Document:

This Collateral Assignment of Leases
                                             was prepared by and after recording
                                                          should be returned to:

                                                   Piper Marbury Rudnick & Wolfe
                                                         1251 Avenue of Americas
                                                   New York, New York 10020-1104
                                                    Attention: Koren Blair, Esq.

                         COLLATERAL ASSIGNMENT OF LEASES

            THIS ASSIGNMENT (the "Assignment") made as of the 29th day of
September, 2000 by GREATE BAY HOTEL AND CASINO, INC., a New Jersey corporation
having an address at the Sands Hotel and Casino, Indiana Avenue and Brighton
Park, Atlantic City, New Jersey 08401 (the "Assignor"), in favor of WELLS FARGO
BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, having its
corporate trust office at Sixth and Marquette, Minneapolis, Minnesota 55479 as
Trustee (the "Assignee") under the Indenture described below for its own benefit
and the benefit of the holders (the "Holders") of the Securities (as defined
below).

                               W I T N E S S E T H

            WHEREAS, the Assignor is the owner of a fee simple interest in
certain land and air spaces situated in the City of Atlantic City, County of
Atlantic, State of New Jersey ("Atlantic City"), being more particularly
described on Schedule A-1 attached hereto and by this reference made a part
hereof (the "Casino Land") and the improvements now or hereafter constructed on
the Casino Land, a portion of which constitute the Sands Hotel and Casino (the
"Sands");

            WHEREAS, the Assignor is the owner of a fee simple interest in
certain land and air spaces situated in Atlantic City, being more particularly
described on Schedule A-2 attached hereto and by this reference made a part
hereof (the "Office Land") and the improvements now or hereafter constructed on
the Office Land (the Casino Land and the Office Land being collectively referred
to herein as the "Land");

            WHEREAS, the Assignor is the owner of certain land situated in the
City of Atlantic City, County of Atlantic, State of New Jersey, being more
particularly described on Schedule A-3 attached hereto and by this reference
made a part hereof (the "Expansion Land" and the improvements now or hereafter
constructed on the Expansion Land (the Casino Land, the Office Land, and the
Expansion Land being collectively referred to herein as the "Land");

            WHEREAS, the Assignor is the owner of an easement interest in the
parcels of real property situated in Atlantic City more particularly described
on Schedule A-4 attached

<PAGE>

hereto and by this reference made a part hereof (the "Easement") and the
improvements now or hereafter constructed on the Easement;

            WHEREAS, the Easement was granted to Assignor pursuant to that
certain Ordinance No. 103 of Atlantic City dated October 7, 1987 and was
recorded January 29,1993 in the Atlantic County, New Jersey Clerk's Office in
Deed Book 5463, Page 228 (the "Easement Ordinance");

            WHEREAS, pursuant to an Indenture, dated as of the date hereof (as
the same may hereafter be amended, supplemented or otherwise modified, the
"Indenture", capitalized terms not otherwise defined herein are used herein as
defined therein), among the Assignor, Assignee, GB Holdings, Inc., a Delaware
corporation ("Holdings") and GB Property Funding Corp., a Delaware corporation
(the "Company"), the Company is issuing, on the date hereof, $110,000,000 of 11%
First Mortgage Notes Due 2005 (the "First Mortgage Notes" or the "Securities");

            WHEREAS, the Assignor has guaranteed repayment of the Securities and
payment and performance by the Company of its other obligations under the
Indenture and with respect to the Securities pursuant to the guarantee contained
in Article 12 of the Indenture (as the same may hereafter be amended,
supplemented or otherwise modified, the "Guarantee");

            WHEREAS, it is a condition precedent to the issuance of the
Securities that the obligations of the Assignor under the Guarantee be secured
by, inter alia, this collateral assignment of the Assignor's interest in all
leases affecting: (x) the Land; (y) the Easement and (z) all improvements
situated thereon (the "Premises");

            WHEREAS, this Assignment is being executed and delivered pursuant to
the terms and conditions set forth in the Indenture and is entitled to the
benefits thereof (all capitalized terms used herein without definition which are
defined in the Indenture being used herein as defined therein).

            NOW, THEREFORE, for good and valuable consideration, the legal
sufficiency of which is hereby acknowledged, the Assignor does hereby sell,
assign, transfer, set over and deliver unto the Assignee, subject to the terms
and conditions of this Assignment:

            ALL right, title and interest of the Assignor, as lessor, in and to
(i) any and all space leases now or hereafter affecting the Premises and
including, without limitation, any and all rentals or lettings of individual
rooms or suites in the Premises (the "Room Lettings") and (ii) any extensions,
renewals, modifications thereof and any guaranties of the obligations owed the
Assignor thereunder ((i) and (ii) above are hereinafter described individually
as a "Lease" and collectively as the "Leases"; a Lease providing for the payment
by a tenant thereunder of an annual basic rental equal to or in excess of
$500,000 shall hereafter be referred to individually as a "Major Lease" and
collectively as "Major Leases");

                                      -2-
<PAGE>

            TOGETHER with all right, title and interest of the Assignor in or to
the immediate and continuing right to collect and receive all of the rents,
income, receipts, revenues, issues and profits now due or which may become due
or to which the Assignor may now or shall hereafter become entitled or may
demand or claim, arising or issuing from or out of the Leases or from or out of
the Premises or any part thereof, together with any and all rights and claims of
any kind which the Assignor may have against the tenants under any Lease (all
such moneys, rights and claims being collectively referred to as the "rents");

            TOGETHER with all of the Assignor's right, title, privileges and
prerogatives under the Leases, including, without limitation, the Assignor's
right, title, privileges and prerogatives to terminate, cancel, modify, change,
supplement, alter, amend or grant any consent or approval under the Leases;

            TO HAVE AND TO HOLD the same unto the Assignee, its successors and
assigns forever or for such shorter period as hereinafter may be provided;

            FOR THE PURPOSE OF SECURING: the payment and performance by Assignor
of its obligations, covenants and duties pursuant to the Guarantee,

            SUBJECT, however, to a license hereby granted by the Assignee to the
Assignor to collect and receive rents under the Leases and otherwise to hold and
exercise all rights, privileges and benefits contemplated herein; and

            TO PROTECT THE SECURITY OF THIS ASSIGNMENT, IT IS COVENANTED AND
AGREED AS FOLLOWS:

            1. The Assignor represents and warrants that the Assignor has good
title to the Leases and rents hereby assigned and authority to assign the same,
and that no other Person has any right, title or interest therein. The Assignor
further represents and warrants that (i) Schedule 1 attached to this Assignment
is a correct and complete list of all Leases affecting the Premises on the date
hereof (other than the Room Lettings), (ii) to the best of Assignor's knowledge,
each Lease listed on Schedule 1 is in full force and effect and unamended,
except as shown on Schedule 1, (iii) a correct and complete copy of each such
Lease has been delivered by the Assignor to the Assignee on or prior to the date
hereof, (iv) to the best knowledge of the Assignor, there exists no material
default or event of default in the performance of any covenant, agreement,
obligation or conditions contained in any Lease listed on Schedule 1 and no
notice of default under any such Lease has been given and (v) the Assignor has
not previously assigned, transferred, mortgaged or pledged the Leases or the
rents pursuant to an instrument still in effect on the date hereof.

            2. The Assignor covenants and agrees at its sole cost and expense,
to keep, observe, perform and discharge, duly and punctually, all material
obligations, terms, covenants, conditions and warranties of the Leases on the
part of the Assignor to be kept, observed, performed and discharged in
accordance therewith. The Assignor agrees (i) not to modify the terms of any of
the Major Leases in a manner (in the aggregate for all such amendments)

                                      -3-
<PAGE>

materially adverse to the interests of the holders of the Securities hereunder,
(ii) not to terminate or cancel the term of any Major Lease nor accept a
surrender thereof unless a duly authorized officer of the Assignor certifies to
the Assignee that such termination, cancellation or surrender will not
materially adversely affect the interest of the holders of the Securities
hereunder, or unless such surrender is required by the terms of such Major
Lease, (iii) not to consent to any assignment by a tenant of its interest in any
Major Lease, unless a duly authorized officer of the Assignor certifies to the
Assignee that such assignment will not materially adversely affect the interest
of the holders of the Securities hereunder, provided, however that if the tenant
under any Major Lease shall have the right to assign its interest in such Major
Lease without the consent of the Assignor, then clause (iii) shall not apply to
such Major Lease, (iv) not to waive or release the other parties to a Major
Lease from any material obligations or conditions to be performed by them, and
(v) except in connection with the incurrence or grant of Liens permitted under
the Indenture, not to make any assignment of Assignor's interest in any Major
Lease to any Person unless a duly authorized officer of the Assignor certifies
to the Assignee that such assignment will not materially adversely affect the
interest of the holders of the Securities hereunder. The Assignor agrees not to
accept payments of rent in advance under the Leases (other than Room Lettings)
which payments would in the aggregate for all Leases (other than Room Lettings)
exceed $1,000,000 (except prepayments in the nature of security for the
performance by the lessees thereunder or for tenant finish work performed with
respect to any such Leases (other than Room Lettings)).

            3. Except during such time as an Event of Default shall have
occurred and be continuing, the Assignor shall have the right, under a license
(the "license") granted hereby (but limited as provided in the following
paragraph), to collect upon all of the rents arising under the Leases and
otherwise exercise all rights, benefits and privileges thereunder.

            4. For so long as an Event of Default has occurred and is
continuing, the following provisions shall apply:

            (a) The Assignee shall have the complete right, power and authority
hereunder then or thereafter to exercise and enforce any or all of the following
remedies: (i) to terminate upon notice to the Assignor the license granted to
the Assignor to collect as aforesaid the rents, and then and thereafter, without
taking possession, in the Assignee's or the Assignor's own name, or as
attorney-in-fact for the Assignor, to demand, collect, receive, sue for, attach
and levy the rents, to give proper receipts, releases and acquittances therefor
and after deducting all reasonable costs and expenses of operation and
collection, as determined by the Assignee, including attorneys' fees and
disbursements, to apply the net proceeds thereof, together with any funds of the
Assignor deposited with the Assignee, to any indebtedness secured hereby and in
such order as the Assignee may determine in accordance with Section 506 of the
Indenture, and (ii) without regard to the adequacy of the security, with or
without any action or proceeding through any Person or by agent, or by a
receiver to be appointed by any court and irrespective of the Assignor's
possession, then or thereafter to enter upon the Premises and succeed to the
Assignor's rights and obligations as lessor under such Leases, and (iii)
otherwise do any act or incur any costs or expenses as the Assignee shall deem
reasonably proper to protect the security hereof, as fully and to the same
extent as the Assignor could do if in possession and in such event

                                      -4-
<PAGE>

to apply the rents so collected to the costs of fulfilling the Assignor's rights
and obligations as lessor under the Leases, but in such order as the Assignee
shall deem proper, and including the payment of any indebtedness secured hereby
in accordance with Section 506 of the Indenture);

            (b) Without limiting the generality of the foregoing paragraph, the
Assignee may:

                  (i) succeed to the Assignor's rights and obligations as lessor
            under the Leases;

                  (ii) lease any part or parts of the Premises for such periods
            of time, and upon such terms and conditions, as the Assignee may, in
            its reasonable discretion, deem proper;

                  (iii) enforce, cancel or modify the Leases;

                  (iv) demand, collect, sue for, attach, levy, recover, receive,
            compromise and adjust, and make, execute and deliver receipts and
            releases for all rents and rights under the Leases and written
            agreements relating thereto that may then be or may thereafter
            become due;

                  (v) institute, prosecute to completion or compromise and
            settle all summary proceedings, actions for rent or for removing any
            and all lessees, tenants, subtenants or occupants of the Premises;
            and/or

                  (vi) make such repairs and alterations to the Premises as the
            Assignee may, in its reasonable discretion, deem proper;

            (c) Upon termination of the Assignor's license by the Assignee by
reason of the continuance of an Event of Default, the Assignor shall be deemed
to have directed and does direct each and all of the tenants (other than persons
in occupancy under Room Lettings) (i) to pay to the Assignee all rents as may
then or thereafter be owing to the Assignee and (ii) to perform any obligations
on its or their part to be then or thereafter performed for the benefit of the
Assignor and relating to the Premises, and such obligors shall pay the sum(s)
then due and thereafter to become due and perform the obligations then or
thereafter owing without further inquiry. No such tenant or obligor shall be
bound to account to the Assignor for any amounts paid to the Assignee by reason
of any payment made to the Assignee following the termination of the Assignor's
license;

            (d) The acceptance by the Assignee of this Assignment, with all of
the rights, powers, privileges and authority so created, shall not, prior to
entry upon and taking of possession of the Premises by the Assignee, be deemed
or construed to constitute the Assignee in possession nor thereafter or at any
time or in any event obligate the Assignee to appear in or defend any action or
proceeding relating to the Leases or to the Premises, or to take any action
hereunder or under the Leases, or to expend any money or incur any expenses or
perform or

                                      -5-
<PAGE>

discharge any obligation, duty or liability under the Leases; nor shall the
Assignee be liable in any way for any injury or damage to person or property
sustained by any Person or Persons in or about the Premises, except for gross
negligence or willful misconduct on the part of the Assignee;

            (e) The collection of the rents as aforesaid and/or the entry upon
and taking possession of the Premises shall not cure or waive any Event of
Default or waive, modify or affect any notice of Default under the Indenture,
the Securities, the Mortgage, the Security Agreement or any Security Instrument
or invalidate any act done pursuant to such notice, and the enforcement of such
right or remedy by the Assignee, once exercised, shall continue for so long as
the Assignee shall elect, provided that if the collection and application
aforesaid of the rents has cured the original Event of Default or such Event of
Default has otherwise been cured, the Assignee agrees to reinstate the license
described herein. If the license has been so reinstated or the Assignee shall
thereafter elect to discontinue the exercise of any such right or remedy
notwithstanding the continuation of an Event of Default, the same or any other
right or remedy hereunder may be reasserted at any time and from time to time
following any subsequent Event of Default.

            (f) Anything herein to the contrary notwithstanding, the rights of
the Assignee to collect or retain any sums shall not apply to amounts to be used
by Assignor to cure an Event of Default or otherwise make any payment in respect
of Securities or make any payment or perform any obligation under the Indenture
or other Security Document (all of which, whether paid to Assignor or Assignee,
shall be made available to Assignor for such purpose)

            5. The failure of the Assignee to avail itself of any of the terms,
covenants and conditions of this Assignment for any period of time or at any
time or times shall not be construed or deemed to be a waiver of any such term,
covenant or condition, and nothing herein contained, nor anything done or
omitted to be done by the Assignee pursuant hereto shall be deemed a waiver by
the Assignee of any of its rights and remedies hereunder or under the Guarantee,
the Indenture, the Securities, the Mortgage, the Security Agreement or any
Security Documents or under the laws of the State of New Jersey or the State of
New York. The right of the Assignee to collect the said indebtedness and to
enforce any other security therefor may be exercised by the Assignee, either
prior to, simultaneously with or subsequent to any action taken hereunder.

            6. The Assignee and the purchaser at any foreclosure sale shall have
the right following foreclosure of the lien of the Mortgage to preserve any
Lease and the rights of Assignor thereunder. Any Lease hereafter entered into
shall contain a covenant by the other parties thereto to attorn to or perform
for the benefit of any such purchaser.

            7. The Assignee shall not be obligated to perform or discharge any
obligation of the Assignor as a result of the assignment hereby effected, and
the Assignor agrees to indemnify and hold harmless the Assignee against any and
all liability, loss or damage which the Assignee may incur by reason of any act
of the Assignee under this Assignment, other than such losses as shall arise out
of the gross negligence or willful misconduct of the Assignee. Should

                                      -6-
<PAGE>

the Assignee incur any such liability, loss or damage by reason of this
Assignment, or in defense against any such claims or demands made with respect
to any act of the Assignee under this Assignment, other than those incurred by
reason of the Assignee's gross negligence or willful misconduct, the amount
thereof, including reasonable costs, expenses and reasonable attorneys' fees,
together with interest thereon at the same rate as borne under the Securities
(but in no event to exceed the maximum lawful rate) shall be included in the
indebtedness secured by the Mortgage, the Security Agreement and any Security
Documents and the Assignor shall reimburse the Assignee therefor within five (5)
days following written demand, provided that no interest shall accrue with
respect to any amount so incurred unless, and to the extent, actually paid by
the Assignee.

            8. The Assignor agrees from time to time to execute and deliver all
such instruments and to take all such action for the purpose of further
effectuating this Assignment and the carrying out of the terms hereof as may be
reasonably requested in writing by the Assignee. The Assignee agrees that at
such time as the indebtedness evidenced by the Securities has been fully paid
and the Assignor's obligations under the Guarantee have been paid and performed
in full, the Assignee shall execute and deliver and take all such action as may
be reasonably necessary to terminate this Assignment.

            9. Neither the Assignee nor its successors and assigns shall be
deemed a mortgagee in possession, nor shall the Assignee or its successors and
assigns be liable for laches, failure to collect the rents or failure to enforce
the Leases.

            10. Neither the execution of this Assignment nor any action or
inaction on the part of the Assignee under this Assignment shall release the
Assignor from any of the obligations under the Leases or constitute an
assumption of any such obligations on the part of the Assignee. No action or
failure to act on the part of the Assignor shall adversely affect or limit, in
any way, the rights of the Assignee under this Assignment, the Guarantee, the
Indenture, the Securities, the Mortgage or any Security Document or, through
this Assignment, under the Leases.

            11. If the Assignee shall resign or become disqualified from acting
as Trustee (whether through disqualification by the Casino Control Commission or
otherwise), or if, for any reason, there shall be appointed a substitute
Trustee, to act instead of the aforenamed Trustee, such substitute shall succeed
to all the estates, rights, powers and duties of the aforenamed Trustee under
this Assignment. Should any instrument of any nature be required from the
Assignor by any successor Trustee to more fully and certainly vest in and
confirm to such successor Trustee such estates, rights, powers and duties, then
upon request by such successor Trustee, any and all such instruments shall be
made, executed, acknowledged and delivered and shall be caused to be recorded
and/or filed by the Assignor. Any successor Trustee appointed pursuant to any of
the provisions hereof shall, without any further act, deed or conveyance become
vested with all the estates, properties, rights, powers and trusts of its or his
predecessor as an Assignee with like effect as if originally named as Trustee
and the Assignee hereby.

                                      -7-
<PAGE>

            12. This Assignment and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with and governed by the
law of the State of New Jersey.

            13. To the extent permitted by law, the Assignor further waives any
claims against the Assignee for consequential, punitive or special damages
arising in connection with the Indenture, the Guarantee, the Mortgage, the
Security Agreement or any Security Document and further waives the right to
interpose any defense based on any statute of limitations or any claim of laches
arising in connection with the Indenture, the Guarantee, the Mortgage, the
Security Agreement or any Security Document and any set off or counterclaim of
any nature or description, it being understood that the Assignor is not liable
except to the extent of the Collateral pledged pursuant to the Indenture.

            14. If any term, covenant, condition or provision of this Assignment
or the application thereof to any circumstance or to any Person shall be invalid
or unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Assignment, or the application thereof to any circumstances
or to any Person other than those as to which any term, covenant, condition or
provision is held invalid or unenforceable, shall not be affected thereby and
each remaining term, covenant, condition and provision of this Assignment shall
be valid and shall be enforceable to the fullest extent permitted by law.

            15. The Assignee and Assignor acknowledge and agree that: (i) all
security interest and other rights in Leases, rents, Premises and any other
Collateral shall be, and hereby are, subject and inferior to any Liens
heretofore or hereafter created from time to time in connection with the
incurrence of Working Capital Indebtedness; and (ii) notwithstanding anything to
the contrary hereunder or in the Indenture or in the other Security Documents,
the Assignor may incur Liens and Indebtedness (including, without limitation,
Liens on Leases, rents, Premises or other Collateral) permitted by the
Indenture. In connection with any of the foregoing, Assignee will, at the
request of Assignor, enter into such intercreditor agreements, standstill
agreements, subordination agreements and other documents as shall be appropriate
under the circumstances for the benefit of the holder of such other Liens or
Indebtedness. Assignor shall have the right to sell, transfer and convey (the
"Sale") the Collateral in whole or in part (the Collateral which is the subject
of such Sale is hereinafter referred to as the "Conveyed Property") and in
connection therewith obtain from Assignee a release of the Conveyed Property
from the Lien of this Collateral and the Security Agreement provided that such
Sale is made in accordance with the provisions of Section 1017 of the Indenture
as if such Sale was an Asset Sale, as the term is defined in the Indenture,
regardless of whether such Sale was in fact an Asset Sale. In connection
therewith, Assignee shall execute, acknowledge and deliver to Assignor such
documents as Assignor may reasonably require to effectuate such release. The
Liens granted hereunder shall not and shall not be deemed to, apply to any
Excluded Property (as defined in the Security Agreement).

            16. This Assignment shall not be amended, modified, discharged,
waived, in whole or in part, except by an agreement signed by the Assignor and
the Assignee.

                                      -8-
<PAGE>

            17. In this Assignment, whenever the context so requires, the
masculine gender shall include the feminine and/or neuter and the singular
number shall include the plural and conversely in each case. All demands,
notices, requests and communications hereunder shall be given as provided in the
Indenture.

            18. Each of the provisions of this Assignment is subject to and
shall be enforced in compliance with the provisions of the Casino Control Act.

            19. THE ASSIGNOR ACKNOWLEDGES THAT IT HAS RECEIVED A TRUE COPY OF
THIS ASSIGNMENT WITHOUT CHARGE.

                    [SIGNATAURES SET FORTH ON FOLLOWING PAGE]

                                     * * * *

                                      -9-
<PAGE>

            IN WITNESS WHEREOF, this Assignment has been duly executed by the
Assignor the day and year first above written.

Attest:                             GREATE BAY HOTEL AND CASINO, INC.
                                    a New Jersey Corporation

By:___________________________      By:__________________________________
   Name: Frederick H. Kraus            Name: Timothy A. Ebling
   Its: Secretary                      Its: Executive Vice-President

                                      -10-
<PAGE>

COUNTY OF NEW YORK      )
                        ) ss:
STATE OF NEW YORK       )

On September 29, 2000, before me, the subscriber, personally appeared Frederick
H. Kraus who being by me duly sworn according to law on his oath saith that he
is the Secretary of Greate Bay Hotel and Casino, Inc., a New Jersey corporation,
the above-named Assignor; that the seal affixed to aforesaid Assignment is the
corporate seal of the said corporation; that Timothy A. Ebling is the Executive
Vice-President of the said corporation; that he saw the said Executive
Vice-President sign the Assignment as the act and deed of said corporation, he
being thereunto duly authorized; and that he signed his name to the Assignment
as an attesting witness.

                                          _______________________

Subscribed before me this ______ day of September, 2000.

__________________________
Notary Public

                                      -11-
<PAGE>

STATE OF NEW YORK       )
                        ): ss
COUNTY OF NEW YORK      )

            BE IT REMEMBERED, that on this 29th day of September, 2000, before
me the subscriber, a Notary Public of the State of New York, personally appeared
Timothy A. Ebling, who resides at 17 Monroe Drive, Laurel Springs, NJ 08021 and
who is the Executive Vice-President of GREATE BAY HOTEL AND CASINO, INC. a New
Jersey corporation and the mortgagor named in the within instrument, who I am
satisfied is the person who executed the within instrument, as Executive
Vice-President of said corporation, and he acknowledged that he signed, sealed
with the proper corporate seal and delivered the same as such officer, that the
within instrument is the voluntary act and deed of such corporation made by
virtue of authority of its board of directors, on, behalf of and as the
voluntary act and deed of such corporation, for the uses and purposes therein
expressed, and that he received a true copy of the within instrument on its own
behalf and on behalf of the mortgagor named therein.

                                          ________________________________
                                          Notary Public of the State of
                                          New York

                                                                            Seal

                                      -12-
<PAGE>

                                  SCHEDULE A-1

                                   Casino Land

TRACT #1:

BEGINNING at a point, in the Easterly line of Illinois Avenue, distant 350 feet
Southwardly from the Southerly line of Pacific Avenue; and extending thence

(1)   Eastwardly, parallel with Pacific Avenue 151 feet to the Westerly line of
      Mt. Vernon Avenue; thence

(2)   Southwardly, in and along the said Westerly line of Mt. Vernon Avenue, 50
      feet; thence

(3)   Westwardly, parallel with Pacific Avenue, 151 feet to the Easterly line of
      Illinois Avenue; thence

(4)   Northwardly, in and along the said Easterly line of Illinois Avenue, 50
      feet to the place of BEGINNING.

BEING KNOWN AS Part of Lot 10 in Block 48, formerly known as part of Lot 191 in
Block 26, as shown on the Tax Map of the City of Atlantic City.

Illinois Avenue now known as Dr. Martin Luther King Boulevard.

TRACT #2:

BEGINNING at a point in the Easterly line of Illinois Avenue 400 feet South of
Pacific Avenue, and extending thence

(1)   Eastwardly, parallel with Pacific Avenue, 151 feet to the Westerly line of
      Mt. Vernon Avenue; thence

(2)   Southwardly, along same 50 feet; thence

(3)   Westwardly, parallel with Pacific Avenue, 151 feet to the Easterly line of
      Illinois Avenue; thence

(4)   Northwardly, along same 50 feet to the BEGINNING.

BEING KNOWN AS Part of Lot 10 in Block 48, formerly known as part of Lot 191 in
Block 26, as shown on the Tax Map of the City of Atlantic City.

Illinois Avenue now known as Dr. Martin Luther King Boulevard.

                                      -13-
<PAGE>

TRACT #3:

BEGINNING at a point in the Westerly line of Kentucky Avenue (50 feet wide),
said point being distant 200.00 feet South of the Southerly line of Pacific
Avenue (60 feet wide); and extending from said beginning point the following
courses and distances:

(1)   South 27 degrees 28 minutes 00 second East, in and along the Westerly line
      of Kentucky Avenue, a distance of 50.00 feet; thence

(2)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
      a distance of 180.00 feet to the Easterly line of Mt. Vernon Avenue (19
      feet wide); thence

(3)   North 27 degrees 28 minutes 00 seconds West, in and along the Easterly
      line of Mt. Vernon Avenue, a distance of 50.00 feet; thence

(4)   North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
      a distance of 180.00 feet to the point and place of BEGINNING.

BEING KNOWN AS Part of Lot 10 in Block 49, formerly known as part of Lot 192 in
Block 26, as shown on the Tax Map of the City of Atlantic City.

TRACT #4:

BEGINNING at a point in the Easterly line of Mt. Vernon Avenue (19 feet wide),
said point being distant 250.00 feet South of the Southerly line of Pacific
Avenue (60 feet wide); and extending from said beginning point the following
course and distances:

(1)   North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
      a distance of 30.00 feet; thence

(2)   South 27 degrees 28 minutes 00 seconds East, parallel with Mt. Vernon
      Avenue, a distance of 50.00 feet; thence

(3)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
      a distance of 30.00 feet to the Easterly line of Mt. Vernon Avenue; thence

(4)   North 27 degrees 28 minutes 00 seconds West, in and along the Westerly
      line of Mt. Vernon Avenue, a distance of 50.00 feet to the point and place
      of BEGINNING.

BEING KNOWN AS Part of Lot 10 in Block 49, formerly known as Part of Lot 192 in
Block 26, as shown on the Tax Map of the City of Atlantic City.

                                      -14-
<PAGE>

TRACT #5:

BEGINNING in the Westerly line of Kentucky Avenue, 250 feet Southwardly from
Pacific Avenue; and extending thence

(1)   Westwardly, parallel with Pacific Avenue, 150 feet; thence

(2)   Southwardly, parallel with Kentucky Avenue, 50 feet; thence

(3)   Eastwardly. parallel with Pacific Avenue, 150 feet to the Westerly line of
      Kentucky Avenue; thence

(4)   Northwardly, in and along same 50 feet to the point and place of
      BEGINNING.

BEING KNOWN AS Part of Lot 10 in Block 49, formerly known as Part of Lot 192 in
Block 26, as shown on the Tax Map of the City of Atlantic City.

TRACT #6:

BEGINNING at a point in the Westerly line of Kentucky Avenue 300 feet
Southwardly from the Southerly line of Pacific Avenue; and extending thence

(1)   Westwardly, parallel with Pacific Avenue, 180 feet; thence

(2)   Southwardly, parallel with Kentucky Avenue, 50 feet; thence

(3)   Eastwardly, parallel with Pacific Avenue, 180 feet to the Westerly line of
      Kentucky Avenue; thence

(4)   Northwardly, along same, 50 feet to the place of BEGINNING.

BEING KNOWN AS Part of Lot 10 in Block 49, formerly known as Part of Lot 192 in
Block 26, as shown on the Tax Map of the City of Atlantic City.

TRACT #7:

BEGINNING at a point in the Westerly line of Kentucky Avenue (50 feet wide) said
point being distant 350.00 feet South of the Southerly line of Pacific Avenue
(60 feet wide); and extending from said beginning point in the following course
and distances:

(1)   South 27 degrees 28 minutes 00 seconds East, in and along the Westerly
      line of Kentucky Avenue, a distance of 91.40 feet; thence

(2)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
      a distance of 4.00 feet; thence

                                      -15-
<PAGE>

(3)   South 27 degrees 28 minutes 00 seconds East, parallel with Kentucky
      Avenue, a distance of 1.00 feet; thence

(4)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
      a distance of 26.00 feet; thence

(5)   South 27 degrees 28 minutes 00 seconds East, parallel with Kentucky
      Avenue, a distance of .075 feet; thence

(6)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
      a distance of 16.60 feet; thence

(7)   South 27 degrees 28 minutes 00 seconds East, parallel with Kentucky
      Avenue, a distance of 10.00 feet; thence

(8)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
      a distance of 133.40 feet to the Easterly line of Mt. Vernon Avenue (19
      feet wide); thence

(9)   North 27 degrees 28 minutes 00 seconds West, in and along the Easterly
      line of Mt. Vernon Avenue, a distance of 103.15 feet; thence

(10)  North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
      a distance of 180.00 feet to the point and place of BEGINNING.

BEING KNOWN AS Part of Lot 10 in Block 49, formerly known as Part of Lot 192 in
Block 26, as shown on the Tax Map of the City of Atlantic City.

ALSO BEING KNOWN AS proposed Lot 119.01 in Block 26 as shown on minor
subdivision plan prepared by Dennis E. Duffy Associates, dated September 26,
1985 and filed in the Atlantic County Clerk's Office on February 6, 1986 as Map
#2358.

TRACT #8:

BEGINNING at a point in the Easterly line of Indiana Avenue (60 feet wide), said
beginning point being South 27 degrees 28 minutes 00 seconds East, 200.10 feet
from where the Easterly line of Indiana Avenue is intersected by the Southerly
line of Pacific Avenue (60 feet wide); and extending thence

(1)   South 27 degrees 28 minutes 00 seconds East, in and along the Easterly
      line of Indiana Avenue, 305.54 feet to a point; thence

(2)   North 62 degrees 30 minutes 00 seconds East, parallel with Pacific Avenue
      350.75 feet to a point in the Westerly line of Illinois Avenue (50 feet
      wide); thence

                                      -16-
<PAGE>

(3)   In said Westerly line, North 27 degrees 28 minutes 00 seconds West, 305.64
      feet to a point, said point being South 27 degrees 28 minutes 00 seconds
      East, 200.00 feet from the point of intersection of the Westerly line of
      Illinois Avenue, now known as Dr. Martin Luther King Boulevard with the
      Southerly line of Pacific Avenue; thence

(4)   South 62 degrees 30 minutes 00 seconds West, parallel with Pacific Avenue
      and along the line of the lands of the former Bala Motel, 150.75 feet to a
      point; thence

(5)   North 27 degrees 27 minutes 00 seconds West, parallel with Illinois and
      Indiana Avenue and along the line of the lands, now or late of the Bala
      Motel, 114.00 feet to a point; thence

(6)   South 62 degrees 30 minutes 00 seconds West, parallel with Pacific avenue,
      50.00 feet to a point; thence

(7)   South 27 degrees 28 minutes 00 seconds East, parallel with Illinois Avenue
      and Indiana Avenue, along the lands now or late of Midtown Motor Inn,
      64.00 feet to a point; thence

(8)   North 62 degrees 30 minutes 00 seconds East, still in said line and
      parallel with Pacific Avenue 5.00 feet to a point; thence

(9)   South 27 degrees 28 minutes 00 seconds East, still in said line and
      parallel with Illinois and Indiana Avenue 50.10 [tax map says 50 feet] to
      a point; thence

(10)  South 62 degrees 30 minutes 00 seconds West, still in said line and
      parallel with Pacific Avenue, 155.00 feet to the point and place of
      BEGINNING.

SUBJECT to the easement for public right-of-way contained in deed Book 3684,
page 254.

BEING KNOWN AS Lot 12 in Block 47, formerly known as Lot 60 in Block 30 as shown
on the Tax Map of the City of Atlantic City.

Illinois Avenue now known as Dr. Martin Luther King Boulevard.

TRACT #9:

PARCEL A:

BEGINNING at a point in the Easterly line of Mt. Vernon Avenue (19 feet wide),
said point being distant 358.00 feet South of the Southerly line of Pacific
Avenue (60 feet wide); and extending from said beginning point, the following
courses and distance:

(1)   South 27 degrees 28 minutes 00 seconds East, in and along the Easterly
      line of Mt. Vernon Avenue, a distance of 15.15 feet: thence

                                      -17-
<PAGE>

(2)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue
      and crossing Mt. Vernon Avenue, a distance of 19.00 feet to the Westerly
      line of Mt. Vernon Avenue; thence

(3)   North 27 degrees 28 minutes 00 seconds West, in and along the Westerly
      line of Mt. Vernon Avenue, a distance of 15.15 feet; thence

(4)   North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue
      and crossing Mt. Vernon Avenue, a distance of 19.00 feet to the Easterly
      line of Mt. Vernon Avenue and the point and place of BEGINNING.

BEING an area above the horizontal plane of Mt. Vernon Avenue between elevation
50.00 and elevation 70.00, said elevations in reference to U.S.C. and G.S. Datum
(elevation 0.00 = mean sea level).

BEING KNOW AS Lot 19 in Block 49, as shown on the Tax Map of the City of
Atlantic City.

PARCEL B

BEGINNING at a point in the Easterly line of Mt. Vernon Avenue (19 feet wide),
said point being distant 432.00 feet South of the Southerly line of Pacific
Avenue (60 feet wide); and extending from said beginning point the following
courses and distances:

(1)   South 27 degrees 28 minutes 00 seconds East, in and along the Westerly
      line of Mt. Vernon Avenue, a distance of 18.00 feet; thence

(2)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue
      and crossing Mt. Vernon Avenue, a distance of 19.00 feet to the Westerly
      line of Mt. Vernon Avenue; thence

(3)   North 27 degrees 28 minutes 00 seconds West, in and along the Westerly
      line of Mt. Vernon Avenue, a distance of 18.00 feet; thence

(4)   North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue
      and crossing Mt. Vernon Avenue, a distance of 19.00 feet to the Easterly
      line of Mt. Vernon Avenue and the point and place of BEGINNING.

BEING an area above the horizontal plane of Mt. Vernon Avenue between elevation
30.00 feet and elevation 50.00, said elevations in reference to U.S.C. and G.S.
Datum (Elevation 0.00 = mean sea level).

BEING KNOW AS Lot 20 in Block 49, as shown on the Tax Map of the City of
Atlantic City.

                                      -18-
<PAGE>

PARCEL C:

BEGINNING at a point in the Easterly line of Illinois Avenue, now known as Dr.
Martin Luther King Boulevard (50 feet wide), said point being distant 365.50
feet South of the Southerly line of Pacific Avenue (60 feet wide); and extending
from said beginning point, the following courses and distances:

(1)   South 27 degrees 28 minutes 00 seconds East, in and along the Easterly
      line of Illinois Avenue, a distance of 15.50 feet; thence

(2)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue
      and crossing Illinois Avenue, a distance of 50.00 feet to the Westerly
      line of Illinois Avenue; thence

(3)   North 27 degrees 28 minutes 00 seconds West, in and along the Westerly
      line of Illinois Avenue, a distance of 15.50 feet; thence

(4)   North 62 degrees 32 minutes 00 seconds east, parallel with Pacific Avenue
      and crossing Illinois Avenue, a distance of 50.00 feet to the Easterly
      Line of Illinois Avenue and the point and place of BEGINNING.

BEING an area above the horizontal plane of Illinois Avenue between elevation
50.00 and elevation 70.00, said elevations in reference to U.S.C. and G.S. Datum
(Elevations 0.00 = mean sea level).

BEING KNOW AS Lot 19 in Block 49, as shown on the Tax Map of the City of
Atlantic City.

Illinois Avenue now known as Dr. Martin Luther King Boulevard.

                                      -19-
<PAGE>

                                  SCHEDULE A-2

                                   Office Land

BEGINNING at a point in the Westerly line of Kentucky Avenue (50 feet wide),
distant 441.40 feet South of the Southerly line of Pacific Avenue (60 feet
wide), as measured in and along the aforesaid Westerly line of Kentucky Avenue,
said beginning point being in the division line between Lots 119.01 and 119.02
in Block 26 as shown on plan of minor subdivision prepared by Dennis E. Duffy
Associates, Project No. 3361, dated September 26, 1985 and filed February 11,
1986, filed Map #2358, and extending from said beginning point; thence

(1)   South 27 degrees 28 minutes 00 seconds East, in and along the aforesaid
      Westerly line of Kentucky Avenue, a distance of 108.60 feet to a point in
      the Northerly line of Lot 13 in said Block 49; thence

(2)   South 62 degrees 32 minutes 00 seconds West, in and along the same and
      parallel with Pacific Avenue, a distance of 150.00 feet to a corner common
      to Lots 11, 12 and 13 in said Block 49; thence

(3)   North 27 degrees 28 minutes 00 seconds West, in and along the Easterly
      line of Lot 12 and parallel with Kentucky Avenue, a distance of 50.00 feet
      to the Northeasterly corner of said Lot 12; thence

(4)   South 62 degrees 32 minutes 00 seconds West, in and along the Northerly
      line of said Lot 12 and parallel with Pacific Avenue, a distance of 30.00
      feet to a point in the Easterly line of Mount Vernon Avenue (19 feet
      wide); thence

(5)   North 27 degrees 28 minutes 00 seconds West, in and along same, a distance
      of 46.85 feet to a point in the aforesaid division line between Lots 11
      and 10; thence

(6)   North 62 degrees 32 minutes 00 seconds East, in and alone same and
      parallel with Pacific Avenue, a distance of 133.40 feet to a point; thence

(7)   North 27 degrees 28 minutes 00 seconds West, continuing in and along the
      said division line and parallel with Kentucky Avenue, a distance of 10.00
      feet to a point; thence

(8)   North 62 degrees 32 minutes 00 seconds East, still in and along the said
      division line and parallel with Pacific Avenue, a distance of 16.60 feet
      to a point; thence

(9)   North 27 degrees 28 minutes 00 seconds West, still in and along the said
      division line and parallel with Kentucky Avenue, a distance of 0.75 feet
      to a point; thence

(10)  North 62 degrees 32 minutes 00 seconds East, still in and along the said
      division line and parallel with Pacific Avenue, a distance of 26.00 feet
      to a point; thence

                                      -20-
<PAGE>

(11)  North 27 degrees 28 minutes 00 seconds West, still in and along the said
      division line and parallel with Kentucky Avenue, a distance of 1.00 feet
      to a point; thence

(12)  North 62 degrees 32 minutes 00 seconds East, still in and along the said
      division line and parallel with Pacific Avenue, a distance of 4.00 feet to
      a point in a the aforesaid Westerly line of Kentucky Avenue and the point
      and place of BEGINNING.

BEING Lot 119.02 in Block 26 as shown on plan of minor subdivision prepared by
Dennis E. Duffy Associates, dated September 26, 1985, Project No. 3361, filed in
the Atlantic County Clerk's Office on February 11, 1986, filed Map #2358.

ALSO BEING KNOWN AS Lot 11 in Block 49, formerly known as Lot 119.02 in Block
26, as shown on the Tax Map of the City of Atlantic City.

                                      -21-
<PAGE>

                                  SCHEDULE A-3

                                 Expansion Land

Tract # 1

ALL THAT CERTAIN LOT, tract or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic and State of New Jersey,
bounded and described as follows:

BEGINNING at a point in the Easterly line of Illinois Avenue (50' wide), distant
200.00' South of the Southerly line of Pacific Avenue (60'wide), when measured
in and along the said Easterly line of Illinois Avenue, and extending from said
beginning point; thence

(1)   North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
      a distance of 151.00' to a point in the Westerly line of Mount Vernon
      Avenue (19' wide); thence

(2)   South 27 degrees 28 minutes 00 seconds East, in and along the same, a
      distance of 45.00' to a point; thence

(3)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
      a distance of 151.00' to a point in the Easterly line of Illinois Avenue;
      thence

(4)   North 27 degrees 28 minutes 00 seconds West, in and along same, a distance
      of 45.00' to the point and place of BEGINNING.

BEING KNOWN AS Lot 8 in Block 48, formerly known as Lot 117 in Block 26, as
shown on the Tax Map of the City of Atlantic City.

Illinois Avenue now known as Dr. Martin Luther King Boulevard.

And subject to Ordinance No. 1994-95 of the City of Atlantic City.

Tract # 2

All that certain Land and Premises, Tract or Parcel, situate in the City of
Atlantic City, County of Atlantic County and State of New Jersey, bounded and
described as follows: Beginning in the Northwesterly Line of Pacific Avenue (60
Ft. Wide) at a point that is 150.75 Feet Northeastwardly of the Northeasterly
Line of Indiana Avenue (50 Ft. Wide) and extending thence by N.J.P.C.S.
MERIDIAN:

(1)   North 27 degrees 40 minutes 05 seconds West, at right angles to Pacific
      avenue, 150.00 Feet; thence

(2)   North 62 degrees 19 minutes 55 seconds East, parallel with Pacific Avenue,
      50.00 Feet; thence

                                      -22-
<PAGE>

(3)   South 27 degrees 40 minutes 05 seconds East, at right angles to Pacific
      Avenue, 150.00 Feet to the first mentioned Northwesterly Line of Pacific
      Avenue; thence

(4)   South 62 degrees 19 minutes 55 seconds West, along said Northwesterly Line
      of Pacific Avenue, 50.00 Feet to the POINT AND PLACE OF BEGINNING.

      Being known as Lot 29, Block 156, formerly Lot 27, Block 33, on the Tax
Map of the City of Atlantic City.

Tract # 3

ALL THAT CERTAIN LOT, tract or parcel of land and premises situate, lying and
being in the CITY OF ATLANTIC CITY, County of ATLANTIC and State of New Jersey,
bounded and described as follows:

BEGINNING in the Southeasterly line of Pacific Avenue (60 feet wide) at a point
that is 50.75 feet Southwestwardly of the Southwesterly line of Dr. Martin
Luther King Jr. Boulevard (50 feet wide) and extending thence by N.J.P.C.S.
MERIDIAN:

(1)   South 27 Degrees 40 minutes 05 seconds East, parallel with Dr. Martin
      Luther King Jr. Boulevard, 100.00 feet; thence

(2)   South 62 degrees 19 minutes 55 seconds West, parallel with Pacific Avenue,
      50.00 feet; thence

(3)   North 27 degrees 40 minutes 05 seconds West, parallel with Dr. Martin
      Luther King Jr. Boulevard, 100.00 feet to the first mentioned
      Southeasterly line of Pacific Avenue; thence

(4)   North 62 degrees 19 minutes 55 seconds East, along said Southeasterly line
      of Pacific Avenue, 50.00 feet to the POINT AND PLACE OF BEGINNING.

BEING Lot 7 in Block 47, formerly known as Lot 14 in Block 30, as shown on the
Tax Map of the City of Atlantic City.

Tract # 4

ALL THAT CERTAIN LOT, tract or parcel of land and premises situate, lying and
being in the CITY of ATLANTIC CITY County of ATLANTIC and State of New Jersey,
bounded and described as follows:

                                      -23-
<PAGE>

TRACT A

BEGINNING at a point in the Southeasterly line of Pacific Avenue (60 feet wide),
said point being distant 100.75 feet Southwestwardly from the intersection of
the said line of Pacific Avenue with the Southwesterly line of Illinois Avenue
(50 feet wide), said point being corner to lands of the former White Tower;
thence

(1)   Southwestwardly along said Pacific Avenue a distance of 100 feet to corner
      to lands of the former Mid Town Motor Inn, said point being distant 150
      feet Northeastwardly from the Northeasterly line of Indiana Avenue; thence

(2)   Southeastwardly parallel with Indiana Avenue (60 feet wide) a distance of
      86 feet to a point; thence

(3)   Northeastwardly parallel with pacific Avenue a distance of 50 feet to a
      point; thence

(4)   Southeastwardly parallel with Illinois Avenue a distance of 114 feet to a
      point; thence

(5)   Northeastwardly parallel with Pacific Avenue a distance of 150.75 feet to
      the Southwesterly line of Illinois Avenue; thence

(6)   Northwestwardly along the Southwesterly line of Illinois Avenue a distance
      of 100 feet to a point; thence

(7)   Southwestwardly parallel with Pacific Avenue a distance of 100.75 feet to
      a point; thence

(8)   Northwestwardly parallel with Illinois Avenue a distance of 100 feet to
      the Southwesterly line of Pacific Avenue to the point and place of
      BEGINNING.

The above description is in accordance with a survey drawn by Arthur W. Ponzio
Co. and Associates dated November 7, 1984 and revised November 23, 1984, January
7, 1985, July 11, 1985, July 12, 1985 and August 5, 1985.

BEING KNOWN AS Lots 6, 5, 4, 10 and 9 in Block 47, formerly known as Lots 2, 3,
16, 42 and 19 in Block 30, on the Tax Map of the City of Atlantic City.

Illinois Avenue now known as Dr. Martin Luther King Boulevard.

TRACT B

BEGINNING at the intersection of the Southeasterly line of Pacific Avenue (60
feet wide) with the Northeasterly line of Indiana Avenue (60 feet wide); thence

(1)   Northeastwardly along the Southeasterly line of Pacific Avenue a distance
      of 150 to a point corner to the former Bala Motel; thence

(2)   Southeastwardly along said lands and extensions thereof and parallel with
      Indiana Avenue a distance of 150 feet to a point; thence

                                      -24-
<PAGE>

(3)   Southwestwardly parallel with Pacific Avenue a distance of 150 feet to the
      Northeasterly line of Indiana Avenue; thence

(4)   Northwestwardly along the Northeasterly line of Indiana Avenue a distance
      of 150 feet to the point and place of BEGINNING.

The above description is in accordance with a survey drawn by Arthur W. Ponzio
Co. and Associates dated November 7, 1984 and revised July 11, 1985, August 5,
1985 and August 6, 1985.

BEING Lots 1, 2 and 3 in Block 47, formerly known as Lots 7, 6 and 5 in Block
30, as shown on the Tax Map of the City of Atlantic City.

TRACT C

BEGINNING at a point on the Northerly sideline of Pacific Avenue, said point
being 100.75 feet Northeast from the intersection of the Northerly sideline of
Pacific Avenue and the Easterly sideline of Indiana Avenue (said point also
being 250.00 feet West of Illinois Avenue) and running thence;

(1)   North 27 degrees 28 minutes 00 seconds West 150.00 feet to a point; thence

(2)   South 62 degrees 32 minutes 00 seconds West 0.75 feet to a point; thence

(3)   North 27 degrees 28 minutes 00 seconds West parallel with Indiana Avenue,
      25 feet to a point; thence

(4)   North 62 degrees 32 minutes 00 seconds East 50.00 feet to a point; thence

(5)   South 27 degrees 28 minutes 00 seconds East 25.00 feet to a point; thence

(6)   North 62 degrees 32 minutes 00 seconds East 0.75 feet to a point; thence

(7)   South 27 degrees 28 minutes 00 seconds East 150.00 feet to the point;
      thence

(8)   South 62 degrees 32 minutes 00 seconds West 50.00 feet to a point and the
      place of BEGINNING.

The above description is in accordance with a survey drawn by Arthur W. Ponzio
Co. and Associates dated November 7, 1984 and revised July 11, 1985, July 12,
1985 and August 5, 1985.

BEING KNOWN AS Lot 31 in Block 156, formerly known as Lot 73 in Block 33, as
shown on the Tax Map of the City of Atlantic City.

Illinois Avenue now known as Dr. Martin Luther King Boulevard.

                                      -25-
<PAGE>

TRACT # 5

ALL THAT CERTAIN LOT, tract or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic and State of New Jersey,
bounded and described as follows:

BEGINNING in the Northeasterly line of Indiana Avenue (60 feet wide) at a point
150 feet Southeastwardly of the Southeasterly line of Pacific Avenue (60 feet
wide); and extending thence

(1)   North 62 degrees 32 minutes East, parallel with pacific Avenue, 155 feet;
      thence

(2)   South 27 degrees 28 minutes East, parallel with Indiana Avenue, 50.10
      feet; thence

(3)   South 62 degrees 32 minutes West, parallel with Pacific Avenue 155 feet to
      the first mentioned Northeasterly line of Indiana Avenue; thence

(4)   North 27 degrees 28 minutes West, along same, 50.10 feet to the point and
      place of BEGINNING.

BEING KNOWN AS Lot 11 in Block 47 as shown on the current tax map of the City of
Atlantic City.

                                      -26-
<PAGE>

                                  SCHEDULE A-4

                                    Easement

EASEMENT I

DESCRIPTION FOR EASEMENT FOR THE PEOPLEMOVER SYSTEM TOGETHER WITH SUPPORTING
COLUMNS ON INDIANA AVENUE.

BEGINNING at a point in the Westerly line of Indiana Avenue (60 feet wide), said
point being distant 342.00 feet South of the Southerly line of Pacific Avenue
(60 feet wide), and extending from said beginning point; thence

(1)   North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue
      a distance of 10.00 feet; thence

(2)   South 27 degrees 28 minutes 00 seconds East, parallel with Indiana Avenue
      a distance of 94.00 feet; thence

(3)   North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue
      a distance of 50.00 feet to the Easterly line of Indiana Avenue; thence

(4)   South 27 degrees 28 minutes 00 seconds East, in and along the Easterly
      line of Indiana Avenue, a distance of 30.00 feet: thence

(5)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue
      a distance of 50.00 feet; thence

(6)   South 27 degrees 28 minutes 00 seconds East, parallel with Indiana Avenue
      a distance of 498.90 feet; thence

(7)   South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue
      a distance of 10.00 feet to the Westerly line of Indiana Avenue; thence

(8)   North 27 degrees 28 minutes 00 seconds West, in and along the Westerly
      line of Indiana Avenue, a distance of 622.90 feet to the point and place
      of BEGINNING.

The above described Easement is located over and along the right of way of
Indiana Avenue. It is understood that the above description is for an elevated
peoplemover system, together with supporting columns on Indiana Avenue and for
an elevated pedestrian passageway or bridge connecting the peoplemover system to
the Claridge and to the Sands respectively. It is further understood that the
bottom of said easement shall be located at elevation 20, mean sea level datum
and the top of said easement shall be at elevation 45.0.

                                      -27-
<PAGE>

EASEMENT II

DESCRIPTION OF A PEOPLEMOVER SYSTEM ENTRANCE AND MUSEUM AT THE BOARDWALK END OF
INDIANA AVENUE.

ALL THAT CERTAIN LOT, tract, or parcel of land and premises situate, lying, and
being in the city of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:

BEGINNING at a point distant 946.90 feet South of the Southerly line of Pacific
Avenue (60 feet wide) and 26.00 feet West of the Westerly line of Indiana Avenue
(60 feet wide), when measured at tight angles to said avenues respectively, and
extending from said beginning point; thence

(1)   North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue
      a distance of 62.00 feet; thence

(2)   South 27 degrees 28 minutes 00 seconds East, parallel with Indiana Avenue
      a distance of 59.37 feet to the Inland or Interior Line of Public Park;
      thence

(3)   South 77 degrees 07 minutes 07 seconds West, in and along the Inland or
      Interior Line of Public Park, a distance of 64.06 feet; thence

(4)   North 27 degrees 28 minutes 00 seconds West, parallel with Indiana Avenue
      a distance of 43.23 feet to the point and place of BEGINNING.

The above described easement is located partly in the right of way of Indiana
Avenue and partly on Lot 5, Block 46 as shown on the Tax Map of the City of
Atlantic City.

It is understood that the above description is for the Museum and Peoplemover
System entrance area at the Boardwalk end of Indiana Avenue.

                                      -28-
<PAGE>

                                   Schedule B

                                  Permitted Encumbrances

      1. Permitted Liens as defined in the Indenture.

      2. All those certain encumbrances listed on Schedule B - Section II of
that certain ALTA Loan Policy - __________ _____, 2000, No. 12134052, issued by
the Title Company of Jersey, as agent for Stewart Title Guaranty Company, dated
September _____, 2000.

      3. The terms of a lease, license or management agreement(s) with an energy
management company(s), supplier(s), or intermediary(s) related thereto now or
hereafter entered into concerning or with respect to the supply and/or
management of utility services and/or the operation of existing or newly
supplied equipment at the property, including, but not limited to heating,
ventilation, and air-conditioning and energy production related equipment.

      4. That certain unrecorded Lease Agreement for Lot 29 in Block 156 between
Mortgagor as Landlord, and T&M Parking, Inc., as Tenant, dated March 20, 1996,
having a month-to-month term.

      5. That certain License Agreement by and between Mortgagor and Eva Daush,
d/b/a Sansations Hair Salon, dated April 28, 1999, and amended March 15, 2000,
for a term to expire September 15, 2000, and to be renewed upon substantially
the same terms.

      6. That certain License Agreement by and between Mortgagor and Bill's
Vending Service, Inc., dated July 12, 1999, and amended October 1, 1999, for a
term of three (3) years.

                                      A-29
<PAGE>

                                   SCHEDULE 1

1.    Brighton Park Improvements Agreement between Assignor and the Claridge at
      Park Place, Inc., dated November 5, 1987, as amended April 5, 2000.

2.    Lease Agreement for Lot 29 in Block 156 between Assignor, as Landlord, and
      T&M Parking, Inc., as Tenant, dated March 20, 1996, having a
      month-to-month term.

3.    License Agreement by and between Assignor and Eva Davsch, d/b/a Sansations
      Hair Salon, dated April 228, 1999, and amended March 15, 2000, for a term
      to expire September 15, 2000, and to be renewed upon substantially the
      same terms.

4.    License Agreement by and between Assignor and Bill's Vending Service,
      Inc., dated July 12, 1999, and amended October 1, 1999, for a term of
      three (3) years.Exhibit 10.12

                               ADDENDUM 1 TO LEASE
                               September 15, 2000

This Addendum is attached to and made part of the lease dated July 1, 1998, by
and between SLT1 L.L.C. (landlord) and ACUTE THERAPEUTICS, Inc. (tenant)(the
"Lease").

I.    LEASED PREMISES

      Begining on September 16, 2000 , the description of the leased premises is
      hereby amended to include all 13,667 square feet of the entire building
      owned by SLT1 L.L.C.

II.   TERM

      The term for the Lease (including the additional premises provided for in
      Section I) shall commence on the 16th day of September 16, 2000 and end at
      the close of business on the 31st day of August 2005.

III.  RENT

      Base Rent: Fourteen dollars and twenty five cents ($14.25) per square foot
      per year ratably due on the first day of each calendar month begining on
      September 16, 2000. Additional rent and increasing minimum rent per square
      foot per year shall be as set forth in the lease.

Except as amended herein, the remaining terms and conditions of the Lease shall
remain in full force and effect.

 Tenant: Discovery Laboratories, Inc.                Landlord: SLT1 L.L.C.
(formerly Acute Therapeutics, Inc.)

By: /s/ Robert J. Capetola                          By: Huei Tsai
   -----------------------------                    ----------------------------
   Robert Capetola, President/CEO                         Huei Tsai

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