Document:

<Page>

                                                                     Exhibit 4.2

                                     WARRANT
                          REGISTRATION RIGHTS AGREEMENT

                                 By and Between

                                  SOLUTIA INC.

                                       and

                            SALOMON SMITH BARNEY INC.

                                       and

                         BANC OF AMERICA SECURITIES LLC
                  as representatives of the Initial Purchasers

               223,000 Warrants to Purchase Shares of Common Stock

                            Dated as of July 9, 2002

<Page>

         This Warrant Registration Rights Agreement (this "AGREEMENT") is made
and entered into as of July 9, 2002, between Solutia Inc., a Delaware
corporation (the "COMPANY"), and Salomon Smith Barney Inc. and Banc of America
Securities LLC as representatives of the Initial Purchasers.

         The Company, SOI Funding Corp., a Delaware corporation ("FUNDING
CORP."), the guarantors named therein and the Initial Purchasers have entered
into a Purchase Agreement, dated July 2, 2002 (the "PURCHASE AGREEMENT"). The
Purchase Agreement provides for the offering by Funding Corp. of 223,000 Units,
each consisting of $1,000 principal amount of Funding Corp.'s 11.25% Senior
Secured Notes due 2009 (the "NOTES") and one warrant initially representing the
right to purchase 24.814 shares of common stock, par value $0.01 per share, of
the Company (the "WARRANT SHARES").

         Pursuant to the Purchase Agreement, the Company has entered into a
Warrant Agreement (the "WARRANT AGREEMENT") with HSBC Bank USA, as warrant agent
(the "WARRANT AGENT"), providing for the issuance of 223,000 warrants (the
"WARRANTS"), each initially representing the right to purchase 24.814 Warrant
Shares.

         In order to induce the Initial Purchasers to purchase the Warrants, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers set forth in Section 6 of the Purchase
Agreement.

         Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Warrant Agreement.

         The parties hereby agree as follows:

1.       DEFINITIONS

         As used in this Agreement, the following capitalized terms shall have
the following meanings:

         "ACT":  The Securities Act of 1933, as amended.

         "ADVICE":  As defined in Section 4(b) hereof.

         "AFFILIATE":  As defined in Rule 144.

         "ASSUMPTION DATE":  As defined in the Warrant Agreement.

         "BLACK OUT NOTICE":  As defined in Section 4(b) hereof.

         "BLACK OUT PERIOD":  As defined in Section 3(a) hereof.

         "CLOSING DATE":  The date hereof.

         "COMMISSION":  The Securities and Exchange Commission.

<Page>

                                      -2-

         "DEADLINE": August 9, 2002, or such earlier date as the Company
determines not to pursue its refinancing plan (as described in the Final
Memorandum).

         "EXCHANGE ACT":  The Securities Exchange Act of 1934, as amended.

         "EXPIRATION DATE": The earlier of (1) the Deadline if the Solutia
Assumption does not occur on or before then or (2) 5:00 p.m. New York City time
on July 15, 2009.

         "FINAL MEMORANDUM":  As defined in the Purchase Agreement.

         "HOLDERS":  As defined in Section 2 hereof.

         "INITIAL PURCHASERS": Salomon Smith Barney Inc., Banc of America
Securities LLC, J.P. Morgan Securities Inc., Banc One Capital Markets, Inc.,
HSBC Securities (USA), Inc. and SG Cowen Securities Corporation.

         "NASD":  National Association of Securities Dealers, Inc.

         "PROSPECTUS": The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.

         "REGISTRATION STATEMENT": Any registration statement of the Company
relating to the registration for resale of Transfer Restricted Securities that
is filed pursuant to the provisions of this Agreement and including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

         "RULE 144":  Rule 144 promulgated under the Act.

         "SOLUTIA ASSUMPTION": As defined in the Indenture, of even date
herewith, between Funding Corp. and HSBC Bank USA, as trustee.

         "TRANSFER RESTRICTED SECURITIES": (a) Each Warrant and Warrant Share
held by an Affiliate of the Company and (b) each other Warrant and Warrant Share
until the earlier to occur of (i) the date on which such Warrant or Warrant
Share (other than any Warrant Share issued upon exercise of a Warrant in
accordance with a Registration Statement) has been disposed of in accordance
with a Registration Statement and (ii) the date on which such Warrant or Warrant
Share (or the related Warrant) is distributed to the public pursuant to Rule 144
under the Act.

2.       HOLDERS

         A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person is the holder of record of Transfer
Restricted Securities.

<Page>

                                      -3-

3.       SHELF REGISTRATION

         (a) SHELF REGISTRATION. The Company shall prepare and cause to be
filed with the Commission on or before 60 days from the Assumption Date
pursuant to Rule 415 under the Act a Registration Statement on the
appropriate form relating to resales of Transfer Restricted Securities by the
Holders thereof and the issuance of Warrant Shares upon the exercise of the
Warrants sold pursuant to such Registration Statement. The Company shall use
its reasonable best efforts to cause the Registration Statement to be
declared effective by the Commission on or before 120 days after the
Assumption Date.

         To the extent necessary to ensure that the Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 3(a), the Company shall use its
reasonable best efforts to keep any Registration Statement required by this
Section 3(a) continuously effective, supplemented, amended and current as
required by and subject to the provisions of Section 4(a) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the later of (i) the second anniversary of the effective date of the
Registration Statement and (ii) the earlier of (A) the Expiration Date and (B)
the first date as of which all Warrants have been exercised by the Holders
thereof; PROVIDED, HOWEVER, that such obligation shall expire before such date
if the Company delivered to the Warrant Agent a written opinion of counsel to
the Company (which opinion of counsel shall be reasonably satisfactory to the
Initial Purchasers) that all Holders (other than Affiliates of the Company) of
Warrants and Warrant Shares may resell the Warrants and the Warrant Shares
without registration under the Act and without restriction as to the manner,
timing or volume of any such sale. Notwithstanding the foregoing, the Company
shall not be required to amend or supplement the Registration Statement, any
related prospectus or any document incorporated therein by reference, for a
period (a "BLACK OUT PERIOD") not to exceed, for so long as this Agreement is in
effect, an aggregate of 90 days in any calendar year, in the event that (i) an
event occurs and is continuing as a result of which the Registration Statement,
any related prospectus or any document incorporated therein by reference as then
amended or supplemented would, in the Company's good faith judgment, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (ii)(A) the Company determines in its
good faith judgment that the disclosure of such event at such time would have a
material adverse effect on the business, operations or prospects of the Company
or (B) the disclosure otherwise relates to a material business transaction which
has not yet been publicly disclosed; PROVIDED, HOWEVER, that such Black Out
Period shall be extended for any period, not to exceed an aggregate of 30 days
in any calendar year, during which the Commission is reviewing any proposed
amendment or supplement to the Registration Statement, any related prospectus or
any document incorporated therein by reference which has been filed by the
Company; and PROVIDED, FURTHER, that no Black Out Period may be in effect during
the three months prior to the Expiration Date.

         (b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
THE REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Registration
Statement pursuant to this Agreement unless and until such Holder furnishes
to the Company in writing, within 20 days after receipt of a request
therefor, the information

<Page>

                                      -4-

specified in Item 507 or 508 of Regulation S-K, as applicable, or such other
information as the Company may reasonably request under the Act for use in
connection with any Registration Statement or Prospectus or preliminary
prospectus included therein or in any application to the NASD; the Company shall
be under no further obligations to such Holder to include such Holder in a
Registration Statement. Each selling Holder agrees to promptly furnish
additional information required to be disclosed in order to make the information
previously furnished to the Company by such Holder not materially misleading.

4.       REGISTRATION PROCEDURES

         (a) In connection with the Registration Statement and any related
Prospectus required by this Agreement, the Company shall:

                  (i) Comply with all the provisions of this Section 4(a) and
         use its reasonable best efforts to effect such registration to permit
         the sale of the Transfer Restricted Securities being sold in accordance
         with the intended method or methods of distribution thereof (as
         indicated in the information furnished to the Company pursuant to
         Section 3(b) hereof), and pursuant thereto the Company will prepare and
         file with the Commission a Registration Statement relating to the
         registration on any appropriate form under the Act, which form shall be
         available for the sale of the Transfer Restricted Securities in
         accordance with the intended method or methods of distribution thereof
         within the time periods and otherwise in accordance with the provisions
         hereof;

                  (ii) use its reasonable best efforts to keep such Registration
         Statement continuously effective and provide all requisite financial
         statements for the period specified in Section 3 of this Agreement.
         Upon the occurrence of any event that would cause any such Registration
         Statement or the Prospectus contained therein (A) to contain an untrue
         statement of material fact or omit to state any material fact necessary
         to make the statement therein, in the light of the circumstances under
         which they were made, not misleading or (B) not to be effective and
         usable for resale of Transfer Restricted Securities during the period
         required by this Agreement, the Company shall, subject to Section 3(a),
         file promptly an appropriate amendment to such Registration Statement
         or a supplement to the Prospectus, as applicable, curing such defect,
         and, in the case of an amendment, use its reasonable best efforts to
         cause such amendment to be declared effective as soon as practicable
         thereafter;

                  (iii) prepare and file with the Commission such amendments and
         post-effective amendments to the applicable Registration Statement as
         may be necessary to keep such Registration Statement effective for the
         applicable period set forth in Section 3; cause the Prospectus to be
         supplemented by any required Prospectus supplement, and as so
         supplemented to be filed pursuant to Rule 424 under the Act, and to
         comply fully with Rules 424, 430A and 462, as applicable, under the Act
         in a timely manner; and comply with the provisions of the Act with
         respect to the disposition of all securities covered by such
         Registration Statement during the applicable period in accordance with
         the intended method or methods of distribution by the sellers thereof
         set forth in such Registration Statement or supplement to the
         Prospectus;

<Page>

                                      -5-

                  (iv) promptly advise each Holder whose Transfer Restricted
         Securities have been included in the Registration Statement (each, a
         "RELEVANT HOLDER") and the Initial Purchasers and, if requested by such
         Person, confirm such advice in writing, (A) when the Prospectus or any
         Prospectus supplement or post-effective amendment has been filed, and,
         with respect to any applicable Registration Statement or any
         post-effective amendment thereto, when the same has become effective,
         (B) of any request by the Commission for amendments to the Registration
         Statement or amendments or supplements to the Prospectus or for
         additional information relating thereto, (C) of the issuance by the
         Commission of any stop order suspending the effectiveness of the
         Registration Statement under the Act or of the suspension by any state
         securities commission of the qualification of the Transfer Restricted
         Securities for offering or sale in any jurisdiction, or the initiation
         of any proceeding for any of the preceding purposes, and (D) of the
         existence of any fact or the happening of any event that makes any
         statement of a material fact made in the Registration Statement, the
         Prospectus, any amendment or supplement thereto or any document
         incorporated by reference therein untrue, or that requires the making
         of any additions or changes in the Registration Statement in order to
         make the statements therein not misleading, or that requires the making
         of any additions to or changes in the Prospectus in order to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading. If at any time the Commission shall issue
         any stop order suspending the effectiveness of the Registration
         Statement, or any state securities commission or other regulatory
         authority shall issue an order suspending the qualification or
         exemption from qualification of the Transfer Restricted Securities
         under state securities or Blue Sky laws, the Company shall use its
         reasonable best efforts to obtain the withdrawal or lifting of such
         order at the earliest possible time;

                  (v) subject to Section 4(a)(ii), if any fact or event
         contemplated by Section 4(a)(iv)(D) hereof shall exist or have
         occurred, prepare a supplement or post-effective amendment to the
         Registration Statement or related Prospectus or any document
         incorporated therein by reference or file any other required document
         so that, as thereafter delivered to the purchasers of Transfer
         Restricted Securities, the Prospectus will not contain an untrue
         statement of a material fact or omit to state any material fact
         necessary to make the statements therein, in the light of the
         circumstances under which they were made, not misleading;

                  (vi) furnish to the Initial Purchasers, before filing with the
         Commission, copies of any Registration Statement or any Prospectus
         included therein or any amendments or supplements to any such
         Registration Statement or Prospectus, which documents will be subject
         to the review and comment of such Persons in connection with such sale,
         if any, for a period of at least five Business Days, and the Company
         will not file any such Registration Statement or Prospectus or any
         amendment or supplement to any such Registration Statement or
         Prospectus (including all such documents incorporated by reference) to
         which such Person shall reasonably object within five Business Days
         after the receipt thereof. Such Person shall be deemed to have
         reasonably objected to such filing if such Registration Statement,
         amendment, Prospectus or supplement, as applicable, as proposed to be
         filed, contains an untrue statement of a material fact or omits to
         state any material fact necessary to make the statements therein, in
         the light of the circumstances under which they were made, not
         misleading or fails to comply with the applicable requirements of the
         Act;
<Page>

                                      -6-

                  (vii) subject to execution of a confidentiality agreement in
         form and substance reasonably acceptable to the Company and the
         Holders, make available, at reasonable times, for inspection by each
         Relevant Holder and the Initial Purchasers and any attorney or
         accountant retained by such Persons, all financial and other records
         and pertinent corporate documents of the Company and cause the
         Company's officers, directors and employees to supply all information
         reasonably requested by any such Person, attorney or accountant in
         connection with such Registration Statement or any post-effective
         amendment thereto subsequent to the filing thereof and prior to its
         effectiveness; PROVIDED, HOWEVER, that any information that is subject
         to the aforementioned confidentiality agreement shall be kept
         confidential by such Persons, unless (i) disclosure of such information
         by such Person is required by court or administrative order or is
         necessary to respond to inquiries of regulatory authorities, (ii)
         disclosure of such information is required by law (including any
         disclosure requirements pursuant to federal securities laws in
         connection with the filing of such Registration Statement or the use of
         any Prospectus, except if the Company obtains "confidential treatment"
         for any document or information in accordance with the rules of the
         Commission), (iii) such information becomes generally available to the
         public other than as a result of a disclosure or failure to safeguard
         such information by such Person or (iv) such information becomes
         available to such Person from a source other than the Company and its
         subsidiaries and such source is not known, after due inquiry, by such
         Person to be bound by an obligation of confidentiality;

                  (viii) if requested by any Relevant Holder or by the Initial
         Purchasers, promptly include in any Registration Statement or
         Prospectus, pursuant to a supplement or post-effective amendment if
         necessary, such information as any such Person reasonably requests to
         have included therein, including, without limitation, information
         relating to the "Plan of Distribution" of the Transfer Restricted
         Securities and the use of the Registration Statement or Prospectus for
         market-making activities; and make all required filings of such
         Prospectus supplement or post-effective amendment as soon as
         practicable after the Company is notified of the matters to be included
         in such Prospectus supplement or post-effective amendment;

                  (ix) furnish to the Initial Purchasers and each Relevant
         Holder upon request, without charge, at least one copy of the
         Registration Statement, as first filed with the Commission, and of each
         amendment thereto, including all exhibits;

                  (x) deliver to the Initial Purchasers and each Relevant
         Holder, without charge, as many copies of the Prospectus (including
         each preliminary prospectus) and any amendment or supplement thereto as
         such Persons reasonably may request; the Company hereby consents to the
         use (in accordance with law) of the Prospectus and any amendment or
         supplement thereto by each Person in connection with the offering and
         the sale of the Transfer Restricted Securities covered by the
         Prospectus or any amendment or supplement thereto;

                  (xi) upon the request of any Relevant Holder or the Initial
         Purchasers, enter into such agreements (including underwriting
         agreements) as are customary in comparable offerings and make such
         representations and warranties and take all such other actions in
         connection therewith in order to expedite or facilitate the disposition
         of the Transfer Restricted Securities pursuant to any applicable
         Registration Statement contemplated by this Agreement as may be

<Page>

                                      -7-

         reasonably requested by any Person in connection with any sale or
         resale pursuant to any applicable Registration Statement. In such
         connection the Company shall:

                           (A) upon the reasonable request of any Holder or
                  Initial Purchaser made in connection with an underwritten
                  sale, furnish (or in the case of paragraphs (2) and (3), use
                  its reasonable best efforts to cause to be furnished) to each
                  Person, upon the effectiveness of the Registration Statement:

                                    (1) a certificate, dated such date, signed
                           on behalf of the Company by (x) the President or any
                           Vice President and (y) a principal financial or
                           accounting officer of the Company, covering, as of
                           the date thereof, matters substantially similar to
                           those set forth in paragraph (d) of Section 6 of the
                           Purchase Agreement and such other similar matters as
                           such Person may reasonably request;

                                    (2) an opinion, dated the date of
                           effectiveness of the Registration Statement, of
                           counsel for the Company covering matters similar to
                           those set forth in paragraph (a)(1) of Section 6 of
                           the Purchase Agreement and such other matters as such
                           Person may reasonably request, and in any event
                           including a statement to the effect that such counsel
                           has participated in conferences with officers and
                           other representatives of the Company and
                           representatives of the independent public accountants
                           for the Company and has considered the matters
                           required to be stated therein and the statements
                           contained therein, although such counsel has not
                           independently verified the accuracy, completeness or
                           fairness of such statements; and that such counsel
                           advises that, on the basis of the foregoing, no facts
                           came to such counsel's attention that caused such
                           counsel to believe that the Registration Statement,
                           at the time such Registration Statement or any
                           post-effective amendment thereto became effective,
                           contained an untrue statement of a material fact or
                           omitted to state a material fact required to be
                           stated therein or necessary to make the statements
                           therein not misleading, or that the Prospectus
                           contained in such Registration Statement as of its
                           date contained an untrue statement of a material fact
                           or omitted to state a material fact necessary in
                           order to make the statements therein, in the light of
                           the circumstances under which they were made, not
                           misleading. Without limiting the foregoing, such
                           counsel may state further that such counsel assumes
                           no responsibility for, and has not independently
                           verified, the accuracy, completeness or fairness of
                           the financial statements, notes and schedules and
                           other financial data included in any Registration
                           Statement contemplated by this Agreement or the
                           related Prospectus; and

                                    (3) a customary comfort letter, dated the
                           date of effectiveness of the Registration Statement,
                           from the Company's independent accountants, in the
                           customary form and covering matters of the type
                           customarily covered in comfort letters to
                           underwriters in connection with underwritten
                           offerings, and covering matters substantially similar
                           to those set forth in the comfort letters

<Page>

                                      -8-

                           delivered pursuant to paragraph (e) of Section 6 of
                           the Purchase Agreement; and

                           (B) deliver such other documents and certificates as
                  may be reasonably requested by such Holder or Initial
                  Purchaser to evidence compliance with the matters covered in
                  clause (A) above and with any customary conditions contained
                  in any agreement entered into by the Company pursuant to this
                  clause;

                  (xii) prior to any public offering of Transfer Restricted
         Securities, cooperate with the selling Holders and their counsel in
         connection with the registration and qualification of the Transfer
         Restricted Securities under the securities or Blue Sky laws of such
         jurisdictions as the selling Holders may reasonably request and do any
         and all other acts or things necessary or advisable to enable the
         disposition in such jurisdictions of the Transfer Restricted Securities
         covered by the applicable Registration Statement; PROVIDED, HOWEVER,
         that the Company shall not be required to register or qualify as a
         foreign corporation where it is not now so qualified or to take any
         action that would subject it to the service of process in suits or to
         taxation, in any jurisdiction where it is not so subject;

                  (xiii) in connection with any sale of Transfer Restricted
         Securities that will result in such securities no longer being Transfer
         Restricted Securities, cooperate with the selling Holders to facilitate
         the timely preparation and delivery of certificates, if any,
         representing Transfer Restricted Securities to be sold and not bearing
         any restrictive legends; and to register such Transfer Registered
         Securities in such denominations and such names as the selling Holders
         may request at least two Business Days prior to such sale of Transfer
         Restricted Securities;

                  (xiv) use its reasonable best efforts to cause the disposition
         of the Transfer Restricted Securities covered by the Registration
         Statement to be registered with or approved by such other governmental
         agencies or authorities as may be necessary to enable the seller or
         sellers thereof to consummate the disposition of such Transfer
         Restricted Securities, subject to the proviso contained in clause (xii)
         above;

                  (xv) provide a CUSIP number for all Transfer Restricted
         Securities not later than the effective date of a Registration
         Statement covering such Transfer Restricted Securities and provide the
         Warrant Agent with certificates for the Transfer Restricted Securities
         which are in a form eligible for deposit with The Depository Trust
         Company; and

                  (xvi) otherwise use its reasonable best efforts to comply with
         all applicable rules and regulations of the Commission so long as any
         provision of this Agreement shall be applicable, and make generally
         available to its security holders with regard to any applicable
         Registration Statement, as soon as practicable and in accordance with
         the Company's customary practice, a consolidated earnings statement
         meeting the requirements of Rule 158 (which need not be audited)
         covering a twelve-month period beginning after the effective date of
         the Registration Statement (as such term is defined in Rule 158(c)
         under the Act).

<Page>

                                      -9-

         (b) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security and the Initial Purchasers agree that, upon receipt
of notice from the Company of the commencement of a Black Out Period (in each
case, a "BLACK OUT NOTICE"), such Person will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable Registration
Statement until (i) such Person has received copies of the supplemented or
amended Prospectus referred to in Section 4(a)(v) hereof, or (ii) such Person is
advised in writing that the use of the Prospectus may be resumed (the "ADVICE").
Each Person receiving a Black Out Notice hereby agrees that it will either (i)
destroy any Prospectuses, other than permanent file copies, then in such
Person's possession which have been replaced by the Company with more recently
dated Prospectuses or (ii) deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Person's possession of
the Prospectus covering such Transfer Restricted Securities that was current at
the time of receipt of the Black Out Notice. The time period regarding the
effectiveness of such Registration Statement set forth in Section 3 hereof shall
be extended by a number of days equal to the number of days in the period from
and including the date of delivery of the Black Out Notice to and including the
date when each Person that received a Black Out Notice shall have received the
copies of the supplemented or amended Prospectus contemplated by Section 4(a)(v)
hereof or shall have received the Advice.

5.       REGISTRATION EXPENSES

         All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees and expenses; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing Prospectuses (whether for sales,
market-making or otherwise)), messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel for the Company; (v) all applications
and filing fees in connection with listing the Warrant Shares on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; and (vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performances).

         Notwithstanding the foregoing, the Holders will be responsible for any
underwriting discounts and commissions, brokers fees and any transfer taxes
relating to Warrants disposed of by the Holders. The Company will, in any event,
bear its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by the Company.

6.       INDEMNIFICATION

         (a) The Company agrees to indemnify and hold harmless each Holder
(including each Initial Purchaser and each Affiliate thereof), the directors,
officers, employees and agents of each such Holder and each Person who controls
any such Holder within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory

<Page>

                                      -10-

law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement as originally filed or in any amendment
thereof, or in any preliminary Prospectus or the Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and jointly and
severally agree to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company will not be liable in any case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder
specifically for inclusion therein; PROVIDED, FURTHER, that with respect to any
untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this Section 6(a) shall not
inure to the benefit of any Holder from whom the person asserting any such loss,
claim, damage or liability purchased the securities concerned, to the extent
that any such loss, claim, damage or liability of such Holder occurs under the
circumstance where it shall have been determined by a court of competent
jurisdiction by final and nonappealable judgment that (w) the Company had
previously furnished copies of the Prospectus to the Holders, (x) delivery of
the Prospectus was required by the Act to be made to such person, (y) the untrue
statement of omission of a material fact contained in the Preliminary Prospectus
was corrected in the Prospectus and (z) there was not sent or given to such
person , at or prior to the written confirmation of the sale of such securities
to such person, a copy of the Prospectus.

         The Company also agrees to indemnify or contribute as provided in
Section 6(d) to Losses of each underwriter of Transfer Restricted Securities
their directors, officers, employees or agents and each Person who controls such
underwriter on substantially the same basis as that of the indemnification of
the Initial Purchasers and the selling Holders provided in this Section 6(a) and
shall, if requested by any Holder, enter into an underwriting agreement
reflecting such agreement.

         (b) Each Holder of securities covered by a Registration Statement
(including each Initial Purchaser and each Affiliate thereof) severally agrees
to indemnify and hold harmless the Company, each of its directors, each of its
officers who signs such Registration Statement, and each Person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each such Holder, but only
with reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.

         (c) Promptly after receipt by an indemnified party under this Section 6
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and de-

<Page>

                                      -11-

fenses; and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ one separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such one separate counsel if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest; (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party; (iii)
the indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action; or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.

         (d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section is unavailable to or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party shall have a joint
and several obligation to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "LOSSES") to
which such indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the Initial Placement
and the Registration Statement which resulted in such Losses; PROVIDED, HOWEVER,
that in no case shall any Initial Purchaser be responsible, in the aggregate,
for any amount in excess of the purchase discount or commission applicable to
such Transfer Restricted Security as set forth on the cover page of the Final
Memorandum, nor shall any underwriter be responsible for any amount in excess of
the underwriting discount or commission applicable to the securities purchased
by such underwriter under the Registration Statement which resulted in such
Losses. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the sum of the total net proceeds from the Initial
Placement (before deducting expenses) as

<Page>

                                      -12-

set forth on the cover page of the Final Memorandum. Benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts
and commissions as set forth on the cover page of the Final Memorandum, and
benefits received by any other Holders shall be deemed to be equal to the value
of receiving Transfer Restricted Securities registered under the Act. Benefits
received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such
Losses. Relative fault shall be determined by reference to, among other things,
whether any alleged untrue statement or omission relates to information provided
by the indemnifying party, on the one hand, or by the indemnified party, on the
other hand, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The parties agree that it would not be just and equitable if
contribution were determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6, each Person who
controls a Holder within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each Person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).

         (e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the officers, directors or controlling Persons referred to
in this Section 6 hereof, and will survive the sale by a Holder of securities
covered by a Registration Statement.

7.       RULE 144

         The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder, to such Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A, and (ii) is subject to Section 13 or 15(d) of the
Exchange Act, to make all filings required thereby in a timely manner in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144.

8.       MISCELLANEOUS

         (a) REMEDIES. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Section 3 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be pos-

<Page>

                                      -13-

sible to measure damages for such injuries precisely and that, in the event of
any such failure, the Initial Purchasers or any Holder may obtain such relief as
may be required to specifically enforce the Company's obligations under Section
3 hereof. The Company further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

         (b) NO INCONSISTENT AGREEMENTS. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as described in the Final
Memorandum, the Company has not previously entered into any agreement granting
any registration rights with respect to its securities to any Person that is
currently effective. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof.

         (c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given, unless (i) in the case of this Section
8(c)(i), the Company has obtained the written consent of Holders of all
outstanding Transfer Restricted Securities, and (ii) in the case of all other
provisions hereof, the Company has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
(excluding Transfer Restricted Securities held by the Company or its
Affiliates); PROVIDED, HOWEVER, that this Agreement may be amended without the
consent of any Holder to the same extent as permitted pursuant to Section 17 of
the Warrant Agreement.

         (d) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect the rights of Holders hereunder.

         (e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:

                  (i) if to a Holder, at the address set forth on the records of
         the Warrant Agent, with a copy to the Warrant Agent at the address set
         forth in the Warrant Agreement; and

                  (ii) if to the Company:

                           Solutia Inc.
                           575 Maryville Center Drive
                           P.O. Box 66760
                           St. Louis, MO 63166-6760 (if by courier, 63141)
                           Attention:  General Counsel
                           Facsimile:  (314) 674-2721
<Page>

                                      -14-

                           With a copy to:

                           Winston & Strawn
                           35 West Wacker Drive
                           Chicago, Illinois 60601-9903
                           Attention: R. Cabell Morris

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.

         Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Warrant Agent at the
address specified in the Warrant Agreement. Upon the date of filing a Shelf
Registration Statement, notice shall be delivered to the Initial Purchasers and
shall be addressed to: Attention: General Counsel, Salomon Smith Barney Inc.,
388 Greenwich Street, New York, New York 10013.

         (f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including, without limitation, and without the need for an express assignment,
subsequent Holders; PROVIDED, HOWEVER, that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Warrant Agreement. If any transferee of any Holder shall acquire Transfer
Restricted Securities in any manner, whether by operation of law or otherwise,
such Transfer Restricted Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Transfer Restricted Securities
such Person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement, including the
restrictions on resale set forth in this Agreement and, if applicable, the
Purchase Agreement, and such Person shall be entitled to receive the benefits
hereof.

         (g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         (h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

         (j) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

<Page>

                                      -15-

         (k) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

                            [Signature Page Follows]

<Page>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                          SOLUTIA INC.

                                         By: /s/ Kevin Wilson
                                            ---------------------------------
                                            Name:  C.K. Wilson
                                            Title: Vice President and Treasurer

SALOMON SMITH BARNEY INC.

By /s/ Aaron Dannenberg
   --------------------------------
   Name:  Aaron Dannenberg
   Title: Vice President

BANC OF AMERICA SECURITIES LLC

By /s/ Mary Jane Goode
   --------------------------------
   Name:  Mary Jane Goode
   Title: Vice President

For themselves and the other several Initial Purchasers.QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.7    
  

AGREEMENT  

BETWEEN 

WYNN RESORTS, LLC  

An
affiliate of Valvino Lamore LLC, being located at 3145 Las Vegas Blvd. South, Las Vegas, NV 89109, USA ("Wynn Resorts"), 

AND 

CALITRI SERVICES AND LICENSING LIMITED LIABILITY COMPANY  

                                        
                                          
                      , Hungary ("Calitri"), 

DATED 

25 JANUARY 2001

The
purpose of this binding Agreement is to set out the terms and conditions upon which Calitri and Wynn Resorts shall enter into a business arrangement for the creation, development and executive
production by Calitri of two new first-class theatrical entertainment attractions ("New Shows Projects") that would be financed, produced and presented by Wynn Resorts on Wynn Resorts property
currently owned by Valvino Lamore, LLC, a portion of which was formerly known as The Desert Inn Resort in Las Vegas, Nevada ("DI Property"). 

A
portion of the DI Property is to house a new large hotel and casino complex, managed, financed and built by Wynn Resorts. 

The
New Shows Projects will consist of one show in an indoor showroom and two outdoor attractions performed in the same outdoor theatre, (respectively "Indoor Show" and "Outdoor Show"). 

THIS AGREEMENT IS STRICLY CONFIDENTIAL

 

1.    DESCRIPTION OF SERVICES  

	A)
	As
more set forth below and as requested by Wynn Resorts, which will finance the productions, Calitri will create, develop and be the sole executive and artistic producer of the New
Shows Projects for the new resort facilities developed by or for" Wynn Resorts on the DI Property.

	B)
	Calitri
will create, develop and co-produce with Wynn Resorts, as executive and artistic producer, the new Indoor Show for the new main indoor showroom to be constructed on
the first new facility to be built on the DI Property (hereunder referred to as "Hotel A"). Such Indoor Show shall premiere to the public between six and nine months after the opening of Hotel A.

	C)
	Calitri
will create, develop and co-produce with Wynn Resorts, as executive and artistic producer, the Outdoor Show, which will be divided into two specific parts, one
being designed for daytime presentation and one being designed for night-time presentation. Both parts of the Outdoor Show will be staged at regular intervals each day and evening at the
new outdoor water theatre to be constructed on the Hotel A site.

	D)
	In
providing the foregoing services, Calitri and Wynn Resorts accept the relationship of trust and confidence established between the parties. Calitri (and Dragone, individually) agree
to use their best efforts in furthering the interests of Wynn Resorts to provide first-class entertainment attractions for the facilities to be developed on the DI Property, and in the performance of
their duties and obligations under this agreement. 

        The
same applies to Wynn Resorts (and Steve Wynn individually). 

	E)
	Wynn
Resorts hereby accepts and acknowledges that Calitri will be the sole executive and artistic producer of the New Shows Projects and that Calitri, as may be deemed necessary or as
may be in the best interests to the Show(s), may utilize consultants and subcontractors to assist Calitri in the performance of the services contemplated hereunder, provided that

	(1)
	Dragone
shall personally control and oversee the creation, development and executive production of the New Shows Projects; and

	(2)
	Calitri
shall remain responsible to Wynn Resorts. 

	F)
	The
parties agree that the Outdoor and Indoor Shows remain independent projects, with the effect that each of them may be carried out without the other. Nothing hereunder shall be
construed as conditioning any of the New Show Projects to the other or as allowing the production of one project to hinder the other. 

2.    CONCEPTION OF NEW SHOWS PROJECTS  

	A)
	Calitri
will create, develop and provide, through Dragone and other conceptors:

	(1)
	a
preliminary Production Budget for both the New Shows Projects and a preliminary Concepts for the New Outdoor Shows Projects, which shall be furnished together by April 15,
2001;

	(2)
	two
main concepts for the New Shows Projects and two sub-concepts for the Outdoor Show ("Concepts"), including complete Production and Operating Budgets with appropriate
contingency, prior to August 31, 2001 for the Outdoor Shows and prior to December 1, 2001 for the Indoor Show; 

Both
conception periods are referred to as the "Conceptual Period". 

The
Concepts shall be subject to the approval of Stephen A. Wynn on behalf of Wynn Resorts. Wynn shall notify Calitri of his approval or disapproval through Dragone within fifteen (15) days
after the delivery and submission of the Concepts. 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

2

 

Stephen
A. Wynn's approval or non-approval of the Concepts shall be purely discretionary. Without prejudice to the above, upon their submission to Wynn Resorts, Stephen A. Wynn shall in
any case provide his approval, non-approval or other feedback of the Concepts, as the case may be, in a timely manner as stated above. Calitri agrees to hire Dragone as the principal
creator of the New Shows Projects and retain his services throughout the Term and any extension thereof. 

	B)
	Wynn
Resorts shall pay to Calitri, as a non-refundable Creation Fee, the sum of US$ 4,000,000, of which US$ 2,000,000 has been paid. The balance of the Creation Fee will be
payable in two equal installments of US$ 1,000,000 each, to be due respectively upon approval of the Concept for the Indoor Show and upon approval of the preliminary Concept of the Outdoor Show. In no
event, however, shall the balance be payable until and unless the (preliminary) Concepts are approved. 

Calitri
may suspend with seven (7) days' notice the creation and development of the Concepts in the event that any payments required hereunder are not made. 

In
addition to the Creation Fee, Wynn Resorts agrees to pay Calitri a development budget which shall not exceed the amount of US$ 600,000 and of which US$ 125,000 have already been paid ("Initial
Development Expenses Payment"), to cover creation and development expenses incurred by Calitri for the New Shows Projects during the Conceptual Period. The expenses to be incurred for the development
and the production of the New Shows Projects shall be budgeted and agreed upon by the parties as provided herein. 

In
addition to such Creation Fee and Initial Development Expenses Payment, Wynn Resorts shall advance to Calitri the funds as necessary to pay the advances, if any, to the New Shows Projects
conceptors other than Dragone ("Advances to Conceptors"). 

Such
Advances to Conceptors shall neither be included in the New Show Production Costs nor in New Shows Projects Expenses for the purpose of Section 14 hereunder, except for the financing costs
of such Advances to Conceptors (as states below). The Advances to Conceptors shall be reimbursed to Wynn Resorts by deduction from the First Royalty (as defined below) to be paid to Calitri. The
parties agree that the total amount of the Advances to Conceptors shall not exceed US$ 2,300,000 for both New Show Projects. 

All
of the aforesaid amounts payable to Calitri shall be paid by Wynn Resorts in immediately available $US funds or bank draft as per Calitri's instructions. 

	C)
	If
the Concepts are not approved, the parties shall determine in good faith the way to modify or replace them so as to have them approved at no additional fee to Wynn. 

If
the Concepts are still not approved, this Agreement shall at the election of Wynn Resorts terminate with either party having no further rights, obligations or liabilities, except as provided
herein. 

Notwithstanding
the foregoing, if the New Shows Projects Concepts are not approved by Stephen A. Wynn and if Calitri wishes to proceed to produce a show reproducing the Concepts at any other place
which is not a Wynn Casino (as defined below) without Wynn Resorts' assistance or involvement, Calitri shall within two years from the date of non-approval reimburse Wynn Resorts for all
of its real out-of-pocket expenses incurred during the Conceptual Period, upon evidence of thereof, except the Creation Fee and general expenses or overhead of Wynn Resorts. 

	D)
	If
the Concepts are approved, Calitri will finalise the creation and development of the New Shows Projects, including all copyrightable elements (including without limitation: the
concept, themes, story line, staging, set and costume designs, choreographies, lighting designs and other artistic or creative designs and all intellectual property of the New Shows Projects) pursuant
to a schedule developed by Wynn, as defined below ("Development Period"). 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

3

 

All
actual costs included in the Development Budget as approved by Wynn Resorts and incurred during the Conceptual and Development Periods, including the direct costs of Calitri personnel, outside
consultant and conceptors' fees and agreed upon indirect expenses shall be collectively referred to as the "Approved Development Costs", and shall be paid by Wynn Resorts. 

All
of such Approved Development Costs together with the Creation Fee and the Initial Development Expenses Payment shall be considered as the "New Shows Projects Production Costs". 

Calitri
shall prepare and develop, in consultation with Wynn Resorts, a development costs budget to cover Approved Development Costs, and such "Development Budget" shall be jointly agreed to by Wynn
Resorts and Calitri. 

3.    EXCLUSIVE RIGHT TO PRESENT NEW SHOWS ELSEWHERE  

Wynn
Resorts shall also have the right to present the New Shows Projects and sell the New Shows Projects Products (as defined below) at any other casino owned or controlled by Wynn Resorts or Stephen
A. Wynn or any other corporations in which Stephen A. Wynn shall have a controlling interest (such other casinos and the DI Property, collectively referred to as the "Wynn Casinos"), upon terms and
conditions at least equivalent to those applicable to the Hotel A. 

4.    CREATIVE AND ARTISTIC CONTROL  

Following
approval of the Concepts by Wynn Resorts, Calitri will lead all creative and artistic matters concerning the development and executive production of the New Shows Projects including, without
limitation, the Concepts, creation, preparation, development, production, costumes, lighting, music, staging, and other related showroom operations. 

Calitri
will fully and meaningfully consult with Wynn Resorts as may be reasonably requested by Wynn Resorts on matters relating to the creation of the New Shows Projects. All creative and artistic
decisions pertaining the New Shows Projects will be made jointly by Dragone and Stephen A. Wynn. 

Without
limiting the foregoing, Calitri and Wynn Resorts will share control and approval rights, on all creative and artistic decisions and matters pertaining to the marketing of the New Shows
Projects including, without limitation, the creation, development, promotion and marketing of New Shows Projects Products, the creation of visual campaigns, the use of music and promotion and the
names and titles to be associated with said promotion. 

5.    RIGHTS OWNERSHIP STRUCTURE  

Wynn
Resorts and Calitri will be the sole and exclusive co-owners in equal unidentified shares of the New Shows Projects and the New Show Projects Products and of all intellectual property
rights relating thereto including, without limitation, the copyright therein, soundtrack and merchandising rights, and all other ancillary rights in and to the New Shows Projects and New Shows
Projects Products. 

All
trademarks, copyrights, DNS registration and other items reflecting ownership relating to the New Shows Projects or the New Show Projects Products shall be registered in the United States (and on
the parties' agreement, elsewhere in the world) at Projects' expenses, in the joint names of Wynn Resorts and Calitri. 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

4

 

6.    LENGTH OF NEW SHOWS PROJECTS  

The
New Shows Projects shall run for approximately the following times: 

	(1)
	For
the Indoor Show: about ninety (90) minutes with no intermission; and

	(2)
	For
the Outdoor Show: about thirty-five (35) minutes for each part with no intermission. 

7.    TITLE OF NEW SHOWS PROJECTS  

The
titles of the New Shows Projects will be mutually agreed upon between Wynn Resorts and Calitri. Wynn Resorts agrees that, at the request of Calitri, whenever or wherever the title of the New Shows
Projects will figure or be used, reference to such title shall also include a reference to a "Franco Dragone Show" or to the name of Franco Dragone. Wynn Resorts and Calitri mutually agree to
establish the parameters of such inclusion or reference when deemed necessary. 

8.    PRODUCTION AND PRESENTATION OF NEW SHOWS PROJECTS  

	A)
	Wynn
Resorts shall, at its sole cost and expense, be the financial producer and shall present the New Shows Projects created and developed by Calitri as their sole executive and
artistic producer. As such financial producer, Wynn Resorts shall provide. upon indications and advice of Calitri and as may reasonable be required by Calitri, all personnel (including but not limited
to production director, technical director, show technicians, engineers, artistic co-ordinator, artists and other staff), costumes and props, equipments and rigging and other accessories,
stage, sets and scenery, lighting, video, sound, musical instruments and any other type of equipment, computer hardware and software, as may required to produce and to present the New Shows Projects
during the Term or any Extension thereof. The recruitment, training and hiring of all performers and the selection of the Artistic Director shall be the responsibility of Calitri. 

Any
decision in relation to the provision of the above personnel and materials for the production of the New Shows Projects shall be made jointly by Wynn Resorts and Calitri in accordance with the
budget(s) mutually agreed upon by the parties. In case of persistent disagreement between the parties, the final decision shall be made by Stephen A. Wynn in consultation with Dragone. What precedes
does not apply to the theatre construction and its equipment, as defined in section 9 and without prejudice of said section 9 hereunder. 

	B)
	Calitri's
executive production services shall relate to actively participating in the selection of the production team, the artists and other artistic personnel for the New Shows
Projects and assisting in the determination and selection of the theatrical equipment and the follow-up and control of the production of the sets, costumes and all other artistic or
creative elements of the New Shows Projects. 

The
costs and expenses of the services provided by Calitri in accordance with the above, as approved by Wynn Resorts, including the costs, of Calitri's own personnel, shall be reimbursed by Wynn
Resorts. 

	C)
	The
New Shows Projects Production Costs prior to the Opening Date (which shall neither include theatre remodelling or construction costs and theatrical and specialised equipment,
operation and performances costs incurred during the Term and any Extension thereof, promotion costs nor expenses related to the New Shows Projects Products) shall be further defined by the parties as
information becomes available, separately for each New Show Project

	D)
	All
direct and pre-approved by Wynn overhead and out-of-pocket expenses incurred by Calitri and its affiliates in connection with the
on-going presentation of the New Shows Projects, including artistic follow-up by Dragone, general supervision and control over creative and artistic matters, 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

5

 

and
its administrative overhead and out-of-pocket expenses, as agreed upon with Wynn, shall be assumed by Wynn Resorts and treated as "New Shows Projects Operating Expenses".
On a yearly basis, not later than sixty (60) days before the end of each year of the Term (except the last year), Wynn Resorts shall prepare, in consultation with Calitri, a budget for the New
Shows Projects Operating Expenses of the forthcoming year, which shall be jointly agreed to by Wynn Resorts and Calitri. 

Both
parties agree to review all Project and Development Budgets and Operating expenses in accordance with the approved Concepts, after the Conceptual Period and as the Shows become more fully
developed. 

9.    THEATRE AND EQUIPMENT  

	A)
	The
New Shows Projects shall be presented by Wynn Resorts in first class theatres situated at Hotel A (`Showrooms"). The seating for the indoor theatre shall be between 1,500 and 1,800
patrons, and for the outdoor water stadium, about 2,000 patrons. The Showrooms are to be designed, constructed and laid out or remodelled, as the case may be, by Wynn Resorts in accordance with
general parameters and specifications discussed with Calitri, including, without limitation, stage dimensions, sound, backstage services, lighting, and other theatrical equipment required by Calitri.
Wynn Resorts agrees that the theatre and Showrooms will have to be completed and. delivered to Calitri for the production of the New Shows, including load in, at least one hundred and eighty
(180) days prior to the first public performance ("Opening Date").

	B)
	Wynn
Resorts shall consult with Dragone and Calitri at every material stage of the construction of the theatre and the Showrooms, so as to ensure that they remain suitable for the New
Shows Projects and respect Calitri's requirements.

	C)
	The
costs of the Showrooms, which shall include construction expense and engineering fees, costs of sound, lighting and other theatrical and specialised equipment as required by
Calitri and approved by Wynn Resorts, shall be established by Wynn Resorts. During the Term, Wynn Resorts shall maintain the Showrooms, including their theatrical and specialised equipment, in good
working order, at its sole cost. 

10.    PERFORMANCE OF NEW SHOWS PROJECTS  

	A)
	Wynn
Resorts shall present, at its sole cost and expense, the New Shows Projects in the Showrooms for a period of ten (10) consecutive years ("Term") commencing on the date of
the respective Opening Dates of the Indoor and the Outdoor Shows.

	(1)
	The
Opening Date of the Outdoor Shows shall be jointly determined by Wynn Resorts and Calitri by no later than July 31, 2002, and such date shall coincide with the opening of
Hotel A.

	(2)
	The
Opening Date of the Indoor Show shall be jointly determined by Wynn Resorts and Calitri by no later than January 31, 2003. 

The
frequency and number of performances of the Indoor Show and both the daytime and night-time Outdoor Shows presented during each year of the Term shall be determined by mutual agreement
of the parties, and shall take into consideration seasonality. 

Wynn
Resorts shall indicate to Calitri before December 31st, 2001 provided that the construction of Hotel A has started, the six-month range schedule as for the
Opening Dates of the New Shows Projects. 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

6

 

	B)
	Wynn
Resorts shall be entitled, with prior acceptance of Calitri which shall not be refused on unreasonable grounds, to extend the presentation of the New Shows Projects on the same
terms and conditions for a five (5) year period following the end of the Term ("Extension").

	C)
	If
after the first twelve months following the Opening Date, the total New Show Projects Revenue per New Shows Project (as defined below) shall be less than the total of the
corresponding New Show Project Operating Expenses (as defined below) during such 12-month period, Wynn Resorts shall have the right within sixty (60) days following the end of such
12-month period, to give Calitri written notice that Wynn Resorts elects to terminate the run of the concerned New Show Project, such termination to become effective thirty
(30) days from receipt of such written notice by Calitri. 

If
Wynn Resorts fails to give Calitri notice of termination pursuant to the preceding paragraph, Wynn Resorts shall have the right to give Cahtri a termination notice within sixty (60) days
following the end of each year during the Term, provided that the total New Shows Projects Revenue of any of the New Shows Projects shall have been less than the total New Shows Projects Operating
Expenses during such year, such termination to become effective thirty (30) days from receipt of such notice. 

11.    EXCLUSIVITY  

	A)
	During
the Term, Wynn Resorts shall be entitled, at its sole discretion, to prevent Calitri, Dragone and/or any affiliate from presenting:

	(1)
	the
New Shows Projects or any other show using same or similar characters or story line as a live presentations at any place in the world but the DI Property or any other Wynn
Casinos;

	(2)
	any
show whatsoever at any casino or any casino hotel complex in North America (USA and Canada) other than the Wynn Casinos. This provision shall also include the production or
creation of
any show or theatrical presentation at any theatre or performance venue located within five miles of any Wynn Casino. 

What
precedes does not apply to: 

	(1)
	Services
provided in connection with a Céline Dion production show to be presented in Las Vegas;

	(2)
	Services
provided in connection with "Mystere" and/or "O" in Las Vegas, Nevada. 

	B)
	During
the Term, Calitri shall be entitled, at its sole discretion, to prevent Wynn Resorts or any other company controlled by Steve Wynn from presenting, directly or indirectly

	(1)
	the
New Shows Projects or any other show using same or similar characters or story line as a live presentations at any place in the world but the DI Property;

	(2)
	any
other show whatsoever, provided that such another show is similar in type to those being or having been created, produced or presented by or through Dragone at the time Wynn
Resorts would be willing to present or produce such other show. In the event Wynn Resorts would be willing to present such other show at any place anywhere in the world, Calitri shall have a right of
first refusal to create and/or produce said other show at the conditions proposed by Wynn Resort. Calitri's right of first refusal shall be exercised in a timely manner. 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

7

 

12.    FINANCIAL MATTERS  

	A)
	Wynn
Resorts shall advance to Calitri the funds as may be required for the payment of the New Shows Projects Production Costs, according to approved cash flows required for the ongoing
development of the New Shows Projects. 

Calitri
shall open and maintain a separate bank account ("Show Bank Account") with a bank to be mutually agreed by the parties hereto which shall be used solely for depositing all advances of Wynn
Resorts to Calitri for the New Show Projects Production Costs and for Calitri to make all payments of New Shows Projects Production Costs. 

All
advances made by Wynn Resorts to Calitri to pay New Shows Projects Production Costs shall be deposited by Calitri in the Show Bank Account and shall be used by Calitri solely for the purpose of
making all payments of New Shows Projects Production Costs (any interest accrued in the Show Bank Account shall also be used by Calitri to pay New Shows Projects Production Costs). 

	B)
	Not
less than ten (10) days before the beginning of each quarterly period following the execution of this Agreement, Calitri shall submit to Wynn Resorts a statement ("Quarterly
Statement of Cash Requirements") based on the New Shows Projects Production Budget, as modified from time to time by mutual consent of the parties hereto, showing:

	(1)
	An
estimate of the New Shows Projects Production Costs estimated to be incurred during the quarterly period immediately following such notice, broken down into each of the categories
specified in the New Shows Projects Production Budget or such greater detail as may be required by Wynn Resorts to the extent such information is available;

	(2)
	The
amount of all cash balances expected to be held in such account as of the first day of such quarterly period; and

	(3)
	The
total amount required to be paid to Calitri by Wynn Resorts in order to meet the New Shows Projects Production Costs during said quarter. 

The
Quarterly Statement of Cash Requirements submitted by Calitri shall be accompanied by the Show Bank Account statements for the previous quarter (or, if such bank statement is not available at such
time, Calitri shall provide same to Wynn Resorts as soon as it receives it), and upon request by Wynn Resorts, Calitri shall also provide Wynn Resorts with a bank reconciliation showing the total
amount of Show Production Costs actually paid from the Show Bank Account for the previous quarter as compared to the amount of funds requested on the Quarterly Statement of Cash Requirements for the
same quarter accompanied, if required by Wynn Resorts, by sufficient supporting documentary evidence in that regard. Wynn Resorts shall, on a monthly basis after its approval of the Quarterly
Statement of Cash Requirements, cause to be deposited in the Show Bank Account the necessary portion amount of the contribution requested to fund the New Shows Projects development. 

	C)
	Wynn
Resorts shall at its own expense at all reasonable times through its on site representative or others, have the right to examine, analyze, copy any and all documents, books and
records of Calitri
relating to the New Shows Projects Production Costs and the Show Bank Account, and to have same audited by its representatives.

	D)
	Wynn
Resorts will retain control over all financial matters, including timing of disbursements, concerning the New Shows Projects provided, however, that 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

8

 

	(1)
	Wynn
Resorts will fully and meaningfully consult Calitri as reasonably requested from time to time by Calitri, especially with regards to all financial matters dealing with creative
and artistic elements of the New Shows Projects; and

	(2)
	The
moneys raised by Wynn Resorts are reasonably sufficient to carry out the creation, development, production and performances of the New Shows Projects, in accordance with the
approved New Shows Concepts. 

	E)
	Wynn
Resorts shall have the right to place one or more on site representatives in Belgium where Calitri will conduct its activity of creation, development and co-production
for the New Shows Projects. The representative(s) shall have the authority and responsibility to act on behalf of Wynn Resorts with regard to financial matters affecting the Projects. Wynn Resorts
shall consult with Dragone with regard to the choice of the representative(s). 

The
representative shall, in conjunction with Dragone, determine all policies and procedures affecting the use of Wynn Resorts funds, including without limitation methods of procurement (including
bidding procedures), budget preparation and approvals, methods of accounting and document control procedures (including disbursements), and any other activity that potentially requires the expenditure
of the funds by Wynn Resorts in direct connection with the New Shows Projects. 

	F)
	Calitri
shall provide adequate office space and support for the representative(s). 

Nothing
contained herein is intended to hinder Dragone's and/or Calitri's, nor their affiliates' control of the creative aspect including the process of production of any project. The parties agree
that the presence and exercise of powers delegated to the Representative(s) are to be exercised in the best interest of the New Shows Projects. 

Although
the parties anticipate that much of the New Shows Projects development and design will occur in Belgium, it is the parties' mutual intent to have, if possible, elements done within United
States during the Development Period. 

	G)
	The
parties mutually understand and recognise that for production process or for the benefit of the creative process it will be necessary to fabricate some material elements in Belgium
as long as the quality (according to industry standards, cost efficiency and after delivery services) can be equal or greater than that which may be available in the United States. All payments by
Wynn Resorts to Calitri or affiliates, for the cost and expenses defined in section 8 herein, shall be based upon Budgets, other documentation and supporting schedules of deliverables as
mutually agreed upon by the parties. All aspects of each Project Budget, including all pre-production expenses, set design and fabrication, other scenic elements, training and rehearsal
expenses, and coach class airfare at lowest available fare for all Calitri personnel and Consultants show-related travel within Europe and support expense, shall be disbursed in accordance
with the Budgets and New Shows Projects requirements in accordance with the financial and administrative procedures established and approved by Wynn Resorts. All expenses requiring a disbursement of
over US$ 25,000 shall be approved in advance by Wynn Resorts. Dragone shall be entitled to travel First Class at all times. Mario Bourdon shall be permitted Business Class travel within Europe and
First Class travel to the U.S. All New Shows Projects documents are subject to audit by the representative(s).

	H)
	Wynn
Resorts acknowledges and agrees that a portion of Calitri's or its affiliates', indirect cost or general overhead will be chargeable to the Projects. Such amounts shall be
pre-approved by Wynn, allocated fairly based upon generally accepted US accounting principles and be a part of all Budgets contemplated hereunder. In the event of any dispute arising out
of or in connection with any provision of this section, and is not resolved between Calitri and the Representative(s) or 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

9

 

Kenneth
Wynn, then Stephen A. Wynn in consultation with Dragone shall have the sole authority to resolve such dispute. 

13.    ENHANCEMENTS  

If
reasonably requested by Calitri, and agreed to by Wynn, Wynn Resorts shall incur, on a cumulative basis, up to US$1,000,000 in costs per New Shows Projects (the two parts of the Outdoor Show being
regarded as one single Show) and per year during the first nine years of the Term and, if the Term is extended, during each year of the Extension, for replacement of one or more segments of the New
Shows Projects with new acts ("Enhancements"), which new acts may include new costumes, lighting, equipment and new choreographies. 

14.    COMPENSATION  

	A)
	As
compensation to Calitri, Wynn Resorts shall pay to Calitri, during the Term and any Extension thereof, the following non-refundable royalties ("Royalties"), in addition
to the non-refundable Creation Fee, the Initial Development Expenses Payment and financing of all New Shows Projects creation, development, production and performances costs:

	(1)
	For
each week and within seven days from the end thereof, a royalty ("First Royalty") equal to thirteen percent (13%) for the Indoor Show and to ten percent (10%) for the Outdoor Show
of one hundred percent (100%) of Net Ticket Revenue from the New Shows Projects, including the value of any complementary tickets given away by Wynn Resorts. The "Net Ticket Revenue" is equal to the
gross ticket price less admission and entertainment taxes, only, if any;

	(2)
	In
respect of each period of three months ("Fiscal Quarter"), a royalty ("Second Royalty') equal to one-third (1/3) of the Indoor Show Net Revenue and
one-half (1/2) of the Outdoor Show Net Revenue (collectively, the "New Shows Projects Net Revenue"). The New Shows Project Net Revenue is the amount by which all of the
specific New Shows Projects Revenue (as defined below) for any Fiscal Quarter exceeds the sum of the specific New Shows Projects Operating Expenses for such Fiscal Quarter.

	(3)
	Wynn
Resorts shall be entitled to deduct from the First Royalty, before paying Calitri, the amount of the Advances to Conceptors (as defined above). 

	B)
	Wynn
Resorts shall retain for its own account all of the Net Ticket Revenue from the New Shows Projects, and all of the New Show Projects Net Revenue.

	C)
	The
payment of the First Royalty shall be made by Wynn Resorts regardless of the level of attendance or amount of the New Shows Projects Revenue or the existence of New Shows Projects
Net Revenue.

	D)
	As
used herein:

	(1)
	"New
Shows Projects Revenue" means, for each Fiscal Quarter, the sum of

	(a)
	100%
of Net Ticket Revenue for the New Shows Projects which shall include the value of any complementary tickets given away by Wynn Resorts; and

	(b)
	100%
of the gross proceeds (being gross revenue less sales and entertainment tax only, if any) for the sale of food and beverages sold in or immediately adjacent to the Showrooms; 

	(2)
	"New
Shows Projects Operating Expenses" means, for each Fiscal Quarter, the sum of 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

10

 

	(a)
	The
First Royalty paid by Wynn Resorts to Calitri in respect of such Fiscal Quarter;

	(b)
	All
direct operating expenses including but not limited to Showroom and equipment maintenance costs (as opposed to major replacement costs) incurred by Wynn Resorts in connection with
the presentation of the New Shows Projects during such Fiscal Quarter;

	(c)
	All
direct expenses incurred by Wynn Resorts during such Fiscal Quarter in the sale of food and beverages in or immediately adjacent to the Showrooms;

	(d)
	During
the first twenty-four (24) months following the Opening Date only, such portion of the aggregate (i) initial launch advertising and promotional
campaign expenses, and (ii) pre-opening operating expenses relating to the presentation of the New Shows Projects, each paid by Wynn Resorts, attributable to such Fiscal Quarter, as
shall be determined based on amortising all of such expenses on a straight-line basis over such 24-month period;

	(e)
	During
the first sixty (60) months following the Opening Date only, such portion of the New Shows Projects Production Costs paid by Wynn Resorts, attributable to such Fiscal
Quarter, as shall be determined based on amortising such costs on a straight-line basis over such 60-month period;

	(f)
	In
respect of the amortisation of the capital costs of all sound, lighting and other equipment purchased by Wynn Resorts for Enhancement, during a period of sixty (60) months
only following the purchase of such equipment, such portion of such costs paid by Wynn Resorts, attributable to such Fiscal Quarter, as shall be determined based on amortising such costs on a
straight-line basis over such period of time; and

	(g)
	Six
percent (6%) of one hundred percent (100%) of Net Ticket Revenues from the New Shows Projects, which amount shall include the value of all complimentary tickets distributed by
Wynn Resorts. Such amount retained by Wynn Resorts is deemed to compensate for all the costs incurred by Wynn Resorts for the construction or remodelling costs of the Theatres and Showrooms (as
defined above).

	(h)
	An
amortisation of the financing expenses of the Advances to Conceptors, at Wynn Resorts average cost of debts, incurred prior to the Opening Dates. Such amortisation shall be over a
period of 24-months from the Opening Dates. The financing expenses of the remaining balance of the Advances to Conceptors shall be based upon Wynn Resorts cost of debts as computed
quarterly. 

For
the purpose of the definition above, New Shows Projects Production Costs, New Shows Projects Pre-opening Costs and New Shows Projects Operating Expenses shall not include, unless
otherwise stated, 

	(i)
	except
for financing expenses relating to New Shows Projects Production Costs only which shall be included therein, any interest and any other financing charges incurred by Wynn
Resorts,

	(ii)
	except
as specifically provided above, any costs of a capital nature and any amortisation in respect thereof, except amortisation in the manner set forth above,

	(iii)
	any
costs and expenses relating to the Showrooms, excluding their maintenance costs but including their theatrical and specialised equipment, and

	(iv)
	any
income taxes, real estate taxes, capital taxes or similar taxes, levies and duties payable by Wynn Resorts. 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

11

 

	E)
	Without
limiting the foregoing, detailed accounts of tickets sales for the New Shows Projects, of New Shows Projects Revenue and same Operating Expenses shall be conveyed by Wynn
Resorts to Calitri within fifteen (15) days following the end of every Fiscal Quarter. 

15.    MERCHANDISING  

	A)
	During
the Term and without prejudice of the other provisions hereof, Wynn Resorts shall have the sole and exclusive worldwide right to license and/or manufacture and sell merchandise
of all types or kinds, such as toys, dolls, wearing apparels and accessories, novelty items, etc. ("New Shows Projects Products").

	B)
	Calitri
and Wynn Resorts shall select together:

	(1)
	The
particular types of New Shows Projects Products to be licensed and/or manufactured and sold by Wynn Resorts and other Wynn Casinos, and all elements of the design thereof,
including without limitation, colors, shapes, packaging, depiction in all respects of the trademarks; and

	(2)
	The
particular types of New Shows Projects Products sold in the Showrooms and the manner in which New Shows Projects Products are sold elsewhere in the world. 

Quality
and manufacturing standards of the New Shows Projects Products shall in any case be comparable to the highest quality in manufacturing standards of similar types of merchandise sold by Wynn
Resorts and Calitri. 

	C)
	Wynn
Resorts shall sell New Shows Projects Products in a retail stone of Hotel A or lobby of the Showrooms, which store shall sell New Shows Projects Products exclusively.

	D)
	Calitri
may develop and create, subject to reasonable approval of Wynn Resorts, a souvenir program in respect of the New Shows Projects ("Souvenir Program"), to be sold by Wynn Resorts
during the Term and any Extension thereof in the retail stores referenced to above and the Showrooms. The parties shall mutually agree as to the best method of manufacture and production of the
Souvenir Program.

	E)
	Wynn
Resorts shall pay to Calitri a merchandise royalty of ten percent (10%) of one hundred (100%) of the retail selling price of all New Shows Projects Products, and Souvenir Programs
sold by Wynn Resorts, less sales taxes, credit-card and handling fees and customer returns, and shall retain all of the gross proceeds of such sales.

	F)
	Wynn
Resorts shall have the right to include the trademark and trade names used in the New Shows Projects in the New Shows Projects Products and in all advertising and promotional
materials prepared for the New Shows Projects. 

16.    OTHER ANCILLARY RIGHTS  

The
parties agree that all ancillary rights pertaining to the New Shows Projects shall be "frozen" and cannot be marketed without the mutual approval of both parties. It is however already agreed upon
by the parties that, unless otherwise stated, they shall equally share ownership of the Ancillary Rights, which include, without limitation, 

	(1)
	The
production of the New Shows Projects in alternate locations other than specified herein, sequels, prequels, remakes, the production of theatrical motion pictures or television
productions based upon the New Shows Projects; 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

12

 
	(2)
	All
videos, audiovisual works, motion pictures, television series, sound recordings and interactive multimedia products, in whatever form and medium, including without limitation
internet web sites specially devoted to the New Shows Projects; and

	(3)
	All
books, magazines, comic strips or other publications, incorporating or using the title or logos of the New Shows Projects or based upon or utilising the visual aspects of the New
Shows Projects including, but not limited to, the characters, the costumes and any pictorial, visual graphics or sculptural works forming part or appearing in the New Shows Projects. 

17.    SPONSORSHIP  

During
the Term, the New Shows Projects as presented in the Showroom should not be utilised so as to endorse any third-party products or services and shall not develop sponsorship arrangements without
the express prior written consent of Wynn Resorts and Calitri, which consents may be arbitrarily withheld. 

18.    MISCELLANEOUS PROVISIONS  

	A)
	This
Agreement together with any attachments hereto shall be the definitive Agreement between the parties and define each party's rights and obligations to the other. This Agreement
may be modified with the consent of both parties by written amendment, which, upon execution shall become a part of this Agreement with the same full force and effect as if first written.

	B)
	As
additional consideration for this Agreement, Dragone will receive an equity participation as described in Exhibit A to this Agreement, in accordance with the terms and
conditions of that Exhibit. Should there be any conflict between the terms and conditions of this Agreement and the terms and conditions of Exhibit A, the latter will control.

	C)
	Calitri
acknowledges that Wynn Resorts and its affiliates conduct businesses that are subject to and exist because of privileged licenses issued by governmental authorities in the
State of Nevada and elsewhere, that regulate gaming and related matters. 

In
the event Calitri is found unsuitable by the appropriate governmental authority or if Wynn Resorts is advised by such governmental authority to terminate its relationship with Calitri, or Wynn
Resorts reasonably determines, based on its internal compliance investigation and based on substantial, objective and evidenced elements, that it is required to terminate its relationship with Cahtri
to avoid the loss of its privileged licenses or receive sanctions, Wynn Resorts shall be entitled to terminate the agreement between the parties without liability to Calitri except for the obligation
to pay all costs incurred to the date of such termination. 

Notwithstanding
the above, Calitri shall be allowed an opportunity to pursue any appeal rights it may have with respect to any governmental determination which Wynn Resorts is using as the basis of
exercising its termination rights. 

If
the licenses are terminated for any reason other than as a result of Calitri's activities as referred to above, Calitri shall be entitled to full indemnification by Wynn Resorts for all and any
provable losses incurred by Calitri due to such termination. 

	D)
	Upon
acceptance of this Agreement by Wynn Resorts, each party undertakes not to disclose the existence of this Agreement to any third party except to its professional advisors and its
consultants and to such other persons as is reasonably required in order to consummate the transactions contemplated herein. 

This
paragraph shall survive the termination of this Agreement. This confidentiality restriction does not apply in the event of litigation between the parties in relation to this Agreement. 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

13

 
	E)
	This
Agreement shall be governed by and construed in accordance with the laws and of the State of Nevada, without regards to conflict of laws principles, and the parties hereby consent
to the exclusive jurisdiction of the Clark County District Court for any dispute arising out of or relating to this Agreement.

	F)
	Neither
this Agreement nor any rights or obligations conveyed hereunder may, be, transferred, assigned, or delegated (including by sublicense) without the written consent of the other
party, which consent may be withheld for any reason whatsoever. Notwithstanding the foregoing, this Agreement may be assigned by Wynn Resorts to any of its affiliated entities, without the prior
consent of the other party; provided that such assignment shall not discharge or otherwise affect the obligations of the assigning party to perform, fulfil and satisfy its obligations and
responsibilities hereunder. This Agreement shall inure to the benefit of and be binding upon the parties hereto and each of their respective successors, permitted assigns, administrators and/or legal
representatives.

	G)
	Calitri
or Dragone shall have the right exercisable in his sole discretion to terminate this Letter of Agreement in the event

	(1)
	Stephen
A. Wynn is no longer a managing member of Wynn Resorts or its assignee, or does not perform those functions; or

	(2)
	Wynn
Resorts or its assignee is purchased, dissolved, merged or consolidated with another unrelated entity, the end result of which is that Wynn Resorts or its assignee or any
affiliate is not the surviving controlling entity; or

	(3)
	Wynn
resorts or its assignee is adjudged to be bankrupt;

	(4)
	Wynn
Resorts or its assignee fails to honour its obligations hereunder. 

Calitri
shall have sixty (60) days from the date of the occurrence of any of the events specified above to elect to terminate this Agreement by sending written notice to Wynn Resorts or its
successor, without compensation nor being liable for any loss or any other damage to be suffered by Wynn Resorts, if any. 

	H)
	Faxed
signatures shall be sufficient to bind each party to this Agreement and this Agreement may be executed in one or more counterparts, which shall form together the entire Agreement
between the parties.

	I)
	Nothing
herein contained shall constitute a partnership or joint venture between the parties hereto. No party shall act in any manner contrary to the terms of this Section 18.1
and no party shall become liable by any representation, act or omission of the other.

	J)
	Except
as otherwise specifically set forth above, nothing contained herein shall be interpreted or construed as creating on Calitri, its staff and personnel, including Franco Dragone,
an obligation to devote time and resources on an exclusive basis.

	K)
	This
Agreement constitutes the complete and exclusive agreement between the parties and replaces and supersedes all prior agreements, negotiations, statements, memoranda and
understandings with respect to its subject matter.

	L)
	The
voiding of any provision of this Agreement by any Court shall not serve as to void or place in less than full force and effect any other provision of this Agreement. 

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

14

 

This
Agreement is agreed to and accepted this 25th day of January 2001 by those parties whose duly authorized signatures are set forth below: 

	 
	 	 
	 	 
	 	 

	CALITRI SERVICES AND LICENSING LLC	 	WYNN RESORTS, LLC Per Valvino Lamore, LLC Its Sole Member
	

Per	
 	

/s/  AUSTIN L. SEALY      
 Austin L. Sealy

Managing Director	
 	

Per	
 	

/s/  STEPHEN A. WYNN       
 Stephen A. Wynn

Managing Member
	

And for notice and acceptance hereof:	
 	

 	
 	

 
	
DRAGONE	
 	
 VALVINO LAMORE, LLC
	

Per	
 	

/s/  FRANCO DRAGONE       
 Franco Dragone

Individually	
 	

Per	
 	

/s/  STEPHEN A. WYNN      
 Stephen A. Wynn

Managing Member

THIS AGREEMENT IS STRICTLY CONFIDENTIAL

15

QuickLinks

Exhibit 10.7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]