BALLYS PARK PLACE INC, S-1/A, 1994-02-11

BALLYS PARK PLACE INC
S-1/A, 1994-02-11
MISCELLANEOUS AMUSEMENT & RECREATION

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BALLY'S PARK PLACE FUNDING, INC.
(a Delaware corporation),
as Obligor,

BALLY'S PARK PLACE, INC.
(a Delaware corporation),
as Guarantor,

BALLY'S PARK PLACE, INC.
(a New Jersey corporation),

BALLY'S PARK PLACE REALTY CO.
(a New Jersey corporation)

and

___________________________,
as Trustee

____________________________

INDENTURE

Dated as of _______ __, 1994

____________________________

______% First Mortgage Notes

due 2004

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<TABLE>

Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture dated as of , 1994*

<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . 608
(a)(2) . . . . . . . . . . . . . . . 608
(b) . . . . . . . . . . . . . . . 607, 609
Section 312(c) . . . . . . . . . . . . . . . 701
Section 314(a) . . . . . . . . . . . . . . . 703
(a)(4) . . . . . . . . . . . . . . 1018
(b) . . . . . . . . . . . . . . 1202
(c)(1) . . . . . . . . . . . . . . . 103, 1204
(c)(2) . . . . . . . . . . . . . . . 103, 1204
(d) . . . . . . . . . . . . . . 1204
(e) . . . . . . . . . . . . . . . 103
Section 315(b) . . . . . . . . . . . . . . . 601
Section 316(a)(last
sentence) . . . . . . . . . . . . . . . . . . . . . 101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . 513
(b) . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . 105
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . 504
Section 318(a) . . . . . . . . . . . . . . . . . . . . . 108

_______________

* This reconciliation and tie shall not, for any purpose, be deemed to
be part of the Indenture.

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<TABLE>
TABLE OF CONTENTS

<CAPTION>
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<S> <C> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1989 Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Acquired Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Adjusted Consolidated Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
A.L.T.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Appraised Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Assignment of Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Average Life to Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Bally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Capital Lease Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Casino Control Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Casino Control Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Casino Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Casino Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Casino Hotel Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Company Request or Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Fixed Charge Coverage
Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Income Tax Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
_______________
Note: This table of contents shall not, for any purpose, be deemed
to be part of this Indenture.

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Consolidated Interest Expense . . . . . . . . . . . . . . . . . 8
Consolidated Net Income . . . . . . . . . . . . . . . . . . . . 9
Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Rental Payments . . . . . . . . . . . . . . . . . . 9
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 10
corporation . . . . . . . . . . . . . . . . . . . . . . . . . 10
Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . 10
Credit Facility Mortgage . . . . . . . . . . . . . . . . . . . . 10
Current Appraisal . . . . . . . . . . . . . . . . . . . . . . . 10
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Division of Gaming Enforcement . . . . . . . . . . . . . . . . . 10
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 10
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Existing Mortgage Notes . . . . . . . . . . . . . . . . . . . . 10
Federal Bankruptcy Code . . . . . . . . . . . . . . . . . . . . 10
Finance Company . . . . . . . . . . . . . . . . . . . . . . . . 11
Gaming License . . . . . . . . . . . . . . . . . . . . . . . . . 11
Generally Accepted Accounting
Principles . . . . . . . . . . . . . . . . . . . . . . . . . . 11
GNAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11
Governmental Authority . . . . . . . . . . . . . . . . . . . . . 11
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Indenture Obligations . . . . . . . . . . . . . . . . . . . . . 13
Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . 13
Intercorporate Agreement . . . . . . . . . . . . . . . . . . . .. 13
Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . 14
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . 14
Interest Swap Obligations . . . . . . . . . . . . . . . . . . . 14
Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
MAI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Material Subsidiary . . . . . . . . . . . . . . . . . . . . . . 14
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Moody's . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Net Cash Proceeds . . . . . . . . . . . . . . . . . . . . . . . 15
Non-Recourse Indebtedness . . . . . . . . . . . . . . . . . . .. 15
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Note Pledge Agreement . . . . . . . . . . . . . . . . . . . . . 16
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 16
Operating Company . . . . . . . . . . . . . . . . . . . . . . . 16

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<S> <C> <C>
Opinion of Counsel . . . . . . . . . . . . . . . . . . 16
Outstanding . . . . . . . . . . . . . . . . . . . . . 16
Pari Passu Mortgage . . . . . . . . . . . . . . . . . 18
Paying Agent . . . . . . . . . . . . . . . . . . . . . 18
Permitted Encumbrances . . . . . . . . . . . . . . . . 18
Permitted Indebtedness . . . . . . . . . . . . . . . . 18
Permitted Investment . . . . . . . . . . . . . . . . . 21
Person . . . . . . . . . . . . . . . . . . . . . . . . 22
Predecessor Security . . . . . . . . . . . . . . . . . 22
Preferred Stock . . . . . . . . . . . . . . . . . . . 23
Property . . . . . . . . . . . . . . . . . . . . . . . 23
Pro Rata Share . . . . . . . . . . . . . . . . . . . . 23
Public Equity Offering . . . . . . . . . . . . . . . . 23
Realty Co. . . . . . . . . . . . . . . . . . . . . . . 23
Redeemable Capital Stock . . . . . . . . . . . . . . . 23
Redemption Date . . . . . . . . . . . . . . . . . . . 24
Redemption Price . . . . . . . . . . . . . . . . . . . 24
Regular Record Date . . . . . . . . . . . . . . . . . 24
Responsible Officer . . . . . . . . . . . . . . . . . 24
Restricted Subsidiary . . . . . . . . . . . . . . . .. 24
Security and Securities . . . . . . . . . . . . . . . 24
Security Documents . . . . . . . . . . . . . . . . . . 24
Security Interests . . . . . . . . . . . . . . . . . . 25
Special Record Date . . . . . . . . . . . . . . . . . 25
Standard & Poor's . . . . . . . . . . . . . . . . . . 25
Stated Maturity . . . . . . . . . . . . . . . . . . . 25
Subordinated Indebtedness . . . . . . . . . . . . . . 25
Subsidiary . . . . . . . . . . . . . . . . . . . . . . 25
Subsidiary Casino Hotel . . . . . . . . . . . . . . . 25
Substitute Collateral . . . . . . . . . . . . . . . . 25
Taking . . . . . . . . . . . . . . . . . . . . . . . . 25
Tax Sharing Agreement . . . . . . . . . . . . . . . . 25
Trust Indenture Act . . . . . . . . . . . . . . . . . 26
Trustee . . . . . . . . . . . . . . . . . . . . . . . 26
Unrestricted Subsidiary . . . . . . . . . . . . . . .. 26
Voting Stock . . . . . . . . . . . . . . . . . . . . . 26
Wholly Owned Subsidiary . . . . . . . . . . . . . . .. 27
Section 102. Other Definitions . . . . . . . . . . . . . . . . . . 27
Section 103. Compliance Certificates and Opinions . . . . . . . . . 27
Section 104. Form of Documents Delivered to Trustee . . . . . . . . 28
Section 105. Acts of Holders . . . . . . . . . . . . . . . . . . . 29
Section 106. Notices, etc., to Trustee and Company . . . . . . . . 31
Section 107. Notice to Holders; Waiver . . . . . . . . . . . . . . 31
Section 108. Conflict of Any Provision of Indenture
with Trust Indenture Act . . . . . . . . . 32
</TABLE>

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<CAPTION>
PAGE
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<S> <C> <C>
Section 109. Effect of Headings and Table of
Contents . . . . . . . . . . . . . . . 32
Section 110. Successors and Assigns . . . . . . . . . 32
Section 111. Separability Clause . . . . . . . . . . 32
Section 112. Benefits of Indenture . . . . . . . . . 33
Section 113. Governing Law . . . . . . . . . . . . . 33
Section 114. Legal Holidays . . . . . . . . . . . . . 33
Section 115. No Recourse against Others . . . . . . . 33

ARTICLE II

SECURITY FORMS

Section 201. Forms Generally . . . . . . . . . . . . 34
Section 202. Form of Face of Security . . . . . . . . 35
Section 203. Form of Reverse of Security . . . . . . 36
Section 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . 42
Section 205. Form of Notation Relating to Guaranty . 42

ARTICLE III

THE SECURITIES

Section 301. Title and Terms . . . . . . . . . . . . 43
Section 302. Denominations . . . . . . . . . . . . . 44
Section 303. Execution, Authentication, Delivery
and Dating . . . . . . . . . . . . . . 45
Section 304. Temporary Securities . . . . . . . . . . 46
Section 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . 47
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . 48
Section 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . 49
Section 308. Persons Deemed Owners . . . . . . . . . 51
Section 309. Cancellation . . . . . . . . . . . . . . 51
Section 310. Computation of Interest . . . . . . . . 52
</TABLE>

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<S> <C> <C>
ARTICLE IV

SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . 55

ARTICLE V

REMEDIES

Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 502. Acceleration of Maturity; Rescission . . . . . . . . . . . . . . . . . . 58
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . . . 59
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . 60
Section 505. Trustee May Enforce Claims without
Possession of Securities . . . . . . . . . . . . . . . . . . . . . . . 61
Section 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . 62
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . 64
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . 64
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . 64
Section 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 515. Waiver of Stay, Extension or Usury
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

ARTICLE VI

THE TRUSTEE

Section 601. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . 67
Section 603. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 604. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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<S> <C> <C>
Section 606. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . 69
Section 607. Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 608. Corporate Trustee Required;
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 609. Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 610. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . 73
Section 611. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . . 74
Section 612. Preferential Collection of Claims
against Company . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 613. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . 74

ARTICLE VII

HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY

Section 701. Disclosure of Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 702. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 703. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . 79

ARTICLE VIII

CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE

Section 801. Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . 81

ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures without
Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 902. Supplemental Indentures with Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 903. Execution of Amendments, Supplements
or Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
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Section 904. Effect of Amendments, Supplements or
Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . 84
Section 906. Reference in Securities to Amendments,
Supplements or Waivers . . . . . . . . . . . . . . . . . . . . . 84

ARTICLE X

COVENANTS

Section 1001. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . 85
Section 1003. Money for Security Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 1004. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . 88
Section 1005. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . 88
Section 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . 89
Section 1007. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . 89
Section 1008. Limitation on Restricted Payments . . . . . . . . . . . . . . . . 90
Section 1009. Limitation on Transactions with
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 1010. Limitation on Encumbrances . . . . . . . . . . . . . . . . . . . . . 95
Section 1011. Limitation on Preferred Stock of
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 1012. Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 1013. Ownership of Casino Hotel; Other
Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 1014. Validity of Liens . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 1015. Change in Control . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 1016. Limitation on Issuance of Guaranties
by Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 1017. Compliance with Securities Laws upon
Purchase of Securities . . . . . . . . . . . . . . . . . . . . . 101
Section 1018. Limitation on Lease of Property as an
Entirety . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 1019. Activities of Finance Company . . . . . . . . . . . . . . . . . . 102
Section 1020. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 1021. Statement as to Compliance; Notice of
Default; Reporting Requirements . . . . . . . . . . . . . . . . 103
Section 1022. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . 103

</TABLE>

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ARTICLE XI

REDEMPTION OF SECURITIES

Section 1101. Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 1102. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 1103. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . 104
Section 1104. Selection by Trustee of Securities to
Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 1105. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 1106. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . 106
Section 1107. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . 106
Section 1108. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . 107
Section 1109. Redemption pursuant to the Casino
Control Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

ARTICLE XII

SECURITY

Section 1201. Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Section 1202. Recording; Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . 109
Section 1203. Disposition of Certain Collateral
without Requesting Release . . . . . . . . . . . . . . . . . . . . . . 112
Section 1204. Requesting Release of Collateral . . . . . . . . . . . . . . . . . . . . 114
Section 1205. Substitute Collateral Other Than Cash
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 1206. Substitution of Cash Collateral . . . . . . . . . . . . . . . . . . . . 119
Section 1207. Appraisals of Collateral . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 1208. Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 1209. Reliance on Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 122
Section 1210. Purchaser May Rely . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Section 1211. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Section 1212. Suits to Protect the Collateral . . . . . . . . . . . . . . . . . . . . 122
Section 1213. Trustee's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

ARTICLE XIII

DEFEASANCE

Section 1301. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . 123
Section 1302. Conditions to Defeasance . . . . . . . . . . . . . . . . . . . . . . . . 125

</TABLE>

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Section 1303. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Other Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . 130
Section 1304. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

ARTICLE XIV

GUARANTY

Section 1401. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 1402. Execution and Delivery of Company
Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

SIGNATURE AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

ACKNOWLEDGMENTS

EXHIBIT A Form of Mortgage Securing Notes

EXHIBIT B Form of Assignment of Leases and Rents

EXHIBIT C Form of Note Pledge Agreement

EXHIBIT D Form of Intercreditor Agreement

EXHIBIT E Form of Pari Passu Certificate
</TABLE>

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Indenture dated as of ____________, 1994, among BALLY'S PARK
PLACE FUNDING, INC., a Delaware corporation (the "Finance Company"), BALLY'S
PARK PLACE, INC., a Delaware corporation (the "Company"), BALLY'S PARK PLACE,
INC., a New Jersey corporation (the "Operating Company"), BALLY'S PARK PLACE
REALTY CO., a New Jersey corporation ("Realty Co."), and __________, a
__________, trustee (the "Trustee").

RECITALS OF THE COMPANY

The Finance Company, the Company, the Operating Company and
Realty Co. have each duly authorized the creation of an issue of the Finance
Company's ______% First Mortgage Notes due 2004 (the "Securities"), of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Finance Company, the Company, the Operating Company and Realty Co.
have duly authorized the execution and delivery of this Indenture;

This Indenture, upon qualification, shall be subject to and
governed by the provisions of the Trust Indenture Act that are required to be
part of and to govern indentures qualified under the Trust Indenture Act;

All acts and things necessary have been done to make the
Securities, when executed by the Finance Company and authenticated and
delivered hereunder and duly issued by the Finance Company, the valid, binding
and legal obligations of the Finance Company, and to make this Indenture a
valid agreement of the Finance Company, the Company, the Operating Company and
Realty Co. in accordance with its terms.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities, as
follows:

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ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions.

For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:

(a) the terms defined in this Article have the
meanings assigned to them in this Article and include the plural as well as the
singular;

(b) all other terms used herein which are defined in
the Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;

(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.

Certain terms, used principally in Articles Five and Ten, are
defined in those Articles.

"1989 Mortgage" means the mortgage and security agreement with
assignment of rents, dated as of August 31, 1989, among the Operating Company,
Realty Co. and Bally's Park Place Funding, Inc., a Delaware corporation, as
mortgagor, and First Fidelity Bank, National Association, New Jersey, as
mortgagee, the assignment of leases and any other security document to which
any of them is a party that is executed and delivered pursuant to such mortgage
or assignment of leases.

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case may be. Acquired Indebtedness shall be deemed to have been incurred on
the date of the related acquisition of assets from any Person or the date the
acquired Person becomes a Subsidiary.

"Adjusted Consolidated Net Income" of the Company means, for
any period, the Consolidated Net Income of the Company and its Subsidiaries for
such periods, adjusted by adding amortization of good will during such periods.

"Affiliate" means, with respect to any specified Person, (i)
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person, (ii) any spouse,
immediate family member or other relative who has the same principal residence
of any Person described in (i) above and (iii) any trust in which any such
Person described in clause (i) or (ii) above has a beneficial interest. For
purposes of this definition, control of a Person means the power, direct or
indirect, to direct or cause the direction of the management or policies of
such Person, whether by contract or otherwise; and the terms "controlling,"
"controlled" and "under common control" have meanings correlative to the
foregoing. For purposes of this definition, beneficial ownership of 10% or
more of voting common equity (on a fully diluted basis) or warrants to purchase
such equity (whether or not currently exercisable) of a Person shall be deemed
to be control of such Person.

"A.L.T.A." means the American Land Title Association.

"Appraised Fair Market Value" means, when used in connection
with the valuation of any property interest at any given date, the then current
fair market value of such property as set forth in the Current Appraisal
performed by a qualified and reputable independent appraiser, who is a member
of MAI in the case of real Property Collateral which appraisal is, in the
opinion of the independent appraiser, prepared in accordance with the standards
and reporting requirements of the Federal Home Loan Bank Board and the Federal
Savings and Loan Insurance Corporation, if then in effect.

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"Assignment of Leases" means the Assignment of Leases and
Rents substantially in the form annexed hereto as Exhibit B and constituting a
part hereof for all purposes.

"Average Life to Stated Maturity" means, as of the date of
determination, with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date
of determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of each such
principal payment by (ii) the sum of all such principal payments.

"Bally" means Bally Manufacturing Corporation, a Delaware
corporation.

"Board of Directors" of any Person means the board of
directors of such Person or any duly authorized committee of such board.

"Board Resolution" of any Person means a copy of a resolution
certified by the Secretary or an Assistant Secretary of such Person to have
been duly adopted by the Board of Directors of such Person and to be in full
force and effect on the date of such certification and on the date delivered to
the Trustee.

"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in The City of New
York or The City of Chicago are authorized or obligated by law, regulation or
executive order to close.

"Capital Lease Obligation" of any Person means any obligations
of such Person and its Subsidiaries on a consolidated basis under any capital
lease of real or personal property which, in accordance with GAAP, has been
recorded as a capitalized lease obligation, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligations determined in accordance with GAAP.

"Capital Stock" of any Person means any and all shares,
interests, participations, or other equivalents (however designated) of such
Person's capital stock

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whether now outstanding or issued after the date of this Indenture.

"Cash Collateral" means U.S. Dollars or U.S. Government
Obligations, which is Collateral for the Securities under the Mortgage.

"Casino Control Act" means the New Jersey Casino Control Act,
as from time to time amended, or any successor provision of law.

"Casino Control Commission" means the New Jersey Casino
Control Commission or any successor agency appointed pursuant to the Casino
Control Act.

"Casino Holdings" means Bally's Casino Holdings, Inc., a
Delaware corporation.

"Casino Hotel" means the casino hotel presently known as
Bally's Park Place Casino Hotel located in Atlantic City, New Jersey[, the
contiguous parking garage and property] and any additions thereto or
improvements thereof or any casino hotel operated on or forming part of the
Collateral.

"Casino Hotel Improvements" means the acquisition of, or
development and construction of, an addition to or expansion of the existing
Casino Hotel facility by the Company and any Restricted Subsidiary in
connection with any proposed increase of hotel rooms and expansion of casino
floor space, and any addition to or expansion of any gaming, parking, dining,
entertainment, retail, promotional, storage, patron services, transportation or
similar facilities related thereto, in each case, after the date of the
Indenture.

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Holdings (other than Bally or a subsidiary of Bally, of which Bally, directly
or indirectly, owns a majority of the total voting power of the Voting Stock
thereof) or Bally; (ii) the Company, the Finance Company, the Operating Company
or Realty Co. consolidates or merges with or into another Person or conveys,
transfers or leases all or substantially all of its assets to any Person in one
transaction or a series of related transactions, or any Person consolidates or
merges with or into the Company, the Finance Company, the Operating Company or
Realty Co., and in any such event the holders of the Voting Stock of such
company immediately prior to such transaction or series of transactions shall
beneficially own, directly or indirectly, less than 50% of the Voting Stock of
the surviving Person immediately after such transaction or series of
transactions; provided, however, that neither the merger or consolidation or
sale of assets by any of the Company, the Finance Company, the Operating
Company or Realty Co. with or into or to any of the Company, the Finance
Company, the Operating Company or Realty Co. nor the liquidation or
dissolution of the non-surviving entity or transferor following any such
transaction shall be deemed a Change in Control; (iii) during or within any
period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of any of the Company, the Finance
Company, the Operating Company, Realty Co., Casino Holdings or Bally (together
with any directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company, the Finance
Company, the Operating Company, Realty Co., Casino Holdings or Bally, as the
case may be, was approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company, the
Finance Company, the Operating Company, Realty Co., Casino Holdings or Bally
then in office; or (iv) the Company, the Operating Company, the Finance
Company, Realty Co. or Bally is liquidated or dissolved or adopts a plan of
liquidation.

"Collateral" means the real property, buildings and
improvements and other real and personal property described in or from time to
time subject to the Mortgage and the Note pledged pursuant to the Note Pledge
Agreement.

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"Collateral Account" means a separate custodial account or
accounts maintained by the Trustee pursuant to Section 1208 into which all cash
received by the Trustee as Substitute Collateral pursuant to Section 1206, and
as Insurance Proceeds pursuant to [Articles 6 and 7] of the Mortgage, less any
Pro Rata Share to be paid over for the benefit of holders of Pari Passu
Mortgages pursuant to Section 1206 and [Articles 6 and 7] of the Mortgage,
shall be deposited.

"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any
time after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.

"Companies" means the Company and the Finance Company.

"Company" means the Person named as the "Company" in the first
paragraph of this instrument, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

"Company Request" or "Company Order" means a written request
or order signed in the name of the Finance Company, the Company, the Operating
Company or Realty Co. (i) by its Chairman, a Vice Chairman, its President or a
Vice President and (ii) by its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary and delivered to the Trustee; provided, however, that
such written request or order may be signed by any two of the officers or
directors listed in clause (i) above in lieu of being signed by one of such
officers or directors listed in such clause (i) and one of the officers listed
in clause (ii) above.

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on a consolidated basis, as determined in accordance with GAAP to (b) the sum
of (i) Consolidated Interest Expense for such period and (ii) one-third of
Consolidated Rental Payments for such period; provided that in making such
computation, the Consolidated Interest Expense attributable to interest on any
Indebtedness computed on a pro forma basis and (A) bearing a floating interest
rate shall be computed as if the rate in effect on the date of computation had
been the applicable rate for the entire period and (B) which was not
outstanding during the period for which the computation is being made but which
bears, at the option of the Company, a fixed or floating rate of interest, the
Company shall apply, at its option, either the fixed or floating rate for
purposes of calculating the Consolidated Fixed Charge Coverage Ratio and
provided, further, that in making such computation, the Consolidated Interest
Expense attributable to interest on Indebtedness under any revolving credit
facility computed assuming that the amount of Indebtedness thereunder is equal
to the weighted average balance during the period for which the computation is
being made.

"Consolidated Income Tax Expense" means for any period, as
applied to any Person and its Restricted Subsidiaries, the provision for
federal, state or local income taxes of such Person and its Restricted
Subsidiaries for such period as determined in accordance with GAAP.

"Consolidated Interest Expense" means, for any period, the
aggregate amount of interest that, in conformity with GAAP, would be set forth
opposite the caption "interest expense" or any like caption on a consolidated
income statement of the Company and its Restricted Subsidiaries (including, but
not limited to, imputed interest on Capital Lease Obligations, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, the net costs associated with hedging
obligations, the interest portion of any deferred payment obligation,
amortization of discount or premium, if any, and all other non-cash interest
expense and excluding amortization of other financing fees and expenses) plus,
without duplication, all capitalized interest of the Company and its Restricted
Subsidiaries for such period and all interest accrued or paid by the Company or
any of its Restricted Subsidiaries under any Guaranty of Indebtedness
(including a Guaranty of principal, interest or any combination thereof) of any

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Person for such period, plus any amounts payable as dividends (whether or not
paid) on Preferred Stock permitted to be outstanding pursuant to the provisions
of Section 1011, in each case determined on a consolidated basis in accordance
with GAAP.

"Consolidated Net Income" of the Company means, for any
period, the consolidated net income (or loss) of the Company and its Restricted
Subsidiaries for such period as determined in accordance with GAAP, adjusted,
to the extent included in calculating such net income (or loss), by excluding
(i) all extraordinary gains or losses (less all fees and expenses relating
thereto), (ii) the portion of net income (or loss) of the Company and its
Restricted Subsidiaries allocable to minority interests in unconsolidated
Persons to the extent that cash dividends or distributions have not actually
been received by the Company or one of its Restricted Subsidiaries, (iii) net
income (or loss) of any Person combined with the Company or any of its
Restricted Subsidiaries in a "pooling of interests" basis attributable to any
period prior to the date of combination, (iv) net income (or loss) of any
Unrestricted Subsidiary regardless of whether cash dividends or distributions
have been made, (v) any gain or loss, net of taxes, realized upon the
termination of any employee pension benefit plan, (vi) any gains or losses
(less all fees and expenses relating thereto) in respect of dispositions of
assets other than in the ordinary course of business, or (vii) the net income
of any Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is not at
the time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.

"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity (excluding Redeemable Capital Stock) of such Person and
its consolidated subsidiaries, as set forth on the most recent consolidated
balance sheet of such Person and its consolidated subsidiaries determined in
accordance with GAAP.

"Consolidated Rental Payments" of the Company means, for any
period, the aggregate rental obligations

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<PAGE> 21
of the Company and its Restricted Subsidiaries under operating leases (not
including taxes, insurance, maintenance and similar expenses that the lessee is
obligated to pay under the terms of the relevant leases), determined on a
consolidated basis in accordance with GAAP.

"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is
located at _______________________________________; Attention: Corporate Trust
Department.

"corporation" includes corporations, associations,
partnerships, companies and business trusts.

"Credit Facility" [TO COME].

"Credit Facility Mortgage" [TO COME].

"Current Appraisal" means the most recent appraisal of the
Appraised Fair Market Value of any property that is performed pursuant to
Section 1204 or otherwise.

"Default" means any event that is, or after notice or passage
of time or both would be, an Event of Default.

"Division of Gaming Enforcement" means the New Jersey Division
of Gaming Enforcement.

"Event of Default" has the meaning specified in Article Five.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"Existing Mortgage Notes" means the 11-7/8% First Mortgage
Notes due 1999 issued by Bally's Park Place Funding, Inc., a Delaware
corporation.

"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11
of the United States Code, as amended from time to time.

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"Finance Company" means the Person named as such in this
Indenture until a successor replaces it pursuant to the Indenture and
thereafter means the successor. To the extent necessary to comply with the
requirements of the provisions of Sections 310 through 317 of the Trust
Indenture Act as they are applicable to the Finance Company, the term "Finance
Company" shall include any other obligor with respect to the Securities for the
purposes of complying with such provisions.

"Gaming License" means any license, franchise or other
authorization required to own, lease, operate or otherwise conduct casino
gaming at the Casino Hotel or any Subsidiary Casino Hotel required under the
Casino Control Act, the regulations of the Casino Control Commission and other
applicable gaming laws.

"Generally Accepted Accounting Principles" or "GAAP" means
generally accepted accounting principles in the United States, consistently
applied, that are in effect from time to time; provided, however, that with
respect to the obligations of any Person under Article Eight and Sections 1007
and 1008 and the definitions applicable thereto, "GAAP" means generally accepted
accounting principles on the date hereof.

"GNAC" means GNAC, CORP.

"Governmental Authority" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any nature
whatsoever of any governmental or quasi-governmental unit, whether federal,
state, county, district, city or other political subdivision or otherwise and
whether now or hereafter in existence, or any officer or official of any
thereof, including, without limitation, the Casino Control Commission.

"Guarantor" means the Company until a successor replaces it
pursuant to this Indenture and thereafter means such successor.

"Guaranty" means, as applied to any obligation, (a) a guaranty
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect

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of which is to assure in any way the payment or performance (or payment of
damages in the event of nonperformance) of any part or all of such obligation,
including, without limiting the foregoing, the payment of amounts drawn down by
letters of credit.

"Holder" means a Person in whose name a Security is registered
in the Security Register.

"Indebtedness" means, with respect to any Person, any
indebtedness, contingent or otherwise, in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof and including any indebtedness issued in exchange for
indebtedness for borrowed money), or evidenced by bonds, notes, debentures or
similar instruments or representing the balance deferred and unpaid of the
purchase price of any property, if and to the extent any of the foregoing
indebtedness would appear as a liability upon a balance sheet of such Person
prepared on a consolidated basis in accordance with GAAP consistently applied
and letters of credit (or reimbursement obligations related thereto); provided,
however, that (a) "Indebtedness" shall not include accounts payable to trade
creditors or other indebtedness for goods or services created or assumed in the
ordinary course of business and Indebtedness incurred pursuant to the
Intercorporate Agreement and (b) Indebtedness shall include only the principal
component of any obligations described above. "Indebtedness" shall also
include the principal component of any Capital Lease Obligations; the maximum
liquidation preference of Redeemable Capital Stock; obligations secured by a
Lien to which any property or asset owned or held by such Person is subject,
whether or not the obligations secured thereby shall have been assumed; and
Guaranties of items that would be included within this definition (regardless
of whether such items would appear upon such balance sheet); provided that for
purposes of computing Indebtedness outstanding at any time, such items shall be
excluded to the extent that they would otherwise be eliminated as intercompany
items in consolidation. For purposes of the preceding sentence, the maximum
liquidation preference of any Redeemable Capital Stock shall be the greatest
amount payable in respect thereof on a liquidation, whether voluntary or
involuntary, including accrued and unpaid dividends. Any reference in the
Indenture to any Indebtedness shall be

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deemed to include any renewals, extensions, refundings, amendments and
modifications of any such Indebtedness.

"Indenture" means this instrument as originally executed
(including all exhibits and schedules hereto) and as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof.

"Indenture Obligations" means the obligations of the Company,
the Operating Company, the Finance Company and Realty Co. (and any other
obligor hereunder or under the Securities) to pay principal of and interest on
the Securities when due and payable, whether at Maturity or an Interest Payment
Date, by acceleration, call for redemption, acceptance of an offer to purchase
on a Change in Control Payment Date or otherwise, and interest on the overdue
principal, if any (and premium, if any), of, and (to the extent lawful)
interest, if any, on the Securities and all other amounts due or to become due
under this Indenture and the Security Documents and to perform all other
obligations of the Company, the Operating Company, the Finance Company and
Realty Co. to the Trustee and the Holders under this Indenture, the
Securities[, the Company Guaranty] and the Security Documents, according to the
terms hereunder and thereunder.

"Insurance Proceeds" means Awards as defined in the Mortgage
and the Company's interest in and to all proceeds which now or hereafter may be
paid under any insurance policies now or hereafter obtained by or on behalf of
the Company, the Operating Company or Realty Co. in connection with the
conversion of the Property subject to the Security Interests or any portion
thereof into cash or liquidated claims, together with the interest payable
thereon and the right to collect and receive the same, including, but without
limiting the generality of the foregoing, proceeds of casualty insurance, title
insurance, business interruption insurance and any other insurance now or
hereafter maintained with respect to such Property.

"Intercorporate Agreement" means the Intercorporate Agreement
dated as of June 24, 1993 among Casino Holdings, Bally and the Company.

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"Intercreditor Agreement" means the Intercreditor Agreement
substantially in the form annexed as Exhibit D, with such changes thereto as
the Finance Company may reasonably request that would not affect the Trustee's
pari passu priority with respect to the Collateral or otherwise impair the
rights thereunder of the Trustee that are necessary for the practical
realization of the substantive benefits afforded them thereunder.

"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.

"Interest Swap Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a fixed or floating rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or floating rate of interest on the same
notional amount or pursuant to any interest rate protection agreement, interest
rate future, interest rate option or other interest rate hedge arrangement.

"Investment" by any Person means, directly or indirectly, any
advance, loan or other extension of credit or capital contribution to (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others) or any purchase or acquisition by
such Person of any stock, bonds, notes, debentures or other securities issued
or owned by, any other Person. Investments shall exclude extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices.

"Lien" means any mortgage, charge, pledge, lien, privilege,
security interest or encumbrance of any kind.

"MAI" means a member of the Appraisal Institute, as designated
by the American Institute of Real Estate Appraisers.

"Material Subsidiary" means the Finance Company, the Operating
Company, Realty Co. and, at the time of determination, any other Subsidiary of
the Company that (a) accounted for more than 10 percent of the consolidat-

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<PAGE> 26
ed net income of the Company for the most recently completed fiscal year of the
Company or (b) was the owner of more than 10 percent of the consolidated assets
of the Company as at the end of such fiscal year, all as shown on the
consolidated financial statements of the Company for such fiscal year.

"Maturity" when used with respect to any Security means the
date on which the principal of (and premium, if any) and interest on such
Security becomes due and payable as therein or herein provided, whether at
Stated Maturity, the Change in Control Payment Date, any Redemption Date and
whether by declaration of acceleration, call for redemption or otherwise.

"Moody's" means Moody's Investors Service, Inc.

"Mortgage" means the Mortgage and Security Agreement with
Assignment of Rents dated as of ___________, 1994 given by the Operating
Company and Realty Co., as mortgagor, to the Trustee, as mortgagee, a copy of
which is attached hereto as Exhibit A, the Assignment of Leases, and any other
security document, to which either of them is a party, which is executed and
delivered pursuant to such Mortgage or Assignment of Leases.

"Net Cash Proceeds" means with respect to any issuance or sale
of Capital Stock or warrants, or any issuance or sale of debt securities or
Redeemable Capital Stock that have been converted into Capital Stock, or
payments made upon exercise thereof, all as referred to in Section 1008, the
cash proceeds of such issuance or payment, net of attorneys' fees, accountants'
fees, brokerage, consultant, underwriting and other fees and expenses actually
incurred in connection with such issuance, sale or payment and net of taxes
paid or estimated to be payable as a result thereof.

"Non-Recourse Indebtedness" means Indebtedness or that portion
of Indebtedness (a) as to which neither the Company nor any of its Restricted
Subsidiaries (i) provides credit support pursuant to any undertaking, agreement
or instrument that would constitute Indebtedness, (ii) is directly or
indirectly liable or (iii) constitutes the lender and (b) no default with
respect to which (including any rights that the holders thereof may

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<PAGE> 27
have to take enforcement action against an Unrestricted Subsidiary) would
permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.

"Note" means the promissory note dated ______________, 1994,
made by the Operating Company in the principal amount of $___,000,000 payable
to the order of the Finance Company.

"Note Pledge Agreement" means the Note Pledge Agreement dated
as of ____________, 1994, among the Finance Company and the Trustee, a form of
which is attached hereto as Exhibit C, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.

"Officers' Certificate" of any Person means a certificate
signed by (i) the Chairman, a Vice Chairman, the President, a Vice President or
the Treasurer of such person and (ii) the Secretary or an Assistant Secretary
of such Person and delivered to the Trustee; provided, however, that such
certificate may be signed by two of the officers or directors listed in clause
(i) above in lieu of being signed by one of such officers or directors listed
in such clause (i) and one of the officers listed in clause (ii) above.

"Operating Company" means Bally's Park Place, Inc., a New
Jersey corporation, until a successor replaces it pursuant to this Indenture
and thereafter means the successor.

"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, the Finance Company or the Operating Company
and who shall be acceptable to the Trustee. Each such opinion shall include
the statements provided for in Trust Indenture Act Section 314(e) to the extent
applicable.

"Outstanding" when used with respect to the Securities means,
as of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:

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<PAGE> 28
(a) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;

(b) Securities, or portions thereof, for whose
payment, redemption or purchase money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company, the Finance Company, another Subsidiary of the Company or one of their
Affiliates) in trust or set aside and segregated in trust by the Company, the
Finance Company or such other Subsidiary (if the Company, the Finance Company
or another Subsidiary shall act as Paying Agent) for the Holders of such
Securities; provided that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;

(c) Securities, except to the extent provided in
Section 1301, with respect to which the Companies, the Operating Company and
Realty Co. have effected defeasance as provided in Article Thirteen; and

(d) Securities in exchange for or in lieu of which
other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands the Securities are valid
obligations of the Companies;

provided, however, that, in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
direction, consent or waiver hereunder, Securities owned by the Company, the
Finance Company, the Operating Company or Realty Co., or any other obligor upon
the Securities or any Affiliate of the Company, the Finance Company, the
Operating Company or Realty Co., or any other obligor upon the Securities or
such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, direction, consent or waiver, only Securities
which the Trustee knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfac-

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<PAGE> 29
tion of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company, the Finance Company, the
Operating Company or Realty Co. or any other obligor upon the Securities or any
Affiliate of the Company, the Finance Company, the Operating Company or Realty
Co. or such other obligor.

"Pari Passu Mortgage" means (i) the 1989 Mortgage and (ii) any
Lien on the Collateral which is pari passu to the Lien of the Mortgage and is
permitted by clause (ii) of Section 1010 of this Indenture, provided that the
instrument creating such Lien contains substantially the following statement:
"Pursuant to the Mortgage and Security Agreement with Assignment of Rents dated
as of ____________, 1994 given by the Operating Company and Realty Co., as
mortgagor, to ___________________________, as mortgagee, the lien created by
this instrument ranks pari passu with the lien created by said Mortgage
recorded on __________ in Mortgage Book __________at page _____ & c. in the
Atlantic County, New Jersey, Clerk's Office."

"Paying Agent" means any Person authorized by the Finance
Company to pay the principal of (or premium, if any) or interest on any
Securities on behalf of the Finance Company.

"Permitted Encumbrances" shall have the meaning provided in
the form of Mortgage attached hereto as Exhibit A.

"Permitted Indebtedness" means, without duplication, any of
the following Indebtedness of the Company or any Restricted Subsidiary, as the
case may be:

(i) Indebtedness (including letters
of credit) outstanding at any time
under any revolving credit facility,
or any successor thereto, in an
aggregate principal amount not to
exceed $50,000,000;

(ii) Any Guaranty by a Subsidiary
under subparagraph (i) above;

(iii) Indebtedness and obligations
under the Securities, including any
Guaranty thereof and the Note;

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<PAGE> 30
(iv) Any Indebtedness and
obligations outstanding on the date
hereof;

(v) Indebtedness of a Wholly Owned
Subsidiary of the Company or another
Wholly Owned Subsidiary of the
Company;

(vi) Indebtedness the proceeds of
which are used, directly or
indirectly, to refinance outstanding
Indebtedness of the Company or any
Subsidiary in a principal amount
(or, if such Indebtedness does not
require cash payments prior to
maturity, with an original issue
price of such Indebtedness) not to
exceed the principal amount of the
Indebtedness so refinanced,
including any premium or penalty for
prepayment provided for in the
instrument governing such
Indebtedness or any premium for
prepayment reasonably determined by
the Board of Directors of the
Company as necessary to accomplish
such refinancing by means of a
tender offer or privately nego-
tiated purchase (or, if the
Indebtedness being refinanced was
issued with an original issue
discount, the original issue price
plus the amortized portion of the
original issue discount to the date
that such refinancing Indebtedness
was incurred and any premium or
penalty for prepayment provided for
in the instrument governing such
Indebtedness or any premium for
prepayment reasonably determined by
the Board of Directors of the
Company as necessary to accomplish
such refinancing by means of a
tender offer or privately negotiated
purchase) plus the amount of any
fees, costs or expenses the Company
incurred in connection with such
refinancing; provided that if the
Indebtedness being refinanced is
Indebtedness of the Company, such
refinancing Indebtedness shall be
Indebtedness of the Company, unless
such refinancing Indebtedness is
used in whole or in part to
refinance the entire principal
amount of the Notes then
outstanding; provided, further, that
Indebtedness the proceeds of which
are used to refinance Indebtedness
of the Company that is expressly
subordinated in right of payment to
the Securities will only be
permitted if (x) such Indebtedness
is expressly

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<PAGE> 31
subordinated in right of payment to
the Securities at least to the same
extent that the Indebtedness to be
refinanced is subordinated to the
Securities, (y) the Average Life to
Stated Maturity of such Indebtedness
exceeds the Average Life to Stated
Maturity of the Securities, and (z)
the final scheduled maturity of such
Indebtedness exceeds the final
Stated Maturity of the Securities;

(vii) Indebtedness under Interest
Swap Obligations and other
agreements between the Company or a
Subsidiary and one or more financial
in- stitutions providing for "swap,"
"cap," "collar" or other interest
rate protection;

(viii) obligations in respect of
performance bonds, surety bonds and
appeal bonds provided by the Company
or any Subsidiary in the ordinary
course of business or related to
Casino Hotel Improvements and any
renewals, extensions or amendments,
modifications or supplements
thereto;

(ix) Indebtedness arising from the
honoring by a bank or other
financial institution of a check,
draft or similar instrument drawn
against insuf- ficient funds in the
ordinary course of business,
provided that such Indebtedness is
extinguished within two Business
Days of its incurrence; and

(x) additional Indebtedness not to
exceed $_,000,000 in the aggregate
at any one time.

For the purpose of determining the amount of outstanding
Indebtedness under any of the foregoing clauses, there shall be included (A)
the principal amount then outstanding that was originally incurred pursuant to
such clause; (B) any outstanding Indebtedness incurred pursuant to clause (vi)
to refinance or refund Indebtedness originally incurred pursuant to such
clause; and (C) any subsequent refinancings or refundings thereof.

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<PAGE> 32
"Permitted Investment" means an Investment which consists of
any one or more of the following:

(i) Investment in a Restricted
Subsidiary or another Person which,
immediately after such Investment,
will be a Wholly Owned Subsidiary,
provided in each case that such
Subsidiary conducts a business which
is substantially identical to any
business conducted by the Company or
its Restricted Subsidiaries on the
date hereof or which is in the
business of the development,
marketing, ownership or management
of casinos or casino hotels and
businesses related to the
development, ownership, marketing or
management of casinos or casino
hotels, including the hosting,
production or promotion of
conventions, sporting events,
amusements and other entertainment;

(ii) Investments by Subsidiaries
in the Company;

(iii) (a) commercial paper rated P-1
by Moody's or A-1 by Standard &
Poor's on the date of acquisition,
(b) certificates of deposit of
United States commercial banks
(having a combined capital and
surplus in excess of $300,000,000),
(c) obligations of, or guaranteed
by, the United States government or
any agency thereof, (d) repurchase
agreements with terms of not more
than 30 days with United States
commercial banking or other
financial institutions (having a
combined capital and surplus in
excess of $300,000,000) with respect
to the types of investments
described in subclauses (a), (b) and
(c) of this clause (iii), (e) money
market funds organized under the
laws of the United States or any
state thereof that invest
substantially all their assets in
any of the types of investments
described in subclauses (a), (b),
(c) and (d) of this clause (iii) or,
(f) to the extent not comprehended
by subclauses (a) through (e) of
this clause (iii), temporary
investments of cash balances in
investments deemed to be cash
equivalents under GAAP;

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<PAGE> 33
(iv) negotiable instruments held for
collection except to the extent that
they would constitute investments in
Affiliates; outstanding travel,
moving and other like advances to
officers, employees and consultants;
lease, utility and other similar
deposits; or stock, obligations or
securities received in settlement of
debts owing to the Company or a
Subsidiary as a result of
foreclosure, perfection or
enforcement of any Lien, in each of
the foregoing cases in the ordinary
course of business of the Company or
a Subsidiary, as the case may be[,
and consistent with past practice];

(v) sales of goods or services on
trade credit terms consistent with
the Company's and its Subsidiaries'
past practices or as otherwise
consistent with trade credit terms
in common use in the industry;

(vi) Investments in Affiliates of
the Company in gaming or
gaming-related ventures, in an
amount not to exceed $_,000,000;

(vii) loans to any employee in an
amount not to exceed $_______ for
any individual and $_,000,000 for
all employees in the aggregate; and

(viii) Investments in effect on the
date of this Indenture.

"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.

"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for a mutilated security or in lieu of a lost, destroyed or stolen
Security shall be

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<PAGE> 34
deemed to evidence the same debt as the mutilated, lost, destroyed or stolen
Security.

"Preferred Stock" means, as applied to any Person, Capital
Stock of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such corporation,
over shares of Capital Stock of any other class of such corporation.

"Property" means any assets or property of any kind or nature
whatsoever, real, personal or mixed (including fixtures), whether tangible or
intangible.

"Pro Rata Share" means that portion of Substitute Collateral
under Section 1206 and Insurance Proceeds under [Articles 6 and 7] of the
Mortgage (collectively, "Collateral Proceeds") equal to the total amount of
such Collateral Proceeds multiplied by a fraction, the denominator of which is
the sum of (i) total indebtedness then outstanding under the Securities and
(ii) the total indebtedness then outstanding and secured by any Pari Passu
Mortgages covering Collateral which is the subject of a substitution or
disposition under Section 1206 or [Article 6 or 7] of the Mortgage, and the
numerator of which is the total indebtedness then outstanding and secured by
any Pari Passu Mortgages covering Collateral which is the subject of a
substitution or disposition under Section 1206 or [Article 6 or 7] of the
Mortgage.

"Public Equity Offering" means an underwritten public offering
of Capital Stock of the Company (other than Redeemable Capital Stock) or Casino
Holdings pursuant to a registration statement filed with the Commission in
accordance with the Securities Act, which public equity offering results in
gross cash proceeds to the Company or Casino Holdings, as the case may be, of
not less than $30,000,000.

"Realty Co." means Bally's Park Place Realty Co., a New Jersey
corporation, which owns a parcel of land upon which a part of the Casino Hotel
is situated.

"Redeemable Capital Stock" means Capital Stock that, either by
its terms, by the terms of any security into which it is convertible or
exchangeable or other-

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<PAGE> 35
wise, is or upon the happening of an event or passage of time would be required
to be redeemed prior to the final Stated Maturity of principal on the
Securities or is redeemable at the option of the holder thereof at any time
prior to such final Stated Maturity, or is convertible into or exchangeable for
debt securities at any time prior to such final Stated Maturity.

"Redemption Date," when used with respect to any Securities to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.

"Redemption Price," when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

"Regular Record Date" for the interest payable on any Interest
Payment Date means the ________ or ________ (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.

"Responsible Officer," when used with respect to the Trustee,
means the Chairman or any Vice Chairman of the Board of Directors, the Chairman
or Vice Chairman of the Executive Committee of the Board of Directors, the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, the Controller and any Assistant
Controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers or assigned
by the Trustee to administer corporate trust matters at its Corporate Trust
Office and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.

"Restricted Subsidiary" means any Subsidiary that is not an
Unrestricted Subsidiary.

"Security" and "Securities" have the meaning set forth in the
second paragraph of this Indenture.

"Security Documents" means the Mortgage, the Assignment of
Leases and the Note Pledge Agreement.

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<PAGE> 36
"Security Interests" means the Lien on the Collateral created
by the Security Documents in favor of the Trustee.

"Special Record Date" means a date fixed by the Trustee for
the payment of any Defaulted Interest pursuant to Section 307.

"Standard & Poor's" means Standard & Poor's Corporation.

"Stated Maturity," when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment
of interest is due and payable.

"Subordinated Indebtedness" means all Indebtedness of the
Company that is expressly subordinated in right of payment to any other
Indebtedness of the Company.

"Subsidiary" means any Person a majority of the total voting
power of the Voting Stock of which is at the time owned, directly or
indirectly, by the Company or by one or more such Subsidiaries, or by the
Company and one or more such Subsidiaries.

"Subsidiary Casino Hotel" means any casino hotel owned or
controlled directly or indirectly by the Company or any Subsidiary, except the
Casino Hotel, including any furniture, furnishing, fixtures, machinery,
equipment or supplies or other tangible personal property contained therein and
owned directly or indirectly by the Company or any Subsidiary, and any
additions thereto or improvements thereof.

"Substitute Collateral" means Property that may be substituted
for or added to the Collateral in accordance with Article Twelve hereof.

"Taking" means any taking by eminent domain, condemnation or
otherwise of all or substantially all of the Property subject to the Lien of
the Mortgage.

"Tax Sharing Agreement" means the tax sharing agreement
between Bally and the Company dated [June 17,

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<PAGE> 37
1993, as amended,] provided, however, that any amendments thereto shall not
change or alter the substantive provisions thereof.

"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, and as in force at the date as of which this Indenture was
executed, except as provided in Section 905.

"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.

"Unrestricted Subsidiary" means (i) any Subsidiary that at the
time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of the Company in the manner provided below and (ii) any
subsidiary of an Unrestricted Subsidiary; provided that such Subsidiary (A) has
assets of less than $1,000, (B) has no Indebtedness other than Non-Recourse
Indebtedness and (C) does not own any equity securities of any Subsidiary
(other than an Unrestricted Subsidiary). The Board of Directors of the Company
may designate any newly formed Subsidiary without assets to be an Unrestricted
Subsidiary. The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary of the Company; provided,
however, that immediately after giving effect to such designation (x) the
Company could incur $1.00 of additional Indebtedness under Section 1007 and (y)
no Default shall have occurred and be continuing. Any such designation by the
Board of Directors of the Company shall be evidenced to the Trustee by promptly
filing with the Trustee a copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions; provided, however, that the failure to
so file such resolution and/or Officers' Certificate with the Trustee shall not
impair or affect the validity of such designation.

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<PAGE> 38
whether or not at the time stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).

"Wholly Owned Subsidiary" means any Restricted Subsidiary all
of whose outstanding Voting Stock (other than directors' qualifying shares, if
any) is owned directly or indirectly by the Company.

Section 102. Other Definitions.

Defined in
<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------

<S> <C>
"Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 105
"Change in Control Payment Date" . . . . . . . . . . . . . . . . . . . . . . .. . . 1015
"Company Guaranty" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 1401
"covenant defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 1301
"defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 1301
"Default Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 1202
"Defaulted Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 307
"incorporated provision" . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 108
"legal defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 1301
"Pari Passu Certificate" . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 613
"Restricted Encumbrance" . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 1010
"Restricted Payments" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 1008
"Security Register" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 305
"Security Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 305
"U.S. Government Obligations" . . . . . . . . . . . . . . . . . . . . . . . . .. . . 1302
</TABLE>

Section 103. Compliance Certificates and Opinions.

Upon any application or request by the Companies to the
Trustee to take any action under any provision of this Indenture, the Companies
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture (including any
covenant compliance with which constitutes a condition precedent) relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture

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<PAGE> 39
relating to such particular application or request, no additional certificate
or opinion need be furnished.

Every certificate or opinion (other than the certificates
required by Section 1021(a)) with respect to compliance with a condition or
covenant provided for in this Indenture shall include:

(a) a statement that each individual
signing such certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;

(b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion
of each such individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and

(d) a statement as to whether, in the
opinion of each such individual, such condition or covenant has been complied
with.

Section 104. Form of Documents Delivered to Trustee.

In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

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<PAGE> 40
icate or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Companies stating that the information with respect to such factual matters is
in the possession of the Companies, unless such counsel knows that the
certificate or opinion or representations with respect to such matters are
erroneous.

Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.

Section 105. Acts of Holders.

(a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Companies, the Operating Company or Realty
Co. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Trust Indenture Act Section 315)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

(b) The fact and date of the execution
by any Person of any such instrument or writing may be proved in any reasonable
manner which the Trustee deems sufficient.

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(d) If any of the Companies, the
Operating Company or Realty Co. shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, it may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of such Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Companies, the Operating Company or Realty Co., as the case may be, shall have
no obligation to do so. Notwithstanding Trust Indenture Act Section 316(c),
any such record date shall be the record date specified in or pursuant to such
Board Resolution, which shall be a date not more than 30 days prior to the
first solicitation of Holders generally in connection therewith and no later
than the date such solicitation is completed.

If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close
of business on such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of Securities then
Outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for this
purpose the Securities then Outstanding shall be computed as of such record
date; provided that no such request, demand, authorization, direction, notice,
consent, waiver or other Act by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.

(e) Any request, demand,
authorization, direction, notice, consent, waiver or other Act by the Holder of
any Security shall bind every future Holder of the same Security or the Holder
of every Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, suffered or
omitted to be done by the Trustee, any Paying Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.

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<PAGE> 42
Section 106. Notices, etc., to Trustee and
Company.

Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,

(a) the Trustee by any Holder or the
Companies, the Operating Company or Realty Co. shall be sufficient for every
purpose hereunder if made, given, furnished or delivered, in writing, to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department; or

(b) the Companies, the Operating
Company or Realty Co. by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or delivered in writing to any of the Companies, the Operating
Company or Realty Co., addressed to it at Park Place and the Boardwalk,
Atlantic City, New Jersey 08401, Attention: President, or at any other address
furnished in writing to the Trustee by the Companies, the Operating Company or
Realty Co.

Section 107. Notice to Holders; Waiver.

Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first class postage prepaid, to
each Holder affected by such event at his address as it appears in the Security
Register not later than the latest date and not earlier than the earliest date
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Any notice when deposited for
mailing to a Holder in the aforesaid manner shall be conclusively deemed to
have been received by such Holder whether or not actually received by such
Holder. Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent

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<PAGE> 43
of such notice. Waivers of notice by Holders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service by
reason of any other cause, it shall be impracticable to mail notice of any
event as required by any provision of this Indenture, then any method of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.

Section 108. Conflict of Any Provision of
Indenture with Trust Indenture Act.

If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by Sections 310 to 318,
inclusive, of the Trust Indenture Act, or conflicts with any provision (an
"incorporated provision") required by or deemed to be included in this
Indenture by operation of such Trust Indenture Act Sections, such imposed
duties or incorporated provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that
may be so modified or excluded, the latter provision shall be deemed to apply
to this Indenture as so modified or excluded, as the case may be.

Section 109. Effect of Headings and Table of
Contents.

The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.

Section 110. Successors and Assigns.

All covenants and agreements in this Indenture by the
Companies, the Operating Company and Realty Co. shall bind their respective
successors and assigns, whether so expressed or not.

Section 111. Separability Clause.

In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforce-

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able, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.

Section 112. Benefits of Indenture.

Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person (other than the parties hereto and their
successors hereunder, any Paying Agent and the Holders) any benefit or any
legal or equitable right, remedy or claim under this Indenture.

Section 113. Governing Law.

This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.

Section 114. Legal Holidays.

In any case where any Interest Payment Date, any date
established for payment of Defaulted Interest pursuant to Section 307, or any
Maturity with respect to any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or date established for
payment of Defaulted Interest pursuant to Section 307 or Maturity, and no
interest shall accrue with respect to such payment for the period from and
after such Interest Payment Date or date established for payment of Defaulted
Interest pursuant to Section 307 or Maturity, as the case may be, to the next
succeeding Business Day.

Section 115. No Recourse against Others.

A director, officer, employee or stockholder, as such, of the
Companies shall not have any liability for any obligations of the Companies
under the Securities, the Security Documents, the Note or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting any of the Securities waives and releases
all such liability.

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<PAGE> 45

ARTICLE II

SECURITY FORMS

Section 201. Forms Generally.

The Securities and the Trustee's certificate of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. Any portion of
the text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.

The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.

The Series A Securities and Series B Securities shall be
substantially identical in all respects except for any reference to series and
certain provisions providing for the rate at which interest is payable and
except that the Series B Securities shall omit the restrictive legend contained
therein relating to registration under the Securities Act of 1933, as amended.

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Section 202. Form of Face of Security.

BALLY'S PARK PLACE FUNDING, INC.

______% First Mortgage Note
due 2004

No. ______ $______

BALLY'S PARK PLACE FUNDING, INC., a Delaware corporation
(herein called the "Finance Company," which term includes any successor entity
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ____________ or registered assigns, the principal sum of
____________ Dollars on ___________, 2004, at the office or agency of the
Finance Company referred to below, and to pay interest thereon semiannually, on
__________, and __________ in each year, from ____________, 1994 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, at the rate of ______% per annum, until the principal hereof is
paid or duly provided for; provided, however, that the interest rate hereof may
be increased in certain circumstances as described in the Indenture. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the _____________ or ___________ (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for, and interest on such defaulted
interest rate at the same interest rate borne by the Securities, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such

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exchange, all as more fully provided in said Indenture. Payment of the
principal of (and premium, if any) and interest on this Security will be made
at the office or agency of the Finance Company maintained for that purpose in
The City of New York, or at such other office or agency of the Finance Company
as may be maintained for such purpose, 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; provided, however, that payment of interest may be
made at the option of the Finance Company by check mailed to the address of the
Person entitled thereto as such address shall appear on the Security Register.

Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture, or be
valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Finance Company has caused this
instrument to be duly executed under its corporate seal.

<TABLE>
<S> <C>
Dated: BALLY'S PARK PLACE
FUNDING, INC.

By _______________________

</TABLE>
Attest:

By______________________

Section 203. Form of Reverse of Security.

This security is one of a duly authorized issue of securities
of the Finance Company designated as its ______% First Mortgage Notes due
2004 (herein called the "Securities"), limited (except as otherwise provided in
the Indenture referred to below) in aggregate principal amount to $___,000,000,
which may be issued under an

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<PAGE> 48
indenture (herein called the "Indenture") dated as of ____________, 1994,
between the Finance Company, BALLY'S PARK PLACE, INC., a Delaware corporation
(the "Company"), BALLY'S PARK PLACE, INC., a New Jersey corporation (the
"Operating Company"), BALLY'S PARK PLACE REALTY CO., a New Jersey corporation
("Realty Co."), and __________________, trustee (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Finance Company, the Company, the
Operating Company, Realty Co., the Trustee and the Holders of the Securities,
and of the terms upon which the Securities are, and are to be, authenticated
and delivered.

The Securities are subject to redemption upon not less than 30
nor more than 60 days' notice, in amounts of $1,000 or an integral multiple of
$1,000 at any time on or after ____________, 1999, as a whole or in part, at
the election of the Finance Company, at a Redemption Price equal to the
percentage of the principal amount set forth below if redeemed during the
12-month period beginning __________, of the years indicated below:

<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
1999 %
-------
2000
-------
2001
-------
</TABLE>

and thereafter at 100% of principal amount together in the case of any such
redemption with accrued and unpaid interest to the Redemption Date (subject to
the right of Holders of record on relevant Regular Record Dates to receive
interest due on an Interest Payment Date), all as provided in the Indenture.

At any time, or from time to time, on or prior to
____________, 1997, the Finance Company may, at its option, use all or a
portion of the net cash proceeds of one or more Public Equity Offerings to
redeem up to an aggregate of 33-1/3% of the principal amount of the Securities
originally issued, at a redemption price equal to _____% of the principal
amount thereof plus accrued and

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unpaid interest, if any, to the redemption date, provided that immediately
following such redemption, at least $100,000,000 principal amount of Securities
remain outstanding. In order to effect the foregoing redemption with the
proceeds of any Public Equity Offering, the Finance Company shall send the
redemption notice not later than 60 days after the consummation of such Public
Equity Offering.

In the event that a Change in Control occurs, the Finance
Company shall make an offer to purchase, at the option of each Holder, such
Holder's Securities in whole or in part in integral multiples of $1,000 at a
purchase price in cash in an amount equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase.

In the case of any redemption of Securities, interest
installments whose Stated Maturity is on or prior to the Redemption Date will
be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Regular Record
Date referred to on the face hereof. Securities (or portions thereof) for
whose redemption and payment provision is made in accordance with the Indenture
shall cease to bear interest from and after the Redemption Date.

In the event of redemption of this Security in part only, a
new Security or Securities for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the cancellation hereof.

If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.

The Indenture contains provisions for defeasance at any time
of the entire indebtedness of the Finance Company on this Security upon
compliance by the Finance Company with certain conditions set forth therein,
which provisions apply to this Security.

The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Finance

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<PAGE> 50
Company, the Company, the Operating Company and Realty Co. and the rights of
the Holders under the Indenture at any time by the Finance Company, the
Company, the Operating Company and Realty Co. and the Trustee with the consent
of the Holders of a majority in aggregate principal amount of the Securities at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Finance Company, the Company, the
Operating Company and Realty Co. with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange therefore or in lieu hereof whether or not notation of such consent
or waiver is made upon this Security.

The Company and the Finance Company are subject to the New
Jersey Casino Control Act (the "Casino Control Act"). If the New Jersey Casino
Control Commission (the "Casino Control Commission") finds that a Holder or
beneficial owner of Securities must be licensed or found qualified or suitable
to hold or own the Securities under the Casino Control Act, and if such Holder
or such beneficial owner does not become so licensed or is not found qualified
or suitable, within any time period specified by the Casino Control Commission
or the Casino Control Act, the Finance Company shall have the right, at its
option, (i) to require such Holder or beneficial owner to dispose of all or a
portion of such Holder's or beneficial owner's Securities within 120 days after
receipt of notice by such Holder or beneficial owner of its disqualification
under the Casino Control Act (or such different period as may be prescribed by
the Casino Control Commission), or (ii) to call for redemption the Securities
of such Holder or beneficial owner, on not less than 30 nor more than 60 days'
notice (or such different period as may be prescribed by the Casino Control
Commission). If such Holder or beneficial owner, having been given the
opportunity by the Finance Company to dispose of such Holder's or beneficial
owner's Securities, shall have failed to do so within the prescribed time
period, the Finance Company shall have the right to redeem such

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Holder's or beneficial owner's Securities on five days' notice. On any
redemption of Securities pursuant to this provision, the Redemption Price shall
be the lesser of (i) the market value thereof on the date of such notice of
redemption (as determined in good faith by the Board of Directors of the
Finance Company) and (ii) the price at which such Holder or beneficial owner
acquired the Securities, together with (if permitted by the Casino Control Act
or by the orders of the Casino Control Commission) accrued interest to the
Redemption Date, unless a Redemption Price or other payment, remuneration or
related terms or restrictions are required by the Casino Control Commission, in
which event such price, terms and restrictions shall be the Redemption Price
and terms of redemption. Each Holder or beneficial owner, by accepting a
Security, agrees to the provisions set forth in this paragraph and in the
Indenture and agrees to inform the Finance Company upon request of the price at
which such Holder or beneficial owner acquired such Securities. No Holder may
acquire 15% or more of the principal amount of the Securities when and until
such Holder (i) qualifies as a "financial source" under the Casino Control Act,
or (ii) obtains a waiver of qualification from the Casino Control Commission.

No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Finance Company, which is absolute and unconditional, to pay the principal of
(and premium, if any) and interest on this Security at the times, place, and
rate, and in the coin or currency, herein prescribed.

Payment of principal and interest (including interest on
overdue principal and overdue interest) is unconditionally guaranteed by the
Company. The Securities are secured by the pledge by the Finance Company of
the $___,000,000 Note of the Operating Company and by the Mortgage on the
property known as the Bally's Park Place Casino Hotel and the security interest
in certain personal property of the Bally's Park Place Casino Hotel granted by
Realty Co. and the Operating Company, which own or lease and operate Bally's
Park Place Casino Hotel.

As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable on
the Security Register of

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the Finance Company, upon surrender of this Security for registration of
transfer at the office or agency of the Finance Company maintained for such
purpose in The City of New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Finance Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.

The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.

No service charge shall be made for any registration of
transfer or exchange or redemption of Securities, but the Finance Company may
require payment of a sum sufficient to pay all documentary, stamp or similar
issue or transfer taxes or other governmental charges payable in connection
with any registration of transfer or exchange.

Prior to the time of due presentment of this Security for
registration of transfer, the Finance Company, the Trustee and any agent of the
Finance Company or the Trustee may treat the Person in whose name this Security
is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Finance Company, the Trustee nor any agent
shall be affected by notice to the contrary.

All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

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Section 204. Form of Trustee's Certificate of
Authentication.

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the
within-mentioned Indenture.

_____________________________,
as Trustee

By___________________________
Authorized Signatory

Section 205. Form of Notation Relating to
Guaranty.

GUARANTY

BALLY'S PARK PLACE, INC., a Delaware corporation (hereinafter
referred to as the "Company," which term includes any successor person under
the Indenture referred to in the Security upon which this notation is endorsed)
(capitalized terms herein being used as defined in the Indenture unless
otherwise indicated), (i) has unconditionally guaranteed on a senior basis (a)
the due and punctual payment of the principal of (premium, if any) and interest
on the Securities, whether at Maturity or Interest Payment Date, by
acceleration, call for redemption or otherwise, and the due and punctual
payment of interest on the overdue principal and interest, if any, of the
Securities and (b) the due and punctual performance of all other obligations of
the Finance Company to the Holders or the Trustee all in accordance with the
terms set forth in Article Fourteen of the Indenture, and (ii) in case of any
extension of time for payment or renewal of any Securities or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Maturity, by
acceleration or otherwise.

No stockholder, officer, director or incorporator, as such,
past, present or future, of the Company shall have any personal liability under
this Guaranty by

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<PAGE> 54
reason of his or its status as such stockholder, officer, director or
incorporator.

This Guaranty shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this
Guaranty is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized signatories.

BALLY'S PARK PLACE, INC.

By_________________________

Attest:

By______________________

ARTICLE III

THE SECURITIES

Section 301. Title and Terms.

The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $___,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section
303, 304, 305, 306, 906, 1015 or 1108.

The Securities shall be known and designated as the "______%
First Mortgage Notes due 2004" of the Finance Company. [For all purposes of
this Indenture, the Securities shall be treated as a single class, regardless
of series.] Their Stated Maturity shall be __________ _, 2004, and they shall
bear interest at the rate of ______% per annum from ____________, 1994, or the
most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable semiannually on __________ and
___________ in each year and at said Stated Maturity, until the principal
thereof is paid or duly provided for.

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The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Finance Company
maintained for such purpose in The City of New York, or at such other office or
agency of the Finance Company as may be maintained for such purpose; provided,
however, that, at the option of the Finance Company, interest may be paid by
check mailed to addresses of the Persons entitled thereto as such addresses
shall appear on the Security Register.

The Securities shall be redeemable as provided in Article
Eleven.

If the Finance Company is served with notice of the
disqualification of any Holder under Section 105(d) of the Casino Control Act
by the Casino Control Commission, such Holder will be prohibited under Section
105(e) of the Casino Control Act from (a) receiving interest on the Securities
held by such Holder, (b) exercising, directly or through any trustee or
nominee, any right conferred on such Securities, and (c) receiving any
remuneration in any form from any Person licensed by the Casino Control
Commission (including the Company and the Trustee) for services rendered or
otherwise. Notwithstanding the foregoing, the Trustee shall be entitled to
exercise all rights with respect to the Securities held by such Holder
including, but not limited to, accelerating the Securities. If the Trustee
exercises voting rights with respect to such Securities, such votes shall be
cast in the same proportion as the votes of the other Outstanding Securities
are cast on such issue. A copy of any notice served upon the Finance Company
as described above shall be promptly delivered by the Company to the Trustee.
Any such notice to the Trustee shall be effective against the Trustee after the
record Business Day after the receipt thereof.

Section 302. Denominations.

The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.

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Section 303. Execution, Authentication,
Delivery and Dating.

The Securities shall be executed on behalf of the Finance
Company by any two of the following: its Chairman, its President or one of its
Vice Presidents, under its corporate seal reproduced thereon and attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Finance Company
shall bind the Finance Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such Securities.

The Trustee shall (upon Company Order) authenticate and
deliver Securities for original issue in an aggregate principal amount of up to
$___,000,000.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of one of
its duly authorized signatories, and such certificate upon any Security shall
be conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.

In case the Finance Company, pursuant to Article Eight, shall
be consolidated or merged with or into any other Person or shall convey,
transfer, lease or otherwise dispose of substantially all of its properties and
assets to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Finance Company
shall have been merged, or the successor Person which shall have received a
conveyance, transfer, lease or other disposition as aforesaid, shall have
executed an indenture supplemental

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hereto with the Trustee pursuant to Article Eight, any of the Securities
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Securities executed in the name of
the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Order of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of
a successor Person pursuant to this Section in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of any Holder but without expense to such Holder, shall provide for the
exchange of all Securities at the time Outstanding held by such Holder for
Securities authenticated and delivered in such new name.

Section 304. Temporary Securities.

Pending the preparation of definitive Securities, the Finance
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.

If temporary Securities are issued, the Finance Company will
cause definitive Securities to be prepared without unreasonable delay. After
the preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Finance Company designated for such
purpose pursuant to Section 1002, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities, the Finance Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a

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like principal amount of definitive Securities of authorized denominations.
Until so exchanged, the temporary Securities shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities.

Section 305. Registration, Registration of Transfer and
Exchange.

The Finance Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register maintained in such office
and in any other office or agency designated pursuant to Section 1002 being
herein sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Finance Company shall
provide for the registration of Securities and of transfers of Securities.
Said office or agency is hereby initially appointed "Security Registrar" for
the purpose of registering Securities and transfers of Securities as herein
provided.

Upon surrender for registration of transfer of any Security at
the office or agency of the Finance Company designated pursuant to Section 1002
for such purpose, the Finance Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series of any authorized
denomination or denominations and of a like aggregate principal amount.

At the option of the Holder, Securities may be exchanged for
other Securities of the same series of any authorized denomination or
denominations and of a like aggregate principal amount upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Finance Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.

All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Finance Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.

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Every Security presented or surrendered for registration of
transfer, or for exchange or redemption, shall (if so required by the Finance
Company or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Finance Company and
the Security Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing.

No service charge shall be made for any registration of
transfer or exchange or redemption of Securities, but the Finance Company may
require payment of a sum sufficient to pay all documentary, stamp or similar
issue or transfer taxes or other governmental charges that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 303, 304, 306, 906, 1015, 1016, or 1108 not
involving any transfer.

The Finance Company shall not be required (a) to issue,
register the transfer of or exchange any Security during a period beginning at
the opening of business (i) 15 days before the mailing of a notice of
redemption of the Securities selected for redemption under Section 1104 and
ending at the close of business on the day of such mailing or (ii) 15 days
before an Interest Payment Date and ending on the close of business on the
Interest Payment Date, or (b) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of Securities being redeemed in part.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.

If (a) any mutilated Security is surrendered to the Trustee,
or (b) the Finance Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Finance Company and the Trustee such security or indemnity as
may be required by them to save each of them and any agent of them harmless,
then, in the absence of notice to the Finance Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Finance Company shall
execute and upon Company Order the Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such de-

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stroyed, lost or stolen Security, a replacement Security of like tenor and
principal amount, and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Finance Company in its
discretion may, instead of issuing a replacement Security, pay such Security.

Upon the issuance of any replacement Securities under this
Section 306, the Finance Company may require the payment of a sum sufficient to
pay all documentary, stamp or similar issue or transfer taxes or other
governmental charges that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

Every replacement Security issued pursuant to this Section 306
in lieu of any destroyed, lost or stolen Security shall constitute a
contractual obligation of the Finance Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall
be entitled to all benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.

The provisions of this Section 306 are exclusive and shall
provide (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

Section 307. Payment of Interest; Interest Rights Preserved.

Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.

Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date and interest
on such defaulted interest at the rate borne by the Securities (such de-

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faulted interest and interest thereon herein collectively called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder; and such Defaulted
Interest may be paid by the Finance Company, at its election in each case, as
provided in Subsection (a) or (b) below:

(a) The Finance Company may elect to make
payment of any Defaulted Interest to the Persons in whose names the Securities
(or their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Finance Company shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment, and at the same time the
Finance Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited for the benefit of
the Persons entitled to such Defaulted Interest as in this Subsection provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Finance Company of such Special Record Date. In the
name and at the expense of the Finance Company, the Trustee shall cause notice
of the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable pursuant to
the following Subsection (b).

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(b) The Finance Company may make payment of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice
given by the Finance Company to the Trustee of the proposed payment pursuant to
this Subsection, such payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section 307, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

Section 308. Persons Deemed Owners.

Prior to the time of due presentment for registration of
transfer, the Finance Company, the Trustee and any agent of the Finance Company
or the Trustee may treat the Person in whose name any Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
(and premium, if any) and (subject to Section 307) interest on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Finance Company, the Trustee nor any agent of the Finance
Company or the Trustee shall be affected by notice to the contrary.

Section 309. Cancellation.

All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled
by it. The Finance Company shall deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Finance
Company may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be destroyed and certification
of their destruction delivered to the Finance Company unless by a Company

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Order the Finance Company shall direct that cancelled Securities be returned to
it.

Section 310. Computation of Interest.

Interest on the Securities shall be computed on the basis of a
year of twelve 30-day months.

ARTICLE IV

SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

This Indenture shall, upon Company Request, cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of Securities herein expressly provided for) and the Trustee, on
demand of and at the expense of the Finance Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when

(a) either

(i) all Securities theretofore
authenticated and delivered (other
than (1) Securities which have been
destroyed, lost or stolen and which
have been replaced or paid as
provided in Section 306 and (2)
Securities for whose payment money
has theretofore been deposited in
trust or segregated and held in
trust by the Finance Company and
thereafter repaid to the Finance
Company or discharged from such
trust, as provided in Section
1003) have been delivered to the
Trustee for cancellation; or

(ii) all such Securities not
theretofore delivered to the Trustee
for cancellation

(1) have become due and payable, or

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(2) will become due and payable at
their Stated Maturity within
one year, or

(3) are to be called for redemption
within one year under arrangements
satisfactory to the Trustee for the
giving of notice of redemption by
the Trustee in the name, and at the
expense, of the Finance Company,

and the Finance Company, in the case of (1), (2) or (3) above, has irrevocably
deposited or caused to be deposited with the Trustee, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the Trustee,
as trust funds in trust solely for the benefit of the Holders for that purpose
cash in U.S. Dollars sufficient to pay and discharge the entire indebtedness on
such Securities not theretofore delivered to the Trustee for cancellation, for
principal of (and premium, if any) and interest to the date of such deposit (in
the case of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;

(b) the Finance Company has paid or
caused to be paid all other sums payable hereunder by the Finance Company; and

(c) the Finance Company has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel each stating
that all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Companies to the Trustee under Section 606
and, if money shall have been deposited with the Trustee pursuant to subclause
(ii) of Subsection (a) of this Section 401, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.

The Security Documents shall not be discharged as a result of
such irrevocable deposit under subclause (ii) of Subsection (a) of this Section
401 unless the Finance Company shall have delivered to the Trustee an

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Opinion of Counsel, subject to customary exclusions and exceptions reasonably
acceptable to the Trustee, to the effect that (i) the Finance Company has
authorization to establish such irrevocable trust in favor of the Trustee for
the benefit of the Holders under applicable law and the action in establishing
the irrevocable trust has been duly and properly authorized by the Finance
Company and such authorization has not been revoked, (ii) the Trustee is an
independent trustee with respect to the irrevocable trust, (iii) a valid trust
is created at the time of such irrevocable deposit and (iv) the Holders of the
Securities will have the sole beneficial ownership interest under applicable
law in the money so deposited in such trust. The Opinion of Counsel so
referred to in this paragraph may contain a qualification that in the event
that a court of competent jurisdiction were to determine that the trust funds
remained owned by the Finance Company after such deposit, the Holders of the
Securities will have a non-avoidable first-priority perfected security interest
under applicable law in the money so deposited (for the limited purpose of the
Opinion of Counsel referred to in this paragraph, such opinion may contain an
assumption that the conclusions contained in a customary solvency letter by a
nationally recognized appraisal firm, dated as of the date of the deposit and
taking into account such deposit, or a customary alternative certificate
reasonably acceptable to the Trustee, are accurate, provided that such solvency
letter or certificate is also addressed and delivered to the Trustee).

It is the intention of the parties hereto that a valid trust
for the benefit of the Holders of the Securities be created at the time that
the Finance Company makes the deposit pursuant to this Section 401. The
security interest in such deposit that is provided for herein to the Holders of
the Securities is intended solely as protection for the Holders of the
Securities in the event that a court of competent jurisdiction were to
determine either that (i) such trust had not been validly created or (ii) such
trust is not enforceable.

The Company and the Finance Company shall take any and all
acts necessary to create and perfect, in favor of the Holders of the
Securities, a first-priority security interest in the money so deposited and
shall take any other action and execute and deliver any other documents that
may reasonably be requested by the Trustee

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to effectuate such security interest, and shall do all of the above at such
appropriate time so that such security interest shall attach to the deposit at
the time such deposit is made.

Notwithstanding the foregoing, prior to the end of the 91-day
period following the irrevocable deposit referred to above, none of the
obligations of the Company, the Operating Company, the Finance Company or
Realty Co. under this Indenture or the Security Documents shall be discharged,
unless and until the Finance Company shall have delivered to the Trustee a
Current Appraisal as of a date no more than 60 days prior to the date of such
irrevocable deposit reflecting the Appraised Fair Market Value of the
Collateral as a going concern in an amount not less than 120% of the amount of
such irrevocable deposit and an Opinion of Counsel, subject to customary
exclusions and exceptions, to the effect that based on such Current Appraisal,
the irrevocable deposit will not be subject to avoidance as a preferential
transfer under 11 U.S.C. Section 547, as it may be amended from time to time.

Section 402. Application of Trust Money.

Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Finance Company, the Company or another Subsidiary
acting as Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal (and premium, if any) and interest for whose payment
such money has been deposited with the Trustee.

ARTICLE V

REMEDIES

Section 501. Events of Default.

An "Event of Default" occurs if:

(a) the Finance Company defaults in
the payment of interest on any Security when the same becomes

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due and payable and such default continues for a period of 30 days; or

(b) the Finance Company defaults in
the payment of the principal of (or premium, if any, on) any Security when the
same becomes due and payable, whether at its Stated Maturity, upon redemption,
or otherwise; or

(c) any of the Company, the Operating
Company, the Finance Company or Realty Co. default in the performance of, or
breach, any covenant or warranty of such company hereunder (other than a
default in the performance, or breach, of a covenant or warranty that is
specifically dealt with elsewhere in this Section) or default in the
performance of, or breach, any covenant or warranty of such company in the
Security Documents and, in any such case, continuance of such default or breach
for the period and after the notice specified below; or

(d) an event or events of default as
defined in any mortgage, bond, indenture, loan agreement or other evidence of
Indebtedness under which there may be issued or by which there may be secured
or evidenced any Indebtedness of either of the Companies or any Subsidiary in
excess of $___,000,000 in the aggregate, which default or defaults extend
beyond any period of grace provided with respect thereto and which default or
defaults relate to (i) the obligation to pay the principal of or interest on
any such Indebtedness, in either case at the final maturity set forth in the
agreement under which such Indebtedness is issued or (ii) any other obligation
which shall result in such Indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise become due and payable;
or

(e) final judgments or orders are
rendered against either of the Companies or any Subsidiary which require the
payment of money, either individually or in an aggregate amount, that is more
than $___,000,000 and (i) an enforcement proceeding with respect thereto has
been commenced or (ii) such judgment or order shall remain unsatisfied or
unstayed, by reason of appeal or otherwise, for 60 days; or

(f) a decree or order is entered by a
court having jurisdiction in the premises (i) for relief in respect of either
of the Companies or any Material

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Subsidiary in an involuntary case or proceeding under the Federal Bankruptcy
Code or any other federal or state bankruptcy, insolvency, reorganization or
similar law or (ii) adjudging either of the Companies or any Material
Subsidiary as bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of either of the Companies or any Material Subsidiary under the Federal
Bankruptcy Code or any other applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of either of the Companies or any Material Subsidiary or of
any substantial part of any of their properties, or ordering the winding up or
liquidation of any of their affairs, and any such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or

(g) either of the Companies or any
Material Subsidiary institutes a voluntary case or proceeding under the Federal
Bankruptcy Code or any other applicable federal or state law or any other case
or proceeding to be adjudicated as bankrupt or insolvent, or either of the
Companies or any Material Subsidiary consents to the entry of a decree or order
for relief in respect of either of the Companies or any Material Subsidiary in
any involuntary case or proceeding under the Federal Bankruptcy Code or any
other applicable federal or state law or to the institution of bankruptcy or
insolvency proceedings against either of the Companies or any Material
Subsidiary, or either of the Companies or any Material Subsidiary files a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable federal or state law, or
consents to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of either of the Companies or any
Material Subsidiary or of any substantial part of its property, or makes an
assignment for the benefit of creditors, or becomes insolvent, or is unable to
pay debts generally as they come due, or admits in writing its inability to pay
its debts generally as they become due or takes corporate action in furtherance
of any such action; or

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(h) there is a default in the
performance or breach of any of the provisions of Article Eight or a failure by
the Finance Company to provide the notice to Holders or to make the payments
required by Section 1015; or

(i) an "Event of Default" under any of
the Security Documents occurs; or

(j) the revocation, suspension or loss
for a period of more than 90 consecutive days of any Gaming License (other than
a voluntary relinquishment of a Gaming License by a Subsidiary other than a
Subsidiary holding the license to operate the Casino Hotel) under which the
Company or any Material Subsidiary owns, leases or operates the Casino Hotel or
any Subsidiary Casino Hotel.

(k) the Company Guaranty shall, at any
time, cease to be in full force and effect or shall be declared invalid or
unenforceable; or either of the Companies shall assert, in any pleading in a
court of competent jurisdiction, that such Company Guaranty is invalid or
unenforceable.

A default under clause (c) is not an Event of Default until
the continuance of such default for a period of 30 days after there has been
given, by registered or certified mail, to either of the Companies by the
Trustee or to either of the Companies and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities a written notice
specifying such default and stating that such notice is a "Notice of Default"
hereunder.

Section 502. Acceleration of Maturity; Rescission.

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immediately, and upon any such declaration such principal, premium and accrued
interest shall become immediately due and payable. If an Event of Default
specified in Section 501(f) or 501(g) occurs and is continuing, the amounts
described above shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

After a declaration of acceleration, but before a judgment or
decree for payment of the money due has been obtained by the Trustee, the
Holders of a majority in aggregate principal amount of the Securities
Outstanding, by written notice to the Finance Company and the Trustee, may
annul such declaration if (a) the Finance Company has paid or deposited with
the Trustee a sum sufficient to pay (i) all sums paid or advanced by the
Trustee under this Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, (ii) all
overdue interest on all Securities, (iii) the principal of and premium, if any,
on any Securities which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Securities, and (iv)
to the extent that payment of such interest is lawful, interest upon overdue
interest at the rate borne by the Securities; and (b) all Events of Default,
other than the non-payment of principal of the Securities which have become due
solely by the declaration of acceleration, have been cured or waived.

Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.

The Finance Company covenants that if

(a) default is made in the payment of
any interest on any Securities when such interest becomes due and payable and
such default continues for a period of 30 days, or

(b) default is made in the payment of
the principal of (or premium, if any, on) any Security at the Maturity thereof,

the Finance Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities

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for principal (and premium, if any) and interest, with interest upon the
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon overdue installments of interest,
at the rate borne by the Securities; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

If the Finance Company fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of the sums so
due and unpaid and may prosecute such proceeding to judgment or final decree,
and may enforce the same against the Companies or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Companies or any other
obligor upon the Securities, wherever situated.

If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders under this Indenture and may enforce any rights or remedies
available to it upon an Event of Default under the Security Documents by such
appropriate private or judicial proceedings as the Trustee shall deem most
effectual to protect and enforce such rights, including foreclosing upon the
Cash Collateral in the Collateral Account.

Section 504. Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company, the Finance Company, the
Operating Company or Realty Co. or any other obligor upon the Securities or the
property of either of the Companies or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Companies for the payment of overdue principal or inter-

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est) shall be entitled and empowered, by intervention in such proceeding or
otherwise,

(a) to file and prove a claim for the
whole amount of principal (and premium, if any) and interest owing and unpaid
in respect of the Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and

(b) to collect and receive any moneys
or other property payable or deliverable on any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 606.

Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any proposal, plan of reorganization, arrangement, adjustment or composition or
other similar arrangement affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.

Section 505. Trustee May Enforce Claims without Possession
of Securities.

All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name and as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the

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Trustee, its agents and counsel, be for the ratable benefit of the Holders of
the Securities in respect of which such judgment has been recovered.

Section 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this Article or
Collateral foreclosed on in the Collateral Account shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any) or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under
Section 606;

SECOND: To the payment of the amounts then due and unpaid
upon the Securities for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (and premium, if any) and
interest; and

THIRD: The balance, if any, to the Finance Company.

Notwithstanding the foregoing, if the Trustee forecloses on
any real Property comprising the Collateral, it shall pay out the proceeds of
such foreclosure in accordance with the provisions of the Mortgage and the
Intercreditor Agreement if there are any Pari Passu Mortgages on such real
Property.

Section 507. Limitation on Suits.

No Holder of any Securities shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture or the
Securities, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless

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(a) such Holder has previously given
written notice to the Trustee of a continuing Event of Default;

(b) the Holders of not less than 25%
in principal amount of the Outstanding Securities shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;

(c) such Holder or Holders have
offered to the Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;

(d) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has failed to institute
any such proceeding; and

(e) no direction inconsistent with
such written request has been given to the Trustee during such 60-day period by
the Holders of a majority in principal amount of the Outstanding Securities;

it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture, the Note or the Security Documents to affect, disturb or
prejudice the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under
this Indenture, the Note or the Security Documents except in the manner
provided in this Indenture, the Note or the Security Documents and for the
equal and ratable benefit of all the Holders.

Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.

Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
interest on such Security on the respective due dates expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for

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the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.

Section 509. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Companies, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.

Section 510. Rights and Remedies Cumulative.

Except as provided in Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.

Section 511. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.

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Section 512. Control by Holders.

The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided that

(a) such direction shall not be in
conflict with any rule of law or with this Indenture or expose the Trustee to
personal liability, and

(b) subject to the provisions of Trust
Indenture Act Section 315, the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.

Section 513. Waiver of Past Defaults.

The Holders of not less than a majority in principal amount of
the Outstanding Securities may on behalf of the Holders of all the Securities
waive any past Default or Event of Default hereunder and its consequences,
except a Default or Event of Default

(a) in the payment of the principal of
(or premium, if any) or interest on any Security, or

(b) in respect of a covenant or
provision hereof which under Article Nine cannot be modified or amended without
the consent of the Holder of each Outstanding Security affected.

Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

Section 514. Undertaking for Costs.

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right or remedy under this Indenture, the Note or the Security Documents or in
any suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium, if any) or interest on any Security on or after the respective
Stated Maturities expressed in such Security (or, in the case of redemption, on
or after the Redemption Date).

Section 515. Waiver of Stay, Extension or Usury Laws.

The Companies covenant (to the extent that they may lawfully
do so) that they will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantages of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Companies
(to the extent that they may lawfully do so) hereby expressly waive all benefit
or advantage of any such law, and covenant that they will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

ARTICLE VI

THE TRUSTEE

Section 601. Notice of Defaults.

Within 90 days after the occurrence of any Default that is
known to the Trustee, the Trustee shall transmit by mail to all Holders, as
their names and

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addresses appear in the Security Register, notice of such Default; provided,
however, that, except in the case of a default in the payment of the principal
of (or premium, if any) or interest on any Security, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.

Section 602. Certain Rights of Trustee.

Subject to the provisions of Trust Indenture Act Sections
315(a) through 315(d):

(a) the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document delivered by it to be genuine and to have been signed or presented by
the proper party or parties;

(b) any request or direction of either
of the Companies mentioned herein shall be sufficiently evidenced by a Company
Request or Company Order and any resolution of the Board of Directors of either
of the Companies may be sufficiently evidenced by a Board Resolution;

(c) whenever in the administration of
this Indenture the Trustee shall deem it desirable that a matter be provided or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;

(d) the Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;

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(e) the Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;

(f) the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine the books, records and
premises of the Companies, personally or by agent or attorney;

(g) the Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;

(h) no provision of this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it; and

(i) the Trustee shall not be liable
for any action it takes or omits to take in good faith which it believes to be
authorized or within the rights or powers conferred upon it by this Indenture.

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Section 603. Not Responsible for Recitals or Issuance of
Securities.

The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Companies, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Finance Company of Securities or
the proceeds thereof, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied or to be
supplied to the Finance Company are true and accurate, subject to the
qualifica- tions set forth therein.

Section 604. May Hold Securities.

The Trustee or any Paying Agent, Security Registrar or other
agent of the Companies or their Affiliates, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Trust
Indenture Act Sections 310(b) and 311, may otherwise deal with the Companies or
their Affiliates with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar or such other agent.

Section 605. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Finance Company.

Section 606. Compensation and Reimbursement.

The Companies agree jointly and severally:

(a) to pay to the Trustee from time to
time reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by

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any provision of law in regard to the compensation of a trustee of an express
trust);

(b) except as otherwise expressly
provided herein, to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and

(c) to indemnify the Trustee for, and
to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.

As security for the performance of the obligations of the
Companies under this Section, the Trustee shall have a claim prior to the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of Holders of particular
Securities.

If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in Section 501(f) or (g), the
expenses and compensation for such services are intended to constitute expenses
of administration under Title 11, U.S. Code or any similar federal or state law
for the relief of debtors.

Section 607. Conflicting Interests.

The Trustee shall comply with the provisions of Section 310(b)
of the Trust Indenture Act.

Section 608. Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Trust

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Indenture Act Section 310(a)(1) and which shall have a combined capital and
surplus of at least $50,000,000 and have its Corporate Trust Office located in
The City of New York (or if its Corporate Trust Office shall not be located in
The City of New York, which shall maintain an office in The City of New York
where the Securities may be presented or surrendered and notices and demands
hereunder may be made or served) to the extent there is such an institution
eligible and willing to serve. If such corporation publishes reports of
condition at least annually pursuant to law or to the requirements of Federal,
State, Territorial or District of Columbia supervising or examining authority,
then, for the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article. The Trustee shall comply with the
Casino Control Act to the extent such requirements are applicable to the
Trustee and are consistent with its duties herein; provided, however, that to
the extent the provisions of the Casino Control Act conflict with the
provisions of the Trust Indenture Act, the Trust Indenture Act shall control;
provided further, however, that this Section 608 shall not require the Trustee
to assume any duties or obligations which are in addition to those set forth
herein.

Section 609. Resignation and Removal; Appointment of
Successor.

(a) No resignation or removal of the
Trustee and no appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Trustee under Section 610.

(b) The Trustee may resign at any time
by giving written notice thereof to the Finance Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.

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(c) The Trustee may be removed at any
time by an Act of the Holders of a majority in principal amount of the
Outstanding Securities, delivered to the Trustee and the Finance Company.

(d) If at any time:

(i) the Trustee fails to comply with
the provisions of Trust Indenture
Act Section 310(b), or

(ii) the Trustee shall cease to be
eligible under Section 608, or

(iii) the Trustee shall become
incapable of acting or shall be
adjudged a bankrupt or insolvent, or
a receiver of the Trustee or of its
property shall be appointed or any
public officer shall take charge or
control of the Trustee or of its
property or affairs for the purpose
of rehabilitation, conservation or
liquidation,

(iv) the Casino Control Commission
determines that the Trustee is
required to be licensed or found
qualified or suitable and the
Trustee does not become so licensed
or found qualified or suitable
within such period as may be
prescribed by the Casino Control
Commis- sion,

then, in any case, (1) the Finance Company by a Board Resolution may remove the
Trustee, or (2), subject to Section 514, the Holder of any Security, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

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cessor Trustee shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities delivered to the Company, upon
approval of the Casino Control Commission, and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with Section 610, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders of the
Securities and so accepted appointment within 60 days, the Finance Company or
the Holders of at least 10% in principal amount of the Securities may petition
any court of competent jurisdiction for the appointment of a successor Trustee.

(f) The Finance Company shall give
notice of each resignation and each removal of the Trustee and each appointment
of a successor Trustee by mailing written notice of such event by first-class
mail, postage prepaid, to the Holders of Securities as their names and
addresses appear in the Security Register. Each notice shall include the name
of the successor Trustee and the address of its Corporate Trust Office.

Section 610. Acceptance of Appointment by Successor.

Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; provided, however,
that the retiring Trustee shall continue to be entitled to the benefit of
Section 606(c). Such retiring Trustee shall, on request of the Company or the
successor Trustee, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all such rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder. Upon request of any such successor Trustee, the Finance Company
shall execute any and all instruments for more fully and certainly

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vesting in and confirming to such successor Trustee all such rights, powers and
trusts.

No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.

Section 611. Merger, Conversion, Consolidation or Succession
to Business.

Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Securities shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities.

Section 612. Preferential Collection of Claims against
Company.

If and when the Trustee shall be or become a creditor of the
Companies (or any other obligor under the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Companies (or any such other obligor).

Section 613. Further Assurances.

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a certificate in the form of Exhibit E hereto (the "Pari Passu Certificate")
and such other assurances or instruments all in form recordable in the Atlantic
County, New Jersey mortgage records, as the Company, the Operating Company, the
Finance Company or Realty Co. may reasonably request to confirm that the
Collateral is held for the ratable benefit of the Holders and such holders of
any Pari Passu Mortgage. The Trustee shall deliver the Pari Passu Certificate
and such other assurances or instruments only upon receipt of, and shall be
fully protected in relying upon, (i) an Opinion of Counsel stating that the
execution and delivery of such assurances or other instruments is in compliance
with this Section 613 based upon the certificates referred to in clauses (ii)
and (iii) below, (ii) an opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee stating that the Indebtedness secured by such Pari Passu Mortgage
is within the limitations set forth in Sections 1007 and 1010 and (iii) an
Officers' Certificate stating that such Pari Passu Mortgage complies with the
provisions of this Indenture, that no Default has occurred and is continuing or
would occur as a result of giving effect to such Pari Passu Mortgage and that
the holder of such Pari Passu Mortgage has caused the Intercreditor Agreement
to be executed.

The delivery by the Trustee of a Pari Passu Certificate and
such other assurances or instruments that the Company, the Operating Company,
the Finance Company or Realty Co. may reasonably request as aforesaid shall
not, however, prevent or estop the Trustee or the Holders of Securities from
thereafter exercising its or their rights and remedies under this Indenture
(not including attempts to set aside or gain priority over those Liens or
mortgages the holders of which have relied on the Pari Passu Certificate) if
the creation or incurrence of the Pari Passu Mortgage referred to in such Pari
Passu Certificate and other assurances or instruments shall not have been
permitted by Sections 1007 and 1010 of this Indenture or does not otherwise
comply with the provisions of this Indenture.

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reasonably request, as provided above in this Section 613, shall conclusively
establish and confirm to all persons that the Lien of the holder of
Indebtedness referred to in the Pari Passu Certificate ranks pari passu with
the Lien of the Mortgage and that the Collateral is held for the ratable
benefit of the Holders and such holder of Pari Passu Mortgages.
Notwithstanding any other provision of this Section 613, the holder of any such
Pari Passu Mortgage, its successors and assigns, shall be entitled to rely on
the Pari Passu Certificate and such other assurances or instruments without
further investigation or other acts.

As used in this Section 613, "ratable benefit of the Holders
and such holder(s) of any Pari Passu Mortgage(s)" shall mean that the cash that
becomes available from the sources described in [Section 13] of the
Intercreditor Agreement for the redemption or repayment of the Securities and
any loan secured by the Pari Passu Mortgage shall be applied as set forth in
Section 12 of the Intercreditor Agreement.

ARTICLE VII

HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY

Section 701. Disclosure of Names and Addresses of Holders.

Every Holder of Securities, by receiving and holding the same,
agrees with the Companies and the Trustee that none of the Companies or the
Trustee or any agent of any of them shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Holders in
accordance with Trust Indenture Act Section 312, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Trust Indenture Act Section 312 at any time following the date on which this
Indenture is qualified under the Trust Indenture Act.

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Section 702. Reports by Trustee.

(a) Within 60 days after __________ of
each year commencing with the first __________ following the date on which this
Indenture is qualified under the Trust Indenture Act, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, as provided in Trust Indenture Act Section 313(c), a brief
report dated as of such __________ if required by Trust Indenture Act Section
313(a).

A copy of each report at the time of its mailing to Holders
shall be mailed to the Finance Company and filed with the Commission and each
stock exchange, if any, on which the Securities are listed.

The Company shall notify the Trustee if the Securities become
listed on any stock exchange.

(b) The Trustee will provide to the
Casino Control Commission and the Division of Gaming Enforcement:

(i) copies of all notices, reports
and other written communications
that the Trustee gives to Holders;

(ii) a list of Holders promptly
after the original issuance of the
Securities and semiannually
thereafter upon the receipt of a
Company Request;

(iii) notice of any Default or Event
of Default under this Indenture, any
acceleration of the Indebtedness
evidenced or secured hereby, the
institution of any legal actions or
proceedings before any court or
governmental authority in respect of
this Indenture, including the
Security Documents, the entering
into or taking possession of any
Property constituting the Collateral
and any rescission, annulment or
waiver in respect of an Event of
Default under any instruments
described in this clause (iii);

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(iv) notice of the removal or
resignation of the Trustee within
five Business Days thereof;

(v) notice of any transfer or
assignment of rights under this
Indenture, or any of the Security
Documents within five Business Days
thereof; and

(vi) a copy of any amendment to the
Securities or this Indenture,
including the Security Documents,
within five Business Days of the
later of the effectiveness or
execution thereof.

The notice specified in clause (iii) above shall be in writing and, except as
set forth below, shall be given within five Business Days after the Trustee has
actual knowledge of any circumstances requiring such notice. In the case of
any notice in respect of any Default or Event of Default under any instrument
described in clause (iii), such notice shall be accompanied by a copy of any
notice from the holders of indebtedness evidenced or secured by such
instruments or a representative thereof or trustee therefor, to such defaulting
Person and, if accompanied by any such notice to the defaulting Person, shall
be given simultaneously with the giving of any such notice to the defaulting
Person. In the case of any legal actions or proceedings, such notice shall be
accompanied by a copy of the complaint or other initial pleading or document.
The Trustee shall advise the Casino Control Commission and the Division of
Gaming Enforcement of any further action taken by the Trustee or the Holders
relating to such Default or Event of Default.

The Trustee and its trust officers shall cooperate with the
Casino Control Commission and the Division of Gaming Enforcement in order to
provide the Casino Control Commission and the Division of Gaming Enforcement
with information and documentation relevant to compliance with clause (iii)
above and as otherwise required by the Casino Control Act, or Casino Control
Commission or the Division of Gaming Enforcement.

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Section 703. Reports by Company.

The Company shall file with the Commission the annual reports,
quarterly reports and other documents required to be filed with the Commission
pursuant to Sections 13 and 15 of the Exchange Act, whether or not the Company
has a class of securities registered under the Exchange Act; the Company shall
file with the Trustee and shall transmit by mail to each Holder of the
Securities (as its name and address appear on the Security Register) within 15
days after it files them with the Commission (or if any such filing is not
permitted under the Exchange Act, 15 days after the Company would have been
required to make such filing) copies of such reports and documents.

ARTICLE VIII

CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE

Section 801. Company May Consolidate, etc., Only on Certain
Terms.

Neither the Company nor any Subsidiary shall consolidate with
or merge with or into any other Person or sell, assign, convey, transfer, lease
or otherwise dispose of all or substantially all of the Properties and assets
of any of (a) the Company and its Subsidiaries taken as a whole, (b) the
Operating Company, substantially as an entirety to any Person or group or (c)
Realty Co. of affiliated Persons unless at the time and after giving effect
thereto:

(i) either (a) the Company or such
Subsidiary shall be the continuing
corporation or (b) the Person (if
other than the Company or a
Subsidiary) formed by such
consolidation or merger, or to which
such sale, assignment, transfer,
lease, conveyance or disposition
shall have been made (the "Surviving
Entity"), is a corporation duly
organized and validly existing under
the laws of the United States of
America, any state thereof or the
District of Columbia and shall, in
either case, expressly assume by
supplemental indenture

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hereto, executed and delivered to
the Trustee, in form satisfactory to
the Trustee, all the obligations of
the Companies under the Indenture
and the Securities and this
Indenture shall remain in full
force and effect;

(ii) immediately prior to such
transaction, and immediately after
giving effect to such transaction on
a pro forma basis, no default or
Event of Default shall have occurred
and be continuing;

(iii) immediately after giving
effect to such transaction on a pro
forma basis, the Company (or the
Surviving Entity, if the Company is
not the continuing obligor under the
Indenture) could incur $1.00 of
addi- tional Indebtedness (other
than Permitted Indebtedness) under
Section 1007 hereof;

(iv) immediately after giving effect
to such transaction on a pro forma
basis, the Consolidated Net Worth of
the Company (or the Surviving Entity
if the Company is not the continuing
obligor under the Indenture) is at
least equal to the Consolidated Net
Worth of the Company immediately
before such transaction;

(v) the Lien of the Security
Documents and the rights of the
Trustee and the Holders thereunder
and under this Indenture have not
been impaired;

(vi) the Surviving Entity has all
Gaming Licenses and other permits
and approvals required to operate
the Casino Hotel and any casino
hotels then owned by such Surviving
Entity and the Surviving Entity or
an Affiliate thereof has had prior
experience in the operation and
management of casinos or casino
hotels, or the Surviving Entity
has retained management with such
prior experience; and

(vii) the Companies have delivered
to the Trustee, in form and
substance

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reasonably satisfactory to the
Trustee, an Officers' Certificate
and an Opinion of Counsel, each stat-
ing that such consolidation, merger
or transfer and such supplemental
indenture, if one is required by
this Section 801, comply with this
Section 801 and that all conditions
precedent herein provided for
relating to such transaction have
been complied with and that the Lien
of the Security Documents and the
rights of the Trustee and the
Holders thereunder and under the
Indenture have not been impaired.

The merger or consolidation of, or sale of assets by, any of the Company, the
Finance Company, the Operating Company or Realty Co. with or into or to any of
the Company, the Finance Company, the Operating Company or Realty Co. shall not
be restricted by the foregoing if such transaction complies with clauses (i),
(ii), (v), (vi) and (vii) above.

Section 802. Successor Substituted.

Upon any consolidation or merger or any sale, assignment,
transfer, lease or conveyance or other disposition of all or substantially all
of the assets of the Company and its Subsidiaries taken as a whole, the
Operating Company or Realty Co., in accordance with Section 801, the successor
corporation formed by such consolidation or into which either the Company or a
Subsidiary is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Companies under this
Indenture with the same effect as if such successor corporation had been named
as one of the respective Companies herein. When a successor assumes all the
obligations of its predecessor under this Indenture and the Securities, the
predecessor will be released from those obligations, provided that, in the case
of a transfer by lease, the predecessor corporation shall not be released from
the payment of principal of and interest on the Securities.

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ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures without Consent of
Holders.

Without the consent of any Holders, the Companies, the
Operating Company and Realty Co., when authorized by Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures, notes or security documents supplemental hereto or to the Note or
Security Documents, as the case may be, in form satisfactory to the Trustee,
for any of the following purposes:

(a) to evidence the succession of
another Person to either of the Companies and the assumption by any such
successor of the covenants of the Company or the Finance Company, as the case
may be, herein and in the Securities;

(b) to add to the covenants of the
Companies for the benefit of the Holders, or to surrender any right or power
herein or in the Securities conferred upon the Companies;

(c) to cure any ambiguity, to correct
or supplement any provision herein which may be defective or inconsistent with
any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture; provided that, in each case,
such provisions shall not adversely affect the interests of the Holders; or

(d) to make any other change that does
not adversely affect the rights of any Holder.

Section 902. Supplemental Indentures with Consent of Holders.

With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of such Holders
delivered to the Finance Company and the Trustee, the Companies, the Operating
Company and Realty Co., when authorized by Board Resolution, and the Trustee
may enter into one or

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more indentures, notes or security documents supplemental hereto or to the Note
or Security Documents, as the case may be, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture, the Note or Security Documents or of waiving or modifying in
any manner the rights of the Holders under this Indenture, the Note or the
Security Documents; provided, however, that no such supplemental indenture,
note or security documents, amendment or waiver shall, without the consent of
the Holder of each Outstanding Security affected thereby:

(a) change the Stated Maturity of the
principal of, or any installment of interest on, any Security or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or change the coin or currency in which the
principal of any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date) or modify the obligation of the Company to purchase
Securities under Section 1015 hereof;

(b) reduce the percentage in principal
amount of the Outstanding Securities, the consent of whose Holders is required
for any amendment, supplement or waiver; or

(c) modify any of the provisions of
this Section or Section 513 or Section 1022, except to increase any of the
percentages set forth in such Sections or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each Security affected thereby.

It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such Act shall approve the substance
thereof.

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Section 903. Execution of Amendments, Supplements or Waivers.

In executing, or accepting the additional trusts created by,
any amendments, supplements or waivers permitted by this Article Nine, the
Trustee shall be entitled to receive, and (subject to Trust Indenture Act
Section 315(a) through 315(d) and Section 602 hereof) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment, supplement or waiver is authorized or permitted by this Indenture.
The Trustee may, but shall not be obligated to, enter into any such amendment,
supplement or waiver that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

Section 904. Effect of Amendments, Supplements or Waivers.

Upon the execution of any amendment, supplement or waiver,
this Indenture, the Notes and the Security Documents shall be modified in
accordance therewith, and such supplemental indenture, note or security
documents shall form a part of this Indenture, the Notes or Security Documents,
as the case may be, for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

Section 905. Conformity with Trust Indenture Act.

Every amendment, supplement or waiver executed pursuant to
this Article Nine shall conform to the requirements of the Trust Indenture Act
as then in effect.

Section 906. Reference in Securities to Amendments,
Supplements or Waivers.

Securities authenticated and delivered after the execution of
any amendment, supplement or waiver pursuant to this Article Nine may, and
shall, if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such amendment, supplement or waiver.
If the Finance Company shall so determine, new Securities so modified as to
conform, in the opinion of the Trustee and the Finance Company, to

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any such amendment, supplement or waiver may be prepared and executed by the
Finance Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.

ARTICLE X

COVENANTS

Section 1001. Payment of Principal, Premium and Interest.

The Finance Company will duly and punctually pay the principal
of (and premium, if any) and interest on the Securities in accordance with the
terms of the Securities and this Indenture.

The Finance Company shall pay interest on overdue principal at
the rate borne by the Securities; it shall pay interest on overdue installments
of interest at the same rate to the extent lawful.

Section 1002. Maintenance of Office or Agency.

The Finance Company will maintain, in The City of New York, an
office or agency where Securities may be presented or surrendered for payment,
where Securities may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Finance Company in respect of the
Securities and this Indenture may be served. If the Corporate Trust Office is
located in New York City, then it shall be such office or agency of the Finance
Company, unless the Finance Company shall designate and maintain some other
office or agency for one or more of such purposes. The Finance Company will
give prompt written notice to the Trustee of any change in the location of any
such office or agency. If at any time the Finance Company shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Finance
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

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The Finance Company may from time to time designate one or
more other offices or agencies (in or outside of The City of New York) where
the Securities may be presented or surrendered for any or all such purposes,
and may from time to time rescind such designation; provided, however, that no
designation or recision shall in any manner relieve the Finance Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Finance Company will give prompt written notice to the Trustee
of any such designation or rescission and any change in the location of any
such office or agency.

Section 1003. Money for Security Payments to Be Held in Trust.

If the Finance Company, the Company or another Subsidiary
shall at any time act as Paying Agent, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.

Whenever the Finance Company shall have one or more Paying
Agents for the Securities, it will, on or before each due date of the principal
of (and premium, if any) or interest on any Securities, deposit with a Paying
Agent a sum in same day funds (or New York Clearing House funds if such deposit
is made prior to the date on which such deposit is required to be made)
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest and (unless such Paying Agent is the
Trustee) the Finance Company will promptly notify the Trustee of such action or
any failure so to act.

The Finance Company will cause each Paying Agent other than
the Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying agent will:

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(a) hold all sums held by it for the
payment of the principal of (and premium, if any) or interest on Securities in
trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;

(b) give the Trustee notice of any
default by the Finance Company (or any other obligor upon the Securities) in
the making of any payment or principal (and premium, if any) or interest; and

(c) at any time during the continuance
of any such default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.

The Finance Company, the Company or another Subsidiary may at
any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or by Company Order, the Finance
Company may direct any Paying Agent to pay, to the Trustee all sums held in
trust by such company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts at those upon which such sums were held by such company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

Any money deposited with the Trustee or any Paying Agent, or
then held by the Finance Company, the Company or another Subsidiary in trust
for the payment of the principal of (and premium, if any) or interest on any
Security and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Finance Company on Company Request or (if then held by the Finance Company, the
Company or another Subsidiary) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor,
look only to the Finance Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all
liability of the Finance Company as trustee thereof, shall thereupon cease.

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Section 1004. Corporate Existence.

Subject to Article Eight, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and that of each Subsidiary of the Company and the
corporate rights (charter and statutory), corporate licenses and corporate
franchises of the Company and its Subsidiaries, except where a failure to do
so, singly or in the aggregate, is not likely to have a materially adverse
effect upon the business, assets, financial conditions or results of operations
of the Company and the Subsidiaries taken as a whole determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles;
provided that the Company shall not be required to preserve any such existence
(except of the Company), right, license or franchise if the Board of Directors
of the Company, or of the Subsidiary concerned, shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company or such Subsidiary and that the loss thereof is not disadvantageous
in any material respect to the Holders.

Section 1005. Payment of Taxes and Other Claims.

The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all material taxes,
assessments and governmental charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of the Company or any of its
Subsidiaries and (b) all material lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a lien upon the property of the
Company or any of its Subsidiaries that could produce a material adverse effect
on the consolidated financial condition of the Company; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings. The foregoing provision shall not apply to the Company's payment
or discharge of any taxes, assessments or governmental charges governed by the
Mortgage.

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Section 1006. Maintenance of Properties.

The Company shall cause all material properties owned by or
leased to it or any Subsidiary of the Company and necessary in the conduct of
its business or the business of such Subsidiary to be maintained and kept in
normal condition, repair and working order, ordinary wear and tear excepted.

The Company shall provide or cause to be provided, for itself
and any Subsidiaries of the Company, insurance (including appropriate
self-insurance) against loss or damage of the kinds customarily insured against
by corporations similarly situated and owning like properties in the same
general areas in which the Company or such Subsidiaries operate.

Section 1007. Limitation on Indebtedness.

The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume, or directly or indirectly guaranty or
in any other manner become directly or indirectly (other than through
Unrestricted Subsidiaries) liable for the payment of (collectively, "incur"),
any Indebtedness (excluding Permitted Indebtedness and including Acquired
Indebtedness and Indebtedness which is a Guaranty permitted pursuant to clause
(v) of Section 1008(b)) unless, at the time of such event and after giving
effect thereto, on a pro forma basis the Company's Consolidated Fixed Charge
Coverage Ratio for the four full fiscal quarters for which financial
information in respect thereof is available immediately preceding such event,
taken as one period, calculated on the assumption that (i) such Indebtedness
and any other outstanding Indebtedness incurred since the first day of such
four-quarter period had been incurred on the first day of such four-quarter
period, (ii) any acquisition or disposition by the Company and its Restricted
Subsidiaries of any assets outside the ordinary course of business since the
first day of such last four full fiscal quarters had been consummated on the
first day of such four-quarter period and (iii) any prepayment of Indebtedness
prior to the scheduled maturity thereof since the first day of such last four
fiscal quarters had been consummated on the first day of such four-quarter
period, is at least equal to the ratios set forth below during the years
indicated below:

<TABLE>
<CAPTION>
Year Ratio
---- -----
<S> <C>
1994 2:1

1995 and 2.25:1
thereafter

</TABLE>

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Any Indebtedness (other than Permitted Indebtedness or
Acquired Indebtedness or Indebtedness that is a Guaranty permitted pursuant to
clause (v) of Section 1008(b)) may be incurred hereunder only if (i) such
Indebtedness has an Average Life to Stated Maturity (A) greater than the
remaining Average Life to Stated Maturity of the Securities, if such
Indebtedness ranks junior to the Securities, or (B) equal to or greater than
the remaining Average Life to Stated Maturity of the Securities, if such
Indebtedness ranks pari passu to the Securities and (ii) such Indebtedness has
a final scheduled maturity which (A) exceeds the final Stated Maturity of the
Securities, if such Indebtedness ranks junior to the Securities, or (B) is
equal to or exceeds the final Stated Maturity of the Securities, if such
Indebtedness ranks pari passu to the Securities.

Section 1008. Limitation on Restricted Payments.

(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or (other than through an Unrestricted
Subsidiary) indirectly,

(i) declare or pay any dividend on,
or make any distribution to holders
of, any shares of the Company's
Capital Stock (other than dividends
or dis- tributions payable in shares
of its Capital Stock or in options,
warrants or other rights to purchase
such Capital Stock, but excluding
dividends or distributions payable
in Redeemable Capital Stock or in
options, warrants or other rights to
purchase Redeemable Capital Stock),

(ii) purchase, redeem or acquire or
retire for value, any Capital Stock
of the Company or any Subsidiary or
any options, warrants or other
rights to ac- quire such Capital
Stock,

(iii) declare or pay any dividend or
distribution on any Capital Stock of
any Subsidiary to any Person (other
than the Company or any of its
Wholly Owned Subsidiaries),

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(iv) prepay, repay, redeem, defease
or otherwise acquire or retire, for
value prior to Stated Maturity,
scheduled repayment or scheduled
sinking fund payment, any
Indebtedness of the Company or the
Finance Company that ranks junior to
or pari passu to the Securities in
right of payment,

(v) incur, create or assume any
Guaranty of Indebtedness of any
Affiliate (other than with respect
to (a) Guaranties of Indebtedness of
any Wholly Owned Subsidiary by the
Company or by any Restricted
Subsidiary or (b) Guaranties of
Indebtedness of the Company by any
Restricted Subsidiary, in each case
in accordance with the terms of this
Indenture), or

(vi) make any Investment (other than
any Permitted Investment) in any
Person

(such payments or other actions described in the foregoing clauses (i) through
(vi), are collectively referred to as "Restricted Payments"), unless at the
time of and after giving effect to the proposed Restricted Payment (the amount
of any such Restricted Payment, if other than cash, shall be as determined by
the Board of Directors of the Company, whose determination, if reasonable and
based on the good-faith business judgment of the Board of Directors of the
Company, shall be conclusive, and evidenced by a Board Resolution), (1) no
Default or Event of Default shall have occurred and be continuing or shall
occur as a result of such Restricted Payment, (2) immediately before and
immediately after giving effect to such transaction on a pro forma basis, the
Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the provisions of Section 1007 and (3) the aggregate amount
of all Restricted Payments declared or made after the date hereof shall not
exceed the sum of:

(A) 50% of the Consolidated Net Income of the Company
accrued on a cumulative basis during the period beginning on April 1,
1994, and ending on the last day of the Company's last fiscal quarter
ending prior to the date of such proposed Restricted Payment (or, if
such aggre-

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gate cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss);

(B) the aggregate Net Cash Proceeds received after the
date hereof by the Company from the issuance or sale (other than to
any of its Subsidiaries) of shares of Capital Stock of the Company
(other than Redeemable Capital Stock) or warrants, options or rights
to purchase such shares of Capital Stock of the Company (other than
Redeemable Capital Stock);

(D) the aggregate Net Cash Proceeds received after the
date hereof by the Company (other than from any of its Subsidiaries)
upon the exercise of options, warrants or rights to purchase shares of
Capital Stock of the Company (other than Redeemable Capital Stock);

(E) the aggregate Net Cash Proceeds received after the
date hereof by the Company from the issuance or sale of debt
securities or Redeemable Capital Stock that have been converted into
or exchanged for Capital Stock of the Company (other than Redeemable
Capital Stock), plus the aggregate Net Cash Proceeds received by the
Company at the time of such conversion or exchange; and

(F) $50,000,000.

(b) The foregoing provision will not be violated by reason of

(i) the payment of any dividend
within 60 days after the date of
declaration thereof, if at such
declaration date such declaration
complied with the foregoing
provision (in which event such
dividend shall be deemed to have
been paid on such date of
declaration thereof for purposes of
the foregoing provision);

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(ii) redemption of any Capital Stock
or Subordinated Indebtedness of the
Company or any Subsidiary required
by the Casino Control Commission or
the Division of Gaming Enforcement;

(iii) the redemption, repurchase or
other acquisition or retirement for
value of Subordinated Indebtedness
of the Company which is made at a
time when there is no default or
Event of Default continuing and
which is made in exchange for, or
out of proceeds of the substantially
concurrent issue and sale (other
than to a Subsidiary) of (A) shares
of Capital Stock (other than
Redeemable Capital Stock) of the
Company, provided, however, that
any net cash proceeds from such
issue are excluded from clause
2(B) of the preceding paragraph or
(B) new Indebtedness of the Company,
so long as (1) such Indebtedness is
expressly subordinated to the
Securities at least to the same
extent as the Subordinated
Indebtedness being so refinanced;
(2) such Indebtedness has an Average
Life to Stated Maturity equal to or
greater than the remaining Average
Life to Stated Maturity of the
Securities; and (3) such
Indebtedness has a final scheduled
maturity which exceeds the final
Stated Maturity of the
Securities,provided, however, that
any Net Cash Proceeds from such
issue are excluded from clause 2(E)
of the preceding paragraph;

(iv) redemption, repurchase or other
acquisition or retirement for value
of Capital Stock of the Company or
any options, warrants or rights to
acquire such Capital Stock of the
Company which is made at a time when
there is no default or Event of
Default continuing and which is made
in exchange for, or out of proceeds
of the substantially concurrent
issue and sale (other than to a
Subsidiary) of shares of Capital
Stock (other than Redeemable Capital
Stock) of the Company, provided,
however, that any Net Cash Proceeds
from such issue are excluded from
clause 2(B) of the preceding
paragraph;

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(v) Guaranties of Indebtedness of
Affiliates of the Company in an
amount not to exceed $20,000,000;
provided, however, that such
Restricted Payment shall comply with
clauses (1) and (2) in the
immediately preceding paragraph; and

(vi) payments permitted pursuant to
clauses (iv) and (v) under the
proviso contained in Section 1009.

The Restricted Payments described in clauses (i) and (ii) shall be included in
any computation of the aggregate amount of Restricted Payments by the Company
and its Subsidiaries. Notwithstanding the foregoing, the payment of a dividend
out of the net proceeds of the issuance of the Securities shall not be deemed a
Restricted Payment for purposes of the calculation of the aggregate amount of
all Restricted Payments in clause (3) of paragraph (a) of this Section 1008.

Section 1009. Limitation on Transactions with Affiliates.

The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or (other than through an Unrestricted
Subsidiary) indirectly, enter into any transaction or series of related
transactions (including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with any Affiliate of the Company (other
than the Company or a Wholly Owned Subsidiary of the Company) unless (i) such
transaction or series of transactions is or are on terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be,
than could have been obtained at the time of such transaction or transactions
in a comparable transaction in arm's-length dealings with an unaffiliated third
party, (ii) with respect to any transaction or series of transactions
involving aggregate payments in excess of $1,000,000, but less than
$10,000,000, the Company delivers an Officers' Certificate to the Trustee
certifying that such transaction or series of transactions complies with clause
(i) above and that such transaction or series of transactions has received the
approval of a majority of the Board of Directors of the Company and (iii) with
respect to any transaction or series of transactions involving aggregate
payments equal to or in excess of $10,000,000, the Company delivers an
Officers' Certificate to the Trustee certifying that such transaction or series
of transactions complies with clause (i) above and that such transaction or
series of transactions has received the approv-

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al of a majority of the disinterested directors of the Board of Directors of
the Company; provided, however, that the foregoing restrictions shall not apply
to (i) the payment of reasonable and customary fees to the directors of the
Company and its Restricted Subsidiaries who are not employees of the Company or
any such Restricted Subsidiary, (ii) loans and advances to and other employment
arrangements with any officer, director or employee of the Company or of any
Restricted Subsidiary entered into in the ordinary course of business and
consistent with past practice, (iii) transactions pursuant to the lease
agreement [dated March 8, 1993,] relating to the lease from the Company
of surface parking lots (located across Boston Avenue and Hartford Avenue from
Bally's Grand Casino Hotel) to GNAC, (iv) transactions, including payments and
reimbursements, in connection with certain management and administrative
services and insurance coverage provided to the Company by Bally and certain
consolidated GNAC/Company operations pursuant to the Intercorporate Agreement,
(v) payments to Bally pursuant to the Tax Sharing Agreement and (vi) Guaranties
permitted pursuant to clause (v) of Section 1008(b). For purposes of this
provision, a director who is neither (i) an officer or an employee of the other
party to such transaction nor (ii) a person who has a personal interest
directly or indirectly in the transaction shall be deemed "disinterested."

Section 1010. Limitation on Encumbrances.

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ginal principal amount of the Securities and any remaining principal amount of
the Existing Mortgage Notes outstanding on the date of issuance of the
Securities after application of the proceeds of the issuance of the Securities
(less the principal amount of the Securities and the Existing Mortgage Notes
outstanding at the time of any calculation), (B) the amount available under the
revolving credit facility described in clause (i) of the definition of
Permitted Indebtedness, (C) $100 million and (D) 66-2/3% of the cost of all
Casino Hotel Improvements reflected on the consolidated balance sheet of the
Company since the date hereof.

[If the Lien of a Restricted Encumbrance permitted under
clause (ii) of the preceding paragraph is created, the Trustee shall, at the
request of the Company, enter into the Intercreditor Agreement with the holder
or holders of the Indebtedness secured by such Restricted Encumbrance.]

Notwithstanding the foregoing provisions of this Section 1010,
the Company or any Restricted Subsidiary may create or incur or permit to exist
purchase money Restricted Encumbrances upon any personal Property acquired by
the Company or any Restricted Subsidiary; provided that no such purchase money
Restricted Encumbrance upon any personal Property acquired by the Company or
any Restricted Subsidiary after the date hereof shall extend to or cover any
other Property or, at the time incurred, secure Indebtedness in excess of 90%
of the lesser of the cost or fair market value of the Property subject to such
purchase money Restricted Encumbrance; and provided further that the aggregate
principal amount of all Indebtedness at any time outstanding and secured by
Restricted Encumbrances permitted by this paragraph plus the aggregate amount
of all leases on personal Property comprising the Collateral and secured by
Restricted Encumbrances shall not, at any time, exceed $[20],000,000.

Section 1011. Limitation on Preferred Stock of
Subsidiaries.

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Capital Stock) issued to any person (other than the Company or a Wholly Owned
Subsidiary), provided that at the time of such issuance, and after giving pro
forma effect thereto, a Restricted Subsidiary of the Company would be entitled
to issue Preferred Stock under Section 1007. The Company will not sell,
transfer or otherwise dispose of Preferred Stock issued by a Restricted
Subsidiary of the Company or permit a Wholly Owned Subsidiary to sell, transfer
or otherwise dispose of Preferred Stock issued by a Restricted Subsidiary other
than (i) to the Company or a Wholly Owned Subsidiary or (ii) to any Person
(other than the Company or a Wholly Owned Subsidiary), provided that such
Preferred Stock is not Redeemable Capital Stock and that at the time of such
sale, transfer or disposition, and after giving pro forma effect thereto, a
Restricted Subsidiary of the Company would be entitled to issue Preferred Stock
under Section 1007. Notwithstanding the foregoing, nothing in this Section
1011 will prohibit the ownership of Preferred Stock (other than Redeemable
Capital Stock) issued by a Person (other than an Unrestricted Subsidiary) prior
to the time (A) such Person becomes a Restricted Subsidiary of the Company, (B)
such Person merges with or into a Restricted Subsidiary of the Company or (C) a
Restricted Subsidiary of the Company merges with or into such Person; provided,
further, that such Preferred Stock was not issued or incurred by such Person in
anticipation of a transaction contemplated by subclause (A), (B) or (C) of this
Section 1011.

Section 1012. Limitation on Dividends and
Other Payment Restrictions Affecting Subsidiaries.

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encumbrance or restriction, with respect to a Restricted Subsidiary that is not
a Subsidiary of the Company on the date hereof, in existence at the time such
Person becomes a Subsidiary of the Company or created on the date it becomes a
Subsidiary; and (iii) any encumbrance or restriction pursuant to any agreement
that extends, refinances, renews or replaces any agreement containing any of
the restrictions described in the foregoing clauses (i) and (ii), provided that
the terms and conditions of any such restrictions, taken as a whole, are not
less favorable to the Holders of the Securities than those under or pursuant to
the agreement extended, refinanced, renewed or replaced. Notwith- standing the
foregoing, this covenant shall not be violated by any restriction required by
the Casino Control Commission or the Division of Gaming Enforcement, except
where such restriction would affect the ability of the Company to make payments
on the Promissory Note.

Section 1013. Ownership of Casino Hotel; Other Businesses.

Except as permitted by and in compliance with Article Eight,
if required, the Operating Company and Realty Co. will own and the Operating
Company will operate the Casino Hotel. In addition, neither the Company nor
the Operating Company shall conduct or engage in any business other than the
development, marketing, ownership or management of casinos or casino hotels and
businesses directly related to the development, marketing, ownership or
management of casinos or casino hotels, including the hosting, production or
promotion of conventions, sporting events, amusements and other entertainment
or investments in entities conducting or engaged in the foregoing to the extent
otherwise permitted by the terms of this Indenture.

Section 1014. Validity of Liens.

Each of the Company, the Operating Company, the Finance
Company and Realty Co. represents and warrants that it has, and covenants that
it shall continue to have, full power and lawful authority to grant, release,
convey, assign, transfer, mortgage, pledge, hypothecate and otherwise create
the Security Interests referred to in Article Twelve; and the Company shall
warrant, preserve and defend the interest of the Trustee in the Collateral
against the claims of all persons, except as permitted by the Security
Documents or by Section 1010

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hereof, and will maintain and preserve the Security Interests contemplated by
Article Twelve.

Section 1015. Change in Control.

Subject to Section 1017, following the occurrence of any
Change in Control, the Finance Company shall make an offer to purchase, at the
option of each Holder, such Holder's Outstanding Securities at a purchase price
equal to 101% of the aggregate principal amount of such Outstanding Securities,
plus accrued and unpaid interest to the date of purchase. The Finance Company
shall purchase such Securities on a date (the "Change in Control Payment Date")
20 Business Days after the mailing of the notice described in the next
succeeding paragraph by mailing or delivering payment for all Securities
properly delivered to the Finance Company pursuant hereto. If the Change in
Control Payment Date is on or after an interest payment record date and on or
before the related Interest Payment Date, any accrued interest will be paid to
the person in whose name a Security is registered at the close of business on
such record date, and no additional interest will be payable to Holders who
deliver Securities pursuant hereto.

Within 30 days after any Change in Control, the Finance
Company (with notice to the Trustee), or the Trustee at the Finance Company's
request and expense, will mail or cause to be mailed to all Holders on the date
of the Change in Control a notice of the occurrence of such Change in Control
and of the Holders' rights arising as a result thereof. Such notice will
contain all instructions and materials necessary to enable Holders to deliver
their Securities to the Finance Company for purchase. Such notice shall state:

(1) the events causing such Change in Control;

(2) the purchase price and the Change in Control Payment
Date;

(3) that any Security not purchased will continue to
accrue interest;

(4) that any Security purchased shall cease to accrue
interest on the Change in Control Payment Date;

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(5) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than
the day before the Change in Control Payment Date, or
such longer period as may be required by law, a
telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the certificate
number and the principal amount of the Security the
Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have the
Security purchased; and

(6) that Holders whose Securities were purchased only in
part will be issued new Securities equal in principal
amount to the unpurchased portion of the Securities
surrendered.

On or before a Change in Control Payment Date, the Finance
Company shall (i) deposit with the Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof which are to be purchased
on such date and (ii) deliver to the Trustee such Securities together with an
Officers' Certificate stating the Securities or portions thereof are being
purchased by the Finance Company. The Paying Agent shall promptly mail or
deliver to Holders of Securities so purchased payment in an amount equal to the
purchase price, and the Finance Company shall execute and the Trustee shall
promptly authenticate and mail or deliver to Holders of Securities purchased
only in part, a new Security equal in principal amount to any unpurchased
portion of the Security surrendered. For purposes of this Section 1015, the
Trustee shall act as the Paying Agent.

The Finance Company shall not be required to make an offer to
purchase pursuant to this Section 1015 if a third party makes such an offer and
purchases Securities in the manner, at the times and otherwise in compliance
with the requirements applicable to the Finance Company pursuant to this
Indenture and the Securities.

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Section 1016. Limitation on Issuance of Guaranties
by Subsidiaries.

(a) The Company will not permit any
Restricted Subsidiary, directly or (other than through an Unrestricted
Subsidiary) indirectly, to assume, Guaranty or in any other manner become
liable with respect to any Indebtedness of the Companies, the Operating
Company, Realty Co. or any other Restricted Subsidiary of the Company unless
(i) such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for a Guaranty of payment of
the Securities by such Restricted Subsidiary constituting senior Indebtedness
of such Restricted Subsidiary, (ii) the Guaranty of the Securities is on terms,
taken as a whole, at least as favorable as the assumption, Guaranty or other
liability of such Restricted Subsidiary, (iii) such Restricted Subsidiary does
not create, incur, assume or suffer to exist any Lien securing such assumption,
Guaranty or other liability unless (A) it complies with Section 1010 hereof and
(B) the Guaranty of Securities is equally and ratably secured and (iv) such
Restricted Subsidiary waives and will not in any manner whatsoever claim or
take the benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Company, the Operating Company,
Realty Co. or any other Restricted Subsidiary of the Company or as a result of
any payment by such Restricted Subsidiary under its Guaranty.

(b) Notwithstanding the foregoing, any
Guaranty by a Restricted Subsidiary of the Securities shall provide by its
terms that it shall be automatically and unconditionally released and
discharged upon any sale, exchange or transfer, to any Person not an Affiliate
of the Company, of all of the Company's Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary, which is in
compliance with this Indenture.

Section 1017. Compliance with Securities Laws upon Purchase
of Securities.

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state securities laws so as to permit the rights and obligations under Section
1015 to be exercised in the time and in the manner specified in Section 1015.

Section 1018. Limitation on Lease of Property as an Entirety.

The Company will not, and will not permit any Subsidiary to,
lease its Properties and assets substantially as an entirety to any person,
except as otherwise permitted by Article Eight.

Section 1019. Activities of Finance Company.

The Finance Company agrees that it will not conduct any
business (and will not incur any Indebtedness) whatsoever other than to collect
principal and interest (and any interest on overdue principal of, premium, if
any, or interest) under the Note, to preserve and enforce its rights under the
Note, the promissory note relating to the Existing Mortgage Notes, the
Securities, the Existing Mortgage Notes, the Security Documents and the
security documents relating to the Existing Mortgage Notes, to do or cause to
be done all things necessary or appropriate to protect the Collateral and to
preserve its rights therein, and to otherwise comply with its obligations under
this Indenture and the Securities, except as provided in the indenture related
to the Existing Mortgage Notes. The Finance Company will not merge into or
consolidate or amalgamate with or transfer its properties and assets to any
person, except (a) as permitted by and in compliance with Article Eight, if
required and (b) any transaction involving the Company or the Operating
Company.

Section 1020. Use of Proceeds.

The Finance Company shall loan all of the proceeds from the
sale of the Securities to the Operating Company immediately after receipt
thereof in exchange for which the Operating Company shall make and deliver the
Note to the Finance Company.

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Section 1021. Statement as to Compliance;
Notice of Default; Reporting Requirements.

(a) The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year ending after the
date hereof, a brief certificate of its principal executive officer, principal
financial officer or principal accounting officer stating whether, to such
officer's knowledge, the Company and its Subsidiaries are in compliance with
all covenants and conditions to be complied with by any of them under this
Indenture. For purposes of this Section 1021, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.

(b) If a Default has occurred and is
continuing, or if the Trustee, any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Subsidiary (other than
Indebtedness in the aggregate principal amount of less than $25,000,000) gives
any notice or takes any other action with respect to a claimed default, the
Company shall deliver to the Trustee an Officers' Certificate specifying such
Default, notice or other action within five Business Days of its occurrence.

(c) The Company shall file with the
Commission the annual reports, quarterly reports and other documents required
to be filed with the Commission pursuant to Sections 13 and 15 of the Exchange
Act, in the form required to be filed under the Exchange Act, whether or not the
Company has a class of securities registered under the Exchange Act; the
Company shall file with the Trustee and shall transmit by mail to each Holder
of the Securities (as its name and address appear on the Security Register)
within 15 days after it files them with the Commission (or if any such filing
is not permitted under the Exchange Act, 15 days after the Company would have
been required to make such filing) copies of such reports and documents.

Section 1022. Waiver of Certain Covenants.

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majority in aggregate principal amount of the Securities at the time
outstanding shall, by Act of such Holders, waive such compliance in such
instance with such covenant or condition, but no such waiver shall extend to or
affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such covenant or condition
shall remain in full force and effect.

ARTICLE XI

REDEMPTION OF SECURITIES

Section 1101. Right of Redemption.

The Securities may be redeemed, at the election of the Finance
Company, as a whole or from time to time in part subject to the conditions and
at the dates and Redemption Prices specified in the form of Security, together
with accrued interest to the Redemption Date.

Section 1102. Applicability of Article.

Redemption of Securities at the election of the Finance
Company, as permitted by any provision of this Indenture, shall be made in
accordance with such provision and this Article.

Section 1103. Election to Redeem; Notice to
Trustee.

The election of the Finance Company to redeem any Securities
pursuant to Section 1101 shall be evidenced by a Board Resolution. In case of
any redemption at the election of the Finance Company, the Finance Company
shall, at least 60 days prior to the Redemption Date fixed by it (unless a
shorter notice period shall be satisfactory to the Trustee), notify the Trustee
of such Redemption Date and of the principal amount of Securities to be
redeemed.

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Section 1104. Selection by Trustee of Securities to
Be Redeemed.

If less than all the Securities are to be redeemed, the
particular Securities or portions thereof to be redeemed shall be selected not
more than 60 days and not less than 30 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities not previously called for redemption,
either pro rata or by lot, and the amounts to be redeemed may be equal to
$1,000 or any integral multiple thereof.

The Trustee shall promptly notify the Finance Company and the
Security Registrar in writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.

For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part, to
the portion of the principal amount of such Security which has been or is to be
redeemed.

Section 1105. Notice of Redemption.

Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of the Securities to be redeemed, at his
address appearing in the Security Register.

All notices of redemption shall state:

(a) the Redemption Date;

(b) the Redemption Price;

(c) if less than all Outstanding
Securities are to be redeemed, the identification (and, in the case of a
Security to be redeemed in part, the principal amount) of the particular
Securities to be redeemed;

(d) that on the Redemption Date the
Redemption Price will become due and payable upon each

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such Security or portion thereof, and that interest thereon shall cease to
accrue on and after said date; and

(e) the place or places where such
Securities are to be surrendered for payment of the Redemption Price.

Notice of redemption of Securities to be redeemed at the
election of the Finance Company shall be given by the Finance Company or, at
its request, by the Trustee in the name and at the expense of the Finance
Company.

Section 1106. Deposit of Redemption Price.

At or prior to 11:00 A.M. New York City time on any Redemption
Date, the Finance Company shall deposit with the Trustee or with a Paying Agent
(or, if the Finance Company is acting as its own Paying Agent, segregate and
hold in trust as provided in Section 1003) an amount of money in same day funds
(or New York Clearing House funds if such deposit is made prior to the
applicable Redemption Date) sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed on
that date.

Section 1107. Securities Payable on Redemption
Date.

Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified and from and after such date
(unless the Finance Company shall default in the payment of the Redemption
Price and accrued interest) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Finance Company at the Redemption Price
together with accrued interest to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 307.

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If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal thereof (and premium, if
any, thereon) shall, until paid, bear interest from the Redemption Date at the
rate borne by such Security.

Section 1108. Securities Redeemed in Part.

Any Security which is to be redeemed only in part shall be
surrendered at the office or agency of the Finance Company maintained for such
purpose pursuant to Section 1002 (with, if the Finance Company, the Security
Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Finance Company, the
Security Registrar or the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Finance Company shall execute,
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.

Section 1109. Redemption pursuant to the Casino Control Act.

(a) Notwithstanding the other
provisions of this Article Eleven, if the Casino Control Commission finds that
a Holder or beneficial owner of Securities must be found licensed or qualified
or suitable to hold or own the Securities under the Casino Control Act, and if
such Holder or such beneficial owner is not found qualified or suitable, within
any time period specified by the Casino Control Commission or the Casino
Control Act, the Finance Company shall have the right, at its option, (i) to
require such Holder or beneficial owner to dispose of all or a portion of such
Holder's or beneficial owner's Securities within 120 days after receipt of
notice by such Holder or beneficial owner of its disqualification under the
Casino Control Act (or such different period as may be prescribed by the Casino
Control Commission), or (ii) to call for redemption the Securities of either
such Holder or beneficial owner, on not less than 30 nor more than 60 days'
notice (or such different

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period as may be prescribed by the Casino Control Commission).

(b) If such Holder or beneficial
owner, having been given the opportunity by the Finance Company to dispose of
such Holder's or beneficial owner's Securities, shall have failed to do so
within the prescribed time period, the Finance Company shall have the right to
redeem such Holder's or beneficial owner's Securities on five days' notice.

(c) On any redemption of Securities
pursuant to this Section 1109, the Redemption Price shall be the lesser of (i)
the market value thereof on the date of such notice of redemption (as
determined in good faith by the Board of Directors of the Company) and (ii) the
price at which such Holder or beneficial owner acquired the Securities,
together with (if permitted by the Casino Control Act or by the orders of the
Casino Control Commission) accrued interest to the Redemption Date, unless a
Redemption Price or other payment, remuneration or related terms or
restrictions are required by the Casino Control Commission, in which event such
price, terms and restrictions shall be the Redemption Price and terms of
redemption. Each Holder and beneficial owner by accepting a Security agrees to
the provisions of this Section 1109 and Section 203 and agrees to inform the
Finance Company upon request made pursuant to this Section 1109 of the price at
which such Holder or beneficial owner acquired such Holder's or beneficial
owner's Securities.

(d) Any redemption notice given by the
Finance Company under this Section 1109 shall state (i) that the Securities are
being called for redemption as a result of the Holder's or beneficial owner's
status under the Casino Control Act or with the Casino Control Commission, (ii)
whether accrued interest is payable to the Holder under the Casino Control Act
and, if so, the information required by subsection (d) of Section 1105 hereof,
and (iii) the information required by subsections (a), (b), (c) and (e) of such
Section 1105.

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ARTICLE XII

SECURITY

Section 1201. Security Interests.

(a) In order to secure the Indenture
Obligations, the Finance Company, the Operating Company and Realty Co. and the
Trustee, as applicable, have entered into the Security Documents in order to
create the Security Interests. Each Holder, by accepting a Security, agrees to
all of the terms and provisions of the Security Documents and the Trustee
agrees to all of the terms and provisions of the Security Documents signed by
it.

(b) The Trustee and each Holder, by
accepting a Security, acknowledge that, as more fully set forth in the
Intercreditor Agreement, the holders of any Pari Passu Mortgage have certain
rights in and to the Collateral and the Trustee agrees to be bound by the
Intercreditor Agreement as it may be in effect from time to time.

(c) As amongst the Holders, the
Collateral as now or hereafter constituted shall be held for the equal and
ratable benefit of the Holders without preference, priority or distinction of
any thereof over any other by reason of difference in series or in time of
issuance, sale or otherwise, as security for the Indenture Obligations.

Section 1202. Recording; Opinions of Counsel.

(a) The Company, the Operating
Company, the Finance Company and Realty Co. will execute and deliver, file and
record, all instruments and documents, and have done and will do all such acts
and other things, at the Finance Company's expense, as are necessary to subject
the Collateral to the Security Interests. The Company, the Operating Company,
the Finance Company and Realty Co. will execute and deliver, file and record
all instruments and do all acts and other things as may be reasonably necessary
or advisable to perfect, maintain and protect the Security Interests. The
Finance Company, the Company, the Operating Company or Realty Co. has obtained
and will deliver to the Trustee A.L.T.A. form

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extended coverage policies (or the local equivalent thereof) or endorsements of
title insurance naming the Trustee as insured for the benefit of the Holders in
the aggregate amount equal to $___,000,000, covering any real Property subject
to the Security Documents, together with reinsurance or coinsurance as may be
required.

(b) The Company shall furnish to the
Trustee promptly after the execution and delivery of this Indenture and the
Security Documents and promptly after the execution and delivery of any
amendment thereto or any other instrument of further assurance, an Opinion of
Counsel stating that in the opinion of such counsel, subject to customary
exclusions and exceptions reasonably acceptable to the Trustee, either (i) this
Indenture, the Security Documents, any such amendment and all other instruments
of further assurance have been properly recorded, registered and filed and all
such other action has been taken to the extent necessary to make effective the
Lien intended to be created by the Indenture and the Security Documents, and
reciting the details of such action or referring to prior Opinions of Counsel
in which such details are given, or (ii) no such action is necessary to make
the Security Interests effective.

(c) The Company shall furnish to the
Trustee within 60 days after ___________ in each year beginning ____________,
199_, an Opinion of Counsel, dated as of such date, (i) stating that, in the
opinion of such counsel, subject to customary exclusions and exceptions
reasonably acceptable to the Trustee, either (A) all such action has been taken
with respect to the recording, registering, filing, rerecording and refiling of
the Indenture, all supplemental indentures, the Security Documents, financing
statements, continuation statements and all other instruments of further
assurance as is necessary to maintain the Security Interests and reciting the
details of such action or referring to prior Opinions of Counsel in which such
details are given, and stating that all financing statements and continuation
statements have been executed and filed and such other actions have been taken
that are necessary fully to preserve and protect the rights of the Holders and
the Trustee hereunder and under the Security Documents, or (B) no such action
is necessary to maintain the Security Interests; and (ii) stating what, if any,
action of the foregoing character is necessary during the one-year

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period commencing __________ in the then current calendar year to so maintain
the Security Interests during such period.

(d) The Finance Company shall furnish
to the Trustee concurrently with execution and delivery of this Indenture a
title insurance policy issued by Lawyers Title Insurance Company or another
title insurance company acceptable to the Company and the Trustee in the amount
of $___,000,000 containing such affirmative coverage acceptable to the Trustee
insuring that the Mortgage creates a valid first lien on the Operating
Company's and Realty Co.'s fee title in the real property Collateral subject to
the Operating Company's and Realty Co.'s Permitted Encumbrances, and insuring
the perfected first priority interest of the Trustee, in and to the Mortgage;
the Company and the Operating Company shall also obtain such co-insurance or
re-insurance as reasonably requested by the Trustee.

(e) The Finance Company shall furnish
to the Trustee concurrently with execution and delivery of this Indenture a
current A.L.T.A. as-built land title survey (or form otherwise acceptable to
the Trustee) and a certificate from a professional licensed land surveyor with
respect to the real Property Collateral, certified to the title insurance
companies participating in the title policies and the Trustee, and showing the
location, dimensions and area of each parcel of the real Property Collateral,
including all existing buildings and improvements, utilities, parking areas and
spaces, internal streets, if any, external streets, rights-of-way, as well as
any easements, setback violations or encroachments on such real Property
Collateral and identifying each item with its corresponding exception, if any,
in the title policy relating thereto and otherwise reasonably acceptable to the
Trustee. Each survey shall contain the original signature and seal of the
surveyor and any additional matter required by the title companies. In
addition, the Finance Company shall provide with respect to the real Property
Collateral a certificate of a professional land surveyor to the effect that
such real Property Collateral is not located in a flood plain area, or, if such
real Property Collateral is in a flood plain area, the Finance Company shall
deliver upon execution of this Indenture evidence of flood insurance.

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Section 1203. Disposition of Certain
Collateral without Requesting Release.

(a) Notwithstanding the provisions of
Sections 1204, 1205 and 1206 hereof, the Operating Company may, without
requesting the release or consent of the Trustee:

(i) sell, assign, transfer, license
or otherwise dispose of, free from
the Security Interests, any
machinery, equipment, or other
personal Property con- stituting
Collateral that has become worn out,
obsolete or unserviceable, upon
replacing the same with or
substituting for the same,
machinery, equipment or other
Property constituting Collateral not
necessarily of the same char- acter
but being of at least equal value
and utility as the Property so
disposed of, which Property shall
without further action become
Collateral subject to the Security
Interests;

(ii) (A) sell, assign, transfer,
license or otherwise dispose of,
free from the Security Interests,
inventory or general intangibles
that at any time are part of the
Collateral in the ordinary course of
the Operating Company's business,
(B) collect, liquidate, sell, factor
or otherwise dispose of, free from
the Secu- rity Interests, accounts
receivable or notes receivable that
at any time are Collateral in the
ordinary course of the Operating
Company's business or (C) make cash
payments (including scheduled
repayments of Indebtedness permitted
to be incurred hereby) from cash
that at any time is part of the
Collateral other than cash in the
Collateral Account in the ordinary
course of business that are not
otherwise prohibited by this
Indenture; and

(iii) abandon, sell, assign,
transfer, license or otherwise
dispose of any personal Property the
use of which is no longer necessary
or desirable in the proper conduct
of the business of the Operating
Company and the maintenance of its
earnings and is not material

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to the conduct of the business of the
Operating Company.

(b) Notwithstanding the provisions of
Subsection (a) above, (x) the Operating Company shall not dispose of or
transfer (by lease, assignment, sale or otherwise), or pledge, mortgage or
otherwise encumber, Collateral pursuant to the provisions of Section
1203(a)(ii) or (iii) with a fair value to the obligor of 10% or more of the
aggregate fair value of all Collateral then existing (as determined in the good
faith judgment of the Company, the Operating Company, the Finance Company and,
if required by the Trust Indenture Act, an independent appraiser), in any
transaction or any series of related transactions without complying with
Section 1204; and (y) the right of the Operating Company to rely upon the
provisions of Section 1203(a)(ii) and (iii) from the date of this Indenture to
___________ , 199__ and for each quarter thereafter shall be conditioned upon
the Company, the Finance Company and the Operating Company delivering to the
Trustee, on or before __________, 199__ and thereafter within 60 days following
the end of such quarter (except those quarters ending on December 31, in which
case within 105 days following the end of the quarter), an Officers'
Certificate to the effect that all of such dispositions by the Operating
Company were in the ordinary course of the Operating Company's business and
that the proceeds therefrom were used by the Operating Company in connection
with its business.

(c) Any disposition of Collateral made
in compliance with the provisions of this Section 1203 shall be deemed not to
impair the Security Interests in contravention of the provisions of this
Indenture.

(d) Upon receipt of a Company Request,
the Trustee shall execute and deliver, within five business days from the
receipt of the Company Request pursuant to Section 1204, any instruments deemed
by the Finance Company or the Operating Company to be necessary or appropriate
to dispose of portions of the Collateral pursuant to this Section 1203 if the
provisions of this Section 1203 have been complied with.

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Section 1204. Requesting Release of Collateral.

(a) Upon receipt of a Company Request,
the Trustee shall execute and deliver, within five business days from the
receipt of such Company Request pursuant to this Section 1204, any instruments
deemed by the Finance Company or the Operating Company to be necessary or
appropriate to release all or a part of the Collateral from the Security
Interests, if the provisions of this Section 1204 have been complied with. Any
such Company Request shall request the Trustee to execute one or more
specifically described release instruments (which release instruments shall
accompany such Company Request) and shall certify that no Default or Event of
Default has occurred and is continuing and such Company Request shall also
certify that one of the following conditions of this Section 1204(a) set forth
below, and the conditions of Section 1205 or 1206, if applicable, have been, or
simultaneously with or immediately following the release will be, fulfilled:

(i) there is a substitution of
Substitute Collateral in accordance
with Section 1205;

(ii) there is a deposit of Cash
Collateral in accordance with
Section 1206;

(iii) the Collateral to be released
is Insurance Proceeds and such
Collateral is used for purposes
permitted by, and in accordance
with, [Articles 6 and 7] of the
Mortgage; or

(iv) the Finance Company or the
Operating Company represents in the
Company Request that the Collateral
to be released is to be released in
con- nection with acquisitions or
redemptions of all Securities then
outstanding pursuant to the
redemption provisions of Section 203
or Section 1109 of this Indenture.

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fair value to the obligor of any Substitute Collateral and as to the fair value
of any Collateral to be released, and by Trust Indenture Act Section 314(c)(3),
as to the fulfillment of any condition precedent to such release, dated as of a
date not more than 60 days prior to the date of substitution or release. Such
certificate or opinion shall state that the proposed release of Collateral will
not impair the Security Interests in contravention of the provisions of this
Indenture. In the case of an acquisition or redemption of all of the
Securities then Outstanding, such certificate or opinion shall state that all
of the Securities then Outstanding are to be redeemed and that all of the
Collateral is to be released on or after the Redemption Date provided that the
Finance Company has not defaulted in making the redemption payment. The person
delivering such certificate or opinion must be independent with respect to the
Company, the Operating Company and the Finance Company if required by Trust
Indenture Act Section 314(d). "Independent" means, for purposes of any
certificate or opinion required by Trust Indenture Act Section 314(d), with
respect to any Person, that such Person (1) is in fact independent, (2) does
not have any direct financial interest or any material indirect financial
interest in the Finance Company, the Operating Company, the Company or other
obligor upon the Securities or in any Affiliate of the Finance Company, the
Operating Company, the Company or such other obligor, and (3) is not connected
with the Finance Company, Operating Company, the Company or such other obligor,
or with an Affiliate of the Finance Company, the Operating Company, the Company
or such other obligor as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.

(c) In addition to any certificates or
opinions required by Section 1204(b), as a condition to any release of
Collateral pursuant to Section 1205 or 1206, the Finance Company or the
Operating Company shall deliver to the Trustee:

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Collateral to be substituted for such
Collateral pursuant to Section 1205
or of the Cash Collateral to be
substituted pursuant to Section
1206; and

(ii) an Opinion of Counsel stating
that, in the opinion of such
counsel, subject to customary
exclusions and exceptions reasonably
acceptable to the Trustee, either
(A) all such instruments and
documents have been duly and validly
executed and delivered and have been
properly recorded, registered and
filed and all such other action has
been taken, in each case to the
extent necessary to grant and
perfect a first priority Security
Interest in the Substitute
Collateral or to make effective the
Security Interest in Cash Collateral
to be substituted for the Collateral
to be released, and reciting the
details of such action or referring
to prior Opinions of Counsel in
which such details are given, or (B)
no further action is necessary.

(d) Any release of Collateral made in
compliance with the provisions of this Section 1204 shall be deemed not to
impair the Security Interests in contravention of the provisions of this
Indenture.

Section 1205. Substitute Collateral Other Than
Cash Collateral.

(a) The Finance Company or the
Operating Company may, at its option, obtain a release of Collateral (except
Cash Collateral and the Note), by subjecting other proposed Collateral which is
of the same type currently covered by the Security Documents to the Security
Interests in place of and in exchange for the Collateral to be released, all in
accordance with the provision and conditions of Section 1204 and this Section
1205 (except that the substitution of Cash Collateral is governed by Section
1206). Substitute Collateral may include the proceeds of the Collateral to be
released, and Substitute Collateral may be substituted for other Substitute
Collateral on the terms set forth in this Section 1205. Notwithstanding the
foregoing, real Property Collateral may not be released pursuant to this
Section 1205. Other Collateral may be released pursuant

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to this Section 1205, if, after giving effect to such release and all previous
releases under this Section 1205, substantially all furniture, fixtures,
machinery and equipment affixed to, located in, or used primarily in connection
with or in the business being conducted in, the Casino Hotel would be
Collateral.

(b) The Finance Company or the
Operating Company may substitute Collateral pursuant to this Section 1205 if
all of the following conditions are met:

(i) the Finance Company or the
Operating Company, as the case may
be, complies with Section 1204(a)
and delivers a Company Request to
the Trustee stating, in addition to
the other requirements of Section
1204, that the Finance Company or
the Operating Company, as the case
may be, intends to substitute the
Property specifically described
therein for the Collateral
specifically described therein;

(ii) the fair value of the proposed
Substitute Collateral (including any
Cash Collateral) is at least equal
to the fair value of the Collateral
to be released; and

(iii) the security interests in
Substitute Collateral are perfected
pursuant to the Security Documents
and Section 1202.

(c) Notwithstanding the foregoing, the
Dennis Hotel, which comprises a portion of the real Property Collateral, may be
released pursuant to this Section 1205 if, in addition to the other applicable
requirements set forth in this Article Twelve, all of the following conditions
are met:

(i) the Finance Company, the Company
or the Operating Company shall
deliver to the Trustee an appraisal
of the Appraised Fair Market Value
of the Casino Hotel including the
Dennis Hotel (the "First Appraisal")
and an appraisal of the Appraised
Fair Market Value of the Casino
Hotel excluding the Dennis Hotel and
taking into account the effect on
the Casino Hotel of destruction of
the Dennis Hotel (the "Second
Appraisal"), such appraisals to be
as

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of a date not more than 90 days
before the date that the Dennis
Hotel is released from the
Collateral; and

(ii) the Finance Company, the
Company or the Operating Company
shall substitute as Substitute
Collateral (A) real Property having
an Appraised Fair Market Value, as
of a date not more than 90 days
before the date that the Dennis
Hotel is released from the
Collateral, or (B) a Letter of
Credit, provided that the sum of the
Ap- praised Fair Market Value of the
real Property substituted pursuant
to clause (A) and the face value of
the Letter of Credit substituted
pursuant to clause (B) is at least
equal to the greater of (x) the
excess of the Appraised Fair Market
Value of the Casino Hotel in the
First Appraisal over the Appraised
Fair Market Value of the Casino
Hotel in the Second Appraisal and
(y) the book value of the Dennis
Hotel as of the end of the most
recent quarter preceding the date
that the Dennis Hotel is released
from the Collateral for which
financial information is available.
If the Appraised Fair Market Value
of the real Property substituted
pursuant to clause (A) is at least
equal to the greater of clause (x)
and clause (y), there shall be no
obligation to substitute as
Substitute Collateral a Letter of
Credit.

(d) In addition to the other
requirements set forth above and those set forth in Section 1202(b), if the
Substitute Collateral is real Property, the Finance Company or the Operating
Company shall deliver to the Trustee:

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clear of all defects and Liens, other
than Permitted Encumbrances, matters
excepted from coverage by the
printed form of such title insurance
policy (and not removable by
affidavit or indemnity) and other
exceptions to title that do not
materially impair the value of the
Substitute Collateral, and that
except for such exceptions or
exclusions from such policies or
endorsements, the applicable
document purporting to grant a
security interest in the Substitute
Collateral constitutes a direct and
valid Lien on such Substitute
Collateral; and

(ii) evidence of payment or a
closing statement indicating
payments to be made by the Finance
Company or the Operating Company, as
the case may be, of all title
premiums, costs and expenses,
including any applicable taxes or
governmental levies and reasonable
legal fees and disbursements of the
attorneys for the Trustee, that may
be incurred to validly and
effectively subject the Substitute
Collateral to the Security
Interests.

Section 1206. Substitution of Cash Collateral.

(a) The Finance Company or the
Operating Company may, at its option, obtain the release of Collateral (other
than the Note) upon the substitution of Cash Collateral in accordance with the
provisions and conditions of Section 1204 and this Section 1206 as follows.
The Finance Company or the Operating Company may obtain the release of all or a
portion of the Collateral by delivering Cash Collateral to the Trustee for
deposit in the Collateral Account as Collateral in place of and in exchange for
the released Collateral, in an amount such that the fair value of the Cash
Collateral so delivered (together with the fair value of any other Substitute
Collateral (other than Cash Collateral) substituted for such released
Collateral pursuant to Section 1205) is at least equal to the fair value to the
obligor of the Collateral to be released; provided, however, that to the extent
any Collateral released is subject to the 1989 Mortgage or one or more Pari
Passu Mortgages, a Pro Rata Share of such Cash Collateral shall be paid over
for the benefit of the holders of the 1989 Mortgage and Pari

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Passu Mortgages and shall not be deposited in the Collateral Account.

(b) The Finance Company or the
Operating Company, as the case may be, shall deliver a Company Request to the
Trustee, stating, in addition to the other requirements of Section 1204(a),
that the Finance Company intends to substitute Cash Collateral for all or a
portion of the Collateral specifically described therein.

Section 1207. Appraisals of Collateral.

The Finance Company shall deliver to the Trustee on the date
of execution and delivery of this Indenture an appraisal of the Appraised Fair
Market Value of the Collateral, which appraisal is as of [January 1, 1993]. On
each of the 24-month intervals from the date hereof (collectively, the
"Appraisal Dates"), the Finance Company shall deliver to the Trustee an
appraisal of the Appraised Fair Market Value of the Collateral then existing;
provided, however, that in the event the Finance Company determines to have an
appraisal of the Appraised Fair Market Value of the Collateral performed prior
to the next Appraisal Date, the next appraisal that is required to be delivered
pursuant to this Section 1207 shall not be due until 24 months after the prior
appraisal was actually performed. Each subsequent Appraisal Date shall be
adjusted accordingly. The Finance Company shall comply with Trust Indenture
Act Section 314(d). The Company, the Finance Company, the Operating Company or
Realty Co. shall deliver to the Trustee, at their expense, one or more A.L.T.A.
title insurance policies providing title insurance (i) on the date hereof, in
the aggregate equal to $___,000,000, with respect to any real Property
Collateral, and (ii) on each Appraisal Date, an amount equal to 120% of the
insurable value of such real Property Collateral.

Section 1208. Collateral Account.

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tled the "BALLY'S PARK PLACE FUNDING, INC. Cash Collateral Account,
_____________, as trustee, secured party." The Trustee shall have sole
dominion and control over the Collateral Account and only the Trustee shall
have any right of withdrawal therefrom.

(b) All cash received by the Trustee
as Substitute Collateral pursuant to Section 1206 hereof, and as Insurance
Proceeds pursuant to [Articles 6 and 7] of the Mortgage, less any Pro Rata
Share paid over for the benefit of holders of Pari Passu Mortgages pursuant to
Section 1206 and [Articles 6 and 7] of the Mortgage, shall be deposited in the
Collateral Account.

(c) The Finance Company may request
the Trustee in writing to, and the Trustee may, in its discretion, invest any
Cash Collateral in the Collateral Account in U.S. Government Obligations. The
Collateral Accounts and all credits thereto and investments therein shall be
maintained in such a manner in accordance with applicable law that the Trustee,
for the benefit of the Holders, shall at all times have a first priority
perfected security interest therein. The Finance Company shall deliver to the
Trustee and any bank where such Collateral Account is maintained all such
notices and other documents and shall otherwise make such filings and take such
other actions as may be required or deemed reasonably necessary by the Trustee
to create and maintain much first priority perfected security interest in the
Collateral Account and all credits thereto and investments therein.

(d) Interest and other amounts earned
on the Collateral Account shall be held in the Collateral Account for the
benefit of the Holders.

(e) As security for the Indenture
Obligation, the Company, the Finance Company, the Operating Company and Realty
Co. hereby grant a security interest to the Trustee in all of each of their
right, title and interest in the Collateral Account and all sums of money,
funds, securities, investments or other property from time to time held in or
credited to the Collateral Account, from any source whatsoever, now or
hereafter transferred or credited to and comprising the Collateral Account,
including, without limitation, all proceeds derived from the Collateral paid
into the Collateral

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Account, and any and all interest and dividends or other distribution from any
such amounts, and all statements, certificates and instruments in or
representing the Collateral Account.

Section 1209. Reliance on Opinion of Counsel.

The Trustee shall, before taking any action under this Article
Twelve, be entitled to receive an Opinion of Counsel, stating the legal effect
of such action, and that such action will not be in contravention of the
provisions hereof, and such opinion shall be full protection to the Trustee for
any action taken or omitted to be taken in reliance thereon; provided that the
Trustee's action under this Article Twelve shall at all times be and remain
subject to its duties under Trust Indenture Act Section 315.

Section 1210. Purchaser May Rely.

A purchaser in good faith of the Collateral or any part
thereof or interest therein which is purported to be transferred, granted or
released by the Trustee as provided in this Article Twelve shall not be bound
(i) to ascertain, and may rely on the authority of the Trustee to execute, such
transfer, grant or release, or (ii) to inquire as to the satisfaction of any
conditions precedent to the exercise of such authority, or (iii) to determine
whether the application of the purchase price therefor complies with the terms
hereof.

Section 1211. Payment of Expenses.

On demand of the Trustee, the Finance Company forthwith shall
pay or satisfactorily provide for all reasonable expenditures incurred by the
Trustee under this Article Twelve, and all such sums shall be a Lien upon the
Collateral and shall be secured thereby.

Section 1212. Suits to Protect the Collateral.

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this Indenture, including the power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid or if the enforcement of, or compliance with, such enactment,
rule or order would impair the Security Interests in contravention of this
Indenture or be prejudicial to the interests of the Holders or of the Trustee.
The Trustee shall give notice to the Finance Company promptly following the
institution of any such suit or proceeding.

Section 1213. Trustee's Duties.

The powers conferred upon the Trustee by this Article Twelve
are solely to protect the Security Interests and shall not impose any duty upon
the Trustee to exercise any such powers except as expressly provided in this
Indenture. The Trustee shall be under no duty whatsoever to make or give any
presentment, demand for performance, notice of nonperformance, protest, notice
of protest, notice of dishonor, or other notice or demand in connection with
any Collateral, or to take any steps necessary to preserve any rights against
prior parties except as expressly provided in this Indenture. The Trustee
shall not be liable for failure to collect or realize upon any or all of the
Collateral, or for any delay in so doing, nor shall the Trustee be under any
duty to take any action whatsoever with regard thereto. The Trustee shall have
no duty to comply with any recording, filing or other legal requirements
necessary to establish or maintain the validity, priority or enforceability of
the Security Interests in, or the Trustee's rights in or to, any of the
Collateral.

ARTICLE XIII

DEFEASANCE

Section 1301. Defeasance and Discharge.

The Finance Company may, at its option by Board Resolution, at
any time, elect to have either paragraph (a) or (b) below applied to the
Outstanding Securities upon compliance with the conditions set forth in Section
1302 below.

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(a) Upon exercise of the option
applicable to this paragraph (a), the Finance Company, the Company, the
Operating Company and Realty Co. shall be deemed to have been released and
discharged from their obligations with respect to the Outstanding Securities on
the date the conditions set forth below are satisfied (hereinafter, "legal
defeasance"). For this purpose, the Finance Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding
Securities, which shall thereafter be deemed to be "Outstanding" only for the
purposes of Section 1303 and the other Sections of this Indenture referred to
in clauses (i) and (ii) below, and the Finance Company, the Company, the
Operating Company and Realty Co. shall be deemed to have satisfied all their
other obligations under such Securities and this Indenture (and the Trustee, on
demand of and at the expense of the Finance Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of Outstanding Securities to receive solely from the trust fund
described in Section 1302 and as more fully set forth in such Section, payments
in respect of the principal of (and premium, if any) and interest on such
Securities when such payments are due, (ii) the Finance Company's and the
Company's obligations with respect to such Securities under Sections 304, 305,
306, 1002 and 1003, (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Companies' obligations in connection therewith
and (iv) this Article Thirteen.

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spect to the Outstanding Securities, the Finance Company, the Company, the
Operating Company and Realty Co. may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 501,
but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby.

Section 1302. Conditions to Defeasance.

The following shall be the conditions to application of either
paragraph (a) or (b) of Section 1301 to the Outstanding Securities:

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ments are due and payable in accordance with the terms of this
Indenture and of such Securities;provided that the Trustee shall have
been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to said payments with respect to the
Securities. For this purpose, "U.S. Government Obligations" means
securities that are (x) direct obligations of the United States of
America for the timely payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by
a bank (as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account
of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such
depository receipt;

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standing Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such legal defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such legal
defeasance had not occurred;

(3) In the case of an election under paragraph (b) of Section
1301 above, the Finance Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the outstanding
Securities will not recognize income, gain or loss for federal income
tax purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts in the same manner
and at the same times as would have been the case if such covenant
defeasance had not occurred;

(4) No Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit or, insofar as Subsection 501(f) or 501(g) is concerned, at
any time during the period ending on the 91st day after the date of
such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);

(5) Such defeasance shall not result in a breach or violation
of, or constitute a default under, this Indenture or any other
material agreement or instrument to which any of the Companies, the
Operating Company or Realty Co. is a party or by which they are bound;

(6) The Finance Company, the Company, the Operating Company
and Realty Co. shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the defeasance under Section 1301
have been complied with; and

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(7) (a) The Security Documents shall not be discharged as a
result of such irrevocable deposit under Section 1302 unless the
Finance Company shall have delivered to the Trustee an Opinion of
Counsel, subject to customary exclusions and exceptions reasonably
acceptable to the Trustee, to the effect that (i) the Finance Company
has authorization to establish such irrevocable trust in favor of the
Trustee for the benefit of the Holders under applicable law and the
action in establishing the irrevocable trust has been duly and
properly authorized by the Finance Company and such authorization has
not been revoked, (ii) to their knowledge, the Trustee is an
independent trustee with respect to the irrevocable trust, (iii) a
valid trust is created at the time of such irrevocable deposit and
(iv) the Holders of the Securities will have the sole beneficial
ownership interest under applicable law in the money so deposited in
such trust. The Opinion of Counsel so referred to in this paragraph
may contain a qualification that in the event that a court of
competent jurisdiction were to determine that the trust funds remained
owned by the Finance Company after such deposit, the Holders of the
Securities will have a non-avoidable first-priority perfected security
interest under applicable law in the money so deposited (for the
limited purpose of the Opinion of Counsel referred to in this
paragraph, such opinion may contain an assumption that the conclusions
contained in a customary solvency letter by a nationally recognized
appraisal firm, dated as of the date of the deposit and taking into
account such deposit, or a customary alternative certificate
reasonably acceptable to the Trustee, are accurate, provided that such
solvency letter or certificate is also addressed and delivered to the
Trustee).

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<PAGE> 140
the Trustee for the benefit of the Holders of the Securities is
intended solely as protection for the Holders of the Securities in the
event that a court of competent jurisdiction were to determine either
that (i) such trust had not been validly created or (ii) such trust is
not enforceable. The Finance Company hereby grants to the Trustee for
the benefit of the Holders a security interest in all money, funds,
investments or other property deposited with the Trustee pursuant to
Section 1302 to secure the Indenture Obligations.

(c) The Company and the Finance Company shall take any and
all acts necessary to create, perfect and maintain, in favor of the
Holders of the Securities, a first-priority security interest in the
money and U.S. Government Obligations so deposited and shall take any
other action and execute and deliver any other documents that may
reasonably be requested by the Trustee to effectuate or evidence such
security interest, and shall do all of the above at such appropriate
time so that such security interest shall attach to the deposit at the
time such deposit is made and shall at all times be perfected.

(d) Notwithstanding the foregoing, prior to the end of the
91-day period following the irrevocable deposit referred to above,
none of the obligations of the Company, the Operating Company, the
Finance Company or Realty Co. under this Indenture or the Security
Documents shall be discharged, unless and until the Finance Company
shall have delivered to the Trustee a Current Appraisal as of a date
no more than 60 days prior to the date of such irrevocable deposit
reflecting the Appraised Fair Market Value of the Collateral in an
amount not less than 120% of the amount of such irrevocable deposit
and an Opinion of Counsel, subject to customary exclusions and
exceptions, to the effect that based on such Current Appraisal, the
irrevocable deposit will not be subject to avoidance as a preferential
transfer

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<PAGE> 141
under 11 U.S.C. Section 547, as it may be amended from time to time.

Section 1303. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Other Miscellaneous Provisions.

Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1303, the "Trustee") pursuant to Section 1302 in
respect of the Outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company or any of its Subsidiaries acting as its own Paying
Agent) as the Trustee may determine, to the Holders of such Securities of all
sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds
except to the extent required by law.

The Finance Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or
U.S. Government Obligations deposited pursuant to Section 1302 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding
Securities.

Anything in this Article Thirteen to the contrary
notwithstanding, the Trustee shall deliver or pay to the Finance Company from
time to time upon Company Request any money or U.S. Government Obligations held
by it as provided in Section 1302 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 1302(l)), are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent defeasance or
covenant defeasance.

The Trustee and the Paying Agent shall pay to the Finance
Company upon request any money held by them for the payment of principal or
interest on the Securi-

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<PAGE> 142
ties that remains unclaimed for two years; provided that the Finance Company
shall have first caused notice of such payment to be published one in a
newspaper of general circulation in the City of New York or mailed to each
Holder entitled thereto no less than 30 days prior to such repayment. After
that, Holders entitled to the money must look to the Finance Company for
payment as general creditors unless otherwise provided by law.

Section 1304. Reinstatement.

If the Trustee or Paying Agent is unable to apply any money in
accordance with Section 1301 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Companies' obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1301 until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 1301; provided,
however, that, if the Finance Company makes any payment of principal of (or
premium, if any) or interest on any Security following the reinstatement of its
obligations, the Finance Company shall be subrogated to the rights of the
Holders of such Securities to receive such payment from the money held by the
Trustee or Paying Agent.

ARTICLE XIV

GUARANTY

Section 1401. Guaranty.

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<PAGE> 143
principal (and premium, if any) and interest, if any, of the Securities, if
lawful, and all other obligations of the Finance Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (ii) in case of any
extension of time of payment or renewal of any Securities or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, the Company will be obligated to pay the same
immediately. The Company hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder of the Securities with respect to any
provisions hereof or thereof, any releases of collateral, any delays in
obtaining or realizing upon or failures to obtain or realize upon Collateral,
the recovery of any judgment against the Finance Company, any action to enforce
the same or any other circumstance that might otherwise constitute a legal or
equitable discharge or defense of a guarantor. The Company hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Finance Company, any right to require
a proceeding first against the Finance Company, protest, notice and all demands
whatsoever and covenants that this Company Guaranty will not be discharged
except by complete performance of the obligations contained in the Securities
and this Indenture. If any Holder or the Trustee is required by any court or
otherwise to return to either of the Companies, or any custodian, Trustee,
liquidator or other similar official acting in relation to either of the
Companies, any amount paid by either of the Companies to the Trustee or such
Holder, this Company Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect. The Company agrees that it shall not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. The Company further agrees that as between the Company, on
the one hand, and the Holders and the Trustee, on the other hand, (i) the
Maturity of the obligations guaranteed hereby may

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<PAGE> 144
be accelerated as provided in Section 502 for the purposes of this Company
Guaranty, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (ii) in
the event of any declaration of acceleration of such obligations as provided in
Section 502, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Company for the purpose of this Company Guaranty.

Section 1402. Execution and Delivery of Company Guaranty.

To evidence its Company Guaranty set forth in Section 1401,
the Company hereby agrees that a notation of such Company Guaranty
substantially in the form set forth in Section 203 shall be endorsed on each
Security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of the Company by its Chairman of the Board, one of
its Vice Chairmen of the Board, its President, one of its Vice Presidents or
its Treasurer and attested to by another officer other than the officer
executing the Indenture, as the case may be.

The Company hereby agrees that its Company Guaranty set forth
in Section 1401 shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Company Guaranty.

If an officer whose signature is on this Indenture no longer
holds that office at the time the Trustee authenticates the Security on which a
Company Guaranty is endorsed, the Company Guaranty shall be valid nevertheless.

The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Company
Guaranty set forth in this Indenture on behalf of the Company.

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<PAGE> 145
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and arrested, all as of the day and year first above written.

<TABLE>
<S> <C>
BALLY'S PARK PLACE
FUNDING, INC.

By:
-------------------------------------------------------
Title:

Attest:
-------------------------------
Title:

BALLY'S PARK PLACE, INC., a
Delaware corporation

By:
-------------------------------------------------------

Attest:
-------------------------------
Title

BALLY'S PARK PLACE, INC., a
New Jersey corporation

By:
-------------------------------------------------------

Attest:
-------------------------------
Title:

BALLY'S PARK PLACE
REALTY CO.

By:
-------------------------------------------------------

Attest:
-------------------------------
Title:

[Trustee]

By:
-------------------------------------------------------

Attest:
-------------------------------
Title:
</TABLE>

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<PAGE> 146
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the ____ day of ____________, 1994, before me personally
came _______________, to me known, who, being by me duly sworn, did depose and
say that he resides at ____________________________________________, that he is
_________ of BALLY'S PARK PLACE FUNDING, INC., one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of such corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed pursuant to authority of the Board
of Directors of such corporation; and that he signed his name thereto pursuant
to like authority.

(NOTARIAL
SEAL)

___________________________

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<PAGE> 147
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the ____ day of ____________, 1994, before me personally
came _______________, to me known, who, being by me duly sworn, did depose and
say that he resides at ____________________________________________, that he is
_________ of BALLY'S PARK PLACE, INC., a Delaware corporation, one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed pursuant to authority
of the Board of Directors of such corporation; and that he signed his name
thereto pursuant to like authority.

(NOTARIAL
SEAL)

_____________________________

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<PAGE> 148
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the ____ day of ____________, 1994, before me personally
came _______________, to me known, who, being by me duly sworn, did depose and
say that he resides at ____________________________________________, that he is
_________ of BALLY'S PARK PLACE, INC., a New Jersey corporation, one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed pursuant to authority
of the Board of Directors of such corporation; and that he signed his name
thereto pursuant to like authority.

(NOTARIAL
SEAL)

___________________________
_

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<PAGE> 149
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the ____ day of ____________, 1994, before me personally
came _______________, to me known, who, being by me duly sworn, did depose and
say that he resides at ____________________________________________, that he is
_________ of BALLY'S PARK PLACE REALTY CO., one of the corporations described
in and which executed the above instrument; that he knows the corporate seal of
such corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed pursuant to authority of the Board of Directors of
such corporation; and that he signed his name thereto pursuant to like
authority.

(NOTARIAL
SEAL)

____________________________

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<PAGE> 150
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the ____ day of ____________, 1994, before me personally
came _______________, to me known, who, being by me duly sworn, did depose and
say that he resides at ____________________________________________, that he is
_________ of ___________________________, one of the corporations described in
and which executed the above instrument; that he knows the corporate seal of
such corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed pursuant to authority of the Board of Directors of
such corporation; and that he signed his name thereto pursuant to like
authority.

(NOTARIAL
SEAL)

___________________________

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<PAGE> 151
EXHIBIT E

This Instrument was prepared by the
below named attorney

_________________________
Name:

PARI PASSU CERTIFICATE

___________________________ ("Trustee"), as Trustee, under the
Indenture dated as of ______________, 1994 (the "Indenture"), among BALLY'S
PARK PLACE FUNDING, INC., a Delaware corporation (the "Finance Company"),
BALLY'S PARK PLACE, INC., a Delaware corporation (the "Company"), BALLY'S PARK
PLACE, INC., a New Jersey corporation (the "Operating Company"), BALLY'S PARK
PLACE REALTY CO., a New Jersey corporation ("Realty Co."), does hereby certify
and confirm to [insert name of a holder of Indebtedness secured by a Restricted
Encumbrance] that the Restricted Encumbrance described in the instrument from
[insert name of maker of Indebtedness secured by a Restricted Encumbrance] to
[insert name of a holder of Indebtedness secured by a Restricted Encumbrance]
dated _________________ ranks pari passu with the lien created by the Mortgage
and Security Agreement with Assignment of Rents dated as of ________________,
1994 given by Operating Company and Realty Co. to Trustee recorded on
________________ in Mortgage Book ______________ at page _____ in the Atlantic
County, New Jersey Clerk's Office and with the lien(s) created by the
mortgage(s) from [insert name(s) of maker(s) of Indebtedness secured by
Restricted Encumbrance(s)] to [insert name(s) of Holder(s) of Indebtedness
secured by Restricted Encumbrance(s)] recorded on _________ in Mortgage Book
___ at page ___ in the Atlantic County, New Jersey Clerk's Office. The term
"pari passu" describes the relationship set out in the Intercreditor Agreement
appearing as Schedule I to the Mortgage.

E-1
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<PAGE> 152
This Certificate is issued pursuant to Sections 613 and 1010
of the Indenture and with the effect stated in said Section 613. The terms
"Indebtedness," "Mortgage" and "Restricted Encumbrance" shall have the
respective meanings set forth in the Indenture.

___________________________,
as Trustee

By:______________________________
Name:
Title:

(SEAL)

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<PAGE> 153

BALLY'S PARK PLACE FUNDING, INC.

(a Delaware corporation)

_______% First Mortgage Notes due 2004

PURCHASE AGREEMENT

____________, 1994

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
JEFFERIES & COMPANY, INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1305

Dear Sirs:

Bally's Park Place Funding, Inc., a Delaware corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Jefferies & Company,
Inc. (together, the "Underwrit- ers") with respect to the sale by the Company
and the purchase by the Underwriters, acting severally and not jointly, of
$___,000,- 000 principal amount of its ______% First Mortgage Notes due 2004
(the "Securities"). The Securities are to be issued pursuant to an indenture
dated as of ________, 1994 (the "Indenture") among the Company, Bally's Park
Place, Inc., a Delaware corporation, as guarantor (the "Guarantor"), Bally's
Park Place, Inc., a New Jersey corporation (the "Operating Company"), Bally's
Park Place Realty Co., ("Realty Co."), a New Jersey corporation and ________,
as trustee (the "Trustee").

Payment of principal and interest on the Securities will be
guaranteed (the "Guaranty") by the Guarantor. The Securities will be secured
by certain properties and assets of the Operating Company, a wholly owned
subsidiary of the Guarantor and property of Realty Co., a

<PAGE> 154

wholly owned subsidiary of the Operating Company. In order to create the
security interests in such properties and assets and to determine the relative
rights therein of the holders of the Securities, the Guarantor, the Company,
the Operating Company and Realty Co., as the case may be, will execute and
deliver the Mortgage and Security Agreement with Assignment of Rents, the
Assignment of Leases and Rents and the Note Pledge Agreement, such documents
are sometimes collectively referred to herein as the "Security Documents," and
the properties and assets subject thereto are collectively referred to as the
"Collateral."

Prior to the purchase and public offering of the Securities by
the several Underwriters, the Company and Merrill Lynch, acting on behalf of
the several Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written telecommunication
between the Company and Merrill Lynch and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the
Securities will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the
Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.

The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (No.
33-_____) and a related preliminary prospectus for the registration of the
Securities under the Securities Act of 1933 (the "1933 Act"), has filed such
amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof, and will file such additional amendments thereto
and such amended prospectuses as may hereafter be required. Such regis-
tration statement (as amended, if applicable) and the prospectus constituting a
part thereof (including in each case the informa- tion, if any, deemed to be
part thereof pursuant to Rule 430A(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"), as from time to
time amended or supplemented pursuant to the 1933 Act) are hereinafter referred
to as the "Registration Statement" and the "Prospectus," respectively, except
that if any revised prospectus shall be provided to the Underwriters

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<PAGE> 155

by the Company in connection with the offering of the Securities which differs
from the Prospectus on file at the Commission at the time the Registration
Statement becomes effective (whether or not such revised prospectus is required
to be filed by the Company pursuant to Rule 424(b) of the 1933 Act
Regulations), the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Underwriters for such use.

The Company understands that the Underwriters propose to make
a public offering of the Securities as soon as the Underwriters deem advisable
after the Registration Statement becomes effective and the Pricing Agreement
has been executed and delivered.

Section 1. Representations and Warranties.

(a) The Company and the Guarantor, jointly and
severally, represent and warrant to each Underwriter as of the date hereof and
as of the Pricing Agreement (such latter date being hereinafter referred to as
the "Representation Date") as follows:

(i) At the time the Registration Statement
becomes effective and at the Representation Date, the Registration
Statement will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and the Trust Indenture
Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (the "1939 Act"), and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Prospectus, at the Representation Date (unless the
term "Prospectus" refers to a prospectus which has been provided to
the Underwriters by the Company for use in connection with the
offering of the Securities which differs from the Prospectus on file
at the Commission at the time the Registration Statement becomes
effective, in which case at the time it is first provided to the
Underwriters for such use) and at Closing Time referred to in Section
2, will not include an untrue statement of a

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<PAGE> 156

material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Underwriters expressly for
use in the Registration Statement or Prospectus.

(ii) The accountants who certified the
financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.

(iii) The consolidated financial statements
and related notes included in the Registration Statement present
fairly the financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in
the Registration Statement, said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis; and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein. The financial information and
statistical data set forth in the Prospectus under the captions
"Prospectus Summary," "Summary Financial Data," "Consolidated
Capitalization," "Selected Financial Data," and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" are prepared on an accounting basis consistent with such
financial statements.

(iv) The information in the Prospectus under
the caption "Investment Considerations-- Relationship with Bally,
Casino

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<PAGE> 157

Holdings and Bally's Grand" is complete and correct in all material
respects.

(v) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Guarantor and
its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, (B) there have been no
transactions entered into by the Guarantor or any of its subsidiaries,
other than those in the ordinary course of business, which are
material with respect to the Guarantor and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution
of any kind declared, paid or made by the Guarantor on any class of
its capital stock.

(vi) Each of the Guarantor and its
subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its state of
incorporation with corporate power and authority to own, lease and
operate its respective properties and to conduct its respective
business as described in the Prospectus; and each of the Guarantor and
its subsidiaries is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to qualify would not have a material adverse effect
on the condition, financial or otherwise, or the earnings or business
affairs of the Guarantor and its subsidiaries considered as one
enterprise.

(vii) The Guarantor had at the date
indicated a duly authorized and outstanding capitalization as set
forth in the Prospectus under "Consolidated Capitalization;" the
shares of issued and outstanding capital stock

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<PAGE> 158

of the Guarantor have been duly authorized and validly issued and are
fully paid and non-assessable.

(viii) All of the issued and outstanding
capital stock of each subsidiary of the Guarantor has been duly
authorized and validly issued, is fully paid and non-assessable, is
directly or through subsidiaries wholly owned by the Guarantor, free
and clear of any security interest, mortgage, pledge, lien, encum-
brance, transfer restriction, claim or equity (except those
restrictions on transferability set forth in the charter documents of
such subsidiaries as required by the New Jersey Casino Control Act
(the "Casino Control Act")). Except for transactions described in the
Prospectus, there are no outstanding rights, warrants or options to
acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of,
any shares of capital stock of or other equity interest in any
subsidiary of the Guarantor.

(ix) The Securities have been duly and
validly authorized by the Company and the Securities, when
authenticated by the Trustee and issued, sold and delivered in
accordance with this Agreement and the Indenture, will have been duly
and validly executed, authenticated, issued and delivered and will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits provided by the Indenture, except as such enforcement may be
limited by (A) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and (B) general principles of
equity (regardless of whether such enforcement may be sought in a
proceeding in equity or at law). The Securities conform in all
material respects to the description thereof contained in the
Prospectus.

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<PAGE> 159

(x) The Guaranty has been duly and validly
authorized by the Guarantor, and the Guaranty, when the Notes are
authenticated by the Trustee, will constitute valid and binding
obligations of the Guarantor, enforceable against the Guarantor in
accordance with their terms and entitled to the benefits provided by
the Indenture, except as such enforcement may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating
to creditors' rights generally and (B) general principles of equity
(regardless of whether such enforcement may be sought in a proceeding
in equity or at law). The Guaranty conforms in all material respects
to the description thereof contained in the Prospectus.

(xi) The Indenture has been duly and validly
authorized by the Guarantor, the Company, the Operating Company and
Realty Co., and the Indenture, when executed and delivered by the
Guarantor, the Company, Realty Co., the Operating Company and the
Trustee, will constitute a valid and binding obligation of the
Guarantor, the Company, the Operating Company and Realty Co.
enforceable against the Guarantor, the Company, the Operating Company
and Realty Co. in accordance with its terms, except as such
enforcement may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar
laws now or hereafter in effect relating to creditors' rights
generally and (B) general principles of equity (regardless of whether
such enforcement may be sought in a proceeding in equity or at law).
The Indenture conforms in all material respects to the description
thereof contained in the Prospectus.

(xii) This Agreement and the Pricing
Agreement have been duly and validly authorized, executed and
delivered by the Guarantor, the Company and the Operating Company and
are valid and binding obliga- tions of the Guarantor, the Company and
the Operating Com-

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<PAGE> 160
pany enforceable against the Guarantor, the Company and the Operating
Company in accordance with their terms, except as such enforcement may
be limited by (A) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and (B) general principles of
equity (regardless of whether such enforcement may be sought in a
proceeding in equity or at law) and except as rights to indemnity and
contribution hereunder may be limited by state or federal securities
laws or the public policy underlying such laws.

(xiii) The Security Documents have been duly
and validly authorized by the Company, the Operating Company and
Realty Co. as the case may be, and, when executed and delivered by the
Company, the Operating Company and Realty Co., as the case may be, at
or prior to the Closing Date, will constitute valid and binding
obligations of the Company, the Operating Company and Realty Co., as
the case may be, enforceable against the Company, the Operating
Company and Realty Co., as the case may be, in accordance with their
respective terms, except as such enforcement may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating
to creditors' rights generally and (B) general principles of equity
(regardless of whether such enforcement may be sought in a proceeding
in equity or at law); upon the completion of all necessary
registrations, recordings and filings thereof under applicable law, as
amended, encumbering the real property portion of the Collateral, the
Mortgage will create a valid lien in and upon the real property
portion of the Collateral and, except as set forth in the Security
Documents and the UCC-1 Financing Statements (the "Financing
Statements") or as described in the Prospectus, the Collateral is not
subject to any lien, charge, security interest or other encumbrance
prior in right to the security interests that will be created by the
Security

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<PAGE> 161

Documents and the Financing Statements. The Security Documents
conform in all material respects to the description thereof in the
Prospectus.
(xiv) Neither the Guarantor nor any of its
subsidiaries is in violation of its charter or by-laws and neither the
Guarantor nor any of its subsidiaries is in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Guarantor or any of its
subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Guarantor or any of its
subsidiaries is subject; and the execution, delivery and performance
of this Agreement, the Pricing Agreement, the Indenture, the Guaranty
and the Security Documents and the consummation of the transactions
contemplated herein and therein, including the issuance, sale and
delivery of the Securities and the Guaranty, will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Guarantor or any of its subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Guarantor or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Guarantor or any of its subsidiaries is
subject, except such breaches or defaults as would not have a material
adverse effect on the condition, financial or otherwise, or the
earnings or business affairs of the Guarantor and its subsidiaries
considered as one enterprise, nor will such action result in any
violation of the provisions of the charter or by- laws of the
Guarantor or any of its subsidiaries or any applicable law,
administrative regulation or administrative or court decree.

(xv) No labor dispute with the employees
of the Guarantor or any of its sub-

0018058.03-Chicago Server 1a Draft December 26, 1993 - 11:18 pm
<PAGE> 162
sidiaries exists or, to the knowledge of the Guarantor, is imminent;
and the Guarantor is not aware of any existing or imminent labor
disturbance by the employees of any principal suppliers or contractors
of the Guarantor or any of its subsidiaries which might be expected to
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Guarantor and its subsidiaries considered as one enterprise.

(xvi) Other than as set forth in the
Prospectus, there is no action, suit or proceeding before or by any
court or governmental agency, or body, domestic or foreign, now
pending, or to the knowledge of the Guarantor and its subsidiaries,
threatened, against or affecting the Guarantor or any of its
subsidiaries, which is required to be disclosed in the Prospectus
wherein an unfavorable ruling, finding or decision would result in any
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the
Guarantor and its subsidiaries considered as one enterprise, or which
would materially and adversely affect the properties or assets thereof
or which would materially or adversely affect the consummation of this
Agreement; all pending legal or governmental proceedings to which the
Guarantor or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described
in the Prospectus, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material; and
there are no contracts or documents of the Company required to be
filed as exhibits to the Registration Statement by the 1933 Act or by
the 1933 Act Regulation which have not been so filed.

(xvii) The Guarantor and its subsidiaries
own or possess, or can acquire on reasonable terms, the patents,
patent rights, licenses, inventions, copyrights, know-how (in-

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<PAGE> 163
cluding trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names presently employed by them
in connection with the business now operated by them, and neither the
Guarantor nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with
respect to any such property, and such property has not been the
subject of any unfavorable decision, ruling or finding, which would
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Guarantor and its subsidiaries considered as one enterprise.

(xviii) No authorization, approval or
consent of any court or governmental authority or agency is necessary
in connection with the sale of the Securities hereunder, except such
as may be required under the 1933 Act or the 1933 Act Regulations and
the qualification of the Indenture under the 1939 Act, which
qualification has been obtained or, if the Registration Statement has
not yet become effective as of the date hereof, will be obtained at
such time as the Registration Statement becomes effective and except
such as may be required under state securities laws and such approvals
as may be required by the New Jersey Casino Control Commission and the
New Jersey Division of Gaming Enforcement (the "Gaming Authorities"),
which such Gaming Authorities approvals have been obtained.

(xix) The Guarantor and its subsidiaries
possess such certificates, licenses, authorities or permits and other
governmental authorizations (collectively, "Permits") issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them (which Permits
are valid and in full force and effect), and are operating in
compliance with the Permits, and neither the Guarantor nor any of its
subsidiaries has received any

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<PAGE> 164
notice of proceedings relating to the revocation or modification of
any such Permit which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Guarantor and
its subsidiaries considered as one enterprise.

(xx) No default or event of default with
respect to any Indebtedness (as such term is defined in the Indenture)
entitling the holders thereof to accelerate the maturity thereof
exists or will exist as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby
and the Guarantor and its subsidiaries have duly performed or observed
all material obligations, agreements, covenants or conditions
contained in any material contract, indenture, mortgage, agreement or
instrument relating to any Indebtedness.

(xxi) Each of the Guarantor, the Operating
Company, the Company and Realty Co. have full corporate power and
authority to execute, deliver and perform their obligations under this
Agreement, the Pricing Agreement, the Guaranty, the Security Documents
and the Indenture and the Company and the Guarantor have full
corporate power and authority to issue, sell and deliver the
Securities and the Guaranty respectively.

(xxii) The Guarantor and each of its
subsidiaries have good and marketable title to, or valid leasehold
interests in, their respective properties, free and clear of all
material liens, charges and encumbrances and equities of record,
except for Permitted Encumbrances (as defined in the Mortgage) and as
set forth in the Security Documents and the Prospectus and except for
the present mortgages encumbering the Bally's Park Place Casino Hotel
in Atlantic City, New Jersey relating to the 11 7/8 First Mortgage
Notes due 1999 (the "Old

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<PAGE> 165
Mortgage Notes") and the Loan Agreement by and among the Guarantor,
the Operating Company, Realty Co. and First Fidelity Bank, N.A., New
Jersey, as agent for the banks signatory thereto dated June 30, 1992
(the "Credit Agreement"); and at the Closing Time, the Guarantor will
have good and marketable title to the Collateral, free and clear of
all liens and defects, except as set forth in the Security Documents
or reflected in the Prospectus, and except for the mortgages relating
to the Old Mortgage Notes and the Credit Agreement. The properties of
the Guarantor and its subsidiaries are in good repair (reasonable wear
and tear excepted), adequately insured and suitable for their
respective uses. Any real properties held under lease by the
Guarantor and its subsidiaries are held by them under valid subsisting
and enforceable leases with such exceptions as are not material and do
not interfere with the conduct of the business of the Guarantor and
its subsidiaries taken as a whole.

(xxiii) Neither the Guarantor nor any
subsidiary is, or as a result of the transactions contemplated by the
Prospectus would be, required to make any filing or to register under
the Investment Company Act or is or will become a "holding company" or
a "subsidiary company" of a "registered holding company," as defined
in the Public Utility Holding Company Act of 1935, as amended.
Neither the Company nor the Guarantor nor any agent acting on its
behalf has taken or will take any action which might cause this
Agreement or the issuance, execution or delivery of the Securities to
violate Regulation G (12 C.F.R. Part 207), Regulation U (12 C.F.R.
Part 221) or Regulation X (12 C.F.R. Part 224), insofar as said
Regulation applies to Regulations G and U, of the Board of Governors
of the Federal Reserve System, in each case as in effect now or as the
same may hereafter be in effect at the Closing Time.

(xxiv) All United States federal income tax
returns of Bally Manufacturing

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<PAGE> 166
Corporation ("Bally") and its consolidated subsidiaries, including the
Guarantor and each of its subsidiaries, required by law to be filed
have been filed and all taxes shown by the said returns or otherwise
assessed which are due and payable have been paid, except assessments
against which appeals have been or will be promptly taken. All United
States federal income tax returns of Bally and its consolidated
subsidiaries, including the Guarantor and its subsidiaries, through
the fiscal year ended 1982 have been settled and no assessment in
connection therewith has been made against the Guarantor or Bally in
connection with the business of the Guarantor. The Guarantor and its
subsidiaries have filed all other tax returns which are required to
have been filed by them pursuant to applicable state, local or other
law except insofar as the failure to file such returns individually
and in the aggregate would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Guarantor and its subsidiaries
considered as one enterprise, and have paid all taxes due pursuant to
said returns or pursuant to any assessment received by the Guarantor
or its subsidiaries, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been
provided. The charges, accruals and reserves on the consolidated
books of the Guarantor in respect of any income and corporation tax
liability for any years not finally determined are adequate (within
the meaning of GAAP) to meet any assessments or re-assessments for
additional income tax for any years not finally determined, except to
the extent of any inadequacy which would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Guarantor and its
subsidiaries considered as one enterprise.

(xxv) The Guarantor and its subsidiaries
maintain a system of internal accounting controls sufficient to
provide rea-

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<PAGE> 1

BALLY'S PARK PLACE FUNDING, INC.
(a Delaware corporation),
as Obligor,

BALLY'S PARK PLACE, INC.
(a Delaware corporation),
as Guarantor,

BALLY'S PARK PLACE, INC.
(a New Jersey corporation),

BALLY'S PARK PLACE REALTY CO.
(a New Jersey corporation)

and

FIRST BANK,
as Trustee

-----------------------------------------

INDENTURE

Dated as of , 1994

-----------------------------------------

% First Mortgage Notes

due 2004

<PAGE> 2
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture dated as of , 1994*

Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607, 609
Section 312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1018
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1202
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103, 1204
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103, 1204
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1204
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
Section 316(a)(last
sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
</TABLE>

___________________________

* This reconciliation and tie shall not, for any purpose, be deemed to be part
of the Indenture.

<PAGE> 3
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

<CAPTION>
ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

<S> <C> <C>
Section 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Acquired Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A.L.T.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Appraised Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . 3
Assignment of Leases . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Average Life to Stated Maturity . . . . . . . . . . . . . . . . . . . . . 3
Bally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Capital Lease Obligation . . . . . . . . . . . . . . . . . . . . . . . . 4
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Casino Control Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Casino Control Commission . . . . . . . . . . . . . . . . . . . . . . . . 4
Casino Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Casino Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Casino Hotel Improvements . . . . . . . . . . . . . . . . . . . . . . . . 5
Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Company Request or Company Order . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Fixed Charge Coverage
Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Income Tax Expense . . . . . . . . . . . . . . . . . . . . . 8
* 1 moved from here; text not shown

Consolidated Interest Expense . . . . . . . . . . . . . . . . . . . . . . 8
Consolidated Net Income . . . . . . . . . . . . . . . . . . . . . . . . . 8

__________________
</TABLE>

<PAGE> 4

** 1 Note: This table of contents shall not, for any purpose, be deemed to be
part of this Indenture.

<TABLE>
PAGE

<S> <C>
Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Rental Payments . . . . . . . . . . . . . . . . . . . . . . . . 9
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Credit Facility Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Current Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dennis Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Division of Gaming Enforcement . . . . . . . . . . . . . . . . . . . . . . . 10
Eligible Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Federal Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Finance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Gaming License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Generally Accepted Accounting
Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
GNAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Indenture Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Intercorporate Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Interest Swap Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Material Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Moody's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Net Cash Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Non-Recourse Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>

<PAGE> 5
<TABLE>
<CAPTION> PAGE
----
<S> <C>
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Note Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . 16
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . 16
Operating Company . . . . . . . . . . . . . . . . . . . . . . . . 16
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 16
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Pari Passu Mortgage . . . . . . . . . . . . . . . . . . . . . . . 18
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . 18
Permitted Indebtedness . . . . . . . . . . . . . . . . . . . . . 18
Permitted Investment . . . . . . . . . . . . . . . . . . . . . . 21
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . 22
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . 23
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Pro Rata Share . . . . . . . . . . . . . . . . . . . . . . . . . 23
Public Equity Offering . . . . . . . . . . . . . . . . . . . . . 23
Realty Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Redeemable Capital Stock . . . . . . . . . . . . . . . . . . . . 24
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . 24
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 24
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . 24
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . 24
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . 25
Security and Securities . . . . . . . . . . . . . . . . . . . . . 25
Security Documents . . . . . . . . . . . . . . . . . . . . . . . 25
Security Interests . . . . . . . . . . . . . . . . . . . . . . . 25
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . 25
Standard & Poor's . . . . . . . . . . . . . . . . . . . . . . . . 25
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 25
Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . 25
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Subsidiary Casino Hotel . . . . . . . . . . . . . . . . . . . . . 25
Substitute Collateral . . . . . . . . . . . . . . . . . . . . . . 26
Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Tax Sharing Agreement . . . . . . . . . . . . . . . . . . . . . . 26
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . 26
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . . 26
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Wholly Owned Subsidiary . . . . . . . . . . . . . . . . . . . . . 27
Section 102. Other Definitions . . . . . . . . . . . . . . . . . . . . 27
Section 103. Compliance Certificates and Opinions . . . . . . . . . . 27
Section 104. Form of Documents Delivered to Trustee . . . . . . . . . 28
Section 105. Acts of Holders . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>

iii

<PAGE> 6
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 106. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . 31
Section 107. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 108. Conflict of Any Provision of Indenture
with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 109. Effect of Headings and Table of
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 110. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 111. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 112. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 113. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 114. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 115. No Recourse against Others . . . . . . . . . . . . . . . . . . . . . . . . . . 34

<CAPTION>
ARTICLE II

SECURITY FORMS
<S> <C> <C>
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 203. Form of Reverse of Security . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 205. Form of Notation Relating to Guaranty . . . . . . . . . . . . . . . . . . . . . 42

<CAPTION>
ARTICLE III

THE SECURITIES
<S> <C> <C>
Section 301. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 303. Execution, Authentication, Delivery
and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>

<PAGE> 7
<TABLE>
<CAPTION>
PAGE
----
ARTICLE IV

SATISFACTION AND DISCHARGE

<S> <C> <C>
Section 401. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . 55

<CAPTION>
ARTICLE V

REMEDIES
<S> <C> <C>
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 502. Acceleration of Maturity; Rescission . . . . . . . . . . . . . . . . . . . . . 59
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . 61
Section 505. Trustee May Enforce Claims without
Possession of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . 64
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 515. Waiver of Stay, Extension or Usury
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

<CAPTION>
ARTICLE VI

THE TRUSTEE
<S> <C> <C>
Section 601. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 603. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 604. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
</TABLE>

<PAGE> 8
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 606. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . 70
Section 607. Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 608. Corporate Trustee Required;
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 609. Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 610. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . 73
Section 611. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 612. Preferential Collection of Claims
against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 613. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

<CAPTION>
ARTICLE VII

HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY
<S> <C> <C>
Section 701. Disclosure of Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 702. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 703. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

<CAPTION>
ARTICLE VIII

CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE

<S> <C> <C>
Section 801. Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

<CAPTION>
ARTICLE IX

SUPPLEMENTAL INDENTURES

<S> <C> <C>
Section 901. Supplemental Indentures without
Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 902. Supplemental Indentures with Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 903. Execution of Amendments, Supplements
or Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
</TABLE>

<PAGE> 9
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 904. Effect of Amendments, Supplements or
Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . 84
Section 906. Reference in Securities to Amendments,
Supplements or Waivers . . . . . . . . . . . . . . . . . . . . . . . . 84

<CAPTION>
ARTICLE X

COVENANTS
<S> <C> <C>
Section 1001. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . 85
Section 1003. Money for Security Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 1004. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 1005. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . 88
Section 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . 89
Section 1007. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . 89
Section 1008. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . 90
Section 1009. Limitation on Transactions with
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 1010. Limitation on Encumbrances . . . . . . . . . . . . . . . . . . . . . . . 96
Section 1011. Limitation on Preferred Stock of
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 1012. Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 1013. Ownership of Casino Hotel; Other
Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 1014. Validity of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 1015. Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 1016. Limitation on Issuance of Guaranties
by Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 1017. Compliance with Securities Laws upon
Purchase of Securities . . . . . . . . . . . . . . . . . . . . . . . 102
Section 1018. Limitation on Lease of Property as an
Entirety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 1019. Activities of Finance Company . . . . . . . . . . . . . . . . . . . . . 102
Section 1020. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 1021. Statement as to Compliance; Notice of
Default; Reporting Requirements . . . . . . . . . . . . . . . . . . . 103
Section 1022. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . 104
</TABLE>

vii

PAGE
----
ARTICLE XI

REDEMPTION OF SECURITIES

<S> <C> <C>
Section 1101. Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 1102. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 1103. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . 104
Section 1104. Selection by Trustee of Securities to
Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 1105. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 1106. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Section 1107. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . 106
Section 1108. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 1109. Redemption pursuant to the Casino
Control Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

ARTICLE XII

SECURITY

<S> <C> <C>
Section 1201. Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Section 1202. Recording; Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 109
Section 1203. Disposition of Certain Collateral
without Requesting Release . . . . . . . . . . . . . . . . . . . . . . . . . 111
Section 1204. Requesting Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . 113
Section 1205. Substitute Collateral Other Than Cash
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 1206. Substitution of Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . 119
Section 1207. Appraisals of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 1208. Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 1209. Reliance on Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 121
Section 1210. Purchaser May Rely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Section 1211. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Section 1212. Suits to Protect the Collateral . . . . . . . . . . . . . . . . . . . . . . . . 122
Section 1213. Trustee's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

ARTICLE XIII

DEFEASANCE
<S> <C> <C>
Section 1301. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Section 1302. Conditions to Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
</TABLE>

viii

<PAGE> 11
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 1303. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Other Miscellaneous Provisions . . . . . . . . . . . . . . . . 129
Section 1304. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . 130

<CAPTION>
ARTICLE XIV

GUARANTY
<S> <C> <C>
Section 1401. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 1402. Execution and Delivery of Company
Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

<CAPTION>
ARTICLE XV

LETTER OF CREDIT
<S> <C> <C>
Section 1501. Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . 133
Section 1502. Acceptance of the Letter of Credit . . . . . . . . . . . . . . . 134
Section 1503. Notices and Certificates . . . . . . . . . . . . . . . . . . . . 134
Section 1504. Events of Payment . . . . . . . . . . . . . . . . . . . . . . . . 136
Section 1505. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . 136

TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
SIGNATURE AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

</TABLE>

ACKNOWLEDGMENTS

EXHIBIT A Form of Mortgage Securing Notes

EXHIBIT B Form of Assignment of Leases and Rents

EXHIBIT C Form of Note Pledge Agreement

EXHIBIT D Form of Intercreditor Agreement

EXHIBIT E Form of Pari Passu Certificate

EXHIBIT F Provisions for Letter of Credit

<PAGE> 12
Indenture dated as of , 1994, among BALLY'S PARK
PLACE FUNDING, INC., a Delaware corporation (the "Finance Company"), BALLY'S
PARK PLACE, INC., a Delaware corporation (the "Company"), BALLY'S PARK PLACE,
INC., a New Jersey corporation (the "Operating Company"), BALLY'S PARK PLACE
REALTY CO., a New Jersey corporation ("Realty Co."), and FIRST BANK, a ,
trustee (the "Trustee").

RECITALS OF THE COMPANY

The Finance Company, the Company, the Operating Company and
Realty Co. have each duly authorized the creation of an issue of the Finance
Company's % First Mortgage Notes due 2004 (the "Securities"), of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Finance Company, the Company, the Operating Company and Realty Co.
have duly authorized the execution and delivery of this Indenture;

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

<PAGE> 13
ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions.

For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:

(a) the terms defined in this Article have the
meanings assigned to them in this Article and include the plural as well as the
singular;

(b) all other terms used herein which are defined in
the Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;

(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.

Certain terms, used principally in Articles Five and Ten, are
defined in those Articles.

"Acquired Indebtedness" means Indebtedness of a Person (i)
existing at the time such Person becomes a Subsidiary or (ii) assumed in
connection with the acquisition of assets from a Person, other than
Indebtedness incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary or such acquisition, as the case may be. Acquired
Indebtedness shall be deemed to have been incurred on the date of the related
acquisition of assets from any Person or the date the acquired Person becomes a
Subsidiary.

<PAGE> 14
"Affiliate" means, with respect to any specified Person, (i)
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person, (ii) any spouse,
immediate family member or other relative who has the same principal residence
of any Person described in (i) above and (iii) any trust in which any such
Person described in clause (i) or (ii) above has a beneficial interest. For
purposes of this definition, control of a Person means the power, direct or
indirect, to direct or cause the direction of the management or policies of
such Person, whether by contract or otherwise; and the terms "controlling,"
"controlled" and "under common control" have meanings correlative to the
foregoing. For purposes of this definition, beneficial ownership of 10% or
more of voting common equity (on a fully diluted basis) or warrants to purchase
such equity (whether or not currently exercisable) of a Person shall be deemed
to be control of such Person.

"A.L.T.A." means the American Land Title Association.

"Appraised Fair Market Value" means, when used in connection
with the valuation of any property interest at any given date, the then current
fair market value of such property as set forth in the Current Appraisal
performed by a qualified and reputable independent appraiser, which appraisal
is, in the opinion of the independent appraiser, prepared in accordance with
the standards and reporting requirements of the Federal Home Loan Bank Board
and the Federal Savings and Loan Insurance Corporation, if then in effect.

"Assignment of Leases" means the Assignment of Leases and
Rents substantially in the form annexed hereto as Exhibit B and constituting a
part hereof for all purposes.

<PAGE> 15
"Bally" means Bally Manufacturing Corporation, a Delaware
corporation.

"Board of Directors" of any Person means the board of
directors of such Person or any duly authorized committee of such board.

"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in The City of New
York are authorized or obligated by law, regulation or executive order to
close.

"Capital Stock" of any Person means any and all shares,
interests, participations, or other equivalents (however designated) of such
Person's capital stock whether now outstanding or issued after the date of this
Indenture.

"Cash Collateral" means U.S. Dollars or U.S. Government
Obligations, which is Collateral for the Securities under the Mortgage.

"Casino Control Act" means the New Jersey Casino Control Act,
as from time to time amended, or any successor provision of law.

"Casino Control Commission" means the New Jersey Casino
Control Commission or any successor agency appointed pursuant to the Casino
Control Act.

<PAGE> 16
"Casino Holdings" means Bally's Casino Holdings, Inc., a
Delaware corporation.

"Casino Hotel" means the casino hotel presently known as
Bally's Park Place Casino Hotel located in Atlantic City, New Jersey, the
contiguous parking garage and property and any additions thereto or
improvements thereof or any casino hotel operated on or forming part of the
Collateral.

"Change in Control" means such time as (i) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than fifty percent (50%) of the total voting power of the then
outstanding Voting Stock of the Company, the Finance Company, the Operating
Company, Realty Co. (other than Casino Holdings, Bally or a subsidiary of Bally
or Casino Holdings, of which Bally or Casino Holdings, directly or indirectly,
owns a majority of the total voting power of the Voting Stock thereof), Casino
Holdings (other than Bally or a subsidiary of Bally, of which Bally, directly
or indirectly, owns a majority of the total voting power of the Voting Stock
thereof) or Bally; (ii) the Company, the Finance Company, the Operating Company
or Realty Co. consolidates or merges with or into another Person or conveys,
transfers or leases all or substantially all of its assets to any Person in one
transaction or a series of related transactions, or any Person consolidates or
merges with or into the Company, the Finance Company, the Operating Company or
Realty Co., and in any such event the holders of the Voting Stock of such
company immediately prior to such transaction or series of transactions shall
beneficially own, directly or indirectly, less than 50% of the Voting Stock of
the surviving Person immediately after such transaction or

<PAGE> 17
series of transactions; provided, however, that neither the merger or
consolidation or sale of assets by any of the Company, the Finance Company, the
Operating Company or Realty Co. with or into or to any of the Company, the
Finance Company, the Operating Company or Realty Co. nor the liquidation or
dissolution of the non-surviving entity or transferor following any such
transaction shall be deemed a Change in Control; (iii) during or within any
period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of any of the Company, the Finance
Company, the Operating Company, Realty Co., Casino Holdings or Bally (together
with any directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company, the Finance
Company, the Operating Company, Realty Co., Casino Holdings or Bally, as the
case may be, was approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company, the
Finance Company, the Operating Company, Realty Co., Casino Holdings or Bally
then in office; or (iv) other than as allowed in (ii) above, the Company, the
Operating Company, the Finance Company, Realty Co. or Bally is liquidated or
dissolved or adopts a plan of liquidation.

"Collateral Account" means a separate custodial account or
accounts maintained by the Trustee pursuant to Section 1208 into which all cash
received by the Trustee as Substitute Collateral pursuant to Section 1206, and
as Insurance Proceeds pursuant to Articles 6 and 7 of the Mortgage, less any
Pro Rata Share to be paid over for the benefit of holders of Pari Passu
Mortgages pursuant to Section 1206 and Articles 6 and 7 of the Mortgage, shall
be deposited.

"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any
time after the

<PAGE> 18
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

"Companies" means the Company and the Finance Company.

"Consolidated Fixed Charge Coverage Ratio" of the Company
means, for any period, the ratio of (a) the sum of Consolidated Net Income,
Consolidated Interest Expense, Consolidated Income Tax Expense and one-third of
Consolidated Rental Payments, plus, without duplication, all depreciation,
amortization and all other non-cash charges, of the Company and its Restricted
Subsidiaries on a consolidated basis, as determined in accordance with GAAP to
(b) the sum of (i) Consolidated Interest Expense for such period and (ii)
one-third of Consolidated Rental Payments for such period; provided that in
making such computation, the Consolidated Interest Expense attributable to
interest on any Indebtedness computed on a pro forma basis and (A) bearing a
floating interest rate shall be computed as if the rate in effect on the date
of computation had been the applicable rate for the entire period and (B) which
was not outstanding during the period for which the computation is being made
but which bears, at the option of the Company, a fixed or floating rate of
interest, the Company shall apply, at its option,

<PAGE> 19
either the fixed or floating rate for purposes of calculating the Consolidated
Fixed Charge Coverage Ratio and provided, further, that in making such
computation, the Consolidated Interest Expense attributable to interest on
Indebtedness under any revolving credit facility computed assuming that the
amount of Indebtedness thereunder is equal to the weighted average balance
during the period for which the computation is being made.

<PAGE> 20
(less all fees and expenses relating thereto), (ii) the portion of net income
(or loss) of the Company and its Restricted Subsidiaries allocable to minority
interests in unconsolidated Persons to the extent that cash dividends or
distributions have not actually been received by the Company or one of its
Restricted Subsidiaries, (iii) net income (or loss) of any Person combined with
the Company or any of its Restricted Subsidiaries in a "pooling of interests"
basis attributable to any period prior to the date of combination, (iv) net
income (or loss) of any Unrestricted Subsidiary regardless of whether cash
dividends or distributions have been made, (v) any gain or loss, net of taxes,
realized upon the termination of any employee pension benefit plan, (vi) any
gains or losses (less all fees and expenses relating thereto) in respect of
dispositions of assets other than in the ordinary course of business, or (vii)
the net income of any Restricted Subsidiary to the extent that the declaration
of dividends or similar distributions by that Restricted Subsidiary of that
income is not at the time permitted, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulations applicable to that Restricted
Subsidiary or its stockholders.

"Consolidated Rental Payments" of the Company means, for any
period, the aggregate rental obligations of the Company and its Restricted
Subsidiaries under operating leases (not including taxes, insurance,
maintenance and similar expenses that the lessee is obligated to pay under the
terms of the relevant leases), determined on a consolidated basis in accordance
with GAAP.

<PAGE> 21
"corporation" includes corporations, associations,
partnerships, companies and business trusts.

"Credit Facility" [to come].

"Credit Facility Mortgage" [to come].

"Current Appraisal" means the most recent appraisal of the
Appraised Fair Market Value of any property that is performed pursuant to
Section 1204 or otherwise.

"Default" means any event that is, or after notice or passage
of time or both would be, an Event of Default.

"Dennis Hotel" means that portion of the Casino Hotel formerly
known as the Dennis Hotel.

"Division of Gaming Enforcement" means the New Jersey Division
of Gaming Enforcement or any successor agency performing the duties thereof.

"Eligible Bank" shall mean, at any time, a domestic commercial
bank that has capital, surplus and undivided profits of at least $300,000,000
in the aggregate and a credit rating (or, if such domestic commercial bank has
no credit rating, the holding company of which has a credit rating) on its
lowest-rated unsecured public debt security of one of the two highest rating
categories used by Moody's or Standard & Poor's or such equivalent ratings by
another nationally recognized credit rating agency of similar standing if
neither of such corporations is in the business of rating unsecured bank
indebtedness.

"Event of Default" has the meaning specified in Article Five.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11
of the United States Code, as amended from time to time.

<PAGE> 22
"Finance Company" means the Person named as such in this
Indenture until a successor replaces it pursuant to the Indenture and
thereafter means the successor. To the extent necessary to comply with the
requirements of the provisions of Sections 310 through 317 of the Trust
Indenture Act as they are applicable to the Finance Company, the term "Finance
Company" shall include any other obligor with respect to the Securities for the
purposes of complying with such provisions.

"Generally Accepted Accounting Principles" or "GAAP" means
generally accepted accounting principles in the United States, consistently
applied, that are in effect from time to time; provided, however, that with
respect to the obligations of any Person under Article Eight and Sections 1007
and 1008 and the definitions applicable thereto, "GAAP" means generally
accepted accounting principles on the date hereof.

"GNAC" means GNAC, CORP.

"Guarantor" means the Company until a successor replaces it
pursuant to this Indenture and thereafter means such successor.

<PAGE> 23
of which is to assure in any way the payment or performance (or payment of
damages in the event of nonperformance) of any part or all of such obligation,
including, without limiting the foregoing, the payment of amounts drawn down by
letters of credit.

"Holder" means a Person in whose name a Security is registered
in the Security Register.

"Indebtedness" means, with respect to any Person, any
indebtedness, contingent or otherwise, in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof and including any indebtedness issued in exchange for
indebtedness for borrowed money), or evidenced by bonds, notes, debentures or
similar instruments or representing the balance deferred and unpaid of the
purchase price of any property, if and to the extent any of the foregoing
indebtedness would appear as a liability upon a balance sheet of such Person
prepared on a consolidated basis in accordance with GAAP consistently applied
and letters of credit (or reimbursement obligations related thereto); provided,
however, that (a) "Indebtedness" shall not include accounts payable to trade
creditors or other indebtedness for goods or services created or assumed in the
ordinary course of business and Indebtedness incurred pursuant to the
Intercorporate Agreement or Tax Sharing Agreement and (b) Indebtedness shall
include only the principal component of any obligations described above.
"Indebtedness" shall also include the principal component of any Capital Lease
Obligations; the maximum liquidation preference of Redeemable Capital Stock, or
Preferred Stock issued pursuant to Sections 1007 and 1011 hereof; obligations
secured by a Lien to which any property or asset owned or held by such Person
is subject, whether or not the obligations secured thereby shall have been
assumed; and Guaranties of items that would be included within this definition
(regardless of whether such items would appear upon such balance sheet);
provided that for purposes of computing Indebtedness outstanding at any time,
such items shall be excluded to the extent that they would otherwise be
eliminated as intercompany items in consolidation. For purposes of the
preceding sentence, the maximum liquidation preference of any Redeemable
Capital Stock shall be the greatest amount payable in respect thereof on a
liquidation, whether voluntary or involuntary, including

<PAGE> 24
accrued and unpaid dividends. Any reference in the Indenture to any
Indebtedness shall be deemed to include any renewals, extensions, refundings,
amendments and modifications of any such Indebtedness.

"Indenture Obligations" means the obligations of the Company,
the Operating Company, the Finance Company and Realty Co. (and any other
obligor hereunder or under the Securities) to pay principal of and interest on
the Securities when due and payable, whether at Maturity or an Interest Payment
Date, by acceleration, call for redemption, acceptance of an offer to purchase
on a Change in Control Payment Date or otherwise, and interest on the overdue
principal, if any (and premium, if any), of, and (to the extent lawful)
interest, if any, on the Securities and all other amounts due or to become due
under this Indenture and the Security Documents and to perform all other
obligations of the Company, the Operating Company, the Finance Company and
Realty Co. to the Trustee and the Holders under this Indenture, the Securities,
the Company Guaranty and the Security Documents, according to the terms
hereunder and thereunder.

"Intercorporate Agreement" means the Intercorporate Agreement
dated as of June 24, 1993 among Casino Holdings, Bally and the Company.

<PAGE> 25
"Intercreditor Agreement" means the Intercreditor Agreement
substantially in the form annexed as Exhibit D, with such changes thereto as
the Finance Company may reasonably request that would not affect the Trustee's
pari passu priority with respect to the Collateral or otherwise impair the
rights of the Trustee .

"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.

"Letter of Credit" means a standby letter of credit accepted
by the Trustee in accordance with Section 1502 and containing in substance, but
not necessarily in the same format, the provisions set forth in Exhibit F to
this Indenture, and containing no materially contrary terms and no other
provisions materially limiting the availability of payment, issued to the
Trustee, at the request of the Finance Company, for the benefit of Holders by
an Eligible Bank, in an amount as provided for by Section 1205.

"Lien" means any mortgage, charge, pledge, lien, privilege,
security interest or encumbrance of any kind.

<PAGE> 26
"Material Subsidiary" means the Finance Company, the Operating
Company, Realty Co. and, at the time of determination, any other Subsidiary of
the Company that (a) accounted for more than 10 percent of the consolidated net
income of the Company for the most recently completed fiscal year of the
Company or (b) was the owner of more than 10 percent of the consolidated assets
of the Company as at the end of such fiscal year, all as shown on the
consolidated financial statements of the Company for such fiscal year.

"Moody's" means Moody's Investors Service, Inc.

"Mortgage" means the Mortgage and Security Agreement with
Assignment of Rents dated as of , 1994 given by the
Operating Company and Realty Co., as mortgagors, to the Trustee, as mortgagee,
a copy of which is attached hereto as Exhibit A, the Assignment of Leases, and
any other security document, to which either of them is a party, which is
executed and delivered pursuant to such Mortgage or Assignment of Leases.

<PAGE> 27
agreement or instrument that would constitute Indebtedness, (ii) is directly or
indirectly liable or (iii) constitutes the lender and (b) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.

"Note" means the promissory note dated , 1994,
made by the Operating Company in the principal amount of $425,000,000 payable
to the order of the Finance Company.

"Note Pledge Agreement" means the Note Pledge Agreement dated
as of , 1994, among the Finance Company and the Trustee, a form of
which is attached hereto as Exhibit C, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.

"Operating Company" means Bally's Park Place, Inc., a New
Jersey corporation, until a successor replaces it pursuant to this Indenture
and thereafter means the successor.

"Opinion of Counsel" means a written opinion of counsel, who
may be internal counsel for the Company, the Finance Company or the Operating
Company and who shall be acceptable to the Trustee. Each such opinion shall
include the statements provided for in Trust Indenture Act Section 314(e) to
the extent applicable.

<PAGE> 28
"Outstanding" when used with respect to the Securities means,
as of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:

(a) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;

(c) Securities, except to the extent provided in
Section 1301, with respect to which the Companies, the Operating Company and
Realty Co. have effected defeasance as provided in Article Thirteen; and

<PAGE> 29
relying upon any such request, demand, direction, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company, the Finance Company, the Operating Company or Realty Co. or
any other obligor upon the Securities or any Affiliate of the Company, the
Finance Company, the Operating Company or Realty Co. or such other obligor.

"Pari Passu Mortgage" means any Lien on the Collateral which
is pari passu to the Lien of the Mortgage and is permitted by clause (ii) of
Section 1010 of this Indenture, provided that the instrument creating such Lien
contains substantially the following statement: "Pursuant to the Mortgage and
Security Agreement with Assignment of Rents dated as of , 1994 given
by the Operating Company and Realty Co., as mortgagor, to , as
mortgagee, the lien created by this instrument ranks pari passu with the
lien created by said Mortgage recorded on in Mortgage Book at
page & c. in the Atlantic County, New Jersey, Clerk's Office."

"Paying Agent" means any Person authorized by the Finance
Company to pay the principal of (or premium, if any) or interest on any
Securities on behalf of the Finance Company.

"Permitted Encumbrances" shall have the meaning provided in
the form of Mortgage attached hereto as Exhibit A.

"Permitted Indebtedness" means, without duplication, any of
the following Indebtedness of the Company or any Restricted Subsidiary, as the
case may be:

(i) Indebtedness (including letters of
credit) outstanding at any time under any revolving credit facility,
or any successor thereto, in an aggregate principal amount not to
exceed $50,000,000;

(ii) Any Guaranty by a Subsidiary under
subparagraph (i) above;

<PAGE> 30

(iii) Indebtedness and obligations under the
Securities, including any Guaranty thereof and the Note;

(iv) Any Indebtedness and obligations
outstanding on the date hereof;

(v) Indebtedness of a Wholly Owned
Subsidiary to the Company or another Wholly Owned Subsidiary of the
Company;

(vi) Indebtedness the proceeds of which are
used, directly or indirectly, to refinance outstanding Indebtedness of
the Company or any Subsidiary in a principal amount (or, if such
Indebtedness does not require cash payments prior to maturity, with an
original issue price of such Indebtedness) not to exceed the principal
amount of the Indebtedness so refinanced, plus accrued and unpaid
interest with respect to the Indebtedness being refinanced through and
to the date of repayment, plus any premium or penalty provided for in
the instrument governing such Indebtedness or any premium reasonably
determined by the Board of Directors of the Company as necessary to
accomplish such refinancing by means of a tender offer, defeasance or
privately negotiated purchase (or, if the Indebtedness being
refinanced was issued with an original issue discount, the original
issue price plus the amortized portion of the original issue discount
to the date that such refinancing Indebtedness was incurred and any
premium or penalty provided for in the instrument governing such
Indebtedness or any premium reasonably determined by the Board of
Directors of the Company as necessary to accomplish such refinancing
by means of a tender offer or privately negotiated purchase) plus the
amount of any fees, costs or expenses the Company incurred in
connection with such refinancing; provided that if the Indebtedness
being refinanced is Indebtedness of the Company, such refinancing
Indebtedness shall be Indebtedness of the Company, unless such
refinancing Indebtedness is used in whole

<PAGE> 31
or in part to refinance the entire principal amount of the Notes then
outstanding; provided, further, that Indebtedness the proceeds of
which are used to refinance Indebtedness of the Company that is
expressly subordinated in right of payment to the Securities will only
be permitted if (x) such Indebtedness is expressly subordinated in
right of payment to the Securities at least to the same extent that
the Indebtedness to be refinanced is subordinated to the Securities,
(y) the Average Life to Stated Maturity of such Indebtedness exceeds
the Average Life to Stated Maturity of the Securities, and (z) the
final scheduled maturity of such Indebtedness exceeds the final Stated
Maturity of the Securities;

(vii) Indebtedness under Interest Swap
Obligations and other agreements between the Company or a Subsidiary
and one or more financial institutions providing for "swap," "cap,"
"collar" or other interest rate protection;

(viii) obligations in respect of performance
bonds and surety bonds provided by the Company or any Subsidiary in
the ordinary course of business or related to Casino Hotel
Improvements and any renewals, extensions or amendments, modifications
or supplements thereto;

(ix) Indebtedness arising from the honoring
by a bank or other financial institution of a check, draft or similar
instrument drawn against insufficient funds in the ordinary course of
business, provided that such Indebtedness is extinguished within two
Business Days of its incurrence;

(x) Indebtedness pursuant to letters of
credit in an amount not to exceed $5,000,000 at any one time; and

[(xi) additional Indebtedness not to exceed
$__,000,000 in the aggregate at any one time.]

<PAGE> 32
"Permitted Investment" means an Investment which
consists of any one or more of the following:

(i) Investment in a Restricted Subsidiary
or another Person which, immediately after such Investment, will be a
Wholly Owned Subsidiary, provided in each case that such Subsidiary
conducts a business which is substantially identical to any business
conducted by the Company or its Restricted Subsidiaries on the date
hereof or which is in the business of the development, marketing,
ownership or management of casinos or casino hotels and businesses
related to the development, ownership, marketing or management of
casinos or casino hotels, including the hosting, production or
promotion of conventions, sporting events, amusements and other
entertainment;

(ii) Investments by Subsidiaries in the
Company;

(iii) (a) commercial paper rated P-1 by
Moody's or A-1 by Standard & Poor's on the date of acquisition, (b)
certificates of deposit of United States commercial banks (having a
combined capital and surplus in excess of $300,000,000), (c)
obligations of, or guaranteed by, the United States government or any
agency thereof, (d) repurchase agreements with terms of not more than
30 days with United States commercial banking or other financial
institutions (having a combined capital and surplus in excess of
$300,000,000) with respect to the types of investments described in
subclauses (a), (b) and (c) of this clause (iii), (e) money market
funds organized under the laws of the United States or any state
thereof that invest substantially all their assets in any of the types
of investments described in subclauses (a), (b), (c) and (d) of this
clause (iii) or, (f) to the extent not comprehended by subclauses (a)
through (e) of this clause (iii), temporary investments of cash
balances in investments deemed to be cash equivalents under GAAP;

<PAGE> 33
(iv) negotiable instruments held for
collection except to the extent that they would constitute investments
in Affiliates; outstanding travel, moving and other like advances to
officers, employees and consultants; lease, utility and other similar
deposits; or stock, obligations or securities received in settlement
of debts owing to the Company or a Subsidiary as a result of
foreclosure, perfection or enforcement of any Lien, in each of the
foregoing cases in the ordinary course of business of the Company or a
Subsidiary, as the case may be, and consistent with past practice;

(v) receivables for sales of goods or
services on trade credit terms consistent with the Company's and its
Subsidiaries' past practices or as otherwise consistent with trade
credit terms in common use in the industry;

(vi) Investments in Affiliates of the
Company in gaming or gaming-related ventures, in an amount not to
exceed $25,000,000;

(vii) loans to any employee in an amount not
to exceed $250,000 for any individual and $1,000,000 for all
employees in the aggregate;

(viii) Investments in effect on the date of
this Indenture;

(ix) Investments required under the Casino
Control Act; and

(x) purchases of Notes by the Operating
Company and the Company.

<PAGE> 34
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for a mutilated security or in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Security.

"Property" means any assets or property of any kind or nature
whatsoever, real, personal or mixed (including fixtures), whether tangible or
intangible.

"Pro Rata Share" means that portion of Substitute Collateral
under Section 1206 and Insurance Proceeds under Articles 6 and 7 of the
Mortgage (collectively, "Collateral Proceeds") equal to the total amount of
such Collateral Proceeds multiplied by a fraction, the denominator of which is
the sum of (i) total indebtedness then outstanding under the Securities and
(ii) the total indebtedness then outstanding and secured by any Pari Passu
Mortgages covering Collateral which is the subject of a substitution or
disposition under Section 1206 or Article 6 or 7 of the Mortgage, and the
numerator of which is the total indebtedness then outstanding and secured by
any Pari Passu Mortgages covering Collateral which is the subject of a
substitution or disposition under Section 1206 or Article 6 or 7 of the
Mortgage.

<PAGE> 35
"Realty Co." means Bally's Park Place Realty Co., a New Jersey
corporation, which owns a parcel of land upon which a part of the Casino Hotel
is situated, until a successor replaces it pursuant to this Indenture and
thereafter means its successor.

"Redeemable Capital Stock" means Capital Stock that, either by
its terms, by the terms of any security into which it is convertible or
exchangeable or otherwise, is or upon the happening of an event or passage of
time would be required to be redeemed prior to the final Stated Maturity of
principal on the Securities or is redeemable at the option of the holder
thereof at any time prior to such final Stated Maturity, or is convertible into
or exchangeable for debt securities at any time prior to such final Stated
Maturity.

"Redemption Date," when used with respect to any Securities to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.

"Redemption Price," when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

"Regular Record Date" for the interest payable on any Interest
Payment Date means the or (whether or not a Business
Day), as the case may be, immediately preceding such Interest Payment Date.

<PAGE> 36
"Restricted Subsidiary" means any Subsidiary that is not an
Unrestricted Subsidiary.

"Security" and "Securities" have the meaning set forth in the
second paragraph of this Indenture.

"Security Documents" means the Mortgage, the Assignment of
Leases and the Note Pledge Agreement.

"Security Interests" means the Lien on the Collateral created
by the Security Documents in favor of the Trustee.

"Special Record Date" means a date fixed by the Trustee for
the payment of any Defaulted Interest pursuant to Section 307.

"Standard & Poor's" means Standard & Poor's Corporation.

"Subordinated Indebtedness" means all Indebtedness of the
Company that is expressly subordinated in right of payment to any other
Indebtedness of the Company.

<PAGE> 37
"Substitute Collateral" means Property that may be substituted
for or added to the Collateral in accordance with Article Twelve hereof.

"Taking" means any taking by eminent domain, condemnation or
otherwise of all or substantially all of the Property subject to the Lien of
the Mortgage.

"Tax Sharing Agreement" means the tax sharing agreement
between Bally and the Company dated [June 17, 1993, as amended,] provided,
however, that any amendments thereto shall not change or alter the substantive
provisions thereof.

"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, and as in force at the date as of which this Indenture was
executed, except as provided in Section 905.

"Unrestricted Subsidiary" means (i) any Subsidiary that at the
time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of the Company in the manner provided below and (ii) any
subsidiary of an Unrestricted Subsidiary. The Board of Directors of the
Company may designate any newly formed Subsidiary to be an Unrestricted
Subsidiary, provided that such Subsidiary (A) has assets of less than $1,000 at
designation, (B) has no Indebtedness other than Non-Recourse Indebtedness and
(C) does not own any equity securities of any Subsidiary (other than an
Unrestricted Subsidiary). The Board of Directors of the Company may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary of the Company;
provided, however, that immediately after giving effect to such designation (x)
the Company could incur $1.00 of additional Indebtedness under Section 1007 and
(y) no Default shall have occurred and be continuing. Any such designation by
the Board of Directors of the Company shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation

<PAGE> 38
complied with the foregoing provisions; provided, however, that the failure to
so file such resolution and/or Officers' Certificate with the Trustee shall not
impair or affect the validity of such designation.

"Voting Stock" means stock of the class or classes pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of a corporation (irrespective of whether or not at the time stock
of any other class or classes shall have or might have voting power by reason
of the happening of any contingency).

"Wholly Owned Subsidiary" means any Restricted Subsidiary all
of whose outstanding Voting Stock (other than directors' qualifying shares, if
any) is owned directly or indirectly by the Company.

Section 102. Other Definitions.

<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
"Bank" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1502
"Change in Control Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . . 1015
"Company Guaranty" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1401
"covenant defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1301
"defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1301
"Default Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1202
"Defaulted Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307
"incorporated provision" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
"legal defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1301
"Pari Passu Certificate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
"Restricted Encumbrance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1010
"Restricted Payments" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1008
"Security Register" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305
"Security Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305
"U.S. Government Obligations" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1302
</TABLE>

Section 103. Compliance Certificates and Opinions.

Upon any application or request by the Companies to the
Trustee to take any action under any provision of this Indenture, the Companies
shall furnish to

<PAGE> 39
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with,
except that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.

Every certificate or opinion (other than the certificates
required by Section 1021(a)) with respect to compliance with a condition or
covenant provided for in this Indenture shall include:

(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the definitions
herein relating thereto;

(b) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

(c) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

(d) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been complied with.

Section 104. Form of Documents Delivered to Trustee.

<PAGE> 40
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Companies may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Companies
stating that the information with respect to such factual matters is in the
possession of the Companies, unless such counsel knows that the certificate or
opinion or representations with respect to such matters are erroneous.

Section 105. Acts of Holders.

(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Companies, the Operating Company or Realty Co. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Trust Indenture Act Section 315) conclusive in favor of the Trustee and

<PAGE> 41
the Company, if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person
of any such instrument or writing may be proved in any reasonable manner which
the Trustee deems sufficient.

(d) If any of the Companies, the Operating Company
or Realty Co. shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, it may, at its
option, by or pursuant to a Board Resolution, fix in advance a record date for
the determination of such Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Companies, the Operating Company or Realty Co., as the case may be, shall have
no obligation to do so. Notwithstanding Trust Indenture Act Section 316(c),
any such record date shall be the record date specified in or pursuant to such
Board Resolution, which shall be a date not more than 30 days prior to the
first solicitation of Holders generally in connection therewith and no later
than the date such solicitation is completed.

<PAGE> 42
(e) Any request, demand, authorization, direction,
notice, consent, waiver or other Act by the Holder of any Security shall bind
every future Holder of the same Security or the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof, in respect of anything done, suffered or omitted to be done by the
Trustee, any Paying Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.

Section 106. Notices, etc., to Trustee and Company.

(a) the Trustee by any Holder or the Companies, the
Operating Company or Realty Co. shall be sufficient for every purpose hereunder
if made, given, furnished or delivered, in writing, to or with the Trustee at
its Corporate Trust Office, Attention: Corporate Trust Department; or

(b) the Companies, the Operating Company or Realty
Co. by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if made, given,
furnished or delivered in writing to any of the Companies, the Operating
Company or Realty Co., addressed to it at Park Place and the Boardwalk,
Atlantic City, New Jersey 08401, Attention: President, or at any other address
furnished in writing to the Trustee by the Companies, the Operating Company or
Realty Co.

Section 107. Notice to Holders; Waiver.

<PAGE> 43
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Any
notice when deposited for mailing to a Holder in the aforesaid manner shall be
conclusively deemed to have been received by such Holder whether or not
actually received by such Holder. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.

Section 108. Conflict of Any Provision of Indenture with
Trust Indenture Act.

Section 109. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.

<PAGE> 44
Section 110. Successors and Assigns.

All covenants and agreements in this Indenture by the
Companies, the Operating Company and Realty Co. shall bind their respective
successors and assigns, whether so expressed or not.

Section 111. Separability Clause.

In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

Section 112. Benefits of Indenture.

Section 113. Governing Law.

This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.

Section 114. Legal Holidays.

<PAGE> 45
Section 115. No Recourse against Others.

ARTICLE II

SECURITY FORMS

Section 201. Forms Generally.

<PAGE> 46

Section 202. Form of Face of Security.

BALLY'S PARK PLACE FUNDING, INC.

% First Mortgage Note
due 2004

No. $

BALLY'S PARK PLACE FUNDING, INC., a Delaware corporation
(herein called the "Finance Company," which term includes any successor entity
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to or registered assigns, the principal sum of
Dollars on , 2004, at the office or agency of the Finance Company
referred to below, and to pay interest thereon semiannually, on and
in each year, from , 1994 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the
rate of % per annum, until the principal hereof is paid or duly
provided for. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the or (whether
or not a Business Day), as the case may be, next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly provided
for, and interest on such defaulted interest rate at the same interest
rate borne by the Securities, to the extent lawful, shall forthwith
cease to be payable to the Holder on such Regular Record Date, and may
be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be
fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or
may be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities may
be listed, and upon such notice as may be required by such exchange, all
as more fully provided in

<PAGE> 47
said Indenture. Payment of the principal of (and premium, if any) and interest
on this Security will be made at the office or agency of the Finance Company
maintained for that purpose in The City of New York, or at such other office or
agency of the Finance Company as may be maintained for such purpose, 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; provided, however, that
payment of interest may be made at the option of the Finance Company by check
mailed to the address of the Person entitled thereto as such address shall
appear on the Security Register.

IN WITNESS WHEREOF, the Finance Company has caused this
instrument to be duly executed under its corporate seal.

Dated: BALLY'S PARK PLACE
FUNDING, INC.

Attest:

Section 203. Form of Reverse of Security.

This security is one of a duly authorized issue of securities
of the Finance Company designated as its % First Mortgage Notes due
2004 (herein called the "Securities"), limited (except as otherwise provided in
the Indenture referred to below) in aggregate principal amount to
$425,000,000, which may be issued under an indenture (herein called the
"Indenture") dated as of

<PAGE> 48
, 1994, between the Finance Company, BALLY'S PARK PLACE, INC., a
Delaware corporation (the "Company"), BALLY'S PARK PLACE, INC., a New Jersey
corporation (the "Operating Company"), BALLY'S PARK PLACE REALTY CO., a New
Jersey corporation ("Realty Co."), and , trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, obligations and immunities thereunder of the Finance
Company, the Company, the Operating Company, Realty Co., the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered.

The Securities are subject to redemption upon not less than 30
nor more than 60 days' notice, in amounts of $1,000 or an integral multiple of
$1,000 at any time on or after , 1999, as a whole or in part, at
the election of the Finance Company, at a Redemption Price equal to the
percentage of the principal amount set forth below if redeemed during the
12-month period beginning , of the years indicated below:

<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
1999 %
-------
2000
-------
2001
-------
</TABLE>

At any time, or from time to time, on or prior to
, 1997, the Finance Company may, at its option, use all or a
portion of the net cash proceeds of one or more public offerings of capital
stock of the Company or Bally's Casino Holdings, Inc. to redeem up to an
aggregate of 33-1/3% of the principal amount of the Securities originally
issued, at a redemption price equal to % of the principal amount thereof
plus accrued

<PAGE> 49
and unpaid interest, if any, to the redemption date, provided that immediately
following such redemption, at least $100,000,000 principal amount of Securities
remain outstanding. In order to effect the foregoing redemption with the
proceeds of any public equity offering, the Finance Company shall send the
redemption notice not later than 60 days after the consummation of such public
equity offering.

In the event of redemption of this Security in part only, a
new Security or Securities for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the cancellation hereof.

If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Finance

<PAGE> 50
Company, the Company, the Operating Company and Realty Co. and the rights of
the Holders under the Indenture at any time by the Finance Company, the
Company, the Operating Company and Realty Co. and the Trustee with the consent
of the Holders of a majority in aggregate principal amount of the Securities at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Finance Company, the Company, the
Operating Company and Realty Co. with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange therefore or in lieu hereof whether or not notation of such consent
or waiver is made upon this Security.

The Company and the Finance Company are subject to the New
Jersey Casino Control Act (the "Casino Control Act"). If the New Jersey Casino
Control Commission (the "Casino Control Commission") finds that a Holder or
beneficial owner of Securities must be found qualified or suitable to hold or
own the Securities under the Casino Control Act, and if such Holder or such
beneficial owner does not become so licensed or is not found qualified or
suitable, within any time period specified by the Casino Control Commission or
the Casino Control Act, the Finance Company shall have the right, at its
option, (i) to require such Holder or beneficial owner to dispose of all or a
portion of such Holder's or beneficial owner's Securities within 120 days after
receipt of notice by such Holder or beneficial owner of its disqualification
under the Casino Control Act (or such different period as may be prescribed by
the Casino Control Commission), or (ii) to call for redemption the Securities
of such Holder or beneficial owner, on not less than 30 nor more than 60 days'
notice (or such different period as may be prescribed by the Casino Control
Commission). If such Holder or beneficial owner, having been given the
opportunity by the Finance Company to dispose of such Holder's or beneficial
owner's Securities, shall have failed to do so within the prescribed time
period, the Finance Company shall have the right to redeem such Holder's or
benefi-

<PAGE> 51
cial owner's Securities on five days' notice. On any redemption of
Securities pursuant to this provision, the Redemption Price shall be the lesser
of (i) the market value thereof on the date of such notice of redemption (as
determined in good faith by the Board of Directors of the Finance Company) and
(ii) the price at which such Holder or beneficial owner acquired the
Securities, together with (if permitted by the Casino Control Act or by the
orders of the Casino Control Commission) accrued interest to the Redemption
Date, unless a Redemption Price or other payment, remuneration or related terms
or restrictions are required by the Casino Control Commission, in which event
such price, terms and restrictions shall be the Redemption Price and terms of
redemption. Each Holder or beneficial owner, by accepting a Security, agrees
to the provisions set forth in this paragraph and in the Indenture and agrees
to inform the Finance Company upon request of the price at which such Holder or
beneficial owner acquired such Securities.

Payment of principal and interest (including interest on
overdue principal and overdue interest) is unconditionally guaranteed by the
Company. The Securities are secured by the pledge by the Finance Company of
the $425,000,000 Note of the Operating Company and by the Mortgage on the
property known as the Bally's Park Place Casino Hotel and the security interest
in certain personal property of the Bally's Park Place Casino Hotel granted by
Realty Co. and the Operating Company, which own or lease and operate Bally's
Park Place Casino Hotel.

As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable on
the Security Register of the Finance Company, upon surrender of this Security
for registration of transfer at the office or agency of the Finance Company
maintained for such purpose in The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the

<PAGE> 52
Finance Company and the Security Registrar duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

<PAGE> 53
Section 204. Form of Trustee's Certificate of Authentication.

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the
within-mentioned Indenture.

as Trustee

By
Authorized Signatory

Section 205. Form of Notation Relating to Guaranty.

GUARANTY

No stockholder, officer, director or incorporator, as such,
past, present or future, of the Company shall have any personal liability under
this Guaranty by

<PAGE> 54
reason of his or its status as such stockholder, officer, director or
incorporator.

BALLY'S PARK PLACE, INC.

Attest:

ARTICLE III

THE SECURITIES

Section 301. Title and Terms.

The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $425,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section
303, 304, 305, 306, 906, 1015 or 1108.

The Securities shall be known and designated as the " %
First Mortgage Notes due 2004" of the Finance Company. Their Stated Maturity
shall be , 2004, and they shall bear interest at the rate of
% per annum from , 1994, or the most recent Interest Payment Date
to which interest has been paid or duly provided for, as the case may be,
payable semiannually on and in each year and at said Stated
Maturity, until the principal thereof is paid or duly provided for.

<PAGE> 55
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Finance Company
maintained for such purpose in The City of New York, or at such other office or
agency of the Finance Company as may be maintained for such purpose; provided,
however, that, at the option of the Finance Company, interest may be paid by
check mailed to addresses of the Persons entitled thereto as such addresses
shall appear on the Security Register.

The Securities shall be redeemable as provided in Article
Eleven.

Section 302. Denominations.

The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.

<PAGE> 56
Section 303. Execution, Authentication, Delivery and Dating.

Securities bearing the manual or facsimile signa tures of
individuals who were at any time the proper officers of the Finance Company
shall bind the Finance Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such Securities.

The Trustee shall (upon Company Order) authenticate and
deliver Securities for original issue in an aggregate principal amount of up to
$425,000,000.

Each Security shall be dated the date of its authentication.

<PAGE> 57
hereto with the Trustee pursuant to Article Eight, any of the Securities
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Securities executed in the name of
the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Order of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of
a successor Person pursuant to this Section in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of any Holder but without expense to such Holder, shall provide for the
exchange of all Securities at the time Outstanding held by such Holder for
Securities authenticated and delivered in such new name.

Section 304. Temporary Securities.

<PAGE> 58
like principal amount of definitive Securities of authorized denominations.
Until so exchanged, the temporary Securities shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities.

Section 305. Registration, Registration of Transfer and
Exchange.

Upon surrender for registration of transfer of any Security at
the office or agency of the Finance Company designated pursuant to Section 1002
for such purpose, the Finance Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denomination or
denominations and of a like aggregate principal amount.

At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denomination or denominations and of a like
aggregate principal amount upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for
exchange, the Finance Company shall execute, and the Trustee shall authenticate
and deliver, the Securities which the Holder making the exchange is entitled to
receive.

<PAGE> 59
Every Security presented or surrendered for registration of
transfer, or for exchange or redemption, shall (if so required by the Finance
Company or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Finance Company and
the Security Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing.

No service charge shall be made for any registration of
transfer or exchange or redemption of Securities, but the Finance Company may
require payment of a sum sufficient to pay all documentary, stamp or similar
issue or transfer taxes or other governmental charges that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 303, 304, 306, 906, 1015 or 1108 not
involving any transfer.

Section 306. Mutilated, Destroyed, Lost and Stolen
Securities.

<PAGE> 60
stroyed, lost or stolen Security, a replacement Security of like tenor
and principal amount, and bearing a number not contemporaneously outstanding.

Section 307. Payment of Interest; Interest Rights Preserved.

<PAGE> 61
faulted interest and interest thereon herein collectively called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder; and such
Defaulted Interest may be paid by the Finance Company, at its election in each
case, as provided in Subsection (a) or (b) below:

(a) The Finance Company may elect to make payment of
any Defaulted Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Finance Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the Finance
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited for the benefit of
the Persons entitled to such Defaulted Interest as in this Subsection provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Finance Company of such Special Record Date. In the
name and at the expense of the Finance Company, the Trustee shall cause notice
of the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable pursuant to
the following Subsection (b).

<PAGE> 62
(b) The Finance Company may make payment of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice
given by the Finance Company to the Trustee of the proposed payment pursuant to
this Subsection, such payment shall be deemed practicable by the Trustee.

Section 308. Persons Deemed Owners.

Section 309. Cancellation.

<PAGE> 63
Order the Finance Company shall direct that cancelled Securities be returned to
it.

Section 310. Computation of Interest.

Interest on the Securities shall be computed on the basis of a
year of twelve 30-day months.

ARTICLE IV

SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

(a) either

(i) all Securities theretofore
authenticated and delivered (other than (1) Securities which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306 and (2) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Finance Company and thereafter repaid to the Finance Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or

(ii) all such Securities not theretofore
delivered to the Trustee for cancellation

(1) have become due and payable, or

<PAGE> 64
(2) will become due and payable at
their Stated Maturity within one year, or

(3) are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and at the
expense, of the Finance Company,

and the Finance Company, in the case of (1), (2) or (3) above, has irrevocably
deposited or caused to be deposited with the Trustee, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the Trustee,
as trust funds in trust solely for the benefit of the Holders for that purpose
cash in U.S. Dollars or U.S. Government Obligations sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal of (and premium, if any) and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;

(b) the Finance Company has paid or caused to be
paid all other sums payable hereunder by the Finance Company; and

(c) the Finance Company has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.

<PAGE> 65
Opinion of Counsel, subject to customary exclusions and exceptions reasonably
acceptable to the Trustee, to the effect that (i) the Finance Company has
authorization to establish such irrevocable trust in favor of the Trustee for
the benefit of the Holders under applicable law and the action in establishing
the irrevocable trust has been duly and properly authorized by the Finance
Company and such authorization has not been revoked, (ii) the Trustee is an
independent trustee with respect to the irrevocable trust, (iii) a valid trust
is created at the time of such irrevocable deposit and (iv) the Holders of the
Securities will have the sole beneficial ownership interest under applicable
law in the money or U.S. Government Obligations so deposited in such trust.
The Opinion of Counsel so referred to in this paragraph may contain a
qualification that in the event that a court of competent jurisdiction were to
determine that the trust funds remained owned by the Finance Company after such
deposit, the Holders of the Securities will have a non-avoidable first-priority
perfected security interest under applicable law in the money or U.S.
Government Obligations so deposited (for the limited purpose of the Opinion of
Counsel referred to in this paragraph, such opinion may contain an assumption
that the conclusions contained in a customary solvency letter by a nationally
recognized appraisal firm, dated as of the date of the deposit and taking into
account such deposit, or a customary alternative certificate reasonably
acceptable to the Trustee, are accurate, provided that such solvency letter or
certificate is also addressed and delivered to the Trustee).

<PAGE> 66
take any other action and execute and deliver any other documents that may
reasonably be requested by the Trustee to effectuate such security interest,
and shall do all of the above at such appropriate time so that such security
interest shall attach to the deposit at the time such deposit is made.

Section 402. Application of Trust Money.

<PAGE> 67
ARTICLE V

REMEDIES

Section 501. Events of Default.

An "Event of Default" occurs if:

(a) the Finance Company defaults in the payment of
interest on any Security when the same becomes due and payable and such default
continues for a period of 30 days; or

(b) the Finance Company defaults in the payment of
the principal of (or premium, if any, on) any Security when the same becomes
due and payable, whether at its Stated Maturity, upon redemption, or otherwise;
or

(c) any of the Company, the Operating Company, the
Finance Company or Realty Co. default in the performance of, or breach, any
covenant or warranty of such company hereunder (other than a default in the
performance, or breach, of a covenant or warranty that is specifically dealt
with elsewhere in this Section) or default in the performance of, or breach,
any covenant or warranty of such company in the Security Documents and, in any
such case, continuance of such default or breach for the period and after the
notice specified below; or

(d) an event or events of default as defined in any
mortgage, bond, indenture, loan agreement or other evidence of Indebtedness
under which there may be issued or by which there may be secured or evidenced
any Indebtedness of either of the Companies or any Subsidiary in excess of
$10,000,000 in the aggregate, which default or defaults extend beyond any
period of grace provided with respect thereto and which default or defaults
relate to (i) the obligation to pay the principal of or interest on any such
Indebtedness, in either case at the final maturity set forth in the agreement
under which such Indebtedness is issued or (ii) any other obligation which
shall result in such Indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise become due and payable; or

(e) final judgments or orders are rendered against
either of the Companies or any Subsidiary

<PAGE> 68
which require the payment of money, either individually or in an aggregate
amount, that is more than $10,000,000 and (i) an enforcement proceeding with
respect thereto has been commenced or (ii) such judgment or order shall remain
unsatisfied or unstayed, by reason of appeal or otherwise, for 60 days; or

(f) a decree or order is entered by a court having
jurisdiction in the premises (i) for relief in respect of either of the
Companies or any Material Subsidiary in an involuntary case or proceeding under
the Federal Bankruptcy Code or any other federal or state bankruptcy,
insolvency, reorganization or similar law or (ii) adjudging either of the
Companies or any Material Subsidiary as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of either of the Companies or any Material
Subsidiary under the Federal Bankruptcy Code or any other applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of either of the Companies or any
Material Subsidiary or of any substantial part of any of their properties, or
ordering the winding up or liquidation of any of their affairs, and any such
decree or order remains unstayed and in effect for a period of 60 consecutive
days; or

(g) either of the Companies or any Material
Subsidiary institutes a voluntary case or proceeding under the Federal
Bankruptcy Code or any other applicable federal or state law or any other case
or proceeding to be adjudicated as bankrupt or insolvent, or either of the
Companies or any Material Subsidiary consents to the entry of a decree or order
for relief in respect of either of the Companies or any Material Subsidiary in
any involuntary case or proceeding under the Federal Bankruptcy Code or any
other applicable federal or state law or to the institution of bankruptcy or
insolvency proceedings against either of the Companies or any Material
Subsidiary, or either of the Companies or any Material Subsidiary files a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable federal or state law, or
consents to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator (or

<PAGE> 69
other similar official) of either of the Companies or any Material Subsidiary
or of any substantial part of its property, or makes an assignment for the
benefit of creditors, or becomes insolvent, or is unable to pay debts generally
as they come due, or admits in writing its inability to pay its debts generally
as they become due or takes corporate action in furtherance of any such action;
or

(h) there is a default in the performance or breach
of any of the provisions of Article Eight or a failure by the Finance Company
to provide the notice to Holders or to make the payments required by Section
1015; or

(i) an "Event of Default" under any of the Security
Documents occurs; or

(j) the revocation, suspension or loss for a period
of more than 90 consecutive days of any Gaming License (other than a voluntary
relinquishment of a Gaming License by a Subsidiary other than a Subsidiary
holding the license to operate the Casino Hotel) under which the Company or any
Material Subsidiary owns, leases or operates the Casino Hotel or any Subsidiary
Casino Hotel; or

(k) the Company Guaranty shall, at any time, cease
to be in full force and effect or shall be declared invalid or unenforceable;
or either of the Companies shall assert, in any pleading in a court of
competent jurisdiction, that such Company Guaranty is invalid or unenforceable.

<PAGE> 70
Section 502. Acceleration of Maturity; Rescission .

If an Event of Default (other than an Event of Default
specified in Section 501(f) or 501(g)) occurs and is continuing, the Trustee or
the Holders of at least 25% of the principal amount of the Securities then
Outstanding, by written notice to the Company and the Finance Company (and to
the Trustee if such notice is given by the Holders), may, and the Trustee at
the request of such Holders shall, declare all unpaid principal of, premium, if
any, and accrued interest on all the Securities to be due and payable
immediately, and upon any such declaration such principal, premium and accrued
interest shall become immediately due and payable. If an Event of Default
specified in Section 501(f) or 501(g) occurs and is continuing, the amounts
described above shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

<PAGE> 71
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.

The Finance Company covenants that if

(a) default is made in the payment of any interest
on any Securities when such interest becomes due and payable and such default
continues for a period of 30 days, or

(b) default is made in the payment of the principal
of (or premium, if any, on) any Security at the Maturity thereof,

the Finance Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal (and premium, if any) and interest,
with interest upon the overdue principal (and premium, if any) and, to the
extent that payment of such interest shall be legally enforceable, upon overdue
installments of interest, at the rate borne by the Securities; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

<PAGE> 72
to protect and enforce such rights, including foreclosing upon the Cash
Collateral in the Collateral Account.

Section 504. Trustee May File Proofs of Claim.

(a) to file and prove a claim for the whole amount
of principal (and premium, if any) and interest owing and unpaid in respect of
the Securities and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and

(b) to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 606.

<PAGE> 73
sition or other similar arrangement affecting the Securities or the
rights of any Holder thereof, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.

Section 505. Trustee May Enforce Claims without Possession of
Securities.

Section 506. Application of Money Collected.

FIRST: To the payment of all amounts due the Trustee under
Section 606;

THIRD: The balance, if any, to the Finance Company.

<PAGE> 74
Notwithstanding the foregoing, if the Trustee forecloses on
any real Property comprising the Collateral, it shall pay out the proceeds of
such foreclosure in accordance with the provisions of the Mortgage and the
Intercreditor Agreement if there are any Pari Passu Mortgages on such real
Property.

Section 507. Limitation on Suits.

(a) such Holder has previously given written notice
to the Trustee of a continuing Event of Default;

(b) the Holders of not less than 25% in principal
amount of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;

(c) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;

(d) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute any such
proceeding; and

(e) no direction inconsistent with such written
request has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities;

<PAGE> 75
the manner provided in this Indenture, the Note or the Security Documents and
for the equal and ratable benefit of all the Holders.

Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.

Section 509. Restoration of Rights and Remedies.

Section 510. Rights and Remedies Cumulative.

<PAGE> 76
Section 511. Delay or Omission Not Waiver.

Section 512. Control by Holders.

(a) such direction shall not be in conflict with any
rule of law or with this Indenture or expose the Trustee to personal liability,
and

(b) subject to the provisions of Trust Indenture Act
Section 315, the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.

Section 513. Waiver of Past Defaults.

(a) in the payment of the principal of (or premium,
if any) or interest on any Security, or

(b) in respect of a covenant or provision hereof
which under Article Nine cannot be modified or amended without the consent of
the Holder of each Outstanding Security affected.

<PAGE> 77
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

Section 514. Undertaking for Costs.

All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, the Note or the Security Documents or in
any suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium, if any) or interest on any Security on or after the respective
Stated Maturities expressed in such Security (or, in the case of redemption, on
or after the Redemption Date).

Section 515. Waiver of Stay, Extension or Usury Laws.

<PAGE> 78
and permit the execution of every such power as though no such law had been
enacted.

ARTICLE VI

THE TRUSTEE

Section 601. Notice of Defaults.

Within 90 days after the occurrence of any Default that is
known to the Trustee, the Trustee shall transmit by mail to all Holders, as
their names and addresses appear in the Security Register, notice of such
Default; provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest on any Security,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders.

Section 602. Certain Rights of Trustee.

Subject to the provisions of Trust Indenture Act Sections
315(a) through 315(d):

(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
delivered by it to be genuine and to have been signed or presented by the
proper party or parties;

(b) any request or direction of either of the
Companies mentioned herein shall be sufficiently evidenced by a Company Request
or Company Order and any resolution of the Board of Directors of either of the
Companies may be sufficiently evidenced by a Board Resolution;

(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be provided or established
prior to taking, suf-

<PAGE> 79
fering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;

(d) the Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;

(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine, upon reasonable notice, the books, records and premises of
the Companies, personally or by agent or attorney;

(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder;

<PAGE> 80
able grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it; and

(i) the Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within the rights or powers conferred upon it by this Indenture.

Section 603. Not Responsible for Recitals or Issuance of
Securities.

Section 604. May Hold Securities.

Section 605. Money Held in Trust.

Money or U.S. Government Obligations held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on

<PAGE> 81
any money received by it hereunder except as otherwise agreed with the Finance
Company.

Section 606. Compensation and Reimbursement.

The Companies agree jointly and severally:

(a) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);

(b) except as otherwise expressly provided herein,
to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and

(c) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.

<PAGE> 82
Section 607. Conflicting Interests.

The Trustee shall comply with the provisions of Section 310(b)
of the Trust Indenture Act.

Section 608. Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Trust Indenture Act Section 310(a)(1) and
which shall have a combined capital and surplus of at least $50,000,000 and
have its Corporate Trust Office located in The City of New York (or if its
Corporate Trust Office shall not be located in The City of New York, which
shall maintain an office in The City of New York where the Securities may be
presented or surrendered and notices and demands hereunder may be made or
served) to the extent there is such an institution eligible and willing to
serve. If such corporation publishes reports of condition at least annually
pursuant to law or to the requirements of Federal, State, Territorial or
District of Columbia supervising or examining authority, then, for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. The Trustee shall comply with the Casino Control Act to the extent
such requirements are applicable to the Trustee and are consistent with its
duties herein; provided, however, that to the extent the provisions of the
Casino Control Act conflict with the provisions of the Trust Indenture Act, the
Trust Indenture Act shall control; provided further, that this Section 608
shall not require the Trustee to assume any duties or obligations which are in
addition to those set forth herein.

Section 609. Resignation and Removal; Appointment of
Successor.

(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the

<PAGE> 83
acceptance of appointment by the successor Trustee under Section 610.

(b) The Trustee may resign at any time by giving
written notice thereof to the Companies. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

(c) The Trustee may be removed at any time by an Act
of the Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and the Companies.

(d) If at any time:

(i) the Trustee fails to comply with the
provisions of Trust Indenture Act Section 310(b), or

(ii) the Trustee shall cease to be eligible
under Section 608, or

(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation,

(iv) the Casino Control Commission
determines that the Trustee is required to be licensed or found
qualified or suitable and the Trustee does not become so licensed or
found qualified or suitable within such period as may be prescribed by
the Casino Control Commission,

<PAGE> 84
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, the Company, by a Board Resolution, shall promptly, upon
approval of the Casino Control Commission, appoint a successor Trustee, which
Trustee shall be licensed or found qualified or suitable under the Casino
Control Act. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company, upon approval of the Casino
Control Commission, and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with Section 610, become the successor Trustee and supersede the
successor Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Holders of the Securities and so
accepted appointment within 60 days, the Finance Company or the Holders of at
least 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

(f) The Finance Company shall give notice of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee by mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of Securities as their names and addresses appear in
the Security Register. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.

Section 610. Acceptance of Appointment by Successor.

Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Companies and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; pro-

<PAGE> 85
vided, however, that the retiring Trustee shall continue to be entitled to
the benefit of Section 606(c). Such retiring Trustee shall, on request of the
Finance Company or the successor Trustee, upon payment of its charges, execute
and deliver an instrument transferring to such successor Trustee all such
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Finance Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.

No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.

Section 611. Merger, Conversion, Consolidation or Succession
to Business.

Section 612. Preferential Collection of Claims against
Company.

<PAGE> 86
of claims against the Companies (or any such other obligor).

Section 613. Further Assurances.

At the request of the Company, the Operating Company, the
Finance Company or Realty Co., the Trustee will execute and deliver to any
holder of any Pari Passu Mortgage, the Lien of which is evidenced by an
instrument containing the Pari Passu statement referred to in the definition of
Pari Passu Mortgage in Section 101 hereof, a certificate in the form of Exhibit
E hereto (the "Pari Passu Certificate") and such other assurances or
instruments all in form recordable in the Atlantic County, New Jersey mortgage
records, as the Company, the Operating Company, the Finance Company or Realty
Co. may reasonably request to confirm that the Collateral is held for the
ratable benefit of the Holders and such holders of any Pari Passu Mortgage. The
Trustee shall deliver the Pari Passu Certificate and such other assurances or
instruments only upon receipt of, and shall be fully protected in relying upon,
(i) an Opinion of Counsel stating that the execution and delivery of such
assurances or other instruments is in compliance with this Section 613 based
upon the certificates referred to in clauses (ii) and (iii) below, (ii) an
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee stating
that the Indebtedness secured by such Pari Passu Mortgage is within the
limitations set forth in Sections 1007 and 1010 and (iii) an Officers'
Certificate stating that such Pari Passu Mortgage complies with the provisions
of this Indenture, that no Default has occurred and is continuing or would
occur as a result of giving effect to such Pari Passu Mortgage and that the
holder of such Pari Passu Mortgage has caused the Intercreditor Agreement to be
executed.

<PAGE> 87
Passu Certificate) if the creation or incurrence of the Pari Passu Mortgage
referred to in such Pari Passu Certificate and other assurances or instruments
shall not have been permitted by Sections 1007 and 1010 of this Indenture or
does not otherwise comply with the provisions of this Indenture.

The filing for record in the Atlantic County, New Jersey
Clerk's Office of the Pari Passu Certificate and such other assurances or
instruments that the Company, the Operating Company or the Finance Company may
reasonably request, as provided above in this Section 613, shall conclusively
establish and confirm to all persons that the Lien of the holder of
Indebtedness referred to in the Pari Passu Certificate ranks pari passu with
the Lien of the Mortgage and that the Collateral is held for the ratable
benefit of the Holders and such holder of Pari Passu Mortgages.
Notwithstanding any other provision of this Section 613, the holder of any such
Pari Passu Mortgage, its successors and assigns, shall be entitled to rely on
the Pari Passu Certificate and such other assurances or instruments without
further investigation or other acts.

ARTICLE VII

HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY

Section 701. Disclosure of Names and Addresses of Holders.

<PAGE> 88
addresses of the Holders in accordance with Trust Indenture Act Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Trust Indenture Act Section 312 at any time
following the date on which this Indenture is qualified under the Trust
Indenture Act.

Section 702. Reports by Trustee.

(a) Within 60 days after __________ of each year
commencing with the first __________ following the date on which this Indenture
is qualified under the Trust Indenture Act, the Trustee shall transmit by mail
to all Holders, as their names and addresses appear in the Security Register,
as provided in Trust Indenture Act Section 313(c), a brief report dated as of
such __________ if required by Trust Indenture Act Section 313(a).

A copy of each report at the time of its mailing to Holders
shall be mailed to the Finance Company and filed with the Commission and each
stock exchange, if any, on which the Securities are listed.

The Company shall notify the Trustee if the Securities become
listed on any stock exchange.

(b) The Trustee will provide to the Casino Control
Commission and the Division of Gaming Enforcement:

(i) copies of all notices, reports and
other written communications that the Trustee gives to Holders;

(ii) a list of Holders promptly after the
original issuance of the Securities and semiannually thereafter upon
the receipt of a Company Request;

<PAGE> 89
denture, including the Security Documents, the entering into or
taking possession of any Property constituting the Collateral and any
rescission, annulment or waiver in respect of an Event of Default under
any instruments described in this clause (iii);

(iv) notice of the removal or resignation
of the Trustee within five Business Days thereof;

(v) notice of any transfer or assignment
of rights under this Indenture, or any of the Security Documents
within five Business Days thereof; and

(vi) a copy of any amendment to the
Securities or this Indenture, including the Security Documents, within
five Business Days of the later of the effectiveness or execution
thereof.

<PAGE> 90
with clause (iii) above and as otherwise required by the Casino Control Act, or
Casino Control Commission or the Division of Gaming Enforcement.

Section 703. Reports by Company.

ARTICLE VIII

CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE

Section 801. Company May Consolidate, etc., Only on Certain
Terms.

Neither the Company nor any Restricted Subsidiary shall
consolidate with or merge with or into any other Person or sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all of the
Properties and assets of any of (a) the Company and its Subsidiaries taken as a
whole, (b) the Operating Company, substantially as an entirety or (c) Realty
Co. to any Person or group of affiliated Persons unless at the time and after
giving effect thereto:

(i) either (a) the Company or such
Restricted Subsidiary shall be the continuing corporation or (b) the
Person (if other than the Company or a Subsidiary) formed by such
consolidation or merger, or to which such sale, assignment, transfer,
lease, conveyance or disposition shall have been made (the "Surviving
Entity"), is a corporation duly orga-

<PAGE> 91
nized and validly existing under the laws of the United States of
America, any state thereof or the District of Columbia and shall, in
either case, expressly assume by supplemental indenture hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Companies under the Indenture and
the Securities and this Indenture shall remain in full force and
effect;

(ii) immediately prior to such transaction,
and immediately after giving effect to such transaction on a pro forma
basis, no default or Event of Default shall have occurred and be
continuing;

(iii) immediately after giving effect to
such transaction on a pro forma basis, the Company (or the Surviving
Entity, if the Company is not the continuing obligor under the
Indenture) could incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under Section 1007 hereof;

(iv) immediately after giving effect to
such transaction on a pro forma basis, the Consolidated Net Worth of
the Company (or the Surviving Entity if the Company is not the
continuing obligor under the Indenture) is at least equal to the
Consolidated Net Worth of the Company immediately before such
transaction;

(v) the Lien of the Security Documents and
the rights of the Trustee and the Holders thereunder and under this
Indenture have not been impaired;

(vi) the Surviving Entity has all Gaming
Licenses and other permits and approvals required to operate the
Casino Hotel and any casino hotels then owned by such Surviving Entity
and the Surviving Entity or an Affiliate thereof has had prior
experience in the operation and management of casinos or casino
hotels, or the Surviving Entity has

<PAGE> 92
retained management with such prior experience; and

(vii) the Companies have delivered to the
Trustee, in form and substance reasonably satisfactory to the Trustee,
an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental
indenture, if one is required by this Section 801, comply with this
Section 801 and that all conditions precedent herein provided for
relating to such transaction have been complied with and that the Lien
of the Security Documents and the rights of the Trustee and the
Holders thereunder and under the Indenture have not been impaired.

Section 802. Successor Substituted.

Upon any consolidation or merger or any sale, assignment,
transfer, lease or conveyance or other disposition of all or substantially all
of the assets of the Company and its Subsidiaries taken as a whole, the
Operating Company or Realty Co., in accordance with Section 801, the successor
corporation formed by such consolidation or into which either the Company or a
Subsidiary is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Companies under this
Indenture with the same effect as if such successor corporation had been named
as one of the Companies herein. When a successor assumes all the obligations
of its predecessor under this Indenture and the Securities, the predecessor
will be released from those obligations, provided that, in the case of a
transfer by lease, the predecessor corporation shall not be released from the
payment of principal of and interest on the Securities.

<PAGE> 93

ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures without Consent of
Holders.

(a) to evidence the succession of another Person to
either of the Companies and the assumption by any such successor of the
covenants of the Company or the Finance Company, as the case may be, herein and
in the Securities;

(b) to add to the covenants of the Companies for the
benefit of the Holders, or to surrender any right or power herein or in the
Securities conferred upon the Companies;

(c) to cure any ambiguity, to correct or supplement
any provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided that, in each case, such
provisions shall not adversely affect the interests of the Holders; or

(d) to make any other change that does not adversely
affect the rights of any Holder.

Section 902. Supplemental Indentures with Consent of Holders.

<PAGE> 94
Board Resolution, and the Trustee may enter into one or more indentures, notes
or security documents supplemental hereto or to the Note or Security Documents,
as the case may be, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture, the Note or
Security Documents or of waiving or modifying in any manner the rights of the
Holders under this Indenture, the Note or the Security Documents; provided,
however, that no such supplemental indenture, note or security documents,
amendment or waiver shall, without the consent of the Holder of each
Outstanding Security affected thereby:

(a) change the Stated Maturity of the principal of,
or any installment of interest on, any Security or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the coin or currency in which the principal of
any Security or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date) or modify the obligation of the Company to purchase Securities
under Section 1015 hereof;

(b) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for any
amendment, supplement or waiver; or

(c) modify any of the provisions of this Section or
Section 513 or Section 1022, except to increase any of the percentages set
forth in such Sections or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of
each Security affected thereby.

<PAGE> 95
Section 903. Execution of Amendments, Supplements or Waivers.

Section 904. Effect of Amendments, Supplements or Waivers.

Section 905. Conformity with Trust Indenture Act.

Every amendment, supplement or waiver executed pursuant to
this Article Nine shall conform to the requirements of the Trust Indenture Act
as then in effect.

Section 906. Reference in Securities to Amend ments,
Supplements or Waivers.

<PAGE> 96
any such amendment, supplement or waiver may be prepared and executed by the
Finance Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.

ARTICLE X

COVENANTS

Section 1001. Payment of Principal, Premium and Interest.

The Finance Company will duly and punctually pay the principal
of (and premium, if any) and interest on the Securities in accordance with the
terms of the Securities and this Indenture.

The Finance Company shall pay interest on overdue principal at
the rate borne by the Securities; it shall pay interest on overdue installments
of interest at the same rate to the extent lawful.

Section 1002. Maintenance of Office or Agency.

<PAGE> 97
The Finance Company may from time to time designate one or
more other offices or agencies (in or outside of The City of New York) where
the Securities may be presented or surrendered for any or all such purposes,
and may from time to time rescind such designation; provided, however, that no
designation or recision shall in any manner relieve the Finance Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Finance Company will give prompt written notice to the Trustee
of any such designation or rescission and any change in the location of any
such office or agency.

Section 1003. Money for Security Payments to Be Held in Trust.

<PAGE> 98
(a) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;

(b) give the Trustee notice of any default by the
Finance Company (or any other obligor upon the Securities) in the making of any
payment or principal (and premium, if any) or interest; and

(c) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.

<PAGE> 99
Section 1004. Corporate Existence.

Subject to Article Eight, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and that of each Restricted Subsidiary of the Company and
the corporate rights (charter and statutory), corporate licenses and corporate
franchises of the Company and its Subsidiaries, except where a failure to do
so, singly or in the aggregate, is not likely to have a materially adverse
effect upon the business, assets, financial conditions or results of operations
of the Company and the Subsidiaries taken as a whole determined on a
consolidated basis in accordance with GAAP; provided that the Company shall
not be required to preserve any such existence (except of the Company), right,
license or franchise if the Board of Directors of the Company, or of the
Restricted Subsidiary concerned, shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company or such
Restricted Subsidiary and that the loss thereof is not disadvantageous in any
material respect to the Holders.

Section 1005. Payment of Taxes and Other Claims.

The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all material taxes,
assessments and governmental charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of the Company or any of its
Subsidiaries and (b) all material lawful claims for labor, materials and
supplies, which, if unpaid, would by law become a lien upon the property of
the Company or any of its Subsidiaries that could produce a material adverse
effect on the consolidated financial condition of the Company; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings. The foregoing provision shall not apply to the Company's payment
or discharge of any taxes, assessments or governmental charges governed by the
Mortgage.

<PAGE> 100
Section 1006. Maintenance of Properties.

The Company shall cause all material properties owned by or
leased to it or any Subsidiary and necessary in the conduct of its business or
the business of such Subsidiary to be maintained and kept in all material
respects in normal condition, repair and working order, ordinary wear and tear
excepted.

Section 1007. Limitation on Indebtedness.

The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, incur, assume, or directly or (other than
through Unrestricted Subsidiaries) indirectly guaranty or in any other manner
become directly or (other than through Unrestricted Subsidiaries) indirectly
liable for the payment of (collectively, "incur"), any Indebtedness (excluding
Permitted Indebtedness and including Acquired Indebtedness and Indebtedness
which is a Guaranty permitted pursuant to clause (v) of Section 1008(b))
unless, at the time of such event and after giving effect thereto, on a pro
forma basis the Company's Consolidated Fixed Charge Coverage Ratio for the four
full fiscal quarters for which financial information in respect thereof is
available immediately preceding such event, taken as one period, calculated on
the assumption that (i) such Indebtedness and any other outstanding
Indebtedness incurred since the first day of such four-quarter period had been
incurred on the first day of such four-quarter period, (ii) any acquisition or
disposition by the Company and its Restricted Subsidiaries of any assets
outside the ordinary course of business since the first day of such last four
full fiscal quarters had been consummated on the first day of such four-quarter
period and (iii) any prepayment of Indebtedness prior to the scheduled maturity
thereof since the first day of such last four fiscal quarters had been
consummated on the first day of such four-quarter period, is at

<PAGE> 101
least equal to the ratios set forth below during the years indicated below:

<TABLE>
<CAPTION>
Year Ratio
---- -----
<S> <C>
1994 2:1
1995 and thereafter 2.25:1
</TABLE>

Any Indebtedness (other than Permitted Indebtedness or
Acquired Indebtedness or Indebtedness that is a Guaranty permitted pursuant to
clause (v) of Section 1008(b)) may be incurred hereunder only if (i) such
Indebtedness has an Average Life to Stated Maturity (A) greater than the
remaining Average Life to Stated Maturity of the Securities, if such
Indebtedness ranks junior to the Securities, or (B) equal to or greater than
the remaining Average Life to Stated Maturity of the Securities, if such
Indebtedness ranks pari passu to the Securities and (ii) such Indebtedness has
a final scheduled maturity which (A) exceeds the final Stated Maturity of the
Securities, if such Indebtedness ranks junior to the Securities, or (B) is
equal to or exceeds the final Stated Maturity of the Securities, if such
Indebtedness ranks pari passu to the Securities.

Section 1008. Limitation on Restricted Payments.

(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or (other than through an Unrestricted
Subsidiary) indirectly,

(i) declare or pay any dividend on, or
make any distribution to holders of, any shares of the Company's
Capital Stock (other than dividends or distributions payable in shares
of its Capital Stock or in options, warrants or other rights to
purchase such Capital Stock, but excluding dividends or distributions
payable in Redeemable Capital Stock or in options, warrants or other
rights to purchase Redeemable Capital Stock),

(ii) purchase, redeem or acquire or retire
for value, any Capital Stock of the Company or any Subsidiary or any
options, war-

<PAGE> 102
rants or other rights to acquire such Capital Stock,

(iii) declare or pay any dividend or
distribution on any Capital Stock of any Subsidiary to any Person
(other than the Company or any of its Wholly Owned Subsidiaries),

(iv) prepay, repay, redeem, defease or
otherwise acquire or retire, for value prior to stated maturity of
principal, scheduled repayment or scheduled sinking fund payment, any
Indebtedness of the Company or the Finance Company that ranks junior
to or pari passu to the Securities in right of payment,

(v) incur, create or assume any Guaranty
of Indebtedness of any Affiliate (other than with respect to (a)
Guaranties of Indebtedness of any Wholly Owned Subsidiary by the
Company or by any Restricted Subsidiary or (b) Guaranties of
Indebtedness of the Company by any Restricted Subsidiary, in each case
in accordance with the terms of this Indenture), or

(vi) make any Investment (other than any
Permitted Investment) in any Person

<PAGE> 103
declared or made after the date the Securities are issued shall not exceed the
sum of:

(F) $50,000,000.

Notwithstanding the foregoing, in the event the Company's
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters exceeds

<PAGE> 104
3.0:1, then the amount of Consolidated Net Income of Bally's Park Place
included in clause (A) above shall be 66 2/3% of Consolidated Net Income of
Bally's Park Place since April 1, 1994. In the event that at the end of any
succeeding fiscal quarter, the Company's Consolidated Fixed Charge Coverage
Ratio for the preceding four consecutive fiscal quarters shall equal or be less
than 3.0:1, then the amount of Consolidated Net Income of Bally's Park Place
included in clause (A) above shall revert to 50% of Consolidated Net Income of
Bally's Park Place.

(b) The foregoing provision will not be violated by reason of

(i) the payment of any dividend within 60
days after the date of declaration thereof, if at such declaration
date such declaration complied with the foregoing provision (in which
event such dividend shall be deemed to have been paid on such date of
declaration thereof for purposes of the foregoing provision);

(ii) redemption of any Capital Stock or
Subordinated Indebtedness of the Company or any Subsidiary required by
the Casino Control Commission or the Division of Gaming Enforcement;

<PAGE> 105
Life to Stated Maturity equal to or greater than the remaining Average
Life to Stated Maturity of the Securities; and (3) such Indebtedness
has a final scheduled maturity which exceeds the final Stated Maturity
of the Securities, provided, however, that any Net Cash Proceeds from
such issue are excluded from clause 3(E) of the preceding paragraph;

(iv) redemption, repurchase or other
acquisition or retirement for value of Capital Stock of the Company or
any options, warrants or rights to acquire such Capital Stock of the
Company which is made at a time when there is no default or Event of
Default continuing and which is made in exchange for, or out of
proceeds of the substantially concurrent issue and sale (other than to
a Subsidiary) of shares of Capital Stock (other than Redeemable
Capital Stock) of the Company, provided, however, that any Net Cash
Proceeds from such issue are excluded from clause 3(B) of the
preceding paragraph;

(v) Guaranties of Indebtedness of
Affiliates of the Company in an amount not to exceed $20,000,000;
provided, however, that such Restricted Payment shall comply with
clauses (1) and (2) of paragraph (a) of this Section 1008;

(vi) payments permitted pursuant to clauses
(iv) and (v) under the proviso contained in Section 1009; and

(vii) Restricted Payments in an amount equal
to any interest paid by the trustee to the Finance Company under the
indenture relating to the Company's 11 7/8 First Mortgage Notes due
1999 on money deposited in connection with the defeasance thereof.

The Restricted Payments described in clauses (b)(i) and (ii) shall be included
in any computation of the aggregate amount of Restricted Payments by the
Company and its Subsidiaries. Notwithstanding the foregoing, the payment of a
dividend out of the net proceeds of the issuance of

<PAGE> 106
the Securities shall not be deemed a Restricted Payment for purposes of the
calculation of the aggregate amount of all Restricted Payments in clause (3) of
paragraph (a) of this Section 1008.

Section 1009. Limitation on Transactions with Affiliates.

The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or (other than through an Unrestricted
Subsidiary) indirectly, enter into any transaction or series of related
transactions (including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with any Affiliate of the Company (other
than the Company or a Wholly Owned Subsidiary of the Company) unless (i) such
transaction or series of transactions is or are on terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be,
than could have been obtained at the time of such transaction or transactions
in a comparable transaction in arm's-length dealings with an unaffiliated third
party, (ii) with respect to any transaction or series of transac- tions
involving aggregate payments in excess of $1,000,000, but less than
$10,000,000, the Company delivers an Officers' Certificate to the Trustee
certifying that such transaction or series of transactions complies with clause
(i) above and that such transaction or series of transactions has received the
approval of a majority of the Board of Directors of the Company and (iii) with
respect to any transaction or series of transactions involving aggregate
payments equal to or in excess of $10,000,000, the Company delivers an
Officers' Certificate to the Trustee certifying that such transaction or series
of transactions complies with clause (i) above and that such transaction or
series of transactions has received the approval of a majority of the
disinterested directors of the Board of Directors of the Company; provided,
however, that the foregoing restrictions shall not apply to (i) the payment of
reasonable and customary fees to the directors of the Company and its
Restricted Subsidiaries who are not employees of the Company or any such
Restricted Subsidiary, (ii) loans and advances to and other employment
arrangements with any officer, director or employee of the Company or of any
Restricted Subsidiary entered into in the ordinary course of business and
consistent with past practice, (iii) transactions pursu-

<PAGE> 107
ant to the lease agreement [dated March 8, 1993,] relating to the lease
from the Company of surface parking lots (located across Boston Avenue and
Hartford Avenue from Bally's Grand Casino Hotel) to GNAC, (iv) transactions,
including payments and reimbursements, in connection with certain management
and administrative services and insurance coverage provided to the Company by
Bally and certain consolidated GNAC/Company operations pursuant to the
Intercorporate Agreement, (v) payments to Bally pursuant to the Tax Sharing
Agreement , (vi) Investments that are Permitted Investments pursuant to clause
(vi) of the definition of Permitted Investments and (vii) Guaranties permitted
pursuant to clause (v) of Section 1008(b). For purposes of this provision, a
director who is neither (i) an officer or an employee of the other party to
such transaction nor (ii) a person who has a personal interest directly or
indirectly in the transaction shall be deemed "disinterested."

Section 1010. Limitation on Encumbrances.

The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or otherwise
suffer to exist or cause or otherwise suffer to become effective any Lien in or
on any right, title or interest to the Mortgage or any Property (real or
personal) that constitutes all or any portion of the Collateral subject to the
Lien of the Mortgage (a "Restricted Encumbrance," which term excludes the Lien
created by the Mortgage and the Credit Facility Mortgage), unless (i) such
Restricted Encumbrance is a Permitted Encumbrance or (ii) such Restricted
Encumbrance secures Indebtedness that ranks junior to or is pari passu to the
Lien of the Mortgage and is granted to secure Indebtedness that, together with
all other indebtedness secured pursuant to this clause (ii), is in an aggregate
principal amount not to exceed the sum of (without duplication) (A) the
original principal amount of the Securities (less the principal amount of the
Securities outstanding at the time of any calculation), (B) the amount
available under the revolving credit facility described in clause (i) of the
definition of Permitted Indebtedness, (C) $100 million and (D) 66-2/3% of the
cost of all Casino Hotel Improvements reflected on the consolidated balance
sheet of the Company since the date hereof.

<PAGE> 108
If the Lien of a Restricted Encumbrance permitted under
clause (ii) of the preceding paragraph is created, the Trustee shall, at the
request of the Company, enter into the Intercreditor Agreement with the holder
or holders of the Indebtedness secured by such Restricted Encumbrance.

Section 1011. Limitation on Preferred Stock of Subsidiaries.

The Company will not permit any Restricted Subsidiary to issue
any Preferred Stock other than (i) Preferred Stock issued to the Company or a
Wholly Owned Subsidiary or (ii) Preferred Stock (other than Redeemable Capital
Stock) issued to any person (other than the Company or a Wholly Owned
Subsidiary), provided that at the time of such issuance, and after giving pro
forma effect thereto, a Restricted Subsidiary of the Company would be entitled
to issue Indebtedness in an amount equal to the maximum liquidation preference
of the Preferred Stock under Section 1007. The Company will not sell, transfer
or otherwise dispose of Preferred Stock issued by a Restricted Subsidiary of
the Company or permit a Wholly Owned Subsidiary to sell, transfer or otherwise
dispose of Preferred Stock issued by a Restricted Subsidiary other than (i) to
the Company or a Wholly Owned Subsidiary or (ii) to any Person (other than the

<PAGE> 109
Company or a Wholly Owned Subsidiary), provided that such Preferred Stock is
not Redeemable Capital Stock and that at the time of such sale, transfer or
disposition, and after giving pro forma effect thereto, a Restricted Subsidiary
of the Company would be entitled to issue Indebtedness in an amount equal to
the maximum liquidation preference of the Preferred Stock under Section 1007.
Notwithstanding the foregoing, nothing in this Section 1011 will prohibit the
ownership of Preferred Stock (other than Redeemable Capital Stock) issued by a
Person (other than an Unrestricted Subsidiary) prior to the time (A) such
Person becomes a Restricted Subsidiary of the Company, (B) such Person merges
with or into a Restricted Subsidiary of the Company or (C) a Restricted
Subsidiary of the Company merges with or into such Person; provided, further,
that such Preferred Stock was not issued or incurred by such Person in
anticipation of a transaction contemplated by subclause (A), (B) or (C) of this
Section 1011.

Section 1012. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries.

The Company will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind, on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distribution on
its Capital Stock, (b) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (c) make any Investment in the Company or any other
Restricted Subsidiary, (d) transfer any of its property or assets to the
Company or any other Restricted Subsidiary or (e) guarantee any Indebtedness of
the Company or any of its Restricted Subsidiaries, except (i) any encumbrance
or restriction pursuant to an agreement in effect at or entered into on the
date hereof; (ii) any encumbrance or restriction, with respect to a Restricted
Subsidiary that is not a Subsidiary of the Company on the date hereof, in
existence at the time such Person becomes a Subsidiary of the Company or
created on the date it becomes a Subsidiary; and (iii) any encumbrance or
restriction pursuant to any agreement that extends, refinances, renews or
replaces any agreement containing any of the restrictions described in the
foregoing clauses (i) and (ii), provided that the terms and conditions of any
such restrictions, taken as a whole, are not less

<PAGE> 110
favorable to the Holders of the Securities than those under or pursuant to the
agreement extended, refinanced, renewed or replaced. Notwithstanding the
foregoing, this covenant shall not be violated by any restriction required by
the Casino Control Commission or the Division of Gaming Enforcement, except
where such restriction would affect the ability of the Company to make payments
on the Promissory Note.

Section 1013. Ownership of Casino Hotel; Other Businesses.

Section 1014. Validity of Liens.

Section 1015. Change in Control.

Subject to Section 1017, following the occurrence of any
Change in Control, the Finance Company shall make an offer to purchase, at the
option of each Holder,

<PAGE> 111
such Holder's Outstanding Securities at a purchase price equal to 101% of the
aggregate principal amount of such Outstanding Securities, plus accrued and
unpaid interest to the date of purchase. The Finance Company shall purchase
such Securities on a date (the "Change in Control Payment Date") 20 Business
Days after the mailing of the notice described in the next succeeding paragraph
by mailing or delivering payment for all Securities properly delivered to the
Finance Company pursuant hereto. If the Change in Control Payment Date is on
or after an interest payment record date and on or before the related Interest
Payment Date, any accrued interest will be paid to the person in whose name a
Security is registered at the close of business on such record date, and no
additional interest will be payable to Holders who deliver Securities pursuant
hereto.

(1) the events causing such Change in Control;

(2) the purchase price and the Change in Control Payment
Date;

(3) that any Security not purchased will continue to
accrue interest;

(4) that any Security purchased shall cease to accrue
interest on the Change in Control Payment Date; and

(5) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than
the day before the Change in Control Payment Date, or
such longer period as may be required by law, a
telegram, telex, facsimile transmission or letter
setting forth the name of the Hold-

100

<PAGE> 112
er, the certificate number and the principal
amount of the Security the Holder delivered for
purchase and a statement that such Holder is
withdrawing his election to have the Security
purchased.

On or before a Change in Control Payment Date, the Finance
Company shall (i) deposit with the Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof which are to be purchased
on such date and (ii) deliver to the Trustee such Securities together with an
Officers' Certificate stating the Securities or portions thereof are being
purchased by the Finance Company. The Paying Agent shall promptly mail or
deliver to Holders of Securities so purchased payment in an amount equal to the
purchase price. For purposes of this Section 1015, the Trustee shall act as
the Paying Agent.

Section 1016. Limitation on Issuance of Guaranties by
Subsidiaries.

101

<PAGE> 113
or suffer to exist any Lien securing such assumption, Guaranty or other
liability unless (A) it complies with Section 1010 hereof and (B) the Guaranty
of Securities is equally and ratably secured and (iv) such Restricted
Subsidiary waives and will not in any manner whatsoever claim or take the
benefit or advantage of, any rights of reimbursement, indemnity or subrogation
or any other rights against the Company, the Operating Company, Realty Co. or
any other Restricted Subsidiary of the Company or as a result of any payment by
such Restricted Subsidiary under its Guaranty.

(b) Notwithstanding the foregoing, any Guaranty by a
Restricted Subsidiary of the Securities shall provide by its terms that it
shall be automatically and unconditionally released and discharged upon any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company's Capital Stock in, or all or substantially all the assets
of, such Restricted Subsidiary, which is in compliance with this Indenture.

Section 1017. Compliance with Securities Laws upon Purchase
of Securities.

In connection with any offer to purchase or purchase of
Securities under Section 1015 hereof, the Company shall (i) comply with Rule
14e-1 under the Exchange Act and (ii) otherwise comply with all federal and
state securities laws so as to permit the rights and obligations under Section
1015 to be exercised in the time and in the manner specified in Section 1015.

Section 1018. Limitation on Lease of Property as an Entirety.

The Company will not, and will not permit any Restricted
Subsidiary to, lease its Properties and assets substantially as an entirety to
any person, except as otherwise permitted by Article Eight.

102

<PAGE> 114
Section 1019. Activities of Finance Company.

The Finance Company agrees that it will not conduct any
business (and will not incur any Indebtedness) whatsoever other than to collect
principal and interest (and any interest on overdue principal of, premium, if
any, or interest) under the Note, to preserve and enforce its rights under the
Note, the Securities and the Security Documents , to do or cause to be done
all things necessary or appropriate to protect the Collateral and to preserve
its rights therein, and to otherwise comply with its obligations under this
Indenture and the Securities. The Finance Company will not merge into or
consolidate or amalgamate with or transfer its properties and assets to any
person, except (a) as permitted by and in compliance with Article Eight, if
required and (b) any transaction involving the Company or the Operating
Company.

Section 1020. Use of Proceeds.

Section 1021. Statement as to Compliance; Notice of Default;
Reporting Requirements.

(a) The Company will deliver to the Trustee, within
120 days after the end of each fiscal year ending after the date hereof, a
brief certificate of its principal executive officer, principal financial
officer or principal accounting officer stating whether, to such officer's
knowledge, the Company and its Subsidiaries are in compliance with all
covenants and conditions to be complied with by any of them under this
Indenture. For purposes of this Section 1021, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.

103

<PAGE> 115
$25,000,000) gives any notice or takes any other action with respect to a
claimed default, the Company shall deliver to the Trustee an Officers'
Certificate specifying such Default, notice or other action within five
Business Days of its occurrence.

Section 1022. Waiver of Certain Covenants.

The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 1007 through 1012 and Section
1016 if, before or after the time for such compliance, the Holders of a
majority in aggregate principal amount of the Securities at the time
outstanding shall, by Act of such Holders, waive such compliance in such
instance with such covenant or condition, but no such waiver shall extend to or
affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such covenant or condition
shall remain in full force and effect.

ARTICLE XI

REDEMPTION OF SECURITIES

Section 1101. Right of Redemption.

Section 1102. Applicability of Article.

Redemption of Securities at the election of the Finance
Company, as permitted by any provision of this Indenture, shall be made in
accordance with such provision and this Article.

Section 1103. Election to Redeem; Notice to Trustee.

The election of the Finance Company to redeem any Securities
pursuant to Section 1101 shall be evi-

104

<PAGE> 116
denced by a Board Resolution. In case of any redemption at the election of
the Finance Company, the Finance Company shall, at least 5 days prior to
mailing of the notice of redemption referred to in Section 1105 (unless a
shorter notice period shall be satisfactory to the Trustee), notify the Trustee
of such Redemption Date and of the principal amount of Securities to be
redeemed.

Section 1104. Selection by Trustee of Securities to Be
Redeemed.

Section 1105. Notice of Redemption.

All notices of redemption shall state:

(a) the Redemption Date;

(b) the Redemption Price;

105

<PAGE> 117
(c) if less than all Outstanding Securities are to
be redeemed, the identification (and, in the case of a Security to be redeemed
in part, the principal amount) of the particular Securities to be redeemed;

(d) that on the Redemption Date the Redemption Price
will become due and payable upon each such Security or portion thereof, and
that interest thereon shall cease to accrue on and after said date; and

(e) the place or places where such Securities are to
be surrendered for payment of the Redemption Price.

Section 1106. Deposit of Redemption Price.

Section 1107. Securities Payable on Redemption Date.

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ny at the Redemption Price together with accrued interest to the
Redemption Date; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such
on the relevant Regular Record Dates according to the terms and the provisions
of Section 307.

If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal thereof (and premium, if
any, thereon) shall, until paid, bear interest from the Redemption Date at the
rate borne by such Security.

Section 1108. Securities Redeemed in Part.

Section 1109. Redemption pursuant to the Casino Control Act.

(a) Notwithstanding the other provisions of this
Article Eleven, if the Casino Control Commission finds that a Holder or
beneficial owner of Securities must be found qualified or suitable to hold or
own the Securities under the Casino Control Act, and if such Holder or such
beneficial owner is not found qualified or suitable, within any time period
specified by the Casino Control Commission or the Casino Control Act, the
Finance Company shall have the right, at its option, (i) to require such Holder
or beneficial owner to dispose of all or a portion of such Holder's or
beneficial owner's

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Securities within 120 days after receipt of notice by such Holder or beneficial
owner of its disqualification under the Casino Control Act (or such different
period as may be prescribed by the Casino Control Commission), or (ii) to call
for redemption the Securities of either such Holder or beneficial owner, on not
less than 30 nor more than 60 days' notice (or such different period as may be
prescribed by the Casino Control Commission).

(b) If such Holder or beneficial owner, having been
given the opportunity by the Finance Company to dispose of such Holder's or
beneficial owner's Securities, shall have failed to do so within the prescribed
time period, the Finance Company shall have the right to redeem such Holder's
or beneficial owner's Securities on five days' notice.

(c) On any redemption of Securities pursuant to this
Section 1109, the Redemption Price shall be the lesser of (i) the market value
thereof on the date of such notice of redemption (as determined in good faith
by the Board of Directors of the Company) and (ii) the price at which such
Holder or beneficial owner acquired the Securities, together with (if permitted
by the Casino Control Act or by the orders of the Casino Control Commission)
accrued interest to the Redemption Date, unless a Redemption Price or other
payment, remuneration or related terms or restrictions are required by the
Casino Control Commission, in which event such price, terms and restrictions
shall be the Redemption Price and terms of redemption. Each Holder and
beneficial owner by accepting a Security agrees to the provisions of this
Section 1109 and Section 203 and agrees to inform the Finance Company upon
request made pursuant to this Section 1109 of the price at which such Holder or
beneficial owner acquired such Holder's or beneficial owner's Securities.

(d) Any redemption notice given by the Finance
Company under this Section 1109 shall state (i) that the Securities are being
called for redemption as a result of the Holder's or beneficial owner's status
under the Casino Control Act or with the Casino Control Commission, (ii)
whether accrued interest is payable to the Holder under the Casino Control Act
and, if so, the information required by subsection (d) of Section 1105 hereof,
and (iii) the information required by subsections (a), (b), (c) and (e) of such
Section 1105.

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ARTICLE XII

SECURITY

Section 1201. Security Interests.

(a) In order to secure the Indenture Obligations,
the Finance Company, the Operating Company and Realty Co. and the Trustee, as
applicable, have entered into the Security Documents in order to create the
Security Interests. Each Holder, by accepting a Security, agrees to all of the
terms and provisions of the Security Documents and the Trustee agrees to all of
the terms and provisions of the Security Documents signed by it.

(b) The Trustee and each Holder, by accepting a
Security, acknowledge that, as more fully set forth in the Intercreditor
Agreement, the holders of any Pari Passu Mortgage have certain rights in and to
the Collateral and the Trustee agrees to be bound by the Intercreditor
Agreement as it may be in effect from time to time.

(c) As amongst the Holders, the Collateral as now or
hereafter constituted shall be held for the equal and ratable benefit of the
Holders without preference, priority or distinction of any thereof over any
other by reason of difference in series or in time of issuance, sale or
otherwise, as security for the Indenture Obligations.

Section 1202. Recording; Opinions of Counsel.

(a) The Company, the Operating Company, the Finance
Company and Realty Co. will execute and deliver, file and record, all
instruments and documents, and have done and will do all such acts and other
things, at the Finance Company's expense, as are necessary to subject the
Collateral to the Security Interests. The Company, the Operating Company, the
Finance Company and Realty Co. will execute and deliver, file and record all
instruments and do all acts and other things as may be reasonably necessary or
advisable to perfect, maintain and protect the Security Interests.

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(b) The Company shall furnish to the Trustee
promptly after the execution and delivery of this Indenture and the Security
Documents and promptly after the execution and delivery of any amendment
thereto or any other instrument of further assurance, an Opinion of Counsel
stating that in the opinion of such counsel, subject to customary exclusions
and exceptions reasonably acceptable to the Trustee, either (i) this Indenture,
the Security Documents, any such amendment and all other instruments of further
assurance have been properly recorded, registered and filed and all such other
action has been taken to the extent necessary to make effective the Lien
intended to be created by the Indenture and the Security Documents, and
reciting the details of such action or referring to prior Opinions of Counsel
in which such details are given, or (ii) no such action is necessary to make
the Security Interests effective.

(c) The Company shall furnish to the Trustee within
60 days after in each year beginning , 199_, an Opinion
of Counsel, dated as of such date, (i) stating that, in the opinion of such
counsel, subject to customary exclusions and exceptions reasonably acceptable
to the Trustee, either (A) all such action has been taken with respect to the
recording, registering, filing, rerecording and refiling of the Indenture, all
supplemental indentures, the Security Documents, financing statements,
continuation statements and all other instruments of further assurance as is
necessary to maintain the Security Interests and reciting the details of such
action or referring to prior Opinions of Counsel in which such details are
given, and stating that all financing statements and continuation statements
have been executed and filed and such other actions have been taken that are
necessary fully to preserve and protect the rights of the Holders and the
Trustee hereunder and under the Security Documents, or (B) no such action is
necessary to maintain the Security Interests; and (ii) stating what, if any,
action of the foregoing character is necessary during the one-year period
commencing in the then current calendar year to so maintain the
Security Interests during such period.

(d) The Finance Company shall furnish to the Trustee
concurrently with execution and delivery of this Indenture a title insurance
policy issued by Lawyers

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Title Insurance Company or another title insurance company acceptable to the
Company and the Trustee in the amount of $425,000,000 containing such
affirmative coverage acceptable to the Trustee insuring that the Mortgage
creates a valid first lien on the Operating Company's and Realty Co.'s fee
title in the real property Collateral subject to the Operating Company's and
Realty Co.'s Permitted Encumbrances, and insuring the perfected first priority
interest of the Trustee, in and to the Mortgage; the Company and the Operating
Company shall also obtain such co-insurance or re-insurance as reasonably
requested by the Trustee.

(e) The Finance Company shall furnish to the Trustee
concurrently with execution and delivery of this Indenture a current A.L.T.A.
as-built land title survey (or form otherwise acceptable to the Trustee) and a
certificate from a professional licensed land surveyor with respect to the real
Property Collateral, certified to the title insurance companies participating
in the title policies and the Trustee, and showing the location, dimensions and
area of each parcel of the real Property Collateral, including all existing
buildings and improvements, utilities, parking areas and spaces, internal
streets, if any, external streets, rights-of-way, as well as any easements,
setback violations or encroachments on such real Property Collateral and
identifying each item with its corresponding exception, if any, in the title
policy relating thereto and otherwise reasonably acceptable to the Trustee.
Each survey shall contain the original signature and seal of the surveyor and
any additional matter reasonably required by the title companies. In addition,
the Finance Company shall provide with respect to the real Property Collateral
a certificate of a professional land surveyor to the effect that such real
Property Collateral is not located in a flood plain area, or, if such real
Property Collateral is in a flood plain area, the Finance Company shall deliver
upon execution of this Indenture evidence of flood insurance.

Section 1203. Disposition of Certain Collateral without
Requesting Release.

(a) Notwithstanding the provisions of Sections 1204,
1205 and 1206 hereof, the Operating Company may, without requesting the release
or consent of the Trustee:

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(i) sell, assign, transfer, license or
otherwise dispose of, free from the Security Interests, any machinery,
equipment, or other personal Property constituting Collateral that has
become worn out, obsolete or unserviceable, upon replacing the same
with or substituting for the same, machinery, equipment or other
Property constituting Collateral not necessarily of the same character
but being of at least equal value and utility as the Property so
disposed of, which Property shall without further action become
Collateral subject to the Security Interests;

(ii) (A) sell, assign, transfer, license or
otherwise dispose of, free from the Security Interests, inventory or
general intangibles that at any time are part of the Collateral in the
ordinary course of the Operating Company's business, (B) collect,
liquidate, sell, factor or otherwise dispose of, free from the
Security Interests, accounts receivable or notes receivable that at
any time are Collateral in the ordinary course of the Operating
Company's business or (C) make cash payments (including scheduled
repayments of Indebtedness permitted to be incurred hereby) from cash
that at any time is part of the Collateral other than cash in the
Collateral Account in the ordinary course of business that are not
otherwise prohibited by this Indenture; and

(iii) abandon, sell, assign, transfer,
license or otherwise dispose of any personal Property the use of which
is no longer necessary or desirable in the proper conduct of the
business of the Operating Company and the maintenance of its earnings
and is not material to the conduct of the business of the Operating
Company.

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10% or more of the aggregate fair value of all Collateral then existing (as
determined in the good faith judgment of the Company, the Operating Company,
the Finance Company and, if required by the Trust Indenture Act, an independent
appraiser), in any transaction or any series of related transactions without
complying with Section 1204; and (y) the right of the Operating Company to rely
upon the provisions of Section 1203(a)(ii) and (iii) from the date of this
Indenture to , 199 and for each quarter thereafter shall be
conditioned upon the Company, the Finance Company and the Operating Company
delivering to the Trustee, on or before , 199__ and thereafter within
60 days following the end of such quarter (except those quarters ending on
December 31, in which case within 105 days following the end of the quarter),
an Officers' Certificate to the effect that all of such dispositions by the
Operating Company were in the ordinary course of the Operating Company's
business and that the proceeds therefrom were used by the Operating Company in
connection with its business.

(c) Any disposition of Collateral made in compliance
with the provisions of this Section 1203 shall be deemed not to impair the
Security Interests in contravention of the provisions of this Indenture.

(d) Upon receipt of a Company Request, the Trustee
shall execute and deliver, within five business days from the receipt of the
Company Request pursuant to Section 1204, any instruments deemed by the Finance
Company or the Operating Company to be necessary or appropriate to dispose of
portions of the Collateral pursuant to this Section 1203 if the provisions of
this Section 1203 have been complied with.

Section 1204. Requesting Release of Collateral.

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specifically described release instruments (which release instruments shall
accompany such Company Request) and shall certify that no Default or Event of
Default has occurred and is continuing and such Company Request shall also
certify that one of the following conditions of this Section 1204(a) set forth
below, and the conditions of Section 1205 or 1206, if applicable, have been, or
simultaneously with or immediately following the release will be, fulfilled:

(i) there is a substitution of Substitute
Collateral in accordance with Section 1205;

(ii) there is a deposit of Cash Collateral
in accordance with Section 1206;

(iii) the Collateral to be released is
Insurance Proceeds and such Collateral is used for purposes permitted
by, and in accordance with, Articles 6 and 7 of the Mortgage; or

(iv) the Finance Company or the Operating
Company represents in the Company Request that the Collateral to be
released is to be released in connection with acquisitions or
redemptions of all Securities then outstanding pursuant to the
redemption provisions of Section 203 or Section 1109 of this
Indenture.

(b) As a condition to any release of Collateral
under this Section 1204, the Finance Company shall deliver to the Trustee any
certificate or opinion required by Trust Indenture Act Section 314(d), as to
the fair value to the obligor of any Substitute Collateral and as to the fair
value of any Collateral to be released, and by Trust Indenture Act Section
314(c)(3), as to the fulfillment of any condition precedent to such release,
dated as of a date not more than 60 days prior to the date of substitution or
release. Such certificate or opinion shall state that the proposed release of
Collateral will not impair the Security Interests in contravention of the
provisions of this Indenture. In the case of an acquisition or redemption of
all of the Securities then Outstanding, such certificate or opinion shall state
that all of the Securities then Outstanding

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are to be redeemed and that all of the Collateral is to be released on or after
the Redemption Date provided that the Finance Company has not defaulted in
making the redemption payment. The person delivering such certificate or
opinion must be independent with respect to the Company, the Operating Company
and the Finance Company if required by Trust Indenture Act Section 314(d).
"Independent" means, for purposes of any certificate or opinion required by
Trust Indenture Act Section 314(d), with respect to any Person, that such
Person (1) is in fact independent, (2) does not have any direct financial
interest or any material indirect financial interest in the Finance Company,
the Operating Company, the Company or other obligor upon the Securities or in
any Affiliate of the Finance Company, the Operating Company, the Company or
such other obligor, and (3) is not connected with the Finance Company,
Operating Company, the Company or such other obligor, or with an Affiliate of
the Finance Company, the Operating Company, the Company or such other obligor
as an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.

(c) In addition to any certificates or opinions
required by Section 1204(b), as a condition to any release of Collateral
pursuant to Section 1205 or 1206, the Finance Company or the Operating Company
shall deliver to the Trustee:

(i) one or more Current Appraisals and an
Officers' Certificate stating that, based on such Current Appraisals,
the Appraised Fair Market Value of the Collateral to be released is
less than or equal to the Appraised Fair Market Value of the
Substitute Collateral to be substituted for such Collateral pursuant
to Section 1205 or of the Cash Collateral to be substituted pursuant
to Section 1206; and

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filed and all such other action has been taken, in each case to the
extent necessary to grant and perfect a first priority Security
Interest in the Substitute Collateral or to make effective the
Security Interest in Cash Collateral to be substituted for the
Collateral to be released, and reciting the details of such action or
referring to prior Opinions of Counsel in which such details are
given, or (B) no further action is necessary.

(d) Any release of Collateral made in compliance
with the provisions of this Section 1204 shall be deemed not to impair the
Security Interests in contravention of the provisions of this Indenture.

Section 1205. Substitute Collateral Other Than Cash
Collateral.

(a) The Finance Company or the Operating Company
may, at its option, obtain a release of Collateral (ex cept Cash Collateral and
the Note), by subjecting other proposed Collateral which is of the same type
currently covered by the Security Documents to the Security Interests in place
of and in exchange for the Collateral to be released, all in accordance with
the provision and conditions of Section 1204 and this Section 1205 (except that
the substitution of Cash Collateral is governed by Section 1206). Substitute
Collateral may include the proceeds of the Collateral to be released, and
Substitute Collateral may be substituted for other Substitute Collateral on the
terms set forth in this Section 1205. Notwithstanding the foregoing, real
Property Collateral may not be released pursuant to this Section 1205. Other
Collateral may be released pursuant to this Section 1205, if, after giving
effect to such release and all previous releases under this Section 1205,
substantially all furniture, fixtures, machinery and equipment affixed to,
located in, or used primarily in connection with or in the business being
conducted in, the Casino Hotel would be Collateral.

(b) The Finance Company or the Operating Company may
substitute Collateral pursuant to this Section 1205 if all of the following
conditions are met:

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(i) the Finance Company or the Operating
Company, as the case may be, complies with Section 1204(a) and
delivers a Company Request to the Trustee stating, in addition to the
other requirements of Section 1204, that the Finance Company or the
Operating Company, as the case may be, intends to substitute the
Property specifically described therein for the Collateral
specifically described therein;

(ii) the fair value of the proposed
Substitute Collateral (including any Cash Collateral) is at least
equal to the fair value of the Collateral to be released; and

(iii) the security interests in Substitute
Collateral are perfected pursuant to the Security Documents and
Section 1202.

(c) Notwithstanding the foregoing, the Dennis Hotel,
which comprises a portion of the real Property Collateral, may be released
pursuant to this Section 1205 if, in addition to the other applicable
requirements set forth in this Article Twelve, all of the following conditions
are met:

(i) the Finance Company, the Company or
the Operating Company shall deliver to the Trustee an appraisal of the
Appraised Fair Market Value of the Casino Hotel including the Dennis
Hotel (the "First Appraisal") and an appraisal of the Appraised Fair
Market Value of the Casino Hotel excluding the Dennis Hotel and taking
into account the effect on the Casino Hotel of destruction of the
Dennis Hotel (the "Second Appraisal"), such appraisals to be as of a
date not more than 90 days before the date that the Dennis Hotel is
released from the Collateral; and

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the sum of the Appraised Fair Market Value of the real Property
substituted pursuant to clause (A) and the face value of the Letter of
Credit substituted pursuant to clause (B) is at least equal to the
greater of (x) the excess of the Appraised Fair Market Value of the
Casino Hotel in the First Appraisal over the Appraised Fair Market
Value of the Casino Hotel in the Second Appraisal and (y) the book
value of the Dennis Hotel as of the end of the most recent quarter
preceding the date that the Dennis Hotel is released from the
Collateral for which financial information is available. If the
Appraised Fair Market Value of the real Property substituted pursuant
to clause (A) is at least equal to the greater of clause (x) and
clause (y), there shall be no obligation to substitute as Substitute
Collateral a Letter of Credit.

(d) In addition to the other requirements set forth
above and those set forth in Section 1202(b), if the Substitute Collateral is
real Property, the Finance Company or the Operating Company shall deliver to
the Trustee:

(i) an A.L.T.A. form title insurance
policy or the local equivalent thereof or endorsement from a title
insurance company (or a specimen policy together with a commitment to
issue such title insurance on the basis of such policy or specimen) in
an amount equal to the fair value of the Substitute Collateral,
together with necessary coinsurance or reinsurance insuring that the
Substitute Collateral is owned by the Finance Company or the Operating
Company, as the case may be, free and clear of all defects and Liens,
other than Permitted Encumbrances, matters excepted from coverage by
the printed form of such title insurance policy (and not removable by
affidavit or indemnity) and other exceptions to title that do not
materially impair the value of the Substitute Collateral, and that
except for such exceptions or exclusions from such policies or
endorsements, the applicable document purporting to grant a security
interest in the Substi-

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tute Collateral constitutes a direct and valid Lien on such Substitute
Collateral; and

(ii) evidence of payment or a closing
statement indicating payments to be made by the Finance Company or the
Operating Company, as the case may be, of all title premiums, costs
and expenses, including any applicable taxes or governmental levies
and reasonable legal fees and disbursements of the attorneys for the
Trustee, that may be incurred to validly and effectively subject the
Substitute Collateral to the Security Interests.

Section 1206. Substitution of Cash Collateral.

(a) The Finance Company or the Operating Company
may, at its option, obtain the release of Collateral (other than the Note) upon
the substitution of Cash Collateral in accordance with the provisions and
conditions of Section 1204 and this Section 1206 as follows. The Finance
Company or the Operating Company may obtain the release of all or a portion of
the Collateral by delivering Cash Collateral to the Trustee for deposit in the
Collateral Account as Collateral in place of and in exchange for the released
Collateral, in an amount such that the fair value of the Cash Collateral so
delivered (together with the fair value of any other Substitute Collateral
(other than Cash Collateral) substituted for such released Collateral pursuant
to Section 1205) is at least equal to the fair value to the obligor of the
Collateral to be released; provided, however, that to the extent any Collateral
released is subject to the Credit Facility Mortgage or one or more Pari Passu
Mortgages, a Pro Rata Share of such Cash Collateral shall be paid over for the
benefit of the holders of the Credit Facility Mortgage and Pari Passu
Mortgages and shall not be deposited in the Collateral Account.

(b) The Finance Company or the Operating Company, as
the case may be, shall deliver a Company Request to the Trustee, stating, in
addition to the other requirements of Section 1204(a), that the Finance Company
intends to substitute Cash Collateral for all or a portion of the Collateral
specifically described therein.

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Section 1207. Appraisals of Collateral.

Section 1208. Collateral Account.

(a) The Trustee shall maintain and establish a
Collateral Account, which shall hold Cash Collateral for the equal and ratable
benefit of the Holders without preference, priority or distinction of any
thereof over any other by reason of difference in time of issuance, sale or
otherwise, as security for the Indenture Obligations. The Collateral Account
shall be entitled the "BALLY'S PARK PLACE FUNDING, INC. Cash Collateral
Account, First Bank, as trustee, secured party." The Trustee shall have sole
dominion and control over the Collateral Account and only the Trustee shall
have any right of withdrawal therefrom.

(b) All cash received by the Trustee as Substitute
Collateral pursuant to Section 1206 hereof, and as Insurance Proceeds pursuant
to Articles 6 and 7 of the Mortgage, less any Pro Rata Share paid over for
the benefit of holders of Pari Passu Mortgages pursuant to Section 1206 and
Articles 6 and 7 of the Mortgage, shall be deposited in the Collateral
Account.

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Accounts and all credits thereto and investments therein shall be maintained in
such a manner in accordance with applicable law that the Trustee, for the
benefit of the Holders, shall at all times have a first priority perfected
security interest therein. The Finance Company shall deliver to the Trustee
and any bank where such Collateral Account is maintained all such notices and
other documents and shall otherwise make such filings and take such other
actions as may be required or deemed reasonably necessary by the Trustee to
create and maintain much first priority perfected security interest in the
Collateral Account and all credits thereto and investments therein.

(d) Interest and other amounts earned on the
Collateral Account shall be held in the Collateral Account for the benefit of
the Holders.

(e) As security for the Indenture Obligation, the
Company, the Finance Company, the Operating Company and Realty Co. hereby
grant a security interest to the Trustee in all of each of their right, title
and interest in the Collateral Account and all sums of money, funds,
securities, investments or other property from time to time held in or credited
to the Collateral Account, from any source whatsoever, now or hereafter
transferred or credited to and comprising the Collateral Account, including,
without limitation, all proceeds derived from the Collateral paid into the
Collateral Account, and any and all interest and dividends or other
distribution from any such amounts, and all statements, certificates and
instruments in or representing the Collateral Account.

Section 1209. Reliance on Opinion of Counsel.

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Section 1210. Purchaser May Rely.

Section 1211. Payment of Expenses.

Section 1212. Suits to Protect the Collateral.

Subject to Section 1201 of this Indenture and to the
provisions of the Security Documents, the Trustee shall have power to institute
and to maintain such suits and proceedings as it may deem expedient to prevent
any impairment of the Collateral by any acts that may be unlawful or in
violation of the Security Documents or this Indenture, including the power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid or if the enforcement of, or
compliance with, such enactment, rule or order would impair the Security
Interests in contraven- tion of this Indenture or be prejudicial to the
interests of the Holders or of the Trustee. The Trustee shall give notice to
the Companies promptly following the institution of any such suit or
proceeding.

Section 1213. Trustee's Duties.

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this Indenture. The Trustee shall be under no duty whatsoever to make or give
any presentment, demand for performance, notice of nonperformance, protest,
notice of protest, notice of dishonor, or other notice or demand in connection
with any Collateral, or to take any steps necessary to preserve any rights
against prior parties except as expressly provided in this Indenture. The
Trustee shall not be liable for failure to collect or realize upon any or all
of the Collateral, or for any delay in so doing, nor shall the Trustee be under
any duty to take any action whatsoever with regard thereto. The Trustee shall
have no duty to comply with any recording, filing or other legal requirements
necessary to establish or maintain the validity, priority or enforceability of
the Security Interests in, or the Trustee's rights in or to, any of the
Collateral.

ARTICLE XIII

DEFEASANCE

Section 1301. Defeasance and Discharge.

(a) Upon exercise of the option applicable to this
paragraph (a), the Finance Company, the Company, the Operating Company and
Realty Co. shall be deemed to have been released and discharged from their
obligations with respect to the Outstanding Securities on the date the
conditions set forth below are satisfied (hereinafter, "legal defeasance").
For this purpose, the Finance Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Outstanding Securities,
which shall thereafter be deemed to be "Outstanding" only for the purposes of
Section 1303 and the other Sections of this Indenture referred to in clauses
(i) and (ii) below, and the Finance Company, the Company, the Operating Company
and Realty Co. shall be deemed to have satisfied all their other obligations
under such Securities and this Indenture (and the Trustee, on demand of and at
the expense of the Finance Compa-

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ny, shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of Outstanding Securities to receive
solely from the trust fund described in Section 1302 and as more fully set
forth in such Section, payments in respect of the principal of (and premium, if
any) and interest on such Securities when such payments are due, (ii) the
Finance Company's and the Company's obligations with respect to such Securities
under Sections 304, 305, 306, 1002 and 1003, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Companies' obligations
in connection therewith and (iv) this Article Thirteen.

(b) Upon exercise of the option applicable to this
paragraph (b), the Finance Company, the Company, the Operating Company and
Realty Co. shall be released and discharged from their obligations under any
covenant contained in Article Eight and in Sections 1004 through 1021 with
respect to the Outstanding Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "covenant defeasance"), and the
Securities shall thereafter be deemed to be not "Outstanding" for the purpose
of any direction, waiver, consent or declaration or act of Holders of
Securities (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the Outstanding Securities, the Finance Company, the Company, the Operating
Company and Realty Co. may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 501, but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby.

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Section 1302. Conditions to Defeasance.

The following shall be the conditions to application of either
paragraph (a) or (b) of Section 1301 to the Outstanding Securities:

(1) The Finance Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 608 who shall agree to comply with the
provisions of this Article Thirteen applicable to it) as trust funds
in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Securities, (A) cash in U.S. Dollars in
an amount, (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day
before the due date of any payment, cash in U.S. Dollars in an amount,
or (C) a combination thereof, in such amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge the
principal of (and premium, if any) and interest on the Outstanding
Securities on the Stated Maturity of such principal (and premium, if
any) or installment of interest or upon redemption on the day on which
such payments are due and payable in accordance with the terms of this
Indenture and of such Securities; provided that the Trustee shall have
been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to said payments with respect to the
Securities. For this purpose, "U.S. Government Obligations" means
securities that are (x) direct obligations of the United States of
America for the timely payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of

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the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case, are not callable
or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended), as custodian with
respect to any such U.S. Government Obligation or a specific payment
of principal of or interest on any such U.S. Government Obligation
held by such custodian for the account of the holder of such
depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation
or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt;

(2) In the case of an election under paragraph (a) of Section
1301 hereof, the Finance Company shall have delivered to the Trustee
an Opinion of Counsel stating that (x) the Finance Company has
received from, or there has been published by, the Internal Revenue
Service a ruling or (y) since the date hereof there has been a change
in the applicable federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders
of the Outstanding Securities will not recognize income, gain or loss
for federal income tax purposes as a result of such legal defeasance
and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
legal defeasance had not occurred;

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will not recognize income, gain or loss for federal income tax
purposes as a result of such covenant defeasance and will be subject
to federal income tax on the same amounts in the same manner and at
the same times as would have been the case if such covenant defeasance
had not occurred;

(7) (a) The Security Documents shall not be discharged as a
result of such irrevocable deposit under Section 1302 unless the
Finance Company shall have delivered to the Trustee an Opinion of
Counsel, subject to customary exclusions and exceptions reasonably
acceptable to the Trustee, to the effect that (i) the Finance Company
has authorization to establish such irrevocable trust in favor of the
Trustee for the benefit of the Holders under applicable law and the
action in establishing the irrevocable trust has been duly and
properly authorized by the Finance Company and such authorization has
not been revoked, (ii) to their knowledge, the

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Trustee is an independent trustee with respect to the irrevocable
trust, (iii) a valid trust is created at the time of such irrevocable
deposit and (iv) the Holders of the Securities will have the sole
beneficial ownership interest under applicable law in the money or
U.S. Government Obligations so deposited in such trust. The Opinion
of Counsel so referred to in this paragraph may contain a
qualification that in the event that a court of competent jurisdiction
were to determine that the trust funds remained owned by the Finance
Company after such deposit, the Holders of the Securities will have a
non-avoidable first-priority perfected security interest under
applicable law in the money or U.S. Government Obligations so
deposited (for the limited purpose of the Opinion of Counsel referred
to in this paragraph, such opinion may contain an assumption that the
conclusions contained in a customary solvency letter by a nationally
recognized appraisal firm, dated as of the date of the deposit and
taking into account such deposit, or a customary alternative
certificate reasonably acceptable to the Trustee, are accurate,
provided that such solvency letter or certificate is also addressed
and delivered to the Trustee).

(b) It is the intention of the parties hereto that a valid
trust for the benefit of the Holders of the Securities be created at
the time that the Finance Company makes the deposit pursuant to
Section 1302. The security interest in such deposit that is granted
herein to the Trustee for the benefit of the Holders of the Securities
is intended solely as protection for the Holders of the Securities in
the event that a court of competent jurisdiction were to determine
either that (i) such trust had not been validly created or (ii) such
trust is not enforceable. The Finance Company hereby grants to the
Trustee for the benefit of the Holders a security interest in all
money, funds, investments or other property deposited with the Trustee
pursuant to Section 1302 to secure the Indenture Obligations.

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(c) The Company and the Finance Company shall take any and
all acts necessary to create, perfect and maintain, in favor of the
Holders of the Securities, a first-priority security interest in the
money and U.S. Government Obligations so deposited and shall take any
other action and execute and deliver any other documents that may
reasonably be requested by the Trustee to effectuate or evidence such
security interest, and shall do all of the above at such appropriate
time so that such security interest shall attach to the deposit at the
time such deposit is made and shall at all times be perfected.

Section 1303. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Other Miscellaneous Provisions.

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accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company or
any of its Subsidiaries acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.

The Trustee and the Paying Agent shall pay to the Finance
Company upon request any money held by them for the payment of principal or
interest on the Securities that remains unclaimed for two years; provided that
the Finance Company shall have first caused notice of such payment to be
published one in a newspaper of general circulation in the City of New York or
mailed to each Holder entitled thereto no less than 30 days prior to such
repayment. After that, Holders entitled to the money must look to the Finance
Company for payment as general creditors unless otherwise provided by law.

Section 1304. Reinstatement.

If the Trustee or Paying Agent is unable to apply any money in
accordance with Section 1301 by reason of any order or judgment of any court or
governmental au-

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thority enjoining, restraining or otherwise prohibiting such application,
then the Companies' obligations under this Indenture and the Securities shall
be revived and reinstated as though no deposit had occurred pursuant to Section
1301 until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 1301; provided, however, that, if the
Finance Company makes any payment of principal of (or premium, if any) or
interest on any Security following the reinstatement of its obligations, the
Finance Company shall be subrogated to the rights of the Holders of such
Securities to receive such payment from the money held by the Trustee or Paying
Agent.

ARTICLE XIV

GUARANTY

Section 1401. Guaranty.

The Company hereby unconditionally guarantees on a senior
basis (such Guaranty to be referred to herein as the "Company Guaranty") to
each Holder of a Security authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Securities or the obligations of the
Finance Company hereunder or thereunder, that: (i) the principal of (and
premium, if any) and interest on the Securities will be promptly paid in full
when due, whether at the Maturity or Interest Payment Date, by acceleration,
call for redemption or otherwise, and interest on the overdue principal (and
premium, if any) and interest, if any, of the Securities, if lawful, and all
other obligations of the Finance Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (ii) in case of any extension
of time of payment or renewal of any Securities or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, the Company will be obligated to pay the same
immediately. The Company hereby agrees that its obligations hereunder

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shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, any releases of Collateral, any
delays in obtaining or realizing upon or failures to obtain or realize upon
Collateral, the recovery of any judgment against the Finance Company, any
action to enforce the same or any other circumstance that might otherwise
constitute a legal or equitable discharge or defense of a guarantor. The
Company hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Finance
Company, any right to require a proceeding first against the Finance Company,
protest, notice and all demands whatsoever and covenants that this Company
Guaranty will not be discharged except by complete performance of the
obligations contained in the Securities and this Indenture. If any Holder or
the Trustee is required by any court or otherwise to return to either of the
Companies, or any custodian, Trustee, liquidator or other similar official
acting in relation to either of the Companies, any amount paid by either of the
Companies to the Trustee or such Holder, this Company Guaranty, to the extent
theretofore discharged, shall be reinstated in full force and effect. The
Company agrees that it shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. The Company further
agrees that as between the Company, on the one hand, and the Holders and the
Trustee, on the other hand, (i) the Maturity of the obligations guaranteed
hereby may be accelerated as provided in Section 502 for the purposes of this
Company Guaranty, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (ii) in the event of any declaration of acceleration of such obligations as
provided in Section 502, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Company for the purpose of this
Company Guaranty.

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Section 1402. Execution and Delivery of Company Guaranty.

The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Company
Guaranty set forth in this Indenture on behalf of the Company.

ARTICLE XV

LETTER OF CREDIT

Section 1501. Letter of Credit.

In order to permit the Operating Company to release the Dennis
Hotel from the Collateral in accordance with Section 1205 so that it may
demolish the Dennis Hotel and build a new multistory tower on the land upon
which the Dennis Hotel is currently situated, the Company, the Finance Company
or the Operating Company may cause the issuance and delivery of the Letter of
Credit to the Trustee at any time after the date hereof and may

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<PAGE> 145
at any time thereafter substitute a new Letter of Credit then held by the
Trustee. Each Holder, by accepting a Security, agrees to all of the terms of
each Letter of Credit.

Section 1502. Acceptance of the Letter of Credit.

The Letter of Credit shall not be effective for purposes of
this Indenture unless and until the Trustee shall accept delivery of the Letter
of Credit. The Trustee shall accept delivery of the Letter of Credit upon
receipt of the following: (i) an opinion of counsel to the bank that issued
the Letter of Credit (the "Bank") (such counsel to be reasonably acceptable to
the Trustee and may be an employee of the Bank, but not counsel to or an
employee of the Company or any of its Affiliates) stating that, in the opinion
of such counsel, the Letter of Credit has been duly authorized and executed
and, when delivered to and accepted by the Trustee, will constitute the legal,
valid and binding agreement of the Bank, enforceable against the Bank in
accordance with its terms; (ii) an Opinion of Counsel to the Finance Company
stating that, in the opinion of such counsel, the Letter of Credit is not
inconsistent with Exhibit F to this Indenture; and (iii) an Officers'
Certificate of the Finance Company stating that the Letter of Credit contains
substantially those terms and conditions set forth in such Exhibit F, no
materially contrary terms and no other provisions materially limiting the
availability of payment. The Trustee may also request other opinions pursuant
to Section 103.

Section 1503. Notices and Certificates.

Within five Business Days after the receipt by the Trustee of
written notice of any Event of Default or the giving by the Trustee of written
notice of any Event of Default in accordance with Section 501, the Trustee
shall (or, in the event that the Trustee otherwise has actual knowledge of an
Event of Default, the Trustee may) deliver written notice to the Bank, at the
Bank's office specified therefor in the Letter of Credit, stating that an Event
of Default has occurred under this Indenture.

In the event that the Bank delivers to the Trustee written
notice of termination of the Letter of

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<PAGE> 146
Credit (the Trustee to give prompt written notice thereof to the Finance
Company), the Company, the Operating Company or the Finance Company may cause
the issuance and delivery of a new Letter of Credit to the Trustee at least 20
Business Days prior to termination of the then outstanding Letter of Credit.
In the event that none of the Company, the Operating Company or the Finance
Company has caused the issuance and delivery of a new Letter of Credit at least
20 Business Days prior to termination of the then outstanding Letter of Credit,
then the Trustee shall deliver, within five Business Days after the
commencement of such 20 Business Day period, written notice to the Bank, along
with the Bank's notice of termination of the Letter of Credit, at the Bank's
office specified therefor in the Letter of Credit, stating that none of the
Company, the Operating Company or the Finance Company has caused the issuance
and delivery of a new Letter of Credit in accordance with this Article Fifteen.

After the Letter of Credit has been delivered to, and accepted
by, the Trustee, within ten Business Days of the end of each of the Finance
Company's fiscal quarters, the Finance Company shall deliver to the Trustee an
Officers' Certificate of the Finance Company stating that the Bank has not
ceased to be an Eligible Bank, and further stating that, as to each Officer
signing such certificate, that to the best of his or her knowledge, during the
preceding fiscal quarter, the Bank has not ceased to be an Eligible Bank. If
the Bank has ceased to be an Eligible Bank, such certificate shall notify the
Trustee of such event. Within ten Business Days of the last day of the Finance
Company's fiscal-quarter in which the Bank ceases to be an Eligible Bank, the
Finance Company shall deliver written notice of such event to the Trustee, and,
upon such delivery (or, if earlier, upon receipt by the Trustee of written
notice from a Holder or Holders that the Bank has ceased to be an Eligible
Bank, the Trustee to give prompt written notice thereof to the Finance
Company), the Company, Operating Company or Finance Company may cause the
issuance and delivery to the Trustee of a new Letter of Credit within ten
Business Days of notice to the Trustee that the Bank has ceased to be an
Eligible Bank. In the event that none of the Company, the Operating Company or
the Finance Company has caused the issuance and delivery of a new Letter of
Credit within ten Business Days after such notice, then the Trustee shall
deliver, within five Business Days

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<PAGE> 147
after the expiration of such ten Business Day period, written notice to the
Bank, at the Bank's office specified therefor in the Letter of Credit, stating
that the Bank has ceased to be an Eligible Bank and that none of the Company,
the Operating Company or the Finance Company has caused the issuance and
delivery of a new Letter of Credit in accordance with this Article Fifteen.

The Trustee shall notify the Holders in writing of the
occurrence of an Event of Payment. Upon delivery to the Trustee of any new
Letter of Credit as provided herein, the Trustee shall surrender to the Finance
Company the then outstanding Letter of Credit.

Section 1504. Events of Payment.

The following events shall be "Events of Payment" under the
Letter of Credit: (i) written notice is delivered to the Bank by the Trustee
stating that an Event of Default has occurred and is continuing under this
Indenture; or (ii) written notice is delivered to the Bank by the Trustee,
along with the Bank's written notice of termination of the Letter of Credit,
stating that none of the Company, the Operating Company or the Finance Company
has caused the issuance and delivery of a new Letter of Credit in accordance
with this Article Fifteen; or (iii) written notice is delivered to the Bank by
the Trustee stating that the Trustee has received notice that the Bank has
ceased to be an Eligible Bank and that none of the Company, the Operating
Company or the Finance Company has caused the issuance and delivery of a new
Letter of Credit in accordance with this Article Fifteen.

Upon the occurrence of an Event of Payment, the Trustee shall
demand payment under the Letter of Credit from the Bank.

Section 1505. Application of Proceeds.

The proceeds of the Letter of Credit, if any, shall be applied
by the Trustee.

First: only after an acceleration pursuant to Section 502, to
the Trustee for amounts due under Section 606;

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<PAGE> 148
Second: to the Trustee to be deposited in the Collateral
Account, less any Pro Rata Share to be paid over for the benefit of
the holders of Pari Passu Mortgages to the extent that the Dennis
Hotel was subject to one or more Pari Passu Mortgages.

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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and arrested, all as of the day and year first above written.

BALLY'S PARK PLACE
FUNDING, INC.

By: _______________________
Title:

Attest:_______________________
Title:

BALLY'S PARK PLACE, INC., a
Delaware corporation

By: _______________________

Attest: _______________________
Title:

BALLY'S PARK PLACE, INC., a
New Jersey corporation

By: _______________________

Attest: _______________________
Title:

BALLY'S PARK PLACE
REALTY CO.

By: _______________________

Attest: _______________________
Title:

FIRST BANK

By: _______________________

Attest: _______________________
Title:

138

<PAGE> 150
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the day of ,1994, before me personally
came to me known, who, being by me duly sworn, did depose and
say that he resides at , that he is
of BALLY'S PARK PLACE FUNDING, INC., one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of such corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed pursuant to authority of the Board
of Directors of such corporation; and that he signed his name thereto pursuant
to like authority.

(NOTARIAL
SEAL)

<PAGE> 151
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the day of , 1994, before me personally
came , to me known, who, being by me duly sworn, did depose and
say that he resides at , that he is
of BALLY'S PARK PLACE, INC., a Delaware corporation, one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed pursuant to authority
of the Board of Directors of such corporation; and that he signed his name
thereto pursuant to like authority.

(NOTARIAL
SEAL)

<PAGE> 152
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the ____ day of ____________, 1994, before me personally
came _______________, to me known, who, being by me duly sworn, did depose and
say that he resides at ____________________________________________, that he is
_________ of BALLY'S PARK PLACE, INC., a New Jersey corporation, one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed pursuant to authority
of the Board of Directors of such corporation; and that he signed his name
thereto pursuant to like authority.

(NOTARIAL
SEAL)

<PAGE> 153
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the day of ,1994, before me personally
came ,to me known, who, being by me duly sworn, did depose and
say that he resides at ,that he is
of BALLY'S PARK PLACE REALTY CO., one of the corporations described
in and which executed the above instrument; that he knows the corporate seal of
such corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed pursuant to authority of the Board of Directors of
such corporation; and that he signed his name thereto pursuant to like
authority.

(NOTARIAL
SEAL)

<PAGE> 154
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)

On the day of ,1994, before me personally
came ,to me known, who, being by me duly sworn, did depose and
say that he resides at ,that he is
of FIRST BANK, one of the corporations described in and which
executed the above instrument; that he knows the corporate seal of such
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed pursuant to authority of the Board of Directors of such
corporation; and that he signed his name thereto pursuant to like authority.

(NOTARIAL
SEAL)

<PAGE> 155
EXHIBIT E

This Instrument was prepared by the
below named attorney

Name:

PARI PASSU CERTIFICATE

First Bank ("Trustee"), as Trustee, under the Indenture dated
as of , 1994 (the "Indenture"), among BALLY'S PARK PLACE FUNDING,
INC., a Delaware corporation (the "Finance Company"), BALLY'S PARK PLACE, INC.,
a Delaware corporation (the "Company"), BALLY'S PARK PLACE, INC., a New Jersey
corporation (the "Operating Company"), BALLY'S PARK PLACE REALTY CO., a New
Jersey corporation ("Realty Co."), does hereby certify and confirm to [insert
name of a holder of Indebtedness secured by a Restricted Encumbrance] that the
Restricted Encumbrance described in the instrument from [insert name of maker
of Indebtedness secured by a Restricted Encumbrance] to [insert name of a
holder of Indebtedness secured by a Restricted Encumbrance] dated
ranks pari passu with the lien created by the Mortgage and Security Agreement
with Assignment of Rents dated as of , 1994 given by Operat
ing Company and Realty Co. to Trustee recorded on in Mortgage
Book at page in the Atlantic County, New Jersey Clerk's
Office and with the lien(s) created by the mortgage(s) from [insert name(s) of
maker(s) of Indebtedness secured by Restricted Encumbrance(s)] to [insert
name(s) of Holder(s) of Indebtedness secured by Restricted Encumbrance(s)]
recorded on in Mortgage Book at page in the Atlantic County,
New Jersey Clerk's Office. The term "pari passu" describes the relationship
set out in the Intercreditor Agreement appearing as Schedule I to the Mortgage.

E-1

<PAGE> 156
This Certificate is issued pursuant to Sections 613 and 1010
of the Indenture and with the effect stated in said Section 613. The terms
"Indebtedness," "Mortgage" and "Restricted Encumbrance" shall have the
respective meanings set forth in the Indenture.

First Bank,
as Trustee

By:
Name:
Title:

(SEAL)

E-2

<PAGE> 157
EXHIBIT F

PROVISIONS FOR LETTER OF CREDIT

Letters of Credit issued at the request of the Finance
Company, the Operating Company or the Company under Article Fifteen of the
Indenture, dated as of ____________, 1994, among the Finance Company, the
Company, the Operating Company, Realty Co. and First Bank, as Trustee (the
"Indenture"), shall contain the following terms and conditions in substance,
but not necessarily in the same format, no contrary terms and no other
provisions limiting the availability of payments:

1. The Letter of Credit shall be nontransferable (except to a
successor of the Trustee who replaces the Trustee in accordance with the
provisions of the Indenture) and irrevocable.

2. The Letter of Credit shall have a term of one year and
shall be automatically renewed on each expiration date for successive terms of
one year unless the bank that issued the Letter of Credit (the "Bank") delivers
to the Trustee and the Finance Company written notice of termination of the
Letter of Credit at least 30, but not more than 60, Business Days prior to the
expiration date of the Letter of Credit, such written notice being deemed to
have been delivered when received by the Trustee.

3. Funds under the Letter of Credit shall be made available
to the Trustee for the equal and ratable benefit of the Holders, in accordance
with paragraph 4 below and upon demand by the Trustee, on and after the
occurrence of the first of any of the following (each, an "Event of Payment" as
defined in Section 1504) of the Indenture):

(a) written notice is delivered to the Bank by the
Trustee stating that an Event of Default has occurred and is
continuing under the Indenture;

(b) written notice is delivered to the Bank by the
Trustee, along with the Bank's written notice of termination of the
Letter of Credit, stating that none of the Finance Company, the
Operating Company or the Company has caused the issuance and delivery

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<PAGE> 158
of a new Letter of Credit in accordance with Article Fifteen of the
Indenture.

(c) written notice is delivered to the Bank by the
Trustee stating that the Trustee has received notice that the Bank has
ceased to be an Eligible Bank and that none of the Finance Company,
the Operating Company or the Company has caused the issuance and
delivery of a new Letter of Credit in accordance with Article Fifteen
of the Indenture.

4. Upon demand for payment under the Letter of Credit by the
Trustee, funds under the Letter of Credit shall be made available immediately
by the Bank during the Bank's business hours at the main office of the Bank, in
immediately available funds; provided, however, that if demand for payment is
made after 11:00 a.m., payment shall be made no later than 10:00 a.m. on the
next succeeding Business Day.

5. Upon payment to the Trustee under the Letter of Credit,
the Bank shall be fully discharged of its obligation under the Letter of Credit
with respect to such demand for payment.

6. The Letter of Credit may also provide for procedures
setting forth the mechanics for notice, demand and payment including the office
of the Bank to which notices and demand for payment shall be made; provided,
however, that such procedures are customary and reasonable.

7. The Letter of Credit shall be subject to the Uniform
Customs and Practice for Documentary Credits, 1983 Revision, International
Chamber of Commerce Publication No. 400 (the "Uniform Customs").

8. The Letter of Credit shall be deemed to be a contract made
under the laws of the State of New York and shall, as to matters not governed
by the Uniform Customs, be governed by and construed in accordance with the
laws of such State.

Unless otherwise defined herein, capitalized terms used herein
shall have the meanings provided in the Indenture. References herein to the
time of an event shall be the local time in the jurisdiction wherein the

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<PAGE> 159
office of the Bank, upon which demand for payment has been made, is located.

F-3

<PAGE> 1

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

This Second Amendment ("Amendment") to the Employment Agreement is
made and entered into this 29th day of September, 1993 between Bally
Manufacturing Corporation, a Delaware corporation with its principal office
located at 8700 West Bryn Mawr Avenue, Chicago, Illinois 60631 (together with
successors and assigns permitted under this Agreement, the "Company"), and
Arthur M. Goldberg, who resides at 6 Kimball Circle, Westfield, New Jersey
07090 (the "Executive").

WITNESSETH

WHEREAS, the Company and the Executive have entered into an Employment
Agreement as of November 1, 1990; and

WHEREAS, the Employment Agreement has been previously amended and the
Company has determined that it is in the best interest of the Company and its
shareholders to further amend said Employment Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Amendment and the Employment Agreement and for other good and
valuable consideration, the receipt of which is mutually acknowledged, the
Company and the Executive agree to modify and amend the Employment Agreement as
follows:

1. Subsection (b) of Section 2, TERM OF EMPLOYMENT, POSITIONS AND
DUTIES SHALL BE ELIMINATED AND REPLACED WITH THE FOLLOWING:

(b) TERM. Subject to the provisions for termination otherwise
included in the Employment Agreement, the term of the employment of the
Executive under the Employment Agreement shall be extended from October 31,
1994 through and including October 31, 1997. Such term shall automatically be
extended for an additional one (1) year period commencing on November 1, 1995
and each November 1st thereafter unless: (i) the Employment Agreement is
terminated as a result of death or disability pursuant to Section 10(a) or (b)
of the Employment Agreement, by the Company for cause pursuant to Section 10(c)
of the Employment Agreement or voluntarily by the Executive pursuant to Section

<PAGE> 2
10(f) of the Employment Agreement; or (ii) either the Company or the Executive
shall give written notice to the other on or before October 1st of any year
during the term of this Agreement, that the term of the Executive's employment
shall be fixed for a three (3) year period commencing on the November 1st
immediately succeeding such written notice, and there shall be no further
automatic extensions. The term of the Employment Agreement, including the
extension through October 31, 1997 and any automatic extensions hereof pursuant
to this Letter Agreement is referred to as the "Term of Employment."

2. Section 6, EXPENSE REIMBURSEMENT shall be amended by adding
the following sentence to the end thereof:

"The Executive shall be entitled to prompt reimbursement by the
Company for all reasonable legal and related expenses incurred by him in
connection with the preparation and approval of the Second Amendment of this
Agreement.

3. Section 8, SUPPLEMENTAL RETIREMENT BENEFIT, shall be
eliminated and replaced with the following:

8. SUPPLEMENTAL RETIREMENT BENEFIT.

(a) AMENDMENT OF SUPPLEMENTAL RETIREMENT BENEFIT: ESTABLISHMENT OF
TRUST. Effective as of December 31, 1992, the Executive's supplemental
retirement benefit is amended by causing future Company contributions to be
made to a trust established by, and for, the Executive. The Executive shall
establish a trust (the "Trust") on or before June 15, 1993. The Trust shall be
a grantor trust, within the meaning of Sections 671 through 679 of the Code,
established by the Executive, which shall receive the Company contributions for
the supplemental retirement benefits provided under this Section 8.

(b) PAYMENT OF BENEFIT. Each year that Executive is employed by
the Company until age 62 and effective with the payment due for 1992, the
Company shall contribute for the Executive's supplemental retirement benefit,
the sum of the following amounts:

(i) the amount necessary to fund the Executive's
"Target Benefit" (determined in accordance with subsection 8(c) below)
shall be paid to the Trust;

(ii) the amount of the Tax Gross-Up Payment
(determined in accordance with subsection 8(e) below) shall be paid to
the Executive (or withheld for the payment of taxes on the Executive's
behalf);

(iii) The fees of the trustee of the Executive's Trust
shall be paid to the trustee of the Trust (or, if previously paid by
the Executive or from the assets of the Trust, to the Executive or to
the Trust to reimburse the Executive or the Trust for such expense.)

2
<PAGE> 3
Contributions under this subsection may be paid directly to the
Executive, forwarded to the appropriate governmental taxing authority on the
Executive's behalf, or paid to the Executive's Trust or the trustee of the
Executive's Trust. Amounts payable for any year under this subsection 8(b)
shall be calculated as of December 31, (the "Calculation Date") of such year
and shall be payable on or before March 15 of the calendar year following the
Calculation Date, provided, that the payment for 1992 shall be made on or
before the later of the date 75 days after the execution of this Second
Amendment or 30 days after the Trust is established. In addition, subsections
8(g)(ii), (iv), (v), and (vi) provide for certain additional contributions to
be made in the event of the Executive's death or the termination of the
Executive's employment with the Company. In such circumstances, the date of
such termination shall be deemed to be a Calculation Date. When the amount so
determined for any Calculation Date has been paid by the Company, the Company
shall have no further obligation to provide the Executive or any other person
benefits which have accrued under this Section 8 through Calculation Date.

(c) TARGET BENEFIT. The amount of the Executive's "Target Benefit"
shall be the amount calculated, as of the Calculation Date, actuarially using
the individual level aggregate method and based on the actuarial assumptions
contained in subsection 8(d), as necessary to provide funding for a retirement
benefit payable in the form of a single life annuity commencing on the January
1 following the Executive's 62nd birthday in an annual amount equal to the
excess, if any, of: (i) 50% of the average of the Executive's compensation
(determined as of such Calculation Date) for any of the three highest years
preceding the year in which he attains age 62 over (ii) the sum of $258,189
(relating to the supplemental retirement benefit assumed to be funded as of
December 31, 1992 by previous annuity purchases) and the retirement benefit,
payable in the form of a single life annuity commencing on the January 1
following the Executive's 62nd birthday, that can be provided by the value, if
any, of any other retirement or similar benefits under plans or programs of the
Company in which the Executive participates (but not including benefits
attributable to the Executive's contributions or contributions made on the
Executive's behalf pursuant to a qualified cash or deferred election under
Section 401(k) of the Internal Revenue Code and earnings thereon.) For purposes
of the preceding sentence, the Executive's compensation means Base Salary plus
the bonuses paid to him under Section 4 of this Agreement (both before and
after the First Amendment of this Agreement.)

(d) ACTUARY AND ACTUARIAL ASSUMPTIONS. The Company, with
Executive's concurrence, shall engage, at its expense, an actuary (the
"Actuary") to perform the calculations required under this Section 8. The
Actuary so engaged shall perform the necessary calculations in accordance with
the timetable set forth in subsection (f). The Actuary shall perform the
necessary calculations using the following assumptions:

(i) MORTALITY: no pre-retirement mortality and
post-retirement mortality based on the 1983 Individual Annuity
Mortality Table for Males.

3
<PAGE> 4
(ii) INTEREST: As of each Calculation Date, the
interest rate used in calculating the Executive's Target Benefit for
the period until the year of the Executive's 62nd birthday and the
Assumed Earnings (as defined in subsection 8(d)(iii), below) for the
period until the next Calculation Date shall be equal to the 7-year
Treasury bond rate in effect on such Date plus 0.5%, rounded to the
nearest 0.25%.

(iii) ASSUMED TRUST BALANCE AND ASSUMED EARNINGS:
As of each Calculation Date, the Actuary shall calculate the "Assumed
Trust Balance" and the "Assumed Earnings" for use in its actuarial
determination of the Target Benefit contribution of subsection 8(b)(i)
and the Tax Gross-Up Payment. The Assumed Trust Balance for the
December 31, 1992 Calculation Date is zero. For each Calculation Date
thereafter, the Assumed Trust Balance shall be equal to the sum of:
(A) the Assumed Trust Balance as of the immediately preceding
Calculation Date, (B) the Target Benefit contribution made under
subsection 8(b)(i) with respect to the immediately preceding
Calculation Date, and (C) the Assumed Earnings on the Assumed Trust
Balance since the immediately preceding Calculation Date and the
Target Benefit contribution made under subsection 8(b)(i) with respect
to the immediately preceding Calculation Date. The Assumed Earnings
between two consecutive Calculation Dates shall be determined by
applying for the period of time between such Calculation Dates,
interest at the rate in effect under subsection 8(d)(ii) above on the
first of such consecutive Calculation Dates to the sum of: (A) the
Assumed Trust Balance as of such first Calculation Date, and (B) the
Target Benefit contribution made under subsection 8(b)(i) with respect
to such first Calculation Date.

(e) TAX GROSS-UP. The Company agrees to pay to the Executive with
respect to each Calculation Date, an amount (the "Tax Gross-Up Payment") such
that the net benefit to the Executive after the calculation and deduction of
any federal, state and local income taxes due with respect to the Company
contributions required by this Section 8 and any federal excise taxes (as
defined in subsection 10(g) below occurring by reason of the Company
contributions described in subsection 8(g)(vi) below) will equal the required
Company Target Benefit contributions of subsection 8(b)(i). In addition, the
Tax Gross-Up Payment will include a gross-up for such taxes incurred by the
Executive due to the Company's payment of the trustee fees described in
subsection 8(b)(iii), his inclusion of the Assumed Earnings (as calculated
pursuant to subsection 8(d)(iii)) for the period ending on such Calculation
Date in gross income.

Further, the portion of the Tax Gross-Up Payment attributable to
federal income taxes shall be reduced by the maximum reduction in federal
income taxes that could be obtained by deduction of the portion of the Tax
Gross-Up payment attributable to state and local incomes taxes. Notwithstanding
anything in this Agreement to the contrary, the Tax Gross-Up payment
attributable to federal excise taxes shall be determined as provided in
subsection 10(g) below.

4
<PAGE> 5
The amount of the Tax Gross-Up Payments shall be determined by the
Company after consultation with the Executive's tax advisors and shall be paid
to the Executive on or before the due date provided in subsection 8(g) below,
in respect of which the Tax Gross-Up Payments shall be based upon tax rates and
laws in effect on the Calculation Date to which such payments relate
notwithstanding the fact that the payment may occur in the following calendar
year.

(f) FUNDING DETERMINATIONS AND TIMING. For each Calculation Date,
a contribution shall be determined for the Executive by the Actuary. With
respect to any Calculation Date corresponding to a December 31, following
December 31, 1992, on or before January 31 of each year, the Company shall
provide the Actuary with the data the Actuary deems necessary to calculate the
contribution for such preceding year. Such data shall, to the extent
necessary, include the Executive's compensation for the preceding year. The
Actuary shall supply his determination of the Company contribution required to
fund the Executive's benefit amount to the Company by February 28 of such year
and the Company shall pay the amounts required under subsection 8(b) to or on
behalf of the Executive on or prior to March 15 of such year. Contributions
for December 31, 1992 shall be made on a similar timetable within 75 days of
the execution of his Second Amendment. Additional contributions for Calculation
Dates not corresponding to December 31 required under subsection 8(g), shall be
made on a similar timetable within 75 days of such Calculation Date.

(g) EMPLOYMENT TERMINATION: ATTAINMENT OF AGE 62

(i) AGE 62. If the Executive remains in the
employ of the Company until the date he attains age 62, he will be
entitled to a final full contribution under subsection 8(b) with
respect to the Calculation Date immediately preceding such date. In
addition, with respect to the Calculation Date immediately following
his 62nd birthday, an additional contribution shall be made consisting
of the trustee's fees and Tax Gross-Up Payment (with respect to the
Assumed Earnings and trustee fees for the calendar year in which his
62nd birthday occurs) which shall be the Company's final payment on
the Executive's behalf under this Section 8.

(ii) DEATH. In the event the Executive's
employment is terminated by death prior to his 62nd birthday, the
Company shall make its final full contribution under Section 8 with
respect to the Calculation Date coincident with or immediately
preceding the date of the Executive's death. In addition, following
his death prior to his 62nd birthday, an additional contribution shall
be made consisting of the trustee's fees and Tax Gross-Up Payment
(with respect to the Assumed Earnings and the trustee fees for the
period from such Calculation Date until the date of the Executive's
death which shall be the Company's final payment on the Executive's
behalf under this Section 8).

5
<PAGE> 6
(iii) DISABILITY. In the event the Executive's
employment is terminated due to Disability prior to his 62nd birthday,
the Executive shall continue to be entitled to supplemental retirement
benefits under this Section 8 as if his employment had not terminated
as provided in subsections 10(b)(v) and (vii), below.

(iv) TERMINATION FOR CAUSE. In the event the
Executive's employment is terminated for Cause prior to his 62nd
birthday, the Company shall make no further contributions or payments
pursuant to this Section 8.

(v) TERMINATION WITHOUT CAUSE. Upon termination
of the Executive's employment pursuant to subsection 10(d) below, the
Company shall make its full contribution under this Section 8 with
respect to the Calculation Date immediately preceding such date of
termination. In addition, the Company shall immediately make an
additional contribution under subsection 8(b), which will equal the
sum of the following amounts:

(A) an amount equal to three times the amount of
the Target Benefit portion (under subsection 8(b)(i) above) of
the contribution provided as of the Calculation Date
immediately prior thereto; provided, however, that the sum of
the benefit provided by such additional contribution (under
this clause (A)) and the benefits provided by the Assumed
Trust Balance as of the date of such termination shall not
exceed the retirement benefit provided under subsection 8(c)
above.

(B) the amount of the trustee's fees (with
respect to the period from such Calculation Date until the
date of the Executive's termination of employment), and

(C) the amount of the Tax Gross-Up Payment (with
respect to the contribution described in clause (A), above,
the Assumed Earnings and the trustee fees for the period from
such Calculation Date until the date of the Executive's
termination of employment).

The contribution described in the preceding sentence shall be the
Company's final payment on the Executive's behalf under this Section
8.

(vi) TERMINATION WITHOUT CAUSE FOLLOWING A CHANGE
IN CONTROL. Upon termination of the Executive's employment pursuant to
subsection 10(e) below, the Company shall make its full contribution
under this Section 8 with respect to the Calculation Date immediately
preceding such date of termination. In addition, the Company shall
immediately make an additional contribution under subsection 8(b)
which shall equal the sum of the following amounts:

6
<PAGE> 7
(A) the amount which, together with the Assumed
Trust Value as of the date of termination (but not including
annuities purchased for the Executive under Section 8 of the
Agreement prior to this Second Amendment), shall provide the
Executive a retirement annuity equal to the Target Benefit
provided under subsection 8(c), above, commencing on the
January 1 following his 62nd birthday,

(B) the amount of the trustee's fees (with
respect to the period from such Calculation Date until the
date of the Executive's termination of employment), and

The contribution described in the preceding sentence shall be the
Company's final payment on the Executive's behalf under this Section
8.

(vii) VOLUNTARY TERMINATION. In the event of the
Executive's voluntary termination of employment prior to his 62nd
birthday (as described in subsection 10(f) below), the Company shall
make its final payment under this Section 8 with respect to the
Calculation Date coinciding with or immediately preceding the date of
his employment termination.

(h) FUNDING. All benefits paid under this Section 8 shall be paid
on an annual basis from the general assets of the Company either directly to
the Executive, forwarded to the appropriate governmental taxing authority on
the Executive's behalf, to the Executive's Trust or the trustee of the
Executive's Trust.

(i) INTERESTS NOT TRANSFERABLE. The interests of the Executive
under this Section 8 are not subject to the claims of his creditors and may not
be voluntarily or involuntarily transferred, assigned, alienated or encumbered.

(j) EFFECT ON OTHER BENEFIT PLANS. Amounts credited or paid under
this Section 8 shall not be considered to be compensation for the purposes of
calculating benefits under any other employee benefit plans maintained by the
Company. The treatment of such amounts under any other employee benefit plan
shall be determined pursuant to the provisions of such plan.

7
<PAGE> 8
4. Section 10, TERMINATION OF EMPLOYMENT shall be revised
effective December 31, 1992 in order to make it consistent with changes made to
Section 8, SUPPLEMENTAL RETIREMENT BENEFIT by this Second Amendment as follows:

A. By substituting the following for subsection
10(a)(vi):
"(vi) contributions required to be paid pursuant to
subsection 8(g)(ii), above; and"

B. By substituting the word "contributions" for
the phrase "annuity purchases" where it appears in subsection
10(b)(v).

C. By substituting the following for subsection
10(b)(vii):
"(vii) any contributions required to be made as of
any Calculation Date prior to the termination of the
Executive's employment due to Disability pursuant to
subsection 8(b), above, but not made at the time of his
termination of employment; and"

D. By substituting the phrase "supplemental
retirement program" for the phrase "annuity program" in
subsection 10(d)(iv).

E. By substituting the following for subsection
10(d)(vi):
"(vi) any contributions required to be made with
respect to any Calculation Date prior to termination of the
Executive's employment pursuant to subsection 8(b), above, but
not made at the time of his termination of employment, plus
the contributions required to be made pursuant to subsection
8(g)(v), above; and

F. By substituting the phrase "supplemental
retirement program" for the phrase "annuity program" in
subsection 10(e)(iii).

G. By substituting the following for subsection
10(e)(v):
"(v) any contributions required to be made with
respect to any Calculation Date prior to termination of the
Executive's employment pursuant to subsection 8(b), above, but
not made at the time of his termination of employment, plus
the contributions required to be made pursuant to subsection
8(g)(vi);"

H. By substituting the phrase "subsection
10(e)(iii)" for the phrase "subsection 8(e)(iii)" in both
places it appears in penultimate sentence of subsection 10(e).

8
<PAGE> 9
I. By substituting the following for subsection
10(f)(iv):
"(iv) any contributions required to be made with
respect to any Calculation Date prior to termination of the
Executive's employment pursuant to subsection 8(b), above but
not made at the time of his termination of employment; and"

5. Section 21, BENEFICIARIES/REFERENCES shall be amended by
substituting the phrase "the Trust specified in Section 8" for the phrase "the
annuity contract specified in Section 8".

All terms of the Employment Agreement, as amended through the First
Amendment thereto, not specifically amended herein shall remain in full force
and effect.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

<TABLE>
<S> <C>
BALLY MANUFACTURING CORPORATION

Attest: /s/ Carol DePaul By: /s/ Lee Hillman
------------------ -------------------------------

/s/ Arthur M. Goldberg
-----------------------------------
Arthur M. Goldberg, as the Executive

Acknowledged and Approved by the
Compensation and Stock Option Committee of
the Board of Directors

Attest: /s/ Susan R. Rehorst By: /s/ Ted Halkyard
--------------------- ------------------------------
Chairman

Agreed to and guaranteed by Bally's Park Place:

Attest: /s/ Dennis P. Venuti By: /s/ Wallace R. Barr
--------------------- ------------------------------
Secretary President
</TABLE>

<PAGE> 1
Exhibit 10(iii).7

BALLY'S
park place
CASINO HOTEL & TOWER

March 15, 1993

Mr. C. Patrick McKoy
Bally's Park Place, Inc.
Park Place and the Boardwalk
Atlantic City, New Jersey 08401

Dear Pat:

This letter will confirm the agreement between Bally's Park Place, Inc.
("Bally's") and you with respect to severance compensation.

Although it is mutually understood that you will continue to serve as an
employee-at-will during the term of your employment and your employment is
subject to termination by Bally's for cause or no cause, Bally's and you have
agreed to the following provisions:

1. If your employment is terminated at any time within thirty-six (36)
months from the date of this letter due to your death, your total
disability for a period of at least six (6) consecutive months, your
intentional or grossly negligent refusal to perform the duties which
are reasonably assigned to you, your inability to so perform as a
result of a determination by any governmental or judicial body
(including any disqualification by a regulatory agency with
jurisdiction over gaming), your fraud, dishonesty or other deliberate
injury to Bally's, or your voluntary decision to leave its employ
(unless under circumstances where Bally's has substantially changed
the duties which you normally perform, has reduced your base salary
or has substantially reduced your other compensation exclusive of
discretionary bonus), you shall not be entitled to any severance
compensation.

2. If your employment is terminated for a reason other than stated above
or for no reason within thirty-six (36) months of the date of this
letter, you shall receive from Bally's a lump-sum amount equal to
eighteen (18) months of your then current annual base salary, less

<PAGE> 2
C. Patrick McKoy
Page - Two -
March 15, 1993
- ----------------

applicable payroll deductions. In addition, you will continue to be
covered under its life, disability and health insurance for the
period of eighteen (18) months after termination; provided, however,
that such disability and health benefits would be considered as being
in lieu of COBRA benefits and excess to any other coverage you or your
dependents may otherwise have under a benefit program of another
employer or under Medicaid or similar public program.

Kindly indicate your acceptance of the terms and conditions stated above by
signing the enclosed copy of this letter on the line provided and returning it
to my office.

Very truly yours,

/s/ Wallace R. Barr
-------------------------
Wallace R. Barr,
President and Chief
Operating Officer

Agreed:

/s/ C. Patrick McKoy
- -------------------------------
C. Patrick McKoy

<PAGE> 1

EXHIBIT 12

BALLY'S PARK PLACE, INC.

CALCULATIONS OF HISTORICAL AND PRO FORMA RATIOS
OF EARNINGS TO FIXED CHARGES

(DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------------------------------------------------
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------- -------------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Income before income taxes,
extraordinary item and
cumulative effect on prior
years of change in
accounting for income
taxes....................... $37,481 $14,177 $14,740 $ 5,466 $14,256 $48,296 $65,242
Add:
Interest expense (a)........ 33,891 36,227 47,960 48,951 46,334 22,294 8,400
Amortization of capitalized
interest.................. 624 620 829 817 635 374 122
------- ------- ------- ------- ------- ------- -------
Earnings available for fixed
charges..................... $71,996 $51,024 $63,529 $55,234 $61,225 $70,964 $73,764
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Fixed charges:
Interest expense (a)........ $33,891 $36,227 $47,960 $48,951 $46,334 $22,294 $ 8,400
Capitalized interest........ 39 67 74 149 2,558 6,871 9,600
------- ------- ------- ------- ------- ------- -------
Total fixed charges........... $33,930 $36,294 $48,034 $49,100 $48,892 $29,165 $18,000
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Ratio of earnings to fixed
charges..................... 2.1x 1.4x 1.3x 1.1x 1.3x 2.4x 4.1x
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
</TABLE>

<TABLE>
<CAPTION>
PRO FORMA
----------------------------------------
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1993 DECEMBER 31, 1992
------------------ -----------------
<S> <C> <C>
Income before income taxes,
extraordinary item and cumulative
effect on prior years of change in
accounting for income taxes........ $ 40,967 $19,389
Add:
Interest expense (a)............... 30,405 43,311
Amortization of capitalized
interest........................ 624 829
---------- -----------------
Earnings available for fixed
charges............................ $ 71,996 $63,529
---------- -----------------
---------- -----------------
Fixed charges:
Interest expense (a)............... $ 30,405 $43,311
Capitalized interest............... 39 74
---------- -----------------
Total fixed charges.................. $ 30,444 $43,385
---------- -----------------
---------- -----------------
Ratio of earnings to fixed charges... 2.4x 1.5x
---------- -----------------
---------- -----------------
</TABLE>

- ---------------

Note:
(a) Includes amortization of debt issuance costs and discount.

<PAGE> 1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our reports on (i) the consolidated financial statements of Bally's
Park Place, Inc. dated February 19, 1993, except for the "Summary of significant
accounting policies" and "Subsequent events" notes as to which the date is June
16, 1993 and (ii) the financial statement schedules for the years ended December
31, 1992, 1991 and 1990 dated February 19, 1993, all included in the Amendment
No. 1 to Registration Statement on Form S-1 (No. 33-51765) and related
Prospectus of Bally's Park Place Funding, Inc. and Bally's Park Place, Inc. for
the registration of $425 million principal amount First Mortgage Notes due 2004.

ERNST & YOUNG

Philadelphia, Pennsylvania

February 8, 1994

<PAGE> 1
Ex. 23.3

CONSENT OF APPRAISER

We hereby consent to the references made to us and to our report by Bally's
Park Place Funding, Inc. and Bally's Park Place, Inc. in the Prospectus
constituting a part of Amendment No. 1 to Registration Statement No. 33-51765
on Form S-1. In giving such consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.

AMERICAN APPRAISAL ASSOCIATES, INC.

By Ronald M. Goergen
---------------------------------
Ronald M. Goergen
Executive Vice President

Milwaukee, Wisconsin
February 11, 1994

<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM T-1

Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee

FIRST BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)

United States 41-0256895
(State of Incorporation) (I.R.S. Employer
Identification No.)

First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)

BALLY'S PARK PLACE FUNDING, INC.
BALLY'S PARK PLACE, INC.
(Exact name of registrant as specified in its charter)

Delaware 22-510861
Delaware 22-2264974
(State of Incorporation) (I.R.S. Employer
Identification No.)

Park Place and The Boardwalk 08401
Atlantic City, New Jersey (Zip Code)
(Address of Principal Executive Offices)

% FIRST MORTGAGE NOTES
(Title of the Indenture Securities)

<PAGE> 2

GENERAL

1. GENERAL INFORMATION Furnish the following information as to the
Trustee.

(a) Name and address of each examining or supervising authority to which it
is subject.

Comptroller of the Currency
Washington, D.C.

(b) Whether it is authorized to exercise corporate trust powers.

Yes

2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation.

None

See Note following Item 16.

Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.

16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification. Each of the exhibits listed
below is incorporated by reference from a previous registration.

1. Copy of Articles of Association.

2. Copy of Certificate of Authority to Commence Business.

3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).

4. Copy of existing By-Laws.

5. Copy of each Indenture referred to in Item 4. N/A

6. The consents of the Trustee required by Section 321(b) of the act.

7. Copy of the latest report of condition of the Trustee published pursuant
to law of the requirements of its supervising or examining authority.

<PAGE> 3

NOTE

The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligor within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligor, or affiliates, are based
upon information furnished to the Trustee by the obligor. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Bank National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested,
all in the City of Saint Paul and State of Minnesota on the 1st day of
February, 1994.

FIRST BANK NATIONAL ASSOCIATION

[SEAL]
/s/ Scott Strodthoff
---------------------------------
Scott Strodthoff
Assistant Vice President

/s/ Frank P. Leslie III
- ------------------------------
Frank P. Leslie III
Assistant Secretary

<PAGE> 4

EXHIBIT 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, FIRST BANK NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.

Dated: February 1, 1994

FIRST BANK NATIONAL ASSOCIATION

/s/ Scott Strodthoff
--------------------------------------
Scott Strodthoff
Assistant Vice President