AMENDED AND RESTATED EMPLOYMENT AGREEMENT

(i)

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

a.

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

b.

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

c.

If the aggregate 2007 EBITDA equals or exceeds $113.95 million but is less than $121.9 million then the 2007 bonus shall be $93,750 + $75,000 + $93,750 for a total of $262,500; and

d.

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

(ii)

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

(b)

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

(c)

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

(d)

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

(e)

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

(a)

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

(b)

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

(c)

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

(i)

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

(ii)

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

(iii)

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

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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

(g)

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

(h)

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

(i)

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

1.

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

2.

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

3.

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

4.

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

5.

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

6.

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

7.

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

8.

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

9.

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

10.

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

11.

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

Cumulative

Ebitda

Targets

$93,750

+75,000

+93,750

+125,000

’07 Budget

January

$ 7.6

$7.9

$8.1

$8.7

February

17.9

18.8

19.3

20.6

March

31.6

33.1

34.0

36.4

April

43.3

45.3

46.5

49.8

May

53.1

55.7

57.2

61.2

June

60.7

63.6

65.2

69.8

July

68.1

71.3

73.2

78.3

August

75.3

78.9

81.0

86.7

September

82.8

86.7

89.0

95.2

October

91.9

96.2

98.8

105.6

November

99.3

104.0

106.8

114.2

December

106.0

111.0

114.0

121.9