Document:

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                                                                 Exhibit 10(mmm)

                            SUBORDINATION AGREEMENT

     This SUBORDINATION AGREEMENT, dated as of January 31, 2001 ("Agreement"),
is made by CIRCUS CIRCUS MICHIGAN, INC., a Michigan corporation (together with
its successors and assigns as holders of the Subordinated Note (as defined
below) the "Intermediate Parent"), which is a wholly-owned subsidiary of
MANDALAY RESORT GROUP, a Nevada corporation formerly known as Circus Circus
Enterprises, Inc. (the "Company"), and DETROIT ENTERTAINMENT, L.L.C., a Michigan
limited liability company ("Borrower"), in favor of BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, "Administrative Agent") for the Lenders
identified below.

                                R E C I T A L S

     WHEREAS, Borrower entered into that certain Loan Agreement dated as of June
30, 1999 with the financial institutions from time to time party thereto (the
"Lenders"), and the Administrative Agent (under its former name, Bank of America
National Trust and Savings Association) (the "Loan Agreement"); and

     WHEREAS, the Lenders party to the Loan Agreement and the Administrative
Agent referred to herein (collectively, the "Senior Creditors") have the benefit
of a Guaranty dated as of June 30, 1999 made by the Company in their favor; and

     WHEREAS, the Intermediate Parent has loaned certain funds to Borrower in
the form of Company Subordinated Debt, which is evidenced by a Subordinated Note
of even date herewith made by Borrower in favor of the Company in the form
attached hereto as Exhibit A; and

     WHEREAS, the Company Guaranty and the Loan Agreement require the
Intermediate Parent to enter into this Agreement and to hereby subordinate such
Company Subordinated Debt to Borrower's obligations to the Senior Creditors; and

     WHEREAS, capitalized terms used in this Agreement are used with the
meanings set forth for those terms in the Loan Agreement.

     The Subordinated Note and the documents described in this recital and the
immediately preceding recital as of any date, together with any other documents
and instruments evidencing, securing, or pertaining to the Subordinated Note,
whether now or hereafter existing, as such documents may be consolidated,
renewed, replaced, extended, restated, modified, amended or supplemented from
time to time through such date in accordance with the terms and conditions of
this Agreement, are hereinafter collectively referred to as the "Subordinated
Loan Documents;"

                                      -1-
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     NOW, THEREFORE, in consideration of the premises and in order to induce
Senior Lenders to continue to make Loans under the Loan Agreement, the parties
hereto hereby agree as follows:

     1.   Certain Defined Terms.  For purposes of this Agreement, the following
          ---------------------
terms shall have the following meanings:

     a.   "Bankruptcy Proceeding" means any insolvency, reorganization,
readjustment of debt, arrangement of debt, receivership, liquidation or other
similar proceeding against Borrower, or receivership proceedings, or assignment
for the benefit of creditors, or any other marshaling of the assets of Borrower.

     b.   "Distribution of Assets" means any distribution of assets of Borrower
of any kind or character in exchange for or in payment of the Subordinated Debt,
whether (a) a payment, purchase or other acquisition or retirement for cash,
property or securities or (b) by way of cancellation, forgiveness or offset of
the Subordinated Debt against any Indebtedness owed by the Intermediate Parent
to Borrower or (c) payable or deliverable by reason of the payment of any other
Indebtedness of Borrower being subordinated to the payment of the Subordinated
Debt and, in any case, shall include any assets of any kind or character
received by the Intermediate Parent in connection with the realization of
security for the Subordinated Debt.

     c.   "payment in full," "paid in full" and any similar terms mean payment
in full in cash of the Senior Obligations, including, without limitation, all
principal, interest (whether accruing before or after commencement of a
Bankruptcy Proceeding or whether due under the terms of the Loan Agreement, but
not accrued as a result of the commencement of any such proceeding), costs, fees
and expenses (including, without limitation, reasonable legal fees and expenses)
of Senior Lenders and Administrative Agent as required under the Senior Loan
Documents and any advances by Senior Lenders, whether or not deemed obligatory,
made (1) to protect the priority, validity or enforceability of the lien of the
Senior Loan Documents, (2) to protect the value or the security of any
Collateral pursuant to the Senior Loan Documents, or (3) to cure any Event of
Default or Default under any of the Senior Loan Documents.  For purposes of this
Agreement, the Senior Obligations shall not be deemed to have been paid in full
to the extent any payment thereof has been set aside as a result of any
proceeding in law or equity.

     d.   "Senior Obligations" means all Obligations as that term is defined in
the Loan Agreement including, without limitation, all advances made under the
Loan Agreement whenever made on or after the Closing Date, any refundings,
renewals or extensions of any Indebtedness thereunder or other obligation
thereunder and all expenses and attorneys' fees for which Borrower is now or
hereafter becomes liable to pay to any Senior Lender.

                                      -2-
<PAGE>

     e.   "Subordinated Debt" means all obligations of Borrower to the
Intermediate Parent now or hereafter existing (whether created directly or
acquired by assignment or otherwise), with respect to all Indebtedness of
Borrower pursuant to the Subordinated Note and the other Subordinated Loan
Documents, and interest and premium, if any, thereon, fees, expenses, indemnity
payments, all other amounts payable in respect thereof, and all other amounts
due with respect to the foregoing whether arising from breach or contract, in
tort or otherwise.

     f.   "Enforcement Action" means any foreclosure proceeding, the exercise of
any power of sale, the taking of a deed or assignment in lieu of foreclosure,
the obtaining of a receiver, or the taking of any other enforcement action
against the Collateral or any part thereof, including the taking of possession,
or control of, or the collection of any rents from the Collateral or any part
thereof.

     2.   Subordination.
          -------------

     a.   The Intermediate Parent shall not receive or accept any Distribution
of Assets from Borrower in respect of principal of or interest on or any other
payments in respect of the Subordinated Debt, pursuant to the Subordinated Note
or the other Subordinated Loan Documents unless and until payment in full of all
Senior Obligations, the termination of the Commitment, and the expiration or
cancellation of all Letters of Credit; provided, however, that:
                                       -----------------

     (a) the Intermediate Parent may receive and accept scheduled payments of
  interest with respect to the Subordinated Note for so long as no Default or
  Event of Default has occurred and remains continuing; and

     (b) the Intermediate Parent may receive and accept scheduled payments of
  principal with respect to the Subordinated Note for so long as no Default or
  Event of Default has occurred and remains continuing and provided that, giving
  pro forma effect to such payments as of the last day of the most recently
  ---------
  ended Fiscal Quarter for which a Compliance Certificate is then required to
  have been delivered pursuant to the Loan Agreement, the Borrower is in pro
                                                                         ---
  forma compliance with the covenants set forth in Sections 6.12 and 6.13 of the
  -----
  Loan Agreement as of such date.

Upon the occurrence of a Default or Event of Default, the Intermediate Parent
hereby covenants to promptly pay over to the Senior Lenders all payments
received by the Intermediate Parent during the 90 days preceding the occurrence
of such Default or Event of Default.  In no event shall the Subordinated Debt be
prepaid, in whole or in part, without prior written consent of each Senior
Lender.

     3.   Distributions Held in Trust.  If the Intermediate Parent receives any
          ---------------------------
Distribution of Assets of Borrower that the Intermediate Parent is not entitled
to retain under

                                      -3-
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the provisions of this Agreement, such payment or assets shall be delivered
forthwith by the Intermediate Parent to Administrative Agent for the benefit of
the Senior Lenders for application to the Senior Obligations, in the form
received except for the addition of any endorsement or assignment necessary to
effect a transfer of all rights therein to Administrative Agent for the benefit
of the Senior Lenders.  Administrative Agent, for the benefit of the Senior
Lenders, is irrevocably authorized to supply any endorsement or assignment
required under this Section 3 that may have been omitted.  Until so delivered
any such payment or collateral shall be held by the Intermediate Parent in trust
for the Senior Lenders and shall not be commingled with other funds or property
of the Intermediate Parent.

     4.   Instruments; Collateral for Senior Obligations.  If Borrower issues or
          ----------------------------------------------
has issued any instrument or document evidencing the Subordinated Debt
(including, without limitation, the Subordinated Loan Documents), each such
instrument and document shall bear a conspicuous legend that it is subordinated
to the Senior Obligations.  Borrower's and the Intermediate Parent's books shall
be marked to evidence the subordination of all of the Subordinated Debt to the
Senior Obligations.  Administrative Agent for the Senior Lenders is authorized
to examine such books from time to time during normal business hours and to make
any notations required by this Agreement.

     5.   Insolvency, Dissolution, Etc. of Borrower.
          -----------------------------------------

     a.   In the event of any dissolution, winding up, liquidation,
reorganization or other similar proceedings with respect to Borrower, its
property or its operations (whether in a Bankruptcy Proceeding or otherwise),
all Senior Obligations (including, without limitation, interest on Senior
Obligations at the Default Rate from the date of filing any petition in
bankruptcy to the date of payment whether or not allowed as a claim) shall first
be paid in full before the Intermediate Parent shall be entitled to receive or
retain any Distribution of Assets of Borrower with respect to the Subordinated
Debt.  In any such proceedings, any Distribution of Assets to which the
Intermediate Parent would be entitled if the Subordinated Debt were not
subordinated to the Senior Obligations shall be paid by the trustee or
Administrative Agent or other person making such payment or distribution, or by
the Intermediate Parent if received by it, directly to Administrative Agent for
the benefit of the Senior Lenders to the extent necessary to make payment in
full of all Senior Obligations remaining unpaid, after giving effect to any
concurrent payment or distribution to or for the benefit of the Senior Lenders.

     b.   At any time and from time to time after the occurrence and during the
continuation of an Event of Default under the Senior Loan Documents until
payment in full of all Senior Obligations, the termination of all Commitments,
and the expiration or cancellation of all Letters of Credit, the Intermediate
Parent shall duly and promptly take such action as Administrative Agent for the
benefit of the Senior Lenders may reasonably request (i) to collect the
Subordinated Debt for the account of the Senior Lenders and to file appropriate
claims or proofs of claim in respect of the Subordinated Debt, (ii) to execute
and deliver to any Senior Lenders such powers of attorney, assignments or other
instruments as it may

                                      -4-
<PAGE>

reasonably request in order to enable it to enforce any and all claims with
respect to, and any security interests and other liens securing payment of, the
Subordinated Debt, and (iii) to collect and receive any and all payments or
distributions that may be payable or deliverable upon or with respect to the
Subordinated Debt.  The Intermediate Parent shall have the rights provided in
Section 18(b) that result from any payment to Senior Lenders under this Section
5(b).

     6.   Power of Attorney.
          -----------------

     a.   The Intermediate Parent hereby irrevocably authorizes and empowers
Administrative Agent for the benefit of the Senior Lenders (and its
representative or representatives) to demand, sue for, collect and receive all
payments and distributions under the Subordinated Note and give acquittance
therefor and to file and enforce claims and proofs of claims or suit and take
all such other actions (including, without limitation, voting the Subordinated
Debt (including in connection with any liquidation, reorganization or
arrangement) or enforcing any security interest or other lien securing payment
of the Subordinated Debt) in the name of the Intermediate Parent or otherwise,
as the Senior Lenders determine to be necessary or appropriate at any time and
from time to time after the occurrence and during the continuation of an Event
of Default under the Senior Loan Documents; provided however, that if
                                            --------
Administrative Agent has failed to file a proof of claim with respect to the
Subordinated Debt in any Bankruptcy Proceeding and 7 or fewer calendar days
remain until the claims' bar date in such proceeding, then, in such event, the
Intermediate Parent may file such proof of claim.  This authorization to file
and enforce claims and proofs of claims and to vote such claims (the
"Authorization") includes the authorization to vote or decline to vote such
claims on any matter whatsoever and specifically includes the authority to vote
such claims to approve a plan of reorganization, including such plan that
provides for the distribution on the Subordinated Debt of only equity in the
reorganized debtor.  Additionally, Administrative Agent may, pursuant to the
Authorization, decline to take certain actions with respect to the Subordinated
Debt, including, by way of example and not limitation, declining to request
adequate protection for the Intermediate Parent's collateral or declining to
object to any priming lien thereon.  In the event any Governmental Authority or
other Person does not recognize or accept Administrative Agent's right to act on
behalf of the Intermediate Parent pursuant to this Section 6a, the Intermediate
Parent agrees to take such lawful action as is directed by Administrative Agent
in accordance with this Section 6a.  In no event shall the Intermediate Parent
waive, forgive or cancel any claim the Intermediate Parent may now or hereafter
have against Borrower.

     The Intermediate Parent agrees that, upon the commencement of any
Bankruptcy Proceeding or action or proceeding against Borrower to recover all or
any part of the Subordinated Debt prior to payment in full of all Senior
Obligations, the termination of all Commitments, and the expiration or
cancellation of all Letters of Credit, Administrative Agent, on behalf of Senior
Lenders, shall have the right to vote the rights of the Intermediate Parent in
any such Bankruptcy Proceeding, or action or proceeding against Borrower to
recover all or any part of the Subordinated Debt, in a manner that benefits
Senior Lenders and

                                      -5-
<PAGE>

without regard to whether the Intermediate Parent is benefitted or receives more
than equity interests in Borrower in exchange for its claims against Borrower.

     b.   In no event shall any Senior Lender be liable to the Intermediate
Parent for any failure to prove the Subordinated Debt, to exercise any right
with respect thereto or to collect any sums payable thereon.  The Intermediate
Parent agrees to protect, indemnify, pay and save harmless, Administrative Agent
and Senior Obligation Holders from and against any and all claims or demands,
asserted by (or on behalf of) the Intermediate Parent and any and all
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel) related thereto that Administrative
Agent or Senior Lender or both may incur or be subject to as a consequence,
direct or indirect of any action in foreclosure under the Senior Loan Documents.

     7.   Agreements by the Intermediate Parent.
          -------------------------------------

     a.   The Intermediate Parent has reviewed the Loan Agreement, and the
Intermediate Parent hereby consents to and approves of the provisions contained
therein.  The Intermediate Parent acknowledges that there are no conditions
precedent to the effectiveness of this Agreement and that this Agreement is in
full force and effect and is binding on the Intermediate Parent upon the
Intermediate Parent's execution and delivery of this Agreement, regardless of
whether the Senior Lenders obtain collateral or any guaranties from others or
take any other action contemplated by the Intermediate Parent.  Without
affecting the rights of Senior Lenders or Borrower under the Loan Agreement, the
Intermediate Parent agrees that, except to the extent that the Loan Agreement
provides for the consent of or notice to the Intermediate Parent, the Senior
Lenders may, at any time and from time to time, without the consent of or notice
to the Intermediate Parent, without incurring responsibility to the Intermediate
Parent, and without impairing or releasing the rights of any of the Senior
Lenders, or any of the obligations of the Intermediate Parent hereunder:

   (i)   change the amount, manner, place or terms of payment or change or
extend the time of payment of or renew or alter Senior Obligations or amend the
Loan Agreement in any manner or enter into or amend in any manner any other
agreement relating to the Senior Obligations;

  (ii)   Sell, exchange, release or otherwise deal with any property by whomever
at any time pledged or mortgaged to secure, or however securing, the Senior
Obligations;

 (iii)   Release anyone (including any guarantor) liable in any manner for the
payment or collection of the Senior Obligations;

  (iv)   Exercise or refrain from exercising any rights against Borrower and
others (including any guarantor or the Intermediate Parent);

                                      -6-
<PAGE>

   (v)   Apply any sums by whomever paid or however realized to the Senior
Obligations; or

  (vi)   Take any other action that otherwise might be deemed to impair the
rights of the Intermediate Parent.

     The Intermediate Parent's obligations hereunder shall be performed in
accordance with and to the extent required by this Agreement regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of the terms of the Notes or the Loan Agreement or any other
document related thereto or the rights of the Senior Lenders with respect
thereto.  The obligations of the Intermediate Parent under this Agreement shall
be absolute and unconditional irrespective of:

   (i)   any lack of genuineness, legality, validity, enforceability or value of
the Loan Agreement, the Notes or any other agreement or instrument relating
thereto or any Collateral;

  (ii)   any failure to pay any taxes that may be payable with respect to the
issuance or transfer of the Notes; or any failure to obtain any authorization or
approval from or other action by, or to notify or file with, any Governmental
Authority required in connection with the issuance or transfer of the Notes;

 (iii)   any impossibility or impracticality of performance, force majeure, any
act of any government, or any other circumstance that might constitute a defense
available to, or a discharge of, the Borrower in respect of the Notes or the
Loan Agreement or the Intermediate Parent in respect of this Agreement or any
other circumstance, event or happening whatsoever, whether foreseen or
unforeseen and whether similar or dissimilar to anything referred to above in
this Section;

  (iv)   the fact that the Senior Obligations or any claim for the Senior
Obligations is subordinated, avoided or disallowed, in whole or in part, under
the Bankruptcy Code or other applicable law; or

   (v)   whether any Person to whom Senior Lenders make disbursements of the
proceeds of the Loans in accordance with the Loan Agreement applies such
proceeds for purposes other than those provided for in the Loan Agreement and
any such application shall not defeat the subordination herein in whole or in
part.

     b.   The Intermediate Parent (i) will not, without the prior written
consent of the Senior Lenders, accelerate the Subordinated Debt, and (ii) agrees
that until payment in full of all Senior Obligations, the termination of all
Commitments, and the expiration or cancellation of all Letters of Credit, the
Intermediate Parent shall neither commence nor join with any other creditor of
Borrower to commence any Bankruptcy Proceeding or commence any action or
proceeding against Borrower to recover all or any part of the Subordinated Debt

                                      -7-
<PAGE>

before any Governmental Authority or other entity with power to bind the parties
to its decisions.

     c.   The Intermediate Parent agrees that, until payment in full of all
Senior Obligations, the termination of all Commitments, and the expiration or
cancellation of all Letters of Credit, the Subordinated Loan and the lien of the
Subordinated Loan Documents shall be subordinate to all leases of space in the
Collateral.  Senior Lenders and the Intermediate Parent hereby agree that Senior
Lenders shall be entitled to seek the appointment of a receiver for the
Collateral to collect rents, pursuant to the terms of Senior Loan Documents and
the Subordinated Loan Documents, respectively, and this Agreement.

     8.   Waivers.  Borrower and the Intermediate Parent each hereby waives any
          -------
defense based on the adequacy of a remedy at law that might be asserted as a bar
to the remedy of specific performance of this Agreement in any action brought
therefor by any Senior Lender.  To the fullest extent permitted by law, Borrower
and the Intermediate Parent each hereby further waives: promptness, diligence,
presentment, demand, protest, notice of protest, notice of default or dishonor,
notice of payment or nonpayment and any and all other notices and demands of any
kind in connection with all negotiable instruments evidencing all or any portion
of the Senior Obligations or (in respect of the Lenders) the Subordinated Debt
to which Borrower or the Intermediate Parent may be a party; notice of the
acceptance of this Agreement; notice of any loans made, extensions granted or
other actions taken in reliance hereon; all other demands and notices of every
kind in connection with this Agreement, the Senior Obligations or the
Subordinated Debt; any right to require marshaling of the assets of Borrower;
any defense based on any statute or rule of law that provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; any provisions of law that conflict
with this Agreement and any legal or equitable discharge of the Intermediate
Parent's obligations hereunder; the benefit of any statute of limitations; any
rights of setoff, recoupment and counterclaim, promptness and diligence by
Administrative Agent or Senior Lenders; any defenses arising from the
incapacity, lack of authority or any disability or other defense of Borrower;
any defense based on any Senior Lender's errors or omissions in the
administration of the Obligations (other than willful misconduct); any defenses
or benefits that may be derived from or afforded by law that limit or exonerate
guarantors or sureties; and any right to require that the Senior Lenders exhaust
any right or take any action against Borrower or any other person or entity or
any collateral or pursue any other remedy in the power of Senior Lenders
whatsoever.

     9.   Representations and Warranties.  The Intermediate Parent hereby
          ------------------------------
represents, warrants and covenants to the Senior Lenders, which representations,
warranties and covenants shall be true and correct as of the date hereof and
throughout the term of this Agreement, that:

     a.   The Intermediate Parent has not heretofore assigned or transferred any
of the Subordinated Debt, any interest therein or any collateral or security
pertaining thereto; the Intermediate Parent is the true and lawful holder and
owner of the Subordinated Note and

                                      -8-
<PAGE>

the Subordinated Note delivered to the Senior Lenders are true and correct an
have not been amended or modified in any way; and the Subordinated Note is free
and clear of any defense, offset, counterclaim or other adverse claims and any
liens, encumbrances or security interests.

     b.   There are no agreements or understandings, written or oral, by the
Intermediate Parent with Borrower other than as set forth in the Subordinated
Note with respect to the obligations evidenced by the Subordinated Note and the
Intermediate Parent has not heretofore given any subordination in respect of the
Subordinated Debt.

     c.   To the best knowledge of the Intermediate Parent, no default exists
with respect to the Subordinated Note.

     10.  Negative Covenants.  Until payment in full of all Senior Obligations,
          ------------------
the termination of all Commitments, and the expiration or cancellation of all
Letters of Credit, without the consent of all Senior Lenders:

     a.   Except as expressly permitted in this Agreement and the Loan
Agreement, Borrower shall not, directly or indirectly, make any payment on
account of or grant a security interest in, mortgage, pledge, assign or transfer
any properties to satisfy or secure all or any part of the Subordinated Debt or
in any way amend or modify the Subordinated Note or any other Subordinated Loan
Document.

     b.   Except as expressly permitted in this Agreement, the Intermediate
Parent shall not demand or accept, directly or indirectly, from Borrower or any
Affiliate of Borrower, any payment or collateral to satisfy or secure all or any
part of or exercise any remedy under the Subordinated Debt nor shall the
Intermediate Parent release, exchange, extend the time of payment of,
compromise, set off or otherwise discharge or enforce any part of the
Subordinated Debt or in any way amend or modify the Subordinated Debt, the
Subordinated Loan Documents or this Agreement.

     c.   The Intermediate Parent shall not hereafter give any subordination in
respect of the Subordinated Debt, convert any or all of the Subordinated Debt to
capital stock or other securities of Borrower, or transfer or assign any of the
Subordinated Debt to any person other than the Senior Lenders without the
consent of Senior Lenders.

     d.   Borrower will not issue any instrument, security or other writing
evidencing any part of the Subordinated Debt other than the Subordinated Note,
and the Intermediate Parent shall not receive any such writing or transfer or
assign any of the Subordinated Debt, except upon the prior written approval of
the Senior Lenders.

     e.   The Subordinated Debt and the Subordinated Loan Documents shall not be
cross-defaulted or cross-collateralized with any other loan or any security
interest encumbering any other property other than pursuant to the provisions of
the Loan Agreement and the Subordinated Note (it being understood that a cross-
default is a default of an obligor

                                      -9-
<PAGE>

that occurs under the terms of one agreement as a direct and express result of a
default by such obligor' under the terms of another agreement).

     f.   The Intermediate Parent shall not transfer or assign the Subordinated
Debt or the Subordinated Loan Documents or any claim that the Intermediate
Parent has or may have against Borrower or the Premises, without Senior Lenders'
prior written consent, which may be granted or denied in Senior Lenders' sole
and complete discretion.  In the event that the Intermediate Parent, its nominee
or designee, obtains title to the Collateral pursuant to an Enforcement Action
or otherwise, the Intermediate Parent shall not thereafter transfer its interest
in the Collateral without Senior Lenders' prior written consent, which may be
granted or denied in Senior Lenders' sole and complete discretion.  Neither
Borrower nor the Intermediate Parent otherwise shall take or permit any action
prejudicial to or inconsistent with the priority of the Senior Lenders over the
Intermediate Parent that is created by this Agreement.

     11.  Financial Matters.  The Intermediate Parent has established adequate
          -----------------
and independent means of obtaining from Borrower on a continuing basis financial
and other information pertaining to the financial condition of Borrower.  The
Intermediate Parent agrees to keep adequately informed from such means of any
facts, events or circumstances that might in any way affect the Intermediate
Parent's risks hereunder, and the Intermediate Parent further agree that no
Senior Lender shall have any obligation to disclose to the Intermediate Parent
information or material acquired by such Senior Lender in the course of its
relationship with Borrower.  The Intermediate Parent understands that there may
be various agreements among the Senior Lenders and Borrower evidencing and
governing the Senior Obligations and the Intermediate Parent acknowledges and
agrees that such agreements are not intended to confer any benefits on the
Intermediate Parent and that no Senior Lender shall have any obligation to the
Intermediate Parent or any other Person to exercise any rights, enforce any
remedies, or take any actions that may be available to it under such agreements.

     12.  Reliance.  The Intermediate Parent understands that in reliance upon
          --------
the terms and provisions of this Agreement, specific monetary and other
obligations are being entered into and will be entered into by the Senior
Lenders that would not be made or entered into but for reliance on this
Agreement.  The Intermediate Parent further understands that this Agreement
constitutes a continuing offer to all persons who become holders of, or continue
to hold Senior Obligations (whether such Senior Obligations was created or
acquired before or after the date of this Agreement).

     13.  Insurance Proceeds and Condemnation Awards.  In the event of a
          ------------------------------------------
casualty to the buildings or improvements constructed on the Premises or a
condemnation or taking under a power of eminent domain of the Premises, or the
buildings or improvements thereon, Senior Lenders shall have a first and prior
interest in and to any payments, awards, proceeds, distributions, or
consideration arising from any such event (the "Award"), provided that if the
amount of the Award is in excess of all Senior Obligations, such excess Award
shall be paid to or held by Senior Lenders (or any other person) for the benefit
of the persons or

                                      -10-
<PAGE>

entities legally entitled thereto. Notwithstanding the foregoing, in the event
of casualty or condemnation, Senior Lenders shall release the Awards from any
such event to Borrower if and to the extent required by the terms and conditions
of the Senior Loan Documents in order to repair and restore the Premises in
accordance with the terms and provisions of the Senior Loan Documents. Awards
made available to Borrower for the repair or restoration of the buildings or
improvements on the Premises shall not be subject to attachment by Subordinate
Creditor.

     14.  Amendments, Etc.  No amendment, modification, termination or waiver of
          ---------------
any provision of this Agreement, or consent to any departure by the Intermediate
Parent or Borrower therefrom, shall in any event be effective without the
written concurrence of Requisite Lenders under the Loan Agreement.  Any waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.

     15.  Entire Agreement.  This writing is intended by the Intermediate
          ----------------
Parent, Borrower and Senior Lenders as the final expression of their agreement
with respect to the matters covered hereby.  No course of dealing, course of
performance or trade usage, and no parol evidence of any nature, shall be used
to supplement or modify any terms of this Agreement.  There are no conditions to
the full effectiveness of this Agreement, other than execution by Senior Lenders
of the Loan Agreement.  If there is any conflict between the terms hereof and
the terms of any other documents executed in connection with the Loan Agreement,
the terms of such documents shall be read together so as to provide the Senior
Lenders with the broadest possible range of rights and remedies.

     16.  Notices.  Any communications between and among Administrative Agent,
          -------
Senior Lenders, the Intermediate Parent and Borrower and any notices or requests
provided herein to be given may be given by mailing the same, postage prepaid,
or by telex, facsimile transmission or cable by 5:00 p.m. (Pacific Time) on a
Business Day to each such party at its address set forth in the Loan Agreement,
on the signature pages hereof or to such other addresses as each such party may
in writing hereafter indicate.  Any notice, request or demand to or upon
Administrative Agent or Senior Lenders or the Intermediate Parent or Borrower
under or relating to this Agreement shall not be effective until received.

     17.  Expenses.  The Intermediate Parent and Borrower jointly and severally
          --------
agree to pay, upon demand, to Administrative Agent for the benefit of the Senior
Lenders the amount of any and all reasonable expenses, including the reasonable
fees and expenses of their respective counsel, that the Senior Lenders may incur
in connection with the exercise or enforcement of any of their rights or
interests hereunder.

                                      -11-
<PAGE>

     18.  Validity of the Subordinated Debt and Senior Obligations.
          --------------------------------------------------------

     a.   The provisions of this Agreement subordinating the Subordinated Debt
are solely for the purpose of defining the relative rights of the Senior Lenders
and the Intermediate Parent and shall not impair, as between the Intermediate
Parent and Borrower, the obligation of Borrower, which is unconditional and
absolute, to pay the Subordinated Debt in accordance with its terms, nor shall
any such provisions, except as otherwise set forth herein, prevent the
Intermediate Parent from exercising all remedies otherwise permitted by
applicable law or under any instrument or agreement evidencing the Subordinated
Debt upon default thereunder, subject to the rights of the Senior Lenders
hereunder to receive cash, property or securities or any other Distribution of
Assets otherwise payable or deliverable to the Intermediate Parent until the
payment in full of all Senior Obligations, the termination of all Commitments,
and the expiration or cancellation of all Letters of Credit.  This agreement
shall provide no rights or remedies to any Person other than Administrative
Agent, Senior Lenders and the Intermediate Parent.

     b.   The Intermediate Parent shall be subrogated to all rights of the
Senior Lenders against Borrower in respect of any amounts paid to the Senior
Lenders directly or indirectly by the Intermediate Parent pursuant to the
provisions of this Agreement; provided that the Intermediate Parent shall not be
entitled to enforce, or to receive any payments arising out of or based upon,
such right of subrogation until payment in full of all Senior Obligations
(including without limitation, any Protective Advances), the termination of all
Commitments and the expiration or cancellation of all Letters of Credit.

     c.   This Agreement is effective notwithstanding any defect in the validity
or enforceability of any instrument or document evidencing the Senior
Obligations.

     19.  Termination; Preferences.  In the event that following the repayment
          ------------------------
of the Commitment, the repayment of the Loans and all other Senior Obligations,
any payment received by the Administrative Agent or the Lenders by reason of any
determination that the same was a voidable preference, or otherwise, then this
Agreement shall be reinstated and revived, and the Intermediate Parent shall
remit to the Administrative Agent for  the account of the Lenders, any payment
received by the Intermediate Parent during the three-hundred sixty-seven (367)
day period prior thereto, to the extent of such voidable preference or other
returned payment.  Neither the dissolution nor the bankruptcy or dissolution of
the Intermediate Parent shall effect a termination hereof.  Until payment in
full of all Senior Obligations, the termination of all Commitments, and the
expiration or cancellation of all Letters of Credit, any Senior Lender may,
without notice to the Intermediate Parent, extend or continue credit and make
other financial accommodations to or for the account of Borrower in reliance
upon this Agreement.

     20.  Successors.  This Agreement shall be binding upon the Intermediate
          ----------
Parent and its successors and assigns.  This Agreement shall inure to the
benefit of Senior Lenders, Administrative Agent, Borrower and their respective
successors and assigns.  The

                                      -12-
<PAGE>

Intermediate Parent shall not assign this Agreement or any of the rights or
obligations of the Intermediate Parent hereunder without the prior written
consent of all Senior Lenders. The Administrative Agent and the Senior Lenders
may, without notice or consent, assign their interest in this Agreement in whole
or in part. The terms and provisions of this Agreement shall inure to the
benefit of any transferee or assignee of any Loan, and in the event of such
transfer or assignment the rights and privileges herein conferred upon Senior
Lenders and Administrative Agent shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.

     21.  Counterparts.  This Agreement may be executed in one or more
          ------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.

     22.  DUTIES OF SENIOR LENDERS LIMITED.  THE RIGHTS GRANTED TO THE SENIOR
          --------------------------------
LENDERS IN THIS AGREEMENT ARE SOLELY FOR THEIR PROTECTION AND NOTHING HEREIN
CONTAINED (I) IMPOSES ON ANY SENIOR LENDER ANY DUTIES WITH RESPECT TO ANY
PROPERTY EITHER OF BORROWER OR OF THE INTERMEDIATE PARENT HERETOFORE OR
HEREAFTER RECEIVED BY ANY SENIOR LENDER NOR (II) SHALL BE DEEMED TO CONSTITUTE
ANY SENIOR LENDER THE ADMINISTRATIVE AGENT  OF THE INTERMEDIATE PARENT FOR ANY
PURPOSE NOR CREATE ANY FIDUCIARY DUTY BETWEEN ANY SENIOR LENDER AND THE
INTERMEDIATE PARENT.  AS BETWEEN SENIOR LENDERS AND THE INTERMEDIATE PARENT, NO
SENIOR LENDER HAS ANY DUTY TO PRESERVE RIGHTS AGAINST PRIOR PARTIES ON ANY
INSTRUMENT OR CHATTEL PAPER RECEIVED FROM BORROWER OR THE INTERMEDIATE PARENT AS
COLLATERAL SECURITY FOR THE SENIOR OBLIGATIONS OR ANY PORTION THEREOF.  AS
BETWEEN SENIOR LENDERS AND THE INTERMEDIATE PARENT, NO ACTION OR INACTION WITH
RESPECT TO ANY COLLATERAL FOR THE SENIOR OBLIGATIONS; NOR ANY AMENDMENT TO ANY
OF THE SENIOR LOAN DOCUMENTS OR ANY OTHER INSTRUMENT OR AGREEMENT RELATING TO,
SECURING OR GUARANTEEING ANY OF THE SENIOR OBLIGATIONS; NOR ANY EXERCISE OR NON-
EXERCISE OF ANY RIGHT, POWER OR REMEDY UNDER OR IN RESPECT OF ANY OF THE SENIOR
OBLIGATIONS OR ANY INSTRUMENT OR AGREEMENT RELATING TO, SECURING OR GUARANTEEING
ANY OF THE SENIOR OBLIGATIONS; NOR ANY WAIVER, CONSENT, RELEASE, INDULGENCE,
EXTENSION, RENEWAL, MODIFICATION, DELAY OR OTHER ACTION, INACTION OR OMISSION IN
RESPECT OF ANY OF THE SENIOR OBLIGATIONS OR ANY INSTRUMENT OR AGREEMENT RELATING
TO, SECURING OR GUARANTEEING ANY OF THE SENIOR OBLIGATIONS SHALL IN ANY EVENT
GIVE RISE TO ANY CLAIM AGAINST ANY SENIOR LENDER OR

                                      -13-
<PAGE>

ANY OFFICER, DIRECTOR, EMPLOYEE OR ADMINISTRATIVE AGENT OF SUCH SENIOR LENDER.

     23.  Additional Documentation.  Borrower and the Intermediate Parent shall
          ------------------------
execute and deliver to the Administrative Agent such further instruments and
shall take such further action as Administrative Agent or any Senior Lender may
at any time reasonably request in order to carry out the provisions and intent
of this Agreement.

     24.  Severability.  In case any provision in or obligation under this
          ------------
Agreement shall be held invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     25.  Waiver of Jury Trial.  The Intermediate Parent, BORROWER,
          --------------------
ADMINISTRATIVE AGENT AND EACH SENIOR LENDER EACH HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT.  The scope of this waiver is intended to be all-
encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation,
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims.  The Intermediate Parent, Borrower, and by their
acceptance of the benefits hereof, Administrative Agent and each Senior Lender
each (i) acknowledges that this waiver is a material inducement for the
Intermediate Parent, Borrower, Administrative Agent and each Senior Lender
Holder to enter into a business relationship, that each has already relied on
this waiver in entering into this Agreement and that each will continue to rely
on the waiver in related future dealings (ii) further warrants and represents
that each has reviewed this waiver with legal counsel, and that each knowingly
and voluntarily waives jury trial rights following consultation with legal
counsel.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

     26.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
          -------------
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

     27.  CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  ALL JUDICIAL
          ----------------------------------------------
PROCEEDINGS BROUGHT AGAINST THE INTERMEDIATE PARENT ARISING OUT OF OR RELATING
TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT THE INTERMEDIATE PARENT ACCEPTS FOR ITSELF AND IN CONNECTION WITH

                                      -14-
<PAGE>

ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. The Intermediate Parent hereby agrees that service of all process in
any such proceeding in any such court may be made by registered or certified
mail, return receipt requested, to the Intermediate Parent at its address
provided in Section 18, such service being hereby acknowledged by the
Intermediate Parent to be sufficient for personal jurisdiction in any action
against the Intermediate Parent in any such court and to be otherwise effective
and binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law.

     28.  All Action Required to be Lawful.  No provision of this Agreement
          --------------------------------
shall require any party hereto to take any action or fail to take any action
that would violate any Gaming Law.

     29.  Capacity of the Intermediate Parent.  This Agreement applies to the
          -----------------------------------
Intermediate Parent only in its capacity as a holder of Company Subordinated
Debt.

  IN WITNESS WHEREOF, the Intermediate Parent and Borrower have each caused this
Agreement to be duly executed and delivered for the benefit of the Senior
Obligations by its  duly authorized officers as of the date first written above.

                                       "Borrower"

                                       DETROIT ENTERTAINMENT, L.L.C.
                                       a Michigan limited liability company

                                       By:    Circus Circus Michigan, Inc.
                                              Its:  authorized member

                                              By:    GLENN SCHAEFFER
                                                     -------------------------

                                              Title: President
                                                     -------------------------

                                       Notice
                                       Address:

                                      -15-
<PAGE>

                           "INTERMEDIATE PARENT"

                           CIRCUS CIRCUS MICHIGAN, INC., a Michigan corporation

                           By:    GLENN SCHAEFFER
                              ------------------------------

                           Title: President
                                  --------------------------

                                      -16-
<PAGE>

                                      Accepted:

                                      Administrative Agent

                                      BANK OF AMERICA, N.A.

                                      By:   JANICE HAMMOND
                                            -----------------------

                                      Title: V.P. - Agency Specialist
                                            -----------------------

                                      Notice Address:

                                      555 South Flower Street, 11th Floor
                                      Los Angeles, California  90071
                                      Attention:  Janice Hammond, Vice President

                                      -17-<PAGE>

                                                                 Exhibit 10(rrr)

                                                                [EXECUTION COPY]

                 AMENDMENT NO. 1 TO LEASE INTENDED AS SECURITY
                 ---------------------------------------------

     THIS AMENDMENT NO. 1 TO LEASE INTENDED AS SECURITY (this "Amendment No.
                                                               -------------
1"), dated as of January 28, 1999 is made by and among CIRCUS CIRCUS LEASING,
INC., a Nevada corporation, as Lessee; CIRCUS CIRCUS ENTERPRISES, INC., a Nevada
corporation, as Guarantor; FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, but solely as Trustee; the
Persons identified in the Lease described below as Certificate Purchasers;
SOCIETE GENERALE FINANCIAL CORPORATION, as Documentation Agent; PNC LEASING
CORP., as Syndication Agent; THE BANK OF NOVA SCOTIA, as Managing Agent; and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, not in its individual
capacity, but solely as Administrative Agent and Lead Arranger.

                              W I T N E S S E T H:
                              -------------------

     WHEREAS, Lessee, Guarantor, Trustee, the Certificate Purchasers,  the Lead
Arranger and the Agents are parties to a Lease Intended as Security, dated as of
October 30, 1998 (as amended or otherwise modified to the date hereof, the

"Lease");
------

     WHEREAS, Lessee has requested, among other things, (i)  that the Trustee
purchase Equipment from time to time for the sole purpose of leasing such
Equipment to Lessee and, in connection therewith, to advance funds from time to
time as initial vendor deposits and vendor progress payments to the Vendors of
such Equipment or, as applicable, advance funds from time to time to Lessee to
reimburse Lessee for payments made by Lessee to any such Vendors for such
deposits and/or progress payments and (ii) amendments to certain provisions of
the Lease to facilitate the advances described in clause (i) above; and
                                                  ----------

     WHEREAS, the Certificate Purchasers are willing, on the terms and subject
to the conditions hereinafter set forth, to so amend the Lease and to permit
Trustee to make such requested advances (and, in connection therewith, to
provide Trustee the funds necessary to make such advances), but only upon the
terms and conditions set forth below;

     NOW, THEREFORE, in consideration of the amendments and other agreements
herein contained, the parties hereto agree as follows:

                                      -1-
<PAGE>

                                   ARTICLE I

                                  DEFINITIONS

     Capitalized terms used herein but not otherwise defined shall have the
meanings specified for such terms in the Lease (as amended hereby).

                                   ARTICLE II

                              AMENDMENTS TO LEASE

     Effective on (and subject to the occurrence of) the "Amendment No. 1
Effective Date" (as defined below), the Lease is amended in accordance with this

Article II.  Except to the extent amended by this Amendment No. 1, the Lease is
----------
and shall continue to be in full force and effect and is hereby ratified and
confirmed in all respects.

     2.1  Section 1.1.  Section 1.1 of the Lease is amended as follows:
          -----------

          (a) The following definitions contained in Section 1.1 of the Lease
are amended and restated to read as follows:

          "Affected Equipment Value Fraction" means, with respect to any item of
           ---------------------------------
     Equipment then subject to this Lease, a fraction determined as of any
     Payment Date the numerator of which is the Purchase Price for such item and
     the denominator of which is the aggregate Purchase Price of all Equipment
     then subject to this Lease, including such item.  Outstanding Progress
     Payment Advances with respect to any Equipment that is not then subject to
     this Lease shall be excluded from the foregoing calculations.

          "Casualty Amount" means, with respect to any item of Equipment or
           ---------------
     System, as the case may be, as of any date specified for payment thereof,
     the sum of (a) a portion of the Lease Balance equal to (i), in the case of
         --- --
     any item of Equipment or System then accepted by Lessee and covered by a
     Lease Supplement, the product obtained by multiplying that portion of the
     outstanding Lease Balance relating to Equipment then accepted by Lessee for
     lease hereunder by the Affected Equipment Value Fraction of such item or
     System, as applicable, or (ii), in the case of any item of Equipment or
     System that constitutes Progress Payment Equipment, the then aggregate
     amount of unpaid Progress Payment Advances made by Trustee with respect to
     such item of Equipment or System, as the case may be, plus (b) all accrued
                                                           ----
     and unpaid Accrual Rent accrued on such portion of the Lease Balance to the
     date of payment, plus (c) all Supplemental Rent (if any) then due and
                      ----
     owing.

          "Delivery Date" means each of the actual dates on or prior to the last
           -------------
     day of the Commitment Period on which the applicable transactions
     contemplated in Article II are completed.
                     ----------

                                      -2-
<PAGE>

          "Equipment" means, individually, each item of equipment set forth in a
           ---------
     Delivery Date Notice (and as generally described on Schedule III of this
                                                         ------------
     Lease), including equipment that is acquired and accepted by Lessee as of
     the applicable Delivery Date as well as equipment with respect to which
     Trustee is requested to make one or more Progress Payment Advances as of
     the applicable Delivery Date, including items collectively identified as a
     System, and, collectively, each of the foregoing, together with any
     substitutions therefor, replacements thereof, and additions thereto from
     time to time pursuant to the Operative Documents.

          "Eurodollar Base Rate" means, relative to any Rent Period with respect
           --------------------
     to the Lease Balance and each Supplement Balance and outstanding Progress
     Payment Advance, the average of the interest rates per annum (rounded
     upward, if necessary, to the next 1/16 of 1%) at which deposits in Dollars
     are offered by the Eurodollar Reference Banks to prime banks in the
     Designated Eurodollar Market at or about 11:00 a.m. local time in the
     Designated Eurodollar Market, two (2) Business Days before the first day of
     the applicable Rent Period in an aggregate amount approximately equal to
     the amount of the Lease Balance or the applicable Supplement Balance or
     outstanding Progress Payment Advance and for a period of time comparable to
     the number of days in the applicable Rent Period.  The determination of the
     Eurodollar Base Rate by Trustee shall be conclusive in the absence of
     manifest error.

          "Eurodollar Rate" means, relative to any Rent Period with respect to
           ---------------
     the Lease Balance and each Supplement Balance and outstanding Progress
     Payment Advance, an interest rate per annum (rounded upward, if necessary,
     to the nearest 1/16 of one percent) determined pursuant to the following
     formula:

                    Eurodollar             Eurodollar Base Rate
                                        --------------------------
                         Rate      /=/   1.00 - Eurodollar Reserve
                                                 Percentage

     The Eurodollar Rate shall be determined as of 11:00 a.m. local time in the
     Designated Eurodollar Market two (2) Business Days prior to the beginning
     of each Rent Period for delivery on the first day of such Rent Period, and
     in an amount approximately equal to the amount of the Lease Balance or the
     applicable Supplement Balance or outstanding Progress Payment Advance and
     for a period approximately equal to such Rent Period.

          "Eurodollar Reserve Percentage" means, relative to any Rent Period
           -----------------------------
     with respect to the Lease Balance and each Supplement Balance and
     outstanding Progress Payment Advance, the maximum reserve percentage
     (expressed as a decimal, rounded upward to the nearest 1/100th of 1%) in
     effect on the date the Eurodollar Base Rate for the Lease Balance or the
     applicable Supplement Balance or outstanding Progress Payment Advance is
     determined (whether or not applicable to any Certificate Purchaser) under
     regulations issued from time to time by the Federal Reserve Board for
     determining the maximum reserve requirement (including any emergency,
     supplemental or other marginal reserve requirement) with respect to
     eurocurrency funding (currently referred to as "eurocurrency liabilities")
     having a term comparable to the applicable Rent Period.  The determination
     by Trustee of

                                      -3-
<PAGE>

     any applicable Eurodollar Reserve Percentage shall be conclusive in the
     absence of manifest error.

          "Interest Differential" means, with respect to any prepayment of all
           ---------------------
     or any portion of the Lease Balance or any Supplement Balance or
     outstanding Progress Payment Advance on a day prior to the last day of the
     applicable Rent Period pertaining thereto, (a) the per annum interest rate
     then applicable to payments of Rent with respect to the Lease Balance or
     such Supplement Balance or Progress Payment Advance (or portion thereof, as
     the case may be) minus (b) the Eurodollar Rate on, or as near as
                      -----
     practicable to the date of the prepayment for an amount equal to the amount
     so prepaid commencing on such date and ending on the last day of the
     applicable Rent Period for the amount so prepaid.

          "Interim Period" means (i) as to each Lease Supplement the period
           --------------
     commencing on (and including) the Delivery Date set forth in Schedule I to
     such Lease Supplement and ending on (but excluding) June 30, 1999, (ii) as
     to each Progress Payment Advance the period commencing on (and including)
     the Delivery Date on which such Progress Payment Advance is made and ending
     on (but excluding) June 30, 1999, and (iii) for this Lease means the period
     commencing on (and including) the initial Delivery Date and ending on (but
     excluding) June 30, 1999.

          "Interim Rent" means, with respect to each Rent Period during the
           ------------
     Interim Period, (a) for each Lease Supplement, an amount equal to Accrual
     Rent allocable to the Supplement Balance of such Lease Supplement during
     such period, (b) for each Progress Payment Advance, an amount equal to
     Accrual Rent allocable to such Progress Payment Advance during such period,
     and (c) for this Lease, the sum of the amounts described in (i) the
                                 --- --
     foregoing clause (a) for all Lease Supplements subject to this Lease and
               ----------
     (ii) the foregoing clause (b) for all Progress Payment Advances made
                        ----------
     hereunder.  Interim Rent shall be due and payable on the last day of each
     Rent Period during the Interim Period.

          "Lease Balance" means, as of any date of determination, the sum of (a)
           -------------                                              --- --
     the aggregate Supplement Balances of all Lease Supplements then subject to
     this Lease and (b) the aggregate outstanding principal balance of all
     Progress Payment Advances made hereunder plus costs, charges or other
                                              ----
     obligations incurred by Trustee or the Certificate Purchasers in connection
     with any such Progress Payment Advances.

          "System" means any "system" or group of items of Equipment classified
           ------
     as a System on Schedule I to a Lease Supplement or, in the case of
     equipment subject to a Progress Payment Advance, as shown on any schedule
     or annex to the applicable Delivery Date Notice.

          (b) Section 1.1 of the Lease is further amended by inserting the
following definitions of "Progress Payment Advance" and "Progress Payment
Equipment" in their appropriate alphabetical place:

                                      -4-
<PAGE>

          "Progress Payment Advance" means an advance of funds for the purchase
           ------------------------
     of an item of Equipment or a System, as the case may be, before such
     Equipment or System is finally accepted by Lessee for lease hereunder, but
     with respect to which Lessee fully expects to accept for lease hereunder at
     a future date.  Progress Payment Advances may consist of vendor deposits
     and/or vendor progress payments made directly to the applicable vendor or
     as reimbursement to Lessee for same.

          "Progress Payment Equipment" is defined in Section 2.2(a).
           --------------------------                --------------

     2.2  Section 2.2.   Section 2.2 of the Lease is amended as follows:
          -----------

          (a) The heading for Section 2.2 of the Lease is amended and restated
to read as follows:

     Fundings; Payment of Purchase Price/Progress Payment Advances; Failure of a
     ---------------------------------------------------------------------------
     Certificate Purchaser to Fund.
     -----------------------------

          (b) Subsection 2.2(a) is amended and restated to read as follows:

          (a) Subject to the terms and conditions hereinafter set forth, and in
     reliance on the representations and warranties contained herein or made
     pursuant hereto, during the Commitment Period upon receipt of each Delivery
     Date Notice, each Certificate Purchaser shall transfer to Trustee (each
     such transfer being referred to herein as a "Funding") on the date
                                                  -------
     specified in such Delivery Date Notice, an amount equal to the sum of (1)
                                                                    --- --
     the product of (x) the aggregate Purchase Price of any Equipment specified
     in such Delivery Date Notice to be acquired by Trustee and accepted by
     Lessee for lease hereunder multiplied by (y) such Certificate Purchaser's
                                ---------- --
     Commitment Percentage, plus (2) the product of (x) the aggregate Progress
                            ----
     Payment Advance specified in such Delivery Date Notice with respect to
     Equipment to be acquired by Trustee and leased by Lessee at a later date
     (such Equipment being referred to herein as "Progress Payment Equipment"),
                                                  --------------------------
     multiplied by (y) such Certificate Purchaser's Commitment Percentage.  In
     ---------- --
     no event shall (i) any Certificate Purchaser be required to provide funds
     under this Lease in an aggregate amount exceeding such Certificate
     Purchaser's Commitment, (ii) the aggregate amount advanced by the
     Certificate Purchasers exceed the Aggregate Commitment Amount, (iii) Lessee
     request (whether by delivery of Delivery Date Notices or otherwise) more
     than one Delivery Date for Equipment in any calendar month, or (iv) Lessee
     request any Progress Payment Advance with respect to any Equipment if (A),
     after giving effect to such Progress Payment Advance and all other Fundings
     made on or prior to the Delivery Date on which such Progress Payment
     Advance is to be made, the unused amount of the Commitments would be
     insufficient to fund the entire estimated amount remaining to be paid to
     acquire the Equipment with respect to which such Progress Payment Advance
     (or any portion thereof) is to be made or (B) the Appraised Value of any
     such Equipment is less than the aggregate estimated purchase price
     (including any Progress Payment Advances theretofore made with respect
     thereto) for such Equipment.

          (c) Subsection 2.2(c)(iv) is amended and restated to read as follows:

                                      -5-
<PAGE>

          (iv) If and to the extent that the Defaulted Amount is not funded by
     the Non-Defaulting Certificate Purchasers, Trustee may reduce the Purchase
     Price and/or the Progress Payment Advance set forth in the Delivery Date
     Notice (in such amount(s) as Trustee may determine) so that the total
     Funding specified in the Delivery Date Notice as so restated equals the
     aggregate revised fundings to be made by the Non-Defaulting Certificate
     Purchasers on the applicable Delivery Date; and

     2.3  Section 2.3.   Section 2.3 of the Lease is amended and restated to
          -----------
read as follows:

          2.3  Application of Funds; Sale and Lease of Equipment; Progress
               -----------------------------------------------------------
     Payment Advances.
     ----------------

          (a) On each Delivery Date with respect to which Trustee is to acquire
     legal title to any Equipment and Lessee is to accept such Equipment for
     lease hereunder, upon (i) receipt by Trustee of all applicable amounts to
     be paid by the Certificate Purchasers pursuant to Section 2.2, and (ii)
                                                       -----------
     satisfaction or waiver of each of the conditions set forth in Article III,
                                                                   -----------
     (A) Trustee shall acquire legal title to, for the benefit of the
     Certificate Purchasers, the Equipment to be leased by Lessee on such
     Delivery Date, as specified in the relevant Delivery Date Notice delivered
     pursuant to Section 3.1, (B) in consideration therefor, Trustee, on behalf
                 -----------
     of the Certificate Purchasers, shall pay, from the funds made available by
     the Certificate Purchasers pursuant to Section 2.2, an amount equal to the
                                            -----------
     aggregate Purchase Price of the Equipment being so sold and purchased, in
     each case, in immediately available funds remitted by wire transfer to the
     account specified by Lessee in the Delivery Date Notice to Lessee or
     directly to Vendors, as applicable, and (C) Trustee, on behalf of the
     Certificate Purchasers, shall lease to Lessee the Equipment so transferred
     to Trustee and Lessee shall accept delivery of and lease from Trustee such
     Equipment pursuant to this Lease.  Delivery of the Equipment to be
     purchased by Trustee on behalf of the Certificate Purchasers on such
     Delivery Date shall be effected by the delivery by Lessee or the Vendor, as
     applicable, of one or more Bills of Sale or Purchase Order Assignments, as
     applicable, specifically identifying the Equipment delivered on such
     Delivery Date.  Each Certificate Purchaser shall hold an undivided interest
     in each item of Equipment equal to such Certificate Purchaser's Commitment
     Percentage.

          (b) On each Delivery Date with respect to which Lessee requests that a
     Progress Payment Advance be made with respect to Progress Payment
     Equipment, upon (i) receipt by Trustee of all applicable amounts to be paid
     by the Certificate Purchasers pursuant to Section 2.2, (ii) satisfaction or
                                               -----------
     waiver of each of the conditions set forth in Article III (other than
                                                   -----------
     Sections 3.2, 3.3 and 3.8 which shall not apply), and (iii) execution and
     ------------  ---     ---
     delivery by Lessee to Trustee of a Purchase Order Assignment transferring
     to Trustee, on behalf of the Certificate Purchasers, all of Lessee's right,
     title and interest in and to any and all Purchase Contracts and/or purchase
     orders (and the Progress Payment Equipment covered thereby) to the extent
     relating to the Progress Payment Equipment, Trustee, on behalf of the
     Certificate Purchasers, shall pay, from the funds made available by the
     Certificate Purchasers pursuant to Section 2.2, an amount equal to the
                                        -----------
     requested Progress Payment Advance, in each case,

                                      -6-
<PAGE>

     in immediately available funds remitted by wire transfer to the account
     specified by Lessee in the Delivery Date Notice to Lessee or directly to
     Vendors, as applicable. Each Certificate Purchaser shall hold an undivided
     interest in such Purchase Contracts, purchase orders and Progress Payment
     Equipment equal to such Certificate Purchaser's Commitment Percentage. If
     Lessee fails to accept (and deliver and execute a Lease Supplement with
     respect to) any item of Progress Payment Equipment for which a Progress
     Payment Advance has been made under this Section 2.3(b) on or before the
                                              --------------
     last day of the Commitment Period, Lessee shall on demand of Trustee
     purchase such item of Progress Payment Equipment from Trustee for the
     aggregate amount so advanced by Trustee, on behalf of the Certificate
     Purchasers, and any other costs or obligations incurred by Trustee or any
     Certificate Purchaser in connection therewith plus all accrued and unpaid
                                                   ----
     Interim Rent with respect to such item of Equipment. Payments by Lessee
     provided for in this Section 2.3(b) and in Section 4.3 shall be due and
                          --------------        -----------
     payable as provided herein and therein, notwithstanding any claim by Lessee
     that: (A) any Progress Payment Equipment is defective or unsatisfactory in
     any respect or fails to conform to any specification, representation or
     warranty by the Vendor; (B) any Progress Payment Equipment has not been
     delivered to Lessee; (C) any Progress Payment Equipment fails to conform to
     any regulation, rule or law imposed by any government or regulatory
     authority; or (D) any applicable Vendor has failed to fulfill any of the
     duties and obligations to Lessee, whether or not in connection with any
     Progress Payment Equipment. Lessee, Trustee and the Certificate Purchasers
     intend that, irrespective of any controversy between Lessee and any common
     carrier or Vendor, Lessee shall pay all amounts due under this Section
                                                                    -------
     2.3(b) and Section 4.3 and shall hold Trustee, the Certificate Purchasers
     ------     -----------
     and the Agents harmless from any loss or damage resulting therefrom.

     2.4  Section 2.4.   Section 2.4 of the Lease is amended and restated to
          -----------
read as follows:

          2.4  Time and Place of Delivery Dates.  Each delivery of the Equipment
               --------------------------------
     and each Progress Payment Advance shall take place on the Delivery Date set
     forth in the applicable Delivery Date Notice, subject to the following:

               (a) each Funding shall occur on the last Business Day of a
     calendar month on or after the date hereof and not later than the last day
     of the Commitment Period, it being understood that there may be a Funding
     without the consummation of a Delivery Date if Lessee has postponed such
     Delivery Date pursuant to Section 2.5, so long as such Delivery Date occurs
                               -----------
     not later than the last day of the Commitment Period;

               (b) each Delivery Date shall occur on the last Business Day of a
     calendar month (unless postponed in accordance with Section 2.5) on or
                                                         -----------
     after the date hereof and not later than the last day of the Commitment
     Period; and

               (c) in no event shall the aggregate amount advance by the
     Certificate Purchasers exceed the Aggregate Commitment Amount, nor shall
     the aggregate amount advance by any Certificate Purchaser exceed such
     Certificate Purchaser's Commitment.

                                      -7-
<PAGE>

     Notwithstanding the foregoing, Lessee may at any time and from time to time
     on or before the last day of the Commitment Period, without the necessity
     of a Funding if all other applicable conditions hereunder are satisfied,
     accept for lease hereunder (and execute and deliver to Trustee a fully
     completed Lease Supplement covering) Progress Payment Equipment.

     2.5  Preamble to Article III.  The preamble to Article III of the Lease is
          -----------------------
amended and restated to read as follows:

          The obligation of each Certificate Purchaser to make any Funding
     hereunder, of Trustee, on behalf of the Certificate Purchasers, to acquire
     title to and lease the Equipment to, Lessee, and of Trustee, on behalf of
     the Certificate Purchasers, to make any Progress Payment Advance, and to
     cause Lessee to cause the transfer of title to any applicable Equipment to,
     and lease such Equipment from, Trustee, on behalf of the Certificate
     Purchasers, on each Delivery Date, shall be subject to the fulfillment to
     the satisfaction of (including, with respect to writings that do not
     conform to any applicable Exhibit hereto, such writings being in form and
     substance reasonably satisfactory to Trustee, Administrative Agent and each
     Certificate Purchaser, and, to the extent provided below, Lessee), or the
     waiver in writing by, Trustee, Administrative Agent and each Certificate
     Purchaser and Lessee, of the conditions precedent applicable to such party
     (provided that no action required to be taken by any such party or any of
      --------
     its Affiliates shall be a condition precedent to such party's obligations)
     set forth in this Article III on or prior to each Delivery Date (except
                       -----------                                    ------
     that the obligation of any party hereto shall not be subject to the
     performance or compliance of such party or any of such party's affiliates).

     2.6  Section 3.1.   Clauses (ii) and (iii) of Section 3.1 of the Lease are
          -----------
amended and restated to read as follows:

     (ii) a description (including model, make and serial number, if available)
     of each item of Equipment (A) to be transferred to Trustee, on behalf of
     the Certificate Purchasers, and leased to Lessee on such Delivery Date
     and/or (B) with respect to which any requested Progress Payment Advance
     relates (and whether such Progress Payment Advance constitutes a direct
     vendor deposit or vendor progress payment (or a reimbursement to Lessee
     thereof, in which case the Administrative Agent and Trustee shall have
     received appropriate documentary evidence of Lessee's prior payment of any
     such deposit or payment)), (iii) the respective Purchase Prices of any
     Equipment to be acquired by Trustee, on behalf of the Certificate
     Purchasers, on such Delivery Date and/or, if applicable, the aggregate
     amount of Progress Payment Advances to be made on such date (together with
                                                                  --------
     a specification of the anticipated aggregate amount remaining to be paid
     with respect to the Progress Payment Equipment covered by such Progress
     Payment Advances in order to place such Progress Payment Equipment on lease
     hereunder) which, for each Delivery Date other than the final Delivery
                                              ----- ----
     Date, shall be in an aggregate amount of not less than $10,000,000,

                                      -8-
<PAGE>

     2.7  Section 3.4.   The phrase "covering all Equipment to be transferred to
          -----------
Trustee, on behalf of the Certificate Purchasers, and leased to Lessee on such
Delivery Date," on the fourth and fifth lines of Section 3.4 of the Lease is
amended and restated in its entirety to read as follows:

     "covering all Equipment to be transferred to Trustee, on behalf of the
     Certificate Purchasers, or to which any Progress Payment Advance pertains,
     as the case may be, which Equipment is to be leased to Lessee on such
     Delivery Date or with respect to which any Progress Payment Advance is to
     be made on such Delivery Date, as the case may be,"

     2.8  Section 3.6.  Section 3.6 of the Lease is amended and restated to read
          -----------
as follows:

          3.6  No Casualty.  No casualty shall have occurred with respect to any
               -----------
     item of Equipment (a) being delivered on such Delivery Date or (b) with
     respect to which a Progress Payment Advance is being made on such Delivery
     Date, as the case may be.

     2.9  Section 3.12.  Section 3.12 of the Lease is amended by adding the
          ------------
following subparagraph at the end thereof:

     With respect to any Delivery Date for  Progress Payment Equipment, the
     foregoing appraisal requirements shall apply with respect to such Progress
     Payment Equipment except that in connection therewith the applicable
                       ------
     parties shall assume, for these purposes, that such Progress Payment
     Equipment would be paid for in full as of such Delivery Date and placed on
     lease hereunder as of such date.

     2.10  Section 4.3.   The first sentence of Section 4.3 of the Lease is
           -----------
amended and restated to read as follows:

     On each Payment Date during the Interim Period and on the last day of the
     Interim Period, Lessee shall pay to Trustee, for the benefit of the
     Certificate Purchasers, an amount equal to the aggregate amount of Interim
     Rent accrued during the Rent Period then ended with respect to (a) all
     Equipment subject to each Lease Supplement and (b) all then outstanding
     Progress Payment Advances.  In addition to the foregoing, if Lessee shall
     have failed to accept any Progress Payment Equipment on or before the last
     day of the Commitment Period, Lessee shall, on demand of Trustee, at the
     direction of the Certificate Purchasers, purchase each such item of
     Progress Payment Equipment from Trustee for the aggregate amount so
     advanced by Trustee, on behalf of the Certificate Purchasers, and any other
     costs or obligations incurred by Trustee or any Certificate Purchaser, in
     connection therewith.

     2.11  Section 6.1.  The proviso set forth in the first paragraph of Section
           -----------
6.1 of the Lease is amended and restated to read as follows:

     provided, that (i) upon the occurrence and during the continuance of a
     --------
     Default or Event of Default, or (ii) with respect to any Progress Payment
     Equipment suffering a Casualty, Lessee shall be obligated, at the option of
     the Required Certificate Purchasers, to make the payments

                                      -9-
<PAGE>

     referred to in clause (a) above and shall not be entitled to exercise any
                   ----------
     right of replacement pursuant to clause (b).
                                      ----------

     2.12  Section 7.7(d).  The words "or if funding of a requested Progress
           --------------
Payment Advance" is inserted between the words "Equipment" and "is" on the
fourth line of Section 7.7(d) of the Lease.

     2.13  Section 9.1.  The last sentence of Section 9.1 of the Lease is
           -----------
 amended and restated to read as follows:

     Such fee shall be due and payable (i) on the last Business Day of the third
     calendar month following the Closing Date and each consecutive three-month
     period thereafter during the Commitment Period, with each such period
     ending on the last Business Day of the applicable calendar month, and (ii)
     on the last day of the Commitment Period.

     2.14  Section 12.1(j).  Section 12.1(j) of the Lease is amended and
           ---------------
restated to read as follows:

          (j) No Default: Casualty.  No event has occurred and is continuing
              --------------------
     that is a Default or Event of Default and no Casualty has occurred with
     respect to any item of Equipment to be delivered on each Delivery Date or
     item of Equipment to which any Progress Payment Advance pertains.

     2.15  Section 12.1(s).  Section 12.1(s) is amended and restated to read as
           ---------------
follows:

          (s) Equipment.  The Purchase Price for each item of Equipment does not
              ---------
     exceed the Appraised Value of such item of Equipment at the time of the
     sale to Trustee, for the benefit of the Certificate Purchasers, hereunder
     and the aggregate Purchase Price for all of the Equipment does not exceed
     the Appraised Value of all of the Equipment at the time of the sale to
     Trustee, for the benefit of the Certificate Purchasers, hereunder.
     Similarly, in connection with any Equipment for which Lessee requests one
     or more Progress Payment Advances, after giving effect to all expected
     Progress Payment Advances for such Equipment, the aggregate amount of such
     Progress Payment Advances with respect to such Equipment shall not exceed
     the Appraised Value of such Equipment.  Lessee has delivered (or will, or
     on prior to each applicable Delivery Date, deliver) true, correct and
     complete copies of invoices evidencing payment in full by Lessee to the
     Vendors  of the Equipment transferred by Lessee which is to be accepted by
     Lessee as of such Delivery Date.  Similarly, Lessee has delivered (or will,
     on or prior to each applicable Delivery Date, deliver) true, correct and
     complete copies of invoices or other appropriate documentation evidencing
     payment by Lessee to the Vendors for the amount of Progress Payment Advance
     for which Lessee requests reimbursement as of such Delivery Date.

     2.16  Section 12.2(c). Section 12.2(c) of the Lease is amended and
           ---------------
restated to read as follows:

                                      -10-
<PAGE>

          (c) Lessor Liens. The Equipment being delivered on such Delivery Date
              ------------
     (or, if applicable, the Equipment with respect to which any Progress
     Payment Advance pertains) and all of the other Collateral is free and clear
     of all Lessor Liens attributable to such Certificate Purchaser.

     2.17  Section 12.3(e). Section 12.3(e) of the Lease is amended and restated
           ---------------
to read as follows:

          (e) Lessor Liens. The Equipment being delivered on such Delivery Date
              ------------
     (or, if applicable, the Equipment with respect to which any Progress
     Payment Advance pertains) and all of the other Collateral is free and clear
     of all Lessor Liens attributable to Trustee, in its individual capacity, as
     Trustee or both.

     2.18  Section 12.4(e). Section 12.4(e) of the Lease is amended and restated
           ---------------
to read as follows:

          (e) Lessor Liens.  The Equipment being delivered on such Delivery Date
              ------------
     (or, if applicable, the Equipment with respect to which any Progress
     Payment Advance pertains) and all of the other Collateral is free and clear
     of all Lessor Liens attributable to Administrative Agent.

     2.19  Section 14.2(d). Clause (D) of Section 14.2(d) of the Lease is
           ---------------
and restated to read as follows:

     (D) a reduction of the Lease Balance, any Supplement Balance, any Progress
     Payment Advance or any amount of Rent due hereunder except pursuant to
                                                         ------
     Section 6.1;
     -----------

     2.20  Exhibit D (Form of Delivery Date Notice). Exhibit D (Form of Delivery
           ----------------------------------------
Date Notice) to the Lease is amended, restated and replaced by Exhibit D
attached to this Amendment No. 1 as Annex I.
                                    -------

                                  ARTICLE III

                  CONDITIONS TO EFFECTIVENESS, REPRESENTATIONS
                    AND WARRANTIES AND ADDITIONAL COVENANTS

     3.1  Effective Date.  This Amendment No. 1 shall be and become effective as
          --------------
of the date (the "Amendment No. 1 Effective Date") upon the prior or concurrent
                  ------------------------------
satisfaction of each of the conditions precedent set forth in this Section 3.1.
                                                                   -----------

          (a) Execution of Certain Documents.  The Administrative Agent, Trustee
              ------------------------------
and Lessee shall have received counterparts of this Amendment No. 1 duly
executed by Lessee, Guarantor, Trustee, Certificate Purchasers, Lead Arranger,
and the Agents (or evidence thereof satisfactory to the Administrative Agent).

                                      -11-
<PAGE>

          (b) Fees.   All reasonable fees and expenses of Sheppard, Mullin,
              ----
Richter & Hampton LLP in connection with the negotiation, execution and delivery
of this Amendment No. 1 and the transactions contemplated herein shall have been
paid in full.

          (c) Accuracy of Representations and Warranties; No Default.  On the
              ------------------------------------------------------
Amendment No. 1 Effective Date, the Administrative Agent shall have received
(with copies for the Trustee and each Certificate Purchaser) certificates of a
Responsible Official of Guarantor and Lessee stating that after giving effect to
this Amendment No. 1, all of the representations and warranties of Lessee and
Guarantor contained in the Lease shall be true and correct on and as of the
Amendment No. 1 Effective Date in all material respects as though made on and as
of that date and no Default has occurred and is continuing.

          (d) Certificate Purchasers.  The first date on which the
              ----------------------
Administrative Agent shall have received affirmative approvals relative to this
Amendment No. 1 from the Certificate Purchasers.

          (e) Legal Details, etc.  The Administrative Agent and its counsel
              ------------------
shall have received (with copies for the Trustee and each Certificate Purchaser)
all information, and such counterpart originals or such certified or other
copies of such materials, as the Administrative Agent or its counsel may
reasonably request, and all legal matters incident to the effectiveness of this
Amendment No. 1 shall be satisfactory to the Administrative Agent and its
counsel.  All documents executed or submitted pursuant hereto or in connection
herewith shall be satisfactory in form and substance to the Administrative Agent
and its counsel.

     3.2  Limitation.  Except as expressly provided hereby, all of the
          ----------
representations, warranties, terms, covenants and conditions of the Lease and
each other Operative Document shall remain unamended and unwaived and shall
continue to be, and shall remain, in full force and effect in accordance with
their respective terms.  The amendments, modifications and consents set forth
herein shall be limited precisely as provided for herein, and shall not be
deemed to be a waiver of, amendment of, consent to or modification of any other
term or provision of the Lease or of any term or provision of any other
Operative Document or other instrument referred to therein or herein, or of any
transaction or further or future action on the part of any of Lessee, Guarantor
or any other Person which would require the consent of the Administrative Agent,
Trustee or any of the Certificate Purchasers under the Lease or any such other
Operative Document or instrument.

                                   ARTICLE IV

                                 MISCELLANEOUS

     4.1  Cross-References.  References in this Amendment No. 1 to any Article
          ----------------
or Section are, unless otherwise specified, to such Article or Section of this
Amendment No. 1.

                                      -12-
<PAGE>

     4.2  Operative Document Pursuant to Lease.  This Amendment No. 1 is an
          ------------------------------------
Operative Document executed pursuant to the Lease and shall (unless otherwise
expressly indicated therein) be construed, administered and applied in
accordance with the terms and provisions of the Lease.

     4.3  Successors and Assigns.  This Amendment No. 1 shall be binding upon
          ----------------------
and inure to the benefit of the parties hereto and their respective successors
and assigns.

     4.4  Counterparts, etc.  This Amendment No. 1 may be executed by the
          -----------------
parties hereto in several counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.

     4.5  Governing Law.  THIS AMENDMENT NO. 1 SHALL BE GOVERNED BY AND
          -------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

     4.6  Guarantor Affirmation and Consent.  By its signature below, Guarantor
          ---------------------------------
hereby acknowledges and consents to this Amendment No. 1 and the amendments to
the Lease provided herein, and the terms and provisions hereof.  Guarantor
hereby reaffirms as of the Amendment No. 1 Effective Date its covenants and
agreements contained in the Guaranty and the Lease, including as such covenants
and agreements may be modified by this Amendment No. 1, and further confirms
that as of the Amendment No. 1 Effective Date (both before and after giving
effect to theeffectiveness to this Amendment No. 1), the Guaranty is and shall
continue to be in full force and effect and is hereby ratified and confirmed in
all respects except that upon the effectiveness of this Amendment No. 1, all
references in the Guaranty to the "Operative Documents", "Lease", "thereunder",
"thereof", or words of like import shall mean the Lease, as the case may be, as
in effect and amended by this Amendment No. 1.

          4.7  Certificate Purchaser Confirmation.  Execution and delivery to
               ----------------------------------
the Administrative Agent by a Certificate Purchaser of a counterpart to this
Amendment No. 1 shall be deemed confirmation by such Certificate Purchaser that
(i) all conditions precedent in Section 3.1 have been fulfilled to the
                                -----------
satisfaction of such Certificate Purchaser and (ii) the decision of such
Certificate Purchaser to execute and deliver to the Administrative Agent an
executed counterpart to this Amendment No. 1 was made by such Certificate
Purchaser independently and without reliance on the Administrative Agent, the
Trustee or any other Certificate Purchaser as to the satisfaction of any
condition precedent set forth in Section 3.1.
                                 -----------

           [The remainder of this page is intentionally left blank.]

                                      -13-
<PAGE>

    IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
 be executed by their respective officers hereunto duly authorized as of the day
 and year first above written.

                                       CIRCUS CIRCUS LEASING, INC.,
                                       as Lessee

                                       By:          MICHAEL S. ENSIGN
                                           ------------------------------------
                                                    Michael S. Ensign,
                                            President, Treasurer and Secretary

                                     S-1
<PAGE>

                                       CIRCUS CIRCUS ENTERPRISES, INC.,
                                       as Guarantor

                                       By:    GLENN SCHAEFFER
                                           ------------------------------------
                                       Name:  Glenn Schaeffer
                                       Title: President, Chief Financial Officer
                                               & Treasurer

                                      S-2
<PAGE>

                                       FIRST SECURITY BANK, NATIONAL
                                       ASSOCIATION, not in its individual
                                       capacity except as expressly set forth
                                       herein, but solely as Trustee

                                       By:         NANCY M. DAHL
                                          -------------------------------------
                                       Name:       Nancy M. Dahl
                                       Title:      Vice President

                                      S-3
<PAGE>

                                      BANK OF AMERICA NATIONAL TRUST AND
                                      SAVINGS ASSOCIATION,
                                      as Administrative Agent and Lead Arranger

                                      By:          CHRISTINA LEE
                                         ---------------------------------------
                                      Name:        Christina Lee
                                      Title:       Vice President

                                      S-4
<PAGE>

                                       BA LEASING & CAPITAL CORPORATION,
                                       as Certificate Purchaser

                                       By:       SONIA T. DELEN
                                          -------------------------------------
                                       Name:     Sonia T. Delen
                                       Title:    Vice President

                                      S-5
<PAGE>

                                       PNC LEASING CORP.,
                                       as Syndication Agent and a Certificate
                                       Purchaser

                                       By:       ROBERT L. HEATH
                                          -------------------------------------
                                       Name:     Robert L. Heath
                                       Title:    Vice President

                                      S-6
<PAGE>

                                       SOCIETE GENERALE FINANCIAL
                                       CORPORATION,
                                       as Documentation Agent and a
                                       Certificate Purchaser

                                       By:       RICHARD W. CRANNELL, JR.
                                           ------------------------------------
                                       Name:     Richard W. Crannell, Jr.
                                       Title:    Vice President

                                      S-7
<PAGE>

                                       THE BANK OF NOVA SCOTIA,
                                       as Managing Agent and a Certificate
                                       Purchaser

                                       By:        ALAN PENDERGAST
                                           ------------------------------------
                                       Name:      Alan Pendergast
                                       Title:     Relationship Manager

                                      S-8
<PAGE>

                                       BANK OF SCOTLAND,
                                       as a Certificate Purchaser

                                       By:           ANNIE CHIN TAT
                                           -------------------------------------
                                       Name:         Annie Chin Tat
                                       Title:        Senior Vice President

                                      S-9
<PAGE>

                                       FLEET BANK N.A.,
                                       as a Certificate Purchaser

                                       By:          JOHN F. CULLMAN
                                           -----------------------------------
                                       Name:        John F. Cullman
                                       Title:       Senior Vice President

                                     S-10
<PAGE>

                                      KEYBANK NATIONAL ASSOCIATION,
                                      as a Certificate Purchaser

                                      By:       THOMAS A CRANDELL
                                          -------------------------------------
                                      Name:     Thomas A. Crandell
                                      Title:    Vice President

                                     S-11
<PAGE>

                                       CREDIT LYONNAIS LOS ANGELES BRANCH,
                                       as a Certificate Purchaser

                                       By:     DIANNE M. SCOTT
                                           ------------------------------------
                                       Name:   Dianne M. Scott
                                       Title:  First Vice President & Manager

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

                                     S-12
<PAGE>

                                       MICHIGAN NATIONAL BANK,
                                       as a Certificate Purchaser

                                       By:             JOHN M. BEBB
                                           ------------------------------------
                                       Name:           John M. Bebb
                                       Title:       Relationship Manager

                                     S-13
<PAGE>

                                       COMMERZBANK AKTIENGESELLSCHAFT,
                                       LOS ANGELES BRANCH,
                                       as a Certificate Purchaser

                                       By:          STEVEN F. LARSEN
                                          -------------------------------------
                                       Name:        Steven F. Larsen
                                       Title:       Vice President

                                       By:          KARLA WIRTH
                                           -------------------------------------
                                       Name:        Karla Wirth
                                       Title:       Assistant Treasurer

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