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                                                                    EXHIBIT 10.2
 
                           INDEMNIFICATION AGREEMENT


     This Indemnification Agreement made and entered into this 9th day of March,
1998 ("Agreement"), by and between Patriot American Hospitality, Inc., a
Delaware corporation (the "Company," which term shall include, where
appropriate, any Entity (as hereinafter defined) controlled directly or
indirectly by the Company) and Lawrence S. Jones ("Indemnitee"):

     WHEREAS, it is essential to the Company that it be able to retain and
attract as officers the most capable persons available;

     WHEREAS, increased corporate litigation has subjected officers to
litigation risks and expenses, and the limitations on the availability of
directors and officers liability insurance have made it increasingly difficult
for the Company to attract and retain such persons;

     WHEREAS, the Company's by-laws require it to indemnify its officers to the
fullest extent permitted by law and permit it to make other indemnification
arrangements and agreements;

     WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of any such by-laws or any change in the ownership of the
Company or the composition of its Board of Directors); and

     WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in entering into an employment agreement with the Company:

     NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

     1.   DEFINITIONS.

          (a)  "Corporate Status" describes the status of a person who is
          serving or has served (i) as a director or officer of the Company,
          (ii) in any capacity with respect to any employee benefit plan of the
          Company, or (iii) as a director, partner, trustee, officer, employee,
          or agent of any other Entity at the request of the Company. For
          purposes of subsection (iii) of this Section 1(a), an officer or
          director of the Company who is serving or has served as a director,
          partner, trustee, officer, employee or agent of a Subsidiary shall be
          deemed to be serving at the request of the Company.

          (b)  "Entity" shall mean any corporation, partnership, limited
          liability company, joint venture, trust, foundation, association,
          organization or other legal entity.
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          (c)  "Expenses" shall mean all fees, costs and expenses incurred in
          connection with any Proceeding (as defined below), including, without
          limitation, attorneys' fees, disbursements and retainers (including,
          without limitation, any such fees, disbursements and retainers
          incurred by Indemnitee pursuant to Sections 10 and 11(c) of this
          Agreement), fees and disbursements of expert witnesses, private
          investigators and professional advisors (including, without
          limitation, accountants and investment bankers), court costs,
          transcript costs, fees of experts, travel expenses, duplicating,
          printing and binding costs, telephone and fax transmission charges,
          postage, delivery services, secretarial services, and other
          disbursements and expenses.

          (d)  "Indemnifiable Expenses," "Indemnifiable Liabilities" and
          "Indemnifiable Amounts" shall have the meanings ascribed to those
          terms in Section 3(a) below.

          (e)  "Liabilities" shall mean judgments, damages, liabilities, losses,
          penalties, excise taxes, fines and amounts paid in settlement.

          (f)  "Proceeding" shall mean any threatened, pending or completed
          claim, action, suit, arbitration, alternate dispute resolution
          process, investigation, administrative hearing, appeal, or any other
          proceeding, whether civil, criminal, administrative, arbitrative or
          investigative, whether formal or informal, including a proceeding
          initiated by Indemnitee pursuant to Section 10 of this Agreement to
          enforce Indemnitee's rights hereunder.

          (g)  "Subsidiary" shall mean any corporation, partnership, limited
          liability company, joint venture, trust or other Entity of which the
          Company owns (either directly or through or together with another
          Subsidiary of the Company) either (i) a general partner, managing
          member or other similar interest or (ii) (A) 50% or more of the voting
          power of the voting capital equity interests of such corporation,
          partnership, limited liability company, joint venture or other Entity,
          or (B) 50% or more of the outstanding voting capital stock or other
          voting equity interests of such corporation, partnership, limited
          liability company, joint venture or other Entity.

     2.   SERVICES OF INDEMNITEE.  In consideration of the Company's covenants
and commitments hereunder, Indemnitee agrees to serve or continue to serve as an
executive officer of the Company.  However, this Agreement shall not impose any
obligation on Indemnitee or the Company to continue Indemnitee's service to the
Company beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.

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     3.   AGREEMENT TO INDEMNIFY.  The Company agrees to indemnify Indemnitee as
follows:

          (a)  Subject to the exceptions contained in Section 4(a) below, if
          Indemnitee was or is a party or is threatened to be made a party to
          any Proceeding (other than an action by or in the right of the
          Company) by reason of Indemnitee's Corporate Status, Indemnitee shall
          be indemnified by the Company against all Expenses and Liabilities
          incurred or paid by Indemnitee in connection with such Proceeding
          (referred to herein as "Indemnifiable Expenses" and "Indemnifiable
          Liabilities," respectively, and collectively as "Indemnifiable
          Amounts").

          (b)  Subject to the exceptions contained in Section 4(b) below, if
          Indemnitee was or is a party or is threatened to be made a party to
          any Proceeding by or in the right of the Company to procure a judgment
          in its favor by reason of Indemnitee's Corporate Status, Indemnitee
          shall be indemnified by the Company against all Indemnifiable
          Expenses.

     4.   EXCEPTIONS TO INDEMNIFICATION.  Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than the following:

          (a)  If indemnification is requested under Section 3(a) and it has
          been adjudicated finally by a court of competent jurisdiction that, in
          connection with the subject of the Proceeding out of which the claim
          for indemnification has arisen, Indemnitee failed to act (i) in good
          faith and (ii) in a manner Indemnitee reasonably believed to be in or
          not opposed to the best interests of the Company, or, with respect to
          any criminal action or proceeding, Indemnitee had reasonable cause to
          believe that Indemnitee's conduct was unlawful, Indemnitee shall not
          be entitled to payment of Indemnifiable Amounts hereunder.

          (b)  If indemnification is requested under Section 3(b) and

                    (i)  it has been adjudicated finally by a court of competent
                    jurisdiction that, in connection with the subject of the
                    Proceeding out of which the claim for indemnification has
                    arisen, Indemnitee failed to act (A) in good faith and (B)
                    in a manner Indemnitee reasonably believed to be in or not
                    opposed to the best interests of the Company, Indemnitee
                    shall not be entitled to payment of Indemnifiable Expenses
                    hereunder; or

                    (ii) it has been adjudicated finally by a court of competent
                    jurisdiction that Indemnitee is liable to the Company with
                    respect to any claim, issue or matter involved in the
                    Proceeding out of which the claim for indemnification has
                    arisen, including, without limitation, a claim that
                    Indemnitee received an improper personal

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                    benefit, no Indemnifiable Expenses shall be paid with
                    respect to such claim, issue or matter unless the Court of
                    Chancery or another court in which such Proceeding was
                    brought shall determine upon application that, despite the
                    adjudication of liability, but in view of all the
                    circumstances of the case, Indemnitee is fairly and
                    reasonably entitled to indemnity for such Indemnifiable
                    Expenses which such court shall deem proper.

     5.   PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS.  Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Amounts for
which Indemnitee seeks payment under Section 3 of this Agreement and a short
description of the basis for the claim.  The Company shall pay such
Indemnifiable Amounts to Indemnitee within twenty (20) calendar days of receipt
of the request.  At the request of the Company, Indemnitee shall furnish such
documentation and information as are reasonably available to Indemnitee and
necessary to establish that Indemnitee is entitled to indemnification hereunder.

     6.   INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL.  Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.  If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved claim, issue
or matter.  For purposes of this Agreement, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.
 
     7.   EFFECT OF CERTAIN RESOLUTIONS.  Neither the settlement or termination
of any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create an adverse presumption
that Indemnitee is not entitled to indemnification hereunder.  In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal action or proceeding, had reasonable cause to
believe that Indemnitee's action was unlawful.

     8.   AGREEMENT TO ADVANCE EXPENSES; CONDITIONS.  The Company shall pay to
Indemnitee all Indemnifiable Expenses incurred by Indemnitee in connection with
any Proceeding, including a Proceeding by or in the right of the Company, in
advance of the final disposition of such Proceeding.  To the extent required by
Delaware law, Indemnitee hereby undertakes to repay the amount of Indemnifiable
Expenses paid to Indemnitee if it is finally 

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determined by a court of competent jurisdiction that Indemnitee is not entitled
under this Agreement to indemnification with respect to such Expenses. This
undertaking is an unlimited general obligation of Indemnitee.

     9.   PROCEDURE FOR ADVANCE PAYMENT OF EXPENSES.  Indemnitee shall submit to
the Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses.  Payment of Indemnifiable Expenses under Section 8 shall be made no
later than twenty (20) calendar days after the Company's receipt of such
request.

     10.  REMEDIES OF INDEMNITEE.

          (a)  Right to Petition Court. In the event that Indemnitee makes a
          request for payment of Indemnifiable Amounts under Sections 3 and 5
          above or a request for an advancement of Indemnifiable Expenses under
          Sections 8 and 9 above and the Company fails to make such payment or
          advancement in a timely manner pursuant to the terms of this
          Agreement, Indemnitee may petition the Court of Chancery to enforce
          the Company's obligations under this Agreement.

          (b)  Burden of Proof. In any judicial proceeding brought under Section
          10(a) above, the Company shall have the burden of proving that
          Indemnitee is not entitled to payment of Indemnifiable Amounts
          hereunder.

          (c)  Expenses. The Company agrees to reimburse Indemnitee in full for
          any Expenses incurred by Indemnitee in connection with investigating,
          preparing for, litigating, defending or settling any action brought by
          Indemnitee under Section 10(a) above, or in connection with any claim
          or counterclaim brought by the Company in connection therewith.

          (d)  Validity of Agreement. The Company shall be precluded from
          asserting in any Proceeding, including, without limitation, an action
          under Section 10(a) above, that the provisions of this Agreement are
          not valid, binding and enforceable or that there is insufficient
          consideration for this Agreement and shall stipulate in court that the
          Company is bound by all the provisions of this Agreement.

          (e)  Failure to Act Not a Defense. The failure of the Company
          (including its Board of Directors or any committee thereof,
          independent legal counsel, or stockholders) to make a determination
          concerning the permissibility of the payment of Indemnifiable Amounts
          or the advancement of Indemnifiable Expenses under this Agreement
          shall not be a defense in any action brought under Section 10(a)
          above, and shall not create a presumption that such payment or
          advancement is not permissible.

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     11.  DEFENSE OF THE UNDERLYING PROCEEDING.

          (a)  Notice by Indemnitee.  Indemnitee agrees to notify the Company
          promptly upon being served with any summons, citation, subpoena,
          complaint, indictment, information, or other document relating to any
          Proceeding which may result in the payment of Indemnifiable Amounts or
          the advancement of Indemnifiable Expenses hereunder; provided,
          however, that the failure to give any such notice shall not disqualify
          Indemnitee from the right to receive payments of Indemnifiable Amounts
          or advancements of Indemnifiable Expenses unless the Company's ability
          to defend in such Proceeding is materially and adversely prejudiced
          thereby.

          (b)  Defense by Company.  Subject to the provisions of the last
          sentence of this Section 11(b) and of Section 11(c) below, the Company
          shall have the right to defend Indemnitee in any Proceeding which may
          give rise to the payment of Indemnifiable Amounts hereunder; provided,
          however that the Company shall notify Indemnitee of any such decision
          to defend within ten (10) days of receipt of notice of any such
          Proceeding under Section 11(a) above.  The Company shall not, without
          the prior written consent of Indemnitee, consent to the entry of any
          judgment against Indemnitee or enter into any settlement or compromise
          which (i) includes an admission of fault of Indemnitee or (ii) does
          not include, as an unconditional term thereof, the full release of
          Indemnitee from all liability in respect of such Proceeding, which
          release shall be in form and substance reasonably satisfactory to
          Indemnitee.  This Section 11(b) shall not apply to a Proceeding
          brought by Indemnitee under Section 10(a) above or pursuant to Section
          19 below.

          (c)  Indemnitee's Right to Counsel.  Notwithstanding the provisions of
          Section 11(b) above, if in a Proceeding to which Indemnitee is a party
          by reason of Indemnitee's Corporate Status, Indemnitee reasonably
          concludes that it may have separate defenses or counterclaims to
          assert with respect to any issue which may not be consistent with the
          position of other defendants in such Proceeding, or if the Company
          fails to assume the defense of such proceeding in a timely manner,
          Indemnitee shall be entitled to be represented by separate legal
          counsel of Indemnitee's choice at the expense of the Company.  In
          addition, if the Company fails to comply with any of its obligations
          under this Agreement or in the event that the Company or any other
          person takes any action to declare this Agreement void or
          unenforceable, or institutes any action, suit or proceeding to deny or
          to recover from Indemnitee the benefits intended to be provided to
          Indemnitee hereunder, Indemnitee shall have the right to retain
          counsel of Indemnitee's choice, at the expense of the Company, to
          represent Indemnitee in connection with any such matter.

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     12.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company hereby
represents and warrants to Indemnitee as follows:

          (a)  Authority.  The Company has all necessary power and authority to
          enter into, and be bound by the terms of, this Agreement, and the
          execution, delivery and performance of the undertakings contemplated
          by this Agreement have been duly authorized by the Company.

          (b)  Enforceability.  This Agreement, when executed and delivered by
          the Company in accordance with the provisions hereof, shall be a
          legal, valid and binding obligation of the Company, enforceable
          against the Company in accordance with its terms, except as such
          enforceability may be limited by applicable bankruptcy, insolvency,
          moratorium, reorganization or similar laws affecting the enforcement
          of creditors' rights generally.
 
     13.  INSURANCE.  The Company shall, from time to time, make the good faith
determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with a reputable insurance company
providing the Indemnitee with coverage for losses from wrongful acts, and to
ensure the Company's performance of its indemnification obligations under this
Agreement.  Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage.  In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's officers and directors. Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, or if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit. The Company
shall promptly notify Indemnitee of any good faith determination not to provide
such coverage.

     14.  CONTRACT RIGHTS NOT EXCLUSIVE.  The rights to payment of Indemnifiable
Amounts and advancement of Indemnifiable Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's by-laws or certificate
of incorporation, or any other agreement, vote of stockholders or directors (or
a committee of directors), or otherwise, both as to action in Indemnitee's
official capacity and as to action in any other capacity as a result of
Indemnitee's serving as a director of the Company.

     15.  SUCCESSORS.  This Agreement shall be (a) binding upon all successors
and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or
indirect successor by merger or consolidation or otherwise by operation of law)
and (b) binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indemnitee.  This 

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Agreement shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.

     16.  SUBROGATION.  In the event of any payment of Indemnifiable Amounts
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against
other persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.

     17.  CHANGE IN LAW.  To the extent that a change in Delaware law (whether
by statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the by-laws of the
Company and this Agreement, Indemnitee shall be entitled to such broader
indemnification and advancements, and this Agreement shall be deemed to be
amended to such extent.

     18.  SEVERABILITY.  Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof,
shall be determined by a court of competent jurisdiction to be illegal, invalid
or unenforceable, in whole or in part, such provision or clause shall be limited
or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.

     19.  INDEMNITEE AS PLAINTIFF.  Except as provided in Section 10(c) of this
Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls, any director or officer thereof, or any third party, unless the
Company has consented to the initiation of such Proceeding. This Section shall
not apply to counterclaims or affirmative defenses asserted by Indemnitee in an
action brought against Indemnitee.

     20.  MODIFICATIONS AND WAIVER.  Except as provided in Section 17 above with
respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto.  No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.

     21.  GENERAL NOTICES.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by 

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certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

          (i)  If to Indemnitee, to:

               At his home address as shown
               in the Company's personnel records;

          (ii) If to the Company, to:

               Patriot American Hospitality, Inc.
               1950 Stemmons Freeway
               Suite 6001
               Dallas, TX  75207
               Attention:  President

or to such other address as may have been furnished in the same manner by any
party to the others.

     22.  GOVERNING LAW.  This Agreement shall be governed by and construed and
enforced under the laws of Delaware without giving effect to the provisions
thereof relating to conflicts of law.

     23.  CONSENT TO JURISDICTION.  The Company hereby irrevocably and
unconditionally consents to the jurisdiction of the courts of the State of
Delaware and the United States District Court for the District of Delaware.  The
Company hereby irrevocably and unconditionally waives any objection to the
laying of venue of any Proceeding arising out of or relating to this Agreement
in the courts of the State of Delaware or the United States District Court for
the District of Delaware, and hereby irrevocably and unconditionally waives and
agrees not to plead or claim that any such Proceeding brought in any such court
has been brought in an inconvenient forum.

                                 [END OF TEXT]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                              PATRIOT AMERICAN HOSPITALITY, INC.



                              By: /s/ WILLIAM W. EVANS, III
                                  ----------------------------------------------
                                  Its: President and Chief Operating Officer


                              INDEMNITEE


                              /s/ LAWRENCE S. JONES
                              --------------------------------------------------
                              Lawrence S. Jones

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