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Exhibit 10.3    
  


 
 

LEASE AGREEMENT    
    
    between    
    
    VALVINO LAMORE, LLC,    
    
    Landlord    
    
    and    
    
    WYNN LAS VEGAS, LLC,    
    
    Tenant    


    Dated October 21, 2002    
  





 
 
 

TABLE OF CONTENTS    
  



	 
	 	 
	 	PAGE

	SECTION 1	 	DEMISED PREMISES	 	1
	

SECTION 2	
 	

TERM	
 	

1
	

SECTION 3	
 	

RENT	
 	

2
	

SECTION 4	
 	

GAMING	
 	

2
	

SECTION 5	
 	

FINANCING	
 	

3
	

SECTION 6	
 	

USE OF PREMISES; EXCLUSIVITY	
 	

3
	

SECTION 7	
 	

ALTERATIONS AND IMPROVEMENTS	
 	

5
	

SECTION 8	
 	

PARKING	
 	

5
	

SECTION 9	
 	

TAXES	
 	

5
	

SECTION 10	
 	

UTILITIES	
 	

6
	

SECTION 11	
 	

MAINTENANCE AND REPAIRS	
 	

6
	

SECTION 12	
 	

LIENS	
 	

7
	

SECTION 13	
 	

INSURANCE	
 	

7
	

SECTION 14	
 	

DESTRUCTION OF PREMISES; CONDEMNATION	
 	

9
	

SECTION 15	
 	

INDEMNIFICATION	
 	

10
	

SECTION 16	
 	

SUBORDINATION	
 	

10
	

SECTION 17	
 	

ASSIGNMENT AND SUBLETTING	
 	

10
	

SECTION 18	
 	

LEASEHOLD FINANCING	
 	

11
	

SECTION 19	
 	

RIGHTS OF ACCESS	
 	

16
	

SECTION 20	
 	

ESTOPPEL CERTIFICATE	
 	

17
	

SECTION 21	
 	

EXPENDITURES	
 	

17
	

SECTION 22	
 	

DEFAULT	
 	

17
	

SECTION 23	
 	

MISCELLANEOUS	
 	

18




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LEASE AGREEMENT    
  


        THIS LEASE AGREEMENT (this "Lease") is entered into as of the 21st day of October, 2002 by and
between Valvino Lamore, LLC, a Nevada limited liability company ("Landlord"), and Wynn Las
Vegas, LLC, a Nevada limited liability company ("Tenant"). 


 
 

WITNESSETH:    
  


        WHEREAS, Landlord owns good and marketable title in and to the parcel of real property described on
Exhibit "A" attached hereto (the "Landlord's Property"), including a building and other improvements located and/or to be constructed thereon and therein (the "Building") as shown on
Exhibit "B" attached hereto; 


        WHEREAS, Landlord desires to lease to Tenant and Tenant desires to lease from Landlord the Building, on a triple net basis, upon the terms
and conditions hereinafter set forth; 


        NOW, THEREFORE, in consideration of the terms, covenants, conditions and provisions hereinafter set forth and other good and valuable
consideration, it is hereby mutually agreed by and between Landlord and Tenant as follows: 


 
 

SECTION 1
  DEMISED PREMISES    
  


        Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Building located on the real property described on Exhibit "C" attached hereto,
together with all and singular improvements, and any appurtenant rights, privileges and/or easements plus all fixtures, equipment and property located therein or thereon (the "Premises"). Landlord
reserves to itself the use of the roof, exterior walls and the area above and below the Premises together with the right to install, maintain, use, repair and replace pipes, ducts, conduits, wires and
structural elements now or in the future leading through
the Premises and which serve the Building, except that such rights shall not materially interfere with Tenant's right to visibility, ingress, egress and operations. 


 
 

SECTION 2
  TERM    
  


        2.1  This
Lease shall be effective and the term of the Lease (the "Lease Term") and payment of Rent (as defined in Section 3.1 hereof) shall commence on
October 21st 2002 (the "Commencement Date") and shall continue for a period of thirty (30) years (the "Initial Term") thereafter unless terminated earlier as elsewhere
herein provided. Following the date (the "Lien Release Date") of the release of Landlord's Property from the lien or liens of that certain First Trust Deed (as defined and described on  Schedule I attached hereto) and that certain Second Trust Deed (as defined and described on Schedule I attached hereto) (collectively, the
"Deeds of Trust"), Tenant may terminate this Lease on thirty (30) days' written notice to Landlord. 


        2.2  In
the event Tenant is not then in default of its obligations hereunder beyond any applicable cure period and this Lease has not previously been terminated, after the
expiration of the Initial Lease Term, the Lease Term shall continue on a month-to-month basis, upon the same terms and conditions as are set forth in this Lease. At any time
during any such extension of the Initial Lease Term, either party may terminate the Lease by delivering written notice to the other party no later than ten (10) days prior to the expiration of
any thirty (30) day extension period. In the event that such notice is not given within such time period, the Lease shall continue in effect. 


        2.3  Upon
the expiration or sooner termination of the Lease Term, Tenant shall, at its sole cost and expense, within fifteen (15) days after receipt of written notice,
remove all personal property and trade fixtures which Tenant has installed or placed on the Premises ("Tenant's Property") from the 


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Premises and repair all damage thereto resulting from such removal, and Tenant shall thereupon surrender the Premises in the same condition as on the Commencement Date, reasonable wear and tear
excepted, broom clean. In the event Tenant fails to remove any of Tenant's Property as provided herein, Landlord may, but is not obligated to, at Tenant's expense, remove all of such property not so
removed and repair all damage to the Premises resulting from such removal, and Landlord shall have no responsibility to Tenant for any loss or damage to Tenant's Property caused by, or resulting from,
such removal or otherwise. In the event any amount due Landlord pursuant to this Lease has not been paid at the expiration or termination of this Lease, Landlord shall have the right to sell or
dispose of Tenant's Property as Landlord so chooses as partial satisfaction of the amount past due. 


 
 

SECTION 3
  RENT    
  


        3.1  During
the Lease Term, Tenant shall pay as monthly Base Rent for the Premises the sum of One Dollar ($1.00) per month (the "Base Rent"). The Base Rent shall be due and
payable in advance on the first (1st) day of each month during the Lease Term. 


        3.2  In
addition to Base Rent, Tenant shall reimburse Landlord, as "Additional Rent", for all costs ("Operating Costs") incurred by Landlord in connection with the
maintenance, repair, replacement, operation and cleaning of the Building, including costs for sewage, janitorial, waste disposal, refuse removal, security and mailroom services. Tenant shall pay
Additional Rent, in equal monthly installments with the Base Rent, based on Landlord's good faith estimate of the Operating Costs. After the end of each calendar year, Landlord shall deliver to Tenant
Landlord's good faith estimate of the Operating Costs for the following year and a statement, in reasonable detail, of the actual Operating Costs incurred by Landlord during the preceding calendar
year. Upon receipt of such statement, there shall be an adjustment between Landlord and Tenant, with payment to Landlord or credit given to Tenant, as the case may be, to reflect the actual Operating
Costs. 


        3.3  The
term "Rent" shall mean Base Rent and Additional Rent. All Rent and other monies required to be paid by Tenant hereunder shall be paid to Landlord without deduction
or offset, prior notice or demand, in lawful money of the United States of America, at the Building or at such other place as Landlord may from time to time designate in writing. 


        3.4  If
Tenant fails to pay, when due and payable, any Rent or any other amounts or charges to be paid by Tenant hereunder within ten (10) days after written notice
from Landlord that the amount is past due, such unpaid amounts shall bear interest from the due date thereof to the date of payment at a rate equal to the prime rate of interest last ascertained by
the Commissioner of Financial Institutions of the State of Nevada pursuant to Section 99.040 of the Nevada Revised Statutes, plus five (5) percentage points (the "Default Rate"). 


 
 

SECTION 4
  GAMING    
  


        Landlord acknowledges that Tenant and its Affiliates (defined below) shall apply for gaming licenses and that such licenses are of vital importance to Tenant's
business. In this regard, Landlord agrees to comply with all reasonable requests made by Tenant for information concerning Landlord's background, which may include, without limitation, completion by
Landlord of Tenant's standard form of Corporate Background Questionnaire and/or Personal Background Questionnaire, as appropriate. Tenant may
immediately terminate this Agreement in the event that (a) Landlord fails to comply with information requests as set forth in the foregoing sentence; or (b) Tenant determines, in its
sole discretion, that continued association with Landlord would jeopardize any gaming license held or pursued by Tenant or any of its Affiliates. 


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SECTION 5
  FINANCING    
  


        Landlord may obtain loans from time to time from third parties to finance acquisition and development of Landlord's and its Affiliates' real property, including
the Premises. For purposes of this Lease, an "Affiliate" of a party shall mean any person or entity (a) that is owned or controlled by the party, (b) that owns or controls the party,
(c) that is owned or controlled by a person or entity that owns or controls the party, (d) that owns or controls an Affiliate of the party, or (e) that is owned or controlled by
an Affiliate of the party. As used in this definition, the words "owns" or "owned" refer to the ownership of twenty percent (20%) or more of the equity interest in the person or entity so owned,
regardless of the manner of ownership. Also, as used in this definition, ownership or control may be direct or indirect. By its execution of this Lease, Tenant (i) acknowledges and consents to
Landlord's collateral assignment of its rights hereunder to its and its Affiliates' lenders, including the beneficiaries under the Deeds of Trust (collectively, "Lenders"); (ii) acknowledges
and affirms Tenant's agreement to attorn performance obligations to the benefit of Lenders in the same manner as it would with respect to Landlord if any such Lender exercises its rights under any
collateral assignment from Landlord; and (iii) agrees to execute such separate consents and acknowledgements to and of Landlord's collateral assignment of this Lease to such third party
Lenders. A Lender or its successor which acquires the Premises (through foreclosure on Landlord's Property or deed in lieu of foreclosure) shall not disturb Tenant's lease of the Premises and shall
respect Tenant's rights under this Lease. 


 
 

SECTION 6
  USE OF PREMISES; EXCLUSIVITY    
  



        6.1  The
Premises are leased to Tenant solely for use as business and administrative offices and uses related thereto. Tenant shall not use or suffer to be used the Premises,
or any portion thereof, for any other purpose or purposes whatsoever, without Landlord's prior written consent, which consent shall not be unreasonably withheld. 


        6.2  Tenant
shall not permit or suffer anything to be done, or kept upon the Premises which will obstruct or interfere with the rights of Landlord, nor will Tenant commit or
permit any nuisance on the
Premises or commit or suffer any immoral or illegal act to be committed thereon. Tenant shall not, without Landlord's prior written approval: 



      6.2.1  Do
or permit anything to be done in or about the Premises, which will in any way affect fire or other insurance upon the Building, or any of its contents, or which
shall in any way conflict with any law, ordinance, rule or regulation affecting the occupancy or use of the Premises; 


      6.2.2  Operate
or permit to be operated on the Premises, any coin or token-operated vending machines or similar devices unless for the sole use of Tenant's employees on the
Premises; or 


      6.2.3  Use
the Premises or any portion thereof as living quarters or sleeping quarters. 




        6.3  Tenant
shall not use the Premises for the generation, storage, manufacture, production, releasing, discharge, or disposal or any Hazardous Substance (defined below) or
allow or suffer any other entity or person to do so. "Hazardous Substance" shall mean any flammable or related material and any other substance or material defined or designated as a hazardous or
toxic substance, material or waste by a governmental law, order, regulation or ordinance presently in effect or as amended or promulgated in the future and shall include, without limitation:
(a) those substances included within the definitions of "hazardous substances," "hazardous materials," "toxic substances" or "solid waste" in CERCLA, RCRA, and the Hazardous Materials
Transportation Act, 40 U.S.C. §§ 1801 et seq., and in the regulations promulgated pursuant to said laws; (b) those
substances listed in the United States Department of Transportation Table (49 CFR 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 


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and amendments thereto); (c) such other substances, materials and wastes which are or become regulated under applicable local, state or federal law, or the United States government, or which
are classified as hazardous or toxic under federal, state or local laws or regulations; and (d) any material, waste or substance which is (i) petroleum, (ii) asbestos,
(iii) polychlorinated biphenyls or (iv) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. §§ 1251  et seq. (33 U.S.C. 1321) or
listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. 1317). 



      6.3.1  Tenant
shall protect, indemnify and hold harmless Landlord, its partners, members, managers, employees, agents, successors and assigns, the Building and the property
in general from and against any and all claims, losses, damages, costs, expenses, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action
requirements, enforcement actions of any kind (including, without limitation, attorneys' fees and costs at trial and on appeal) directly or indirectly arising out of or attributable to, in whole or in
part, the breach of any of the covenants, representations and warranties of this Section 6.3, or the use, generation, manufacture, production, storage, release, threatened release, discharge,
disposal, or presence of a Hazardous Substance on, under, from or about the Premises. The foregoing indemnity shall further apply to any residual contamination on, under, from or about the Premises,
the Building or the property in general, or affecting any natural resources arising in connection with the use, generation, manufacture, production,
handling, storage, transport, discharge or disposal of any such Hazardous Substance, and irrespective of whether any of such activities were or will be undertaken in accordance with environmental laws
or other applicable laws, regulations, codes and ordinances. 


      6.3.2  Landlord
reserves the right to request appropriate governmental officials to inspect the Premises, from time to time, in order to determine Tenant's compliance
herewith. 




        6.4  Tenant
shall, at all times during the Lease Term, comply with all governmental rules, regulations, ordinances, statutes and laws, now or hereafter in effect pertaining
to the Building, the Premises or Tenant's use thereof. 


        6.5  Tenant
hereby covenants and agrees that it, its agents, employees, servants, contractors, subtenants and licensees shall abide by any and all reasonable rules and
regulations as Landlord may, from time to time, adopt for the safety, care and cleanliness of the Premises or the Building. 


        6.6  Tenant
shall not erect any signs, posters, billboards, or other advertising device to be displayed to the public (collectively "Signs") without the prior written consent
of Landlord. If prior written consent is obtained, Tenant agrees that Tenant will erect any and all Signs at Tenant's sole cost. 


        6.7  Tenant
shall not use the name "Desert Inn" or any other name that Landlord shall use to refer to the Building, or its business in the Building, from time to time or any
derivation thereof (the "Landlord's Name") in connection with, or as part of, Tenant's business, without the prior written consent of Landlord. In the event that Landlord allows Tenant to use the
Landlord's Name in advertising, such use shall be deemed a nonexclusive license or privilege only, which confers no property rights therein, and such license or privilege may be revoked by Landlord at
any time, in which event Tenant shall immediately cease the use of the Landlord's Name. Landlord's permission to use the Landlord's Name shall not be deemed to abridge the right of Landlord to grant
or license the use of the Landlord's Name to any other person at any other time. Tenant shall have no right to use any Landlord owned or licensed trademarks or copyrights without the prior written
consent of Landlord. Any rights to use Landlord's owned or licensed trademarks or copyrights on Tenant's merchandise shall be nonexclusive and the subject of a separate agreement. 


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SECTION 7
  ALTERATIONS AND IMPROVEMENTS    
  


        Tenant shall be responsible, at its sole cost and expense, for all decorating, fixturizing, furnishing and equipping of the Premises subject to Landlord's prior
written approval, which approval shall not be unreasonably withheld or delayed. Tenant shall not make any alterations, improvements or changes ("Improvements") in or to the Premises without the prior
written approval of Landlord, which approval shall not be unreasonably withheld or delayed. Any Improvements shall be at the sole cost and expense of Tenant. Landlord may require Tenant, at Tenant's
sole cost and expense, to furnish a bond, or other security satisfactory to Landlord, to assure diligent and faithful performance of any work to be performed by Tenant. Any Improvements shall be made
promptly, in good and workmanlike manner by duly licensed union contractors and in compliance with all insurance requirements and with all applicable permits, authorizations, building regulations,
zoning laws and all other governmental rules, regulations, ordinances, statutes and laws, now or hereafter in effect, pertaining to the Premises or Tenant's use thereof. Tenant shall remove all
Improvements, at Tenant's sole cost and expense, upon termination of this Lease and to surrender the Premises in the same condition as they were in prior to the making of any or all such Improvements,
ordinary wear and tear excepted. Notwithstanding the above, Tenant shall have the right to remove any trade fixtures installed by Tenant upon the Premises. 


 
 

SECTION 8
  PARKING    
  


        Tenant, its agents, employees, servants, contractors, subtenants, licensees, customers and business invitees shall have the nonexclusive right to access and use
the parking structure (the "Parking Facility") currently located on the north side of Landlord's Property, as shown on Exhibit "B", subject to such rules and regulations as Landlord may from
time to time impose and consistent with Tenant's rights in the Parking Facility pursuant to that certain Parking Facility Lease between the parties dated of even date herewith. In addition, Landlord
hereby grants Tenant, its employees, invitees and patrons a non-exclusive license to (a) traverse Landlord's Property in order to travel between the Building and the Parking
Facility along sidewalks and pathways designated from Landlord from time to time and (b) to drive in, through, and out of the Parking Facility. 


 
 

SECTION 9
  TAXES    
  


        9.1  Tenant
will, at Tenant's own cost and expense, bear, pay, and discharge prior to delinquency, all real estate taxes, assessments, sewer rents, water rents and charges,
duties, impositions, license and permit fees, charges for public utilities of any kind, payments and other charges of every kind and nature whatsoever, ordinary or extraordinary, foreseen or
unforeseen, general or special (all of which are hereinafter collectively referred to as "Impositions"), which shall, pursuant to present or future law or otherwise, during the Lease Term, have been
or be levied, charged, assessed, or imposed upon, or become due and payable out of or for, or become or have become a lien on the Premises, the Building and any Improvements; it being the intention of
the parties hereto that the rents reserved herein shall be received and enjoyed by Landlord as a net sum free from all such Impositions. Provided, however, that for such part of the Lease Term, if
any, as the Premises is not separately assessed but is included
as part of Landlord's Property for computation of real property taxes and assessments, or is separately assessed but the taxes attributable thereto are billed to Landlord, then Tenant's share of taxes
shall be an amount equal to twenty five percent (25%) of the total assessments for Landlord's Property; provided further that following the release of the liens of the Deeds of Trust, Landlord and
Tenant shall either create a tax parcel for the Premises separate from the remainder of Landlord's Property, or equitably adjust the percentage of property taxes payable by Tenant for the Premises
following adjustments in assessments for Landlord's Property attributable to construction or demolition activity 


5





 


on Landlord's Property other than the Premises. All taxes payable by Tenant hereunder shall be paid to Landlord, as the case may be, on the later of (a) ten (10) days before such tax
becomes delinquent or (b) ten (10) days after Landlord, or the taxing authority, notifies Tenant that a payment is due. Subject to any reimbursement due from Tenant as provided herein,
Landlord shall be responsible for timely payment of all assessments on Landlord's Property. In the event Landlord fails to timely pay any such assessment, Tenant may, but is not obligated to pay such
assessment directly to the taxing authority and pursue reimbursement of Landlord's share of such assessment from Landlord. Upon the termination of this Lease, Landlord shall promptly reimburse Tenant
for any Impositions paid by Tenant attributable to the period of time following such termination. All Impositions shall be prorated on the basis of a 365-day year. 


        9.2  Tenant
shall be liable for and shall pay before delinquency (and, upon five (5) days of written demand by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of the payment thereof) all Impositions of whatsoever kind or nature, and penalties and interest thereon, if any, levied against any personal property of Tenant of whatsoever
kind and to whomsoever belonging situated or installed in or upon the Premises, whether or not affixed to the realty. 


        9.3  Tenant
shall pay when due all taxes, assessments or fees for which Tenant is liable and which arise directly or indirectly from Tenant's operations at the Premises
including without limitation all sales and use taxes. Within five (5) days of written demand from Landlord, Tenant shall furnish Landlord evidence satisfactory to Landlord of the timely payment
of any such tax, assessment or fee. 


        9.4  Whenever
Landlord shall receive any statement or bill for any tax, payable in whole or in part by Tenant as additional rent, or shall otherwise be required to make any
payment on account thereof, except as otherwise provided herein, Tenant shall pay the amount due hereunder within ten (10) days after demand therefor accompanied by delivery to Tenant of a copy
of such tax statement, if any. 


 
 

SECTION 10
  UTILITIES    
  


        The parties acknowledge that this Lease is intended to be a fully net Lease and that, except as expressly provided in this Lease, Tenant shall be responsible for
the payment of all utilities consumed at the Building, including but not limited to water, electricity, gas and telephone, together with any taxes thereon and, to the extent that they are contracted
by Tenant, or are paid separately by Tenant,
the same shall not constitute Operating Costs under this Lease. Tenant shall contract with and pay, directly to the appropriate supplier, the cost of all such utilities and services supplied to the
Building. 


 
 

SECTION 11
  MAINTENANCE AND REPAIRS    
  



      11.1  Landlord
agrees to keep in good order, condition and repair the foundations, exterior walls, floor and roof of the Building, including cleaning, removal of trash, dirt
and debris, sweeping and janitorial services, electrical, mechanical, plumbing, lighting of the Building and service corridors, repair and replacement of sprinkler systems, HVAC, directional signs and
other markers and pest extermination, except for reasonable wear and tear and except for any damage thereto caused by any act or negligence of Tenant or its agents, employees, servants, contractors,
subtenants or licensees. Further, Landlord acknowledges and agrees that Landlord's security department and security officers are responsible for providing security services in and to the Premises. 



      11.2  Landlord
shall not be obligated to perform any service or to repair or maintain any structure or facility except as provided in this Section 11 and
Section 14 of this Lease unless caused by the negligence of Landlord, its agents, customers or contractors. Landlord shall not be obligated to provide any service or maintenance or to make any
repairs pursuant to this Lease when such service, maintenance or repair is made necessary because of the negligence or misuse of Tenant, Tenant's 


6





 




agents, employees, servants, contractors, subtenants or licensees. Landlord reserves the right to stop any service when Landlord reasonably deems such stoppage necessary, whether by reason of
accident or emergency, or for repairs or Improvements or otherwise. Landlord shall not be liable under any circumstances for loss or injury however occurring, through or in connection with or incident
to any stoppage of such services, provided, however, that Rent and other charges hereunder shall be abated during the period that Tenant cannot open for business due to such stoppage. Landlord shall
have no responsibility or liability for failure to supply any services or maintenance or to make any repairs when prevented from doing so by any cause beyond Landlord's reasonable control unless
caused by the negligence of Landlord, its agents, customers, or contractors. Landlord shall not be obligated to inspect the Premises and shall not be obligated to make any repairs or perform any
maintenance hereunder unless first notified of the need thereof in writing by Tenant, or unless actually known to Landlord. Landlord shall not be liable for any loss or damage to persons or property
sustained by Tenant or other persons, which may be caused by the Building or the Premises, or any appurtenances thereto, being out of repair or by bursting or leakage of any water, gas, sewer or steam
pipe, or by theft, or by any act or neglect of any tenant or occupant of the Building, or of any other person. 


      11.3  Except
as provided for elsewhere herein, Tenant shall keep and maintain in good order, condition and repair (including any such replacement and restoration as is
required for that purpose) the Premises and every part thereof and any and all appurtenances thereto wherever located, including, without limitation, the exterior and interior portion of all doors,
door checks, windows, plate glass, all
plumbing and sewage facilities within the Premises that exclusively service the Building, fixtures, walls, floors, ceilings and all interior lighting. Tenant shall also keep and maintain in good
order, condition and repair (including any such replacement and restoration as is required for that purpose) any Improvements, special equipment, furnishings, fixtures or facilities installed by it on
the Premises. Tenant shall store all trash and garbage in containers located where designated by Landlord and so as not to be visible or create a nuisance to guests, customers and business invitees of
the Building, and so as not to create or permit any health or fire hazard. 


 
 

SECTION 12
  LIENS    
  


      12.1  Tenant,
at all times, whether by bond or otherwise, shall keep Landlord, the Building, the Premises, the leasehold estate created by this Lease, and any trade fixtures,
equipment or personal property within the Premises, free and clear from any claim, lien or encumbrance (other than personal property, consensual security interests for lines of credit or inventory
financing or purchase money liens in connection with the acquisition of any personal property, in each case in the ordinary course of Tenant's business), tax lien or levy, mechanic's lien, attachment,
garnishment or encumbrance arising directly or indirectly from any obligation, action or inaction of Tenant whatsoever, except to the extent permitted under Sections 17 and 18 below and except
for "Permitted Liens" as defined in the Credit Agreement (as that term is defined in the First Trust Deed) and the Mortgage Notes Indenture (as that term is defined in the Second Trust Deed). 


      12.2  Tenant
shall, within ten (10) business days of the filing of any lien that is not permitted under Section 12.1 above, either pay or satisfy the same in
full and procure the discharge thereof or commence an action to discharge the same, fully bond such lien, and diligently prosecute such action, or shall cause Tenant's contractor to do the same. 


 
 

SECTION 13
  INSURANCE    
  


      13.1  Landlord
and Tenant are covered under the same policies of comprehensive public liability insurance and all-risk, commercial property insurance. The parties
each agree to pay its respective share of such insurance cost. 


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      13.2  If
at any time during the Lease Term Tenant ceases to be covered by common insurance with Landlord, Tenant will, at its sole cost and expense, maintain in full force
and effect: 



        (a)  a
policy of comprehensive public liability insurance issued by an insurance carrier approved by Landlord, insuring against loss, damage or liability for injury or death
to persons and loss or damage to property occurring from any cause whatsoever in connection with the Premises or Tenant's use thereof. Landlord shall be named as an additional insured under each such
policy of insurance; 


        (b)  a
standard form of all-risk, commercial property insurance with extended coverage insurance covering leasehold improvements, furniture, fixtures and
equipment, and personal property located in or on the Premises whether owned by Landlord or Tenant, and the personal property of others in Tenant's possession in, upon or about the Premises. Such
insurance shall be in an amount equal to the current replacement value of the property required to be insured. Tenant and Landlord, as their interests may appear, shall be the named insureds under
each such policy of insurance; and 


        (c)  During
any period of any construction on the Premises, Tenant shall maintain (i) course of construction and builder's risk insurance on an "all risks" basis,
including materials in storage and while in transit, and (ii) worker's compensation and employer's liability insurance for any person working on such construction who is employed by Tenant or
any general contractor and/or any construction contractor. 




      13.3  A
certificate issued by the insurance carrier for each policy of insurance required to be maintained by Tenant under Section 13.2 above, if any, or a copy of
each such policy, shall be delivered to Landlord on or before the Commencement Date and thereafter, as to policy renewals, within thirty (30) days prior to the expiration of the terms of each
such policy. Each of said certificates of insurance and each such policy of insurance shall be from an insurer and in a form and substance satisfactory to Landlord, shall expressly evidence insurance
coverage as required by this Lease and shall contain an endorsement or provision requiring not less than thirty (30) days written notice to Landlord and all other named insureds prior to the
cancellation, diminution in the perils insureds against, or reduction of the amount of coverage of, the particular policy in question. In addition to the foregoing certificates, Tenant shall at all
times during the Lease Term maintain (either through common insurance with Landlord or otherwise), at Tenant's sole cost and expense, workers' compensation coverage evidencing coverage at Nevada
statutory limits. 


      13.4  Tenant
shall not use or occupy, or permit the Premises to be used or occupied, in a manner that will make void any insurance then in force. 


      13.5  Landlord
and Tenant hereby waive any and all rights of recovery from the other party and its officers, agents and employees for any loss or damage, including
consequential loss or damage, caused
by any peril or perils (including negligent acts) that are caused by or result from risks insured against under any form of insurance policy. 



      13.6  Each
policy of insurance provided for in this Section 13 shall contain an express waiver of any and all rights of subrogation thereunder whatsoever against the
other party, its officers, directors, agents and employees. All such policies shall be written as primary policies and not contributing with or in excess of the coverage, if any, which Landlord may
carry. Notwithstanding any other provision contained in this Section 13 or elsewhere in this Lease, the amounts of all insurance required hereunder to be paid by Tenant shall be not less than
an amount sufficient to prevent Landlord from becoming a co-insurer. The limits of the public liability insurance required to be maintained by Tenant under this Lease shall in no way limit
or diminish Tenant's liability under Section 15 hereof and such limits shall be subject to increase at any time and from time to time during the Lease Term if Landlord, in the exercise of
reasonable discretion, deems such an increase necessary for its adequate 


8





 




protection; provided, however, Landlord may not exercise its right under this sentence more frequently than one time every two years during the Lease Term. 



      13.7  All
of the provisions of this Section 13 are subject to, and shall be modified as reasonably necessary to be consistent with, the requirements of the Credit
Agreement and the Mortgage Notes Indenture. 


 
 

SECTION 14
  DESTRUCTION OF PREMISES; CONDEMNATION    
  


      14.1  During
the period prior to the earlier to occur of the expiration of the Initial Lease Term or the Lien Release Date, should the Premises or any portion thereof be
destroyed by any cause whatsoever ("Damaged") and provided that restoration is permitted under the Credit Agreement and the Mortgage Notes Indenture, Tenant shall restore the Premises. After the
earlier to occur of the expiration of the Initial Lease Term or the Lien Release Date, should the Premises be Damaged, Tenant may elect to either terminate this Lease or restore the Premises by
delivery of written notice to Landlord within thirty (30) days after the casualty event giving rise to the Damage. If Tenant fails to give timely notice of Tenant's election, Tenant shall be
deemed to have elected to terminate and this Lease shall terminate at the end of the calendar month following the calendar month in which such casualty event shall have occurred. If Tenant is required
or elects to restore the Premises, the following provisions shall apply: After any such casualty and during the reconstruction period, Rent shall continue to accrue and be payable as if such event of
destruction had not occurred. Tenant shall reconstruct the Damaged Improvements with all reasonable diligence (allowing for adjustment and collection of insurance proceeds, licensing, permitting, and
approvals) and as often as any structures subsequently constructed on the Premises or any part thereof shall be Damaged. No Damage to any building or Improvements on the Premises by fire, windstorm,
or any other casualty shall entitle Tenant to violate any of the provisions of this Lease. Landlord hereby agrees to assign to Tenant any insurance proceeds otherwise payable to Landlord, whether
payable solely to Landlord or jointly to Landlord and
Tenant, subject to reasonable and third party customary construction control procedures, so long as Tenant uses such proceeds solely to repair or rebuild the Damaged buildings or Improvements. 


      14.2  INTENTIONALLY
OMITTED 


      14.3  Notwithstanding
the foregoing provisions, in the event the Premises or any portion thereof shall be Damaged by fire or other casualty due to the fault, negligence or
willful misconduct of Tenant, its agents, employees, servants, contractors, subtenants, licensees, customers or business invitees, then this Lease shall not terminate, the Damage shall be repaired by
Tenant, and there shall be no apportionment or abatement of any Rent. 


      14.4  All
insurance proceeds payable under any fire and extended coverage risk insurance covering the Premises and maintained by Landlord shall be payable to Landlord in the
event of Damage, and Tenant shall have no interest therein, except to the extent of such insurance separately carried by Tenant. Tenant shall in no case be entitled to compensation for damages on
account of any annoyance or inconvenience in making repairs under any provision of this Lease. Except to the extent provided for in this Section 14, neither the Rent payable by Tenant nor any
of Tenant's other obligations under any provision of this Lease shall be affected by any Damage. 


      14.5  Should
the whole of the Premises be condemned or taken by a competent authority for any public or quasi-public purpose, then this Lease shall terminate upon such
taking. If such portion of the Premises is condemned or taken such that the remaining portion thereof will not be reasonably adequate for the operation of Tenant's business after Landlord completes
such repairs or alterations as Landlord elects to make, either Landlord or Tenant shall have the option to terminate this Lease by notifying the other party hereto of such election in writing within
twenty (20) days after such taking. If by such condemnation and taking a portion of the Premises is taken and the remaining part thereof is 


9





 




suitable for the purposes for which Tenant has leased the Premises, this Lease shall continue in full force and effect, but the Rent and all other charges hereunder shall be reduced in an amount
equal to that proportion of such charges which the square footage of the portion taken bears to the total square feet of the Premises, and Rent and other charges shall be suspended during any period
of time that Tenant is closed for business. In the event a partial taking does not terminate this Lease, Landlord, at Landlord's expense, shall repair the damage to the Premises with reasonable
dispatch and restore it as nearly as reasonably possible to its condition immediately before the taking. If any part of the Building shall be taken or appropriated so as to materially and adversely
affect the ability of Tenant's subtenants, customers and/or invitees to reach the Premises, Tenant shall have the right, at its option to terminate this Lease by notifying the other party within
twenty (20) days of such taking. 


      14.6  For
the purposes hereof, a deed in lieu of condemnation shall be deemed a taking. 


 
 

SECTION 15
  INDEMNIFICATION    
  


      15.1  Each
party ("Indemnitor") hereby covenants and agrees to indemnify, defend, save and hold the other party ("Indemnitee"), the Premises and the leasehold estate created
by this Lease free, clear and harmless from any and all liability, loss, costs, expenses (including attorneys' fees), judgments, claims, liens and demands of any kind whatsoever in connection with,
arising out of, or by reason of any act, omission, or negligence of Indemnitor, its agents, employees, servants, contractors, subtenants or licensees while in, upon, about, or in any way connected
with, the Premises or the Building or arising from any accident, injury or damage, howsoever and by whomsoever caused, to any person or property whatsoever, occurring in, upon, about or in any way
connected with the Premises or any portion thereof other than as a result of the intentional or negligent acts of Indemnitee. 


 
 

SECTION 16
  SUBORDINATION    
  


        Tenant agrees upon request of Landlord to subordinate this Lease and its rights hereunder to the lien of any mortgage, deed of trust or other encumbrance,
together with any renewals, extensions or replacements thereof now or hereafter placed, charged or enforced against the Premises, or any portion thereof, and to execute and deliver at any time, and
from time to time, upon demand by Landlord, such documents as may be reasonably required to effectuate such subordination within ten (10) days after receiving such documents, provided that in
connection with such subordination agreement Landlord's lender agrees to provide a non-disturbance agreement for the benefit of Tenant in form and substance reasonably acceptable to Tenant
and its lender(s). 


 
 

SECTION 17
  ASSIGNMENT AND SUBLETTING    
  


      17.1  Except
as otherwise set forth herein, Tenant shall not assign, mortgage, pledge, hypothecate or encumber this Lease nor the leasehold estate hereby created or any
interest herein, or sublet the Premises or any portion thereof, or license the use of all or any portion of the Premises without the prior written consent of Landlord, which consent may be withheld in
Landlord's sole discretion. Provided, however, that Tenant shall have the right, upon giving notice to Landlord, to assign this Lease or sublet all or any portion of the Premises to an Affiliate of
Tenant so long as such Affiliate agrees to be bound by the terms and provisions of this Lease and, in the case of an assignment, assumes Tenant's obligations under this Lease. The restriction or
limitation on use of the Premises shall continue to apply to any subtenant or assignee hereunder. Any consent by Landlord to any act
requiring consent pursuant to this Section 17.1 shall not constitute a waiver of the necessity for such consent to any subsequent act. Tenant shall pay all reasonable costs, expenses and
reasonable attorneys' fees that may be incurred or paid by Landlord in processing, documenting or administering any request of Tenant for Landlord's consent required pursuant to this
Section 17.1. 


10







  





      17.2  Landlord may reasonably require that each proposed assignee or sublessee agree, in a written agreement satisfactory to Landlord, to assume and abide by all the terms
and provisions of this Lease, including those which govern the permitted uses of the Premises. 


      17.3  In
the absence of an express agreement in writing to the contrary executed by Landlord, no assignment, mortgage, pledge, hypothecation, encumbrance, subletting or
license hereof or hereunder shall act as a release of Tenant from any of the provisions, covenants and conditions of this Lease on the part of Tenant to be kept and performed. 


 
 

SECTION 18
  LEASEHOLD FINANCING    
  


        18.1    Leasehold Mortgage Permitted.    Nothing in this Lease shall be construed as restricting in any manner the
right of Tenant, from time to time, or at any time, to create one or more liens on, or encumber, by mortgage, deed of trust or trust deed in the nature of a mortgage (each, a
"Leasehold Mortgage") the leasehold interest of Tenant in the Premises, and subject to the restrictions and limitations contained in any such instrument
as to further conveyances, transfers and assignments, Tenant will have the right at any time, and from time to time, to convey, transfer and assign its interest under this Lease to a mortgagee,
trustee or beneficiary, of its designee (each "Leasehold Mortgagee"), under a Leasehold Mortgage given to secure any note or other obligation of Tenant
or an Affiliate thereof. 


        18.2    Certain Benefits to Leasehold Mortgage.    If Tenant shall execute any Leasehold Mortgage, then, in such event
and so long as such Leasehold Mortgage shall constitute a lien or encumbrance against the leasehold estate of Tenant hereunder, the following provisions shall apply: 



        18.2.1    Amendment of Lease.    No agreement by Landlord and Tenant for the assignment, cancellation, surrender,
acceptance of surrender or termination, modification or amendment of this Lease shall be effective as to any Leasehold Mortgagee without the written consent of such Leasehold Mortgagee. If the
Leasehold Mortgagee whose lien has first priority consents to an amendment, any Leasehold Mortgagee of a junior lien on the Premises will not unreasonably withhold its consent to such amendment. 


        18.2.2    Exercise of Section 365(h)(i) Rights.    Landlord agrees, for the benefit of such Leasehold
Mortgagee, that the right of election arising under Section 365(h)(i) of the Bankruptcy Code shall be exercised by the most senior Leasehold Mortgagee at such time and not by Tenant. Any
attempted exercise by Tenant of such right of election in violation hereof shall be void. 


        18.2.3    Loss Payee.    The name of each such Leasehold Mortgagee shall be added to the "Loss
Payable Endorsement" of any and all insurance policies required to be carried by Tenant under this Lease. 


        18.2.4    Proceeds of Casualty and Condemnation.    Notwithstanding anything in this Lease to the contrary, in the
event of any casualty to or condemnation of the Premises or any portion thereof, the Leasehold Mortgagees shall be entitled to receive all insurance proceeds and/or condemnation awards as their
interests appear (up to the amount of the indebtedness secured by the Leasehold Mortgage) otherwise payable to Tenant or Landlord or both and apply them in accordance with the Leasehold Mortgage and
shall have the right, but not the obligation, to restore the Premises. 


        18.2.5    Merger.    If Tenant shall acquire fee title, or any other estate, title or interest in the Premises which
is the subject of this Lease, or any part thereof, or if the leasehold estate created by this Lease, or any portion thereof, shall be assigned, sold or otherwise transferred to the owner of such fee
title or other estate, title or interest in the Premises which is the subject of this Lease, then in either such event, upon the election of the Leasehold Mortgagee first in priority expressly 



11





 





made in writing at any time thereafter, each Leasehold Mortgage shall attach to and be a lien upon such fee title and/or other estate so acquired (but only as the same pertains to the Premises), and
such fee title and/or other estate so acquired shall be considered as mortgaged, assigned and conveyed to each Leasehold Mortgagee and the lien of each such Leasehold Mortgage shall be spread to cover
such estate with the same force and effect as though specifically mortgaged, assigned or conveyed in such Leasehold Mortgage (and upon request of any Leasehold Mortgagee, either or both Landlord and
Tenant shall execute further mortgages, assignments of leases and rents, amendments to documents and instruments as such Leasehold Mortgagee may reasonably require for such purpose); provided,
however, that notwithstanding the foregoing, if and so long as any of the indebtedness secured by any such Leasehold Mortgage shall remain unpaid, unless the Leasehold Mortgagee thereunder shall
otherwise in writing expressly consent, the fee title to the Premises which is the subject of this Lease and the leasehold estate created by this Lease shall not merge but shall always be kept
separate and distinct, notwithstanding the union of said estates either in Landlord or in Tenant, or in a third party, by purchase or otherwise. Nothing in this Section 18.2.5 shall be deemed
to subordinate or require Landlord to subordinate the fee interest of Landlord in the Premises to the lien of a Leasehold Mortgage. 


        18.2.6    Right of Entry.    Each Leasehold Mortgagee shall have the right to enter upon the Premises at any time for
any purpose, including curing any defaults by Tenant under this Lease, and Landlord hereby agrees to accept performance and compliance by any such Leasehold Mortgagee of any covenants, agreements,
provisions, conditions and limitations on Tenant's part to be kept, observed or performed
hereunder, with the same force and effect as though kept, observed and performed by Tenant. Any default by Tenant that is not susceptible to being cured by a Leasehold Mortgagee shall be deemed waived
by Landlord. 


        18.2.7    Notice to Tenant.    Landlord shall serve Tenant with notice if Landlord files, or has filed against it, a
petition under chapters 7 or 11 of the Bankruptcy Code. Such notice shall be served within twenty-four (24) hours of such filing. Landlord shall, upon serving Tenant with any notice
of (1) a bankruptcy fling as herein described, (2) default pursuant to the provisions of this Lease, or (3) a matter on which Landlord may predicate or claim a default, at the
same time serve a copy of such notice upon every Leasehold Mortgagee that has provided Landlord with notice of its identity and address, and no such notice by Landlord to Tenant hereunder shall have
been deemed duly given unless and until a copy thereof has been so served on every such Leasehold Mortgagee. 


        18.2.8    Termination.    Anything contained in this Lease to the contrary notwithstanding, if any default shall occur
which entitles Landlord to terminate this Lease, or to exercise any other rights, powers or remedies available to it under this Lease, Landlord shall have no right to terminate this Lease or to
exercise any of such rights, powers or remedies unless following the expiration of the period of time given Tenant to cure such default (or the act or omission which gave rise to such default),
Landlord shall notify every Leasehold Mortgagee of Landlord's intent to so terminate or exercise any such rights, powers or remedies ("Default Notice")
at least (x) sixty (60) days in advance of the proposed effective date of such termination, or exercise of any rights, powers or remedies if such default is capable of being cured by the
payment of money, and (y) ninety (90) days in advance of the proposed effective date of such termination, or exercise of any such rights, powers or remedies if such default is not
capable of being cured by the payment of money ("Default Notice Period"). The provisions of Subsection 18.2.9 below shall apply if during such
thirty (60) or ninety (90) day Default Notice Period, any Leasehold Mortgagee shall notify Landlord of such Leasehold Mortgagee's desire to nullify such notice (the
"Nullification Notice"). 



12





 




        18.2.9    Procedure on Default.    



        (a)  If
Landlord shall elect to terminate this Lease or obtain possession of the Premises by reason of any default of Tenant, and a Leasehold Mortgagee shall have delivered
the Nullification Notice set forth in Subsection 18.2.8, the specified date for the termination of this Lease as fixed by Landlord in its Default Notice or for the obtaining of possession shall
be extended for a period of six (6) months, provided that such Leasehold Mortgagee shall, during such six (6) month period: 



        (1)  pay
or cause to be paid the monetary obligations of Tenant under this Lease as the same become due, and continue its good faith efforts to perform all of Tenant's other
obligations under this Lease, excepting (i) obligations of Tenant to satisfy or otherwise discharge any lien, charge or encumbrance against Tenant's interest in this Lease or the Premises
junior in priority to the lien of the mortgage held
by such Leasehold Mortgagee and (ii) past non-monetary obligations then in default and not reasonably susceptible of being cured by such Leasehold Mortgagee (including by reason of
a bankruptcy stay or if possession of the Premises is required in order to cure such default); provided that Leasehold Mortgagee may offset amounts it
expends to cure any defaults by Landlord under this Lease; and 



        (2)  if
not enjoined or stayed, take steps to acquire or sell Tenant's interest in this Lease by foreclosure of the Leasehold Mortgage or other appropriate means and
prosecute the same to completion with due diligence. 




        (b)  If
at the end of such six (6) month period such Leasehold Mortgagee is complying with Subsection 18.2.9(a) then this Lease shall not then terminate, and
the time for completion by such Leasehold Mortgagee of its proceedings shall continue so long as such Leasehold Mortgagee is enjoined or stayed and thereafter for so long as such Leasehold Mortgagee
proceeds to complete steps to acquire or sell Lessee's interest in this Lease by foreclosure of the Leasehold Mortgage or by other appropriate means with reasonable diligence. Nothing in this
Subsection 18.2.9, however, shall be construed to extend this Lease beyond the original term thereof or to require a Leasehold Mortgagee to continue such foreclosure proceedings after the
default has been cured. If the default shall be cured and the Leasehold Mortgagee shall discontinue such foreclosure proceedings, this Lease shall continue in full force and effect as if Tenant had
not defaulted under this Lease. 


        (c)  If
a Leasehold Mortgagee is complying with Subsection 18.2.9(a) of this Section, then upon the acquisition of Tenant's estate herein by such Leasehold Mortgagee
or its designee or any other purchaser at a foreclosure sale or otherwise (and the discharge of any lien, charge or encumbrance against the Tenant's interest in this Lease or the demised premises
which is junior in priority to the lien of the Leasehold Mortgage held by such Leasehold Mortgagee and which the Tenant is obligated to satisfy and discharge by reason of the terms of this Lease) this
Lease shall continue in full force and effect as if Tenant had not defaulted under this Lease. 




        18.2.10    Receiver.    A Leasehold Mortgagee shall have the right after institution of foreclosure proceedings to
apply to the court for the appointment of a receiver of the Premises. In the event foreclosure proceedings have been instituted, any money held by Landlord which becomes payable to Tenant shall be
payable upon demand to such Leasehold Mortgagee as the interest of such Leasehold Mortgagee may appear when the same so becomes payable to Tenant. If Landlord shall at any time be in doubt as to
whether such monies are payable to such Leasehold Mortgagee or to Tenant, Landlord may pay such monies into court and file an appropriate action of interpleader in which event all of Landlord's costs
and expenses (including attorneys' fees) shall first be paid out of the proceeds so deposited. 



13





 

        18.2.11    No Assumption.    For purposes of this Subsection 18.2.11, the making of a Leasehold Mortgage shall
not be deemed to constitute an assignment or transfer of this Lease or of the leasehold estate hereby created, nor shall any Leasehold Mortgagee, as such, be deemed to be an assignee or transferee
of this Lease or of the leasehold estate hereby created, so as to require such Leasehold Mortgagee, as such, to assume the performance of any of the terms, covenants or conditions on the part of
Tenant to be performed hereunder, but the purchaser at any sale of this Lease and of the leasehold estate hereby created in any proceedings for the foreclosure of any Leasehold Mortgage, or the
assignee or transferee of this Lease and of the leasehold estate hereby created under any instrument of assignment or transfer in lieu of the foreclosure of any Leasehold Mortgage, shall be deemed to
be an assignee or transferee within the meaning of this Subsection 18.2.11 and shall be deemed to have agreed to perform all of the terms, covenants and conditions on the part of Tenant to be
performed hereunder arising and accruing from and after the date of such purchase and assignment, but only for so long as such purchaser or assignee is the owner of the leasehold estate. 


        18.2.12    Successive Sales.    Any Leasehold Mortgagee or other acquiror of the leasehold estate of Tenant pursuant
to foreclosure, assignment in lieu of foreclosure or-other proceedings may, upon acquiring Tenant's leasehold estate, without further consent of Landlord, sell and assign the leasehold
estate so acquired on such terms and to such persons or organizations as are acceptable to such Leasehold Mortgagee or acquiror and thereafter be relieved of all obligations under this Lease; provided
that such assignee has delivered to Landlord its written agreement to be bound by all of the provisions of this Lease from and after the date of such assignment. 


        18.2.13    Leasehold Mortgagee Need Not Cure Specified Defaults.    Nothing herein contained shall require any
Leasehold Mortgagee or its designee as a condition to the exercise of its rights hereunder to cure any default of Tenant not reasonably susceptible of being cured by such Leasehold Mortgagee or its
designee. 


        18.2.14    Lease Proceedings.    Landlord shall give each Leasehold Mortgagee that has provided Landlord with notice
of its interest and address, prompt notice of any arbitration or legal proceedings between Landlord and Tenant involving this Lease. Each Leasehold Mortgagee shall have the right to intervene in any
such proceedings and be made a party to such proceedings, and the parties hereto do hereby consent to such intervention. In the event that any Leasehold Mortgagee shall not elect to intervene or
become a party to any such proceedings, Landlord shall give such Leasehold Mortgagee notice of, and a copy of any award or decision made in any such proceedings, which shall be binding on all
Leasehold Mortgagees not intervening after receipt of notice of arbitration. Tenant agrees that each Leasehold Mortgagee shall also have the right to intervene in, and be made a party to, any such
proceedings. 


        18.2.15    Future Leasehold Mortgage: Amendment of Lease.    



        (a)  Notwithstanding
anything in this Lease to the contrary, each Leasehold Mortgagee shall have the right (if it has such right under its loan documents) to restrict, limit
or prohibit the execution of any other Leasehold Mortgage junior in priority to the lien of such senior Leasehold Mortgage, or, in the event of the execution of any such junior Leasehold Mortgage, to
accelerate or increase the interest rate under the indebtedness secured by such senior Leasehold Mortgage; and 



        (b)  In
the event of a Leasehold Mortgage (each, a "Successor Leasehold Mortgage") the proceeds of which are used to pay off
in its entirety the indebtedness secured by any existing Leasehold Mortgage (each such existing Leasehold Mortgage, an "Initial Leasehold Mortgage"),
then the Successor Leasehold Mortgage shall be deemed to have succeeded to the position and all of the rights and priorities of the mortgagee under the Initial Leasehold 




14





 






Mortgage with respect to the mortgagor under the Initial Leasehold Mortgage and with respect to third parties. 




        18.2.16    Certificate.    Landlord shall, without charge, at any time and from time to time within ten
(10) business days after written request of Tenant to do so, certify by written instrument duly executed and acknowledged to any Leasehold Mortgagee or purchaser, or proposed Leasehold
Mortgagee or proposed purchaser, or any other person, firm or corporation specified in such request: (1) as to whether this Lease has been supplemented or amended, and if so, the substance and
manner of such supplement or amendment; (2) as to the validity and force and effect of this Lease, in accordance with its tenor; (3) as to the existence of any default hereunder or any
event which with the passage of time or notice would constitute a default hereunder; (4) as to the existence of any offsets, claims, counterclaims or defenses hereto on the part of Landlord or,
to Landlord's knowledge, on the part of Tenant; (5) as to the commencement and expiration dates of this Lease; and (6) as to any other matters as may be reasonably so requested. Any such
certificate play be relied upon by Tenant and any other person, firm or corporation to whom the same maybe exhibited or delivered, and the contents of such certificate shall be binding on Landlord. 



        18.2.17    Nominee.    Any acquisition by a Leasehold Mortgagee of the leasehold estate under this Lease, or any
rights or privileges thereunder may be taken in the name of such Leasehold Mortgagee or in the name of any nominee or designee selected by it. 


        18.2.18    New Lease.    In the event of the termination of this Lease as a result of Tenant's default prior to the
expiration of the term, or in the event of a rejection by Landlord or Tenant of this Lease under Chapter 11 of the Bankruptcy Code, Landlord shall, in addition to providing the notices of
default and termination as required by this Lease, provide each Leasehold Mortgagee with written notice that the Lease has been terminated or that Landlord has filed a request with the Bankruptcy
Court seeking to reject the Lease, together with a statement of all sums which would at that time be due under this Lease but for such termination or rejection, and of all other defaults, if any, then
known to Landlord. Upon any request of the Leasehold Mortgagee, or its designee, Landlord agrees to enter into a new lease ("New Lease") of the Premises
with such Leasehold Mortgagee or its designee for the remainder of the term of this Lease, effective as of the date of termination or rejection, as the case may be, at the Rent, and upon the terms,
covenants and conditions (including all transfer rights, but excluding requirements which are not applicable or which have already been fulfilled) of this Lease; provided,
however, that (i) the Leasehold Mortgagee whose lien upon the Premises is superior to the lien of any other Leasehold Mortgage (the "Senior
Leasehold Mortgagee") shall have the right to give notice of its intent to enter into a New Lease to the Landlord for a period of 60 days from its receipt of the notice
referred to in the first sentence of this Section 18.2.18 and (ii) if the Senior Leasehold Mortgagee does not exercise its right to enter into the New Lease during this
60-day period; the Leasehold Mortgagee whose lien upon the Premises is superior to the lien of any other Leasehold Mortgage (other than the
Senior Leasehold Mortgagee) shall have the right to give notice of its intent to enter into a New Lease to the Landlord during the remainder of the period(s) specified below; and  provided further, however, 



        (a)  Such
Leasehold Mortgagee shall make written request upon Landlord for such New Lease at the later of (1) within one hundred (100) days after the date such
Leasehold Mortgagee receives Landlord's notice of termination or rejection of this Lease given pursuant to this Subsection 18.2.18; or (2) within forty-five (45) days
after the actual termination of the Lease as same may have been extended by Subsection 18.2.18 hereof. 



        (b)  Such
Leasehold Mortgagee or its designee shall pay or cause to be paid to Landlord at the time of the execution and delivery of such New Lease, any and all sums which
would at the time of execution and delivery thereof be due pursuant to this Lease but for such 




15





 






termination and, in addition thereto, all reasonable expenses, including reasonable attorneys' fees, court costs and costs and disbursements which Landlord shall have incurred by reason of such
termination and the execution and delivery of the New Lease and which have not otherwise been received by Landlord from or on behalf of Tenant. Upon the execution of such New Lease, Landlord shall
allow to Tenant named therein as an offset against the sums otherwise due under this Subsection 18.2.18 or under the New Lease, an amount equal to the net income derived by Landlord from the
Premises during the period from the effective date of termination of this Lease to the date of the beginning of the lease term under the New Lease. In the event of a controversy as to the amount to be
paid to Landlord pursuant to this Section 18.2, the payment obligation shall be satisfied if Landlord shall be paid the amount not in controversy, and such Leasehold Mortgagee or its designee
shall agree to pay any additional sum ultimately determined to be due. 


        (c)  Such
Leasehold Mortgagee or its designee shall agree to remedy any of Tenant's defaults of which said Leasehold Mortgagee was notified by Landlord's notice of
termination or rejection and which are reasonably susceptible of being so cured by such Leasehold Mortgagee or its designee. 


        (d)  The
Tenant under such New Lease shall have the same right, title and interest in and to the Premises and buildings and improvements thereon as Tenant under this Lease.
Any holder of any such lien, charge or encumbrance or sublease shall execute such instruments of non-disturbance and/or attornment as the tenant under the New Lease may at any time
require. 


        (e)  The
tenant under any New Lease shall be liable to perform the obligations imposed on the Tenant by such New Lease only for and during the period such person has
ownership of the Premises. 


        (f)    If
more than one (1) Leasehold Mortgagee shall request a New Lease pursuant to this Section 18.3, Landlord shall enter into such New Lease with the
Leasehold Mortgagee whose mortgage is in the first lien position, or with the designee of such Leasehold Mortgagee. 


        (g)  Concurrently
with the execution and delivery of any New Lease, Landlord shall assign to the tenant named therein all of the right, title and interest in and to moneys
(including insurance proceeds and condemnation awards), if any, then held by and payable by Landlord which Tenant would have been entitled to receive but for the termination of the Lease. Upon the
execution of any New Lease, the tenant named therein shall be entitled to any rent received under any sublease in effect during the period from the date of termination of the Lease to the date of
execution of such New Lease. 




 
 

SECTION 19
  RIGHT OF ACCESS    
  


        Landlord and its authorized agents, representatives and employees shall be entitled to enter the Premises immediately in the case of an emergency or with
reasonable notice for the purpose of observing, posting or keeping posted thereon notices provided for hereunder, and such other notices as Landlord may deem reasonably necessary or appropriate; for
the purpose of inspecting the Premises; for the purpose of exhibiting the Premises to prospective purchasers or lessees; and for the purpose of making repairs and providing services to the Premises or
the Building and performing any work upon the Premises which Landlord may elect or be required to make. In any such case, Landlord and its agents and representatives shall not unreasonably interfere
with Tenant's operations at the Premises. 


16





 


 
 

SECTION 20
  ESTOPPEL CERTIFICATE    
  


        Tenant agrees that within ten (10) business days of any demand therefor by Landlord, Tenant will execute and deliver to Landlord a certificate stating that
this Lease is in full force and effect without amendment, or if amended attaching a copy thereof to the certificate, the date to which all rentals have been paid, any defaults or offsets claimed by
Tenant and such other information concerning this Lease, the Premises or Tenant as Landlord may request. Landlord will provide a similar document to Tenant upon request by Tenant within ten
(10) business days after request. 


 
 

SECTION 21
  EXPENDITURES    
  


      21.1  Whenever
under any provision of this Lease, Tenant shall be obligated to make any payment or expenditure, or to do any act or thing, or to incur any liability
whatsoever, and Tenant fails, refuses or neglects to perform as herein required after notice and an opportunity to cure (which shall be deemed to be thirty (30) days unless provided for
specifically herein), Landlord shall be entitled, but shall not be obligated, to make any such payment or to do any such act or thing, or to incur any such liability, all on behalf of and at the cost
and for the account of Tenant. In such event, the amount thereof with interest thereon at the Default Rate, shall constitute and be collectable as additional rent on demand. 


      21.1  Whenever
under any provision of this Lease, Landlord shall be obligated to make any payment or expenditure, or to do any act or thing, or to incur any liability
whatsoever, and Landlord fails, refuses or neglects to perform as herein required after notice and an opportunity to cure (which shall be deemed to be thirty (30) days unless provided for
specifically herein), Tenant shall be entitled, but shall not be obligated, to make any such payment or to do any such act or thing, or to incur any such liability, all on behalf of and at the cost
and for the account of Landlord. In such event, the amount thereof with interest thereon at the Default Rate, shall be collectable on demand. 


 
 

SECTION 22
  DEFAULT    
  


      22.1  Tenant
shall be in default of this Lease if: 



    22.1.1  Tenant
shall fail to make timely and full payment of any sum of money required to be paid hereunder and such failure continues for ten (10) days after written
notice thereof from Landlord; 


    22.1.2  Tenant
shall fail to perform any other term, covenant or condition of Tenant contained in this Lease, and such failure continues for twenty (20) days after
written notice thereof from Landlord; provided, however, that if correction is impossible to correct within twenty (20) days, Tenant shall not be deemed in default if Tenant commences
correction within said twenty (20) day period, and diligently pursues such correction to completion; 


    22.1.3  Tenant
should vacate or abandon the Premises; or 


    22.1.4  There
is filed any petition in bankruptcy or Tenant is adjudicated a bankrupt or insolvent, or there is appointed a receiver or trustee to take possession of Tenant
or of all or substantially all of the assets of Tenant, or there is a general assignment by Tenant for the benefit of creditors, or any action is taken by or against Tenant under any state of federal
insolvency or bankruptcy act, or any similar law now or hereafter in effect; or 



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      22.2  In
the event of a default, in addition to any other rights or remedies provided for herein or at law or in equity, Landlord, at its sole option, shall have the
following rights: 



    22.2.1  The
right to declare the Lease Term ended and to re-enter the Premises and take possession thereof, and to terminate all of the rights of Tenant in and to
the Premises; or 


    22.2.2  Pursuant
to its rights of re-entry, Landlord may, but shall not be obligated to (i) remove all persons from the Premises, (ii) remove all
property therefrom, and (iii) enforce any rights Landlord may have against said property or store the same in any warehouse or elsewhere at the cost and for the account of Tenant. Tenant agrees
to hold Landlord free and harmless of any liability whatsoever for the removal and/or storage of any such property, whether of Tenant or any third party whomsoever, except for damage caused by the
willful misconduct or gross negligence of Landlord, its agents or subcontractors. 


    22.2.3  Anything
contained herein to the contrary notwithstanding, Landlord shall not be deemed to have terminated this Lease or the liability of Tenant to pay any Rent or
other sum of money accruing hereunder, by any such re-entry, or by any action in unlawful detainer or otherwise to obtain possession of the Premises, unless Landlord shall specifically
notify Tenant in writing that it has so elected to terminate this Lease. 




      22.3  In
any action brought by Landlord to enforce any of its rights under or arising from this Lease, Landlord shall be entitled to receive its reasonable costs and legal
expenses, including reasonable attorneys' fees, whether such action is prosecuted to judgment or not. 



      22.4  The
waiver by Landlord of any breach of this Lease by Tenant shall not be a waiver of any preceding or subsequent breach of this Lease by Tenant. The subsequent
acceptance of Rent or any other payment hereunder by Landlord shall not be construed to be a waiver of any preceding breach of this Lease by Tenant. No payment by Tenant or receipt by Landlord of a
lesser amount than the Rent herein provided shall be deemed to be other than on account of the earliest Rent due and payable hereunder. 


 
 

SECTION 23
  MISCELLANEOUS    
  


      23.1  Tenant,
upon paying the rentals and other payments herein required and upon performance of all of the terms, covenants and conditions of this Lease on its part to be
kept, may quietly have, hold and enjoy the Premises during the Lease Term without any disturbance from Landlord or from any other person claiming through Landlord, except as expressly provided
otherwise in this Lease. 


      23.2  In
the event of any sale or exchange of the Premises by Landlord, Landlord shall be, and is, hereby relieved of all liability under and all of its covenants and
obligations contained in or derived from this Lease. Tenant agrees to attorn to such purchaser or transferee, provided that such purchaser or transferee agrees to be bound as Landlord under all of the
terms and conditions of this Lease. Any sale of the Building or the Premises by Landlord shall be subject to this Lease. 


      23.3  It
is agreed that in the event Landlord fails or refuses to perform any of the provisions, covenants or conditions of this Lease, Tenant, prior to exercising any right
or remedy Tenant may have against Landlord, shall give written notice to Landlord of such default, specifying in said notice the default with which Landlord is charged and Landlord shall not be deemed
in default if the same is cured within thirty (30) days of receipt of said notice. Notwithstanding any other provision hereof, Tenant agrees that if the default is of such a nature that the
same can be rectified or cured by Landlord, but cannot with reasonable diligence be rectified or cured within that thirty (30) day period, then such default shall be deemed to be rectified or
cured if Landlord within that thirty (30) day period shall commence the rectification and curing thereof and shall continue thereafter with all due diligence to cause such rectification and
curing to proceed. 


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      23.4  Neither
party shall be in breach of this Lease if it fails to perform as required hereunder due to labor disputes, civil commotion, war, warlike operation, sabotage,
governmental regulations or control, fire or other casualty, inability to obtain any materials, or other causes beyond such party's reasonable control (financial inability excepted); provided,
however, that nothing contained herein shall excuse Tenant from the prompt payment of any Rent or charge required of Tenant hereunder. 


      23.5  Any
and all notices and demands required or desired to be given hereunder shall be in writing and shall be validly given or made (and effective) if served personally,
delivered by a nationally recognized overnight courier service, or deposited in the United States mail, certified or registered, postage prepaid, return receipt requested, to the following addresses: 



	If to Landlord:	 	Valvino Lamore, LLC

3145 Las Vegas Boulevard South

Las Vegas, Nevada 89109

Attention: Legal Department

Telephone: 702-733-4444

Facsimile: 702-791-0167
	

If to Tenant:	
 	

Wynn Las Vegas, LLC

3145 Las Vegas Boulevard South

Las Vegas, Nevada 89109

Attention: Legal Department

Telephone: 702-733-4556

Facsimile: 702-733-4596






Either
party may change its address for the purpose of receiving notices by providing written notice to the other. 


      23.6  The
various rights, options, elections and remedies of Landlord contained in this Lease shall be cumulative and no one of them shall be construed as exclusive of any
other, or of any right, priority or remedy allowed or provided for by law and not expressly waived in this Lease. 


      23.7  The
terms, provisions, covenants and conditions contained in this Lease shall apply to, bind and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, legal representatives, successors and assigns, as permitted in Section 17 hereof. 


      23.8  If
any term, covenant or condition of this Lease, or any application thereof, should be held by a court of competent jurisdiction to be invalid, void or unenforceable,
all terms, covenants and conditions of this Lease, and all applications thereof, not held invalid, void or unenforceable, shall continue in full force and effect and shall in no way be affected,
impaired or invalidated thereby. 


      23.9  Time
is of the essence of this Lease and all of the terms, covenants and conditions hereof. 


    23.10  This
Lease contains the entire agreement between the parties and cannot be changed or terminated orally. 


    23.11  Nothing
contained herein shall be deemed to create any partnership, joint venture, agency or other relationship between Landlord and Tenant other than the relationship
of landlord and tenant. 


    23.12  The
captions are descriptive only and for convenience in reference to this Lease and in no way whatsoever define, limit or describe the scope or intent of this Lease
nor in any way affect this Lease. 


    23.13  The
laws of the State of Nevada shall govern the validity, construction, performance and effect of this Lease. Each party hereto consents to, and waives any objection
to, Clark County, Nevada as the 


19





 




proper and exclusive venue for any disputes arising out of or relating to this Lease or any alleged breach thereof. 



    23.14  In
the event Tenant now or hereafter shall consist of more than one person, firm, corporation or trust, then and in such event, all such persons, firms, corporations
or trusts shall be jointly and severally liable as Tenant hereunder. 


    23.15  This
Lease may not be recorded without Landlord's prior written consent. However, the parties agree to record a Memorandum of Lease in the form attached hereto as
Exhibit "D". A Memorandum of Termination of Lease in the form attached hereto as Exhibit "E" shall also be executed by the parties, shall be held by Landlord, and shall be recorded by
Landlord upon termination of the Lease. 


    23.16  All
necessary actions have been taken under the parties' organizational documents to authorize the individuals signing this Lease on behalf of the respective parties
to do so. 


    23.17  The
prevailing party in any action regarding this Lease shall be entitled to receive its costs and legal expenses including reasonable attorneys' fees, whether such
action is prosecuted to judgment or not. The parties hereto shall and they hereby do waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the
other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises, and/or any claim of injury
or damage. 


    23.18  Landlord
and Tenant each represent and warrant to the other that they have not entered into any written contractual arrangement with, or promised to pay any broker's
fee, finder's fee, commission or other similar compensation to, or otherwise agreed to compensate, any real estate agent or broker in connection with this transaction. Landlord and Tenant each agree
to indemnify, defend, save and hold the other harmless from and against all loss, cost and expense incurred by reason of the breach of the foregoing representation and warranty arising from any claim
for compensation founded upon or as a
result of acts asserted to have been performed on their respective behalf. Such indemnification obligation shall survive any termination of the Lease. 



    23.19  This
Lease may be executed in one or more counterparts, all of which executed counterparts shall be deemed an original, but all of which, together, shall constitute
one and the same instrument. Signature pages may be detached from the counterparts and attached to a single copy of this document to physically form one document. 


[Signature page follows]


20





 

        IN
WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first above-written. 



	"Landlord"	 	"Tenant"
	
Valvino Lamore, LLC

a Nevada limited liability company	
 	
Wynn Las Vegas, LLC

a Nevada limited liability company
	

By:	

Wynn Resorts, Limited,

a Nevada corporation

its sole member	
 	

By:	

Wynn Resorts Holdings, LLC

a Nevada limited liability company,

its sole member
	

By:	

/s/  MARC H. RUBINSTEIN      	
 	

 	

 
	 	
	 	By:	Valvino Lamore, LLC
	Name:	Marc H. Rubinstein	 	 	a Nevada limited liability company,
	Title:	Senior Vice President, General Counsel & Secretary	 	 	its sole member
	

 	

 	
 	

By:	

Wynn Resorts, Limited,

a Nevada corporation,

its sole member
	

 	

 	
 	

By:	

/s/  MARC H. RUBINSTEIN      

	 	 	 	Name:	Marc H. Rubinstein
	 	 	 	Title:	Senior Vice President, General Counsel & Secretary




21






  



 
 

SCHEDULE 1    
  



        1.    First Deed of Trust.    Amended and Restated Deed of Trust, Assignment of Rents and Leases, Security Agreement
and Fixture Filing made by Valvino Lamore, LLC, a Nevada limited liability company, as Trustor, to Nevada Title Company, a Nevada corporation, as Trustee, for the benefit of Deutsche Bank Trust
Company Americas, in its capacity as Administrative Agent for the benefit of the Banks, as Beneficiary; and 


        2.    Second Deed of Trust.    Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing
made by Valvino Lamore, LLC, a Nevada limited liability company, as Trustor, to Nevada Title Company, a Nevada corporation, as Trustee, for the benefit of Wells Fargo Bank, National
Association, in its capacity as the Mortgage Notes Indenture Trustee, as Beneficiary. 


1









QuickLinks



Exhibit 10.3


LEASE AGREEMENT between VALVINO LAMORE, LLC, Landlord and WYNN LAS VEGAS, LLC, Tenant Dated October 21, 2002

TABLE OF CONTENTS


LEASE AGREEMENT

WITNESSETH

SECTION 1 DEMISED PREMISES

SECTION 2 TERM

SECTION 3 RENT

SECTION 4 GAMING

SECTION 5 FINANCING

SECTION 6 USE OF PREMISES; EXCLUSIVITY

SECTION 7 ALTERATIONS AND IMPROVEMENTS

SECTION 8 PARKING

SECTION 9 TAXES

SECTION 10 UTILITIES

SECTION 11 MAINTENANCE AND REPAIRS

SECTION 12 LIENS

SECTION 13 INSURANCE

SECTION 14 DESTRUCTION OF PREMISES; CONDEMNATION

SECTION 15 INDEMNIFICATION

SECTION 16 SUBORDINATION

SECTION 17 ASSIGNMENT AND SUBLETTING


SECTION 18 LEASEHOLD FINANCING

SECTION 19 RIGHT OF ACCESS

SECTION 20 ESTOPPEL CERTIFICATE

SECTION 21 EXPENDITURES

SECTION 22 DEFAULT

SECTION 23 MISCELLANEOUS



SCHEDULE 1