Document:

<PAGE>
                                                                    EXHIBIT 4.10

                                                                      EXHIBIT A1

                                 [Face of Note]

                                                         CUSIP/CINS ____________

                       7.85% Senior Secured Notes due 2012

No. ___                                                            $____________

                 AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
            AMERICAN CASINO & ENTERTAINMENT PROPERTIES FINANCE CORP.

each promise to pay to ____________________ or registered assigns,

the principal sum of ___________________________________ DOLLARS on February 1,
2012.

Interest Payment Dates: February 1 and August 1

Record Dates: January 15 and July 15

Dated:

                                        AMERICAN CASINO & ENTERTAINMENT
                                        PROPERTIES LLC

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        AMERICAN CASINO & ENTERTAINMENT
                                        PROPERTIES FINANCE CORP.

                                        By: ____________________________________
                                            Name:
                                            Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

WILMINGTON TRUST COMPANY,
 as Trustee

By: ____________________________________
         Authorized Signatory

                                      A1-1
<PAGE>

                                 [Back of Note]
                       7.85% Senior Secured Notes due 2012

[Insert the Global Note Legend, if ap`plicable pursuant to the provisions of the
Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

      Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

            (1) INTEREST. American Casino & Entertainment Properties LLC, a
      Delaware limited liability company ("ACEP") and American Casino &
      Entertainment Properties Finance Corp., a Delaware corporation ("ACEP
      Finance", together with ACEP, the "Company"), promises to pay interest on
      the principal amount of this Note at 7.85% per annum from
      ________________, 20__ until maturity and shall pay the Liquidated
      Damages, if any, payable pursuant to Section 5 of the Registration Rights
      Agreement referred to below. The Company will pay interest and Liquidated
      Damages, if any, semi-annually in arrears on February 1 and August 1 of
      each year, or if any such day is not a Business Day, on the next
      succeeding Business Day (each, an "Interest Payment Date"). Interest on
      the Notes will accrue from the most recent date to which interest has been
      paid or, if no interest has been paid, from the date of issuance; provided
      that if there is no existing Default in the payment of interest, and if
      this Note is authenticated between a record date referred to on the face
      hereof and the next succeeding Interest Payment Date, interest shall
      accrue from such next succeeding Interest Payment Date; provided further
      that the first Interest Payment Date shall be _____________, 20__. The
      Company will pay interest (including post-petition interest in any
      proceeding under any Bankruptcy Law) on overdue principal and premium, if
      any, from time to time on demand at a rate that is 1% per annum in excess
      of the rate then in effect; it will pay interest (including post-petition
      interest in any proceeding under any Bankruptcy Law) on overdue
      installments of interest and Liquidated Damages, if any, (without regard
      to any applicable grace periods) from time to time on demand at the same
      rate to the extent lawful. Interest will be computed on the basis of a
      360-day year of twelve 30-day months.

            (2) METHOD OF PAYMENT. The Company will pay interest on the Notes
      (except defaulted interest) and Liquidated Damages, if any, to the Persons
      who are registered Holders of Notes at the close of business on the
      January 15 or July 15 next preceding the Interest Payment Date, even if
      such Notes are canceled after such record date and on or before such
      Interest Payment Date, except as provided in Section 2.12 of the Indenture
      with respect to defaulted interest. The Notes will be payable as to
      principal, premium and Liquidated Damages, if any, and interest at the
      office or agency of the Company maintained for such purpose within or
      without the City and State of New York, or, at the option of the Company,
      payment of interest and Liquidated Damages, if any, may be made by check
      mailed to the Holders at their addresses set forth in the register of
      Holders; provided that payment by wire transfer of immediately available
      funds will be required with respect to principal of and interest, premium
      and Liquidated Damages, if any, on, all Global Notes and all other Notes
      the Holders of which hold at least $2.0 million aggregate principal amount
      of Notes and shall have provided wire transfer instructions to the Company
      or the Paying Agent. Such payment will be in such coin or currency of the
      United States of America as at the time of payment is legal tender for
      payment of public and private debts.

            (3) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company,
      the Trustee under the Indenture, will act as Paying Agent and Registrar.
      The Company may change

                                      A1-2
<PAGE>

      any Paying Agent or Registrar without notice to any Holder. The Company or
      any of its Subsidiaries may act in any such capacity.

            (4) INDENTURE AND COLLATERAL DOCUMENTS. The Company issued the Notes
      under an Indenture dated as of January 29, 2004 (the "Indenture") among
      the Company and the Trustee. The terms of the Notes include those stated
      in the Indenture and those made part of the Indenture by reference to the
      TIA (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all
      such terms, and Holders are referred to the Indenture and such Act for a
      statement of such terms. To the extent any provision of this Note
      conflicts with the express provisions of the Indenture, the provisions of
      the Indenture shall govern and be controlling. The Notes are secured
      obligations of the Company. The Notes are secured by a pledge of Note
      Collateral pursuant to the Collateral Documents referred to in the
      Indenture.

            (5) OPTIONAL REDEMPTION.

      (a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to February 1, 2008.
On or after February 1, 2008, the Company will have the option to redeem the
Notes, in whole or in part, upon not less than 15 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on February 1 of the years indicated below:

<TABLE>
<CAPTION>
Year                                  Percentage
----                                  ----------
<S>                                   <C>
2008...............................    103.925%
2009...............................    101.963%
2010 and thereafter................    100.000%
</TABLE>

      (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, at any time prior to February 1, 2007, the Company may on one or more
occasions redeem up to 35% of the aggregate principal amount of Notes (including
Additional Notes) issued under the Indenture with the net cash proceeds of one
or more Equity Offerings of from the proceeds of Permitted Affiliate
Subordinated Debt of ACEP at a redemption price equal to 107.850% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date; provided that at least 65%
in aggregate principal amount of the Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption (excluding Notes
held by ACEP and its Subsidiaries) and that such redemption occurs within 60
days of the date of the closing of such Equity Offering or the issuance of
Permitted Affiliate Subordinated Debt.

            (6) REDEMPTION PURSUANT TO GAMING LAWS.

      If any Gaming Authority requires that a Holder or Beneficial Owner of
Notes be licensed, qualified or found suitable under any applicable Gaming Law
and such Holder or Beneficial Owner:

      (a) fails to apply for a license, qualification or a finding of
suitability within 30 days (or such shorter period as may be required by the
applicable Gaming Authority) after being requested to do so by the Gaming
Authority; or

      (b) is denied such license or qualification or not found suitable;

      ACEP shall then have the right, at its option:

                                      A1-3
<PAGE>

      (c) to require each such Holder or Beneficial Owner to dispose of its
Notes within 30 days (or such earlier date as may be required by the applicable
Gaming Authority) of the occurrence of the event described in clause (1) or (2)
above, or

      (d) to redeem the Notes of each such Holder or Beneficial Owner, in
accordance with Rule 14e-1 of the Exchange Act, if applicable, at a redemption
price equal to the lowest of:

            (1) the principal amount thereof, together with accrued and unpaid
      interest and Liquidated Damages, if any, to the earlier of the date of
      redemption, the date 30 days' after such Holder or Beneficial Owner is
      required to apply for a license, qualification or finding of suitability
      (or such shorter period that may be required by any applicable Gaming
      Authority) if such Holder or Beneficial Owner fails to do so ("Application
      Date") or of the date of denial of license or qualification or of the
      finding of unsuitability by such Gaming Authority;

            (2) the price at which such Holder or Beneficial Owner acquired the
      Notes, together with accrued and unpaid interest and Liquidated Damages,
      if any, to the earlier of the date of redemption, the Application Date or
      the date of the denial of license or qualification or of the finding of
      unsuitability by such Gaming Authority; and

            (3) such other lesser amount as may be required by any Gaming
      Authority.

      Immediately upon a determination by a Gaming Authority that a Holder or
Beneficial Owner of the Notes will not be licensed, qualified or found suitable
and must dispose of the Notes, the Holder or Beneficial Owner will, to the
extent required by applicable Gaming Laws, have no further right:

      (a) to exercise, directly or indirectly, through any trustee or nominee or
any other Person or entity, any right conferred by the Notes, the Note
Guarantees or the Indenture; or

      (b) to receive any interest, Liquidated Damages, dividend, economic
interests or any other distributions or payments with respect to the Notes and
the Note Guarantees or any remuneration in any form with respect to the Notes
and the Note Guarantees from the Company, the Guarantors or the Trustee, except
the redemption price referred to above.

            (7) SPECIAL MANDATORY REDEMPTION. In the event each of the Release
      Conditions shall not have been satisfied on or prior to the earlier of (A)
      August 31, 2004 and (B) an Interest Top-Off Failure (the earlier of (A)
      and (B) being the "Escrow Break Date"), ACEP shall redeem all of the
      Notes, on the second Business Day immediately following the Escrow Break
      Date, at a redemption price equal to 100% of the principal amount of the
      Notes, plus accrued and unpaid interest to the date of redemption.

            (8) MANDATORY REDEMPTION. Other than in connection with redemption
      pursuant to Gaming Laws or a Special Mandatory Redemption, the Company is
      not required to make mandatory redemption or sinking fund payments with
      respect to the Notes.

            (9) REPURCHASE AT THE OPTION OF HOLDER.

                  (a) If there is a Change of Control, the Company will be
      required to make an offer (a "Change of Control Offer") to repurchase all
      or any part (equal to $1,000 or an integral multiple thereof) of each
      Holder's Notes at a purchase price equal to 101% of the aggregate
      principal amount thereof plus accrued and unpaid interest and Liquidated
      Damages thereon, if any, to the date of purchase (the "Change of Control
      Payment"). Within 30 days following any

                                      A1-4
<PAGE>

      Change of Control, the Company will mail a notice to each Holder setting
      forth the procedures governing the Change of Control Offer as required by
      the Indenture.

                  (b) If the Company or a Restricted Subsidiary of the Company
      consummates any Asset Sales, within five days of each date on which the
      aggregate amount of Excess Proceeds exceeds $5.0 million, the Company will
      commence an offer to all Holders of Notes and all holders of other
      Indebtedness that is pari passu with the Notes containing provisions
      similar to those set forth in the Indenture with respect to offers to
      purchase or redeem with the proceeds of sales of assets (an "Asset Sale
      Offer") pursuant to Section 3.11 of the Indenture to purchase the maximum
      principal amount of Notes (including any Additional Notes) and other pari
      passu Indebtedness that may be purchased out of the Excess Proceeds at an
      offer price in cash in an amount equal to 100% of the principal amount
      thereof plus accrued and unpaid interest and Liquidated Damages thereon,
      if any, to the date fixed for the closing of such offer, in accordance
      with the procedures set forth in the Indenture. To the extent that the
      aggregate amount of Notes (including any Additional Notes) and other pari
      passu Indebtedness tendered pursuant to an Asset Sale Offer is less than
      the Excess Proceeds, the Company may use such deficiency for any purpose
      not otherwise prohibited by the Indenture. If the aggregate principal
      amount of Notes and other pari passu Indebtedness surrendered by holders
      thereof exceeds the amount of Excess Proceeds, the Trustee shall select
      the Notes and other pari passu Indebtedness to be purchased on a pro rata
      basis. Holders of Notes that are the subject of an offer to purchase will
      receive an Asset Sale Offer from the Company prior to any related purchase
      date and may elect to have such Notes purchased by completing the form
      entitled "Option of Holder to Elect Purchase" attached to this Note.

                  (c) If the Company or a Restricted Subsidiary of the Company
      receives Excess Loss Proceeds, within five days of each date on which the
      aggregate amount of Excess Loss Proceeds exceeds $5.0 million, the Company
      will commence an offer to all Holders of Notes and all holders of other
      Indebtedness that is pari passu with the Notes containing provisions
      similar to those set forth in the Indenture that require the Company to
      make an Event of Loss Offer pursuant to Section 3.12 of the Indenture to
      purchase the maximum principal amount of Notes (including any Additional
      Notes) and other pari passu Indebtedness that may be purchased out of the
      Excess Loss Proceeds at an offer price in cash in an amount equal to 100%
      of the principal amount thereof plus accrued and unpaid interest and
      Liquidated Damages thereon, if any, to the date fixed for the closing of
      such offer, in accordance with the procedures set forth in the Indenture.
      To the extent that the aggregate amount of Notes (including any Additional
      Notes) and other pari passu Indebtedness tendered pursuant to an Event of
      Loss Offer is less than the Excess Loss Proceeds, the Company may use such
      deficiency for any purpose not otherwise prohibited by the Indenture. If
      the aggregate principal amount of Notes and other pari passu Indebtedness
      surrendered by holders thereof exceeds the amount of Excess Loss Proceeds,
      the Trustee shall select the Notes and other pari passu Indebtedness to be
      purchased on a pro rata basis. Holders of Notes that are the subject of an
      offer to purchase will receive an Excess Loss Offer from the Company prior
      to any related purchase date and may elect to have such Notes purchased by
      completing the form entitled "Option of Holder to Elect Purchase" attached
      to this Note.

            (10) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
      least 15 days but not more than 60 days before the redemption date to each
      Holder whose Notes are to be redeemed at its registered address, except
      that redemption notices may be mailed more than 60 days prior to a
      redemption date if the notice is issued in connection with a defeasance of
      the Notes or a satisfaction or discharge of the Indenture. Notes in
      denominations larger than $1,000 may be redeemed in part but only in whole
      multiples of $1,000, unless all of the Notes held by a

                                      A1-5
<PAGE>

      Holder are to be redeemed. On and after the redemption date interest
      ceases to accrue on Notes or portions thereof called for redemption.

            (11) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
      form without coupons in denominations of $1,000 and integral multiples of
      $1,000. The transfer of Notes may be registered and Notes may be exchanged
      as provided in the Indenture. The Registrar and the Trustee may require a
      Holder, among other things, to furnish appropriate endorsements and
      transfer documents and the Company may require a Holder to pay any taxes
      and fees required by law or permitted by the Indenture. The Company need
      not exchange or register the transfer of any Note or portion of a Note
      selected for redemption, except for the unredeemed portion of any Note
      being redeemed in part. Also, the Company need not exchange or register
      the transfer of any Notes for a period of 15 days before a selection of
      Notes to be redeemed or during the period between a record date and the
      corresponding Interest Payment Date.

            (12) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
      treated as its owner for all purposes.

            (13) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
      exceptions, the Indenture, the Note Guarantees or the Notes may be amended
      or supplemented with the consent of the Holders of at least a majority in
      principal amount of the then outstanding Notes and Additional Notes, if
      any, voting as a single class, and any existing Default or Event of
      Default compliance with any provision of the Indenture, the Note
      Guarantees or the Notes may be waived with the consent of the Holders of a
      majority in principal amount of the then outstanding Notes and Additional
      Notes, if any, voting as a single class. Without the consent of any Holder
      of a Note, the Indenture, the Note Guarantees or the Notes may be amended
      or supplemented to cure any ambiguity, defect or inconsistency, to provide
      for uncertificated Notes in addition to or in place of certificated Notes,
      to provide for the assumption of the Company's or any Guarantor's
      obligations to Holders of the Notes in case of a merger or consolidation,
      to make any change that would provide any additional rights or benefits to
      the Holders of the Notes or that does not adversely affect the legal
      rights under the Indenture of any such Holder, to comply with the
      requirements of the SEC in order to effect or maintain the qualification
      of the Indenture under the TIA, to conform the text of the Indenture, the
      Collateral Documents or the Notes to any provision of the "Description of
      Notes" section of the Offering Memorandum, to the extent that such
      provision in that "Description of Notes" was intended to be a verbatim
      recitation of a provision of the Indenture, the Note Guarantees, the
      Collateral Documents or the Notes, to provide for the Issuance of
      Additional Notes in accordance with the limitations set forth in the
      Indenture, or to allow any Guarantor to execute a supplemental indenture
      to the Indenture and/or a Note Guarantee with respect to the Notes.

            (14) DEFAULTS AND REMEDIES. Events of Default include: (i) default
      for 30 days in the payment when due of interest or Liquidated Damages on
      the Notes; (ii) default in payment when due of principal of or premium, if
      any, on the Notes when the same becomes due and payable at maturity, upon
      redemption (including in connection with an offer to purchase) or
      otherwise, (iii) failure by the Company to comply with Section 3.08, 3.09,
      4.07, 4.09, 4.10, 4.15, 4.16 or 5.01 of the Indenture; (iv) failure by the
      Company for 60 days after notice to the Company by the Trustee or the
      Holders of at least 25% in principal amount of the Notes then outstanding
      voting as a single class to comply with certain other agreements in the
      Indenture, the Notes or the Collateral Documents; (v) default under
      certain other agreements relating to Indebtedness of the Company which
      default results in the acceleration of such Indebtedness prior to its
      express maturity; (vi) certain final judgments for the payment of money
      that remain

                                      A1-6
<PAGE>

      undischarged for a period of 60 days; (vii) certain events of bankruptcy
      or insolvency with respect to the Company or any of its Restricted
      Subsidiaries that is a Significant Subsidiary or any group of Restricted
      Subsidiaries that, when taken together, would constitute a Significant
      Subsidiary; (viii) the breach of certain covenants in the Collateral
      Documents or the Collateral Documents shall be held in any judicial
      proceeding to be unenforceable or invalid or shall cease for any reason to
      be in full force and effect; (ix) certain cessations or suspensions of the
      Company's Gaming Licenses; and (x) except as permitted by the Indenture,
      any Note Guarantee shall be held in any judicial proceeding to be
      unenforceable or invalid or shall cease for any reason to be in full force
      and effect or any Guarantor or any Person acting on its behalf shall deny
      or disaffirm its obligations under such Guarantor's Note Guarantee. If any
      Event of Default occurs and is continuing, the Trustee or the Holders of
      at least 25% in principal amount of the then outstanding Notes may declare
      all the Notes to be due and payable. Notwithstanding the foregoing, in the
      case of an Event of Default arising from certain events of bankruptcy or
      insolvency, all outstanding Notes will become due and payable without
      further action or notice. Holders may not enforce the Indenture or the
      Notes except as provided in the Indenture. Subject to certain limitations,
      Holders of a majority in principal amount of the then outstanding Notes
      may direct the Trustee in its exercise of any trust or power. The Trustee
      may withhold from Holders of the Notes notice of any continuing Default or
      Event of Default (except a Default or Event of Default relating to the
      payment of principal or interest) if it determines that withholding notice
      is in their interest. The Holders of a majority in aggregate principal
      amount of the Notes then outstanding by notice to the Trustee may on
      behalf of the Holders of all of the Notes waive any existing Default or
      Event of Default and its consequences under the Indenture except a
      continuing Default or Event of Default in the payment of interest on, or
      the principal of, the Notes. The Company is required to deliver to the
      Trustee annually a statement regarding compliance with the Indenture, and
      the Company is required upon becoming aware of any Default or Event of
      Default, to deliver to the Trustee a statement specifying such Default or
      Event of Default.

            (15) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
      or any other capacity, may make loans to, accept deposits from, and
      perform services for the Company or its Affiliates, and may otherwise deal
      with the Company or its Affiliates, as if it were not the Trustee.

            (16) NO RECOURSE AGAINST OTHERS. A director, officer, manager (or
      managing member) direct or indirect member, partner, employee,
      incorporator or stockholder, of the Company or any of the Guarantors, as
      such, will not have any liability for any obligations of the Company or
      such Guarantor under the Notes, the Note Guarantees, the Collateral
      Documents or the Indenture or for any claim based on, in respect of, or by
      reason of, such obligations or their creation. Each Holder by accepting a
      Note waives and releases all such liability. The waiver and release are
      part of the consideration for the issuance of the Notes.

            (17) AUTHENTICATION. This Note will not be valid until authenticated
      by the manual signature of the Trustee or an authenticating agent.

            (18) ABBREVIATIONS. Customary abbreviations may be used in the name
      of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
      ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
      survivorship and not as tenants in common), CUST (= Custodian), and
      U/G/M/A (= Uniform Gifts to Minors Act).

            (19) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
      RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
      of Notes under the

                                      A1-7
<PAGE>

      Indenture, Holders of Restricted Global Notes and Restricted Definitive
      Notes will have all the rights set forth in the Registration Rights
      Agreement dated as of January 29, 2004, among the Company and the other
      parties named on the signature pages thereof or, in the case of Additional
      Notes, Holders of Restricted Global Notes and Restricted Definitive Notes
      will have the rights set forth in one or more registration rights
      agreements, if any, among the Company , the Guarantors and the other
      parties thereto, relating to rights given by the Company and the
      Guarantors to the purchasers of any Additional Notes (collectively, the
      "Registration Rights Agreement").

            (20) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
      Committee on Uniform Security Identification Procedures, the Company has
      caused CUSIP numbers to be printed on the Notes and the Trustee may use
      CUSIP numbers in notices of redemption as a convenience to Holders. No
      representation is made as to the accuracy of such numbers either as
      printed on the Notes or as contained in any notice of redemption and
      reliance may be placed only on the other identification numbers placed
      thereon.

      The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

American Casino & Entertainment Properties LLC
American Casino & Entertainment Properties Finance Corp.
2000 Las Vegas Boulevard South
Las Vegas, Nevada 89104
Attention: Denise Barton

                                      A1-8
<PAGE>

                                 ASSIGNMENT FORM

      To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: __________________________________
                                               (Insert assignee's legal name)

________________________________________________________________________________
                  (Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date: _______________

                                        Your Signature: ________________________
                                              (Sign exactly as your name appears
                                               on the face of this Note)

Signature Guarantee*: _________________________

*     Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                      A1-9
<PAGE>
                       OPTION OF HOLDER TO ELECT PURCHASE

               If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10, 4.15 or 4.16 of the Indenture, check the appropriate
box below:

        [ ] Section 4.10       [ ] Section 4.15      [ ] Section 4.16

      If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10, Section 4.15 or Section 4.16 of the Indenture,
state the amount you elect to have purchased:

                                $_______________

Date: _______________

                                        Your Signature: ________________________
                                              (Sign exactly as your name appears
                                               on the face of this Note)

                                        Tax Identification No.:_________________

Signature Guarantee*: _________________________

*     Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                     A1-10
<PAGE>

             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

      The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:

<TABLE>
<CAPTION>
                                                                    Principal Amount
                  Amount of decrease in   Amount of increase in    at maturity of this
                    Principal Amount        Principal Amount      Global Note following   Signature of authorized
                     at maturity of          at maturity of           such decrease        officer of Trustee or
Date of Exchange    this Global Note        this Global Note          (or increase)              Custodian
----------------    ----------------        ----------------          -------------              ---------
<S>               <C>                     <C>                     <C>                     <C>
</TABLE>

* This schedule should be included only if the Note is issued in global form.

                                     A1-11
<PAGE>

                                                                      EXHIBIT A2

                       FORM OF AFFILIATE SUBORDINATED NOTE

Dated as of [        ]

American Casino & Entertainment Properties LLC
2000 Las Vegas Boulevard South
Las Vegas, Nevada 89104

      FOR VALUE RECEIVED, the undersigned, American Casino & Entertainment
Properties LLC, a Delaware limited liability company (the "Maker"), hereby
promises to pay to [ ] (the "Holder"), its successors or its assigns, at the
offices of the Holder, or at such other place as the holder of this Affiliate
Subordinated Note (this "PASI Note") shall specify, on [ ]* (the "Repayment
Date") (or on such later date as the parties shall mutually agree), in such coin
or currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts, the aggregate unpaid principal
amount of all Advances (as defined below), plus all interest added to the
outstanding principal amount of this PASI Note pursuant to the terms hereof.

      The Maker promises to pay interest on the outstanding principal amount of
this PASI Note in accordance with Section 2 of this PASI Note.

      1. Definitions. Except as provided herein below, capitalized terms used
herein shall have the meanings ascribed to such terms in the Indenture, dated as
of January 29, 2004 (as amended, supplemented or restated, the "Indenture"), by
and among the Maker, American Casino & Entertainment Properties Finance Corp.
("ACEP Finance"), certain Guarantors named therein and Wilmington Trust Company,
as trustee (including any successor trustees, the "Trustee"), whether or not
such Indenture is still in effect. The terms defined in this Section 1 shall
have the following meanings for all purposes in this PASI Note:

      1.1 "Advance" means loans or advances made or deemed to be made
(including, for purposes of clarification, pursuant to Section 2.3) by the
Holder to or on behalf of the Maker.

      1.2 "Advance Date" means any date upon which Advances are made or deemed
to be made (including, for purposes of clarification, pursuant to Section 2.3)
by the Holder to or on behalf of the Maker.

      1.3 "Advance Schedule" has the meaning set forth in Section 3.

      1.4 "Capitalized Interest Date" has the meaning ascribed to such term in
Section 2.3.

      1.5 "Event of Default" means an Event of Default under the Indenture.

      1.6 "Holder" has the meaning set forth in the first paragraph of this PASI
Note.

      1.7 "Indenture Debt" means the aggregate principal amount of the 8.85%
Senior Secured Notes due 2012 (the "Notes"), including any Additional Notes
issued under the Indenture, together in

--------
* No earlier than three months after the final maturity date of the Notes.

                                      A2-1
<PAGE>

each case with interest thereon (including, without limitation, any interest
subsequent to the filing by or against the Maker or ACEP Finance of any
bankruptcy, reorganization or similar proceeding, whether or not such interest
would constitute an allowed claim in any such proceeding, calculated at the rate
set forth for overdue payments on the Notes set forth in the Indenture) and all
fees, expenses and other amounts owing from time to time by the Maker, ACEP
Finance and the Guarantors under the Indenture.

      1.8 "Maker" has the meaning set forth in the first paragraph of this PASI
Note.

      1.9 "Proceeding" has the meaning set forth in Section 6.5.

      1.10 "Repayment Date" has the meaning set forth in the first paragraph of
this PASI Note.

      1.11 "Senior Bank Debt" means the principal amount of all loans from time
to time outstanding or owing under the Bank Credit Facility, together with
interest thereon (including, without limitation, any interest subsequent to the
filing by or against the Maker or ACEP Finance of any bankruptcy, reorganization
or similar proceeding, whether or not such interest would constitute an allowed
claim in any such proceeding, calculated at the rate set forth for overdue loans
in the Bank Credit Facility) and all fees, expenses and other amounts owing from
time to time by the Maker or ACEP Finance under the Bank Credit Facility.

      1.12 "Senior Debt" means (i) the Indenture Debt, (ii) the Senior Bank
Debt, (iii) all fees, expenses and other amounts owed to the Collateral Agent by
the Maker and ACEP Finance under any collateral or other agreement relating to
the Indenture Debt and/or the Senior Bank Debt, and (iv) any other indebtedness
or other obligations of the Maker designated in writing by the Maker and Holder
as Senior Debt.

      The provisions of this Section 1 to the contrary notwithstanding, to the
extent any term defined in this PASI Note by cross reference to the Indenture is
amended, such term shall be deemed likewise amended herein. Such terms shall
continue to have the meanings set forth in the Indenture whether or not the
Indenture remains in effect.

      2. Interest Rates; Interest Repayment and Accrual.

      2.1 Interest on the outstanding principal amount, if any, of each Advance
shall accrue from and after the Advance Date with respect to each Advance,
calculated on the basis of a 360-day year for the actual number of days elapsed,
at the rate per annum of:

      [                            ]

      2.2 Until the principal amount of this PASI Note and any other amounts due
hereunder are paid in full in cash, all accrued and unpaid interest on the
outstanding principal amount of this PASI Note shall be payable quarterly in
arrears on [ ], [ ], [ ], and [ ] of each year, commencing [ ], to the extent
such payment is permitted under the Indenture and the Bank Credit Facility,
provided that no such payments shall be made if a Default or an Event of Default
shall have occurred and be continuing. All payments of principal of and interest
on this PASI Note shall be payable in lawful currency of the United States of
America. All such cash payments shall be made by the Maker to an account set
forth on Schedule A or such other account designated in writing by the Holder to
the Maker, and shall be recorded on the books and records of the Maker and the
Holder. Subject to the provisions in Section 6 hereof, all accrued and unpaid
interest shall be payable in cash upon maturity of this PASI Note (whether at
stated maturity, by acceleration or otherwise) and from time to time thereafter
upon demand of the Holder until this PASI Note is paid in full in cash.

                                      A2-2
<PAGE>

      2.3 On the date any accrued interest on the unpaid principal amount of
this PASI Note is payable pursuant to Section 2.2 above, to the extent all or
part of such payment is not permitted pursuant to Section 2.2 above, then on
such date (the "Capitalized Interest Date") all or such portion of such interest
shall be deemed to be an Advance to the Maker and shall be added to the
outstanding principal amount of this PASI Note on such Capitalized Interest
Date.

      3. Notation of Advances, Repayments and Prepayments. At the time of the
making of each Advance (including, for purposes of clarification, pursuant to
Section 2.3) or of any repayment or prepayment, if any, the Holder shall make a
notation on Schedule I of this PASI Note or on a continuation thereof (the
"Advance Schedule"), specifying the date of such Advance, repayment or
prepayment and the amount of such Advance, repayment or prepayment; provided,
however, that a failure to make a notation with respect to any Advance shall not
limit or otherwise affect the obligation of the Maker hereunder and recognition
of payment of principal (including pursuant to Section 2.3 above) or interest on
this PASI Note shall not be affected by the failure to make a notation on said
Advance Schedule. If necessary to evidence an extension of the payment date or
any other change in the provisions of this PASI Note agreed to in writing by the
Maker and the Holder, the Maker shall furnish a new note in substitution for
this PASI Note. The first notation made by the Holder on the Advance Schedule
attached to the replacement PASI Note shall be the most recent aggregate
outstanding principal balance appearing on the Advance Schedule attached to the
replaced note.

      4. Prepayments. To the extent permitted under the Indenture and the Bank
Credit Facility, the Maker shall have the right from time to time to prepay this
PASI Note, in whole or in part, together with accrued interest on the amount of
principal prepaid to the date of prepayment without penalty or premium.

      5. Unconditional Obligations; Fees; Waivers, Etc.

      5.1 The obligations to make the payments provided for in this PASI Note
are absolute and unconditional and not subject to any defense, set-off,
counterclaim, rescission, recoupment or adjustment whatsoever.

      5.2 The Holder agrees that, until the Senior Debt has been paid in full in
cash, (i) it will not accelerate payment of all or any part of the principal,
interest and other amounts owing under this PASI Note, unless the obligations
under the Indenture or the Bank Credit Facility have been accelerated and (ii)
it will not file or join in any petition or proceeding commencing the bankruptcy
of the Maker or commencing any other Proceeding, but may join in any Proceeding
after it has commenced. In the event of any Proceeding, if all Senior Debt has
not been paid in full in cash at such time, Holder agrees to use its good faith,
commercially reasonable efforts to enforce claims comprising obligations under
this PASI Note in the name of Holder in any such Proceeding by proof of debt,
proof of claim, suit or otherwise.

      5.3 Subject to Sections 5.2, 6 and 8, if the holder of this PASI Note
shall institute any action to enforce the collection of principal of and/or
interest on this PASI Note, there shall be immediately due and payable from the
Maker, in addition to the then unpaid principal amount of and interest on this
PASI Note, all reasonable costs and expenses incurred by the Holder in
connection therewith, including reasonable attorneys' fees and disbursements.

      5.4 No forbearance, indulgence, delay or failure to exercise any right or
remedy with respect to this PASI Note shall operate as a waiver, nor as an
acquiescence in any default. No single or partial exercise of any right or
remedy shall preclude any other or further exercise thereof or the exercise of
any other right or remedy.

                                      A2-3
<PAGE>

      5.5 This PASI Note may not be modified or discharged orally, but only in
writing duly executed by the holder hereof.

      5.6 The Maker hereby waives presentment, demand, notice of dishonor,
protest and notice of protest.

      6. Subordination.

      6.1 Subordination Agreement. The Holder and the Maker agree that the
payment of principal of and interest on this PASI Note, and any other amounts
payable with respect thereto, is subordinated to the prior payment in full in
cash (whether at maturity, by prepayment, by acceleration or otherwise) of any
and all Senior Debt, and agree that, except as permitted under the Indenture and
the Bank Credit Facility, no payment of, on, or on account of the indebtedness
so subordinated shall be made unless and until all payments of principal,
interest or amounts otherwise payable with respect to all Senior Debt have been
paid in full in cash. Except as permitted under the Indenture and the Bank
Credit Facility, the Holder further agrees not to receive or accept any such
payment until all Senior Debt has been paid in full in cash.

      In the event that, notwithstanding the foregoing provisions, any payment
shall be received by the Holder on account of principal of or interest on or
other amounts payable with respect to this PASI Note in contravention of the
foregoing provisions, such payment shall be held in trust for the benefit of and
shall, to the extent that at such time all Senior Debt has not been paid in full
in cash, be paid over to the Collateral Agent, as agent for the holders of the
Senior Debt, for application to the payment of the Senior Debt until all such
Senior Debt shall have been paid in full in cash.

      6.2 Dissolution, Etc. In the event of any dissolution, winding-up,
liquidation or reorganization of the Maker or ACEP Finance (whether voluntary or
involuntary and whether in bankruptcy, insolvency or receivership proceedings or
upon an assignment for the benefit of creditors or any other marshaling of the
assets and liabilities of the Maker or ACEP Finance or otherwise):

      6.2.1 the holders of the Senior Debt shall be entitled to receive payments
in full in cash of all such Senior Debt (including, as applicable, interest
accruing on, or original issue discount accreting with respect to, such Senior
Debt after the commencement of a bankruptcy case or proceeding at the contract
rate whether or not such interest is an allowed claim in such case or proceeding
and any additional interest that would have accrued thereon but for the
commencement of any such case or proceeding) before the Holder is entitled to
receive any payment on account of the principal of or interest on or any other
amounts payable in respect of this PASI Note;

      6.2.2 any payment or distribution of assets of the Maker in the form of
cash or property, to which the Holder would, except for the subordination
provisions set forth herein, be entitled shall be paid by the Maker, or any
receiver, trustee in bankruptcy, liquidating trustee or agent or other person
making such payment or distribution directly to the Collateral Agent, as agent
for the holders of the Senior Debt, to the extent necessary to make payment in
full in cash of all Senior Debt remaining unpaid; and

      6.2.3 in the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Maker in the form of cash or property
shall be received by the Holder on account of principal of or interest on or
other amounts payable in respect of this PASI Note before all Senior Debt
(including, as applicable, interest accruing on, or original issue discount
accreting with respect to, such Senior Debt after the commencement of a
bankruptcy case or proceeding at the contract rate whether or not such interest
is an allowed claim in such case or proceeding and any additional interest that
would have accrued thereon but for the commencement of any such case or
proceeding) is paid in full in cash, or

                                      A2-4
<PAGE>

effective provision is made for their payment, such payment or distribution
shall be received in trust and shall, to the extent that at such time all Senior
Debt has not been paid in full in cash, be paid over to the Collateral Agent, as
agent for the holders of the Senior Debt, for application to the payment of such
Senior Debt until all such Senior Debt shall have been paid in full in cash.

      The consolidation of the Maker with, or the merger of the Maker into,
another entity in accordance with the provisions of Article 5 of the Indenture
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
purpose of these subordination provisions.

      6.3 Subrogation. Subject to the payment in full in cash of all Senior
Debt, the Holder shall be subrogated to the rights of the holders of the Senior
Debt or their respective representatives (except that the Holder shall not be
subrogated to the position of a secured creditor until the payment in full in
cash of all Senior Debt), to receive payments or distributions of assets of the
Maker applicable to the Senior Debt until all amounts owing on this PASI Note
shall be paid in full in cash, and for the purpose of such subrogation, no
payments or distributions to the holders of the Senior Debt, or their respective
representatives, as the case may be, by or on behalf of the Maker or by or on
behalf of the Holder, which otherwise would have been made to the Holder shall,
as between the Maker and its creditors, be deemed to be payment by the Maker to
or on account of the holders of the Senior Debt, or their respective
representatives, as the case may be, it being understood that the subordination
provisions in this Section 6 are intended solely for the purpose of defining the
relative rights of the Holder, on the one hand, and the holders of the Senior
Debt and their respective representatives, on the other hand.

      6.4 Obligation to Pay Unconditional. Except as expressly provided herein,
nothing is intended to or shall impair, as between the Maker and the Holder, the
obligation of the Maker, which is absolute and unconditional, to pay to the
Holder the principal of and interest on this PASI Note as and when the same
shall become due and payable in accordance with its terms.

      6.5 Proceedings. This PASI Note shall remain in full force and effect as
between the Holder, the Trustee and Collateral Agent, the Maker and/or
Administrative Agent notwithstanding the occurrence of any (a) insolvency,
bankruptcy, receivership, liquidation, reorganization, readjustment, composition
or other similar proceeding of or against the Maker or ACEP Finance, its
property or its creditors as such, (b) proceeding for any liquidation,
dissolution or other winding-up of the Maker or ACEP Finance, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings, (c)
general assignment for the benefit of creditors of the Maker or ACEP Finance or
(d) other marshalling of the assets of the Maker or ACEP Finance (each of (a)
through (d) above, a "Proceeding").

      7. Events of Default.

      7.1 Subject to the provisions of Sections 5.2 and 7.2 hereof, upon the
happening of an Event of Default, and while such Event of Default is continuing,
the Holder may, by written notice to the Maker and subject to applicable cures
and waivers, declare this PASI Note immediately due and payable, whereupon the
principal of, the interest on, and any other amount owing under, this PASI Note
shall immediately become due and payable; provided, that the Holder may not
accelerate the obligations under this PASI Note unless the obligations under the
Indenture and the Bank Credit Facility have been accelerated. Notwithstanding
the foregoing, if an Event of Default specified in Sections 6.01(9) or 6.01(10)
of the Indenture occurs, the principal of, the interest on, and any other amount
owing under, this PASI Note shall be due and payable immediately without further
action or notice.

      7.2 The provisions of Section 7.1 to the contrary notwithstanding, in the
event an Event of Default under the Indenture shall be waived or cured, then the
related Event of Default under this PASI Note shall be deemed waived or cured,
as the case may be, for all purposes of this PASI Note. To the

                                      A2-5
<PAGE>

extent the maturity of and payments due under this PASI Note shall have been
accelerated as a result of any Event of Default that is deemed waived or cured,
such indebtedness shall cease to be accelerated and all terms of this PASI Note
shall continue to be in effect as if no acceleration occurred.

      8. Suits for Enforcement and Remedies. Subject to the provisions of
Sections 5.2, 6 and 7 hereof, if any one or more Events of Default shall occur
and be continuing, the Holder may proceed to protect and enforce the Holder's
rights either by suit in equity or by action at law, or both, or proceed to
enforce the payment of this PASI Note or to enforce any other legal or equitable
right of the Holder. No right or remedy herein or in any other agreement or
instrument conferred upon the Holder is intended to be exclusive of any other
right or remedy, and each and every such right or remedy shall be cumulative and
shall be in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or by statute or otherwise.

      9. Miscellaneous.

      9.1 If any payment hereunder falls due on a Saturday, Sunday or any other
day on which commercial banks in New York City are authorized or required by law
to close, the maturity thereof shall be extended to the next succeeding business
day.

      9.2 The headings of the various Sections of this PASI Note are for
convenience of reference only and shall in no way modify any of the terms or
provisions of this PASI Note.

      9.3 The Trustee, for the benefit of the holders of the Notes, and the
Administrative Agent, for the benefit of the lenders of the Bank Credit Facility
shall be express third party beneficiaries of the provisions of this PASI Note
relating to subordination and the deferral or accrual of interest payments and
the maturity date of the PASI Notes (including without limitation Sections 5.2,
6, 7 and 9.3 of this PASI Note). No such provisions may be amended without the
consent of the requisite holders of each class of Senior Debt.

      10. CHOICE OF LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THIS PASI NOTE WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

      11. Consent to Jurisdiction. Each of the Maker and the Holder (a)
irrevocably agrees that any suit, action or proceeding arising out of or based
upon this PASI Note shall be instituted in any United States Federal or New York
State court located in the Borough of Manhattan, The City of New York, (b)
irrevocably waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding, and (c) irrevocably submits to the non-exclusive jurisdiction of any
United States Federal or New York State court located in the Borough of
Manhattan, The City of New York in connection with any suit, action or
proceeding arising out of, or relating to this PASI Note. Each of the Maker and
the Holder expressly consents to the jurisdiction of such courts in respect of
any such action and waives any other requirements of or objections to personal
jurisdiction with respect thereto.

                  [Remainder of page intentionally left blank]

                                      A2-6
<PAGE>

                                        AMERICAN CASINO & ENTERTAINMENT
                                        PROPERTIES LLC
                                        By:________________________________
                                        Name:
                                        Title:

Agreed to and Acknowledged:

[HOLDER]

By: ________________________________
    Name:
    Title:

                                      A2-7
<PAGE>

                                   Schedule A

                               ACCOUNT INFORMATION

                                      A2-8
<PAGE>

                                   Schedule I

                      ADVANCES, REPAYMENTS AND PREPAYMENTS

<TABLE>
<CAPTION>
                          AMOUNT
          AMOUNT      OF REPAYMENT OR         UNPAID
DATE    OF ADVANCE      PREPAYMENT       PRINCIPAL BALANCE    NOTATION MADE BY
----    ----------    ---------------    -----------------    ----------------
<S>     <C>           <C>                <C>                  <C>
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
----    ----------    ---------------    -----------------    ----------------
</TABLE>

                                      A2-9
<PAGE>

                                                                      EXHIBIT A3

                  [Face of Regulation S Temporary Global Note]

                                                           CUSIP/CINS __________

                       7.85% Senior Secured Notes due 2012

No. ___                                                              $__________

                 AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
            AMERICAN CASINO & ENTERTAINMENT PROPERTIES FINANCE CORP.

promises to pay to ____________________ or registered assigns,

the principal sum of ___________________________________________________ DOLLARS
on February 1, 2012.

Interest Payment Dates:  February 1 and August 1

Record Dates: January 15 and July 15

Dated:

                                        AMERICAN CASINO & ENTERTAINMENT
                                        PROPERTIES LLC

                                        By: ____________________________________
                                            Name:
                                            Title:

                                        AMERICAN CASINO & ENTERTAINMENT
                                        PROPERTIES FINANCE CORP.

                                        By: ____________________________________
                                            Name:
                                            Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

WILMINGTON TRUST COMPANY,
  as Trustee

By:  ____________________________________
             Authorized Signatory

                                      A3-1
<PAGE>

                  [Back of Regulation S Temporary Global Note]
                       7.85% Senior Secured Notes due 2012

THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.12 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF AMERICAN CASINO & ENTERTAINMENT
PROPERTIES LLC.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF American Casino & Entertainment Properties LLC THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a) IN THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) OUTSIDE THE UNITED STATES
IN AN

                                      A3-2
<PAGE>

OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (c)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a) (1),
(2), (3) OR (7) OF THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION
OF COUNSEL ACCEPTABLE TO AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF AMERICAN CASINO & ENTERTAINMENT PROPERTIES
LLC SO REQUESTS), (2) TO AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. IF AT ANY TIME THE
NEVADA GAMING COMMISSION FINDS THAT A HOLDER OF THIS SECURITY IS UNSUITABLE TO
CONTINUE TO OWN THE SECURITY, AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
SHALL HAVE THE RIGHT TO REQUIRE SUCH HOLDER TO DISPOSE OF SUCH SECURITY AS
PROVIDED BY THE GAMING LAWS OF THE STATE OF NEVADA AND THE REGULATIONS
PROMULGATED THEREUNDER. ALTERNATIVELY, AMERICAN CASINO & ENTERTAINMENT
PROPERTIES LLC SHALL HAVE THE RIGHT TO REDEEM THE SECURITY FROM THE HOLDER AT A
PRICE SPECIFIED IN THE INDENTURE GOVERNING THE SECURITY. NEVADA GAMING LAWS AND
REGULATIONS RESTRICT THE RIGHT UNDER CERTAIN CIRCUMSTANCES: (A) TO PAY OR
RECEIVE ANY INTEREST UPON SUCH SECURITY; (B) TO EXERCISE, DIRECTLY OR THROUGH
ANY TRUSTEE OR NOMINEE, ANY VOTING RIGHT CONFERRED BY SUCH SECURITY; OR (C) TO
RECEIVE ANY REMUNERATION IN ANY FORM FROM AMERICAN CASINO & ENTERTAINMENT
PROPERTIES LLC, FOR SERVICES RENDERED OR OTHERWISE.

      Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

            (1) INTEREST. American Casino & Entertainment Properties LLC, a
      Delaware limited liability company ("ACEP") and American Casino &
      Entertainment Properties Finance Corp., a Delaware corporation ("ACEP
      Finance", together with ACEP, the "Company"), promises to pay interest on
      the principal amount of this Note at 7.85% per annum from
      ________________, 20__ until maturity and shall pay the Liquidated
      Damages, if any, payable pursuant to Section 5 of the Registration Rights
      Agreement referred to below. The Company will pay interest and Liquidated
      Damages, if any, semi-annually in arrears on February 1 and August 1 of
      each year, or if any such day is not a Business Day, on the next
      succeeding Business Day (each, an "Interest Payment Date"). Interest on
      the Notes will accrue from the most recent date to which interest has been
      paid or, if no interest has been paid, from the date of issuance; provided
      that if there is no existing Default in the payment of interest, and if
      this Note is authenticated between a record date referred to on the face
      hereof and the next succeeding Interest Payment Date, interest shall
      accrue from such next succeeding Interest Payment Date; provided further
      that the first Interest Payment Date shall be _____________, 20__. The
      Company will pay interest (including post-petition interest in any
      proceeding under any Bankruptcy Law) on overdue principal and premium, if
      any, from time to time on demand at a

                                      A3-3
<PAGE>

      rate that is 1% per annum in excess of the rate then in effect; it will
      pay interest (including post-petition interest in any proceeding under any
      Bankruptcy Law) on overdue installments of interest and Liquidated
      Damages, if any, (without regard to any applicable grace periods) from
      time to time on demand at the same rate to the extent lawful. Interest
      will be computed on the basis of a 360-day year of twelve 30-day months.

      Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Note, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.

            (2) METHOD OF PAYMENT. The Company will pay interest on the Notes
      (except defaulted interest) and Liquidated Damages, if any, to the Persons
      who are registered Holders of Notes at the close of business on the
      January 15 or July 15 next preceding the Interest Payment Date, even if
      such Notes are canceled after such record date and on or before such
      Interest Payment Date, except as provided in Section 2.12 of the Indenture
      with respect to defaulted interest. The Notes will be payable as to
      principal, premium and Liquidated Damages, if any, and interest at the
      office or agency of the Company maintained for such purpose within or
      without the City and State of New York, or, at the option of the Company,
      payment of interest and Liquidated Damages, if any, may be made by check
      mailed to the Holders at their addresses set forth in the register of
      Holders; provided that payment by wire transfer of immediately available
      funds will be required with respect to principal of and interest, premium
      and Liquidated Damages, if any, on, all Global Notes and all other Notes
      the Holders of which hold at least $2.0 million aggregate principal amount
      of Notes and shall have provided wire transfer instructions to the Company
      or the Paying Agent. Such payment will be in such coin or currency of the
      United States of America as at the time of payment is legal tender for
      payment of public and private debts.

            (3) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company,
      the Trustee under the Indenture, will act as Paying Agent and Registrar.
      The Company may change any Paying Agent or Registrar without notice to any
      Holder. The Company or any of its Subsidiaries may act in any such
      capacity.

            (4) INDENTURE AND COLLATERAL DOCUMENTS. The Company issued the Notes
      under an Indenture dated as of January 29, 2004 (the "Indenture") among
      the Company and the Trustee. The terms of the Notes include those stated
      in the Indenture and those made part of the Indenture by reference to the
      TIA (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all
      such terms, and Holders are referred to the Indenture and such Act for a
      statement of such terms. To the extent any provision of this Note
      conflicts with the express provisions of the Indenture, the provisions of
      the Indenture shall govern and be controlling. The Notes are secured
      obligations of the Company. The Notes are secured by a pledge of Note
      Collateral pursuant to the Collateral Documents referred to in the
      Indenture.

            (5) OPTIONAL REDEMPTION.

            (a) Except as set forth in subparagraph (b) of this Paragraph 5, the
      Company will not have the option to redeem the Notes prior to February 1,
      2008. On or after February 1, 2008, the Company will have the option to
      redeem the Notes, in whole or in part, upon not less than 15 nor more than
      60 days' notice, at the redemption prices (expressed as percentages of
      principal amount) set forth below plus accrued and unpaid interest and
      Liquidated Damages, if any, thereon to the applicable redemption date, if
      redeemed during the twelve-month period beginning on February 1 of the
      years indicated below:

                                      A3-4
<PAGE>

<TABLE>
<CAPTION>
Year                                        Percentage
----                                        ----------
<S>                                         <C>
2008....................................     103.925%
2009....................................     101.963%
2010 and thereafter.....................     100.000%
</TABLE>

                  (b) Notwithstanding the provisions of subparagraph (a) of this
      Paragraph 5, at any time prior to February 1, 2007, the Company may on one
      or more occasions redeem up to 35% of the aggregate principal amount of
      Notes (including Additional Notes) issued under the Indenture with the net
      cash proceeds of one or more Equity Offerings of from the proceeds of
      Permitted Affiliate Subordinated Debt of ACEP at a redemption price equal
      to 107.850% of the aggregate principal amount thereof plus accrued and
      unpaid interest and Liquidated Damages, if any, to the redemption date;
      provided that at least 65% in aggregate principal amount of the Notes
      issued under the Indenture remains outstanding immediately after the
      occurrence of such redemption (excluding Notes held by ACEP and its
      Subsidiaries) and that such redemption occurs within 60 days of the date
      of the closing of such Equity Offering or the issuance of Permitted
      Affiliate Subordinated Debt.

            (6) REDEMPTION PURSUANT TO GAMING LAWS.

      If any Gaming Authority requires that a Holder or Beneficial Owner of
Notes be licensed, qualified or found suitable under any applicable Gaming Law
and such Holder or Beneficial Owner:

      (a) fails to apply for a license, qualification or a finding of
suitability within 30 days (or such shorter period as may be required by the
applicable Gaming Authority) after being requested to do so by the Gaming
Authority; or

      (b) is denied such license or qualification or not found suitable;

      ACEP shall then have the right, at its option:

      (a) to require each such Holder or Beneficial Owner to dispose of its
Notes within 30 days (or such earlier date as may be required by the applicable
Gaming Authority) of the occurrence of the event described in clause (1) or (2)
above, or

      (b) to redeem the Notes of each such Holder or Beneficial Owner, in
accordance with Rule 14e-1 of the Exchange Act, if applicable, at a redemption
price equal to the lowest of:

            (1) the principal amount thereof, together with accrued and unpaid
      interest and Liquidated Damages, if any, to the earlier of the date of
      redemption, the date 30 days' after such Holder or Beneficial Owner is
      required to apply for a license, qualification or finding of suitability
      (or such shorter period that may be required by any applicable Gaming
      Authority) if such Holder or Beneficial Owner fails to do so ("Application
      Date") or of the date of denial of license or qualification or of the
      finding of unsuitability by such Gaming Authority;

            (2) the price at which such Holder or Beneficial Owner acquired the
      Notes, together with accrued and unpaid interest and Liquidated Damages,
      if any, to the earlier of the date of redemption, the Application Date or
      the date of the denial of license or qualification or of the finding of
      unsuitability by such Gaming Authority; and

            (3) such other lesser amount as may be required by any Gaming
      Authority.

                                      A3-5
<PAGE>

      Immediately upon a determination by a Gaming Authority that a Holder or
Beneficial Owner of the Notes will not be licensed, qualified or found suitable
and must dispose of the Notes, the Holder or Beneficial Owner will, to the
extent required by applicable Gaming Laws, have no further right:

      (c) to exercise, directly or indirectly, through any trustee or nominee or
any other Person or entity, any right conferred by the Notes, the Note
Guarantees or the Indenture; or

      (d) to receive any interest, Liquidated Damages, dividend, economic
interests or any other distributions or payments with respect to the Notes and
the Note Guarantees or any remuneration in any form with respect to the Notes
and the Note Guarantees from the Company, the Guarantors or the Trustee, except
the redemption price referred to above.

      (7) SPECIAL MANDATORY REDEMPTION. In the event each of the Release
Conditions shall not have been satisfied on or prior to the earlier of (A)
August 31, 2004 and (B) an Interest Top-Off Failure (the earlier of (A) and (B)
being the "Escrow Break Date"), ACEP shall redeem all of the Notes, on the
second Business Day immediately following the Escrow Break Date, at a redemption
price equal to 100% of the principal amount of the Notes, plus accrued and
unpaid interest to the date of redemption.

      (8) MANDATORY REDEMPTION. Other than in connection with redemption
pursuant to Gaming Laws or a Special Mandatory Redemption, the Company is not
required to make mandatory redemption or sinking fund payments with respect to
the Notes.

      (9) REPURCHASE AT THE OPTION OF HOLDER.

                  (a) If there is a Change of Control, the Company will be
      required to make an offer (a "Change of Control Offer") to repurchase all
      or any part (equal to $1,000 or an integral multiple thereof) of each
      Holder's Notes at a purchase price equal to 101% of the aggregate
      principal amount thereof plus accrued and unpaid interest and Liquidated
      Damages thereon, if any, to the date of purchase (the "Change of Control
      Payment"). Within 30 days following any Change of Control, the Company
      will mail a notice to each Holder setting forth the procedures governing
      the Change of Control Offer as required by the Indenture.

                  (b) If the Company or a Restricted Subsidiary of the Company
      consummates any Asset Sales, within five days of each date on which the
      aggregate amount of Excess Proceeds exceeds $5.0 million, the Company will
      commence an offer to all Holders of Notes and all holders of other
      Indebtedness that is pari passu with the Notes containing provisions
      similar to those set forth in the Indenture with respect to offers to
      purchase or redeem with the proceeds of sales of assets (an "Asset Sale
      Offer") pursuant to Section 3.11 of the Indenture to purchase the maximum
      principal amount of Notes (including any Additional Notes) and other pari
      passu Indebtedness that may be purchased out of the Excess Proceeds at an
      offer price in cash in an amount equal to 100% of the principal amount
      thereof plus accrued and unpaid interest and Liquidated Damages thereon,
      if any, to the date fixed for the closing of such offer, in accordance
      with the procedures set forth in the Indenture. To the extent that the
      aggregate amount of Notes (including any Additional Notes) and other pari
      passu Indebtedness tendered pursuant to an Asset Sale Offer is less than
      the Excess Proceeds, the Company may use such deficiency for any purpose
      not otherwise prohibited by the Indenture. If the aggregate principal
      amount of Notes and other pari passu Indebtedness surrendered by holders
      thereof exceeds the amount of Excess Proceeds, the Trustee shall select
      the Notes and other pari passu Indebtedness to be purchased on a pro rata
      basis. Holders of Notes that are the subject of an offer to purchase will
      receive an Asset Sale Offer from the Company prior to any related purchase
      date and may elect to have such

                                      A3-6
<PAGE>

      Notes purchased by completing the form entitled "Option of Holder to Elect
      Purchase" attached to this Note.

                  (c) If the Company or a Restricted Subsidiary of the Company
      receives Excess Loss Proceeds, within five days of each date on which the
      aggregate amount of Excess Loss Proceeds exceeds $5.0 million, the Company
      will commence an offer to all Holders of Notes and all holders of other
      Indebtedness that is pari passu with the Notes containing provisions
      similar to those set forth in the Indenture that require the Company to
      make an Event of Loss Offer pursuant to Section 3.12 of the Indenture to
      purchase the maximum principal amount of Notes (including any Additional
      Notes) and other pari passu Indebtedness that may be purchased out of the
      Excess Loss Proceeds at an offer price in cash in an amount equal to 100%
      of the principal amount thereof plus accrued and unpaid interest and
      Liquidated Damages thereon, if any, to the date fixed for the closing of
      such offer, in accordance with the procedures set forth in the Indenture.
      To the extent that the aggregate amount of Notes (including any Additional
      Notes) and other pari passu Indebtedness tendered pursuant to an Event of
      Loss Offer is less than the Excess Loss Proceeds, the Company may use such
      deficiency for any purpose not otherwise prohibited by the Indenture. If
      the aggregate principal amount of Notes and other pari passu Indebtedness
      surrendered by holders thereof exceeds the amount of Excess Loss Proceeds,
      the Trustee shall select the Notes and other pari passu Indebtedness to be
      purchased on a pro rata basis. Holders of Notes that are the subject of an
      offer to purchase will receive an Excess Loss Offer from the Company prior
      to any related purchase date and may elect to have such Notes purchased by
      completing the form entitled "Option of Holder to Elect Purchase" attached
      to this Note.

            (10) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
      least 15 days but not more than 60 days before the redemption date to each
      Holder whose Notes are to be redeemed at its registered address, except
      that redemption notices may be mailed more than 60 days prior to a
      redemption date if the notice is issued in connection with a defeasance of
      the Notes or a satisfaction or discharge of the Indenture. Notes in
      denominations larger than $1,000 may be redeemed in part but only in whole
      multiples of $1,000, unless all of the Notes held by a Holder are to be
      redeemed. On and after the redemption date interest ceases to accrue on
      Notes or portions thereof called for redemption.

            (11) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
      form without coupons in denominations of $1,000 and integral multiples of
      $1,000. The transfer of Notes may be registered and Notes may be exchanged
      as provided in the Indenture. The Registrar and the Trustee may require a
      Holder, among other things, to furnish appropriate endorsements and
      transfer documents and the Company may require a Holder to pay any taxes
      and fees required by law or permitted by the Indenture. The Company need
      not exchange or register the transfer of any Note or portion of a Note
      selected for redemption, except for the unredeemed portion of any Note
      being redeemed in part. Also, the Company need not exchange or register
      the transfer of any Notes for a period of 15 days before a selection of
      Notes to be redeemed or during the period between a record date and the
      corresponding Interest Payment Date.

      This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii) upon presentation
of certificates (accompanied by an Opinion of Counsel, if applicable) required
by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary
Global Note for one or more Global Notes, the Trustee shall cancel this
Regulation S Temporary Global Note.

                                      A3-7
<PAGE>

            (12) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
      treated as its owner for all purposes.

            (13) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
      exceptions, the Indenture, the Note Guarantees or the Notes may be amended
      or supplemented with the consent of the Holders of at least a majority in
      principal amount of the then outstanding Notes and Additional Notes, if
      any, voting as a single class, and any existing Default or Event of
      Default compliance with any provision of the Indenture, the Note
      Guarantees or the Notes may be waived with the consent of the Holders of a
      majority in principal amount of the then outstanding Notes and Additional
      Notes, if any, voting as a single class. Without the consent of any Holder
      of a Note, the Indenture, the Note Guarantees or the Notes may be amended
      or supplemented to cure any ambiguity, defect or inconsistency, to provide
      for uncertificated Notes in addition to or in place of certificated Notes,
      to provide for the assumption of the Company's or any Guarantor's
      obligations to Holders of the Notes in case of a merger or consolidation,
      to make any change that would provide any additional rights or benefits to
      the Holders of the Notes or that does not adversely affect the legal
      rights under the Indenture of any such Holder, to comply with the
      requirements of the SEC in order to effect or maintain the qualification
      of the Indenture under the TIA, to conform the text of the Indenture, the
      Collateral Documents or the Notes to any provision of the "Description of
      Notes" section of the Offering Memorandum, to the extent that such
      provision in that "Description of Notes" was intended to be a verbatim
      recitation of a provision of the Indenture, the Note Guarantees, the
      Collateral Documents or the Notes, to provide for the Issuance of
      Additional Notes in accordance with the limitations set forth in the
      Indenture, or to allow any Guarantor to execute a supplemental indenture
      to the Indenture and/or a Note Guarantee with respect to the Notes.

            (14) DEFAULTS AND REMEDIES. Events of Default include: (i) default
      for 30 days in the payment when due of interest or Liquidated Damages on
      the Notes; (ii) default in payment when due of principal of or premium, if
      any, on the Notes when the same becomes due and payable at maturity, upon
      redemption (including in connection with an offer to purchase) or
      otherwise, (iii) failure by the Company to comply with Section 3.08, 3.09,
      4.07, 4.09, 4.10, 4.15, 4.16 or 5.01 of the Indenture; (iv) failure by the
      Company for 60 days after notice to the Company by the Trustee or the
      Holders of at least 25% in principal amount of the Notes including
      Additional Notes, if any, then outstanding voting a single class to comply
      with certain other agreements in the Indenture, the Notes or the
      Collateral Documents; (v) default under certain other agreements relating
      to Indebtedness of the Company which default results in the acceleration
      of such Indebtedness prior to its express maturity; (vi) certain final
      judgments for the payment of money that remain undischarged for a period
      of 60 days; (vii) certain events of bankruptcy or insolvency with respect
      to the Company or any of its Restricted Subsidiaries that is a Significant
      Subsidiary or any group of Restricted Subsidiaries that, when taken
      together, would constitute a Significant Subsidiary; (viii) the breach of
      certain covenants in the Collateral Documents or the Collateral Documents
      shall be held in any judicial proceeding to be unenforceable or invalid or
      shall cease for any reason to be in full force and effect; (ix) certain
      cessations and suspensions of the Company's Gaming Licenses; and (x)
      except as permitted by the Indenture, any Note Guarantee shall be held in
      any judicial proceeding to be unenforceable or invalid or shall cease for
      any reason to be in full force and effect or any Guarantor or any Person
      acting on its behalf shall deny or disaffirm its obligations under such
      Guarantor's Note Guarantee. If any Event of Default occurs and is
      continuing, the Trustee or the Holders of at least 25% in principal amount
      of the then outstanding Notes may declare all the Notes to be due and
      payable. Notwithstanding the foregoing, in the case of an Event of Default
      arising from certain events of bankruptcy or insolvency, all outstanding
      Notes will become due and payable without further action or notice.
      Holders may not enforce the Indenture or the Notes except as provided

                                      A3-8
<PAGE>

      in the Indenture. Subject to certain limitations, Holders of a majority in
      principal amount of the then outstanding Notes may direct the Trustee in
      its exercise of any trust or power. The Trustee may withhold from Holders
      of the Notes notice of any continuing Default or Event of Default (except
      a Default or Event of Default relating to the payment of principal or
      interest) if it determines that withholding notice is in their interest.
      The Holders of a majority in aggregate principal amount of the Notes then
      outstanding by notice to the Trustee may on behalf of the Holders of all
      of the Notes waive any existing Default or Event of Default and its
      consequences under the Indenture except a continuing Default or Event of
      Default in the payment of interest or premium or Liquidated Damages, if
      any, on, or the principal of, the Notes. The Company is required to
      deliver to the Trustee annually a statement regarding compliance with the
      Indenture, and the Company is required upon becoming aware of any Default
      or Event of Default, to deliver to the Trustee a statement specifying such
      Default or Event of Default.

            (15) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
      or any other capacity, may make loans to, accept deposits from, and
      perform services for the Company or its Affiliates, and may otherwise deal
      with the Company or its Affiliates, as if it were not the Trustee.

            (16) NO RECOURSE AGAINST OTHERS. A director, officer, manager (or
      managing member) direct or indirect member, partner, employee,
      incorporator or stockholder, of the Company or any of the Guarantors, as
      such, will not have any liability for any obligations of the Company or
      such Guarantor under the Notes, the Note Guarantees, the Collateral
      Documents or the Indenture or for any claim based on, in respect of, or by
      reason of, such obligations or their creation. Each Holder by accepting a
      Note waives and releases all such liability. The waiver and release are
      part of the consideration for the issuance of the Notes.

            (17) AUTHENTICATION. This Note will not be valid until authenticated
      by the manual signature of the Trustee or an authenticating agent.

            (18) ABBREVIATIONS. Customary abbreviations may be used in the name
      of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
      ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
      survivorship and not as tenants in common), CUST (= Custodian), and
      U/G/M/A (= Uniform Gifts to Minors Act).

            (19) ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights
      provided to Holders of Notes under the Indenture, Holders of Restricted
      Global Notes and Restricted Definitive Notes will have all the rights set
      forth in the Registration Rights Agreement dated as of January 29, 2004,
      among the Company and the other parties named on the signature pages
      thereof or, in the case of Additional Notes, Holders of Restricted Global
      Notes and Restricted Definitive Notes will have the rights set forth in
      one or more registration rights agreements, if any, among the Company ,
      the Guarantors and the other parties thereto, relating to rights given by
      the Company and the Guarantors to the purchasers of any Additional Notes
      (collectively, the "Registration Rights Agreement").

            (20) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
      Committee on Uniform Security Identification Procedures, the Company has
      caused CUSIP numbers to be printed on the Notes and the Trustee may use
      CUSIP numbers in notices of redemption as a convenience to Holders. No
      representation is made as to the accuracy of such numbers either as
      printed on the Notes or as contained in any notice of redemption and
      reliance may be placed only on the other identification numbers placed
      thereon.

                                      A3-9
<PAGE>

      The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

American Casino & Entertainment Properties LLC
American Casino & Entertainment Properties Finance Corp.
2000 Las Vegas Boulevard South
Las Vegas, Nevada 89104
Attention:  Denise Barton

                                     A3-10
<PAGE>

                                 ASSIGNMENT FORM

      To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: __________________________________
                                               (Insert assignee's legal name)

________________________________________________________________________________
                  (Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date:  _______________

                                        Your Signature: ________________________
                                              (Sign exactly as your name appears
                                              on the face of this Note)

Signature Guarantee*:  _________________________

*     Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                     A3-11
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

      If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10, 4.15 or 4.16 of the Indenture, check the appropriate box below:

         [ ] Section 4.10      [ ] Section 4.15      [ ] Section 4.16

      If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10, Section 4.15 or Section 4.16 of the Indenture,
state the amount you elect to have purchased:

                                $_______________

Date:  _______________

                                        Your Signature: ________________________
                                              (Sign exactly as your name appears
                                              on the face of this Note)

                                        Tax Identification No.: ________________

Signature Guarantee*: _________________________

*     Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                     A3-12
<PAGE>

           SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE

      The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or exchanges in part of another
other Restricted Global Note for an interest in this Regulation S Temporary
Global Note, have been made:

<TABLE>
<CAPTION>
                                                                      Principal Amount
                   Amount of decrease in   Amount of increase in    at maturity of this
                      Principal Amount        Principal Amount     Global Note following   Signature of authorized
                      at maturity of          at maturity of           such decrease        officer of Trustee or
Date of Exchange     this Global Note        this Global Note          (or increase)              Custodian
----------------     ----------------        ----------------          -------------              ---------
<S>                <C>                     <C>                     <C>                     <C>
</TABLE>

                                     A3-13
<PAGE>

                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
AMERICAN CASINO & ENTERTAINMENT PROPERTIES FINANCE CORP.
2000 Las Vegas Boulevard South
Las Vegas, Nevada 89104
Attention: Denise Barton

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890

      Re: 7.85% Senior Secured Notes due 2012

      Reference is hereby made to the Indenture, dated as of January 29, 2004
(the "Indenture"), among American Casino & Entertainment Properties LLC, a
Delaware limited liability company, as issuer ("ACEP"), American Casino &
Entertainment Properties Finance Corp., a Delaware corporation, as co-issuer
("ACEP Finance", together with ACEP, the "Company"), the Guarantors party
thereto and Wilmington Trust Company, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

      ___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:

                             [CHECK ALL THAT APPLY]

      1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A, and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.

      2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S PERMANENT GLOBAL NOTE
OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a Person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and

                                      B-1
<PAGE>

neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Permanent Global Note,
the Regulation S Temporary Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.

      3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

            (a) [ ] such Transfer is being effected pursuant to and in
      accordance with Rule 144 under the Securities Act;

                                       or

            (b) [ ] such Transfer is being effected to the Company or a
      subsidiary thereof;

                                       or

            (c) [ ] such Transfer is being effected pursuant to an effective
      registration statement under the Securities Act and in compliance with the
      prospectus delivery requirements of the Securities Act;

                                       or

            (d) [ ] such Transfer is being effected to an Institutional
      Accredited Investor and pursuant to an exemption from the registration
      requirements of the Securities Act other than Rule 144A, Rule 144, Rule
      903 or Rule 904, and the Transferor hereby further certifies that it has
      not engaged in any general solicitation within the meaning of Regulation D
      under the Securities Act and the Transfer complies with the transfer
      restrictions applicable to beneficial interests in a Restricted Global
      Note or Restricted Definitive Notes and the requirements of the exemption
      claimed, which certification is supported by (1) a certificate executed by
      the Transferee in the form of Exhibit D to the Indenture and (2) if such
      Transfer is in respect of a principal amount of Notes at the time of
      transfer of less than $250,000, an Opinion of Counsel provided by the
      Transferor or the Transferee (a copy of which the Transferor has attached
      to this certification), to the effect that such Transfer is in compliance
      with the Securities Act. Upon consummation of the proposed transfer in
      accordance with the terms of the Indenture, the transferred beneficial
      interest or Definitive Note will be subject to the restrictions on
      transfer enumerated in the Private Placement Legend printed on the IAI
      Global Note and/or the Restricted Definitive Notes and in the Indenture
      and the Securities Act.

      4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

                                      B-2
<PAGE>

      (a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

      (b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.

      (c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.

      This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                        ________________________________________
                                               [Insert Name of Transferor]

                                        By:_____________________________________
                                           Name:
                                           Title:

      Dated: _______________________

                                      B-3
<PAGE>

                       ANNEX A TO CERTIFICATE OF TRANSFER

      1. The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (a) OR (b)]

            (a) [ ] a beneficial interest in the:

                  (i) [ ] 144A Global Note (CUSIP _________), or

                  (ii) [ ] Regulation S Global Note (CUSIP _________), or

                  (iii) [ ] IAI Global Note (CUSIP _________); or

            (b) [ ] a Restricted Definitive Note.

      2. After the Transfer the Transferee will hold:

                                   [CHECK ONE]

            (a) [ ] a beneficial interest in the:

                  (i) [ ] 144A Global Note (CUSIP _________), or

                  (ii) [ ] Regulation S Global Note (CUSIP _________), or

                  (iii) [ ] IAI Global Note (CUSIP _________); or

                  (iv) [ ] Unrestricted Global Note (CUSIP _________); or

            (b) [ ] a Restricted Definitive Note; or

            (c) [ ] an Unrestricted Definitive Note,

            in accordance with the terms of the Indenture.

                                      B-4
<PAGE>

                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
AMERICAN CASINO & ENTERTAINMENT PROPERTIES FINANCE CORP.
2000 Las Vegas Boulevard South
Las Vegas, Nevada 89104
Attention: Denise Barton

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890

      Re: 7.85% Senior Secured Notes due 2012 (CUSIP ____________)

      Reference is hereby made to the Indenture, dated as of January 29, 2004
(the "Indenture"), among American Casino & Entertainment Properties LLC, a
Delaware limited liability company, as issuer ("ACEP"), American Casino &
Entertainment Properties Finance Corp., a Delaware corporation, as co-issuer
("ACEP Finance", together with ACEP, the "Company"), the Guarantors party
thereto and Wilmington Trust Company, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

      __________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:

      1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE

      (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

      (b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the

                                       C-1
<PAGE>

Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

      (c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

      (d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

      2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES

      (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.

      (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
[ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.

      This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                      C-2
<PAGE>

                                        ________________________________________
                                              [Insert Name of Transferor]

                                        By:_____________________________________
                                           Name:
                                           Title:

Dated:  ______________________

                                      C-3
<PAGE>

                                                                       EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
AMERICAN CASINO & ENTERTAINMENT PROPERTIES FINANCE CORP.
2000 Las Vegas Boulevard South
Las Vegas, Nevada 89104
Attention: Denise Barton

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890

      Re: 7.85% Senior Secured Notes due 2012

      Reference is hereby made to the Indenture, dated as of January 29, 2004
(the "Indenture"), among American Casino & Entertainment Properties LLC, a
Delaware limited liability company, as issuer ("ACEP"), American Casino &
Entertainment Properties Finance Corp., a Delaware corporation, as co-issuer
("ACEP Finance", together with ACEP, the "Company"), the Guarantors party
thereto and Wilmington Trust Company, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

      In connection with our proposed purchase of $____________ aggregate
principal amount of:

      (a) [ ] a beneficial interest in a Global Note, or

      (b) [ ] a Definitive Note,

      we confirm that:

      1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the "Securities Act").

      2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any Person

                                       D-1
<PAGE>

                                                                       EXHIBIT D

purchasing the Definitive Note or beneficial interest in a Global Note from us
in a transaction meeting the requirements of clauses (A) through (E) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein.

                                      D-2
<PAGE>

      3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.

      4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.

      5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.

      You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.

                                        ________________________________________
                                          [Insert Name of Accredited Investor]

                                        By:_____________________________________
                                           Name:
                                           Title:

Dated:  _______________________

                                      D-3
<PAGE>

                                                                       EXHIBIT E

                          FORM OF NOTATION OF GUARANTEE

      For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture, dated as of January 29, 2004 (the "Indenture"),
among American Casino & Entertainment Properties LLC, a Delaware limited
liability company, as issuer ("ACEP"), American Casino & Entertainment
Properties Finance Corp., a Delaware corporation, as co-issuer ("ACEP Finance",
together with ACEP, the "Company"), the Guarantors party thereto and Wilmington
Trust Company, as trustee (the "Trustee"), (a) the due and punctual payment of
the principal of, premium and Liquidated Damages, if any, and interest on, the
Notes, whether at maturity, by acceleration, redemption or otherwise, the due
and punctual payment of interest on overdue principal of and interest on the
Notes, if any, if lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with
the terms of the Indenture and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Note Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Note Guarantee. Each Holder of a Note, by accepting the
same, (a) agrees to and shall be bound by such provisions and (b) appoints the
Trustee attorney-in-fact of such Holder for all purposes.

      Capitalized terms used but not defined herein have the meanings given to
them in the Indenture.

                                        [NAME OF GUARANTOR(S)]

                                        By:_____________________________________
                                        Name:
                                        Title:

                                       E-1
<PAGE>

                                                                       EXHIBIT F

                         FORM OF SUPPLEMENTAL INDENTURE
                    TO BE DELIVERED BY SUBSEQUENT GUARANTORS

      SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of American Casino & Entertainment Properties LLC, a
Delaware limited liability company, as issuer ("ACEP") (or its permitted
successor), American Casino & Entertainment Properties Finance Corp., a Delaware
corporation, as co-issuer ("ACEP Finance", together with ACEP, the "Company"),
the other Guarantors (as defined in the Indenture referred to herein) and
Wilmington Trust Company, as trustee under the Indenture referred to below (the
"Trustee").

                               W I T N E S S E T H

      WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of January 29, 2004 providing for the
issuance of 7.85% Senior Secured Notes due 2012 (the "Notes");

      WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and

      WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

      NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

      1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

      2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Note Guarantee and in the indenture including but not limited
to Article 11 thereof.

      4. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Collateral Documents, the Indenture or this Supplemental Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a
waiver is against public policy.

      5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

                                      F-1
<PAGE>

      6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

      7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.

      8. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.

                                      F-2
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

      Dated: _______________, 20___

                                      [GUARANTEEING SUBSIDIARY]

                                      By: _______________________________
                                      Name:
                                      Title:

                                      AMERICAN CASINO & ENTERTAINMENT PROPERTIES
                                      LLC

                                      By: _______________________________
                                      Name:
                                      Title:

                                      AMERICAN CASINO & ENTERTAINMENT PROPERTIES
                                      FINANCE CORP.

                                      By: _______________________________
                                      Name:
                                      Title:

                                      [EXISTING GUARANTORS]

                                      By: _______________________________
                                      Name:
                                      Title:

                                      [TRUSTEE],
                                       as Trustee

                                      By: _______________________________
                                           Authorized Signatory

                                      F-3<PAGE>

                                                                    EXHIBIT 10.1

                                                               EXECUTION VERSION

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT (the "Agreement") is entered into on July 1, 2004, and
effective as of April 1, 2004 (the "Effective Date"), by and between ATARI, INC.
(the "Company") and BRUNO BONNELL, the undersigned individual ("Executive").

      IN CONSIDERATION of the mutual covenants and agreements hereinafter set
forth, the Company and Executive agree as follows:

      1. Employment: As of the Effective Date, the Company employs Executive to
render his services as Chairman of the Board, Chief Executive Officer, and Chief
Creative Officer of the Company, reporting directly to the Company's Board of
Directors (hereinafter "the Board"), and Executive agrees to perform such
services, on the terms and conditions hereinafter set forth. During the Term, as
hereinafter defined, Executive shall have the duties, responsibilities and
authority commensurate with his position and such other duties commensurate with
his position as assigned to him by the Board, and Executive shall devote a
significant portion of (and at least a majority of) his full business time,
skill and efforts to the business and affairs of the Company and its
subsidiaries, including entities managed by the Company.

      2. Term: The term of this Agreement shall commence on the Effective Date
and continue for a period of five (5) years (the "Initial Period"). Unless
Executive's employment has otherwise been terminated in accordance with this
Agreement, following the Initial Period this Agreement shall be extended
automatically for up to two (2) additional one (1) year periods (each a "Renewal
Term"), unless either party gives written notice in the manner specified herein
at least six (6) months prior to the expiration of the Initial Period or any
Renewal Term of such party's decision not to renew this Agreement, in which
event the Term shall end at the conclusion of the then-current year of the
Initial Period or Renewal Term. The "Term" of this Agreement shall be the
Initial Period plus any Renewal Terms. Upon any such expiration of the Term, on
termination of Executive's employment at such time or thereafter, Executive
shall receive Accrued Amounts, any amounts or benefits due under any benefit or
payroll plan or program and, subject to Section 4(b) hereof, a Pro Rata Bonus
(as defined in Section 10(a) below) and have at least one (1) year thereafter to
exercise any vested stock options or, if less, the remainder of the Term of the
grant, provided that if such expiration is the result of the Executive giving
notice of nonrenewal, such expiration shall be treated as a resignation other
than for Good Reason by the Executive. Any employment of Executive after
expiration of the Term shall be at will employment terminable by either party at
any time with or without Cause or with or without Good Reason, except as may
otherwise be specifically provided in a written agreement.

<PAGE>

                                       2

      3. Other Business Activity and Conflicts of Interest:

         (a) During the Term, subject to the provisions of this Agreement,
Executive shall abide by the Company's written policies with respect to
conflicts of interest. Without limiting the generality of the foregoing, except
as provided in (b) below, Executive shall not engage in any activity which
conflicts or interferes with the performance of Executive's duties hereunder,
except that Executive shall be entitled to attend to personal and family affairs
and investments, be involved in not for profit, charitable and professional
activities, be involved in other business and creative endeavors (not involving
video games) and with the prior consent of the Board, serve on public for profit
boards, provided that the foregoing does not, in the aggregate, materially
interfere with Executive's responsibilities hereunder, and except as otherwise
approved in advance in writing by the Board. The Board hereby approves
Executive's service on the boards of directors set forth in Exhibit A hereto.

         (b) Without limiting the generality of the foregoing, the parties
acknowledge and agree that during at least a portion of the Term hereof,
Executive shall be rendering his services to Infogrames Entertainment, SA
("IESA") as its Chairman of the Board and Chief Executive Officer (the "Other
Position"), and that, provided Executive complies with the relevant provisions
of this Agreement with respect to such Other Position, such rendering of
services (and receipt of compensation and benefits therefrom) shall not be
considered a conflict of interest and/or a breach of this Agreement, it being
understood that in the event either Executive or either of the Boards of
Directors of the Company or IESA reasonably determines that Executive's vote as
a member of either Board of Directors on a particular topic might constitute a
conflict of interest to the detriment of the Company or IESA, and so notifies
Executive in writing, except a writing shall not be necessary if the conflict
arises during a Director's meeting, prior to the vote, Executive shall recuse
himself from discussion and voting in connection with such issue. The foregoing
does not affect Executive's ability to vote, or take other actions on any issue
as a Shareholder. Furthermore, Executive may be involved, from time to time, in
other business and creative enterprises other than primarily involving creation
and distribution of video games, provided that such activities shall be subject
to Section 8 hereof and further provided that the foregoing activities and those
under Section 3(a) hereof do not, in the aggregate, materially interfere with
Executive's responsibilities hereunder. Executive shall keep the Board informed
of any such business or creative enterprise at such time as they become material
and concrete. If the manner of exploitation of any such activity or enterprise
involves (i) video games or is, at the time such manner of exploitation is
determined, otherwise directly competitive with any other business that the
Company is then actively in or is actively contemplating entering into in the
following six (6) months (any of the foregoing being the "Competitive Activity")
and (ii) does not involve rights already owned by another person or entity (in
which Executive or his immediate family does not own at such time more than ten
percent (10%) of the equity in such entity) at the time Executive becomes
involved in the project, the Executive shall use reasonable business efforts to
cause the Company to be given a right of first offer on the Competitive Activity
rights of such project in accordance with the provisions of Exhibit C if at the
time such
<PAGE>

                                        3

exploitation is to be commenced or the product for such exploitation
is to be developed Executive is employed by the Company.

      4. Compensation:

         (a) Base Salary: For all of Executive's services to the Company and its
subsidiaries, the Company shall pay to Executive a base salary at the rate of
Five Hundred Thousand Euros (euro 500,000) per annum, payable in equal
installments in accordance with the Company's customary payroll practice for its
employees in effect at the time, but no less frequently than monthly.
Executive's base salary may be reviewed annually for increase. Any such
increases shall be in the sole discretion of the Company's Compensation
Committee and subject to the approval of the Board. Executive understands and
agrees that neither the Compensation Committee nor the Board is obligated to
increase Executive's salary and any decision not to increase Executive's salary
will not be deemed a breach of this Agreement.

            (b) Annual Incentive Payments:

                  (i) Executive shall be eligible for an aggregate annual
discretionary incentive payment (the "Incentive Bonus") of up to a target of
100% of Executive's then-current annual base salary. The Incentive Bonus shall
be structured as follows: (a) the Board, in it sole and unreviewable discretion,
may award Executive annual incentive compensation of up to 30% of Executive's
then-current annual base salary based upon the creative performance of the
Company's business; and (b) the Board shall award Executive additional annual
incentive compensation of up to 70% of Executive's then-current annual base
salary based on the overall financial performance of the Company, in each case
applying criteria and objectives similar to those it considers when determining
incentive compensation for other similar senior executives of the Company for
the same period of the Term. Upon expiration of the Term, the pro rata bonus for
the fiscal year in which expiration occurs shall be based on actual financial
results for the fiscal year for the full 100% of the bonus instead of only 70%
of the bonus.

               (ii) In addition to the foregoing, the Board shall have sole and
unreviewable discretion to award Executive additional incentive compensation at
any time for significant product successes.

            (c) Direct Deposit of Monies: Provided Executive provides the
Company with appropriate written authorization, all payments made under
subsections (a) and (b) of this Paragraph 4 shall be deposited in Euros directly
into an account maintained by Executive in France, which Executive shall
designate as his "direct deposit" account, except that the Company shall deduct
from such payments prior to their deposit any required federal, state and local
United States tax and other payroll withholdings (including, to the extent
required or elected, Social Security) and any other deductions or charges
authorized by Executive. All conversions between Euros and dollars shall be in
compliance with the requirements of the Internal Revenue Code.

<PAGE>

                                       4

            (d) Long-Term Incentive:

            (i) On July 1, 2004, the Company shall grant Executive 2,000,000
Company stock options at fair market value on such date. The stock options will
be subject to the following vesting schedule: (A) 25% of the options (i.e.
500,000 options) will vest on March 31, 2005; and (B) the remaining options
(i.e. 1,500,000 options) will vest in accordance with the vesting schedule
contained in the Company's 2000 Stock Option Plan (the "Plan") (i.e., 6.25% per
calendar quarter, commencing with the July, 2005, calendar quarter).
Notwithstanding the foregoing, the grant of the last 800,000 stock options that
shall vest pursuant to the prior sentence shall be conditioned on the approval
by the shareholders of the Company of an amendment to the Plan increasing the
number of options that can be granted on July 1, 2004 to a sufficient number
such that the grant of such 800,000 stock options to the Executive on July 1,
2004 shall not violate the limit on individual grant of stock options during a
specified period under the Plan. The Company represents and warrants that the
Board has approved such an amendment and the Company will seek approval of such
amendment by the shareholders of the Company at the Company's next annual
meeting.

               (ii) In addition to the above stock option grant, the Board shall
have sole and unreviewable discretion to grant Executive additional stock
options.

            (e) Expenses: Upon submission of itemized expense statements in the
manner reasonably specified by the Company, Executive shall be entitled to
reimbursement for reasonable business-related travel and other reasonable
business expenses duly incurred by Executive in the performance of Executive's
duties under this Agreement in accordance with the policies and procedures
established by the Company from time to time for executives of the same level
and responsibility as Executive. Executive shall have the use of a Company
credit card and be entitled to business-related air travel in business class, or
if not available, first class. Since Executive will also be providing services
to IESA for which he will have to be in France, the Company shall pay at least
70% of Executive's expenses for travel between France and the United States,
other than for personal travel (provided that travel between the United States
and France to work for IESA or the Company shall not be considered personal
travel) (and to the extent such payments are taxable to the Executive, gross up
such amounts, such that Executive has no after tax cost therefor). Without
limiting the generality of the foregoing, the Company hereby agrees to pay the
legal fees incurred in connection with the preparation and negotiation of this
agreement and to the extent taxable to the Executive provide a gross up such
that Executive has no after tax cost therefor.

      5. Benefits:

         (a) During the Term, and subject to the terms and provisions of such
plans, Executive shall be entitled to participate in the benefit plans and
programs, and receive the benefits and perquisites, generally provided to the
Company's executives of the same level and
<PAGE>

                                       5

responsibility as Executive to the extent Executive is otherwise eligible under
the terms thereof. Nothing in this Agreement shall preclude the Company from
terminating or amending from time to time any employee benefit plan or program.
In addition, Executive shall be compensated for the cost of tax and financial
advice and preparation on the same terms as typically provided to other
expatriate senior executives of the Company, including for preparation of French
and United States tax returns by the international accounting firm which has
contracted with the Company to prepare returns for specific international
executives. This advice and preparation shall be provided also for the year of
expiration of the Agreement and the year of any termination other then a
termination for Cause or voluntary without Good Reason. Said payments shall be
grossed up as necessary to account for any applicable income or other taxes for
which Executive may be responsible in connection therewith (including for the
gross up payment).

            (b) During the Term, in addition to the benefits under (a) above,
the Company shall provide Executive with, or pay the premium on, term life
insurance on Executive's life in the amount of his Base Salary. Executive shall
be entitled to name the beneficiary of such policy and such policy shall be
portable. In the event Executive is not insurable by an amount equal to the cost
at standard rates, the amount of insurance shall be that purchasable at standard
rates.

      6. Relocation and Housing Allowance: The Company shall provide Executive
with a relocation and housing allowance for the period commencing April 1, 2004
through December 31, 2005, which shall include reimbursement for Executive's
actual and documented rent, security deposit, and broker commissions or fees;
provided, however, that rent reimbursement will be capped at $7,600 per month
through December 31, 2004 (the "2004 Cap") and $8,360 per month in 2005 (the
"2005 Cap"). The Company shall also cover similar expenses incurred from January
1, 2004 through the Effective Date, subject to the 2004 Cap. The Company hereby
agrees to execute any rent payment guarantees reasonably required by any third
party as a result of Executive's international status in connection with
Executive's living accommodations. All relocation and housing allowances made
under this Paragraph shall be grossed up as necessary to account for any
applicable income or other taxes for which Executive may be responsible in
connection therewith, including as a result of the gross up. If Executive's
employment hereunder is terminated prior to December 31, 2005 by the Company
without Cause or as a result of Disability, as a result of the Executive's death
or by the Executive for Good Reason, the Company will assume all of Executive's
obligations with respect to his housing through December 31, 2005, subject to
the 2004 Cap and the 2005 Cap.

      7. Place of Employment: Executive's services hereunder shall be rendered
primarily at the Company's office in New York City, New York. The Company may,
however, from time to time require Executive to travel to and render services
elsewhere, as the Company may reasonably deem necessary.
<PAGE>

                                       6

      8. Restrictive Covenants:

         (a) Confidential Information; Non-Solicitation:

               (i) Existence of Confidential Information. The Company owns and
has developed and compiled, and will develop and compile, certain proprietary
techniques and confidential information which have great value to its business
(referred to in this Agreement, collectively, as "Confidential Information").
Confidential Information includes not only information disclosed by the Company
to Executive, but also information developed or learned by Executive during the
course or as a result of employment with the Company, which information shall be
the property of the Company. Confidential Information includes all information
that has or could have commercial value or other utility in the business in
which the Company is engaged or contemplates engaging, and all information of
which the unauthorized disclosure could be detrimental to the interests of the
Company, whether or not such information is specifically labeled as Confidential
Information by the Company. By way of example and without limitation,
Confidential Information includes any and all information developed, obtained,
licensed by or to or owned by the Company concerning trade secrets, techniques,
know-how (including designs, plans, procedures, merchandising, marketing,
distribution and warehousing know-how, processes, and research records),
software, computer programs, and any other intellectual property created, used
or sold (through a license or otherwise) by the Company, Electronic Data
Information know-how and processes, innovations, discoveries, improvements,
research, development, test results, reports, specifications, data, formats,
marketing data and plans, business plans, strategies, forecasts, unpublished
financial information, orders, agreements and other forms of documents, price
and cost information, merchandising opportunities, expansion plans, store plans,
budgets, projections, customer, supplier, licensee, licensor and subcontractor
identities, characteristics, agreements and operating procedures, and salary,
staffing and employment information. Notwithstanding the foregoing, Confidential
Information shall not include information which (A) is or becomes generally
available to the public or is, at the time in question, in the public domain
other than as a result of a disclosure by Executive, (B) was available to
Executive on a non-confidential basis prior to the date of this Agreement, (C)
becomes available to Executive from a source other than the Company, its agents
or representatives (or former agents or representatives), or (D) is required to
be disclosed pursuant to law; provided, that Executive shall provide the Company
with prompt notice of such required disclosure, and Executive shall reasonably
cooperate with the Company (at Company expense) to enable the Company to seek a
protective order; provided, further, that in the case of (C) above, the source
of such information was not bound by a confidentiality agreement with the
Company.

               (ii) Protection of Confidential Information. Executive
acknowledges and agrees that in the performance of duties hereunder the Company
discloses to and entrusts Executive with Confidential Information which is the
exclusive property of the Company and which Executive may possess or use only in
the performance of duties for the Company. Executive also acknowledges that he
is aware that the unauthorized disclosure of Confidential Information, among
other things, may be prejudicial to the Company's interests, an invasion of
<PAGE>

                                       7

privacy and an improper disclosure of trade secrets. Executive shall not,
without the prior written consent of the Board, directly or indirectly, use,
make available, sell, disclose or otherwise communicate to any corporation,
partnership, individual or other third party, other than in the course of
Executive's responsibilities and, as he deems in good faith, for the benefit of
the Company, any Confidential Information, either during the Term or thereafter,
provided that the Company acknowledges that IESA is a majority shareholder of
Atari and, accordingly, disclosure of Confidential Information to IESA shall not
be deemed a violation of this provision. In the event Executive desires to
publish the results of Executive's work for or experiences with the Company
through literature, interviews or speeches, Executive will submit requests for
such interviews or such literature or speeches to the Board at least fourteen
(14) days before any anticipated dissemination of such information for a
determination of whether such disclosure is in the best interests of the
Company, including whether such disclosure may impair trade secret status or
constitute an invasion of privacy. Executive agrees not to publish, disclose or
otherwise disseminate such information without the prior written approval of the
Board.

               (iii) Proprietary Information. Executive will hold in strictest
confidence and will not disclose, use, or publish, any of the Company's
Proprietary Information (defined below), except as such disclosure, use or
publication may be required in connection with Executive's work for the Company
or unless an officer of the Company expressly authorizes such in writing,
provided that the foregoing shall not apply to disclosure of confidential
Proprietary Information to IESA. Subject to Section 9 of this Agreement,
Executive hereby assigns to the Company any rights Executive may have or acquire
in such Proprietary Information and recognizes that all Proprietary Information
shall be the sole property of the Company and its assigns, and that the Company
and its assigns shall be the sole owner of all title, patent rights, copyrights,
trade secret rights, moral rights, and all other rights throughout the world
(collectively, "Proprietary Rights") in connection therewith.

               For purposes of this Agreement, "Proprietary Information" is
information that was or will be developed, created, or discovered by or on
behalf of the Company, including without limitation, by Executive in the course
of his work for the Company, or which became or will become known by, or was or
is conveyed to the Company, which has commercial value in the Company's business
and is subject to Section 9 of this Agreement.. By way of illustration, but not
limitation, "Proprietary Information" includes (a) inventions (whether
patentable or not), mask works, trade secrets, ideas, processes, formulas,
source and object codes, data, programs, other works of authorship, consumer
preference algorithms, strategic alliances, application or other developments,
know-how, technology, improvement, discoveries, designs and techniques
(collectively referred to herein as "inventions"), and (b) information regarding
plans for research, development, new products, marketing and selling, business
plans, budgets and unpublished financial statements, licenses, prices and costs,
suppliers and customers; and information regarding the skills and compensation
of other employees of or consultants to the Company.

<PAGE>

                                       8

               (iv) Enforcement of Proprietary Rights. Executive will assist the
Company in every proper way to obtain and from time to time enforce United
States and foreign Proprietary Rights relating to Company Inventions (as defined
in Section 9(c) of this Agreement) in any and all countries, including without
limitation, executing, verifying and delivering such documents and performing
such other acts (including, at Company expense, appearances as a witness) as the
Company may reasonably request for use in applying for, obtaining, perfecting,
evidencing, sustaining and enforcing such Proprietary Rights and the assignment
thereof. In addition, Executive will execute, verify and deliver assignments of
such Proprietary Rights to the Company or its designee. To that end Executive
will execute, verify, and deliver such documents and perform such other acts
(including, at Company expense, appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining, and enforcing such Proprietary Rights and the assignment thereof. In
addition, Executive will execute, verify, and deliver assignments of such
Proprietary Rights to the Company or its designee. Executive's obligation to
assist the Company with respect to Proprietary Rights relating to Company
Inventions in any and all countries shall continue beyond the termination of
this Agreement, provided that the Company shall compensate Executive at a
reasonable rate for the time actually spent by Executive at the Company's
request, if any, on such assistance after termination of Executive's employment.
In the event the Company is unable for any reason, after reasonable effort, to
secure Executive's signature on any document needed in connection with the
actions specified in this paragraph, Executive hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as Executive's
agent and attorney in fact, to act for and in Executive's behalf to execute,
verify, and file any such documents and to do all other lawfully permitted acts
to further the purposes of the preceding paragraph thereon with the same legal
force and effect as if executed by Executive. Executive hereby waives and
quitclaims to the Company any and all claims, of any nature whatsoever, which
Executive now or may hereafter have for infringement of any Proprietary Rights
owned by the Company pursuant to this Agreement.

               (v) Third Party Information. Executive will hold confidential or
proprietary information that the Company has received and in the future may
receive from third parties ("Third Party Information"), subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes, in the strictest confidence and will not
disclose (to anyone other than Company or IESA personnel who need to know such
information in connection with their work for the Company), use, or publish
except in connection with Executive's work for the Company, such Third Party
Information unless expressly authorized by an officer of the Company in writing
or in compliance with legal process or governmental inquiry.

               (vi) Deliverer of Records, Etc. In the event Executive's
employment with the Company ceases for any reason, Executive will not remove
from the Company's premises without its prior written consent any records,
files, drawings, documents, equipment, materials and writings belonging to the
Company, including those which relate to or contain Confidential Information, or
any copies thereof (other than Executive's rolodex and similar
<PAGE>

                                       9

address books, provided that they only contain names, addresses, telephone
numbers, and similar contact information, and further provided that the
Executive, upon written request, shall furnish the Company with a copy of such
rolodex and similar address books). Upon request or when employment with the
Company ends, Executive will immediately deliver the same to the Company.

               (vii) Non-Solicitation/Non-Hire. Executive acknowledges and
agrees that any attempt to interfere with the Company's existing employment
relationships would result in significant harm to the Company's interests.
Accordingly, Executive agrees that during his employment with the Company
(whether under this Agreement or otherwise) and for a period of twenty-four (24)
months after such employment ends (regardless of reason), Executive will not,
except in the good faith performance of his duties while employed by the
Company, in any way, directly or indirectly, solicit any employee of the Company
to terminate his or her employment with the Company, or hire any person who is
then an employee of the Company and, if after termination of employment, was an
employee of the Company on the date of termination, provided that the foregoing
shall not apply to general advertising not specifically targeted at employees of
the Company.

            (b) Non-Competition: Executive hereby agrees and covenants that, for
the greater period of either: (i) six (6) months after Executive's employment
with the Company ends (regardless of reason); or (ii) the number of months for
which Executive will receive severance payments under Paragraph 10 of this
Agreement, Executive will not render services to the eight entities set forth on
a list provided by the Company to the Executive simultaneously herewith (the
"Listed Entities"), provided that the foregoing shall not apply to continuation
of matters permitted and done in accordance with Section 3 hereof which were
commenced at a time when an entity was not a Listed Entity. The Listed Entities
named herein may be amended from time to time in the Company's sole discretion
by written notice to Executive, provided that the Listed Entities will, at no
time, include more than eight entities, all such entities shall be competitive
with the business of the Company, and any such amendment shall be effective only
if written notice thereof shall have been given to Executive at least 90 days
prior to the effective date of Executive's termination of employment. Nothing in
this Paragraph 8(b) shall prohibit Executive from being employed, or providing
services, in a non-competitive position with a large conglomerate that owns one
of the foregoing. In the event the length of Executive's non-compete obligation
under this Paragraph 8(b) exceeds twelve (12) months, at any time after the end
of the initial twelve (12) months, Executive may elect to forfeit the right to
future severance pay in exchange for termination of this non-compete provision
upon written notice to the Company. If Executive voluntarily resigns without
Good Reason and begins to render services to one of the Listed Entities within
six (6) months of his termination of employment in violation of the obligations
under this paragraph, the Executive shall repay the Company, in cash, within
five business days after demand is made therefore by the Company, the total
amount of the "Award Gain" (as defined herein) realized by the Executive upon
any exercise of Company stock options that occurred on or after the date that is
six (6) months prior to the date the Executive began to render services to the
Listed Entity in violation of the obligations under this paragraph.
<PAGE>

                                       10

The term "Award Gain" shall mean the product of: (x) the fair market value per
share of stock on the date of such exercise (without regard to any subsequent
change in the market price of shares) minus the exercise price, times (y) the
number of shares as to which the option was exercised at that date.

            (c) Non-Disparagement: During the Term and thereafter, Executive and
the Company each agree that he or it will take no unnecessary action which is
intended, or would reasonably be expected, to harm the other's reputation or
which would reasonably be expected to lead to unwanted or unfavorable publicity
to the other. Nothing in this Paragraph 8(c) shall preclude Executive from
making non-defamatory statements regarding the Company and taking other actions
in the course of engaging in legitimate competitive activities.

      9. Rights to Results of Services:

            (a) Subject to the remainder of this paragraph, in addition to
Executive's services, the Company shall own, and Executive hereby sells, grants,
assigns, transfers and sets over to the Company, all rights of every kind in and
to all results and proceeds of Executive's services hereunder, including,
without limitation, all documents prepared or compiled by Executive in
connection with such services. Executive's creative services hereunder relate
only to video games and derivatives of video games created for the Company,
which shall be all video games except as provided below. The Company shall have
no right of any kind hereunder in any intellectual properties created by
Executive for IESA with regard to, or derived from, video games and other
intellectual properties currently owned by IESA or with regard to developments
of video games done by IESA for the Company or any other entity pursuant to a
developmental contract. In addition, the Company shall have no right hereunder
to any intellectual property created by Executive, including, but not limited
to, movies, books, DVDs, television programs and designs (and video games based
on the foregoing if the video games are derivatives of the foregoing as opposed
to the foregoing being derivatives of the video games) other than video games
and derivatives thereof as provided above. In the event an agreement is entered
into pursuant to Exhibit C hereto, the Company shall have such rights as
provided therein. At all times, Executive shall own his name and image and the
Company shall have no right in it, except it may identify the Executive as the
creator of products.

            (b) Notwithstanding any other provision of this Agreement to the
contrary, this Agreement does not obligate Executive to assign or offer to
assign to the Company any of Executive's rights in an invention for which no
equipment, supplies, facilities or trade secret information of the Company was
used and which was developed entirely on Executive's own time, unless (1) the
invention resulted from work performed by Executive for the Company, (2) the
invention relates to the business of the Company, or (3) the invention relates
to the Company's actual or demonstrably anticipated research or development
provided however, that any work Executive expends in connection with such
excluded inventions shall be done on Executive's own time, during non-working
hours, and not interfere with Executive's full and faithful performance of
Executive's duties as an employee or consultant of the Company, and in
<PAGE>

                                       11

any event, there shall be no obligation or offer to assign any invention not
covered by the grant in (a) above.

            (c) Inventions assigned to or otherwise held by the Company pursuant
to paragraph (b) above are hereinafter referred to as "Company Inventions."

            (d) Executive expressly assigns any rights that Executive may have
to control the content or appearance of any Company Invention, to seek credit as
its author/inventor or to seek compensation for such Company Invention. To the
extent that assignment of these rights is not permitted under applicable law and
to the extent the law permits a waiver of those rights, Executive hereby waives
any of Executive's rights in any Company Invention.

            (e) Inventions, if any, patented or unpatented, which Executive made
prior to the commencement of Executive's employment relationship with the
Company and to which Executive claims ownership ("Pre-existing Inventions") are
excluded from the scope of this Agreement; provided, however, that Executive
shall maintain appropriate documentation to establish the existence and scope of
any Pre-existing Inventions.

      10. Termination:

            (a) Death of Executive: Executive's employment shall terminate
automatically upon Executive's death. If Executive's employment under this
Agreement is terminated by reason of Executive's death, the Company shall pay to
Executive's designated beneficiary or estate, as appropriate: (i) any accrued
amounts, including any salary that Executive has earned but that remains unpaid
as of the date of such termination, any accrued but unused vacation, any
unreimbursed business expenses and any bonus due for any completed fiscal year
("Accrued Amounts"); and (ii) a pro rata portion of Executive's annual incentive
for the year of Executive's death based on actual results and the relative
period of such year through which Executive was employed (the "Pro Rata Bonus").
Further, all stock options previously granted to Executive by the Company shall
vest immediately upon Executive's death and be exercisable for a period of one
(1) year thereafter or, if less, the remainder of the term of the grant. Nothing
in this Paragraph 10(a) shall affect any entitlement of Executive's heirs to the
benefits of any life insurance plan or other applicable benefits, including but
not limited to as provided in Sections 5 and 6 hereof.

            (b) Disability of the Executive: The Company may, at its option,
terminate Executive's employment by written notice given to the Executive while
he remains incapacitated if Executive shall fail, by virtue of or by reason of
some physical or mental impairment, to perform Executive's duties hereunder for
a period of six (6) consecutive months or more. In the event of such
termination, Executive shall remain eligible for such short-term and long-term
disability benefits as the Company provides to its senior executives generally
at that time to the extent Executive is eligible for those benefits under the
provisions of those plans as amended from time to time. In that regard,
following such termination of this Agreement, Executive shall
<PAGE>

                                       12

be considered an employee solely for the purpose of applying for and receiving
disability payments (both temporary and long-term) in accordance with the terms
and conditions of such disability plans in effect at the time. During any period
that Executive fails to perform his duties hereunder as a result of incapacity
due to physical or mental injury or illness, Executive shall continue to receive
the compensation and benefits provided by Paragraphs 4, 5 and 6 hereof until
Executive's employment hereunder is terminated; provided, however, that the
amount of compensation and benefits received by Executive during said period
shall be reduced by the aggregate amounts, if any, payable to Executive under
the Company's disability benefit plans and programs or under the Social Security
disability insurance program covering the same period of time. In the event of
termination for disability under this Paragraph 10(b), the Company will pay
Executive his Accrued Amounts, the Pro Rata Bonus and any amounts or rights due
under any benefit plan or program, including but not limited to as provided in
Sections 5 and 6 hereof. Further, all stock options previously granted to
Executive by the Company shall vest immediately upon Executive's termination for
disability under this Paragraph 10(b) and be exercisable by Executive for a
period of one (1) year thereafter or, if less, the remainder of the term of the
grant.

            (c) Voluntary Quit: The Executive may voluntarily resign at any time
with or without Good Reason. If Executive resigns voluntarily for any reason
(other than for "Good Reason" as defined herein), the Company will pay Executive
his Accrued Amounts and any amounts or rights due under any benefit plan or
program, and shall have no further obligations under this Agreement, except as
provided herein with regard to indemnification and director and officer
liability insurance All of Executive's unvested stock options will terminate
immediately upon Executive's notice of resignation or Executive's actual
resignation, whichever occurs first. Any vested stock options will be
exercisable for a period of thirty (30) days following Executive's actual
resignation date.

            (d) Termination for Cause: The Company shall have the right to
terminate the Executive's services for "Cause" during the Term. For purposes of
this agreement, "Cause" shall be defined as:

               (i) Willful and material breach of any of the restrictive
covenants set forth in Paragraph 8 of this Agreement;

               (ii) Willful failure or refusal to attempt to perform any of
Executive's material duties, responsibilities, or obligations under this
Agreement, provided that Executive has received written notice from the Company
setting forth the manner in which Executive has failed or refused to attempt to
perform his duties, responsibilities or obligations, has been given an
opportunity to cure within ten (10) days;

               (iii) Any willful act involving material fraud, theft,
misappropriation of funds, embezzlement or dishonesty with regard to the
Company;
<PAGE>

                                       13

               (iv) Conviction of a felony or plea of nolo contender involving a
felony, whether or not involving the Company (excluding cases based solely on
Executive's vicarious liability for the conduct of the Company or others, and
cases involving traffic violations); or

               (v) Gross neglect or willful misconduct in carrying out
Executive's duties, responsibilities, or obligations under this Agreement, which
has a materially adverse effect on the Company.

            Prior to termination for Cause, Executive shall be entitled to
receive written notice from the Company stating the grounds therefor, and shall
have an opportunity to be heard with counsel at a special Board meeting. No act
shall be deemed willful, if taken in good faith and with a reasonable belief
that it was in the best interests of the Company.

            In the event the Company terminates the Executive for Cause he shall
receive his Accrued Amounts (other than any prior year bonus) and as provided
under any benefit or equity plan or program. In such event all unexercised stock
options, whether or not vested, shall immediately cease to be exercisable and
shall be forfeited.

            (e) Termination Without Cause or for "Good Reason" by Executive
Prior to a "Change in Control": In the event the Company terminates the
Executive's employment under this Agreement during the Term and prior to a
"Change in Control" (as defined herein), other than as provided in (g) below,
for any reason other than death, disability, or for Cause, or if Executive
voluntarily resigns for "Good Reason" (as defined herein) prior to a Change in
Control:

               (i) The Company will pay Executive his then-current annual base
salary for a period of twelve (12) months;

               (ii) The Company will pay Executive an amount equal to the target
Incentive Bonus for the fiscal year of termination when annual bonuses would
otherwise be received;

               (iii) The Company will continue to provide Executive with any
medical, health and life insurance that Executive elected during his employment,
and continue to pay the Company's portion of the premiums therefor, for a period
of twelve (12) months following Executive's termination or until Executive is
eligible to receive such benefits coverage from a new employer, whichever comes
first;

               (iv) All of Executive's stock options shall immediately vest upon
Executive's termination under this Paragraph 10(e), and all vested options shall
remain exercisable for a period of one (1) year thereafter or, if less, the
remainder of the term of the grant;(v) The Company will pay Executive the
Accrued Amounts and the Pro Rata Bonus; and
<PAGE>

                                       14

               (v) The Executive shall be entitled to any amounts or rights
under any benefit plan or program, including but not limited to as provided in
Sections 5 and 6 hereof.

      All payments and benefits under this Paragraph 10(e) are subject to
Executive's ongoing compliance with the non-compete provision in paragraph 8(b)
of this Agreement, and are conditioned on Executive executing a waiver and
release of all known and unknown claims against the Company, in substantially
the form annexed hereto as Exhibit B.

            (f) Termination Without Cause or for "Good Reason" by Executive
Within 24 Months After a "Change in Control": In the event that the Company
terminates Executive's employment under this Agreement during the Term and
within twenty-four (24) months after the occurrence of a Change in Control or as
provided in (g) below for any reason other than for death, disability, or for
Cause, or if Executive voluntarily resigns for Good Reason within twenty-four
(24) months after the occurrence of a Change in Control or as provided in (g)
below:

               (i) The Company will pay Executive an amount equal to two (2)
times the sum of (x) his then current annual base salary and (y) the Incentive
Bonus payment Executive received from the Company for the immediately preceding
bonus year (or if higher, the Incentive Bonus payment made to the Executive with
respect to the full fiscal year immediately preceding the Change in Control) in
twenty-four (24) equal monthly installments commencing with the first day of the
month after such termination;

               (ii) The Company will continue to provide Executive with any
medical, health and life insurance that Executive elected during his employment,
and continue to pay the Company's portion of the premiums therefor, for a period
of twenty-four (24) months following Executive's termination or until Executive
is eligible to receive such benefits coverage from a new employer, whichever
comes first;

               (iii) All of Executive's stock options shall immediately vest
upon Executive's termination under this Paragraph 10(f), and all vested options
shall remain exercisable for a period of one (1) year thereafter or, if less,
the remainder of the term of the grant;

               (iv) The Company will pay Executive the Accrued Amounts and the
Pro Rata Bonus; and

               (v) The Executive shall be entitled to any amounts or rights
under any benefit plans or program, including but not limited to as provided in
Sections 5 and 6 hereof.

            All payments and benefits under this Paragraph 10(f) are subject to
Executive's ongoing compliance with the non-compete provision in Section 8(b) of
this Agreement, and are conditioned on Executive executing a waiver and release
of all known and unknown claims against the Company, substantially in the form
annexed hereto as Exhibit B.
<PAGE>

                                       15

            (g) For purposes of the Agreement, if the Executive's employment
with the Company is terminated without Cause or the Executive terminates with
Good Reason prior to the date on which the Change in Control occurs, but the
Executive reasonably demonstrates that the termination (i) was at the request of
a third party who had taken steps reasonably calculated to effect a Change in
Control or (ii) otherwise arose in connection with or in anticipation of a
Change in Control which has been threatened or proposed, such termination shall
be deemed to have occurred after a Change in Control for purposes of this
Agreement provided a Change in Control shall actually have occurred.

            (h) Payment of Excise Taxes:

               (i) If any payment or payments to Executive under this Paragraph
10 or under any other plan, program, arrangement, or agreement of the Company or
any other person in connection with the Company is subject to excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended from time to
time (the "Code"), or any successor or similar provision of the Code, the
Company shall pay Executive an additional amount (the "Gross Up") such that the
net amount retained by Executive after deduction of any such excise tax and any
income or employment tax, social security tax, excise tax, or interest or
penalties imposed on amounts paid under this Paragraph 10(h) shall be equal to
the full amount of the intended payment.

               (ii) For purposes of determining the Gross Up, Executive shall be
deemed to pay federal, state, and local income tax at the highest marginal rate
of applicable taxation in the calendar year in which the payment is made. The
determination of whether excise tax is payable, including whether any exception
may apply, and if so the amount thereof shall be made upon the opinion of tax
counsel (delivered to the Company and Executive) selected by the Company and
reasonably acceptable to Executive, applying the following rules: (A) all
payments shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to excise tax
unless in the opinion of counsel such payments do not constitute parachute
payments or such excess parachute payments represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of the Code
in excess of the "base amount" within the meaning of Section 280G(b)(3) of the
Code or are otherwise not subject to excise tax; and (B) the value of any
non-cash or deferred payments or benefits shall be determined by an independent
accounting firm selected by the Company and reasonably acceptable to Executive
in accordance with the principles of Section 280G(d)(3) and (4) of the Code. All
fees, costs, and expenses of tax counsel and any accounting firm or other
advisor retained in accordance with this paragraph shall be borne solely by the
Company.

               (iii) The Gross Up, if any, shall be paid to Executive in cash
and in a lump sum within thirty (30) days after the date on which the amount
thereof has been determined or is reasonably determinable by tax counsel, and in
any event not later than forty-five (45) days
<PAGE>

                                       16

following termination of Executive's employment; provided, however, that if the
amount of the Gross Up cannot be finally determined at or before such time, the
amount paid shall be the estimated full amount of the Gross Up as reasonably
determined by tax counsel in good faith and in accordance with the principles of
the preceding paragraph. If such an estimated Gross Up is paid, or if the
opinion of tax counsel is not finally accepted by the Internal Revenue Service,
then appropriate adjustments shall be computed (with additional Gross Up, if
necessary) by tax counsel based upon the final amount of excise tax, and any
additional amount due to Executive as a result of such adjustment (including any
interest or penalties owed by Executive by reason of any underpayment) shall be
paid in cash and in a lump sum within thirty (30) days of such computation. Any
amount due the Company as a result of such an adjustment shall be paid by
Executive in cash in a lump sum within thirty (30) days of such computation.

               (iv) The gross up shall be recalculated and a further payment
made to Executive if: (x) the Internal Revenue Service disagrees with the
position of the tax counsel, (y) under applicable law, the excess parachute
payments are required to be recalculated, or (z) permissive recalculation of the
excess parachute payment is permitted and the Company elects to do so.

      11. Good Reason:

          (a) For purposes of this Agreement, except as expressly specified in
the last sentence paragraph (b) below, "Good Reason" shall be defined as any of
the following: (i) a change in Executive's direct reporting relationship to the
Board; (ii) a diminution in Executive's job title (other than temporarily while
Executive is incapacitated); (iii) a material diminution or adverse change
(other than temporarily while Executive is incapacitated) in Executive's
position, office or duties (including, but not limited to, Executive's removal
from or non-re-election to the Board); (iv) the assignment of duties
inconsistent with Executive's position; (v) a decrease in Executive's base
salary or target annual incentive compensation opportunity; (vi) a material
breach of this Agreement by the Company, which remains uncured, if curable,
after more than ten (10) days after the giving of written notice by the
Executive; or (vii) the failure to secure and deliver to Executive, a written
assumption of the Company's obligations under this Agreement from any successor.

            (b) Notwithstanding anything to the contrary expressed or implied in
paragraph 11(a) above, the parties acknowledge and agree that during the Term,
Executive and the Board may agree that an additional senior executive (an
"Additional Executive") should be appointed as Chief Executive Officer of the
Company to assume some of the day-to-day duties theretofore undertaken by
Executive hereunder, in order to enable the Executive to devote substantially
and comparatively more of his time to his creative role for the Company. In such
case, this event shall not be considered "Good Reason" for the purposes of this
Agreement so long as Executive approves, in writing, the change and the person
appointed to such position.
<PAGE>

                                       17

      12. Change in Control:

          (a) For purposes of this Agreement, a "Change in Control" shall mean
any of the following occurrences:

               (i) Any "person" (as such term is used in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934 ("Exchange Act")), other than IESA, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 35% or
more of the combined voting power of the Company's then outstanding securities
(other than as a result of a merger or consolidation covered by clause 12(c)
below in connection with a merger involving the Company which would result in
voting securities of the Company outstanding immediately prior thereto
continuing to represent more than 65% of the combined voting power of the voting
securities of the Company or the surviving entity (or its parent) outstanding
immediately after such merger or consolidation);

               (ii) During any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of the Company, and any new
director (other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause (i),
(iii) or (iv) of this definition) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof;

               (iii) The consummation of a merger or consolidation of the
Company with any other entity, other than (x) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 65% of
the combined voting power of the voting securities of the Company or such
surviving entity (or its parent) outstanding immediately after such merger or
consolidation, or (y) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no "person"
(as hereinabove defined, but not including IESA) acquires more than 35% of the
combined voting power of the Company's then outstanding securities; or

               (iv) The stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
<PAGE>

                                       18

      13. Applicable Law; Arbitrations, Etc.:

          (a) THIS AGREEMENT WAS NEGOTIATED AND ENTERED INTO WITHIN THE STATE OF
NEW YORK. ALL MATTERS PERTAINING TO THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE WHOLLY PERFORMED
THEREIN (WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS PRINCIPLES UNDER NEW YORK
LAW).

          (b) Subject to the provisions of Paragraph 13(c) of this Agreement,
any and all controversies or claims arising out of or relating to this
Agreement, its performance, construction, interpretation or breach, or otherwise
relating to or arising from Executive's employment or the termination thereof
(including claims for employment discrimination), shall be resolved by final and
binding arbitration, to the greatest extent allowed by law, which arbitration
will be conducted in New York County in accordance with the rules of the
American Arbitration Association then in effect, and any award that may be
rendered by the arbitrator or arbitrators may be enforced in any court of
competent jurisdiction. The arbitrator shall have no authority to change or
modify any provision of this Agreement. With respect to any dispute arising
prior to a Change in Control and not during the Protected Pre Change in Control
Period, the prevailing party in any such arbitration, as determined by the
arbitrator, shall be entitled to reimbursement by the other party for its
reasonable attorneys' fees incurred in connection with the dispute; provided,
however, no award of attorneys' fees shall be made against Executive unless it
is found by the arbitrator that his overall position was frivolous or taken in
bad faith. With respect to any dispute arising after a Change in Control or
during the Protected Pre Change in Control Period, Executive shall be entitled
to reimbursement for reasonable attorneys' fees in all instances unless it is
determined by the arbitrator that Executive's overall position is frivolous or
that Executive brought it in bad faith and the Company shall not be entitled to
reimbursement even if it prevails except if Executive's overall position is
found by the arbitrator to have been frivolous or taken in bad faith.

          (c) Notwithstanding the provisions of Paragraph 13(b) of this
Agreement, either party may bring a court action in equity for an injunction or
other equitable relief or for interim relief pending a decision by the
arbitrator with regard to Section 8 hereof. Any court action under this section
may be brought in state or federal court within New York County, and the parties
each agree to waive any objection they may have to the in personam jurisdiction
or venue of any such court.

          (d) Nothing in this Agreement shall be construed to require the
commission of any act contrary to law, and wherever there is any conflict
between any provision of this agreement and any material present or future
statute, law, governmental regulation or ordinance as a result of which the
parties have no legal right to contract or perform, the latter shall prevail,
but in such event the provision(s) of this Agreement affected shall be curtailed
and limited only to the extent necessary to bring it or them within the legal
requirements.

<PAGE>

                                       19

      14. Assignment and Transfer:

          (a) The Company: This Agreement shall inure to the benefit of and be
enforceable by, and may be assigned by the Company to, and only to, any
purchaser of all or substantially all of the Company's business or assets, any
successor to the Company or any assignee thereof (whether direct or indirect, by
purchase, merger, consolidation or otherwise). The Company will require any such
purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such purchase, succession or assignment had taken
place in a writing delivered to the Executive.

          (b) Executive: Executive's rights and obligations under this Agreement
shall not be transferable by Executive by assignment or otherwise, and any
purported assignment, transfer or delegation thereof shall be void; provided,
however, that if Executive shall die, all amounts then payable to Executive
hereunder shall be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee or other designee or, if there be no such designee,
to Executive's estate.

      15. Miscellaneous:

            (a) Other Obligations: Executive represents and warrants that
neither his employment with the Company nor his performance of his obligations
hereunder will conflict with or violate or otherwise are inconsistent with any
other obligations, legal or otherwise, which Executive may have, except that the
Company is aware of Executive's fiduciary obligation to IESA.

            (b) Cooperation: Following termination of employment with the
Company, Executive shall cooperate with the Company, as reasonably requested by
the Company and at the Company's expense for Executive's out-of-pocket expenses,
to effect a transition of Executive's responsibilities and to ensure that the
Company is aware of all material matters being handled by Executive.

            (c) Entire Agreement: This Agreement contains the entire agreement
and understanding between the parties hereto in respect of the subject matter
hereof and supersedes, cancels and annuls any prior or contemporaneous written
or oral agreements, understandings, commitments and practices between them
respecting the subject matter hereof, including all prior employment agreements,
if any, between the Company and Executive, which agreement(s) hereby are
terminated and shall be of no further force or effect.

<PAGE>

                                       20

            (d) Amendment: This Agreement may be amended or terminated only by a
writing which makes express reference to this Agreement as the subject of such
amendment or termination and which is signed by Executive and, on behalf of the
Company, by its duly authorized officer.

            (e) Severability: If any term, provision, covenant or condition of
this Agreement or part thereof, or the application thereof to any person, place
or circumstance, shall be held to be invalid, unenforceable or void, the
remainder of this Agreement and such term, provision, covenant or condition
shall remain in full force and effect, and any such invalid, unenforceable or
void term, provision, covenant or condition shall be deemed, without further
action on the part of the parties hereto, modified, amended and limited to the
extent necessary to render the same and the remainder of this Agreement valid,
enforceable and lawful. In this regard, Executive acknowledges that the
provisions of Paragraphs 8(a) and 8(b) of this Agreement are reasonable and
necessary for the protection of the Company.

            (f) Construction: The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in construing
or interpreting this Agreement. The language in all parts of this Agreement
shall be in all cases construed according to its fair meaning and not strictly
for or against the Company or Executive. The use herein of the word "including,"
when following any general provision, sentence, clause, statement, term or
matter, shall be deemed to mean "including, without limitation". As used herein,
"Company" shall mean the Company and its parents and subsidiaries and any
purchaser of, successor to or assignee (whether direct or indirect, by purchase,
merger, consolidation or otherwise) of all or substantially all of the Company's
business or assets which is obligated to perform this Agreement by operation of
law, agreement, or otherwise, and the parent, if any, thereof. As used herein,
the words "day" or "days" shall mean a calendar day or days.

            (g) Non-waiver: Neither any course of dealing nor any failure or
neglect of either party hereto in any instance to exercise any right, power or
privilege hereunder or under law shall constitute a waiver of any other right,
power or privilege or of the same right, power or privilege in any other
instance. All waivers by either party hereto must be contained in a written
instrument signed by the party to be charged and, in the case of the Company, by
its duly authorized officer.

            (h) Remedies for Breach: The parties hereto agree that (i) Executive
is obligated under this Agreement to render personal services during the Term of
a special, unique, unusual, extraordinary and intellectual character, thereby
giving this Agreement peculiar value, and (ii) in the event of a breach or
threatened breach by either party of any covenant in Section 8 hereof, the
injury or imminent injury to the value and the goodwill of the Company's
business or to the Executive could not be reasonably or adequately compensated
in damages in an action at law. Accordingly, each party expressly acknowledges
that the other party shall be entitled to specific performance, injunctive
relief or any other equitable remedy against the breaching party, without the
posting of a bond and without limitation as to any other remedy, in the event of
any breach or

<PAGE>

                                       21

threatened breach of any provision of Section 8 of this Agreement.
The rights and remedies of the parties hereto are cumulative and shall not be
exclusive, and each such party shall be entitled to pursue all legal and
equitable rights and remedies and to secure performance of the obligations and
duties of the other under this Agreement, and the enforcement of one or more of
such rights and remedies by a party shall in no way preclude such party from
pursuing, at the same time or subsequently, any and all other rights and
remedies available to it.

            (i) Notices: Any notice, request, consent or approval required or
permitted to be given under this Agreement shall be sufficient if in writing,
and if and when sent by certified or registered mail, return receipt requested,
with postage prepaid, to Executive's residence (as reflected in the Company's
records or as otherwise designated by Executive on thirty (30) days prior
written notice to the Company), with a similar copy to Executive's residence in
France or to the Company's principal executive office, attention: General
Counsel, as the case may be. All such notices, requests, consents and approvals
so sent shall be effective upon being deposited in the United States mail.
However, the time period in which a response thereto must be given shall
commence to run from the date of receipt on the return receipt of the notice,
request, consent or approval by the addressee thereof. Rejection or other
refusal to accept, or the inability to deliver because of changed address of
which no notice was given as provided herein, shall be deemed to be receipt of
the notice, request, consent or approval sent.

            (j) Assistance in Proceedings, Etc.: Executive shall, without
additional compensation, but at Company expense, during the Term, upon
reasonable notice and at reasonable times, and after the Term, as reasonably
requested considering Executive's other commitments, furnish such information
and proper assistance to the Company as may reasonably be required by the
Company in connection with any legal or quasi-legal proceeding, including any
external or internal investigation, involving the Company or any of its
affiliates or in which any of them is, or may become, a party, and, in all
cases, which relate to activities in which Executive was involved during the
Term and in which Executive's interests are not adverse to those of the Company.

            (k) Insurance and Indemnification:

                  (i) Executive shall be covered under any director and officer
insurance policy obtained by the Company, if any, and shall be entitled to
benefit from any officer indemnification arrangements adopted by the Company, if
any, to the same extent as other directors or senior executive officers of the
Company (including the right to such coverage or benefit following Executive's
employment to the extent liability continues to exist); provided, however that
Executive acknowledges and agrees that the Company shall not be obligated, in
any way, except as provided in (ii) below, to obtain such insurance coverage or
to adopt any such indemnification arrangements for such officers.

<PAGE>
                  (ii) The Company shall indemnify the Executive to the fullest
extent permitted by law against any claim or suits arising out of any act or
inaction in connection with his positions.

            (l) Survival: This Agreement and the respective obligations, rights
and benefits of the Company and the Executive as set forth herein shall survive
the cessation or termination of Executive's employment with the Company and the
termination of the Term in accordance with the terms set forth herein.

            (m) Counterparts: This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement. Facsimile signatures of
any party will have the same force and effect as original signatures.

                                        ATARI, INC.

                                        By: /s/ Harry Z. Glantz
                                            -------------------

                                        By: Sr. V.P. Human Resources
                                            ------------------------

ACCEPTED AND AGREED TO:

/s/ Bruno Bonnell
-----------------
Bruno Bonnell

<PAGE>

EXHIBIT A

                         PRE-APPROVED BOARD MEMBERSHIPS

IESA and any subsidiaries
DANONE S.A
EURAZEO S.A
SCPS
SAOS OL
PATHE

<PAGE>

EXHIBIT B

                    TERMINATION AND GENERAL RELEASE AGREEMENT

                                   ATARI, INC.
                                417 Fifth Avenue
                            New York, New York 10016

                                                                        <<Date>>

<<Gender>> <<EMP_First_Name>> <<EMP_Last_Name>>
<<Address>>
<<City>>, <<State>> <<Zip>>

Dear <<EMP_First_Name>>

      PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL CLAIMS AND
A WAIVER OF ALL RIGHTS TO MAKE A CLAIM AGAINST ATARI. DO NOT SIGN THIS AGREEMENT
IMMEDIATELY. YOU HAVE TWENTY-ONE (21) DAYS FROM THE DATE YOU RECEIVE THIS
AGREEMENT TO DECIDE WHETHER OR NOT YOU WISH TO SIGN IT. YOU SHOULD CONSULT WITH
AN ATTORNEY BEFORE SIGNING THIS AGREEMENT. IF YOU DO SIGN THIS AGREEMENT, YOU
HAVE SEVEN (7) DAYS TO CHANGE YOUR MIND AND TERMINATE THIS AGREEMENT, THEREBY
RELEASING ALL PARTIES FROM ANY OBLIGATIONS SET FORTH IN THIS AGREEMENT.

      You and Atari, Inc. ("Employer") hereby agree as follows:

      1. TERMINATION. The termination of your employment with Employer shall be
effective as of the end of the day on <<TERMINATION_DATE>> (the "Termination
Date").

      2. TERMINATION OF SALARY AND BENEFITS.

            (a) (i) As full and final consideration for the promises and terms
set forth herein, and in lieu of any and all severance or other payment to which
you might otherwise be entitled with respect to the termination of your
employment with Employer, and as full and final settlement of any and all
outstanding and remaining obligations of Employer to you which have, may have,
or otherwise would have accrued had your employment with Employer continued,
during the period (the "Severance Period") commencing <<Severance_Begin_Date>>
and Employer shall pay you [as provided in Section 10 of the Employment
Agreement].

<PAGE>

                                       2

               (ii) In addition, during the Severance Period, if you so elect,
Employer will continue your medical/dental/vision benefits under COBRA, to the
same extent as during your employment with your premiums deducted through
payroll. Flexible spending account benefits may be continued through COBRA on a
post-tax basis. If you wish to decline this benefit, you must notify your Human
Resources Representative in writing. However, if you wish to continue your
medical/dental/vision benefits after the Severance Period, you will be
responsible for the entire COBRA premium. All COBRA related information will be
sent directly to you by Employer's COBRA administrator, ARC. All ancillary
benefits, such as 401K, Life, AD&D, STD, LTD Insurance will cease on the
Termination Date.

               (iii) It is expressly understood and agreed that neither holiday
pay, vacation time, nor sick days accrue during the Severance Period. Without
limiting the generality of the foregoing, promptly following the Termination
Date, you will be paid out for all unused, earned vacation, subject to customary
wage related withholding.

               (iv) Any of your stock options that remain unvested on the
Termination Date shall expire on such date. With respect to any stock options
that have vested as of the Termination Date, however, you are afforded a period
within which to exercise such vested stock options, as provided in your
Employment Agreement and/or the applicable plan and grant.

               (v) Your eligibility to participate in the Employee Stock
Purchase Program shall cease on the Termination Date. Accordingly, if the
Termination Date falls within any offering period in which you were a
participant in the Employee Stock Purchase Plan, Employer shall promptly refund
to you all contributions made by you for that offering period.

            (b) Employer may make appropriate deductions from payments hereunder
of all applicable taxes and other usual charges (including Social Security) for
which you are responsible in respect of payments referred to herein.

            (c) Except as expressly stated in this paragraph 2, you shall not be
entitled to receive any payments from Employer with respect to any period after
the Termination Date. Without limiting the foregoing, it is understood that you
shall not be entitled to any bonus payments beyond what you have already
received.

            (d) Notwithstanding anything to the contrary expressed or implied
elsewhere in this agreement, Employer hereby agrees that it shall not oppose,
and/or otherwise provide any information adverse to, any application for
unemployment benefits that you may make with respect to the termination of your
employment with Atari.

      3. COMPANY PROPERTY/CONFIDENTIALITY; NONSOLICITATION/REMEDIES FOR BREACH.
Sections 8, 9 and 15(h) as provided in your Employment Agreement shall continue
to apply.

      4. ARBITRATION. Section 13(b) as provided in your Employment Agreement
shall continue to apply.

<PAGE>

                                       3

      5. RELEASE.

         (a) In consideration of the foregoing (but except with respect to any
ongoing obligations of Employer hereunder), you hereby release and discharge
Employer, its parent, subsidiary or affiliated companies, from any and all
claims, damages, liabilities, expenses, causes of action, whether now known or
unknown, arising out of or relating to your employment by or performance of
services for Employer, its parent, subsidiary or affiliated companies, and/or
the termination of such employment or services, including, without limitation,
any claims relating to a wrongful, premature or discriminatory termination of
your employment and/or any claims relating to rights under federal, state or
local laws prohibiting discrimination on the basis of race, color, creed,
ancestry, national origin, age, sex or other basis prohibited by law, and any
other applicable federal, state or local laws regulations, including, without
limitation: (1) the Age Discrimination in Employment Act, 29 U.S.C. Sections
621-634 (age discrimination in employment including discrimination against
individuals forty years of age or over); (2) Title VII of the Civil Rights Act
of 1964, 42 U.S.C. Sections 2000e et seq. (race, color, religion, sex and
national origin discrimination); (3) the Civil Rights Act of 1866, 42
U.S.C.Section 1981 (discrimination); (4) the Equal Pay Act of 1963, 29 U.S.C.
Section 206 (equal pay); (5) the Americans With Disabilities Act, 42 U.S.C.
Section 12101 et seq. (discrimination against individuals with disabilities);
(6) the Fair Labor Standards Act of 1939, 29 U.S.C.Section 201 et seq. (wage and
hour matters); (7) the Consolidated Omnibus Budget Reconciliation Act of 1985,
42 U.S.C. Section 1395(C) (insurance matters); (8) the Employee Retirement
Income Security Act, 29 U.S.C. Section 1001 et seq. (retirement matters); (9)
Executive Order 11246 (race, color, religion, sex and national origin
discrimination); (10) Executive Order 11141 (age discrimination); (11) Section
503 of the Rehabilitation Act of 1973, 29 U.S.C. Sections 701 et seq. (handicap
discrimination). This also includes, but is not limited to, a release of any
claims or rights you may have based upon contract, covenant, public policy or
tort. If, notwithstanding this Agreement, you bring an action against Employer,
based on any matter otherwise covered by this Agreement, you agree that you will
pay all costs and expenses incurred by Employer in defending against such suit,
including reasonable attorneys' fees; (12) the New York State Human Rights Law;
(13) the New York City Human Rights Law, and any other federal, state or local
laws or regulations, from the beginning of time through the date that this
Agreement becomes effective.

            (b) This Release shall not cover any rights or obligations with
regard to any parent or affiliated entity with which you were separately
employed, any rights of indemnification, any rights to directors and officer
liability insurance, any right as a shareholder or any right under Section 10(g)
of your Employment Agreement.

            (c) Atari, Inc., and its parent, subsidiary or affiliated companies,
hereby acknowledge and agree that on and after the Termination Date, each of
them will immediately be deemed to have and shall release and discharge you from
any and all claims, damages, liabilities, expenses, causes of action, whether
now known or unknown, arising out of arising out of or relating to your
employment by or performance of services for Atari, Inc. its parent, subsidiary
or affiliated companies, and/or the termination of such employment or services,
including, without limitation, any claims relating to violations of Atari,
Inc.'s policies and procedures.

      7. NOTICES; MISCELLANEOUS.

         (a) By entering into this Agreement, neither you nor the Employer or
any of the Employer's officers, agents or employees, admit any wrongdoing or
violation of law.

<PAGE>

                                       4

         (b) This agreement contains all the understandings and agreements
between the parties hereto with respect to the matters set forth herein, and
there are no others made either contemporaneously herewith or otherwise. This
agreement may not be changed or modified in any manner except in writing, signed
by a duly authorized officer of Employer and by you. THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
WHOLLY PERFORMED THEREIN (WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS
PRINCIPLES UNDER NEW YORK LAW). If any section of this agreement is determined
to be void, voidable or unenforceable, it shall have no effect on the remainder
of this agreement, which shall remain in full force and effect.

         (c) You understand that should you violate any portion of this release
agreement, you will forfeit any right to receive the payments and, if the
Payment has already been paid, Employer shall have the right to demand that you
repay and you shall immediately repay any and all payments made by Employer to
you pursuant to this agreement.

         (d) This agreement shall be binding upon the parties hereto and upon
their heirs, administrators, representatives, executors, successors and assigns
and shall inure to the benefit of said parties and each of them and to their
heirs, administrators, representatives, executors, successors and assigns.

         (e) You hereby acknowledge that you have been afforded the opportunity
to consult with an attorney of your choice concerning this agreement.

      If the foregoing is in accordance with your understanding of our
agreement, please so indicate by signing in the place provided below.

                                               Very truly yours,

                                               ATARI, INC.

                                               By: ______________________

                                        Print Name: ______________________

ACCEPTED AND AGREED TO:

__________________________

Name:_____________________

SS#:______________________

Date:_____________________

<PAGE>

EXHIBIT C

                              RIGHT OF FIRST OFFER

Executive shall notify, in writing, the General Counsel of the Company and the
Chairman of the Audit Committee of the Board of the general outlines of the
proposed Competitive Activity project (the "Project"), with details of the terms
acceptable to the Executive and any other person or entity which has an interest
therein (the "Initial Term Sheet"). The Company will have thirty (30) days to
determine if it desires to commit to the Project on the terms specified. If the
Company decides it wants to commit to the Project and so notifies Executive in
writing within the thirty (30) day period, the Executive shall thereafter cause
to be tendered to the Company an agreement with regard to the proposed terms of
the Project based on the Initial Term Sheet. The Company shall then have thirty
(30) days to accept or reject the proposed agreement. Such acceptance shall be
evidenced by execution of the agreement and making of any initial payments
required thereunder. If the Company does not accept or rejects either the
Initial Term Sheet or the agreement, Executive may enter into a deal with
another party (including a related party) on terms no less favorable to him (or
it) in the aggregate, during the 180 days following such rejection or failure to
accept and the Company shall have no further rights with regard to the Project.
If the Executive does not enter into such a deal during this 180 day period, the
preceding procedures of this Exhibit C shall once again apply. Any changes in
the signed deal with another party thereafter which are done in good faith shall
not negate the deal with the other party or give the Company any new rights,
including but not limited to those of first offer.

                                        ATARI, INC.

                                        By: ______________________

                                        By: ______________________

ACCEPTED AND AGREED TO:

___________________________
Bruno Bonnell

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