AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of January 1, 2007 (this
“Agreement”), between American Casino & Entertainment Properties LLC (the
“Company”), having an address at 2000 Las Vegas Boulevard South, Las Vegas,
Nevada 89104, and Mr. Richard P. Brown (“Employee”), having an address at 1795
Mezza Court, Henderson, Nevada 89012. THIS AGREEMENT AMENDS AND RESTATES IN ITS
ENTIRETY THE EMPLOYMENT AGREEMENT BETWEEN THE PARTIES DATED AS OF JANUARY 1,
2007.

1. Employment

Upon the terms and conditions hereinafter set forth, the Company hereby agrees
to employ Employee and Employee hereby agrees to become employed by the Company.
During the Term of Employment (as hereinafter defined), Employee shall be
employed in the position of President and Chief Executive Officer of the Company
and shall also serve in other positions of affiliates of the Company as may be
designated (the “Designated Affiliates”) from time to time by the board of
directors of the Company (the “Board”), provided that such Designated Affiliates
are engaged in businesses relating to gaming, casino or resort operation or
development (collectively, the “Gaming Business”). Employee shall perform such
duties as are specified from time to time by the Company, the Board and the
Designated Affiliates. Employee shall serve in such capacities at the pleasure
of the Board. Employee shall report to and be under the supervision of the
Company’s Board. Employee will also meet and work with executives of American
Property Investors, Inc. (“API”) and members of the board of directors of API.

During the Term of Employment, Employee shall devote all of his professional
attention, on a full time basis, to the business and affairs of the Company and
the Designated Affiliates, shall use his best efforts to advance the best
interest of the Company and the Designated Affiliates and shall comply with all
of the policies of the Company and the Designated Affiliates, including, without
limitation, such policies with respect to legal compliance, conflicts of
interest, confidentiality and business ethics as are from time to time in
effect.

Except as specifically provided herein, during the Term of Employment, Employee
shall not, without the prior written consent of the Company, directly or
indirectly (i) render services to, or otherwise act in a business or
professional capacity on behalf of or for the benefit of, any other Person (as
hereinafter defined) as an employee, advisor, independent contractor, agent,
consultant, representative or otherwise, whether or not compensated, (ii) plan,
negotiate or have discussions with any Person regarding, or otherwise attempt to
secure, future employment with any Person other than the Company or the
Acquiring Person (as hereinafter defined) or (iii) plan, take any actions in
furtherance of, or otherwise devote any time to, any future business opportunity
(except as otherwise provided in this Agreement), whether sponsored by Employee
or any other Person (the “Exclusivity Obligation”). However, nothing contained
herein shall restrict Employee from being involved in the business of horse
racing/breeding of thoroughbred horses (“Other Activity”), provided that (a)
Employee devotes his full professional attention to the business affairs of the
Company, its subsidiaries and of any affiliated entities to which the Company
has made his services available, (b) the Other Activity does not interfere with,
and Employee is otherwise in compliance with, Employee’s professional duties and
responsibilities hereunder, and (c) Employee otherwise cooperates with the
Company in connection with any information regarding the Other Activity that may
be requested or required by any licensing or other regulatory authorities.

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2. Term

The employment period shall commence as of January 1, 2007 and shall continue
through the period (the “Term of Employment”) ending on December 31, 2008 (the
“Expiration Date”), unless earlier terminated as set forth in this Agreement.

3. Compensation

For all services to be performed by Employee under this Agreement, during the
Term of Employment, Employee shall be compensated in the following manner:

(a) Base Compensation 

The Company will pay Employee a salary (the “Base Salary”) at an annual rate of
$625,000. The Base Salary shall be payable in accordance with the normal payroll
practice of the Company (but no less frequently than bi-weekly).

(b) Bonus Compensation

During the Term of Employment, Employee shall be eligible to receive an annual
bonus, as determined in the sole discretion of the Board (the “Bonus
Compensation”). The Bonus Compensation, if any, shall be computed based upon the
following formula of performance targets (“Targets”):

 
(i)
2007 bonus is conditioned on ACEP’s four current properties having aggregate
EBITDA of not less than $106.0 million, in each case for the fiscal year ended
December 31, 2007;

 
a.
If the aggregate 2007 EBITDA equals or exceeds $106.0 million but is less than
$111.0 million then the 2007 bonus shall be $93,750.

 
b.
If the aggregate 2007 EBITDA equals or exceeds $111.0 million but is less than
$113.95 million then the 2007 bonus shall be $93,750 + $75,000 for a total of
$168,750.

 

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1 Employee and the Company acknowledge and agree that these Targets are based
upon EBITDA forecasted in the 2007 budget submitted by the Company’s management
to API.
 
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c.
If the aggregate 2007 EBITDA equals or exceeds $113.95 million but is less than
$121.9 million then the 2007 bonus shall be $93,750 + $75,000 + $93,750 for a
total of $262,500; and

 
d.
If the 2007 EBITDA equals or exceeds $121.9 million then the 2007 bonus shall be
$262,500 + $ $125,000, for a total bonus of 387,500;

 

 
(ii)
Targets for 2008 EBITDA and amount of 2008 bonus shall be determined by the
Company in January 2008.

All calculations and determinations of any of the foregoing matters (including
the amount of Bonus Compensation, or any component thereof, including but not
limited to EBITDA or the achievement of any Target) will be made by the Company
in its reasonable discretion and will be final and binding on Employee, and
provided further will be adjusted by the Company to exclude the impact, as it
may determine, of extraordinary accounting items.

The allocation of the Bonus Compensation shall be deemed earned and to become
due on (i) December 31, 2007, with respect to 2007 Targets, provided that
Employee is employed in good standing as of such date, and provided further that
the Bonus Compensation with respect to the 2007 Targets shall not be payable by
the Company until February 28, 2008, and (ii) December 31, 2008, with respect to
2008 Targets, provided that Employee is employed in good standing as of such
date, and provided further that the Bonus Compensation with respect to the 2008
Targets shall not be payable by the Company until February 28, 2009.

(c) Taxes

All amounts paid by the Company to Employee under or pursuant to this Agreement,
including, without limitation, the Base Salary and any Bonus Compensation, or
any other compensation or benefits, whether in cash or in kind, shall be subject
to normal withholding and deductions imposed by any one or more local, state or
federal governments.

(d) Change of Control

(i) In the event that the Company enters into a binding contract for a Change of
Control transaction during the Term of Employment and Employee is employed in
good standing as of such date, then, if Employee has complied with the
requirements of clause (ii) below and Employee: (x) has not been terminated for
Cause or resigned prior to the Closing Date; or (y) if the Election (as defined
in clause (ii) below) has occurred, Employee has not been terminated for Cause
or resigned prior to the expiration of the Transition Period, then Employee
shall be paid a lump-sum bonus of $1,000,000 (the “Change of Control Payment”),
subject to and in accordance with Section 5(b) below.

(ii) Employee acknowledges and agrees that, in the event of a Change of Control
as a result of: (x) an acquisition of the equity of the Company or its direct or
indirect parent (whether by sale of equity interests, merger or otherwise), then
this Agreement will remain the obligation of the Company (or its successor) and
Employee’s obligations hereunder will remain in full force and effect; or (y) a
transfer of assets of the Company or its subsidiaries and in connection
therewith this Agreement is assigned by the Company, then this Agreement will
become the obligation of the assignee and Employee’s obligations hereunder will
(as such) remain in full force and effect. If, prior to the Closing Date, the
Company so elects (the “Election”) by giving written notice thereof to Employee,
then Employee shall provide, on a full time basis and in a professional manner,
during the Transition Period, such services to the Company, the acquiring Person
in such Change of Control transaction (the “Acquiring Person”) and their
respective designees as are necessary in all respects to permit a smooth,
professional transition of management (which may include, without limitation,
continuing to provide the services specified in this Agreement or such other
executive services as may be specified from time to time by the Company, the
Acquiring Person or their respective designees).

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(iii) It is understood and agreed that: (aa) if Employee becomes, directly or
indirectly, an employee of the Acquiring Person, then all of Employee’s salary,
benefits and other compensation shall be paid by the Acquiring Person; and (bb)
if Employee has entered into a new employment agreement with the Acquiring
Person then the term “Cause” shall be deemed for purposes of the foregoing
provision to have the meaning given such term in such new employment agreement.

(iv) Notwithstanding any provision of this Agreement to the contrary, (x)
following a Change of Control Employee shall not accrue any additional Bonus
Compensation under Section 3(b) for the calendar year 2007, and (y) any Bonus
Compensation or other benefits for the year commencing January 1, 2008 shall be
established in the sole and absolute discretion of the Board of Directors of the
Company.
 
4. Termination

This Agreement shall terminate (subject to Section 10(g) below) and the Term of
Employment shall end, on the first to occur of (each a “Termination Event”):
 

  (a) The Expiration Date;

     

 
(b)
The death of Employee or the total or partial disability that, in the judgment
of the Company, renders Employee, with or without reasonable accommodation,
unable to perform his essential job functions for the Company for a period of at
least 90 consecutive business days;

 
(c)
The discharge of Employee by the Company with or without Cause (as hereinafter
defined);

 
(d)
The resignation of Employee (and without limiting the effect of such
resignation, Employee agrees to provide the Company with not less than 30 days
prior written notice of his resignation); or

 
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(e)
Upon the later of: (x) a Change of Control; or (y) if the Election has been
delivered to Employee, then upon the expiration of the Transition Period.

The Company may discharge Employee at any time, for any reason or no reason,
with or without Cause, in which event Employee shall be entitled only to such
payments as are set forth in Section 5 below. As used herein, “Cause” is defined
as Employee’s: (i) failure to (x) perform the duties assigned to him or (y)
comply with the instructions given to him; (ii) personal misconduct or
insubordination; (iii) impairment due to alcohol or substance abuse; (iv)
conviction of a crime or being charged with a felony; (v) violation of a federal
or state securities law or regulation; (vi) commission of an act of moral
turpitude or dishonesty relating to the performance of his duties hereunder;
(vii) failure to comply with any of the terms of this Agreement; (viii) breach
of the Exclusivity Obligation or any of his obligations set forth in Section 6
or Section 7 below; (ix) any revocation or suspension by any state or local
authority of Employee’s required license(s) to serve in his position(s) with the
Company; or (x) any act or failure to act by Employee which causes any gaming or
other regulatory authority having jurisdiction over the Company, the Designated
Affiliates or any of their affiliates to seek any redress or remedy against
Employee, the Company, any Designated Affiliate or any of their affiliates. In
the case of clauses (i) and (vii) above, the Company will give Employee a
written notice of the alleged “Cause” and a 20-day period to cure prior to
termination, to the extent that the Company, in its sole discretion, determines
such conduct is curable.

5. Effect of Termination

In the event of termination of Employee’s employment hereunder, all rights of
Employee under this Agreement, including all rights to compensation, shall end
and Employee shall only be entitled to be paid the amounts set forth in this
Section 5 below.

 
(a)
In the event that the Term of Employment ends (i) for the reason set forth in
Section 4(a) above (i.e., Expiration Date), or (ii) for any of the reasons set
forth in Section 4(b) above (i.e. death or disability), or (iii) for the reason
set forth in Section 4(d) above (i.e. resignation), or (iv) due to the discharge
of Employee by the Company for Cause, then, in lieu of any other payments of any
kind (including, without limitation, any Severance Payment or Change of Control
Payment), Employee shall be entitled to receive, within fifteen (15) days
following the date on which the Termination Event in question occurred (the
“Clause (a) Termination Date”) any amounts of: (A) Base Salary due and unpaid to
Employee from the Company as of the Clause (a) Termination Date; and (B) Bonus
Compensation earned, vested, due and unpaid to Employee from the Company as of
the Clause (a) Termination Date (as determined below, and not on a pro rata
basis); and (C) any compensation due to Employee in respect of any accrued
vacation days that were not taken by Employee prior to the Clause (a)
Termination Date.

 
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(b)
In the event that the Term of Employment ends for the reason set forth in
Section 4(e) above (i.e., Change of Control or Election), then, in lieu of any
other payments of any kind (including, without limitation, any Severance
Payment), Employee shall be entitled to receive: (A) within fifteen (15) days
following the Closing Date, any amounts of Base Salary due and unpaid to
Employee from the Company as of the Clause (b) Termination Date, ; and (B) any
compensation due to Employee in respect of any accrued vacation days that were
not taken by Employee prior to the Clause (b) Termination Date; and (B) sixty
(60) days following the Closing Date (if Employee has complied with the
requirements of clause (ii) of Section 3(d) above), (1) Bonus Compensation
earned, vested, due and unpaid to Employee from the Company as of the Clause (b)
Termination Date (as determined below) and (2) the Change of Control Payment,
payment of which shall be conditioned upon Employee’s execution of an Employee
Severance and Release Agreement in a form similar to that shown in Exhibit A of
this Agreement; provided that the Change of Control Payment shall not be payable
to Employee if either of the following events has occurred: (1) if the Company
has delivered the Election to Employee, but Employee has been terminated for
Cause or resigns prior to the expiration of the Transition Period; or (2) if
Employee has been terminated for Cause or resigns prior to the Closing Date.

For purposes of this Section 5(b), Bonus Compensation shall be determined by
revising the final paragraph of Section 3(b) to provide that if a Change of
Control occurs in 2007, a pro rata determination of the Bonus Compensation for
such year, based on the period between January 1, 2007 and the Closing Date,
shall be made as shown in the examples on Schedule 1 hereto.

 
(c)
In the event that the Term of Employment ends due to the discharge of Employee
by the Company without Cause (which the Company is free to do at any time in its
sole and absolute discretion) then, in lieu of any other payments of any kind
(including, without limitation, any Change of Control Payment), Employee shall
be entitled to receive, within fifteen (15) days following the date on which the
Termination Event in question occurred (the “Clause (c) Termination Date”): (A)
any amounts of Base Salary due and unpaid to Employee from the Company as of the
Clause (c) Termination Date; (B) any amounts of Bonus Compensation earned,
vested, due and unpaid to Employee from the Company as of the Clause (c)
Termination Date (as determined below, and not on a pro rata basis); (C) any
compensation due to Employee in respect of any accrued vacation days that were
not taken by Employee prior to the Clause (c) Termination Date; and (D) a
lump-sum payment in the amount equal to one year’s then current Base Salary (the
“Severance Payment”), payment of which shall be conditioned upon Employee’s
execution of an Employee Severance and Release Agreement in a form similar to
that shown in Exhibit A of this Agreement. Notwithstanding the foregoing, if all
of the following occur, then Employee shall be entitled to receive, within
fifteen (15) days following the Closing Date, an additional payment equal to the
difference between $1,000,000 and the Severance Payment that was previously paid
to Employee: (i) Employee is employed in good standing with the Company through
and including the date that the Company enters into a binding contract for a
Change of Control transaction (the “Execution Date”); and (ii) Employee is
terminated without Cause either (1) after the Execution Date but prior to the
Closing Date, or (2) after the Election is made but prior to the end of the
Transition Period; and (iii) Employee has complied with clause (ii) of Section
3(d) from the beginning of a sale or auction process that is reasonably likely
to lead to a Change of Control (the “Sale Process”) through the date of
termination of Employee’s employment; and (iv) the Closing Date occurs on or
prior to December 31, 2008; and (v) the party with whom the Company engages in a
Change of Control transaction is a party with respect to which the Employee was
actively involved in the negotiation of the Sale Process prior to the date of
termination of Employee’s employment; provided further that the Employee shall
execute and deliver a “bring down” release as a condition for the receipt of
such payment.

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For the purpose of this Paragraph 5, any Bonus Compensation shall be deemed
earned, vested and to become due, (a) with respect to the 2007 Targets, on
December 31, 2007, provided that Employee is employed in good standing by the
Company as of such date, and provided further that the Bonus Compensation with
respect to the 2007 Targets shall not be payable by the Company to Employee
until February 28, 2008, and (b) with respect to the 2008 Targets, on December
31, 2008, provided Employee is employed in good standing by the Company as of
such date, and provided further that the Bonus Compensation with respect to the
2008 Targets shall not be payable by the Company to Employee until February 28,
2009.

Employee acknowledges and agrees that, notwithstanding any provisions to the
contrary contained in this Agreement, in the event that Employee becomes
entitled to: (x) a Change of Control Payment, then Employee shall not be
entitled to any payments under Section 5(a) or 5(c); or (y) a Severance Payment
or other payment pursuant to Section 5(a) or 5(c), then Employee shall not be
entitled to any Change of Control Payment.

6. Non-Disclosure

During the Term of Employment and at all times thereafter, Employee shall hold
in a fiduciary capacity for the benefit of the Company, each Designated
Affiliate and each of their affiliates, respectively, all secret or confidential
information, knowledge or data, including, without limitation, trade secrets,
identity of investments, identity of contemplated investments, business
opportunities, valuation models and methodologies, relating to the business of
the Company, the Designated Affiliates or their affiliates, and their respective
business as, (i) obtained by Employee at any time during Employee’s employment
by the Company and (ii) not otherwise in the public domain (“Confidential
Information”). Employee also agrees to keep confidential and not disclose to any
unauthorized Person any personal information regarding any controlling Person of
the Company, the Designated Affiliates or any of their affiliates and any member
of the immediate family of any such Person (and all such personal information
shall be deemed “Confidential Information” for the purposes of this Agreement).
Employee shall not, without the prior written consent of the Company: (i) except
to the extent compelled pursuant to the order of a court or other body having
jurisdiction over such matter or based upon the advice of counsel that such
disclosure is legally required, communicate or divulge any Confidential
Information to anyone other than the Company and those designated by the
Company; or (ii) use any Confidential Information for any purpose other than the
performance of his duties as an employee of the Company. Employee will assist
the Company, at the Company’s expense, in obtaining a protective order, other
appropriate remedy or other reliable assurance that confidential treatment will
be accorded any Confidential Information disclosed pursuant to the terms of this
Agreement.

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In no event shall Employee during or after his employment hereunder, disparage
the Company, the Designated Affiliates, any controlling Person of the Company,
the Designated Affiliates, their respective affiliates and family members or any
of their respective officers, directors or employees.

All processes, technologies, intellectual property and inventions (collectively,
“Inventions”) conceived, developed, invented, made or found by Employee, alone
or with others, during the Term of Employment, whether or not patentable and
whether or not on the Company’s time or with the use of the Company’s facilities
or materials, shall be the property of the Company and shall be promptly and
fully disclosed by Employee to the Company. Employee shall perform all necessary
acts (including, without limitation, executing and delivering any confirmatory
assignments, documents, or instruments requested by the Company) to vest title
to any such Inventions in the Company and to enable to the Company, at its
expense, to secure and maintain domestic and/or foreign patents or any other
rights for such Inventions.

7. Non-Compete

(a) During the Term of Employment and, unless Employee’s employment is
terminated

(x) by the Company without Cause, in which case this Section 7(a) shall
terminate automatically and without notice, or

(y) by the Company in connection with a Change of Control, in which case this
Section 7(a) shall terminate automatically and without notice 60 days following
the Closing Date, or

(z) for the reason set forth in Section 4(a) above (i.e., Expiration Date), in
which case this Section 7(a) shall terminate automatically and without notice
if, but only if Employee has delivered to the Company, no later than ninety (90)
days prior to the Expiration Date, a written notice, in form and substance
satisfactory to the Company, certifying that (i) Employee’s employment with the
Company shall terminate on the Expiration Date, (ii) Employee has at all times
during the Term of Employment complied with the Exclusivity Obligation and (iii)
Employee shall, from the date of such notice through and including the
Expiration Date, continue to comply with the Exclusivity Obligation,

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for a period of one (1) year following the last day of Employee’s employment by
the Company, Employee will not, either directly or indirectly, as principal,
agent, owner, employee, partner, investor, shareholder (other than solely as a
holder of not more than 1% of the issued and outstanding shares of any public
corporation), consultant, advisor or otherwise howsoever own, operate, carry on
or engage in the operation of or have any financial interest in or provide,
directly or indirectly, financial assistance to or lend money to or guarantee
the debts or obligations of any Person carrying on or engaged in the hotel or
casino business in or within one hundred (100) miles of the Stratosphere Hotel
and Casino.

For the avoidance of doubt, nothing in this Agreement will prohibit Employee
from investing in the securities of private companies in which he does not
participate in the management (either as an employee, officer or director),
provided that such investment has been cleared in accordance with all investment
or insider trading policies applicable to Employee or to the Other Activity as
outlined in Section 1 of this Agreement.

(b) Employee covenants and agrees with the Company and its subsidiaries that,
during Employee’s employment by the Company and for one (1) year following the
last day of Employee’s employment by the Company, Employee shall not directly,
or indirectly, for himself or for any other Person:

 
(i)
solicit, interfere with or endeavor to entice away from the Company, any
Designated Affiliate or any of their subsidiaries or affiliates, any customer,
client or any Person in the habit of dealing with any of the foregoing;

 
(ii)
interfere with, entice away or otherwise attempt to obtain the withdrawal of any
employee of the Company, any Designated Affiliate or any of their subsidiaries
or affiliates; or

 
(iii)
advise any Person not to do business with the Company, any Designated Affiliate
or any of their subsidiaries or affiliates.

Employee represents to and agrees with the Company that the enforcement of the
restrictions contained in Section 6 and Section 7 (the Non-Disclosure and
Non-Compete sections respectively) would not be unduly burdensome to Employee
and that such restrictions are reasonably necessary to protect the legitimate
interests of the Company. Employee agrees that the remedy of damages for any
breach by Employee of the provisions of either of these sections may be
inadequate and that the Company shall be entitled to injunctive relief, without
posting any bond. In the event the terms of this Section 7 shall be determined
by any court of competent jurisdiction to be unenforceable by reason of its
extending for too great a period of time or over too great a geographical area
or by reason of its being too extensive in any other respect, it will be
interpreted to extend only over the maximum period of time for which it may be
enforceable, over the maximum geographical area as to which it may be
enforceable, or to the maximum extent in all other respects as to which it may
be enforceable, all as determined by such court in such action. This section
constitutes an independent and separable covenant that shall be enforceable
notwithstanding any right or remedy that the Company may have under any other
provision of this Agreement or otherwise.

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8. Benefits

During the Term of Employment, Employee shall be entitled to receive certain
healthcare and other similar employee welfare benefits (including eligibility to
participate in the Executive Medical Reimbursement Plan provided by the Company)
comparable to those received by other employees of the Company at a similar pay
level and/or position with the Company as such may be provided by the Company in
its sole and absolute discretion from time to time, which shall include 20
business days paid vacation per calendar year, which shall accrue at the rate of
1.67 days per each calendar month.

In the event that, during the Term of Employment, the Company awards to its
executives stock options or restricted stock in anticipation of a public
offering, Employee shall be eligible to receive an award of such options or
restricted stock comparable to that received by other employees at a similar pay
level and/or position with the Company; provided, however, that the decision to
make any such award to Employee and the amount of any such award shall be
subject to the review and approval of the Board, in its sole and absolute
discretion. This provision will not be applicable in the event of a Change of
Control and will not be binding on the Company or any Acquiring Person following
the occurrence of a Change of Control.

9. Definitions

For purposes of this Agreement only, the following definitions shall apply:

"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.

“Change of Control” means: (i) the consummation of any transaction (including,
without limitation, any merger or consolidation), the result of which is that
any Person, other than Carl Icahn or the Related Parties, becomes the Beneficial
Owner, directly or indirectly, of more than 50% of the Voting Stock of the
Company, measured by voting power rather than number of shares; or (ii) the
sale, transfer or other disposition of all or substantially all of the assets of
the Company; or (iii) the sale, transfer or other disposition of all of the
Company’s interest in the Stratosphere Las Vegas Hotel & Casino (the
“Stratosphere”); it being understood and agreed that the direct or indirect
sale, transfer or other disposition of any one or more individual properties of
the Company shall in no event constitute a Change of Control under the foregoing
clause (ii), unless such transaction includes the sale, transfer or other
disposition of all of the Company’s interest in the Stratosphere.

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“Closing Date” means the later of the following dates: (i) the closing of the
Change of Control transaction; or (ii) the transfer of funds from the Change of
Control transaction to Carl Icahn or the Related Parties.

“EBITDA” means, with respect to the Company net income, plus (i) net interest
expense (which includes interest expense and interest income), (ii) provision
for income tax (or less income tax benefit), and (iii) depreciation and
amortization, calculated in a manner consistent with the preparation of the
Company’s most recent financial statements.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor thereto.

“Person” means any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act, other than employee benefit
plans sponsored or maintained by the Company or by entities controlled by the
Company.

“Related Parties" means: (1) Carl Icahn, any spouse and any child, stepchild,
sibling or descendant of Carl Icahn; (2) any estate of Carl Icahn or of any
person identified in clause (1); (3) any person who receives a beneficial
interest in any estate identified in clause (2) to the extent of such interest;
(4) any executor, personal administrator or trustee who holds such beneficial
interest in the Company for the benefit of, or as fiduciary for, any person
identified in clauses (1), (2) or (3) to the extent of such interest; (5) any
corporation, partnership, limited liability company, trust, or similar entity,
directly or indirectly owned or controlled by Carl Icahn or any other person or
persons identified in clauses (1), (2), (3) or (4); and (6) any not-for-profit
entity not subject to taxation pursuant to Section 501(c)(3) of the Internal
Revenue Code or any successor provision to which Carl Icahn or any person
identified in clauses (1), (2), (3) or (4) above contributes his beneficial
interest in the Company or to which such beneficial interest passes pursuant to
such person’s will.

“Transition Period” means 60 days following a Change of Control.

"Voting Stock" means, with respect to any Person that is (a) a corporation, any
class or series of capital stock of such Person that is ordinarily entitled to
vote in the election of directors thereof at a meeting of stockholders called
for such purpose, without the occurrence of any additional event or contingency,
(b) a limited liability company, membership interests entitled to manage, or to
elect or appoint the Persons that will manage the operations or business of the
limited liability company, or (c) a partnership, partnership interests entitled
to elect or replace the general partner thereof.

10. Miscellaneous

 
(a)
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all previous written, and all
previous or contemporaneous oral negotiations, understandings, arrangements, and
agreements.

 
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(b)
This Agreement and all of the provisions hereof shall inure to the benefit of
and be binding upon the legal representatives, heirs, distributees, successors
(whether by merger, operation of law or otherwise) and assigns of the parties
hereto; provided, however, that Employee may not delegate any of Employee’s
duties hereunder, and may not assign any of Employee’s rights hereunder, without
the prior written consent of the Company, which may be withheld in its sole and
absolute discretion. Without limiting the foregoing, Employee acknowledges and
agrees that the Company shall have the right (but no obligation) to assign this
Agreement, in connection with or in anticipation of a Change of Control, any
sale or transfer of assets or equity or otherwise, to any Person (including,
without limitation, to an Acquiring Person or to any Person that acquires
directly or indirectly any one or more properties of the Company). If elected by
the Company, upon any such assignment, all references herein to the Company
shall be deemed instead to be references to the assignee and/or its designee(s).

 
(c)
This Agreement will be interpreted and the rights of the parties determined in
accordance with the laws of the United States applicable thereto and the
internal laws of the State of New York.

 
(d)
Employee covenants and represents that he is not a party to any contract,
commitment or agreement, nor is he subject to, or bound by, any order, judgment,
decree, law, statute, ordinance, rule, regulation or other restriction of any
kind or character, which would prevent or restrict him from entering into and
performing his obligations under this Agreement, including without limitation
any contract, commitment, agreement, rule or regulation relating to the Other
Activity.

 
(e)
Employee acknowledges that he has had the assistance of legal counsel in
reviewing and negotiating this Agreement.

 
(f)
This Agreement shall be deemed drafted equally by both the parties. Its language
shall be construed as a whole and according to its fair meaning. Any presumption
or principle that the language is to be construed against any party shall not
apply. The headings in this Agreement are only for convenience and are not
intended to affect construction or interpretation. Any references to paragraphs,
subparagraphs, sections or subsections are to those parts of this Agreement,
unless the context clearly indicates to the contrary.

 
(g)
This Agreement and all of its provisions, other than the provisions of Section
5, Section 6, Section 7 and Section 10 hereunder (which shall survive
termination), shall terminate upon Employee ceasing to be an employee of the
Company for any reason.

 
Page 12 of 20

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(h)
In the event of the death of Employee during the Term of Employment, Employee’s
heir shall be entitled to receive all payments otherwise earned, vested, due and
unpaid to Employee from the Company pursuant to the terms and conditions of this
Agreement as of the date of Employee’s death.

 
(i)
Employee acknowledges and agrees that he shall be solely responsible for the
payment of all federal, state and other income taxes, excise taxes and other
taxes that may be payable from time to time by Employee with respect to all
payments or benefits earned or received by or payable to Employee under this
Agreement (whether consisting of Base Salary, Bonus Compensation, Severance
Payment, Change of Control Payment, or otherwise) and shall not be entitled to
receive any “gross-up payments” or other additional payments from the Company or
its affiliates on account of, with respect to, in mitigation of, or as a set-off
against, such taxes. Without limiting the foregoing, if it is determined that
any amount, right or benefit paid or payable (or otherwise provided or to be
provided) to Employee by the Company or any of its affiliates under this
Agreement or any other plan, program or arrangement under which Employee
participates or is a party (whether consisting of Base Salary, Bonus
Compensation, Severance Payment, Change of Control Payment, or otherwise), would
constitute an “excess parachute payment” within the meaning of Section 280G of
the Internal Revenue Code, as amended (the “Code”), subject to the excise tax
imposed by Section 4999 of the Code, as amended from time to time (the “Excise
Tax”), then Employee shall be solely responsible for the payment of the Excise
Tax and shall not be entitled to receive any “gross-up payments” or other
additional payments from the Company or its affiliates on account of, with
respect to, in mitigation of, or as a set-off against, such Excise Tax.

Page 13 of 20

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American Casino & Entertainment Properties LLC                 By: /s/ Denise
Barton         Name: Denise Barton         Title: CFO      

 

EMPLOYEE:                 By: /s/ Richard P. Brown         Richard P. Brown    
 

 
[Signature page to Employment Agreement between American Casino & Entertainment
Properties LLC and Richard P. Brown]

Page 14 of 20

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EXHIBIT A

 
DRAFT

 
____________, 200__

Employee
[Address]

Re: Separation Agreement and Release of Claims

Dear _________:

Reference is hereby made to your Employment Agreement with American Casino &
Entertainment Properties LLC (ACEP) (the “Company”), dated _______, 2007 (the
“Employment Agreement”).
 
This letter agreement (this “Agreement”), upon your signature, will constitute
the agreement between you and the Company on the terms of your separation from
employment with the Company.
 

 
1.
Your employment with the Company will be terminated effective ___________,
200__, and you will be paid the applicable amounts set forth in the Employment
Agreement.

 

 
2.
You agree that this consideration exceeds any payment, benefit, or other thing
of value to which you otherwise would be entitled to absent this Agreement and
the Employment Agreement.

 

 
3.
As consideration and inducement to the Company to grant you the payment
described in paragraph 1 above, you, for yourself, your heirs, executors,
administrators and assigns (collectively, the “Releasors”), unconditionally
release the Company, its parent, members, subsidiaries and affiliates, and its
officers, directors, managers, agents and employees, including without
limitation Carl C. Icahn (collectively, the “Releasees”), from any claims,
charges, complaints or grievances of any nature whatsoever whether known or
unknown, which you or any other Releasor has or ever have had against any
Releasee by reason of any actual or alleged act, omission, transaction,
practice, conduct, occurrence, or other matter up to and including the
“effective date” of this Agreement, as defined in paragraph 10 below, including
but not limited to, (i) those arising under Title VII of the Civil Rights Act of
1964, as amended, 42 U.S.C. § 1981, the Fair Labor Standards Act, the Equal Pay
Act, the Age Discrimination in Employment Act, as amended, the Americans with
Disabilities Act, the Family Medical Leave Act, the Employee Retirement Income
Security Act of 1974, the Civil Rights Act of 1991, as amended, the Worker
Adjustment and Retraining Notification Act, as well as any other federal, state
or local law (statutory or decisional), regulation or ordinance, and (ii) any
tort and/or contract claims, including any claims of wrongful discharge,
defamation, emotional distress, nonphysical injury, personal injury or sickness
or other harm. You further agree not to institute any legal actions against any
Releasee for any claim arising out of your employment or the termination
thereof, excluding any claim to enforce your rights under this Agreement or for
state unemployment benefits. You represent that you have not filed any
complaints, claims, charges or actions against any Releasee with any federal,
state or local agency or court based on actions occurring at any time up to the
date of your execution of this Agreement.

 
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4.
You agree to keep confidential and not to disclose to persons other than your
family members, attorneys, accountants, personal advisors or authorities (as
required) the facts and terms of this Agreement and the discussions leading up
to the preparation and signature of this Agreement.

 

 
5.
You agree not to disclose any information (whether business or personal), trade
secrets, knowledge or data relating to the business of the Company or its
affiliates or relating to the person or persons who control the Company,
obtained by you in the course of employment with the Company. You agree to not,
without prior written consent of the Company, except to the extent compelled
pursuant to the order of a court or other body having jurisdiction over such
matter, communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by the Company. To the extent that
you are requested to divulge such information and you believe that you are
required to do so, you will immediately notify the Company of the facts and
circumstances thereof and cooperate with the Company if it determines to attempt
to assert that you are not so required.

 

 
6.
You agree that all processes, technologies and inventions including new
contributions, improvements, ideas, discoveries, agreements, contracts,
trademarks or trade names conceived, developed, invented, made or found by you
alone or with other employees, during the period of your employment by the
Company shall be and remain property of the Company.

 

 
7.
You agree and acknowledge that should you violate any term of this Agreement,
the amount of damages that the Company, or any individual named or acknowledged
in Section 3 would suffer as a result of such violation would be difficult to
ascertain. You further agree and acknowledge that in the event of a breach of
any term of this Agreement, the Company’s duty to provide you with any payments
pursuant to this Agreement shall immediately cease, and, in addition to
injunctive relief or any other damages, the Company, or individuals as outlined
in this section above and in Section 3, may recover all consideration paid
pursuant to this Agreement, as well as all costs and expenses incurred by the
Company in enforcing this Agreement or defending against a suit brought in
violation of this Agreement, including damages and reasonable attorneys’ fees.

 
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8.
This Agreement and the Employment Agreement sets forth the entire agreement
between you and the Company. There are no other written or verbal agreements.

 

 
9.
You have forty five (45) days to consider this Agreement from the date that it
was first given to you, although you may accept it at any time within the forty
five (45) day period. You are advised to consult with an attorney to review this
Agreement.

 

 
10.
You have seven (7) days after signing this Agreement to revoke it by notifying
_________ in writing, of such revocation within the seven (7) day period.
However, if you do not revoke the agreement, it will become effective on the
eighth day after you sign it (the “effective date”). To accept this Agreement,
please date and sign this Agreement and return it to ___________ - _________ of
American Casino & Entertainment Properties LLC (ACEP) c/o the Stratosphere
Hotel, 2000 Las Vegas Blvd. S., Las Vegas, NV 89104. (An additional copy is
enclosed for your records.)

 

 
11.
Notwithstanding any provisions to the contrary set forth in the Employment
Agreement (including, without limitation, Sections 5(b) and 5(c) thereof), you
hereby agree that no Change of Control Payment (as such term is defined in the
Employment Agreement) or Severance Payment (as such term is defined in the
Employment Agreement) shall be payable to you unless and until the “effective
date” of this Agreement, as defined in paragraph 10 above, shall have occurred. 

 

        American Casino & Entertainment Properties, LLC  
   
   
    By:      

--------------------------------------------------------------------------------

Name:   Title 

 
Page 17 of 20

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I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT AND UNDERSTAND ALL OF
ITS TERMS, INCLUDING THE FULL AND FINAL RELEASE OF CLAIMS SET FORTH HEREIN. I
FURTHER ACKNOWLEDGE THAT I HAVE VOLUNTARILY ENTERED INTO THIS AGREEMENT, THAT I
HAVE NOT RELIED UPON ANY REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET
FORTH IN THIS AGREEMENT AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO HAVE THIS
AGREEMENT REVIEWED BY MY ATTORNEY. I ALSO ACKNOWLEDGE THAT I HAVE BEEN AFFORDED
A REASONABLE AMOUNT OF TIME TO CONSIDER THIS AGREEMENT. I FURTHER ACKNOWLEDGE
THAT THE WAIVER AND RELEASE IN THIS AGREEMENT IS BEING REQUESTED IN CONNECTION
WITH THE CESSATION OF MY EMPLOYMENT WITH THE COMPANY AND IN EXCHANGE FOR MY
RECEIPT OF CONSIDERATION TO WHICH I OTHERWISE WOULD NOT BE ENTITLED.
 

          Dated:                   Signature:      

 
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SCHEDULE 1

Examples for Section 5(b)

Assume a Closing Date of October 31, 2007 or after 83.3% (10/12th) of the year
would have been completed:

(a) Assume EBITDA for this 10 month period is equals or exceeds $91.9 million
but is less than $96.2 million

Employee is entitled to Bonus Compensation for that portion of the year
completed or 83.3%:
 
The full year Bonus Compensation for this range would have been $93,750,
accordingly:

$93,750 x 83.3% partial year = $78,095 bonus
 
(b) Assume EBITDA for this 10 month period equals or exceeds $96.2 million but
is less then $98.8 million

Employee is entitled to Bonus Compensation for that portion of the year
completed or 83.3%:
 
The full year Bonus Compensation for this range would have been $168,752,
accordingly:

$168,750. x 83.3% partial year = $140,570 bonus

(c) Assume EBITDA equals or exceeds between $98.8 million but is less than
$105.6 million, then Bonus Compensation would be determined as follows:

Employee is entitled to Bonus Compensation for that portion of the year
completed or 83.3%:

The full year Bonus Compensation for this range would have been $262,500,
accordingly:

            $262,500.00 x 83.3% partial year = $218,663 bonus.

(d) Assume EBITDA equals or exceeds $105.6 million, then Bonus Compensation
would be determined as follows:

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Employee is entitled to Bonus Compensation for that portion of the year
completed or 83.3%:

The full year Bonus Compensation for this range would have been $387,500;
accordingly:
 
$387,500 x 83.3% partial year = $322,788
 
(e) Assume actual EBITDA for this 10 month period is $91.4 million

Actual EBITDA is 99.5% of budget and does not meet Bonus Compensation Target.
Therefore, no Bonus Compensation paid.

(f) Assume actual EBITDA for this 10 month period is $91.4 million but EBITDA is
ahead of budget for November and December and totals $107 million for 2007

Actual EBITDA is 99.5% of budget at time of sale and does not meet Bonus
Compensation Target. Therefore, no Bonus Compensation paid. The fact that the
annual budget is met as a result of above budget months in November and December
is irrelevant.
 
If closing takes place before the 15th of the month the next earlier completed
month will be used for bonus calculations

Partial year EBITDA Targets and applicable bonus payout ranges month by month,
assuming closing as of the end of each month.

Cumulative
Ebitda
Targets
           
0-4.7169%
4.7169-7.499%
7.5-14.999%
15% and over
   
$93,750
+75,000
+93,750
+125,000
   
(millions)
’07 Budget
         
January
$ 7.6
$7.9
$8.1
$8.7
   
February
17.9
18.8
19.3
20.6
   
March
31.6
33.1
34.0
36.4
   
April
43.3
45.3
46.5
49.8
   
May
53.1
55.7
57.2
61.2
   
June
60.7
63.6
65.2
69.8
   
July
68.1
71.3
73.2
78.3
   
August
75.3
78.9
81.0
86.7
   
September
82.8
86.7
89.0
95.2
   
October
91.9
96.2
98.8
105.6
   
November
99.3
104.0
106.8
114.2
   
December
106.0
111.0
114.0
121.9
   

 
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