not enter into, terminate or amend in any respect any Management
Agreement without the consent of Lessor, (4) maintain or cause to be maintained,
appropriate certifications and licenses for such use and (5) keep Lessor advised
of the status of any litigation affecting the Leased Property.

               (d)  Lessee shall not commit or suffer to be committed any waste
on the Leased Property, or in the Facility, nor shall Lessee cause or permit any
nuisance thereon.

               (e)  Lessee shall neither suffer nor permit the Leased Property
or any portion thereof, or Lessee's Personal Property, 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.

               (f)  Lessee acknowledges and agrees that all employees involved
in the use and operation of the Leased Property shall be employees of Lessee,
Manager, or one of their Affiliates and not of Lessor or any of its Affiliates.
Lessee, the Manager, and their respective Affiliates shall fully comply with all
Legal Requirements and all collective bargaining and other agreements  

                                       30
<PAGE>
 
applicable to such employees. Upon the expiration or earlier termination of this
Lease, all such employees shall be terminated or retained by Lessee, Manager or
their respective Affiliates, as applicable, and Lessee, Manager or their
respective Affiliates, as applicable, shall provide any required notices or
other rights to such employees, all without liability to Lessor or the Leased
Property, or any other owner, lessee or manager of the Leased Property. Payment
of all costs and expenses associated with accrued but unpaid salary, earned but
unpaid vacation pay, accrued but unearned vacation pay, pension and welfare
benefits, the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA")benefits, employee fringe benefits, employee termination payments or 
  -----
any other employee benefits due to such employees, shall be the sole
responsibility and obligation of and shall be paid when due by Lessee, Manager
or their respective Affiliates, as applicable. Upon the expiration or earlier
termination of this Lease, any owner, manager or lessee of the Leased Property
shall have the right, but not the obligation, to extend offers of employment to
some or all of such employees on such terms and conditions as are determined
solely in such party's discretion; and Lessee shall, and shall cause Manager to,
use reasonable efforts to assist such party in its efforts to secure
satisfactory employment arrangements with such employees. Lessee, Manager or
their respective Affiliates, as applicable, shall provide any notices, coverages
or other rights as shall be required to comply with the medical coverage
continuation requirements of COBRA to any persons who are entitled to such
rights by virtue of the maintenance of any group health plan by Lessee, Manager
or their respective Affiliates, as applicable, and shall maintain, or cause an
affiliate company to maintain, a group health plan that such person shall be
entitled to participate in for the maximum period required by COBRA. Lessee
shall indemnify, defend and hold harmless Lessor, the Leased Property, and any
other owner, lessee or manager of the Leased Property, from and against any and
all claims, causes of action, proceedings, judgments, damages, penalties,
liabilities, costs and expenses (including reasonable attorney's fees and
disbursements) arising out of the employment or termination of employment of or
failure to offer employment to any employee or prospective employee by Lessee,
Manager or their respective Affiliates, including, without limitation, claims of
discrimination, sexual harassment, breaches of employment or collective
bargaining agreements, or the failure of Lessee, Manager or any of their
Affiliates to comply with the provisions of this section. The indemnification
rights and obligations provided for in this section shall survive the
termination of this Lease.

                                 ARTICLE VIII
                                 ------------

                              LEGAL REQUIREMENTS
                              ------------------

          8.1  Compliance with Legal and Insurance Requirements.  Subject to
               ------------------------------------------------             
Sections 8.2 and 8.3 and Article XII relating to permitted contests, Lessee, at
- --------------------     -----------                                           
its expense, will promptly (a) comply with all applicable Legal Requirements and
Insurance Requirements in respect of the use, operation, maintenance, repair and
restoration of the Leased Property, and (b) procure, maintain and comply, or
cause Manager to procure, maintain and comply, with all appropriate licenses and
other authorizations required for any use of the Leased Property and Lessee's
Personal Property then being made, and for the proper erection, installation,
operation and maintenance of the Leased Property or any part thereof.

                                       31
<PAGE>
 
          8.2  Legal Requirement Covenants.  Subject to Section 8.3, Lessee
               ---------------------------              -----------        
covenants and agrees that (i) the Leased Property and Lessee's Personal 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, (ii) Lessee
shall or shall cause Manager to 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 and (iii) Lessee's use of the Leased Property and
maintenance, alteration, and operation of the same, and all parts thereof, shall
at all times conform to all Legal Requirements, unless the same are finally
determined by a court of competent jurisdiction to be unlawful (and Lessee shall
cause all such sub-tenants, invitees or others (including Manager) to so comply
with all Legal Requirements).

          8.3  Environmental Covenants.  Lessor and Lessee (in addition to, and
               -----------------------                                         
not in diminution of, Lessee's covenants and undertakings in Sections 8.1 and
8.2 hereof) covenant and agree as follows:

               (a)  At all times hereafter until Lessee completely vacates the
Leased Property and surrenders possession of the same to Lessor, Lessee shall
fully comply with all Environmental Laws applicable to the Leased Property and
the operations thereon, except to the extent that such compliance would require
the remediation of Environmental Liabilities for which Lessee has no indemnity
obligations under Section 8.3(b). Lessee agrees to give Lessor prompt written
                  --------------
notice of (1) all Environmental Liabilities; (2) all pending, threatened or
anticipated Proceedings, and all notices, demands, requests or investigations,
relating to any Environmental Liability or relating to the issuance, revocation
or change in any Environmental Authorization required for operation of the
Leased Property; (3) all Releases at, on, in, under or in any way affecting the
Leased Property, or any Release known by Lessee at, on, in or under any property
adjacent to the Leased Property; and (4) all facts, events or conditions that
could reasonably lead to the occurrence of any of the above-referenced matters.

               (b)  LESSEE WILL PROTECT, INDEMNIFY, HOLD HARMLESS AND DEFEND
LESSOR INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL ENVIRONMENTAL
LIABILITIES TO THE EXTENT PERMITTED BY LAW INCLUDING THOSE RESULTING FROM A
LESSOR INDEMNIFIED PARTIES' OWN NEGLIGENCE except to the extent that the same
(i) are caused by the intentionally wrongful acts or grossly negligent failures
to act of Lessor, or (ii) result from conditions existing at the Leased Property
at the date of this Lease (an "Existing Condition") or from Releases or other
                               ------------------
violations of Environmental Laws originating on adjacent property but affecting
the Leased Property (a "Migration"), provided that in either case such
                        ---------
exclusions shall not apply to the extent that the Existing Condition or the
Migration has been exacerbated by Lessee's act or negligent failure to act.

               (c)  Lessor hereby agrees to defend, indemnify and save harmless
any and all Lessee Indemnified Parties from and against any and all
Environmental Liabilities to the extent

                                       32
<PAGE>
 
that the same were caused by the intentionally wrongful acts or grossly
negligent failures to act of Lessor.

               (d)  If any Proceeding is brought against any Indemnified Party
in respect of an Environmental Liability with respect to which such Indemnified
Party may claim indemnification under either Section 8.3(b) or (c), the
                                             --------------    ---
Indemnifying Party, upon request, shall at its sole expense resist and defend
such Proceeding, or cause the same to be resisted and defended by counsel
designated by the Indemnifying Party and approved by the Indemnified Party,
which approval shall not be unreasonably withheld or delayed; provided, however,
that such approval shall not be required in the case of defense by counsel
designated by any insurance company undertaking such defense pursuant to any
applicable policy of insurance. Each Indemnified Party shall have the right to
employ separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel will be at the sole expense
of such Indemnified Party unless a conflict of interest prevents representation
of such Indemnified Party by the counsel selected by the Indemnifying Party and
such separate counsel has been approved by the Indemnifying Party, which
approval shall not be unreasonably withheld or delayed. The Indemnifying Party
shall not be liable for any settlement of any such Proceeding made without its
consent, which shall not be unreasonably withheld or delayed, but if settled
with the consent of the Indemnifying Party, or if settled without its consent
(if its consent shall be unreasonably withheld), or if there be a final,
nonappealable judgment for an adversary party in any such Proceeding, the
Indemnifying Party shall indemnify and hold harmless the Indemnified Parties
from and against any liabilities incurred by such Indemnified Parties by reason
of such settlement or judgement.

               (e)  At any time any Indemnified Party has reason to believe
circumstances exist which could reasonably result in an Environmental Liability,
upon reasonable prior written notice to Lessee stating such Indemnified Party's
basis for such belief, an Indemnified Party shall be given immediate access to
the Leased Property (including, but not limited to, the right to enter upon,
investigate, drill wells, take soil borings, excavate, monitor, test, cap and
use available land for the testing of remedial technologies), Lessee's
employees, and to all relevant documents and records regarding the matter as to
which a responsibility, liability or obligation is asserted or which is the
subject of any Proceeding; provided that such access may be conditioned or
restricted as may be reasonably necessary to ensure compliance with law and the
safety of personnel and facilities or to protect confidential or privileged
information and shall also be subject to any limitations set forth in the
Management Agreement.  All Indemnified Parties requesting such immediate access
and cooperation shall endeavor to coordinate such efforts to result in as
minimal interruption of the operation of the Leased Property as practicable.

               (f)  The indemnification rights and obligations provided for in
this Article VIII shall be in addition to any indemnification rights and
     ------------
obligations provided for elsewhere in this Lease.

               (g)  The indemnification rights and obligations provided for in
this Article VIII shall survive the termination of this Lease.
     ------------
     

                                       33
<PAGE>
 
               For purposes of this Section 8.3, all amounts for which any
                                    -----------                           
Indemnified Party seeks indemnification shall be computed net of (a) any actual
income tax benefit resulting therefrom to such Indemnified Party, (b) any
insurance proceeds received (net of tax effects) with respect thereto, and (c)
any amounts recovered (net of tax effects) from any third parties based on
claims the Indemnified Party has against such third parties which reduce the
damages that would otherwise be sustained; provided that in all cases, the
timing of the receipt or realization of insurance proceeds or income tax
benefits or recoveries from third parties shall be taken into account in
determining the amount of reduction of damages.  Each Indemnified Party agrees
to use its reasonable efforts to pursue, or assign to Lessee or Lessor, as the
case may be, any claims or rights it may have against any third party which
would materially reduce the amount of damages otherwise incurred by such
Indemnified Party.

                                  ARTICLE IX
                                  ----------

                            MAINTENANCE AND REPAIRS
                            -----------------------

          9.1  Maintenance and Repair.
               ---------------------- 

               (a)  Except as provided in Section 9.1(b), Lessee will, or will
                                          --------------
cause the Manager to, keep the Leased Property and all parts thereof, including
without limitation, all private roadways, sidewalks, curbs and other
appurtenances thereto that are under Lessee's control, and including without
limitation windows and plate glass, parking lots, HVAC, mechanical, electrical
and plumbing systems and equipment (including conduit and ductware), in good
order and repair and, if applicable, in compliance with the standards of the
Management Agreement (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) ordinary wear and tear excepted except for the
obligation to make necessary and appropriate repairs, replacements and
improvements as provided in this Section 9.1(a), and, except as otherwise
                                 --------------
provided in Section 9.1(b), 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 commencement of the Term of this Lease
(concealed or otherwise), or required by any governmental agency having
jurisdiction over the Leased Property. 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. If Lessee fails to make any
required repairs or replacements after fifteen (15) days notice from Lessor, or
after such longer period as may be reasonably required provided that Lessee at
all times diligently proceeds with such repair or replacement, then Lessor shall
have the right, but shall not be obligated, to make such repairs or replacements
on behalf of and for the account of Lessee. In such event, such work shall be
paid for in full by Lessee as Additional Charges.

               (b)  Notwithstanding Lessee's obligations under Section 9.1(a)
                                                               --------------
above but subject to the limitations on Lessor's obligations for Capital
Expenditures set forth in Article XXXVIII and the terms and conditions set forth
                          ---------------
in Article 8 of the Management Agreement, unless caused 
   ---------

                                       34
<PAGE>
 
by Lessee's negligence or willful misconduct or that of its employees,
contractor or agents, Lessor shall be required to make all Capital Expenditures.
Except as set forth in the preceding sentence, Lessor shall not under any
circumstances be required to build or rebuild any improvement on the Leased
Property, or 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 non-
responsibility under any mechanic's lien laws now or hereafter existing.

               (c)  Nothing contained in this Lease and no action or inaction by
Lessor shall be construed as (1) constituting the request of Lessor, expressed
or implied, to any contractor, subcontractor, laborer, materialman or vendor to
or for the performance of any labor or services or the furnishing of any
materials or other property for the construction, alteration, addition, repair
or demolition of or to the Leased Property or any part thereof, or (2) giving
Lessee any right, power or permission to contract for or permit the performance
of any labor or services or the furnishing of any materials or other property in
such fashion as would permit the making of any claim against Lessor and any
ground lessor(s) in respect thereof or to make any agreement that may create, or
in any way be the basis for any right, title, interest, lien, claim or other
encumbrance upon the estate of Lessor in the Leased Property, or any portion
thereof.

               (d)  Lessee will, upon the expiration or prior termination of the
Term, 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 in
accordance with Section 9.1(a) above, as would a prudent owner of comparable
                --------------
property, during the entire Term) or damage by casualty or Condemnation (subject
to the obligation of Lessee to restore or repair as set forth in this Lease.)


                                   ARTICLE X
                                   ---------

                                  ALTERATIONS
                                  -----------

          10.1  Alterations.  Subject to first obtaining the written approval of
                -----------                                                     
Lessor (except only as and to the extent, if any, that Manager has such rights
to make alterations pursuant to the Management Agreement without first obtaining
the Lessee's prior approval), Lessee may, but shall not be obligated to, if and
to the extent permitted pursuant to the Management Agreement, make such
additions, modifications or improvements to the Leased Property from time to
time as Lessee deems desirable for its permitted uses and purposes, provided
that such action will not alter the character or purposes of the Leased Property
or detract from the value or operating efficiency thereof and will not impair
the revenue-producing capability of the Leased Property or adversely affect the
ability of the Lessee or Lessor to comply with the provisions of this Lease. 
All such 

                                       35
<PAGE>
 
work shall be performed in a first class manner in accordance with all
applicable governmental rules and regulations and after receipt of all required
permits and licenses.  If required by Lessor all such work shall be covered by
performance bonds issued by bonding companies reasonably acceptable to Lessor.
The cost of such additions, modifications or improvements to the Leased Property
shall be paid by Lessee, and all such additions, modifications and 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.

          10.2  Salvage.  All materials which are scrapped or removed in
                -------                                                 
connection with the making of repairs required by Articles IX or X shall be or
                                                  -----------    -            
become the property of Lessor or Lessee depending on which party is paying for
or providing the financing for such work.

          10.3  Lessor Alterations.  Lessor shall have the right, without
                ------------------                                       
Lessee's consent (unless Manager's consent is required pursuant to the
Management Agreement), to make or cause to be made alterations and additions to
the Leased Property required in connection with (i) Emergency Situations, (ii)
Legal Requirements, (iii) maintenance of the Management Agreement, and (iv) the
performance by Lessor of its obligations under this Lease.  Without Lessee's
consent (unless Manager's consent is required pursuant to the Management
Agreement), Lessor shall further have the right, but not the obligation, to make
such other additions to the Leased Property as it may reasonably deem
appropriate during the Term of this Lease.  All such work unless necessitated by
Lessee's acts or omissions or unless otherwise required to be performed by
Lessee under this Lease (in which event work shall be paid for by Lessee) shall
be performed at Lessor's expense, in compliance with all Legal Requirements, in
a good and workmanlike manner and shall be done after reasonable notice to and
coordination with Lessee, so as to minimize any disruptions or interference with
the operation of the Facility.

                                  ARTICLE XI
                                  ----------

                                     LIENS
                                     -----

          11.1  Liens.  Subject to the provision of Article XII relating to
                -----                               -----------            
permitted contests, Lessee will not directly or indirectly create or allow to
remain and will promptly discharge at its expense any lien, encumbrance,
attachment, title retention agreement or claim upon the Leased Property
resulting from the action or inaction of Lessee, or any attachment, levy, claim
or encumbrance in respect of the Rent, excluding, however, (a) this Lease, (b)
the matters, if any, included as exceptions or insured against 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, (d)
liens for those taxes 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 to the extent Lessee is
responsible hereunder for such compliance so long as (l) the same are not yet
delinquent or (2) such liens are in the process of being contested as permitted
by Article XII, (g) liens of mechanics, laborers, suppliers or vendors for sums
   -----------
either disputed or not yet due provided that any such liens for disputed sums
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 this Lease.

                                       36
<PAGE>
 
                                  ARTICLE XII
                                  -----------

                              PERMITTED CONTESTS
                              ------------------

          12.1  Permitted Contests.  Lessee shall have the right to contest the
                ------------------                                             
amount or validity of any Imposition to be paid by Lessee or any Legal
Requirement to be satisfied by Lessee hereunder or any lien, attachment, levy,
encumbrance, charge or claim (any such Imposition, Legal Requirement, lien,
attachment, levy, encumbrance, charge or claim herein referred to as "Claims")
                                                                      ------  
not otherwise permitted by Article XI, by appropriate legal proceedings in good
                           ----------                                          
faith and with due diligence (but this shall not be deemed or construed in any
way to relieve, modify or extend Lessee's covenants to pay or its covenants to
cause to be paid any such charges at the time and in the manner as in this
Article provided), on condition, however, that such legal proceedings shall not
operate to relieve Lessee from its obligations hereunder and shall not cause the
sale or risk the loss of any portion of the Leased Property, or any part
thereof, or cause Lessor or Lessee to be in default under any mortgage, deed of
trust, security deed or other agreement encumbering the Leased Property or any
interest therein.  Upon the request of Lessor, as security for the payment of
such Claims, Lessee shall either (a) provide a bond or other assurance
reasonably satisfactory to Lessor (and satisfactory to any Holder, if approval
thereof is required by such Holder's Mortgage) that all Claims which may be
assessed against the Leased Property together with interest and penalties, if
any, thereon and legal fees anticipated to be incurred in connection therewith
will be paid, or (b) deposit within the time otherwise required for payment with
a bank or trust company designated by Lessor as trustee upon terms reasonably
satisfactory to Lessor, or with any Holder upon terms satisfactory to such
Holder, money in an amount sufficient to pay the same, together with interest
and penalties thereon and legal fees anticipated to be incurred 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 Holder 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 Notice to
Lessee, pay such charges together with any interest and penalties and the same
shall be repayable by Lessee to Lessor as Additional Charges at the next 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 only give such
Notice as is practical under the circumstances. Lessor reserves the right to
contest any of the Claims at its expense not pursued by Lessee. Lessor and
Lessee agree to cooperate in coordinating the contest of any Claims.

                                       37
<PAGE>
 
                                 ARTICLE XIII
                                 ------------

                                   INSURANCE
                                   ---------

          13.1  General Insurance Requirements.
                ------------------------------ 

                (a)  Coverages. During the Term of this Lease, the Leased
                     ---------    
Property shall at all times be insured with the kinds and amounts of insurance
described below. This insurance shall be written by companies authorized to
issue insurance in the State. The policies must name the party obtaining the
policy as the insured and the other party as an additional named insured, and
the Manager shall also be named as an additional insured under the coverages
described in Sections 13.1(a)(iv) through (xi). Losses shall be payable to
             --------------------         ----   
Lessor or Lessee as provided in this Lease. Any loss adjustment for coverages
insuring both parties shall require the written consent of Lessor and Lessee,
each acting reasonably and in good faith. Evidence of insurance shall be
deposited with Lessor. The policies on the Leased Property, including the Leased
Improvements, Fixtures and Lessee's Personal Property, shall at all times
satisfy the requirements of the Management Agreement and of any ground lease,
mortgage, security agreement or other financing lien affecting the Leased
Property and at a minimum shall include:

                         Building insurance on the "Special Form" (formerly "All
                Risk" form) (including earthquake and flood in reasonable
                amounts if and as determined by Lessor) in an amount not less
                than 100% of the then full replacement cost thereof (as defined
                in Section 13.2) or such other amount which is acceptable to
                   ------------
                Lessor, and personal property insurance on the "Special Form" in
                the full amount of the replacement cost thereof;

                         Insurance for loss or damage (direct and indirect) from
                steam boilers, pressure vessels or similar apparatus, air
                conditioning systems, piping and machinery, and sprinklers, if
                any, now or hereafter installed in the Facility, in the minimum
                amount of $5,000,000 or in such greater amounts as are then
                customary or as may be reasonably requested by Lessor from time
                to time;

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

                         Commercial general liability insurance, with
                contractual indemnity endorsement, with amounts not less than
                $1,000,000 combined single limit for each occurrence and
                $2,000,000 for the aggregate of all occurrences within each
                policy year, as well as excess liability (umbrella) insurance
                with limits of at least $50,000,000 per occurrence, covering
                each of the following: bodily injury, death, or property damage
                liability per occurrence, personal injury, general aggregate,

                                       38
<PAGE>
 
                products and completed operations with respect to Lessee, and
                "all risk legal liability" (including liquor law or "dram shop"
                liability, if liquor or alcoholic beverages are served on the
                Leased Property) with respect to Lessor and Lessee;

                         Fidelity bonds or blanket crime policies with limits
                and deductibles as may be reasonably determined by Lessor,
                covering Lessee's employees in job classifications normally
                bonded under prudent hotel management practices in the United
                States or otherwise required by law;

                         Workers' compensation insurance to the extent necessary
                to protect Lessor, Lessee and the Leased Property against
                Lessee's workman's compensation claims to the extent required by
                applicable state laws;

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

                         Garagekeeper's legal liability insurance covering both
                comprehensive and collision-type losses with a limit of
                liability of $3,000,000 for any one occurrence, of which
                coverage in excess of $1,000,000 may be provided by way of an
                excess liability policy;

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

                         Safe deposit box legal liability insurance covering
                property of guests while in a safe deposit box on the Leased
                Property for which Lessor is legally responsible with a limit of
                not less than $100,000 in any one occurrence; and

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

                (b)  Responsibility for Insurance. Lessee shall obtain the
                     ----------------------------
insurance and pay the premiums for the coverages described in Sections
                                                              --------  
13.1(a)(iv) through (x), and Lessor shall obtain the insurance and pay the
- -----------         ---
premiums for the coverages described in Sections 13.1(a)(i) through (iii),
                                        -------------------         -----
provided that Lessee shall reimburse Lessor immediately after demand therefor
for any premiums paid by Lessor for the coverages required under Section
                                                                 -------
13.1(a)(i) to the extent that the premiums relate to coverages for property
- ----------
owned by Lessee or coverages which benefit Lessee. Insurance required by Section
                                                                         -------
13.1(a)(xi) shall be obtained and paid for by Lessor to the extent that it
- -----------
relates to risks of the type covered by the insurance obtained pursuant to
Sections 13.1(a)(i) 
- -------------------

                                       39
<PAGE>
 
through (iii), and obtained and paid for by Lessee if it relates to risks of the
- -------------
type covered by the insurance obtained pursuant to Sections 13.1(a)(iv) through
                                                   --------------------
(x). The party responsible for the premium for any insurance coverage shall also
- ---
be responsible for any and all deductibles and self-insured retentions in
connection with such coverages. In the event that either party can obtain
comparable insurance coverage required to be carried by the other party from
comparable insurers and at a cost significantly less than that at which such
other party can obtain such coverage, the parties shall cooperate in good faith
to obtain such coverage at the lower cost and shall allocate the premiums
therefor in accordance with the provisions of the first sentence of this Section
                                                                         -------
13.1(b). In addition to the rights set forth in Sections 17.1 and 39.1, if any
- -------                                         ----------------------
party responsible for obtaining and maintaining the insurance required under
this Lease fails to do so or fails to obtain renewals or substitutions therefor
at least fifteen (15) days before such insurance will lapse, the other party may
obtain such insurance and the defaulting party shall reimburse the party
obtaining such insurance for the cost thereof promptly upon demand, together
with interest thereon at the Overdue Rate until such cost is repaid by the
defaulting party.

                (c)  Notwithstanding anything to the contrary contained herein,
Lessee shall be deemed to be in compliance with the requirements of this Section
                                                                         -------
13.1 if and to the extent Manager maintains the insurance required pursuant to
- ----
Article XII of the Management Agreement.
- -----------

          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 including an increased cost of construction
endorsement, if available, and the cost of debris removal.  In the event either
party believes that full replacement cost has increased or decreased at any time
during the Term, it shall have the right to have such full replacement cost
redetermined.

          13.3  (Intentionally deleted)

          13.4  Waiver of Subrogation.  Lessor and Lessee each waive any and all
                ---------------------                                           
rights of recovery against the other (and against the partners, officers,
employees and agents of the other party) for loss of or damage to such waiving
party or its property or the property of others under its control, to the extent
such loss or damage is covered by, or in the event the responsible party fails
to maintain the required insurance hereunder, would have been covered by, the
insurance required to be obtained by such waiving party under Sections 13.1(a)
                                                              ----------------
through (iii); provided, however, that this waiver does not apply to any rights
- -------------                                                                  
that either party may have to insurance proceeds from their respective insurance
policies at the time of such loss or damage.  In obtaining policies of property
insurance on their respective interests in the personal property and
improvements located in the Leased Property, Lessor and Lessee shall give notice
to their respective insurance carriers that the foregoing mutual waiver of
subrogation is contained in this Lease; and Lessor and Lessee shall each obtain
from their insurance carriers a consent to such waiver.

          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 satisfactory to Lessor and shall satisfy the
requirements of any ground lease, mortgage, security agreement or 

                                       40
<PAGE>
 
other financing lien, if any, on the Leased Property and of the Management
Agreement. The party responsible for obtaining any policy shall pay all of the
premiums therefor, and deliver copies of such policies or certificates thereof
to the other party prior to their effective date (and, with respect to any
renewal policy, thirty (30) days prior to the expiration of the existing
policy), and in the event of the failure of the responsible party either to
effect such insurance as herein called for or to pay the premiums therefor, or
to deliver such policies or certificates thereof to the other party at the times
required, such other party shall be entitled, but shall have no obligation,
after ten (10) days' Notice to the responsible party (or after less than ten
(10) days' Notice if required to prevent the expiration of any existing policy),
to effect such insurance and pay the premiums therefor, and to be reimbursed for
any such premiums upon written demand therefor. 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 the party not responsible hereunder
for obtaining such policy, that it will give to such party thirty (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 and 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.  If the parties fail to agree on
such limits, the matter shall be referred to arbitration as provided for in
Section 40.1.  However, in no event shall such limits fail to satisfy the
- ------------                                                             
requirements of the Management Agreement and of any ground lease, Mortgage,
security agreement or other financing lien, if any, affecting the Leased
Property.

          13.7  Blanket Policy.  Notwithstanding anything to the contrary
                --------------                                           
contained in this Article XIII, Lessee or Lessor may bring the insurance
                  ------------                                          
provided for herein within the coverage of a so-called blanket policy or
policies of insurance carried and maintained by Lessee or Lessor; provided,
however, that the coverage afforded to Lessor and Lessee will not be reduced or
diminished or otherwise be different from that which would exist under a
separate policy meeting all other requirements of this Lease by reason of the
use of such blanket policy of insurance, and provided further that the
requirements of this Article XIII are otherwise satisfied.
                     ------------                         

          13.8  Separate Insurance.  Neither Lessor nor Lessee shall on its own
                ------------------                                             
initiative or pursuant to the request or requirement of any third party, take
out separate insurance concurrent in form or contributing in the event of loss
with that required in this Article to be furnished, or increase the amount of
any then existing insurance by securing an additional policy or additional
policies, unless all parties having an insurable interest in the subject matter
of the insurance, including in all cases Lessor, are included therein as
additional insureds, and the loss is payable under such additional separate
insurance in the same manner as losses are payable under this Lease. Each party
shall immediately notify the other party that it has obtained any such separate
insurance or of the increasing of any of the amounts of the then existing
insurance.

          13.9  Reports On Insurance Claims.  Lessee shall promptly investigate
                ---------------------------                                    
and make a complete and timely written report to the appropriate insurance
company as to all accidents, all 

                                       41
<PAGE>
 
claims for damage relating to the ownership, operation, and maintenance of the
Facility, and any damage or destruction to the Facility and the estimated cost
of repair thereof and shall prepare any and all reports required by any
insurance company in connection therewith. All such reports shall be timely
filed with the insurance company as required under the terms of the insurance
policy involved, and a copy of all such reports shall be furnished to Lessor.

                                  ARTICLE XIV
                                  -----------

                           DAMAGE AND RECONSTRUCTION
                           -------------------------

          14.1  Insurance Proceeds.  Except as and to the extent set forth in
                ------------------                                           
the Management Agreement, all proceeds of the insurance contemplated by Sections
                                                                        --------
13.1(a)(i) and (ii) 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 made
            ------------                                               
available, if applicable, for reconstruction 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 reconstruction or repair upon satisfaction of reasonable terms and
conditions specified by Lessor.  Any excess proceeds of insurance remaining
after the completion of the restoration or reconstruction of the Leased Property
shall be paid to Lessor.  If neither Lessor nor Lessee is required or elects to
repair and restore, and the Lease is terminated as described in Section 14.2,
                                                                ------------ 
all such insurance proceeds shall be retained by Lessor except for any amount
thereof paid with respect to Lessee's Personal Property.  All salvage resulting
from any risk covered by insurance shall belong to Lessor, except to the extent
of salvage relating to Lessee's Personal Property.

          14.2  Reconstruction in the Event of Damage or Destruction Covered by
                ---------------------------------------------------------------
                Insurance.
                ---------

                (a) If during the Term the Leased Property is totally or 
partially destroyed by a risk covered by the insurance described in Article XIII
                                                                    ------------
and the Facility thereby is rendered Unsuitable or Uneconomic for its Primary
Intended Use, this Lease shall (if and to the extent the Management Agreement
may be terminated pursuant to Article 15 thereof) terminate as of the date of
                              ----------
the casualty and neither Lessor nor Lessee shall have any further liability
hereunder except for any liabilities which have arisen prior to or which survive
such termination, and Lessor shall be entitled to retain all insurance proceeds
except for any amount thereof paid with respect to Lessee's Personal Property.

                (b) If during the Term the Leased Property is partially
destroyed by a risk covered by the insurance described in Article XIII, but the
                                                          ------------
Facility is not thereby rendered Unsuitable or Uneconomic for its Primary
Intended Use, Lessor or, at the election of Lessor (unless required pursuant to
Article 15 of the Management Agreement), Lessee shall restore the Facility to
- ----------
substantially the same condition as existed immediately before the damage or
destruction and otherwise in accordance with the terms of this Lease, and this
Lease shall not terminate as a result of such damage or destruction. If Lessee
restores the Facility, the insurance proceeds shall be paid out by Lessor from
time to time for the reasonable costs of such restoration upon satisfaction of
terms and conditions specified by Lessor, and any excess proceeds remaining

                                       42
<PAGE>
 
after such restoration shall be paid to Lessor except for any amount thereof
paid with respect to Lessee's Personal Property.

                (c) If the Facility is to be restored in accordance with the
provisions of Section 14.2(b) or otherwise and if the cost of the repair or
              ---------------                                              
restoration exceeds the amount of proceeds received by Lessor from the insurance
required under Article XIII, Lessor shall agree to contribute any excess amounts
               ------------                                                     
needed to restore the Facility prior to requiring Lessee to commence such work.
Such difference shall be made available by Lessor, together with any other
insurance proceeds, for application to the cost of repair and restoration in
accordance with the provisions of Section 14.2(b).
                                  --------------- 

          14.3  Reconstruction in the Event of Damage or Destruction Not Covered
                ----------------------------------------------------------------
by Insurance. If during the Term the Facility is totally or materially damaged
- ------------                                                                  
or destroyed by a risk not covered by the insurance described in Article XIII,
                                                                 ------------ 
or if the Holder will not make the proceeds of such insurance available to
Lessor for restoration of the Facility, unless in either event such damage or
destruction renders the Facility Unsuitable or Uneconomic for its Primary
Intended Use, Lessor at its option shall either, (a) at Lessor's sole cost and
expense, restore the Facility to substantially the same condition it was in
immediately before such damage or destruction and this Lease shall not terminate
as a result of such damage or destruction, or (b) terminate the Lease (if and to
the extent the Management Agreement may be terminated pursuant to Article 15
                                                                  ----------
thereof) and neither Lessor nor Lessee shall have any further liability
thereunder except for any liabilities which have arisen or occurred prior to
such termination and those which expressly survive termination of this Lease.
If such damage or destruction is determined by Lessor not to be material, Lessor
may, at Lessor's sole cost and expense, restore the Facility to substantially
the same condition as existed immediately before the damage or destruction and
otherwise in accordance with the terms of the Lease, and this Lease shall not
terminate as a result of such damage or destruction.

          14.4  Lessee's Property and Business Interruption Insurance.  All
                -----------------------------------------------------      
insurance proceeds payable by reason of any loss of or damage to any of Lessee's
Personal Property and the business interruption insurance maintained for the
benefit of Lessee shall be paid to Lessee; provided, however, no such payments
shall diminish or reduce the insurance payments otherwise payable to or for the
benefit of Lessor hereunder.

          14.5  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 pay Rent required by this Lease shall remain unabated by any
damage or destruction which does not result in a reduction of Gross Revenues. If
and to the extent that any damage or destruction results in a reduction of Gross
Revenues which would otherwise be realizable from the operation of the Facility,
then Lessor shall receive all loss of income insurance and Lessee shall have no
obligation to pay Rent in excess of the amount of Percentage Rent, if any,
realizable from Gross Revenues generated by the operation of the Leased Property
during the existence of such damage or destruction; provided, however, that if
such damage or destruction was caused by Lessee's gross negligence or willful
misconduct, Lessee shall remain liable for the amount of Rent which would have
been payable hereunder at a rate equal to the average Rent during the last three
preceding 12-month Lease Years (or if three 12-month Lease Years shall not have
elapsed, the average during the preceding 12-

                                       43
<PAGE>
 
month Lease Years or if one Lease Year has not elapsed, the amount derived by
annualizing the Percentage Rent from the Commencement Date of this Lease) as if
such damage or destruction had not occurred.

                                  ARTICLE XV
                                  ----------

                                 CONDEMNATION
                                 ------------

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

          15.4  Allocation of Award.  The total Award made with respect to the
                -------------------                                           
Leased Property or for loss of rent, or for Lessor's loss of business beyond the
Term, shall be solely the property of and payable to Lessor. Any Award made for
loss of Lessee's business during the remaining Term, if any, for the taking of
Lessee's Personal Property, 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,

                                       44
<PAGE>
 
at its respective expense; provided, however, neither Lessor nor Lessee shall
initiate, prosecute or acquiesce in any proceedings that may result in a
diminution of any Award payable to the other.

          15.5  Partial Taking.
                -------------- 

                (a) If title to less than the whole of the Leased Property is
condemned, and the Leased Property is not Unsuitable or Uneconomic for its
Primary Intended Use, or if Lessor and Lessee are entitled but elect not to
terminate this Lease as provided in Section 15.3, then Lessor or, at Lessor's
                                    ------------                             
election, Lessee shall, with all reasonable dispatch and to the extent that the
Holder permits the application of the Award therefor and the Award to be
contributed to restoration as provided in this Section 15.5(a) is sufficient
                                               ---------------              
therefor, restore the untaken portion of any Leased Improvements so that such
Leased Improvements constitute a complete architectural unit of the same general
character and condition (as nearly as may be possible under the circumstances)
as the Leased Improvements existing immediately prior to the Condemnation.
Lessor and Lessee shall each 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 Improvements; provided,
however, that the amount of such contribution shall not exceed such cost.

                (b) In the event of a partial Taking as described in Section
                                                                     -------
15.5(a) which does not result in a termination of this Lease by Lessor, the Base
- -------
Rent shall be abated in the manner and to the extent that is fair, just and
equitable to both Lessee and Lessor, taking into consideration, among other
relevant factors, the number of usable rooms, the amount of square footage, or
the revenues affected by such partial Taking. If Lessor and Lessee are unable to
agree upon the amount of such abatement within thirty (30) days after such
partial Taking, the matter shall be submitted to Arbitration as provided for in
Section 40.2 hereof.
- ------------        

          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 times herein
specified, the full amounts of Base Rent, Percentage Rent and Additional Charges
realizable from Gross Revenues generated by the Leased Property during such
period, together with additional amounts of Rent, if any, to the extent of the
remaining balance, if any, of the Award made to Lessee for such Condemnation
allocable to the Term (after payment of Base Rent and Additional Charges),
Lessee shall pay Percentage Rent at a rate equal to the average Percentage Rent
during the last three preceding 12-month Lease Years (or if three 12-month Lease
Years shall not have elapsed, the average during the preceding 12-month Lease
Years).  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
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 (a) directly to Lessee if the Award is
payable by the Condemnor on a monthly basis, or (b) if payable by the Condemnor
less frequently than on a monthly basis, the Award shall be paid to an 

                                       45
<PAGE>
 
institutional trustee designated by Lessor or to the Holder of a Mortgage, if
any, and made available to Lessee on terms reasonably satisfactory to Lessor or
such Holder for application pursuant to the provisions of this Section 15.6.
                                                               ------------
Lessee covenants that upon the termination of any such period of temporary use
or occupancy it will, to the extent that its Award is sufficient therefor and
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.

                                  ARTICLE XVI
                                  -----------

                                   DEFAULTS
                                   --------

          16.1  Events of Default.  Any one or more of the following events
                -----------------                                          
shall constitute an Event of Default (herein so called) hereunder:

                (a) if Lessee fails to make any payment of Base Rent or
Percentage Rent within ten (10) days after receipt by the Lessee of Notice from
Lessor that the same has become due and payable, provided that Lessor shall not
be required to give any such Notice more than once in any Lease Year and that
any second or subsequent failure by Lessee during such Lease Year to make any
payment of Base Rent or Percentage Rent on the date the same becomes due and
payable shall constitute an immediate Event of Default; or

                (b) if Lessee fails to make any payment of Additional Charges
within ten (10) days after receipt by Lessee of Notice from Lessor that the same
has become due and payable; or

                (c) if Lessee fails to observe or perform any other term,
covenant or condition of this Lease and such failure is not curable, or if
curable is not cured by Lessee within a period of thirty (30) days after receipt
by the Lessee of Notice thereof from Lessor, unless such failure is curable but
cannot with due diligence be cured within a period of thirty (30) days, in which
case it shall not be deemed an Event of Default if (i) Lessee, within such
thirty (30) day period, proceeds with due diligence to cure the failure and
thereafter diligently completes the curing thereof within 120 days of Lessor's
Notice to Lessee, which 120-day period shall cease to run during any period that
a cure of such failure is prevented by an Unavoidable Delay and shall resume
running upon the cessation of such Unavoidable Delay, and (ii) the failure does
not result in a notice or declaration of default under any material contract or
agreement to which Lessor, the Company, or any Affiliate of either of them is a
party or by which any of their assets are bound; or

                (d) if Lessee shall (i) be generally not paying its debts as
they become due, (ii) file, or consent by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement or any
other petition in bankruptcy, for liquidation or to take

                                       46
<PAGE>
 
advantage of any bankruptcy or insolvency law of any jurisdiction, (iii) make an
assignment for the benefit of its creditors, (iv) consent to the appointment of
a custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its assets, (v) be adjudicated
insolvent, or (vi) take corporate action for the purpose of any of the
foregoing; or if a court or governmental authority of competent jurisdiction
shall enter an order appointing, without consent by Lessee, a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its assets, or if an order for relief
shall be entered in any case or proceeding for liquidation or reorganization or
otherwise to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of Lessee,
or if any petition for any such relief shall be filed against Lessee and such
petition shall not be dismissed within sixty (60) days; or

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

                (f) if the estate or interest of Lessee in the Leased Property
or any part thereof is voluntarily or involuntarily transferred, assigned,
conveyed, levied upon or attached in any Proceeding; or

                (g) if, except as a result of and to the extent required by
damage, destruction, Condemnation or Unavoidable Delay, Lessee ceases operations
on the Leased Property; or

                (h) if notice of a default or an event of default has been given
by the Manager under the Management Agreement with respect to the Facility on
the Leased Property as a result of any action or failure to act by the Lessee or
any Person with whom the Lessee contracts at the Facility, which default or
event of default is not cured within applicable cure periods and does not arise
solely from Lessor's breach of any of its obligations under this Lease which are
required to maintain the Management Agreement in effect;

                (i) if Manager shall default beyond any applicable notice and
cure period (without extension or waiver by Lessee) under the Management
Agreement;

                (j) if an Event of Default occurs under any or all of the Other
Leases; or

                (k) if Lessee breaches any of the provisions of Article XXXV.
                                                                ------------

                Notwithstanding anything to the contrary contained in Section
                                                                      -------
16.1(c), the cure periods set forth in Section 16.1(c) shall not apply to (i)
- -------                                ---------------
any intentional failure by Lessee to observe or perform any term, covenant or
condition of this Lease, or (ii) any failure by Lessee to perform any term,
covenant or condition for which a different grace or cure period is expressly
set forth in any other provision of this Lease, and in either of the foregoing
events such failure shall, after the expiration of any other grace or cure
period expressly set forth elsewhere herein, constitute an immediate Event of
Default.

                                       47
<PAGE>
 
                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  Remedies.  Upon the occurrence of an Event of Default, Lessor
                --------                                                     
shall have the right, at Lessor's option, to elect to do any one or more of the
following without further notice or demand to Lessee:  (a) terminate this Lease,
in which event Lessee shall immediately surrender the Leased Property to Lessor,
and, if Lessee fails to so surrender, Lessor shall have the right, without
notice, to enter upon and take possession of the Leased Property and to expel or
remove Lessee and its effects without being liable for prosecution or any claim
for damages therefor; and Lessee shall, and hereby agrees to, indemnify Lessor
for all loss and damage which Lessor suffers by reason of such termination,
including without limitation, damages in an amount equal to the total of (1) the
reasonable costs of recovering the Leased Property in the event that Lessee does
not promptly surrender the Leased Property, and all other reasonable expenses
incurred by Lessor in connection with Lessee's default; (2) the unpaid Rent
earned as of the date of termination, plus interest at the Overdue Rate accruing
after the due date until such sums are paid by Lessee to Lessor; (3) the total
Rent (including Percentage Rent as determined below) which Lessor would have
received under this Lease for the remainder of the Term, but discounted to the
then present value at a rate of fifteen percent (15%) per annum, less the fair
market rental value of the balance of the Term as of the time of such default
discounted to the then present value at a rate of fifteen percent (15%) per
annum; and (4) all other sums of money and damages owing by Lessee to Lessor; or
(b) enter upon and take possession of the Leased Property without terminating
this Lease and without being liable for prosecution or any claim for damages
therefor, and, if Lessor elects, relet the Leased Property on such terms as
Lessor deems advisable, in which event Lessee shall pay to Lessor on demand the
reasonable costs of repossessing and reletting the Leased Property and any
deficiency between the Rent payable hereunder (including Percentage Rent as
determined below) and the rent paid under such reletting; provided, however,
that Lessee shall not be entitled to any excess payments received by Lessor from
such reletting and Lessor's failure to relet the Leased Property shall not
release or affect Lessee's liability for Rent or for damages; or (c) enter the
Leased Property without terminating this Lease and without being liable for
prosecution or any claim for damages therefor and maintain the Leased Property
and repair or replace any damage thereto or do anything for which Lessee is
responsible hereunder.  Lessee shall reimburse Lessor immediately upon demand
for any expense which Lessor incurs in thus effecting Lessee's compliance under
this Lease, and Lessor shall not be liable to Lessee for any damages with
respect thereto. Notwithstanding anything herein to the contrary, Lessee shall
not be liable to Lessor for consequential, punitive or exemplary damages.

          The rights granted to Lessor in this Section 16.2 shall be cumulative
                                               ------------                    
of every other right or remedy provided in this Lease or which Lessor may
otherwise have at law or in equity or by statute, and the exercise of one or
more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies or constitute a forfeiture or
waiver of Rent or damages accruing to Lessor by reason of any Event of Default
under this Lease.

                                       48
<PAGE>
 
          Percentage Rent for the purposes of this Section 16.2 shall be a sum
                                                   ------------               
equal to (i) the average of the annual amounts of the Percentage Rent for the
three 12-month Lease Years immediately preceding the Lease Year in which the
termination, re-entry or repossession takes place, or (ii) if three 12-month
Lease Years shall not have elapsed, the average of the Percentage Rent during
the preceding 12-month Lease Years during which the Lease was in effect, or
(iii) if one Lease Year has not elapsed, the amount derived by annualizing the
Percentage Rent from the effective date of this Lease.

          16.3  Waiver.  Each party waives, to the extent permitted by
                ------                                                
applicable law, any right to a trial by jury in any proceedings brought by
either party to enforce the provisions of this Lease, including, without
limitation, proceedings to enforce the remedies set forth in this Article XVI,
                                                                  ----------- 
and Lessee waives the benefit of any laws now or hereafter in force exempting
property from liability for rent or for debt.

          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.

                                 ARTICLE XVII
                                 ------------

                            LESSOR'S RIGHT TO CURE
                            ----------------------

          17.1  Lessor's Right to Cure Lessee's Default.  If Lessee fails to
                ---------------------------------------                     
make any payment or to perform any act required to be made or performed under
this Lease including, without limitation, Lessee's failure to comply with the
terms of any Management Agreement  and fails to cure the same within the
relevant time periods, if any, provided in Section 16.1 or elsewhere in this
                                           ------------                     
Lease, 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 upon Notice to Lessee 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, subject to Section 16.2, take all such action thereon as, in Lessor's
                ------------                                              
opinion, may be necessary or appropriate therefor.  No such entry shall be
deemed an eviction of Lessee.  All sums so paid by Lessor and all costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses, in each case to the extent permitted by law) so incurred, together
with a late charge thereon (to the extent permitted by law) at the Overdue Rate
from the date on which such sums or expenses are paid or incurred by Lessor
until such sums or expenses are paid by Lessee to Lessor, shall constitute
Additional Charges and 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.

                                       49
<PAGE>
 
                                 ARTICLE XVIII
                                 -------------

                                  LIMITATIONS
                                  -----------

          18.1  Personal Property Limitation.  Anything contained in this Lease
                ----------------------------                                   
to the contrary notwithstanding, (i) the average of the adjusted tax bases of
the items of Lessor's personal property that are leased to the Lessee under this
Lease at the beginning and at the end of any Lease Year shall not exceed 15% of
the average of the aggregate adjusted tax bases of the Leased Property at the
beginning and at the end of such Lease Year and (ii) the rent attributable to
personal property leased hereunder with respect to any calendar shall not exceed
10% of the total rent under this Lease for such year (the limitations in the
preceding clauses (i) and (ii) are referred to collectively as the "Personal
                                                                    --------
Property Limitation"). Lessor and Lessee shall at all times cooperate in good
- -------------------
faith and use their best efforts to permit Lessor to comply with the Personal
Property Limitation, which compliance may include, by way of example only and
not by way of limitation or obligation, the purchase by Lessee at fair market
value of personal property in excess of the Personal Property Limitation. All
such compliance shall be effected in a manner which has no material net economic
detriment to Lessee and will not jeopardize the Company's status as a real
estate investment trust under the applicable provisions of the Code. This
Section 18.1 is intended to ensure that the Rent qualifies as (i) "rents from
- ------------
real property," within the meaning of Section 856(d) of the Code, or any similar
or successor provisions thereto, and (ii) excluded "rents" described in Section
512(b)(3)(A) of the Code or any similar or successor provision thereto, and
shall be interpreted in a manner consistent with such intent.

          18.2  Sublease Rent Limitation.  Anything contained in this Lease to
                ------------------------                                      
the contrary notwithstanding, Lessee shall not sublet the Leased Property or
enter into any licenses or concessions or enter into any similar arrangement on
any basis such that the rental or other amounts to be paid by the sublessee
thereunder would be based, in whole or in part, on either (a) the net income or
profits derived by the business activities of the sublessee, licensee, or
concessionaire, or (b) any other formula such that any portion of the Rent would
fail to qualify as "rents from real property" within the meaning of Section
856(d) of the Code, or any similar or successor provision thereto.

          18.3  Sublease Lessee Limitation.  Anything contained in this Lease to
                --------------------------                                      
the contrary notwithstanding, Lessee shall not sublease the Leased Property to,
or enter into any license, concession or similar arrangement with, any Person in
which the Company owns, directly or indirectly, a 10% or more interest, within
the meaning of Section 856(d)(2)(B) of the Code, or any Person in which Boston
Properties Limited Partnership owns, directly or indirectly,  a ten percent
(10%) or more interest within the meaning of the same section as modified by
Section 7704(d)(3)(B) of the Code or any similar or successor provisions
thereto.

          18.4  Lessee Ownership Limitation.  Anything contained in this Lease
                ---------------------------                                   
to the contrary notwithstanding, Lessor shall not take, or permit an Affiliate
of Lessor to take, any action that would cause the Company to own, directly or
indirectly, a 10% or more interest in the Lessee within the meaning of Section
856(d)(2)(B) of the Code, or that would cause Boston Properties Limited
Partnership to own, directly or indirectly, a ten percent (10%) or more interest
in the Lessee within the meaning of the same Section as modified by Section
7704(d)(3)(B) of the Code, or any similar or successor provisions thereto.
Anything contained in this Lease to the contrary notwithstanding, Lessee shall
not take, or permit an Affiliate of Lessee to take, any action that would cause
the Company to own, directly or indirectly, a 10% or more interest in the 

                                       50
<PAGE>
 
Lessee within the meaning of Section 856(d)(2)(B) of the Code, or that would
cause Boston Properties Limited Partnership to own, directly or indirectly, a
ten percent (10%) or more interest in the Lessee within the meaning of the same
Section as modified by Section 7704(d)(3)(B) of the Code, or any similar or
successor provisions thereto. Any transfer of interests in the Lessee pursuant
to Section 35.4 shall be deemed to be an action of Lessee for purposes of this
Section 18.4.

          18.5  Schedule of Owners.  Upon the Commencement Date, Lessee shall
                ------------------                                           
provide to Lessor a schedule of all owners of interests in Lessee who own of
record or beneficially ten percent (10%) or more of the outstanding ownership
interests in Lessee.  During the Term, Lessee shall promptly provide Lessor with
Notice of any changes in the foregoing schedule.  Lessee shall from time to time
provide such information as Lessor may reasonably request to verify Lessee's
compliance with Section 18.4 and this Section 18.5.
                ------------          ------------ 

                                  ARTICLE XIX
                                  -----------

                                 HOLDING OVER
                                 ------------

          19.1  Holding Over.  If Lessee for any reason remains in possession of
                ------------                                                    
the Leased Property after the expiration or earlier termination of the Term,
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 Lease
Year of the Term, (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 XX
                                  ----------

                                  INDEMNITIES
                                  -----------

          20.1  Indemnification.
                --------------- 

                (a) LESSEE WILL PROTECT, INDEMNIFY, HOLD HARMLESS AND DEFEND
LESSOR INDEMNIFIED PARTIES 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, INCLUDING THOSE RESULTING FROM A LESSOR INDEMNIFIED PARTY'S
OWN NEGLIGENCE but excluding 

                                       51
<PAGE>
 
those resulting from a Lessor Indemnified Party's gross negligence or willful
misconduct, imposed upon or incurred by or asserted against Lessor Indemnified
Parties by reason of: (a) any accident, injury to or death of persons or loss of
or damage to property occurring on or about the Leased Property or adjoining
sidewalks, during the Term or while the Leased Property is in the possession or
control of Lessee including without limitation any claims under liquor
liability, "dram shop" or similar laws, (b) any past, present or future use,
misuse, non-use, condition, management, operation, maintenance or repair by
Lessee or any of its agents, employees, contractors or invitees of the Leased
Property or Lessee's Personal Property, or any litigation, proceeding or claim
by governmental entities or other third parties to which a Lessor Indemnified
Party is made a party or participant related to such use, misuse, non-use,
condition, management, operation, maintenance, or repair thereof by Lessee or
any of its agents, employees, contractors or invitees, including any failure of
Lessee or any of its agents, employees, contractors 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 nonperformance by Lessee or any of its agents, employees or
contractors of any of the terms and provisions of any and all existing and
future subleases of the Leased Property to be performed by the landlord
thereunder.

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

                (c) Any amounts that become payable by an Indemnifying Party
under this Section shall be paid within ten (10) days after liability therefor
on the part of the Indemnifying Party is determined by litigation or otherwise,
and if not timely paid, shall bear a late charge (to the extent permitted by
law) at the Overdue Rate from the date of such determination to the date of
payment. Any such amounts shall be reduced by insurance proceeds received and
any other recovery (net of costs) obtained by the Indemnified Party. An
Indemnifying Party, upon request, shall at its sole expense resist and defend
any Proceeding, claim or action, or cause the same to be resisted and defended
by counsel designated by the Indemnified Party and approved by the Indemnifying
Party, which approval shall not be unreasonably withheld; provided, however,
that such approval shall not be required in the case of defense by counsel
designated by any insurance company undertaking such defense pursuant to any
applicable policy of insurance. Each Indemnified Party shall have the right to
employ separate counsel in any such Proceeding, claim or action and to
participate in the defense thereof, but the fees and expenses of such counsel
will be at the sole expense of such Indemnified Party unless a conflict of
interest prevents representation of such Indemnified Party by the counsel
selected by the Indemnified Party and such separate counsel has been approved by
the Indemnifying Party, which approval shall not be unreasonably withheld. The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding, claim or action made without its consent, which consent shall not be
unreasonably withheld, but if settled with the consent of the Indemnifying
Party, or if settled without its consent (if its consent shall be unreasonably
withheld), or if there be a final, non-appealable judgment for 

                                       52
<PAGE>
 
an adversary party in any such Proceeding, claim or action, the Indemnifying
Party shall indemnify and hold harmless the Indemnified Party from and against
any liabilities incurred by such Indemnified Party by reason of such settlement
or judgement. Nothing herein shall be construed as indemnifying a Lessor
Indemnified Party against its own grossly negligent acts or omissions or willful
misconduct.

                (d) Lessee's and Lessor's obligations under the provisions of
this Article shall survive any termination of this Lease.

                                  ARTICLE XXI
                                  -----------

                           SUBLETTING AND ASSIGNMENT
                           -------------------------

          21.1  Subletting and Assignment.
                ------------------------- 

                (a) Subject to the provisions of Article XVIII and Sections
                                                 -------------     --------
21.2, 21.3 and any other express consents, conditions, limitations or other
- ----------
provisions set forth herein, Lessee shall not assign this Lease or hereafter
sublease all or any part of the Leased Property without first obtaining the
written consent of Lessor. In the case of a permitted subletting, the sublessee
shall comply with the provisions of Sections 18.2, 18.3, 18.4, 18.5, 21.2 and
                                    -------------------------------------
21.3, and in the case of a permitted assignment, the assignee shall assume in
- ----
writing and agree to keep and perform all of the terms of this Lease on the part
of Lessee to be kept and performed and shall be, and become, jointly and
severally liable with Lessee for the performance thereof. In case of either an
assignment or subletting made during the Term, Lessee shall remain primarily
liable, as principal rather than as surety, for the prompt payment of the Rent
and for the performance and observance of all of the covenants and conditions to
be performed by Lessee hereunder. An original counterpart of each such sublease
and assignment and assumption, duly executed by Lessee and such sublessee or
assignee, as the case may be, in form and substance satisfactory to Lessor,
shall be delivered promptly to Lessor.

                (b) Lessee acknowledges that this Lease is a lease of
nonresidential real property and therefore agrees that Lessee, as the debtor in
possession, or the trustee for Lessee (collectively "the Trustee") in any
                                                     -----------
proceeding under Title 11 of the United States Bankruptcy Code relating to
Bankruptcy, as amended (the "Bankruptcy Code"), shall not seek or request any
                             ---------------
extension of time to assume or reject this Lease or to perform any obligations
of this Lease which arise from or after the order of relief.

                (c) If the Trustee proposes to assume or to assign this Lease or
sublet the Premises (or any portion thereof) to any person which shall have made
a bona fide offer to accept an assignment of this Lease or a subletting on terms
acceptable to the Trustee, the Trustee shall give Lessor, and lessors and
mortgagees of Lessor of which Lessee has notice, written notice setting forth
the name and address of such person and the terms and conditions of such offer,
no later than twenty (20) days after receipt of such offer, but in any event no
later than ten (10) days prior to the date on which the Trustee makes
application to the Bankruptcy Court for authority and approval to enter into
such assumption and assignment or subletting.  Lessor shall have the prior 

                                       53
<PAGE>
 
right and option, to be exercised by written notice to the Trustee given at any
time prior to the effective date of such proposed assignment or subletting, to
receive an assignment of this Lease or subletting of the Premises to Lessor or
Lessor's designee upon the same terms and conditions and for the same
consideration, if any, as the bona fide offer made by such person, less any
brokerage commissions which may be payable out of the consideration to be paid
by such person for the assignment or subletting of this Lease.

                (d) The Trustee shall have the right to assume Lessee's rights
and obligations under this Lease only if the Trustee: (a) promptly cures or
provides adequate assurance that the Trustee will promptly cure any default
under this Lease; (b) compensates or provides adequate assurance that the
Trustee will promptly compensate Lessor for any actual pecuniary loss incurred
by Lessor as a result of Lessee's default under this Lease; and (c) provides
adequate assurance of future performance under this Lease. Adequate assurance of
future performance by the proposed assignee shall include, as a minimum, that:
(i) any proposed assignee of this Lease shall provide to Lessor an audited
financial statement, dated no later than six (6) months prior to the effective
date of such proposed assignment or sublease with no material change therein as
of the effective date, which financial statement shall show the proposed
assignee to have a net worth equal to at least the Minimum Net Worth, or, in the
alternative, the proposed assignee shall provide a guarantor of such proposed
assignee's obligations under this Lease, which guarantor shall provide an
audited financial statement meeting the requirements of (i) above and shall
execute and deliver to Lessor a guaranty agreement in form and substance
acceptable to Lessor; and (ii) any proposed assignee shall grant to Lessor a
security interest in favor of Lessor in all furniture, fixtures, and other
personal property to be used by such proposed assignee in the Leased Property.
All payments required of Lessee under this Lease, whether or not expressly
denominated as such in this Lease, shall constitute rent for the purposes of
Title 11 of the Bankruptcy Code.

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

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

                                       54
<PAGE>
 
          21.2  Attornment.  Lessee shall insert in each future sublease
                ----------                                              
permitted under Section 21.1 provisions to the effect that (a) such sublease is
                ------------                                                   
subject and subordinate to all of the terms and provisions of this Lease and to
the rights of Lessor hereunder, (b) if this Lease terminates before the
expiration of such sublease, the sublessee thereunder will, at Lessor's option,
attorn to Lessor and waive any right the sublessee may have to terminate the
sublease or to surrender possession thereunder as a result of the termination of
this Lease, and (c) if the sublessee receives a written Notice from Lessor or
Lessor's assignees, if any, stating that an uncured Event of Default exists
under this Lease, the sublessee shall thereafter be obligated to pay all rentals
accruing under said sublease directly to the party giving such Notice, or as
such party may direct.  All rentals received from the sublessee by Lessor or
Lessor's assignees, if any, as the case may be, shall be credited against the
amounts owing by Lessee under this Lease.

          21.3  Management Agreement.  Lessee shall not enter into any
                --------------------                                  
management or agency agreement relating to the management or operation of the
Facility or any modifications to such management or agency agreement without
Lessor's prior written approval of the terms and conditions thereof and of the
identity of any manager of the Facility which is not an Affiliate of Lessee.
Lessor hereby approves that certain Management Agreement dated as of March 30,
1979, as amended successively on March 30, 1979, April 9, 1979, December 27,
1979, April 2, 1980, March 10, 1982, January 20, 1989, June 28, 1990 and June
___, 1997, as the same may be further amended or modified with the  prior
written consent of Lessor, and that certain Development Agreement dated January
10, 1979, as amended successively on March 30, 1979, December 27, 1979, June 28,
1990 and June ___, 1997, as the same may be further amended or modified with the
prior written consent of Lessor (collectively, the "Management Agreement")
between Lessee, as Developer and Marriott International, Inc., as manager.  To
the extent any of the provisions of the Management Agreement impose a greater
obligation on Lessee than the corresponding provisions of this Lease, then
Lessee shall be obligated to comply with, and to take all reasonable actions
necessary to prevent breaches or defaults under, the provisions of the
Management Agreement, except to the extent that Lessee is prevented from
complying with the Management Agreement because of Lessor's breach of its
obligations to comply with Article XXXVIII.  It is the intent of the parties
                           ---------------                                  
hereto that Lessee shall comply in every respect with the provisions of the
Management Agreement so as to avoid any default thereunder during the term of
this Agreement.  Lessee shall not terminate or enter into any modification of
the Management Agreement without in each instance first obtaining Lessor's
written consent.  Lessor and Lessee agree to cooperate fully with each other in
the event it becomes necessary to obtain a management extension or modification
or a new franchise for the Leased Property, and in any transfer of the
Management Agreement to Lessor or any Affiliate thereof or any other successor
to Lessee upon the termination of this Lease.  Any management or agency
agreement other than the Management Agreement shall provide, among other things,
that (i) upon termination of this Lease or termination of Lessee's right to
possession of the Leased Property for any reason whatsoever, the Management
Agreement may be terminated by Lessor without liability for any payment due or
to become due to the Manager, and (ii) all fees and other amounts payable by
Lessee to the Manager shall be fully subordinate to Rent and other amounts
payable by Lessee to Lessor hereunder.  Subject to Lessor's prior approval,
Lessee may elect to manage the Facility itself, in which case where appropriate
in this Lease, the term "Manager" shall mean Lessee.  Lessee shall not enter
into any franchise or license agreement without the prior written consent of
Lessor and shall, upon Lessor's 

                                       55
<PAGE>
 
written request, cooperate fully with Lessor in entering into and establishing a
franchise or license agreement relating to the Leased Property.

                                 ARTICLE XXII
                                 ------------

                             ESTOPPEL CERTIFICATES
                             ---------------------

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

          (a)  At any time and from time to time upon not less than ten (10)
days Notice by Lessor, Lessee will furnish to Lessor an Officer's 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 the Rent has been paid, whether to the
knowledge of Lessee there is any existing default or Event of Default hereunder
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, any underwriter and any prospective purchaser of the
Leased Property.

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

               (1)  if requested in writing by Lessor: the most recent
      Consolidated Financials of Lessee within thirty (30) days after each
      quarter of any fiscal year (or, in the case of the final quarter in any
      fiscal year, the most recent Consolidated Financials of Lessee within
      ninety (90) days);

               (2)  with reasonable promptness, such other information
      respecting the financial condition, operations and affairs of Lessee or
      the Leased Property (A) as Lessor or the Company may be required or may
      deem desirable in its reasonable discretion to file with or provide to the
      SEC or any other governmental agency or any other Person, all in the form,
      and either audited or unaudited, as Lessor may request in Lessor's
      reasonable discretion, (B) as may be reasonably necessary to confirm
      compliance by Lessee and its Affiliates with the requirements of this
      Lease, and (C) as may be required or requested by any existing, potential
      or future Holder;

               (3)  on or before each Friday during the Term, a preliminary
      schedule of Room Revenues, Food Sales and Beverage Sales of the Facility
      for the immediately preceding calendar week, and on or before the 5th day
                                                   ---
      of each month, a preliminary schedule of Gross Revenues of the Facility
      for the immediately preceding calendar month, and on or before the 25th
                                                    ---
      day of each month, a balance sheet, and detailed profit and loss and cash
      flow statements showing the financial position of the Facility as at the
      end of the preceding month and the results of operation of the Facility
      for such preceding month and the Lease Year to date in accordance with
      Section 5.05 of the Management Agreement;
      ------------

                                       56
<PAGE>
 
               (4)  monthly STR Reports within five (5) days of Lessee's receipt
      thereof, if any;

               (5)  unless required earlier pursuant to this Lease, within five
      (5) days of Lessee's receipt thereof, any reports received from the
      Manager under the Management Agreement; and

               (6)  upon request by Lessor, copies of all licenses, permits,
      occupancy agreements, operating agreements, leases, contracts, inspection
      reports, studies, appraisals, assessments, default or other notices and
      similar materials and information existing with respect to the Leased
      Property.

          (c)  At any time and from time to time upon not less than ten (10)
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 or Lessor's part hereunder, and such other information as
may be reasonably requested by Lessee. Any such certificate furnished pursuant
to this Section may be relied upon by Lessee, any lender, any underwriter and
any purchaser of the assets of Lessee.

          (d)  Lessee covenants to cause its officers and employees, its
auditors and Manager (to the maximum extent permitted under the Management
Agreement) to cooperate fully and promptly with Lessor and the Company and with
the auditors for Lessor and the Company in connection with the timely
preparation and filing of Lessor's and the Company's filings, reports and
returns under applicable federal, state and other governmental securities, blue
sky and tax laws and regulations.

                                 ARTICLE XXIII
                                 -------------

                                  INSPECTIONS
                                  -----------

          23.1  Regular Meetings; Lessor's Right to Inspect.
                -------------------------------------------

                (a) Lessee agrees that if requested by Lessor (if and to the
extent agreed to by Manager), the general manager, the controller, the director
of marketing, the asset manager and, if specifically requested by Lessor, the
director of food and beverage and the chief engineer for the Facility will meet
at the Facility with Lessor and its representatives on a monthly basis
throughout each Lease Year in order to discuss all aspects of the management,
maintenance and operation of the Facility.

                (b) Lessee shall permit Lessor and its 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. In

                                       57
<PAGE>
 
conducting such inspections Lessor shall not unreasonably interfere with the
conduct of Lessee's business at the Leased Property.

                                 ARTICLE XXIV
                                 ------------

                                   NO WAIVER
                                   ---------

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


                                  ARTICLE XXV
                                  -----------

                              CUMULATIVE REMEDIES
                              -------------------

          25.1  Remedies Cumulative.  To the extent permitted by law but subject
                -------------------                                             
to Article XXXIX and any other provisions of this Lease expressly limiting the
   -------------                                                              
rights, powers and remedies of either Lessor or Lessee, 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
                                 ------------

                                   SURRENDER
                                   ---------

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

                                 ARTICLE XXVII
                                 -------------

                                   NO MERGER
                                   ---------

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

                                       58
<PAGE>
 
                                ARTICLE XXVIII
                                --------------

                             CONVEYANCE BY LESSOR
                             --------------------

          28.1  Conveyance by Lessor.  Lessor shall have the unrestricted right
                --------------------                                           
to mortgage or otherwise convey the Leased Property to a Holder.  If Lessor
conveys the Leased Property in accordance with the terms hereof other than to a
Holder, 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 shall thereupon be released from all
future liabilities and obligations of Lessor under this Lease arising or
accruing from and after the date of such conveyance or other transfer as to the
Leased Property and all such future liabilities and obligations shall thereupon
be binding upon the new owner.  If Lessee is not reasonably satisfied that the
new owner is a capable, reliable and qualified Person of good reputation and
character, Lessee may terminate this Lease upon sixty (60) days' Notice to
Lessor given within thirty (30) days after Lessee receives Notice of such
conveyance.



          28.2  Lessor May Grant Liens.
                ---------------------- 

                (a) 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 upon the Leased Property, or any portion thereof or
interest therein, or upon Lessor's interest in this Lease, whether to secure any
borrowing or other means of financing or refinancing.  This Lease and Lessee's
interest hereunder shall at all times be subject and subordinate to the lien and
security title of any deeds to secure debt, deeds of trust, mortgages, or other
interests heretofore or hereafter granted by Lessor or which otherwise encumber
or affect the Leased Property and to any and all advances to be made thereunder
and to all renewals, modifications, consolidations, replacements, substitutions,
and extensions thereof (all of which are herein called the "Mortgage"), provided
                                                            --------            
that the Mortgage and all security agreements delivered by Lessor in connection
therewith shall be subject to Lessee's rights under this Lease to receive all
Gross Revenues of the Facility prior to the earlier of the occurrence of an
Event of Default or the date that this Lease is terminated by the Holder of the
Mortgage in the exercise of its remedies thereunder.  In confirmation of such
subordination, however, Lessee shall, at Lessor's request, promptly execute,
acknowledge and deliver any instruments which may be required to evidence
subordination to any Mortgage and to the Holder thereof and the assignment of
this Lease and Lessor's rights and interests thereunder to such Holder.  In the
event of Lessee's failure to deliver such instruments and if the Mortgage and
such instruments do not change materially and adversely any term of this Lease,
Lessor may, in addition to any other remedies for breach of covenant hereunder,
execute, acknowledge, and deliver the instrument as the agent or attorney-in-
fact of Lessee, and Lessee hereby irrevocably constitutes Lessor its attorney-
in-fact for such purpose, Lessee acknowledging that the appointment is coupled
with an interest and is irrevocable.

                (b) Lessee shall, upon the request of Lessor or any existing,
potential or future Holder, (i) provide Lessor or such Holder with copies of all
licenses, permits, occupancy agreements, operating agreements, leases,
contracts, inspection reports, studies, appraisals, assessments, default or
other notices and similar materials reasonably requested in connection with

                                       59
<PAGE>
 
any existing or proposed financing of the Leased Property, and (ii) execute
and/or cause the Manager to execute, as applicable, such estoppel agreements and
collateral assignments with respect to the Facility's liquor license, the
Management Agreement and any of the other aforementioned agreements as Holder
may reasonably request in connection with any such financing, provided that no
such estoppel agreement or collateral assignment shall in any way affect the
Term or affect adversely in any material respect any rights of Lessee under this
Lease.

                (c) No act or failure to act on the part of Lessor which would
entitle Lessee under the terms of this Lease, or by law, to be relieved of any
of Lessee's obligations hereunder (including, without limitation, its obligation
to pay Rent) or to terminate this Lease, shall result in a release or
termination of such obligations of Lessee or a termination of this Lease unless:
(i) Lessee shall have first given written notice of Lessor's act or failure to
act to any Holder of whom Lessee has been given written notice of such Holder's
status as a Holder, specifying the act or failure to act on the part of Lessor
which would give basis to Lessee's rights; and (ii) the Holder, after receipt of
such notice, shall have failed or refused to correct or cure the condition
complained of within a reasonable time thereafter (in no event less than sixty
(60) days), which shall include a reasonable time for such Holder to obtain
possession of the Leased Property, if possession is reasonably necessary for the
Holder to correct or cure the condition, or to foreclose such Mortgage, and if
the Holder notifies the Lessee of its intention to take possession of the Leased
Property or to foreclosure such Mortgage, and correct or cure such condition. If
such Holder is prohibited by any process or injunction issued by any court or by
reason of any action by any court having jurisdiction or any bankruptcy, debtor
rehabilitation or insolvency proceedings involving Lessor from commencing or
prosecuting foreclosure or other appropriate proceedings in the nature thereof,
provided, however, that this Lease shall continue to be in full force and
effect, the times for commencing or prosecuting such foreclosure or other
proceedings shall be extended for the period of such prohibition.

                (d) Lessee shall deliver by notice delivered in the manner
provided in Article XXX to any Holder who gives Lessee written notice of its
            -----------
status as a Holder, at such Holder's address stated in the Holder's written
notice or at such other address as the Holder may designate by later written
notice to Lessee, a duplicate copy of any and all notices regarding any default
which Lessee may from time to time give or serve upon Lessor pursuant to the
provisions of this Lease. Copies of such notices given by Lessee to Lessor shall
be delivered to such Holder simultaneously with delivery to Lessor. No such
notice by Lessee to Lessor hereunder shall be deemed to have been given unless
and until a copy thereof has been mailed to such Holder as provided above.

                (e) At any time, and from time to time, upon not less than ten
(10) days' notice by a Holder to Lessee, Lessee shall deliver to such Holder an
estoppel certificate certifying as to the information required in 
Section 22.1(c), and such other information as may be reasonably requested by
- ---------------
such Holder. Any such certificate may be relied upon by such Holder.

                (f) Lessee shall cooperate in all reasonable respects, and as
generally described in Section 42.2 of this Lease, with any transfer of the
                       ------------                                        
Leased Property to a Holder that succeeds to the interest of Lessor in the
Leased Property (including, without limitation, in connection with 

                                       60
<PAGE>
 
the transfer of any management, franchise, license, lease, permit, contract,
agreement, or similar item to such Holder or such Holder's designee necessary or
appropriate to operate the Leased Property). Lessor and Lessee shall cooperate
in (i) including in this Lease by suitable amendment from time to time any
provision which may be requested by any proposed Holder, or may otherwise be
reasonably necessary, to implement the provisions of this Article and (ii)
entering into any further agreement with or at the request of any Holder which
may be reasonably requested or required by such Holder in furtherance or
confirmation of the provisions of this Article; provided, however, that any such
amendment or agreement shall not in any way affect the Term nor affect adversely
in any material respect any rights of Lessor or Lessee under this Lease.

                                 ARTICLE XXIX
                                 ------------

                                QUIET ENJOYMENT
                                ---------------

          29.1  Quiet Enjoyment.  So long as Lessee pays all Rent as the same
                ---------------                                              
becomes due and complies with all of the terms of this Lease and performs its
obligations hereunder, in each case within the applicable grace and/or cure
periods, if any, Lessee shall peaceably and quietly have, hold and enjoy the
Leased Property for the Term hereof, free of any claim or other action by Lessor
or anyone claiming by, through or under Lessor and not claiming by, through or
under Lessee, but subject to all liens and encumbrances subject to which the
Leased Property was conveyed to Lessor or hereafter consented to by Lessee or
provided for herein. Lessee shall have the right by separate and independent
action to pursue any claim it may have against Lessor as a result of a breach by
Lessor of the covenant of quiet enjoyment contained in this Section.

                                  ARTICLE XXX
                                  -----------

                                    NOTICES
                                    -------

          30.1  Notices.  All notices, demands, requests, consents approvals and
                -------                                                         
other communications ("Notice" or "Notices") hereunder shall be in writing and
personally served or mailed (by express mail, courier, or registered or
certified mail, return receipt requested and postage prepaid), (i) if to Lessor
at c/o Boston Properties, Inc., 8 Arlington Street, Boston, MA 02116, Attention:
David Barrett and David G. Gaw and  (ii) if to Lessee at 8 Arlington Street,
Boston, MA  02116, Attention: William J. Wedge, or to such other address or
addresses as either party may hereafter designate.  Personally delivered Notice
shall be effective upon receipt, and Notice given by mail shall be complete at
the time of deposit in the U.S. Mail system, but any prescribed period of Notice
and any right or duty to do any act or make any response within any prescribed
period or on a date certain after the service of such Notice given by mail shall
be extended five days.

                                       61
<PAGE>
 
                                 ARTICLE XXXI
                                 ------------

                                  APPRAISALS
                                  ----------

          31.1  Appraisers.  If it becomes necessary to determine the fair
                ----------                                                
market value or fair market rental of the Leased Property for any purpose of
this Lease, then, except as otherwise expressly provided in this Lease, the
party required or permitted to give Notice of such required determination shall
include in the Notice the name of a person selected to act as appraiser on its
behalf.  Within ten (10) days after Notice, Lessor (or Lessee, as the case may
be) shall by Notice to Lessee (or Lessor, as the case may be) appoint a second
person as appraiser on its behalf.  The appraisers thus appointed, each of whom
must be a member of the American Institute of Real Estate Appraisers (or any
successor organization thereto) with at least five years experience in the State
appraising property similar to the Leased Property, shall, within ten (10) days
after the date of the Notice appointing the second appraiser, proceed to
appraise the Leased Property to determine the fair market value or fair market
rental 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 or fair market rental 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
ten (10) days to appoint a third appraiser. If no such appraiser shall have been
appointed within such ten (10) days or within sixty (60) days of the original
request for a determination of fair market value or fair market rental,
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 thirty (30) 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 XXXII
                                 -------------

                            (Intentionally Deleted)

                                       62
<PAGE>
 
                                ARTICLE XXXIII
                                --------------

                            (Intentionally Deleted)

                                 ARTICLE XXXIV
                                 -------------

                            (Intentionally Deleted)


                                 ARTICLE XXXV
                                 ------------

                      LESSEE CAPITALIZATION REQUIREMENTS
                      ----------------------------------

          35.1  Lessee's Net Worth.  Lessee shall be obligated to maintain at
                ------------------                                           
all times during the Term a Net Worth in an amount at least equal to twenty
percent (20%) of the aggregate projected Base Rent and Percentage Rent for the
Leased Property and the Other Leased Properties, shown from time to time on the
Annual Operating Projection for the Leased Property last approved by Lessor
pursuant to Section 3.5 of this Lease and the similar annual budgets last
            -----------                                                  
approved by Lessor pursuant to Section 3.5 or similar sections of the Other
                               -----------                                 
Leases (the "Minimum Net Worth").  As used herein, "Net Worth" shall mean the
             -----------------                                               
excess of total assets over total liabilities, total assets and total
liabilities each to be determined in accordance with GAAP, excluding, however,
from the determination of total assets:  (a) goodwill, organizational expenses,
research and development expenses, trademarks, trade names, copyrights, patents,
patent applications, and other similar intangibles; (b) all deferred charges
that are not required to be capitalized in accordance with GAAP or unamortized
debt discounts and expense; (c) treasury stock; (d) securities which are not
readily marketable; (e) any write-up in the book value of any asset resulting
from a revaluation thereof; (f) this Lease and the Other Leases; and (g) any
items not included in clauses (a) through (f) above that are treated as
intangibles in conformity with GAAP. Notwithstanding the foregoing, demand notes
from Messrs. Zuckerman and/or Linde shall be acceptable assets hereunder.

          35.2  Lessee's Cash.  On the date hereof Lessee shall have Cash and/or
                -------------                                                   
Working Capital in the amount of at least $500,000, and Lessee shall at all
times hereafter maintain an adequate amount of Working Capital to operate the
Facility.  As used herein, "Cash" shall mean (a) cash or other immediately
                            ----                                          
available funds, (b) any debt instrument with a term of up to 12 months that is
issued by or backed by the full faith and credit of the United States, (c) any
certificate of deposit with a term of up to 12 months that is issued by an
issuer that, on the date of issuance and on each date of any renewal or
reissuance thereof, is a substantial U.S. financial institution that is
satisfactory to Lessor (an "Approved Financial Institution"), and which
                            ------------------------------             
instrument is in form and substance satisfactory to the Lessor, (d) any
irrevocable, "clean" letter of credit issued by an issuer that, on the date of
issuance and on each date of any renewal or reissuance thereof, is an Approved
Financial Institution, and which instrument is in form and substance
satisfactory to the Lessor, and (e) a repurchase agreement with a term of up to
ninety (90) days that is binding upon an Approved Financial Institution, and
which agreement is in form and substance satisfactory to  


                                      63
<PAGE>
 
the Lessor. As used herein, "Working Capital" shall mean the excess of the
Lessee's current assets over the Lessee's current liabilities, both as
determined in accordance with GAAP.

          35.3  Verification of Net Worth.  In addition to the Consolidated
                -------------------------                                  
Financials of Lessee to be delivered to Lessor pursuant to Section 22.1, Lessee
                                                           ------------        
shall deliver to Lessor, together with such Consolidated Financials of Lessee,
an Officer's Certificate in form reasonably required by Lessor, certifying the
Net Worth and Cash of Lessee as of the date of the Consolidated Financials of
Lessee being delivered concurrently therewith and stating that Lessee is in
compliance with its obligations under Sections 35.1 and 35.2 of this Lease, or
                                      ----------------------                  
if not, so stating and including the reasons therefor.  Lessor shall have the
right from time to time and at any time to have an independent certified public
accountant selected by Lessor perform an audit or other review of the books and
records of Lessee to verify the amount of Lessee's Net Worth and Cash, and
Lessee shall cooperate with Lessor in connection therewith.  If Lessor audits or
reviews the amount of Lessee's Net Worth and Cash shown in the last Officer's
Certificate delivered to Lessor, and such audit or review discloses that either
the Net Worth or Cash of Lessee as of such date certified is one percent (1%) or
more less than the amount shown on the Officer's Certificate or that the
statements in such Officer's Certificate regarding Lessee's compliance with
those obligations under Sections 35.1 or 35.2 is otherwise materially incorrect,
                        ---------------------                                   
then in addition to any other rights and remedies of Lessor, Lessee shall pay
for the cost of the audit or review.  Otherwise, Lessor shall bear the cost of
the audit or review.

          35.4  Change of Control.  Lessee represents and warrants that it is a
                -----------------                                              
Delaware limited liability company all of whose interests are owned by Mortimer
B. Zuckerman and Edward H. Linde who, in the aggregate, hold a 9.8% ownership
interest, Seven Cambridge Center, Inc., which holds a 90.2% ownership interest.
Without the prior written consent of Lessor, neither Lessee nor any member of
Lessee shall, directly or indirectly, sell, transfer, convey, pledge or assign,
or suffer or permit the sale, transfer, conveyance, pledge or assignment, of (a)
its interest in this Lease, or (b) any ownership interest in Lessee.

          35.5  Other Business Activities.  Lessee shall not engage in or incur
                -------------------------                                      
any expenses, indebtedness or obligations related to any business or activity,
including without limitation owning, leasing or managing hotels other than the
Facility, that is not directly related to leasing the Leased Property under this
Lease or the Other Leased Properties under the Other Leases.

          35.6  Non-Competition.  Without Lessor's prior written consent,
                ---------------                                          
neither Lessee nor any Affiliate thereof shall, during the Term hereof, either
(a) lease or manage another hotel owned by a real estate investment trust other
than the Company, or (b) acquire, construct, operate, lease, franchise or manage
any hotel within a five (5) mile radius of the Leased Property.


                                      64
<PAGE>
 
                                 ARTICLE XXXVI
                                 -------------

                         LESSOR'S OPTION TO TERMINATE
                         ----------------------------

          36.1  Lessor's Option to Terminate Lease.
                ---------------------------------- 

                (a)  In the event (i) Lessor consummates a bona fide contract to
sell the Leased Property to a non-Affiliate, (ii) of a Tax Law Change resulting
in Lessor's determination to terminate this Lease, or (iii) a Tax Structure
Change, then in any of such events Lessor may terminate this Lease by (1) giving
not less than thirty (30) days prior Notice to Lessee of Lessor's election to
terminate this Lease upon the closing under such contract, or (2) upon a date
specified by Lessor which is on or after the effective date of the Tax Law
Change or an election of Lessor to terminate this Lease under (iii) above,
whichever is applicable. Effective upon such date, this Lease shall terminate
and be of no further force and effect except as to any obligations of the
parties existing as of such date that survive termination of this Lease and all
Rent including Percentage Rent and Additional Charges shall be adjusted as of
the termination date.

                (b)  As compensation for the early termination of its leasehold
estate under this Article XXXVI because of a Tax Law Change, Lessor shall within
                  -------------
ninety (90) days of such termination, pay to Lessee the fair market value of
Lessee's leasehold estate hereunder for the twelve (12) month period commencing
on the date of such termination (or, if shorter, the remaining term of the
Lease).

                (c)  As compensation for the early termination of its leasehold
estate under this Article XXXVI because of a Tax Structure Change, Lessor shall
                  -------------
within ninety (90) days after the termination of this Lease pay to Lessee the
fair market value of Lessee's leasehold estate hereunder for the twelve (12)
month period commencing on the date of such termination (or, if shorter, the
remaining term of the Lease).

                (d)  For the purposes of this Section, fair market value of the
leasehold estate means, as applicable, an amount equal to the price that a
willing buyer not compelled to buy would pay a willing seller not compelled to
sell for Lessee's leasehold estate under this Lease or an offered replacement
leasehold estate assuming that the remaining term of the Lease is the lesser of
                 -------- ----
(i) the actual remaining term or (ii) twelve (12) months. In computing fair
market value of a leasehold estate and a new management agreement, the appraiser
shall discount all future income, expenses and fees to the then present value at
a rate of fifteen percent (15%) per annum.


                                      65
<PAGE>
 
                                ARTICLE XXXVII
                                --------------

                                LESSOR'S RIGHTS
                                ---------------

          37.1  Lessor's Rights.  Notwithstanding anything to the contrary
                ---------------                                           
contained herein or in the Management Agreement, any event or other circumstance
requiring Lessee's consent under the Management Agreement shall not be granted
or withheld by Lessee unless and until Lessee shall have consulted with Lessor
in connection with such consent or disapproval.

                                ARTICLE XXXVIII
                                ---------------

                             CAPITAL EXPENDITURES
                             --------------------

          38.1  Capital Expenditures.
                -------------------- 

                (a)  Commencing upon the Commencement Date, Lessor shall be
obligated to accrue the Capital Expenditures Reserve (to the extent such reserve
is not maintained by Manager pursuant to the Management Agreement). Except as
otherwise provided in the Management Agreement, upon written request by Lessee
to Lessor stating the specific use to be made and subject to the reasonable
approval thereof by Lessor, such funds shall only be made available by Lessor to
Lessee for Capital Expenditures if and to the extent specifically approved by
Lessor; provided, however, that no Capital Expenditures shall be used to
purchase property (other than "real property" within the meaning of Treasury
Regulations Section 1.856-3(d)), to the extent that doing so would cause the
Lessor to recognize income other than "rents from real property" as defined in
Section 856(d) of the Code or to recognize income other than rents described in
Section 512(b)(3) of the Code. Lessor's obligation shall be cumulative, but not
compounded, and any amounts that have accrued hereunder shall be payable in
future periods for such uses and in accordance with the procedures set forth
herein. Lessee shall have no interest in any accrued obligation of Lessor
hereunder after the termination of this Lease. All Capital Improvements shall be
owned by Lessor subject to the provisions of this Lease and the Management
Agreement. Lessee shall promptly notify Lessor of any Capital Expenditures or
other expenditures made in accordance with the Management Agreement.

                (b) Except as specifically provided otherwise in Section 8.3(b),
                                                                 -------------- 
Lessor's obligation to make Capital Expenditures in respect to Capital
Improvements and to comply with the provisions of this Lease which may require
the availability of funds for Capital Improvements shall be limited to amounts
available in the Capital Expenditures Reserve and such additional amounts as
Lessor may agree to make available in Lessor's sole discretion; provided,
however, that if additional Capital Expenditures are required to meet Emergency
Situations, Lessor shall make such amounts available to Lessee and, unless
otherwise provided in Section 8.03(B) of the Management Agreement, receive a pro
rata credit therefor against amounts which Lessor is obligated to accrue for the
Capital Expenditures Reserve during the remainder of the Term.  No arbitration
resulting from the failure of Lessor and Lessee to agree upon any matter shall
increase Lessor's obligation for Capital Expenditures beyond the amounts set
forth in the immediately preceding sentence.  To the extent that Lessee's
obligations under this Lease (including, without 


                                      66
<PAGE>
 
limitation, the obligations set forth in Sections 7.2, 8.1 and 9.1 and in
                                         -----------------     ---
Article XXXVII) are dependent upon the availability of amounts for Capital
- --------------
Expenditures which exceed the amounts that Lessor is obligated to provide
pursuant to this Article XXXVIII, such obligations of Lessee shall be
                 ---------------
correspondingly diminished.

                (c)  Lessor shall, subject to Manager's rights pursuant to the
Management Agreement, have sole authority with respect to the implementation of
all Capital Improvements. Such authority shall extend both to the plans and
specifications (including matters of design and decor) and to the contracting
and purchasing of all labor, services and materials.

                                 ARTICLE XXXIX
                                 -------------

                               LESSOR'S DEFAULT
                               ----------------

          39.1  Lessor's Default.
                ---------------- 

                (a)  It shall be a breach of this Lease if Lessor fails to
observe or perform any term, covenant or condition of this Lease on its part to
be performed and such failure continues for a period of thirty (30) days after
Notice thereof from Lessee, unless such failure cannot with due diligence be
cured within a period of thirty (30) days, in which case such failure shall not
be deemed a breach if Lessor proceeds within such thirty (30)-day period, with
due diligence, to cure the failure and thereafter diligently completes the
curing thereof. The time within which Lessor shall be obligated to cure any such
failure also shall be subject to extension of time due to the occurrence of any
Unavoidable Delay. If Lessor does not cure any such failure within the
applicable time period as aforesaid, Lessee may declare the existence of a
"Lessor Default" by a second Notice to Lessor. Thereafter, subject to the
 --------------
provisions of the following paragraph, Lessee may (but shall be under no
obligation at any time thereafter to) make such payment or perform such act for
the account and at the expense of Lessor. All sums so paid by Lessee and all
costs and expenses (including, without limitation, reasonable attorneys' fees
and court costs) so incurred, together with interest thereon at the Overdue Rate
from the date on which such sums or expenses are paid or incurred by Lessee
until the date paid by Lessor or offset by Lessee as expressly provided herein,
shall be paid by Lessor to Lessee on demand or Lessee may offset or counterclaim
such sums actually paid by Lessee against Percentage Rents or Other Charges due
hereunder. Lessee shall have no right to terminate this Lease for any Lessor
Default and no right, for any such Lessor Default, to offset or counterclaim
against any rent or other Charges due hereunder unless otherwise expressly
provided in this Lease.

                (b)  If Lessor shall in good faith dispute the occurrence of any
Lessor Default and Lessor, before the expiration of the applicable cure period,
shall give Notice thereof to Lessee, setting forth, in reasonable detail, the
basis therefor, no Lessor Default shall be deemed to have occurred and Lessor
shall have no obligation with respect thereto, and Lessee shall have no right to
offset or counterclaim for costs and expenses incurred and paid by Lessee
against any Percentage Rent or Other Charges due hereunder, until final adverse
determination thereof, whether through arbitration or otherwise; provided,
                                                                 -------- 
however, that in the event of any such adverse determination, Lessor shall pay
- -------
to Lessee, or Lessee may offset or counterclaim against Percentage 


                                      67
<PAGE>
 
Rent or Other Charges due hereunder, interest on any disputed funds at the Base
Rate, from the date demand for such funds was made by Lessee until the date of
final adverse determination and, thereafter, at the Overdue Rate until paid. If
Lessee and Lessor shall fail, in good faith, to resolve any such dispute within
ten (10) days after Lessor's Notice of dispute, either may submit the matter for
determination by arbitration, but only if such matter is required to be
submitted to arbitration pursuant to any provision of this Lease, or otherwise
by a court of competent jurisdiction.

                (c)  Notwithstanding anything to the contrary contained in this
Lease, for the enforcement of any judgment (or other judicial decree) requiring
the payment of money by Lessor to Lessee by reason of any default by Lessor
under this Lease or otherwise, Lessee shall look solely to the estate and
property of Lessor in the Leased Property and any insurance proceeds under any
policies of insurance maintained by Lessor in accordance with this Lease which
are paid on account of the same circumstances as led to Lessee's judgment, it
being intended that no other assets of Lessor or any of Lessor's Affiliates
shall be subject to levy, execution, attachment or any other legal process for
the enforcement or satisfaction of any judgment (or other judicial decree)
obtained by Lessee against Lessor, except in the following cases: (i) any
liability of Lessor for its own gross negligence, willful misconduct or
Environmental Liabilities caused by affirmative actions of Lessor, (ii) any
liability of Lessor for repayment to Lessee upon the termination of this Lease
of any excess payments of Percentage Rent or Additional Charges for the last
Lease Year or part thereof, and (iii) in the case of a final award of damages
against Lessor payable to Lessee, Lessee may offset the amount of such judgment
or award against the Percentage Rent next coming due under this Lease.

                                  ARTICLE XL
                                  ----------

                                  ARBITRATION
                                  -----------

          40.1  Arbitration.  Except as set forth in Section 40.2, in each case
                -----------                          ------------              
specified in this Lease in which it shall become necessary to resort to
arbitration, such arbitration shall be determined as provided in this Section
                                                                      -------
40.1.  The party desiring such arbitration shall give Notice to that effect to
- ----                                                                          
the other party, and an arbitrator shall be selected by mutual agreement of the
parties, or if they cannot agree within thirty (30) days of such notice, by
appointment made by the American Arbitration Association ("AAA") from among the
                                                           ---                 
members of its panels who are qualified and who have experience in resolving
matters of a nature similar to the matter to be resolved by arbitration.

          40.2  Alternative Arbitration.  In each case specified in this Lease
                -----------------------                                       
for a matter to be submitted to arbitration pursuant to the provisions of this
Section 40.2, Lessor shall be entitled to designate any nationally recognized
- ------------                                                                 
accounting firm with a hospitality division of which Lessor or an Affiliate of
Lessor is not a significant client to serve as arbitrator of such dispute within
fifteen (15) days after written demand for arbitration is received or sent by
Lessor.  In the event Lessor fails to make such designation within such fifteen
(15) day period, Lessee shall be entitled to designate any nationally recognized
accounting firm with a hospitality division of which Lessee or an Affiliate of
Lessee is not a significant client to serve as arbitrator of such dispute within


                                      68
<PAGE>
 
fifteen (15) days after Lessor fails to timely make such designation.  In the
event no nationally recognized accounting firm satisfying such qualifications is
available and willing to serve as arbitrator, the arbitration shall instead be
administered as set forth in Section 40.1.
                             ------------ 

          40.3  Arbitration Procedures.  In any arbitration commenced pursuant
                ----------------------                                        
to Sections 40.1 or 40.2, a single arbitrator shall be designated and shall
   -------------    ----                                                   
resolve the dispute. The arbitrator's decision shall be binding on all parties
and shall not be subject to further review or appeal except as otherwise allowed
by applicable law. Upon the failure of either party (the "non-complying party")
                                                          -------------------
to comply with his decision, the arbitrator shall be empowered, at the request
of the other party, to order such compliance by the non-complying party and to
supervise or arrange for the supervision of the non-complying party's obligation
to comply with the arbitrator's decision, all at the expense of the non-
complying party. To the maximum extent practicable, the arbitrator and the
parties, and the AAA if applicable, shall take any action necessary to insure
that the arbitration shall be concluded within ninety (90) days of the filing of
such dispute. The fees and expenses of the arbitrator shall be shared equally by
Lessor and Lessee except as otherwise specified above in this Section 40.3.
                                                              ------------
Unless otherwise agreed in writing by the parties or required by the arbitrator
or AAA, if applicable, arbitration proceedings hereunder shall be conducted in
the State. Notwithstanding formal rules of evidence, each party may submit such
evidence as each party deems appropriate to support its position and the
arbitrator shall have access to and right to examine all books and records of
Lessee and Lessor regarding the Facility during the arbitration.

                                  ARTICLE XLI
                                  -----------

                                  TRADE-OUTS
                                  ----------

          41.1  Trade-outs.  Lessee shall not enter into and shall use its best
                ----------                                                     
efforts not permit Manager to enter into any material trade-out agreements or
arrangements (i.e., agreements or arrangements pursuant to which goods or
services are provided to or for the benefit of Lessee or Manager or their
respective Affiliates or the Facility in exchange for free or reduced rate
rooms, food and beverage services, or other Facility services) without Lessor's
prior written consent.  As to any trade-out agreements assigned to and assumed
by Lessee from Lessor or the prior owner of the Leased Property, Lessor and
Lessee shall agree on fair and equitable amounts (or a methodology for
determining such amounts) to be included in Beverage Sales, Food Sales and Room
Revenues for purposes of this Lease, including the calculation of Percentage
Rent, to take into account the loss of Gross Revenues, if any, resulting from
the rooms or services provided by the Facility in exchange for the goods or
services provided to Lessee, its Affiliates, or the Facility.  If Lessor and
Lessee do not reach agreement as to such amounts (or a methodology for
determining such amounts) the disagreement shall be resolved by arbitration
pursuant to Section 40.2.  Lessor shall not unreasonably withhold its consent to
            ------------                                                        
a trade-out agreement or arrangement proposed by Lessee which benefits the
Facility provided that the term of the trade-out agreement does not extend
beyond the stated Term of this Lease and provided that Lessor and Lessee have
agreed in writing as to the amounts (or a methodology for determining such
amounts) to be included in Beverage Sales, Food Sales and Room Revenues to take
into account the loss of Gross Revenues, if any, resulting from the rooms or
services provided by the Facility in exchange for the goods or services provided
to or for the benefit of the Facility.


                                      69
<PAGE>
 
                                 ARTICLE XLII
                                 ------------

                                 MISCELLANEOUS
                                 -------------

          42.1  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 and limited to 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, but not including its conflicts of laws rules.  If
any payment required to be made pursuant to this Lease shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day.

          42.2  Transition Procedures.  Lessee shall and shall cause Manager to
                ---------------------                                          
cooperate in good faith to provide access and information to any prospective
purchaser or lessee of the Leased Property which may acquire the Leased Property
or lease it upon the expiration or termination of the Term.  Upon any expiration
or termination of the Term, Lessor and Lessee shall do the following and, in
general, shall cooperate in good faith to effect an orderly transition of the
lease of the Facility.  The provisions of this Section 42.2 shall survive the
                                               ------------                  
expiration or termination of this Lease until they have been fully performed.
Nothing contained herein shall limit Lessor's rights and remedies under this
Lease if such termination occurs as the result of an Event of Default.

                (a)  Transfer of Licenses. Upon the expiration or earlier
                     --------------------   
termination of the Term, Lessee shall use its best efforts (i) to transfer to
Lessor or Lessor's designee all licenses, operating permits and other
governmental authorizations and all contracts, including contracts with
governmental or quasi-governmental entities, in each instance to the extent held
in the name of Lessee, that may be necessary for the operation of the Facility
(collectively, "Licenses"), or (ii) if such transfer is prohibited by law or
                --------
Lessor otherwise elects, to cooperate with Lessor or Lessor's designee in
connection with the processing by Lessor or Lessor's designee of any
applications for all Licenses, including Lessee or Manager continuing to operate
the liquor operations under its licenses with Lessor or its designee agreeing to
indemnify and hold Lessee harmless as a result thereof except for the gross
negligence or willful misconduct of Lessee; provided, in either case, that the
costs and expenses of any such transfer or the processing of any such
application shall be paid by Lessor or Lessor's designee.


                                      70
<PAGE>
 
                (b)  Leases and Concessions. Lessee shall assign to Lessor or
                     ----------------------
Lessor's designee simultaneously with the termination of this Agreement, and the
assignee shall assume all leases, contracts, concession agreements and
agreements (including the Management Agreement) in effect with respect to the
Facility then in Lessee's name, unless Lessor rejects one or more of such
leases, contracts, concession agreements or other agreements (other than the
Management Agreement) in writing within thirty (30) days following the date of
termination of this Agreement in which event the agreement or agreements so
rejected shall be deemed reassigned and shall remain the property and
responsibility of Lessee.

                (c)  Books and Records. To the extent that Lessor has not
                     -----------------
already received copies thereof, a copy of all books and records (including
computer records) for the Facility kept by Lessee pursuant to Section 3.6 shall
                                                              -----------
be promptly delivered to Lessor or Lessor's designee.

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

          42.3  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.

          42.4  Standard of Discretion.  In any provision of this Lease
                ----------------------                                 
requiring or permitting the exercise by Lessor or Lessee of such party's
approval, election, decision, consent, judgment, determination or words of
similar import (collectively, an "Approval"), such Approval may, unless
                                  --------                             
otherwise expressly specified in such provision, be given or withheld in such
party's sole, absolute and unreviewable discretion.  Any Approval which by the
terms of this Lease may not be unreasonably withheld shall also not be
unreasonably delayed.

          42.5  Action for Damages.  In any suit or other claim brought by
                ------------------                                        
either party seeking damages against the other party for breach of its
obligations under this Lease, the party against whom such claim is made shall be
liable to the other party only for actual damages and not for consequential,
punitive or exemplary damages.


                                      71
<PAGE>
 
          IN WITNESS WHEREOF, the parties have executed this Lease by their duly
authorized representatives as of the date first above written.

                                 LESSOR:
                                 ------ 

                                 DOWNTOWN BOSTON PROPERTIES TRUST


                                    By:
                                       -------------------------------- 
                                    Name: Mortimer B. Zuckerman
                                          -----------------------------
                                    Title: Trustee and Not Individually
                                           ----------------------------



                                    By:
                                       --------------------------------
                                    Name: Edward H. Linde
                                          -----------------------------
                                    Title: Trustee and Not Individually
                                           ----------------------------



                                 LESSEE:
                                 ------ 

                                 ZL HOTEL LLC, a Delaware limited liability 
                                 company


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


                                      72
