Document:

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

                                                        Mitchell S. Berkey, Esq.
                                                               Wolff & Samson PC
                                                                One Boland Drive
                                                   West Orange, New Jersey 07052

                              ASSIGNMENT OF LEASES

         THIS ASSIGNMENT (the "Assignment") made as of the 22nd day of July,
2004 by ACE GAMING LLC, a New Jersey limited liability company 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, 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;

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

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         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, the Assignor is the sole owner and holder of the lessee's
interest (the "Leasehold Estate") under the Lease dated December 18, 2000
originally between Madison House Group, L.P., as lessor, and Greate Bay Hotel
and Casino, Inc., as lessee (the "Madison House Lease"), with respect to certain
property located in the City of Atlantic City, County of Atlantic and State of
New Jersey commonly known as 125 Dr. Martin Luther King Boulevard and more
particularly described on Schedule A-5 attached hereto and by this reference
made a part hereof.

         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, and Atlantic Coast Entertainment
Holdings, Inc. (the "Company"), the Company is issuing, on the date hereof, up
to $110 million of 3% Notes Due 2008 (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 assignment of the Assignor's interest in all leases affecting: (i)
the Land; (ii) the Easement, (iii) the Leasehold Estate and (iv) 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.

         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");

         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

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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)
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

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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 acquaintances 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,

               (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

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                     same extent as the Assignor could do if in possession and
                     in such event 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

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               to expend any money or incur any expenses or perform or 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

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arise out of the gross negligence or willful misconduct of the Assignee. Should
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.

         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.

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         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.

         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.

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         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.

                    [SIGNATURES SET FORTH ON FOLLOWING PAGE]

                                     * * * *

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

Attest

                                ACE GAMING, LLC
                                a New Jersey Limited Liability Corporation

                                By: /s/ Patricia Wild
                                   ------------------
                                   Name:  Patricia Wild
                                   Title: Vice President, General Counsel,
                                          Secretary

                                By:/s/ Douglas S. Niethold
                                   -----------------------
                                   Name:  Douglas S. Niethold
                                   Title: Vice-President, Finance and Chief
                                          Financial Officer

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COUNTY OF NEW YORK   )
                     :  SS.:
STATE OF NEW YORK    )

BE IT REMEMBERED, that on this 22nd day of July, 2004, before me the subscriber,
a Notary Public of the State of New York, personally appeared Patricia Wild, who
is Vice President, General Counsel and Secretary of ACE GAMING, LLC, a New
Jersey limited liability company and the mortgagor named in the within
instrument, who I am satisfied is the person who executed the within instrument,
as Vice-President, General Counsel and Secretary of said company, and she
acknowledged that she signed and delivered the same as such officer, that the
within instrument is the voluntary act and deed of such company made by virtue
of authority of its members, on, behalf of and as the voluntary act and deed of
such company, for the uses and purposes therein expressed, and that she received
a true copy of the within instrument on its own behalf and on behalf of the
mortgagor named therein.

Subscribed before me this 22nd day of July 2004.

/s/ Ellen Warren
----------------
Notary Public

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STATE OF NEW YORK   )
                    :  SS.:
COUNTY OF NEW YORK  )

On July 22, 2004, before me, the subscriber, a Notary Public of the State of New
York, personally appeared Douglas S. Niethold who being by me duly sworn
according to law on his oath saith that he is the Vice-President, Finance and
Chief Financial Officer of ACE Gaming LLC, a New Jersey limited liability
company, the above-named Assignor; that Patricia Wild is the Vice President,
General Counsel and Secretary of the said company; that he saw the said Vice
President, General Counsel and Secretary sign the Assignment as the act and deed
of said company, she being thereunto duly authorized; and that he signed his
name to the Assignment as an attesting witness.

                                    /s/ Ellen Warren
                                    -----------------------------
                                    Notary Public of the State of
                                    New York

                                       12
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                                  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.

<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 to a point; 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 to a point; 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 to a point; thence

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

<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

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

(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 0.75 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

(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 formerly of the Bala Motel, 150.75 feet to
      a point; thence

<PAGE>

(5)   North 27 degrees 28 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 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 distances:

(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

(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.

<PAGE>

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.

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

<PAGE>

(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
(Elevation 0.00 = mean sea level).

BEING KNOWN AS Lot 19 in Block 47, as shown on the Tax Map of the City of
Atlantic City.

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

<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 along 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

(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

<PAGE>

(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 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.

<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

<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:

<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 of lands formerly of the 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 4, 5, 6, 9 and 10 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 lands formerly of the 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

<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 5, 6 and 7 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.

TRACT # 5

<PAGE>

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.

<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.

<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.

<PAGE>

                                  SCHEDULE A-5

                     Leasehold Estate - Madison House Lease

         ALL THAT following lands located 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 245 feet
South 27 degrees 28 minutes East from the Southerly line of Pacific Avenue; and
extending thence

         (1) North 62 degrees 32 minutes East, parallel with Pacific Avenue 151
feet to the Westerly line of Mount Vernon Avenue; thence

         (2) South 27 degrees 28 minutes East, in and along the Westerly line of
Mount Vernon Avenue 105 feet; thence

         (3) South 62 degrees 32 minutes West, parallel with Pacific Avenue 151
feet to the Easterly line of Illinois Avenue; thence

         (4) North 27 degrees 28 minutes West, in and along the Easterly line of
Illinois Avenue 105 feet to the point and place of beginning.

         BEING Lot 9, Block 48 on the Official Tax Map of Atlantic City.

<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 No. 1021671060, issued by the Title Company of
Jersey, as agent for Stewart Title Guaranty Company, dated June 22, 2004.

         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 Assignor 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 Assignor 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 Assignor and 21st
Century Hot Dogs, LLC, dated May 16, 2003, for a term of three (3) years.

<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 Dausch, 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.       That certain License Agreement by and between Assignor and 21st Century
         Hot Dogs, LLC, dated May 16, 2003, for a term of three (3) years.<PAGE>

This Mortgage was prepared by and after
recording should be returned to:

Mitchell S. Berkey, Esq.
Wolff & Samson PC
One Boland Drive
West Orange, New Jersey 07052

                 MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT
                 -----------------------------------------------

         This MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT (this "Mortgage"),
made this 22nd day of July, 2004 by ACE GAMING, LLC, a limited liability company
duly formed and existing under the laws of the State of New Jersey and having
its principal place of business at the Sands Hotel and Casino, Indiana Avenue
and Brighton Park, Atlantic City, New Jersey 08401 (the "Mortgagor"), in favor
of WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association having
its corporate trust office at Sixth and Marquette, Minneapolis, Minnesota 55479,
as Trustee (the "Mortgagee") under the Indenture described below on its own
behalf and on behalf of the holders from time to time of the Securities referred
to below (the "Holders").

                               W I T N E S S E T H

         WHEREAS, the Mortgagor 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 and Parking
Garage (the "Sands");

         WHEREAS, the Mortgagor 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;

         WHEREAS, the Mortgagor 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 Mortgagor 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 hereto

<PAGE>

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 the Mortgagor and the Claridge
Casino Hotel 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, the Mortgagor is the sole owner and holder of the lessee's
interest (the "Leasehold Estate") under the Lease dated December 18, 2000
originally between Madison House Group, L.P., as lessor, and Greate Bay Hotel
and Casino, Inc., as lessee (the "Madison House Lease"), with respect to certain
property located in the City of Atlantic City, County of Atlantic and State of
New Jersey commonly known as 125 Dr. Martin Luther King Boulevard and more
particularly described on Schedule A-5 attached hereto and by this reference
made a part hereof.

         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 Mortgagor, the Mortgagee and Atlantic Coast
Entertainment Holdings, Inc., a Delaware corporation (the "Company"), the
Company is issuing, on the date hereof, up to $110 million of 3% First Mortgage
Notes Due 2008 (the "First Mortgage Notes" or the "Securities");

         WHEREAS, this Mortgage is being executed and delivered pursuant to the
terms and conditions set forth in the Indenture and is entitled to the benefits
thereof;

         WHEREAS, the Mortgagor has guaranteed the punctual payment (including
applicable notice and/or grace periods) of the principal of and any interest on
the Securities, whether at maturity, by acceleration or otherwise, and payment
and performance by the Company, and the Mortgagor of their other respective
obligations (including the payment of fees and expenses) 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 from time to time, the "Guarantee"); and

         WHEREAS, it is a condition precedent to the issuance of the Securities
that the obligations of Mortgagor under the Guarantee be secured by, among other
things, this Mortgage.

         NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Mortgagor
agrees as follows:

         TO SECURE:

         The payment and performance by the Mortgagor of all of its obligations,
covenants and duties, including, but not limited to, obligations to make payment
of all principal, interest (including any interest that accrues after the filing
of a petition of the type referred to in Sections 501(vi) and 501(vii) of the
Indenture) fees, expenses and other amounts payable under the Guarantee, this
Mortgage, the Indenture and any other Security Document, including all amounts
that constitute part of such obligations and would be owed by the Company or the
Mortgagor to

                                       2
<PAGE>

the Mortgagee but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
the Company or the Mortgagor, (all of such obligations, covenants and duties
referred to in this paragraph being called, collectively, the "Liabilities").

         The Mortgagor hereby grants to the Mortgagee on behalf of the Mortgagee
and of the Holders, a security interest in, and the Mortgagor hereby mortgages
to the Mortgagee on its own behalf and on behalf of the Holders, all of its
estate, right, title and interest in, to and under, or derived from, the
following property:

         The Land, together with all right, title and interest of the Mortgagor
now owned or hereafter acquired, if any, in and to the streets, the land lying
in the bed of any streets, roads, avenues, alleys, passages and sidewalks; and
all reversionary rights with respect to the vacation of said streets, roads,
avenues, alleys, passages and sidewalks, open or proposed, in front of,
adjoining or abutting the Land to the center line thereof and any air spaces
thereover and all and singular the reversions or remainders in and to the Land
and the tenements, hereditaments, easements (in gross and/or appurtenant),
rights-of-way or use, rights (including alley, drainage, crop, timber,
agricultural, horticultural, mineral, water, ditch, reservoir, oil and gas
rights), privileges, royalties and appurtenances to the Land, now or hereafter
belonging or in anywise appertaining thereto, including any such estate, right,
title, interest in, to or under any agreement or right granting, conveying or
creating, for the benefit of the Land, any easement, right or license in any way
affecting the said property and other property and in, to or under any streets,
ways, alleys, vaults, gores or strips of land adjoining the Land and or any
parcel thereof, or in or to the air space over the Land, and all rights of
ingress and egress by motor vehicles to parking facilities on or within the
Land, and all claims or demands of the Mortgagor, either at law or in equity, in
possession or expectancy, of, in or to the same;

         TOGETHER WITH all right, title and interest of the Mortgagor to the
Easement, any interest in any fee, greater or lesser title to the Easement that
Mortgagor may own or hereafter acquire and all credits, deposits, options,
privileges and rights of Mortgagor under the Easement and the Easement Ordinance
(including all rights of use, occupancy and enjoyment) and under any amendments,
supplements, extensions, renewals, restatements, replacements and modifications
thereof (including, without limitation, (i) the right to give consents, (ii) the
right to receive moneys payable to Mortgagor, (iii) the right, if any, to
purchase the real property subject to the Easement and (iv) the right to
terminate or modify the Easement);

         TOGETHER WITH all right, tittle and interest of the Mortgagor in and to
the Leasehold Estate;

         TOGETHER WITH all right, title and interest of the Mortgagor to the
interests granted to the Mortgagor by Atlantic City pursuant to that certain
Ordinance of Atlantic City of Atlantic City, New Jersey, No. 70, dated August 1,
1986;

         TOGETHER WITH all buildings, structures, facilities and other
improvements now or hereafter located on the Land or the Easement or subject to
the Leasehold Estate, including, without limitation, the Sands and all building
material, building equipment, supplies and fixtures of every kind and nature now
or hereafter located on the Land or the Easement or subject to the

                                       3
<PAGE>

Leasehold Estate or attached to, or contained in any such buildings, structures
or facilities including, without limitation, all of the same which may be or
become a part of the Sands, and all additions thereto and betterments, renewals,
substitutions and replacements thereof, in each case only to the extent the same
is both: (i) owned or leased by the Mortgagor or in which the Mortgagor has or
shall acquire an interest and (ii) now or hereafter located on the Land or the
Easement or subject to the Leasehold Estate (all of the foregoing hereinafter
collectively called the "Improvements") (the Land, the Easement and the
Leasehold Estate, together with the Improvements are hereinafter collectively
referred to as the "Premises");

         TOGETHER WITH all machinery, apparatus, equipment, materials, fittings,
fixtures and all appurtenances and additions thereto and betterments, renewals,
substitutions and replacements thereof, owned or leased by the Mortgagor or in
which the Mortgagor has or shall acquire an interest, to the extent that the
same are now or hereafter located on, attached to or contained in the Premises
or placed on any part thereof, though not attached thereto (including, without
limitation, the elevated, enclosed and motorized pedestrian walkway currently
constructed upon the Easement (the "People-Mover") and the equipment, fittings,
materials and all appurtenances and additions thereto and betterments, renewals,
substitutions, replacements, proceeds and products thereof, which are
incorporated in, or a part of or are necessary for the operation of the
People-Mover (all of the foregoing; including the People-Mover, hereinafter
collectively called the "Fixtures"; the Premises and the Fixtures together being
collectively referred to as the "Mortgaged Premises"), including, without
limitation, any of the foregoing that constitute heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, gas, steam, electrical,
incinerating and/or compacting plants, systems, fixtures and equipment, security
systems, elevators, escalators, hoists, cleaning systems, call systems,
sprinkler systems and other fire prevention and extinguishing apparatus and
materials, loading and unloading apparatus, landscaping, motors, machinery,
pipes, ducts, conduits, dynamos, engines, compressors, generators, boilers,
furnaces, pumps, tanks, appliances, equipment, shops, girders, beams, fittings
and fixtures; the Mortgagee shall have, in addition to all rights and remedies
provided in the Indenture, the Security Agreement, dated as of the date hereof,
made by the Mortgagor to the Mortgagee (the "Security Agreement"), the
Assignment of Leases, dated as of the date hereof, made by the Mortgagor to the
Mortgagee, this Mortgage and any other agreements, commitments and undertakings
made by the Mortgagor to the Mortgagee, all of the rights and remedies of a
"secured party" under said Uniform Commercial Code. If the Lien of this Mortgage
is subject to a security interest covering any property described in this
paragraph, then all of the right, title and interest of the Mortgagor in and to
any and all such property is hereby assigned to the Mortgagee, together with the
benefits of all deposits and payments now or hereafter made thereon by or on
behalf of the Mortgagor;

         TOGETHER WITH all of the Mortgagor's interest in the leases, subleases,
lettings and licenses of, and all other contracts and agreements affecting, the
Land, the Easement, the Leasehold Estate, the Improvements and the Fixtures, or
any part thereof, now or hereafter entered into, and all modifications,
supplements, additions, extensions, renewals and replacements thereof, and all
right, title and interest of the Mortgagor thereunder, including cash and
securities deposited thereunder as security, the right to receive and collect
the rents, additional rents, increases in rents, security deposits, advance
rents, income, proceeds, earnings, revenues, issues and profits payable
thereunder and the rights to enforce, whether at law or in equity or by any
other means, all provisions thereof, and any other benefits derived or to be

                                       4
<PAGE>

derived therefrom, including, without limitation, any security deposits made by
the Space Tenants (as hereinafter defined), and the right to apply the same to
the payment of the Liabilities subject to the terms and provisions of this
Mortgage;

         TOGETHER WITH all other property, of every kind and nature, which may
from time to time be subjected to the Lien hereof by the Mortgagor through a
supplement to this Mortgage or by anyone on its behalf or with its consent, or
which may come into the possession of or be subject to the control of the
Mortgagee pursuant to this Mortgage;

         TOGETHER WITH all unearned premiums, accrued, accruing or to accrue
under insurance policies now or hereafter obtained by the Mortgagor with respect
to the Mortgaged Premises, and the Mortgagor's interest in and to all proceeds
of the conversion and the interest payable thereon, voluntary or involuntary, of
the Mortgaged Premises or any part thereof, to the extent the same are property
of the Mortgagor, into cash or liquidated claims, including without limitation,
but subject to the provisions of this Mortgage and the Indenture, proceeds of
casualty insurance, title insurance or other insurance maintained on the
Premises and the Fixtures (excluding the proceeds of all worker's compensation
insurance and personal or general liability insurance), and the right to collect
and receive the same and all awards or payments, including interest thereon,
hereafter made to the Mortgagor for the taking by eminent domain of the whole or
any part of the Land, Easement, the Leasehold Estate or Mortgaged Premises or
the use thereof, or any easement therein, including any awards or payments for
changes of grade of streets or any other injury to or decrease in the value of
the Land, Easement or Mortgaged Premises, which said awards and payments,
subject to the terms of this Mortgage and the Indenture, are hereby assigned to
the Mortgagee on its own behalf and on behalf of the Holders, who is hereby
authorized, subject to the terms of this Mortgage and of the Indenture, to
collect and receive the proceeds thereof and to give proper receipts and
acquittances therefor, and to apply the same toward the payment of the
Liabilities, at any time secured hereby, notwithstanding the fact that the
amount thereof may not then be due and payable and toward the reasonable counsel
fees, costs and disbursements incurred by the Mortgagee in connection with the
collection of such award or payments, and any and all refunds of real estate
taxes which may become due to the Mortgagor and any and all deposits by the
Mortgagor with providers of utilities and other services to the Premises; and
the Mortgagor hereby agrees, upon request, to make, execute and deliver any and
all assignments and other instruments sufficient for the purpose of assigning
said awards or payments to the Mortgagee on its own behalf and on behalf of the
Holders, free, clear and discharged of any encumbrances (other than encumbrances
permitted hereunder or under the Indenture) of any kind or nature whatsoever;

         TOGETHER WITH all of the Mortgagor's right, title and interest in all
proceeds, both cash and non cash, of the foregoing which may be sold or
otherwise disposed of pursuant to the terms hereof;

         TOGETHER WITH any and all monies now or hereafter on deposit for the
payment of real estate taxes or special assessments against the Mortgaged
Premises or for the payment of premiums on fire or other property insurance
covering the Mortgaged Property (hereinafter defined).

                                       5
<PAGE>

         All of the foregoing real and personal property and rights and
interests in property and awards are herein collectively referred to as the
"Mortgaged Property".

         TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee, its
successors and assigns, to its and their own proper use, benefit and behalf
forever.

         PROVIDED ALWAYS, and these presents are upon the express condition
that, if (i) the outstanding principal of the Securities, and any interest which
may become due thereon and any other sums which may become due in connection
therewith shall be paid in full in accordance with the terms of the Securities,
the Indenture and hereof and if all of the Liabilities shall be performed and
paid in full or (ii) the Indenture is otherwise discharged, then these presents
and the estate hereby created shall cease, determine and be void and the
Mortgagee agrees that at such time, upon the request of the Mortgagor, it shall
execute and deliver such documents and take all action as may be reasonably
requested by the Mortgagor to be necessary to terminate this Mortgage of record.

         AND the Mortgagor represents and warrants to and covenants with the
Mortgagee on its own behalf and on behalf of the Holders that, to the best of
its knowledge, it has and at all times hereafter will have good and marketable
fee simple title to the Premises (except that in the case of the Easement, the
Mortgagor shall maintain its interest, and in the case of the Leasehold Estate,
the Mortgagor shall maintain its leasehold interest) and the Mortgagor covenants
that its estate, right, title and interest in and to the Premises is free and
clear of all taxes, Liens, and encumbrances whatsoever, except as appears in
Schedule B attached hereto and made a part hereof; provided however, that the
Mortgager and Mortgagee acknowledge and agree that: (x) all security interest
and other rights in the Mortgaged Property 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 (y) notwithstanding anything to the contrary hereunder or in
the Indenture or in the other Security Documents, the Mortgagor and its
subsidiaries may incur Liens and Indebtedness (including, without limitation,
Liens on the Mortgaged Property and other Collateral) permitted by the
Indenture. In connection with any of the foregoing, Mortgagee will, at the
request of Mortgagor, 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 Indebtedness
or of the superior liens.

         The Mortgagor further covenants with the Mortgagee on its own behalf
and on behalf of the Holders as follows:

         1. Payment of Liabilities. As set forth in the Guarantee, the Mortgagor
will pay, or cause to be paid, the Liabilities secured by this Mortgage and
shall perform all conditions, covenants and obligations on the part of the
Mortgagor in accordance with the terms of the Guarantee, the Indenture, the
Security Documents and this Mortgage, including, without limitation, applicable
notice and grace periods.

                                       6
<PAGE>

         2. Insurance.

            2.1 The Mortgagor shall at its own expense at all times maintain or
cause to be maintained on all of the Mortgaged Property and all other personal
property subject to the Security Agreement: (x) insurance satisfying the
requirements of clauses (c) and (d) below; and (y) property and liability
insurance against such risks, in such amounts and in such form, as is usually
carried by companies engaged in a business similar to the business conducted by
Mortgagor in Atlantic City, New Jersey, provided however, that in no event shall
Mortgagor be required to obtain insurance in excess of any of the following: (a)
commercial liability insurance (including blanket contractual liability
insurance, innkeeper's liability, products liability and elevator liability)
covering all claims for bodily injury, including death, or property damage
occurring on, in or about the Mortgaged Premises and the adjoining sidewalks and
passageways in an amount of not less than $50,000,000 combined single limit as
respects bodily injury and property damage in respect of any one occurrence
provided that the primary policy, providing liability limits of $1,000,000 per
occurrence and $1,000,000 in the aggregate for bodily injury liability and
property damage liability, as such limits are defined in standard endorsement
L6108 entitled: "Amendment - Limits of Liability (Single Limit) (Individual
Coverage Aggregate Limit)", and such insurance may be excess to a $500,000
self-insured retention per occurrence and may be subject to $500,000 combined
single limit sublimit for coverage provided for the care, custody and control of
property, a $250,000 per loss/aggregate sublimit for Innkeeper's Property Damage
Liability, a $250,000 per loss/aggregate sublimit for Hotel Safe Deposit Box
Liability, a $250,000 per occurrence limit for real property fire liability, and
a $250,000 in the aggregate, a $1,000,000 aggregate limit for personal injury
liability, liquor liability, advertising liability and pollution liability;
during any period of alterations or improvements in, on or to the Mortgaged
Premises, the Mortgagor will cause to have the commercial liability insurance
policy endorsed to provide owners and contractors protective liability coverage
including completed operations liability coverage or maintain separate policies
with respect to such coverage; (b) workers' compensation insurance (including
employer's liability insurance) for all employees of the Mortgagor engaged on or
with respect to the Mortgaged Property in such amounts as are required by law;
(c) physical damage insurance covering the Improvements and Fixtures for loss or
damages resulting from the perils of fire, lightning and such other risks and
hazards as are provided under the current standard "Extended Coverage
Endorsement" and vandalism and malicious mischief coverage for 100% of the full
replacement value of the Improvements and Fixtures (excluding footings and
foundations) on condition that the policy contains an "agreed amount
endorsement" and that no co-insurance provisions would be applicable, provided
that the property policy limit may be subject to a total limit of $200,000,000
for all loss arising out of one occurrence subject to a sublimit of $100,000,000
unless the loss is caused by fire, lightning, removal, wind and hail, leakage
from fire protective equipment, explosion, smoke, aircraft and vehicles, sonic
shock wave, riot, civil commotion and vandalism, molten material, and in which
case the $100,000,000 sublimit will not apply, a sublimit of $35,000,000 in the
aggregate for loss due to earthquake, a sublimit of $5,000,000 in the aggregate
for loss caused by flood, a sublimit of $1,000,000 for property in transit, a
sublimit of $1,000,000 on newly acquired property, a sublimit of $105,000,000
for business interruption loss defined to include net profit plus certain
continuing expenses except ordinary payroll expenses, a $50,000,000 sublimit for
general boiler and machinery coverage, and a maximum deductible of $500,000 for
each loss and a 72-hour exclusion for any time element loss; (d) insurance on
all Equipment and all Inventory (as such terms are defined in the Security
Agreement and included in the "Collateral" therein) against loss

                                       7
<PAGE>

or damage by reason of any hazard referred to in subsection (c) and subject to
the conditions stated in subsection (c) of this subsection 2.1 in an amount of
100 percent of the full replacement value thereof; (e) insurance against loss of
rents/business interruption by reason of any hazard covered under the insurance
required under subsections (c) and (d) of this subsection 2.1 in an amount
sufficient to avoid any co-insurance penalty, and subject to the conditions
stated in subsection (c); and (f) insurance against such other risks of damages,
hazards, casualties and contingencies, but only if and only to the extent and in
such amounts that insurance against such other risks, hazards, casualties or
contingencies shall then be commonly carried by prudent owners and lessees of
buildings or improvements in the locality similar in character, construction,
use and occupancy to the Improvements, appurtenances, and Fixtures and equipment
on or constituting a part of the Mortgaged Property; all such insurance, after
providing for costs of collection. The Mortgagor will duly and punctually
comply, or cause compliance with, all of the material terms and conditions of
any insurance policy covering or applicable to the Mortgaged Property, whether
or not expressly required hereunder, all material requirements of the issuer of
any such policy, and all orders, rules and other requirements of the National
Board of Fire Underwriters (or any body exercising similar functions) binding
upon the Mortgagor or applicable to or affecting the Mortgaged Property or any
use or condition thereof. The types, terms, conditions, coverages and policy
limits of insurance maintained pursuant to this subsection 2.1 may be increased,
decreased, amended, supplemented or otherwise modified from time to time to the
extent available and at a reasonable cost to reflect what prudent owners and/or
lessees of buildings or improvements similar in type and locality to the
Mortgaged Property would carry, as certified to the Mortgagee in an Officer's
Certificate (as defined herein) of the Mortgagor.

            2.2 All insurance required pursuant to subsection 2.1 hereof shall
be evidenced by valid and enforceable policies, in form and substance, and
issued by and distributed among insurers of recognized responsibility having an
A.M. Best Company rating of at least A or B and a financial size category of
Class VII or above, and authorized to do business in the State of New Jersey.
The originals of all such policies, or certified duplicate copies or
certificates thereof (accompanied by photostats of the policies as soon as
available), shall be delivered to the Mortgagee concurrently with the execution
and delivery of this Mortgage and, thereafter (i) all quotations, synopses and
letters of amendment thereto in respect of proposed coverage, as well as
definitive insurance binders relating to the renewal or replacement policies,
shall be delivered to the Mortgagee as soon as reasonably practicable prior to
the expiration of the policy or policies to be renewed or replaced and (ii) all
renewal or replacement policies, or certified duplicate copies or certificates
thereof (accompanied by photostats of the policies), shall be delivered to the
Mortgagee as soon as reasonably practicable after the expiration date of the
policy or policies to be renewed or replaced, in each case accompanied by
evidence that all premiums currently payable with respect to such policies have
been paid in full.

            2.3 Except in the case of workers' compensation, general and
personal liability and loss of rents/business interruption insurance, all
insurance policies at any time required by this Section 2 shall (a) provide as
follows: (i) the insureds named therein shall include the Mortgagee on its own
behalf and on behalf of the Holders and the Mortgagor, as their respective
interests may appear, (ii) all losses payable thereunder in amounts less than or
equal to $1,000,000 shall be payable directly to the Mortgagor, (iii) all losses
payable thereunder in excess of $1,000,000 shall be payable to the Mortgagee on
its own behalf and on behalf of the

                                       8
<PAGE>

Holders pursuant to a standard mortgagee clause naming the Mortgagee on its own
behalf and on behalf of the Holders, as their interests may appear, with loss
payable to the Mortgagee on its own behalf and on behalf of the Holders without
contribution, and (iv) all losses thereunder in excess of $10,000,000 shall be
adjusted by the Mortgagor with the prior consent of the Mortgagee (which consent
shall not be unreasonably withheld); (b) such policies may not be canceled or
amended without at least thirty (30) days' prior written notice to the
Mortgagee; and (c) no act, omission or negligence of the Mortgagor, or its
agents, servants or employees, or of any Space Tenant under any Space Lease (as
defined in Section 24.4 hereof) or any of their agents, servants or employees
which might otherwise result in a forfeiture of such insurance or any part
thereof, shall in any way affect the validity or enforceability of, or the
amounts which may be collected under, any of such insurance with respect to the
Mortgagee. All losses payable to the Mortgagee pursuant to subsection
2.3(a)(iii) shall be assigned and paid directly to the Mortgagee for deposit
into the Collateral Account to be held and applied in accordance with Sections
1018 and 1404 of the Indenture and Section 9.3 hereof. The policy or policies of
insurance of the character described in subsections (a), (b), (c), (d), (e) and
(f) of subsection 2.1 hereof may consist of blanket policies insuring the
Mortgaged Premises and other property of the Mortgagor; provided that such
policy or policies shall set forth the amount of insurance in force thereunder
applicable to the Mortgaged Premises and any sublimits in such blanket policy
applicable to the Mortgaged Premises, which amounts shall be not less than the
amounts required pursuant to this Section 2 and shall otherwise comply with the
provisions of this Section 2 and shall afford the same protections to the
Mortgagee as would be provided by policies individually applicable to the
Mortgaged Premises, provided that if a portion of such policy covers the
insurance to be given in Section 2, the total coverage afforded under such
portion shall be on an "occurrence" basis, and provided further that if the
Mortgagor converts any insurance policy from an "occurrence" to a "claims" basis
(or vice versa), the Mortgagor shall cause the risk to be covered by such policy
to be continuously insured against notwithstanding such change. If,
notwithstanding the provisions of subsection 2.3(a)(iii) hereof, any insurance
proceeds in excess of $1,000,000 are made payable to the Mortgagor, rather than
to the Mortgagee as required, the Mortgagor shall promptly deliver such
proceeds, in the form received but with any necessary endorsements, to the
Mortgagee and the Mortgagor hereby irrevocably appoints the Mortgagee as its
attorney-in-fact, coupled with an interest, to endorse and/or transfer any such
payment to the name of the Mortgagee on its own behalf and on behalf of the
Holders. All proceeds of the insurance shall be held and disbursed in accordance
with Sections 1018 and 1404 of the Indenture and Section 9.3 hereof.

            2.4 If the Mortgagee on its own behalf and on behalf of the Holders
shall by any manner acquire the title or estate of the Mortgagor in or to any
portion of the Mortgaged Premises, it shall thereupon, to the extent such
insurance policies are not blanket insurance policies of the Mortgagor, become
the sole and absolute owner of all insurance policies held by or required
hereunder to be delivered to the Mortgagee, affecting such portion, with the
sole right to collect and retain all unearned premiums thereon, and the
Mortgagor shall be entitled only to a credit, in reduction of the then
outstanding Liabilities secured hereby, in the amount of any cancellation refund
actually received by the Mortgagee. To the extent applicable the Mortgagor
agrees, immediately upon demand, to execute and deliver such assignments or
other authorizations or instruments as may be necessary or desirable to
effectuate the foregoing.

                                       9
<PAGE>

            2.5 In the event that the Mortgagor fails to (i) provide, maintain
or keep in force the insurance policies required pursuant to subsection 2.1
hereof or (ii) deliver and furnish to the Mortgagee the original policies of
insurance (or certified duplicate copies or certificates thereof, accompanied by
photostats of the policies) or definitive binders relating to renewal or
replacement policies pursuant to subsection 2.2 hereof prior to the expiration,
cancellation or amendment of existing policies, the Mortgagee on its own behalf
and on behalf of the Holders may at its sole option upon prior written notice to
Mortgagor (but in no event shall the Mortgagee be so obligated) obtain such
insurance, and the Mortgagor will pay all premiums thereon promptly upon demand
by the Mortgagee, with interest thereon, from the date on which such premiums
are paid by the Mortgagee until the Mortgagor shall reimburse the Mortgagee for
such amounts, at a rate of interest equal to the prime rate plus 2% per annum
from time to time announced by the Mortgagee, and such sums, until paid, shall
be secured by this Mortgage.

            2.6 The Mortgagor shall not take out separate insurance concurrent
in form or contributing in the event of loss with that required to be obtained
and maintained under this Section 2. Subject to the foregoing, any insurance
effected by the Mortgagor on any part of the Mortgaged Premises whether or not
required under this Mortgage, shall be for the mutual benefit of the Mortgagee
on its own behalf and on behalf of the Holders and the Mortgagor and shall be
subject to all other provisions of this Mortgage.

         3. Alterations.

            3.1 Neither the Improvements nor the Fixtures (except as permitted
in the Indenture or this Mortgage) shall be removed, demolished or materially
altered, except that the Mortgagor may: (a) make non-structural alterations to
the extent that such alterations constitute alterations in the normal course of
business, including removal and reconstruction of interior walls and relocation
of hotel and casino facilities; (b) replace the Fixtures or any part thereof on
the terms and conditions set forth in the Indenture and (c) make any other
alteration, structural or non-structural, (A) with an estimated cost of less
than $500,000; (B) with a cost estimated by the architect, engineer or general
contractor supervising such alteration to be in excess of $500,000 but not
exceeding $2,000,000 after the Mortgagor shall have given written notice to the
Mortgagee of such alteration; (C) with a cost estimated by the architect,
engineer or general contractor supervising such alteration to be in excess of
$2,000,000 but not exceeding $20,000,000 after the Mortgagor shall have given
written notice to the Mortgagee of such alteration, together with an Officer's
Certificate of the Mortgagor that such alteration complies with items (i)
through (viii) below, inclusive, and either (I) the Mortgagee shall have
approved such alteration in writing, such approval not to be unreasonably
withheld or delayed or (II) the Holders of at least 25% in principal amount of
Outstanding Securities shall have approved such alteration; and (D) with a cost
estimated by the architect, engineer or general contractor supervising such
alteration to be in excess of $20,000,000 after the Mortgagor shall have given
written notice to the Mortgagee, together with a duly authorized certificate
from an officer of the Mortgagor (an "Officer's Certificate") that such
alteration will comply with items (i) through (ix), below, inclusive, and based
on the information provided in such certificate and the documentation required
to be provided under this subsection to the Mortgagee, the Holders of at least
25% in principal amount of Outstanding Securities shall have approved such
alteration.

                                       10
<PAGE>

         The items with which the Officer's Certificate shall state the
Mortgagor will comply, as set forth above with regard to alterations or
Improvements made to the Mortgaged Premises under this Section 3.1, are as
follows:

            (i) any change or alteration, once commenced, shall be made
promptly, in good and workmanlike manner and in compliance with all material
requirements of applicable law ("Legal Requirements");

            (ii) appropriate builder's risk (if the total cost of the proposed
change or alteration exceeds Two Million Dollars ($2,000,000)), workers'
compensation, and general liability insurance shall be maintained for any work
in progress;

            (iii) the Mortgaged Premises shall be kept free of Liens for labor
and materials supplied or claimed to have been supplied in connection with such
change or alterations or in the event that such Liens have been filed against
the Mortgaged Premises, the Mortgagor shall either satisfy such Liens, stay
their effect, bond against or otherwise secure against each to the reasonable
satisfaction of the Mortgagee;

            (iv) such alterations will not materially and adversely affect the
value, character and usefulness of the Mortgaged Premises;

            (v) such alterations shall not cause (a) the Sands (inclusive of any
such completed alterations) to fail to qualify (absent a waiver by the Casino
Control Commission of such nonqualifying condition(s)) as a licensed
hotel/casino under the Casino Control Act or (b) the Sands to fail to be
independently qualifiable (exclusive of any such alterations) at all times as a
licensed hotel/casino under the Casino Control Act;

            (vi) any alteration or replacement Fixture, upon completion or
replacement, as the case may be, shall be subject to the Lien of this Mortgage,
the Lien created by the security agreement made a part of this Mortgage or the
Lien of the Security Agreement and shall be free from any title retention,
security agreement or other encumbrance, except the Lien of this Mortgage and
the other Security Documents and encumbrances permitted under Section 1014 of
the Indenture;

            (vii) no Event of Default shall have occurred or be continuing or
occur as a result of the proposed alteration or replacement;

            (viii) with respect to any proposed alteration with a cost estimated
by the architect, engineer or general contractor supervising such alteration to
be in excess of $2,000,000 but less than $20,000,000, the Mortgagor shall submit
to the Mortgagee (a) copies of all materials relating thereto when filed with
the Casino Control Commission, (b) if no materials relating thereto are to be
filed with the Casino Control Commission and the estimated cost of such project
is in excess of $5,000,000, a description of such proposed alteration (which
shall include the type of financing, if any, the estimated cost, the parties
involved and the estimated date of completion), and copies of all available
plans and specifications in connection therewith, no later than 45 days prior to
commencement of such proposed alteration and (c) final plans,

                                       11
<PAGE>

specifications and Casino Control Commission approvals of such alteration no
later than 90 days after completion thereof;

            (ix) with respect to any proposed alteration with a cost estimated
by the architect, engineer or general contractor supervising such alteration to
be in excess of $20,000,000, the Mortgagor shall submit to the Mortgagee all
materials described in item (viii) above as well as any additional information
reasonably required by the Holders to review such proposed alteration; and

            (x) the Mortgagor will pay all reasonable expenses of the Mortgagee
in connection with any consent of the Mortgagee required pursuant to this
Section 3, including, without limitation, in connection with the review of any
plans and specifications in connection therewith.

            3.2 Mortgagor will at all times maintain sufficient parking spaces
for the use of the Sands which shall in no event be less than approximately
1,675 spaces.

         4. Estoppel Certificates. The Mortgagor, within 10 days after a request
by the Mortgagee, will furnish a written statement, duly acknowledged, and in
form for recording, of the amount due on this Mortgage and the Mortgagor will
deliver such a statement further setting forth whether any offsets or defenses
exist against the Liabilities. The Mortgagee, within 10 days after request from
the Mortgagor, will furnish a written statement, duly acknowledged and in form
for recording of the amount due on the Mortgage and stating whether it has
received written notice of or has actual knowledge of any defaults existing
hereunder and containing such other information as the Mortgagor may reasonably
request.

         5. Impositions.

            5.1 The Mortgagor will pay or cause to be paid as and when due and
payable, and before they become delinquent, all Impositions (as such term is
defined in subsection 5.4.4 hereof) levied upon the Mortgaged Property, or any
part thereof for which the Mortgagor and/or the Mortgaged Property, or any part
thereof, shall be assessed or chargeable and will cause tenants under Major
Leases (as such term is defined in the Assignment of Leases, dated of even date
herewith, made by Mortgagor to Mortgagee) to comply with all lease provisions or
contracts relating to payment of such Impositions. Notwithstanding the
foregoing, if by law any Imposition may at the option of the taxpayer be paid in
installments (whether or not interest shall accrue on the unpaid balance
thereof), the Mortgagor may cause to be paid or to pay the same (and any accrued
interest on the unpaid balance of such Imposition) in installments as they fall
due and before any fine, penalty, further interest or cost may be added thereto;
provided that no Event of Default (as defined in Section 12 hereof) shall then
exist under this Mortgage and that payment in installments would not create or
cause to be created any Lien on the Mortgaged Premises or any portion thereof
which could be levied upon prior to the failure to pay a then due installment.

            5.2 The Mortgagor will pay any taxes (including, without limitation,
stamp taxes, but excluding (a) income taxes assessed by the United States
government or the State of New Jersey or any other State or any political
subdivision of any of them, (b) franchise, estate or

                                       12
<PAGE>

similar taxes based upon or measured by income) imposed on the Mortgagee on its
own behalf and on behalf of the Holders, their successors or assigns, by reason
of the holding of this Mortgage or any of the Securities, as the case may be, or
the receipt of the interest payable thereunder.

            5.3 Unless manifestly erroneous, the certificate, advice or bill of
the appropriate official designated by law to make or issue the same or to
receive payment or any Imposition, which such certificate, advice or bill
indicates the nonpayment of such Imposition, shall be prima facie evidence that
such Imposition is due and unpaid at the time of the making or issuance of such
certificate, advice or bill.

            5.4 The Mortgagor shall have the right, at Mortgagor's sole cost,
after giving notice to the Mortgagee to contest the amount or validity, in whole
or in part, of any Imposition, or to seek a reduction in the valuation of the
Mortgaged Property or any portion thereof as assessed for real estate or
personal property tax purposes by appropriate proceedings diligently conducted
in good faith and where the amount so contested or for which a reduction is
sought is in excess of $2,000,000, the Mortgagor shall also prior to
commencement of such contest or proceeding have complied with the provisions of
subsections 5.4.1 through 5.4.5, inclusive, hereof or made payment of such
Imposition unless such payment would operate as a bar to such contest or
interfere materially with the prosecution thereof, in which event the Mortgagor
may postpone or defer payment of such Imposition after compliance with the
provisions of subsections 5.4.1 through 5.4.5, inclusive, hereof if:

            5.4.1 Neither the Mortgaged Property nor any part thereof would by
reason of such postponement or deferment be in danger of being forfeited or lost
prior to final determination of such contest or proceeding and the Mortgagee
shall not, by virtue of the contest or proceeding, be in any danger of criminal
liability and neither the Mortgaged Property nor any part thereof by any
interest therein would be subject to the imposition of any lien for which the
Mortgagor has not furnished adequate security as provided below; and

            5.4.2 Subject to the provisions of the first paragraph of Section
5.4, the Mortgagor shall either have (a) deposited with the Mortgagee in trust
the amount (at the option of the Mortgagor in cash or in the form of a letter of
credit) so contested and unpaid, together with all interest and penalties in
connection therewith and all charges that may or might be assessed against or
become a charge on the Mortgaged Property or any part thereof as estimated by
the Mortgagee, in such proceedings or (b) posted with the Mortgagee a bond
issued by a surety company reasonably satisfactory to the Mortgagee, whereby
such surety undertakes to pay such Imposition, interest, penalties and charges
(x) in the event that the Mortgagor shall fail to pay the same upon the final
disposition of the contest (including appeals), or (y) in the event that the
Mortgaged Property or any part thereof is in danger of being sold, forfeited or
lost during the pendency of such contest or (z) if the Mortgagor fails to
increase the amount of such bond as hereinafter provided. Any deposit made by
the Mortgagor with the Mortgagee under the provisions of this subsection 5.4.2,
together with any additions thereto made pursuant to this subsection 5.4.2,
shall be held in trust and, at the request of the Mortgagor, invested in
Collateral Investments (as defined in the Security Agreement), and the interest
on such deposits shall be disposed of as hereinafter provided. Upon the
termination of any such proceeding (including appeals), or if the Mortgagor
should so elect, at any time prior thereto, the Mortgagor shall pay

                                       13
<PAGE>

the amount of such Imposition or part thereof as finally determined in such
proceeding (or appeal), the payment of which may have been deferred during the
prosecution of such proceeding (or appeal), together with any costs, fees,
interest, penalties or other liabilities in connection therewith, and upon such
payment, the Mortgagee shall return any amount deposited with it together with
interest, if any, received thereon with respect to such Imposition. Such
payment, at the request of the Mortgagor, shall be made by the Mortgagee out of
the amount deposited with it pursuant to clause (a) of this subsection 5.4.2
with respect to such Imposition, to the extent that such amount is sufficient
therefor, and any balance due shall be paid by the Mortgagor and any balance
remaining shall be paid to the Mortgagor together with interest, if any,
received thereon. If, at any time during the continuance of such proceeding, the
Mortgagee shall reasonably deem the amount deposited with it or provided by bond
insufficient, the Mortgagor shall, within ten (10) days after demand, make an
additional deposit of, or increase the amount of its letter of credit or bond
by, such additional amount as the Mortgagee may request to cover payment of the
items set forth in this subsection 5.4.2, and upon failure of the Mortgagor so
to do, the Mortgagee may, after 10 days following written notice from the
Mortgagee to the Mortgagor, apply the amount theretofore deposited with it (or
the Mortgagee may submit for payment the letter of credit and apply the amount
thereof, or may require application of the bonded amount by the surety company,
if a bond has been furnished) to or on account of the payment, removal or
discharge of such Imposition and the interest and penalties in connection
therewith and any costs, fees or other liability accruing in any such
proceeding, or any part of any of the same and the balance, if any, shall be
returned to the Mortgagor. The Mortgagor shall, during the continuance of any
contest (including appeals) referred to herein and at its sole cost and expense,
provide the Mortgagee with such information relating to the same as the
Mortgagee may reasonably request. If, at any time during the continuance of such
proceeding, the Mortgaged Property or any part thereof is, in the judgment of
the Mortgagee, in any reasonable danger of being sold, forfeited or lost, the
Mortgagee may require, after ten (10) days' notice to the Mortgagor, that the
amount theretofore deposited with it be applied to the payment of such
Imposition (or the Mortgagee may submit for payment the letter of credit and
apply the amount thereof, or may require application of the bonded amount by the
surety company, if a bond has been furnished) in the manner provided in the
preceding sentence. Notwithstanding anything contained herein to the contrary,
no such deposit held by the Mortgagee, or any part thereof, shall be returned to
the Mortgagor so long as any Event of Default shall exist hereunder. The
Mortgagee shall act as the holder, in trust, of the monies, if any, deposited by
the Mortgagor pursuant to this subsection 5.4.2.

         5.4.3 The Mortgagor will exhibit to the Mortgagee the original receipts
(or copies thereof) or other proof reasonably satisfactory to the Mortgagee of
the payment of all real estate taxes within 30 days after the same are required
to be paid by the Mortgagor in compliance with subsection 5.1 hereof.
Concurrently with the delivery of the financial statements and other information
required by Section 1009 of the Indenture, Mortgagor shall for all other
Impositions deliver to the Mortgagee quarterly an Officer's Certificate that, to
the best knowledge of such officer, all such Impositions have been paid and
that, to the best of such officer's knowledge, the aggregate of all unpaid
amounts on such Impositions do not exceed $25,000, except for Impositions which
are being contested in accordance with the provisions of the first paragraph of
subsection 5.4. The Mortgagor shall immediately notify the Mortgagee of the
receipt by the Mortgagor of any notice that any Imposition has not been paid
when due and shall, at the same time, furnish to the Mortgagee a copy of such
notice of non-payment.

                                       14
<PAGE>

         5.4.4 "Impositions" shall mean all duties, taxes (including sales and
use taxes), water, sewer and other rents, rates and charges, assessments
(including, without limitation, all assessments for public improvements or
benefit, whether or not commenced or completed prior to the date hereof),
charges for public or private utilities, highway services, communication
services, sprinkler systems, protective services and levies, license and permit
fees, inspection fees and other authorization fees and other charges, ordinary
or extraordinary, whether foreseen or unforeseen, of any kind and nature
whatsoever, including interest or penalties thereon, which prior to or during
the term of this Mortgage will have been or may be laid, levied, assessed or
imposed upon or become due and payable out of or in respect of, or become a Lien
on the Mortgaged Property or any part thereof, or the occupancy, use or
possession of or activity conducted on the Mortgaged Property or any part
thereof or which are levied or assessed against the income received by the
Mortgagor from all or any part of the Mortgaged Property by virtue of any
present or future law, order or ordinance of the United states of America or of
any state, county or local government or of any department, office or bureau
thereof or of any other governmental authority (such governments or other
authorities being collectively referred to herein as a "Governmental Authority")
having or claiming jurisdiction over the Mortgagor and/or the Mortgaged Premises
or any part thereof. The term "Impositions" shall not include (a) income taxes
assessed by the United States government or the State of New Jersey or any other
State or any political subdivision of any of them, or (b) franchise, estate or
similar taxes based upon or measured by income.

         6. Changes in Method of Taxation.
            -----------------------------

         6.1 In the event of the passage after the date hereof of any law
applicable to the Mortgaged Premises or any part thereof, (i) deducting from the
value of the Mortgaged Premises, for the purposes of taxation, any Lien thereon,
or changing in any way the laws for the taxation of mortgages or debts secured
by mortgages or the manner of collection of any such taxes, or (ii) imposing a
tax, either directly or indirectly, on this Mortgage or any other documents
evidencing or securing the Liabilities, in each case, the result of which
affects adversely the Mortgagee, the Mortgagee shall have the right to declare,
by written notice delivered to Mortgagor, that an Event of Default will occur
hereunder one hundred twenty (120) days from the giving of such written notice
unless the Mortgagor is exempt from such tax or, if not exempt from such tax, is
permitted by law to pay the whole of such tax (or to provide funds to the
Mortgagee to pay such taxes) and assumes as an obligation and Liability secured
hereby the obligation to make all payments (or provide funds to the Mortgagee to
pay such taxes) of any tax so imposed until full payment of the Liabilities. The
Mortgagor shall promptly notify the Mortgagee of the occurrence of any of the
events set forth in clauses (i) or (ii) of this Section 6.1.

         6.2 The Mortgagor shall not have, nor will claim nor demand nor be
entitled to receive, any credit or credits by virtue of the payment of taxes as
provided herein against the Liabilities or the other sums payable as provided
herein and in the Securities secured hereby, and such taxes shall be paid
without abatement of or deduction from, and without counterclaim or setoff
against such principal, interest and other sums, for any reason, including,
without limitation, for so much of the taxes assessed against the Mortgaged
Premises as is equal to the tax rate applied to the amount due on this Mortgage
or any part thereof, and no deduction shall otherwise be made or claimed from
the taxable value of the Mortgaged Premises, or any part thereof, by reason of
the indebtedness secured by this Mortgage.

                                       15
<PAGE>

         7. Expenses of Litigation. If an action to foreclose this Mortgage or
to collect any of the Liabilities is commenced or any other action or proceeding
is commenced to which the Mortgagee is or becomes a party or in which the
Mortgagee is defending or upholding the Lien of this Mortgage, or in which the
Mortgagee is served in with any legal process, discovery notice or subpoena
relating to this Mortgage, all reasonable sums paid by the Mortgagee for the
expense of any such litigation or appearance or action in response to any such
legal process, discovery notice or subpoena (including attorneys' fees and
disbursements associated with legal costs) shall be paid by the Mortgagor within
thirty (30) days after notice has been given by the Mortgagee to the Mortgagor,
together with interest thereon on such amounts as have actually been paid by the
Mortgagee to third parties at a rate of interest equal to the greater of the
prime rate of the Mortgagee plus 2% per annum, and such amounts shall be a Lien
on the Mortgaged Property prior to any other right or title to, interest in or
claim upon the Mortgaged Property subordinate to the Lien of this Mortgage, and
shall be secured by this Mortgage, and, in any action or proceeding to foreclose
this Mortgage, or to recover or collect any of the Liabilities, the provisions
of law respecting the recovery of costs, disbursements and allowances shall
prevail unaffected by this covenant.

         However, if such action or proceeding is not one relating to the
enforcement of the rights of any Holders or the Lien of this Mortgage, the
Mortgagee shall promptly notify the Mortgagor of such action or proceeding and
the Mortgagor may participate in the conduct of such action or proceeding at the
Mortgagor's sole cost and expense.

         8. Maintenance. Subject to the Mortgagor's rights of alteration
pursuant to Section 3 hereof, the Mortgagor will maintain and operate the Sands
and the hotel that is the subject of the Madison House Lease at a quality level
at least as high as that existing on the date hereof and keep the Mortgaged
Property in good condition and repair (subject to ordinary wear and tear), will
not commit or suffer any waste of the Mortgaged Property and will comply with,
or cause to be complied with, all statutes, ordinances and requirements of any
Governmental Authority to which the Mortgaged Property are subject and which
failure to comply therewith would have a materially adverse effect on the
Mortgaged Property. Notwithstanding the foregoing, the Mortgagor shall have the
right to contest the application of any such statute, ordinance or requirement
of a Governmental Authority; provided that, if such statute or ordinance or
requirement of a Governmental Authority imposes an immediate fine or monetary
Imposition in an amount in excess of $2,000,000 upon the Mortgaged Premises for
the failure to comply with such ordinance or requirement, the Mortgagor shall
either pay such fine or monetary imposition and file an action for recovery
thereof or deposit with Mortgagee, in the manner described in Section 5.4.2
hereof, an amount reasonably determined by the Mortgagee to be sufficient to
protect the Mortgagee's interest (on its own behalf and on behalf of the
Holders). Subject to the provisions of Section 9.3 hereof, the Mortgagor will
promptly repair, restore, replace or rebuild any part of the Mortgaged Premises
now or hereafter subject to the Lien of this Mortgage which may be damaged or
destroyed by any casualty whatsoever, free from Liens and encumbrances, except
the Lien of this Mortgage and the other Security Documents and the encumbrances
permitted by Section 1014 of the Indenture, without regard to the adequacy of
any insurance proceeds, provided that the insurance proceeds are made available
to the Mortgagor pursuant to Section 9 of this Mortgage. The Mortgagor will do
all other things reasonably required for the maintenance and continuance of all
such services in respect of Impositions to the extent required to fulfill the
obligations set forth in this Section 8.

                                       16
<PAGE>

         9. Destruction: Restoration; Condemnation.

            9.1 Definitions. "Restoration" shall, for purposes of this Mortgage,
mean the replacement, rebuilding or repairing of damaged, destroyed or, in the
case of a condemnation, remaining areas of the Mortgaged Premises or the repair
or replacement of the Mortgaged Premises not so condemned, in either case as
nearly as possible to the condition, character and size of the Mortgaged
Premises immediately prior to such damage, destruction or condemnation to comply
with the Casino Control Act and all other material Legal Requirements and all
material requirements of any insurance policy covering or applicable to the
Mortgaged Premises including, without limitation, all material requirements of
any issuer of such policy and any applicable board of underwriters.

            9.2 Destruction. If the Mortgaged Premises, or any part thereof,
shall be destroyed or damaged by fire or any other casualty, the Mortgagor shall
give prompt notice thereof to the Mortgagee. If the Mortgagor does not promptly
make proof of loss after a casualty, the Mortgagee may make proof of loss, and
each insurance company concerned is hereby authorized and directed to make
payment for such loss directly to the Mortgagor and/or the Mortgagee on its own
behalf and on behalf of the Holders as their interests appear in accordance with
the provisions of subsection 2.3 hereof. In all instances where the insurance
proceeds are less than $1,000,000, the Mortgagor shall use such proceeds only
for Restoration. In all instances of destruction or casualty as aforesaid where
the insurance proceeds exceed $1,000,000, the insurance proceeds shall be
deposited into and held in the Collateral Account and applied in accordance with
Section 1018 of the Indenture and subsection 9.3 hereof. In the event that the
Mortgagee releases such proceeds to the Mortgagor, the Mortgagor shall be
obligated to restore or repair the Mortgaged Premises. In the event of
foreclosure of the Mortgaged Premises or other transfer of title to the
Mortgaged Premises in extinguishment of the indebtedness under the Securities
and this Mortgage, all right, title and interest of the Mortgagor in and to any
insurance policies then in force shall pass to the purchaser or grantee and the
Mortgagor hereby appoints the Mortgagee its attorney-in-fact, in the Mortgagor's
name, to assign and transfer all such policies and proceeds to such purchaser or
grantee, and the Mortgagor shall be entitled only to a credit in reduction of
the then outstanding Liabilities secured hereby in the amount of the
cancellation refund actually received by the Mortgagee. The Mortgagor agrees,
within fifteen (15) days following such foreclosure and written request by the
Mortgagee, to execute and deliver such assignments or other authorizations or
instruments as may be necessary or desirable to effectuate the foregoing.

            9.3 Restoration. If any insurance proceeds or condemnation award
(including interest thereon, the "Restoration Funds"), held by the Mortgagee in
the Collateral Account or otherwise are to be applied to the Restoration of the
Mortgaged Premises or any portion thereof as determined in this Section 9.3 or
Section 1018 of the Indenture, the Mortgagor shall promptly restore, replace or
rebuild the damaged or destroyed Mortgaged Premises and such Restoration shall
be performed only in accordance with the following conditions:

                (a) In the event the cost estimated by the architect supervising
the Restoration (the "Estimated Restoration Cost") is less than $2,000,000, the
Mortgagor shall diligently use the Restoration Funds to restore and repair the
Mortgaged Premises provided that any proceeds remaining after the Restoration
may be retained by the Mortgagor; provided

                                       17
<PAGE>

further, however, that if any Event of Default shall occur and then exist, the
Restoration Funds shall be paid over to the Mortgagee to be applied in
accordance with the terms of the Indenture.

            (b) Intentionally Omitted.

            (c) Prior to commencement of the Restoration or at any time during
the Restoration, if the Estimated Restoration Costs exceeds the amount of the
Restoration Funds by a sum greater than or equal to $2,000,000, the amount of
such excess shall be paid by the Mortgagor to the Mortgagee in the form of cash
or a letter of credit (reasonably acceptable in form and substance to the
Mortgagee) to be added to the Restoration Funds in the Collateral Account and in
the event such shortfall is less than the sum of $2,000,000, the Mortgagor shall
pay such shortfall on an ongoing basis during the course of the Restoration.

            (d) If no Default or Event of Default shall have occurred and be
continuing, all proceeds of loss of rents/business interruption insurance
payable as a result of any damage or destruction affecting the Mortgaged
Premises shall be paid first, to the Mortgagee in an amount sufficient to pay,
when due, all Liabilities, including the interest on and the principal of the
Securities, for so long as the interruption shall continue or until coverage is
exhausted, and second, to the Mortgagor. If a Default or Event of Default shall
have occurred and be continuing, all such proceeds of loss of rents/business
interruption insurance shall be paid to the Mortgagee. The Mortgagee shall hold
such proceeds in trust and, at the direction of the Mortgagor, shall invest such
proceeds in the type of investments set forth in clauses (a) through (d) in the
definition of "Cash Equivalents" in the Indenture (such investments being
referred to hereafter as "Cash Equivalents". The Mortgagee shall apply or cause
to be applied the proceeds and such income received thereon to the payment of
taxes, insurance premiums, rents, interest on and principal of the Securities,
and the normal operating expenses of the Mortgaged Property from and after the
date of the occurrence of such damage or destruction until the completion of the
necessary Restoration, if any, or until the exhaustion of such proceeds,
whichever first occurs. Upon completion of such Restoration, any remainder of
such loss of rents/business interruption insurance proceeds in the hands of the
Mortgagee shall, provided that no Event of Default shall be continuing
hereunder, be paid to the Mortgagor with interest received thereon, if any.

            (e) Except as provided in Section 1018 of the Indenture, nothing in
this Section 9 shall relieve the Mortgagor of its duty to repair, restore,
rebuild or replace the Mortgaged Property following damage or destruction by
fire or other casualty or partial condemnation in the event that no or
inadequate proceeds of insurance are available to defray the cost of such
repairing, restoring, rebuilding or replacement. In addition, nothing contained
herein shall relieve the Mortgagor of its duty to pay all Liabilities subsequent
to the occurrence of any fire or other casualty or condemnation; provided,
however, that, if the Mortgagee is applying the proceeds of business
interruption insurance or temporary taking proceeds to the payment of the
principal and accrued interest under the Securities, the Mortgagor shall not be
required to make double payments.

         9.4 Condemnation/Eminent Domain.

             (a) Immediately upon obtaining knowledge or the institution of any
proceedings for the condemnation or taking, either permanent or temporary, by
eminent domain of the Mortgaged Premises or any portion thereof, the

                                       18
<PAGE>

Mortgagor will notify the Mortgagee of the pendency of such proceedings. The
Mortgagee may, but shall not be obligated to, participate in any such
proceedings, and the Mortgagor shall from time to time deliver to the Mortgagee
all instruments requested by it to permit such participation. Except as
otherwise provided herein, the Mortgagor shall, at its expense, diligently
prosecute any such proceeding and shall consult with the Mortgagee, its
attorneys and experts and cooperate with them in any defense of any such
proceedings. The Mortgagor will not enter into any agreement for the taking or
conveyance of the Mortgaged Premises or any material part thereof, with anyone
authorized to acquire the same by eminent domain or in condemnation unless the
Mortgagor shall have delivered to the Mortgagee an Officer's Certificate from
the Mortgagor that such agreement is fair and reasonable in light of all of the
circumstances.

             (b) All awards and proceeds of condemnation in respect of any of
the Mortgaged Premises shall be applied in the same manner provided in Section
9.3 hereof in respect of damage or destruction.

         10. Inspection. The Mortgagee and any persons authorized by the
Mortgagee shall have the right to enter and inspect the Mortgaged Premises upon
reasonable notice at all reasonable times, but shall undertake such inspections
in such a manner as to minimize disruption and interference of the operation
thereof.

         11. Assignment of Rents, Issues and Profits.

            (a) Subject to the limitations contained herein, the Mortgagor
hereby assigns to the Mortgagee on its own behalf and on behalf of the Holders
the rents, issues and profits derived from (i) all leases of the Mortgaged
Premises now or hereafter entered into by the Mortgagor and (ii) all occupancy,
license and concession agreements in respect of any part of the Mortgaged
Premises now or hereafter entered into, and the Mortgagor grants to the
Mortgagee the right to enter the Mortgaged Premises for the purpose of
collecting the same and to lease the Mortgaged Property, or any part thereof,
and to apply said rents, issues and profits on account of the Liabilities. This
assignment, grant and right to apply rents, issues and profits shall continue in
effect until the Liabilities are paid in full, but the Mortgagee hereby waives
the right to enter the Mortgaged Premises and/or to collect said rents, issues
and profits, and the Mortgagor shall be entitled to collect, receive, use and
retain said rents, issues and profits, until the occurrence of and during the
continuation of an Event of Default; such right of the Mortgagor to exercise all
such rights, including the right to collect, receive, use and retain said rents,
issues and profits may be revoked by the Mortgagee upon the occurrence of and
during the continuation of an Event of Default by the Mortgagee giving written
notice of such revocation to the Mortgagor. The Mortgagor shall not accept
prepayments of installments of rent under the leases which payments would, in
the aggregate for all such leases, exceed the sum of $1,000,000 (except for
tenant finish work performed with respect to any such lease). If, following the
occurrence of an Event of Default, the Mortgagee shall thereafter elect to
discontinue the exercise of any right or remedy assigned or granted to the
Mortgagee on its own behalf and on behalf of the Holders pursuant to this
Section 11 or such Event of Default has otherwise been cured, the Mortgagor's
rights under this subsection 11(a) shall be automatically reinstated, subject to
the same or any other right or remedy hereunder being reasserted at any time and
from time to time following any subsequent Event of Default. Anything herein to
the contrary notwithstanding, the rights of the Mortgagor to collect or retain
any sums shall not apply to amounts to be used by Mortgagor to

                                       19
<PAGE>

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 Mortgagor or Mortgagee, shall
be made available to Mortgagor for such purpose).

            (b) The granting of the assignment created in Section 11(a) hereof
shall not, prior to entry upon and taking of possession of the Mortgaged
Property by the Mortgagee, be deemed or construed to constitute the Mortgagee in
possession nor thereafter or at any time or in any event obligate the Mortgagee
to perform or discharge any obligation of the Mortgagor or to appear in or
defend any action or proceeding relating to the Mortgaged Property or the leases
relating thereto nor shall the Mortgagee be liable in any way for any injury or
damage to person or property sustained by any individual or individuals in or
about the Mortgaged Property and the Mortgagor agrees to indemnify and hold
harmless the Mortgagee against any and all such liability, loss or damage,
except for losses occurring as the result of gross negligence or willful
misconduct on the part of the Mortgagee.

         12. Events of Default. The occurrence of one or more of the following
events shall constitute an "Event of Default" (occurring for any reason
whatsoever, whether voluntary or involuntary, or by operation o(pound) law or
pursuant to or in compliance with any judgment, decree or order of any court or
of any Legal Requirement or otherwise):

            (a) any Event of Default, as defined in the Indenture; or

            (b) upon the assignment of any of the rents, issues, profits or
leases of any portion of the Mortgaged Property, or any part thereof, to anyone
other than the Mortgagee on its own behalf and on behalf of the Holders without
the prior written consent of the Mortgagee, except as permitted in the
Indenture, and such assignments of rents, issues, profits or leases are not
rescinded or otherwise voided following the giving by the Mortgagee to the
Mortgagor of 30 days' written notice thereof; or

            (c) in the event of a lease, assignment or other transfer of any
portion of the Mortgaged Property other than as permitted in the Indenture, this
Mortgage or as Permitted Encumbrances, and such lease or other transfer is not
rescinded or otherwise voided following the giving by the Mortgagee to the
Mortgagor of 30 days' written notice thereof; or

            (d) the event that the Mortgagee declares that an Event of Default
has occurred in accordance with Section 6.1.

            12.2 Remedies. Upon the occurrence of an Event of Default hereunder,
in addition to its remedies contained in the Indenture, the Mortgagee on its own
behalf and on behalf of the Holders may take any or all of the following
actions, at the same or at different times:

            (a) Possession. Enter upon and take possession of the Mortgaged
Property, and lease and let the Mortgaged Property, or any part thereof, and
receive all the rents, issues and profits thereof which are overdue, due or to
become due, and apply the same, after payment of all reasonably necessary
charges and expenses, on account of the amounts hereby secured, and the

                                       20
<PAGE>

Mortgagee is hereby given and granted full power and authority to do any act or
thing, which the Mortgagor might or could legally do in connection with the
management and operation of the Mortgaged Property. The granting of the
authority so created shall not, prior to entry upon and taking of possession of
the Mortgaged Property by the Mortgagee, be deemed or construed to constitute
the Mortgagee in possession nor thereafter or at any time or in any event
obligate the Mortgagee to perform or discharge any obligation of the Mortgagor
or to appear in or defend any action or proceeding relating to the Mortgaged
Property or the leases relating thereto nor shall the Mortgagee be liable in any
way for any injury or damage to person or property sustained by any individual
or individuals in or about the Mortgaged Property and the Mortgagor agrees to
indemnify and hold harmless the Mortgagee against any and all such liability,
loss or damage, except for losses occurring as the result of gross negligence or
willful misconduct on the part of the Mortgagee.

            (b) Foreclosure. Institute an action of mortgage foreclosure, or
take other action as the law may allow, at law or in equity, for the enforcement
of this Mortgage, and proceed thereon to final judgment and execution of the
entire unpaid balance of the Liabilities including costs of suit, interest and
reasonable attorneys' fees. In case of any sale of the Mortgaged Property by
virtue of judicial proceedings, the Mortgaged Property may be sold in one parcel
and as an entirety or in such parcels, manner or order as the Mortgagee in its
sole discretion may elect. The failure to make any tenants parties defendant to
a foreclosure proceeding and to foreclose their rights will not be asserted by
the Mortgagor as a defense in any proceeding instituted by the Mortgagee to
collect any of the Liabilities.

            (c) Appointment of Receiver. Without notice to the Mortgagor,
appoint a receiver of the rents, issues and profits of the Mortgaged Property
without the necessity of proving either the depreciation or the inadequacy of
the value of the security or the insolvency of the Mortgagor or any person who
may be legally or equitably liable to pay moneys secured hereby and the
Mortgagor and each such person waives such proof and hereby consents to the
appointment of a receiver.

            (d) Excess Monies. Apply on account of the unpaid Liabilities and
the interest thereon or on account of any arrearages of interest thereon, or on
account of any balance due to the Mortgagee after a foreclosure sale of the
Mortgaged Property, or any part thereof, any unexpended moneys still retained by
the Mortgagee that were paid by the Mortgagor to the Mortgagee for the payment
of, or as security for the payment of, taxes, assessments, municipal or
governmental rates, charges, Impositions, Liens, water or sewer rents, or
insurance premiums, if any, or in order to secure the performance of some other
act by or obligation of the Mortgagor.

            (e) Other Remedies. Exercise any and all other rights and remedies
granted under this Mortgage or now or hereafter existing in equity, at law, by
virtue of statute or otherwise, including, without limitation, the right and
power to sell the whole or any portion of the Mortgaged Property according to
law.

            12.3 Remedies, Cumulative and Concurrent. The rights and remedies of
the Mortgagee on its own behalf and on behalf of the Holders as provided in this
Mortgage and the other documents securing the indebtedness evidenced by the
Securities will be cumulative and concurrent and may be pursued separately,
successively or together against the Mortgagor or

                                       21
<PAGE>

against other obligors or against the Mortgaged Property, or any one or more of
them, in the sole and absolute discretion of the Mortgagee, and may be exercised
as often as occasion for such pursuit arises. The failure to exercise any such
right or remedy will not be construed as a waiver or release of that right or
remedy. The Mortgagee's consent to any act or omission by subsequent act or
omission or a waiver of the need for such consent in any future or other
instance.

            12.4 Waiver of Exemptions; Marshalling. Subject to any contrary
provisions contained in this Mortgage, the Mortgagor hereby waives and releases,
to the extent permitted by law:

            (a) All benefit that might accrue to the Mortgagor by virtue of any
present or future law exempting the Mortgaged Property or any part of the
proceeds arising from any sale of the Mortgaged Property. from attachment, levy
or sale on execution; and

            (b) Exemption from civil process; and

            (c) Redemption or extension of time for payment; and

            (d) Any right to have the Mortgaged Property marshalled.

            12.5 Discontinuance of Proceedings. If the Mortgagee has proceeded
to enforce any right under the Guarantee, the Indenture, the Securities or this
Mortgage or any other document securing the Liabilities and such proceedings
have been discontinued or abandoned for any reason, then in every such case, the
Mortgagor and the Mortgagee will be restored to their former positions and the
rights, remedies and powers of the Mortgagee will continue as if no such
proceedings had been taken.

            12.6 Application of Proceeds. In the event of any sale of the
Mortgaged Property by foreclosure, through suit in equity, by publication or
otherwise, the proceeds of any such sale shall be applied in the manner set
forth in Section 506 of the Indenture.

         13. No Waivers, Etc. Any failure by the Mortgagee to insist upon the
strict performance by the Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and the Mortgagee, notwithstanding any such failure, shall have the
right thereafter to insist upon the strict performance by the Mortgagor of any
and all of the terms and provisions of this Mortgage to be performed by the
Mortgagor; neither the Mortgagor nor any other person now or hereafter obligated
for the payment of the whole or any part of the sums now or hereafter secured by
this Mortgage, including, but not limited to, any guarantor, shall be relieved
of such obligation by reason of the failure of the Mortgagee to comply with any
request of the Mortgagor, or of any other person so obligated, to take action to
foreclose this Mortgage or otherwise enforce any of the provisions of this
Mortgage or any provisions relating to the Liabilities including the
indebtedness evidenced by the Securities, or by reason of the release,
regardless of consideration, of the whole or any part of the security held for
the indebtedness evidenced by the Securities or the Liabilities, or by reason of
any agreement or stipulation between any subsequent owner or owners of the
Mortgaged Property and the Mortgagee extending the time of payment or modifying
the terms of the Securities or this Mortgage, without first having obtained the
consent

                                       22
<PAGE>

of the Mortgagor or such other person and, in the last-mentioned event, the
Mortgagor and all such other persons shall continue to be liable to make such
payments according to the terms of any such agreement of extension or
modification unless expressly released and discharged in writing by the
Mortgagee; the Mortgagee may release, regardless of consideration and without
the necessity for any notice to or consent by the holder of any subordinate Lien
on the Mortgaged Property as may be permitted pursuant to the terms of the
Indenture, any part of the security held for the indebtedness evidenced by the
Securities or the Liabilities without, as to the remainder of the security,
impairing or affecting the Lien of this Mortgage or the priority of such Lien
over any subordinate Lien; the holder of any subordinate Lien on the Mortgaged
Property shall have no right to terminate any lease affecting the same, or any
part thereof, whether or not such lease be subordinate to this Mortgage; and the
Mortgagee may resort for the payment of the indebtedness evidenced by the
Securities or the Liabilities secured to any other security therefor held by the
Mortgagee in such order and manner as the Mortgagee may elect.

         14. Revenue Stamps. If at any time the United States of America or the
State of New Jersey shall require internal revenue or other stamps to be affixed
to the Securities or this Mortgage, the Mortgagor will pay for the same,
together with any interest or penalties imposed in connection therewith.

         15. Notices. (a) Any request, demand, authorization, direction, notice,
consent, waiver or other document provided or permitted by this Mortgage to be
made upon, given or furnished to, or filed with:

         (1) the Mortgagee shall be sufficient for every purpose hereunder if in
writing and mailed postage prepaid, by registered or certified mail, return
receipt requested, or delivered personally, to the Mortgagee at:

                           Wells Fargo Bank, National Association
                           MAC N9303-121
                           P.O. Box 1517
                           Minneapolis, Minnesota 55480

with a copy, in the case of any notice from the Mortgagor to the Mortgagee,
given in one of the foregoing manners to:

                           Jones Day
                           222 East 41st Street
                           New York, New York 10017
                           Tel.: 212-326-3939
                           Attention: Donald F. Devine, Esq.

(provided that any failure by the Mortgagor to furnish such a copy shall not
affect the sufficiency of any such request, demand, authorization, direction,
notice, consent, waiver or other document with respect to the Mortgagee); and

                                       23
<PAGE>

         (2) the Mortgagor shall be sufficient for every purpose hereunder if in
writing and mailed postage prepaid, registered or certified mail, return receipt
requested, or delivered personally, to the Mortgagor, addressed to it at:

                           The Sands Hotel and Casino
                           Indiana Avenue and Brighton Park
                           Atlantic City, New Jersey 08401
                           Attention:  Patricia Wild, Esq.

or at any other address previously furnished in writing to the Mortgagee by the
Mortgagor, with a copy given in one of the foregoing manners to:

                           Jones Day
                           222 East 41st Street
                           New York, New York 10017
                           Tel.: 212-326-3939
                           Attention: Donald F. Devine, Esq.

and also to the Guarantor at the address provided in the Indenture (provided
that any failure to furnish such copies shall not affect the sufficiency of any
such demand, request, authorization, direction, notice, consent, waiver or other
document provided or permitted to be made, given or furnished in connection with
this mortgage).

            (b) In the event that a notice is given by personal delivery as
provided in this Section 15, the party giving such notice shall, within three
days after such personal delivery, also give such notice by mail as provided in
subsection 15(a) above, provided that such notice shall be effective as of the
date of personal delivery.

         16. Modification; Amendment. This Mortgage may not be modified,
amended, discharged, waived in whole or in part except by an agreement in
writing signed by the party against whom enforcement of any such modification,
amendment, discharge or waiver is sought.

         17. Partial Invalidity. In the event any one or more of the provisions
contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable, in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included.

         18. No Subordinate Financing. The Mortgagor shall not execute or
deliver, or suffer to exist, any pledge, security agreement, or mortgage (other
than this Mortgage and the Permitted Encumbrances) covering all or any portion
of the Mortgaged Property except as expressly permitted under Section 1014 of
the Indenture.

         19. Intentionally Omitted.

         20. Security Agreement. It is the intention of the parties hereto that
this Mortgage shall constitute a security agreement within the meaning of the
Uniform Commercial Code with respect to the Fixtures, and that a security
interest shall attach thereto for the benefit of the

                                       24
<PAGE>

Mortgagee to secure the Liabilities and all other sums and charges which may
become due hereunder or secured hereby. The Mortgagor hereby authorizes the
Mortgagee to file financing and continuation statements with respect to the
Fixtures in which the Mortgagor has a mortgageable interest, without the
signature of the Mortgagor whenever lawful and, upon written request, the
Mortgagor shall promptly prepare and execute financing and continuation
statements reasonable and necessary to establish and maintain a valid security
interest hereunder in form reasonably satisfactory to the Mortgagee to further
evidence and secure the Mortgagee's interest in the Fixtures, and shall pay all
filing fees in connection therewith. Upon the occurrence of an Event of Default
under this Mortgage, the Mortgagee, pursuant to Section 9-501(4) of the Uniform
Commercial Code, as said Section is currently constituted or may be hereafter
amended, shall have the option of proceeding as to both real and personal
property in accordance with its rights and remedies in respect of the real
property, in which event the default provisions of the Uniform Commercial Code
shall not apply. The parties agree that in the event that the Mortgagee elects
to proceed with respect to the Fixtures separately from the real property, ten
(10) days' notice of the sale of the Fixtures shall be reasonable notice.

         21. Successors and Assigns. All covenants of the Mortgagor contained in
this Mortgage are imposed solely and exclusively for the benefit of the
Mortgagee on its own behalf and on behalf of the Holders and its successors and
assigns, and no other person shall have standing to require compliance with such
covenants or shall, under any circumstances, be deemed to be a beneficiary of
such covenant, any or all of which may be freely waived in whole or in part by
the Mortgagee at any time if in its sole discretion it deems it advisable to do
so. But all such covenants of the Mortgagor shall run with the Land and bind the
Mortgagor, the successors and assigns of the Mortgagor (and each of them) and
all subsequent owners, encumbrancers and tenants of the Mortgaged Premises, and
shall enure to the benefit of the Mortgagee, its successors and assigns. The
word "Mortgagor" shall be construed as if it read "Mortgagors" whenever the
sense of this Mortgage so requires and shall include all successors and assigns
of the Mortgagor. The word "Mortgagee" shall be construed to mean the Mortgagee
named herein and the successors and assigns thereof. The Mortgagor understands
and agrees that whenever herein the Mortgagee's consent is required, the
Mortgagee may be obligated, prior to giving such consent, to obtain the
agreement of the Holders as required in the Indenture and, in such event, the
Mortgagee's obligation to deliver any such consent to the Mortgagor shall be
subject to the Mortgagee first obtaining the required Holders' consent. All
covenants, agreements and obligations of the Mortgagee hereunder shall inure to
the benefit of the Mortgagor and its successors and assigns and shall be binding
upon the Mortgagee, Holders, participants and their respective successors and
assigns.

         22. Governing Law. This Mortgage and all matters relating or pertaining
to this Mortgage shall be governed, construed and enforced by and under the laws
of the State of New Jersey.

         23. Space Leases; Leasehold Estate.

            23.1 All Space Leases of all or any portion of the Mortgaged
Property hereafter entered into after the date hereof by the Mortgagor (i) will
be subordinated to the Lien created by this Mortgage unless Mortgagee directs
otherwise and (ii) shall provide that following the sale of the Mortgaged
Property or any part thereof through foreclosure or otherwise, or following

                                       25
<PAGE>

conveyance of the Mortgaged Property or any part thereof by deed or assignment
in lieu of foreclosure, the Space Tenant under each such Space Lease will, upon
ten (10) days' written notice from the purchaser of the Mortgaged Property or
any part thereof (or its assignee) given within sixty (60) days after the sale
thereof, attorn to such purchaser or assignee as the direct tenant of such
purchaser or assignee.

            23.2 The Mortgagor shall duly and punctually perform and serve all
of the material terms, covenants and conditions of the Space Leases required to
be performed and observed by it as landlord thereunder substantially in
accordance with the terms thereof. The Mortgagor will further do all things
reasonably necessary to preserve and keep unimpaired its rights under all Space
Leases. The Mortgagor shall require all Space Tenants to observe, keep and
perform all material covenants and agreements imposed upon them under the Space
Leases. The Mortgagor shall appear in and defend any action or proceeding
arising under or in any manner connected with any of the Space Leases.

            23.3 The Mortgagor shall furnish to the Mortgagee a copy of each
Space Lease promptly after its execution. At any time, and from time to time,
upon request and on reasonable notice from the Mortgagee, the Mortgagor shall
deliver to the Mortgagee a schedule of all Space Leases then in effect, which
schedule shall include the following: (i) the name of the Space Tenant under the
Space Lease; (ii) a description of the space leased thereunder in form
satisfactory to the Mortgagee, including but not limited to the approximate
number of square feet leased thereunder, type of activity performed under such
lease and type of space leased; (iii) the rental rate, including any
escalations, if any; (iv) the term of the Space Lease and a description of any
renewal options; and (v) such other information as the Mortgagee may reasonably
request.

            23.4 "Space Leases" shall mean any and all leases, licenses,
concessions or other agreements (written now or hereafter in effect), which
grant a possessory interest in and to, or the right to use part of the Mortgaged
Property. "Space Tenant" shall mean the tenant or other user or occupant of such
part of the Improvements.

            23.5 With respect to the Madison House Lease and the Leasehold
Estate created thereby:

                 (a) The Mortgagor shall fully perform and comply with all
agreements, terms, covenants, obligations and conditions of the lessee under the
Madison House Lease within the time periods provided therein.

                 (b) The Mortgagor shall not, without the Mortgagee's prior
written consent (which shall not be unreasonably withheld or delayed), (i)
modify, amend, supplement, terminate or cancel the Madison House Lease, (ii)
assign, transfer or otherwise convey all or any portion of the Leasehold Estate
or (iii) surrender or abandon the Leasehold Estate.

                 (c) The Mortgagor shall give prompt written notice to the
Mortgagee of the occurrence of any default or event of default by the lessor or
the Mortgagor under the Madison House Lease.

                                       26
<PAGE>

                 (d) No release, forbearance or forgiveness of any of the
Mortgagor's obligations under the Madison House Lease shall release or otherwise
affect the Mortgagor's obligations under this Mortgage.

         24. Indenture. This Mortgage has been executed and delivered pursuant
to the terms of the Indenture and is entitled to the benefits of the Indenture.

         25. Further Assurances. The Mortgagor will, at any time and from time
to time after the execution and delivery of this Mortgage, promptly upon
request, execute and deliver such further deeds of trust, mortgages, instruments
of further assurances and other documents and do such further acts and things as
the Mortgagee may reasonably request in order to evidence further the Lien and
security interest of this Mortgage, pursuant to its terms and to protect further
the security of the Mortgagee on its own behalf and on behalf of the Holders,
and otherwise to effect fully the purposes of this Mortgage.

         26. Escrowed Sums. In order to more fully protect the security of this
Mortgage and to insure the payment of Impositions and insurance premiums, from
and after the occurrence of an Event of Default hereunder and until such Event
of Default is cured, the Mortgagor shall pay to the Mortgagee and as "Escrowed
Sums", in monthly installments in advance, an amount equal to the pro rata sum
of (a) Impositions (estimated wherever necessary) to become due for the tax year
during which such payment is so directed and (b) the insurance premiums for the
same year for those insurance policies as are required hereunder. If the
Mortgagee determines that any amounts theretofore paid by the Mortgagor are
insufficient for the payment in full of such Impositions and insurance premiums,
the Mortgagee shall notify the Mortgagor of the increased amounts required to
provide a sufficient fund, whereupon the Mortgagor shall pay to the Mortgagee,
within thirty (30) days thereafter the additional amount as stated in such
notice by the Mortgagee. The Escrowed Sums shall be held by the Mortgagee and
upon written request of the Mortgagor invested in Cash Equivalents and shall not
be commingled with the Mortgagee's other funds and shall be paid directly by the
Mortgagee to the applicable Governmental Authority or the insurance companies
entitled thereto. Upon assignment of its rights under this Mortgage, the
Mortgagee shall have the right to pay over the balance of the Escrowed Sums then
in its possession to the assignee and upon assumption of such liability by the
assignee, the Mortgagee on its own behalf and on behalf of the Holders shall
become completely released from all liability with respect thereto. Upon full
payment of the Liabilities or at such earlier time as the Mortgagee may elect,
the balance of the Escrowed Sums in the Mortgagee's possession shall be paid
over to the Mortgagor and no other party shall have any right or claim thereto.
If no Event of Default shall be continuing hereunder, the Escrowed Sums shall,
at the option of the Mortgagee, be repaid to the Mortgagor in sufficient time to
allow the Mortgagor to satisfy the Mortgagor's obligations under this Mortgage
to pay Impositions and the required insurance premiums; or be paid directly by
the Mortgagee to the applicable Governmental Authority and the insurance company
entitled thereto. If an Event of Default shall be continuing hereunder, however,
the Mortgagee shall have the additional option of crediting the full amount of
the Escrowed Sums against the Liabilities. Notwithstanding anything to the
contrary contained in this Section 26 or elsewhere in this Mortgage, the
Mortgagee hereby reserves the right to waive the payment by the Mortgagor to the
Mortgagee of the Escrowed Sums, and, in the event that the Mortgagee does so
waive such payment, it shall be without prejudice to the Mortgagee's rights to
insist, at any subsequent time or times, that such payments be made in
accordance herewith.

                                       27
<PAGE>

         27. Release by Mortgagee. Any release of, regardless of consideration,
any part of the Mortgaged Property or any other collateral security for any of
the Liabilities or the indebtedness evidenced by the Securities will not in any
way impair, affect, subordinate or release the Lien or security interests
created in or evidenced by this Mortgage or its stature as a Lien and security
interest in and to the Mortgaged Property. For payment of the Liabilities or the
indebtedness evidenced by the Securities, the Mortgagee may resort to the
security of the Mortgage and/or any other security held by the Mortgagee on its
own behalf and on behalf of the Holders in such order and manner as the
Mortgagee may elect. The Mortgagee may, to the full extent that it may lawfully
do so, pursue any one or more remedies permitted or referred to hereunder or
under applicable law to enforce the provisions of this Mortgage, to collect the
Liabilities or the indebtedness evidenced by the Securities or to realize upon
the security given therefor at the same time or at different times without in
any way impairing or waiving its right to pursue any other remedy or remedies so
provided.

         28. Waiver of Damages. Except as to claims arising out of the
negligence or willful misconduct of the Mortgagee, the Mortgagor further waives
any claim against the Mortgagee for consequential, special or punitive damages
arising in connection with the Indenture, this Mortgage or any of the other
documents securing the Securities, 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 or this Mortgage and any setoff or counterclaim of
any nature or description.

         29. Unenforceability. If any term, covenant, condition or provision of
this Mortgage or the application thereof to any circumstance or to any person,
firm or corporation shall be invalid or unenforceable to any extent, the
remaining terms, covenants, conditions and provisions of this Mortgage 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 or impaired thereby and each remaining
term, covenant, condition and provision of this Mortgage shall be valid and
shall be enforceable to the fullest extent permitted by law.

         30. Spill Compensation and Control Act and Industrial Site Recovery
Act.

         Industrial Site Recovery Act.

         A. Representations and Warranties.

         For the purposes of this Section 30, the Mortgagor makes the following
representations only as to properties owned, occupied and/or leased by it and
solely on its own behalf:

         (1) To the best of the Mortgagor's knowledge, none of the real property
owned, occupied and/or leased by the Mortgagor, and located in the State of New
Jersey, including, but not limited to the Mortgaged Premises, has ever been used
by previous owners and/or operators to refine, produce, store, handle, transfer,
process, transport, generate, manufacture, treat or dispose of "Hazardous
Substances", as such term is defined in N.J.S.A. 58:10-23.11b(k), and the
Mortgagor has not in the past used, nor does intend in the future to use, its
said real property, including, but not limited to the Mortgaged Premises, for
the purpose of refining, producing,

                                       28
<PAGE>

storing, handling, transferring, processing, transporting, generating,
manufacturing, treating or disposing of said "Hazardous Substances".

         (2) None of the real property owned, occupied and/or leased by it and
located in the State of New Jersey, including, but not limited to the Mortgaged
Premises, has been or is now being used or, to the best of Mortgagor's
knowledge, has been used as a "Major Facility", as such term is defined in
N.J.S.A. 58:10-23.11b(1), and said real property, including, but not limited to
the Mortgaged Premises, will not be used as a "Major Facility" after completion
of any construction, renovation, restoration and other developmental work which
the Mortgagor may undertake thereon.

         (3) To the best of the Mortgagor's knowledge, no Lien has been attached
to any revenues or any real or personal property owned, occupied and/or leased
by the Mortgagor, and located in the State of New Jersey, including, but not
limited to, the Mortgaged Premises, as a result of the chief executive of the
New Jersey Spill Compensation Fund expending monies from said fund to pay for
"Damages", as such term is defined in N.J.S.A. 58:10-23.11(g) and/or "Cleanup
and Removal Costs", as such term is defined in N.J.S.A. 58:10-23 11b(d), arising
from an intentional or unintentional action or omission of the Mortgagor or any
previous owner and/or operator of said real property, including, but not limited
to the Mortgaged Premises, resulting in the releasing, spilling, pumping,
pouring, emitting, emptying or dumping of "Hazardous Substances", as such term
is defined in N.J.S.A. 58.10-23.11b(k), into the waters of the State of New
Jersey or onto lands from which it might flow or drain into said waters or into
waters outside the jurisdiction of the State of New Jersey where damage may have
resulted to the lands, waters, fish, shellfish, wildlife, biota, air and other
resources owned, managed, held in trust or otherwise controlled by the State of
New Jersey.

         (4) To the best of Mortgagor's knowledge, the Mortgagor has not
received a summons, citation, directive, letter or other written communication
from the New Jersey Department of Environmental Protection concerning any
intentional or unintentional action or omission on the Mortgagor's part
resulting in the releasing, spilling, leaking, pumping, pouring, emitting,
emptying or dumping of "Hazardous Substances", as such term is defined in
N.J.S.A. 58:10-23.11b(k), into the waters or onto the lands of the State of New
Jersey, or into the waters outside the jurisdiction of the State of New Jersey
resulting in damage to the lands, waters, fish, shellfish, wildlife, biota, air
and other resources owned, managed, held in trust or otherwise controlled by and
within the jurisdiction of the State of New Jersey.

         (5) To the best of the Mortgagor's knowledge, none of the real property
owned, occupied and/or leased by the Mortgagor and located in the State of New
Jersey, including, but not limited to the Mortgaged Property, has ever been used
by previous owners and/or operators to generate, manufacture, refine, transport,
treat, store, handle or dispose of "Hazardous Substances", or "Hazardous
Wastes", as such terms are defined in N.J.A.C. 7:1-3.3, and the Mortgagor does
not intend to use any of its real property, including, but not limited to the
Mortgaged Property for such purposes.

         (6) In connection with the purchase of the Mortgaged Premises and any
other real property acquired by the Mortgagor on or after January 1, 1984, the
Mortgagor required that the Seller of said real property, including the
Mortgaged Property, comply with the provisions of the

                                       29
<PAGE>

New Jersey Industrial Site Recovery Act (N.J.S.A. 13:1k-6 et seq.) and the
Seller did comply therewith.

         (7) If and to the extent required by applicable law, the Mortgagor has
conducted a complete and thorough on-site inspection of the Mortgaged Property,
including, but not limited to, a geohydrological survey of soil and sub-surface
conditions as well as other tests, to determine the presence of "Hazardous
Substances" or "Hazardous Wastes", as such terms are defined in N.J.A.C.
7:1-3.3, and the Mortgagor found no evidence of the presence of said "Hazardous
Substances" or Hazardous Wastes" on or in the Mortgaged Property.

         B. Covenants.

         (1) If the Mortgagor is presently an owner or operator of a "Major
Facility" in the State of New Jersey, as such term is defined in N.J.S.A.
58:10-23.11b(1), or if the Mortgagor ever becomes such an owner or operator,
then the Mortgagor shall furnish the New Jersey Department of Environmental
Protection with all the information required by N.J.S.A. 58:10-23.11d to the
extent applicable.

         (2) The Mortgagor shall not cause or permit to exist, as a result of an
intentional or unintentional action or omission on its part, a releasing,
spilling, leaking, pumping, emitting, pouring, emptying or dumping of a
"Hazardous Substance", as such term is defined in N.J.S.A. 58:10-23.11b(k) into
waters of the State of New Jersey or onto the lands from which it might flow or
drain into said waters. or into waters outside the jurisdiction of the State of
New Jersey where damage may result to the lands, waters, fish, shellfish,
wildlife, biota, air and other resources owned, managed, held in trust or
otherwise controlled by the State of New Jersey unless said spill, leak, etc. is
pursuant to and in compliance with the conditions of a permit issued by the
appropriate federal or state governmental authorities.

         (3) So long as the Mortgagor shall own or operate any real property
located in the State of New Jersey, which is used as a "Major Facility", as such
term is defined in N.J.S.A. 58:10-23.11b(1), the Mortgagor shall duly file or
cause to be duly filed with the Director of the Division of Taxation in the New
Jersey Department of the Treasury, a tax report or return and shall pay or make
provision for the payment of all taxes due therewith, all in accordance with and
pursuant to N.J.S.A. 58:10-23.11h to the extent applicable.

         (4) In the event that there shall be filed a Lien against the Mortgaged
Premises by the New Jersey Department of Environmental Protection, pursuant to
and in accordance with the provisions of N.J.S.A. 58:10-23.11f(f), as a result
of the chief executive of the New Jersey Spill Compensation Fund having expended
monies from said fund to pay for "Damages", as such term is defined in N.J.S.A.
58:10-23.11g. and/or "Cleanup and Removal Costs", as such term is defined in
N.J.S.A. 58:10-23.11b(d), arising from an intentional or unintentional action or
omission of the Mortgagor, resulting in the releasing, spilling, pumping,
pouring, emitting, emptying or dumping of "Hazardous Substances", as such term
is defined in N.J.S.A. 58:10-23.11b(k) into the waters of the State of New
Jersey or onto lands from which it might flow or drain into said waters, then
the Mortgagor shall, within thirty (30) days from the date that the Mortgagor is
given notice that the Lien has been placed against the Mortgaged Premises or
within such shorter period of time in the event that the State of New Jersey has
commenced steps

                                       30
<PAGE>

to cause the Mortgaged Premises to be sold pursuant to the Lien, either (i) pay
the claim and remove the Lien from the Mortgaged Premises, or (ii) furnish (a) a
bond reasonably satisfactory to the Mortgagee in the amount of the claim out of
which the Lien arises, (b) a cash deposit in the amount of the claim out of
which the Lien arises, or (c) other security reasonably satisfactory to the
Mortgagee in an amount sufficient to discharge the claim out of which the Lien
arises (a commitment of a reputable title insurance company to affirmatively
insure over or omit such claim shall constitute such reasonably satisfactory
security).

         (5) Should the Mortgagor cause or permit any intentional or
unintentional action or omission resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying or dumping of "Hazardous Substances", as
such term is defined in N.J.S.A. 58:10-23.11b(k), into the waters or onto the
lands of the State of New Jersey, or into the waters outside the jurisdiction of
the State of New Jersey resulting in damage to the lands, waters, fish,
shellfish, wildlife, biota, air or other resources owned, managed or held in
trust or otherwise controlled by the State of New Jersey, without having
obtained a permit issued by the appropriate governmental authorities, the
Mortgagor shall promptly clean up such spill, leak, pumping, pouring, emission,
emptying or dumping, if so required by the Department of Environmental
Protection in accordance with the provisions of the New Jersey Spill
Compensation and Control Act and all other applicable law.

         C. Exceptions

         Notwithstanding Subsections A and B above.

         (1) With respect to Lot 12 in Block 47 of the Tax Map of the City of
Atlantic City, two underground oil storage tanks were abandoned in place in
accordance with applicable regulations of the New Jersey Department of
Environmental Protection ("NJDEP") and the Mortgagor maintains an above ground
oil storage tank on such property.

         (2) The prior owner of Lots 1-6, 9, and 10 in Block 47 abandoned in
place 3 underground storage tanks (the "Midtown Bala Properties"), completed
product recovery operations and well closure activities with respect to spilled
oil product which respect to one such tank, and received "no further action"
letters from the NJDEP with respect to such company to remove asbestos from its
Midtown Bala Properties improvements prior to the demolition thereof.

         (3) The Sands may store small quantities of substances that may be
"hazardous" substances to use in the ordinary course of operating its casino
hotel.

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

         32. In this Mortgage, 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.

         THE MORTGAGOR ACKNOWLEDGES THAT THE MORTGAGOR HAS RECEIVED FROM THE
MORTGAGEE WITHOUT CHARGE A TRUE COPY OF THIS

                                       31
<PAGE>

INSTRUMENT STAMPED "COPY" AND ON WHICH SUCH COPY IS A CERTIFICATION BY THE
MORTGAGEE THAT SUCH INSTRUMENT IS A TRUE COPY OF THIS MORTGAGE.

         33. Notwithstanding anything to the contrary herein contained or
contained in the Indenture, the Security Agreement or any document executed in
connection therewith: (i) Mortgagor shall have the right to sell, transfer and
convey (the "Sale") the Mortgaged Property in whole or in part (including,
without limitation, in a transaction involving a parcel of Land together with
all Improvements and Fixtures thereon and all Space Leases pertaining thereto)
(the parcel(s) which is the subject of such Sale is hereinafter referred to as
the "Conveyed Property") and in connection therewith obtain from Mortgagee a
release of the Conveyed Property from the Lien of this Mortgage 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 that term is
defined in the Indenture, regardless of whether such Sale was in fact an Asset
Sale. In connection therewith, Mortgagee shall execute, acknowledge and deliver
to Mortgagor such documents as Mortgagor may reasonable require to effectuate
such release; and (ii) Mortgagor shall have the right to lease (the "Lease") the
Mortgaged Property in whole or in part (a parcel of Land together with all
Improvements and Fixtures thereon and all Space Leases pertaining thereto) (the
parcel(s) which is the subject of such Lease is hereinafter referred to as the
"Leased Property") pursuant to a long term ground lease or operating lease and
in connection therewith obtain from Mortgagee a nondisturbance agreement
reasonably satisfactory to Mortgagor to such Lease provided that the rentals
provided for in such Lease, in the aggregate, represents the fair market value
of a lease of the Leased Property at that time.

                                     * * * *

                                       32
<PAGE>

         IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be signed
in its name.

                                    ACE GAMING, LLC

                                    By: /s/ Patricia Wild
                                        -----------------
                                        Name:  Patricia Wild
                                        Title: Vice President, General Counsel,
                                               Secretary

Attest:

By: /s/ Douglas S. Niethold
    -----------------------

                                       33
<PAGE>

COUNTY OF NEW YORK   )
                         :SS.:
STATE OF NEW YORK    )

         BE IT REMEMBERED, that on this 22nd day of July 2004, before me, the
subscriber, a Notary Public of the State of New York, personally appeared,
Patricia Wild, the Vice President, General Counsel and Secretary of ACE Gaming,
LLC, a New Jersey limited liability company and the assignor named in the within
instrument, who I am satisfied is the person who executed the within instrument,
as the Vice President, General Counsel and Secretary of said company, and she
acknowledged that she signed and delivered the same as such officer, that the
within instrument is the voluntary act and deed of such company made by virtue
of authority of its members, on behalf of and as the voluntary act and deed of
the company, for the uses and purposes therein expressed, and that he received a
true copy of the within instrument on behalf of the assignor named therein.

Subscribed before me this 22nd day of July 2004.

/s/ Ellen Warren
-----------------------------
Notary Public

                                       34
<PAGE>

COUNTY OF NEW YORK     )
                             :SS.:
STATE OF NEW YORK      )

On July 22, 2004 before me, the subscriber, a Notary Public of the State of New
York, personally appeared Douglas S. Niethold who being by me duly sworn
according to law on his oath saith that he is the Vice-President, Finance and
Chief Financial Officer of ACE Gaming, LLC, a New Jersey limited liability
company, the above-named Mortgagor; that Patricia Wild is the Vice President,
General Counsel and Secretary of the said company; that he saw the said Vice
President, General Counsel and Secretary sign the Mortgage as the act and deed
of said company, she being thereunto duly authorized; and that he signed his
name to the Mortgage as an attesting witness.

                                          /s/ Ellen Warren
                                          --------------------------------------
                                          Notary Public of the State of New York

                                       35
<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.

<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 to a point; 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 to a point; 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 to a point; thence

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

                                       37
<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

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

                                       38
<PAGE>

(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 0.75 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

(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 formerly of the Bala Motel,
         150.75 feet to a point; thence

                                       39
<PAGE>

(5)      North 27 degrees 28 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 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 distances:

(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

(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.

                                       40
<PAGE>

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.

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

                                       41
<PAGE>

(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
(Elevation 0.00 = mean sea level).

BEING KNOWN AS Lot 19 in Block 47, as shown on the Tax Map of the City of
Atlantic City.

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

                                       42
<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 along 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

(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

                                       43
<PAGE>

(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 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.

                                       44
<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

                                       45
<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:

                                       46
<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 of lands formerly of the 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 4, 5, 6, 9 and 10 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 lands formerly of the 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

                                       47
<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 5, 6 and 7 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.

TRACT # 5

                                       48
<PAGE>

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.

                                       49
<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.

                                       50
<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.

                                       51
<PAGE>

                                  SCHEDULE A-5

                     Leasehold Estate - Madison House Lease

         ALL THAT following lands located 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 245 feet
South 27 degrees 28 minutes East from the Southerly line of Pacific Avenue; and
extending thence

         (1) North 62 degrees 32 minutes East, parallel with Pacific Avenue 151
feet to the Westerly line of Mount Vernon Avenue; thence

         (2) South 27 degrees 28 minutes East, in and along the Westerly line of
Mount Vernon Avenue 105 feet; thence

         (3) South 62 degrees 32 minutes West, parallel with Pacific Avenue 151
feet to the Easterly line of Illinois Avenue; thence

         (4) North 27 degrees 28 minutes West, in and along the Easterly line of
Illinois Avenue 105 feet to the point and place of beginning.

         BEING Lot 9, Block 48 on the Official Tax Map of Atlantic City.

                                       52
<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 No. 1021671060, issued by the Title Company of
Jersey, as agent for Stewart Title Guaranty Company, dated June 22, 2004.

         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 21st
Century Hot Dogs, LLC, dated May 16, 2003, for a term of three (3) years.

                                       53

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