ARTICLE I DEFINITIONS 1.1 Adjusted Capital Account Deficit. . . . . . . . . . . . . . . . . . . 1 1.2 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.3 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2...

OPERATING AGREEMENT

ALADDIN GAMING, LLC,
A NEVADA LIMITED LIABILITY COMPANY

TABLE OF CONTENTS

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ARTICLE I

DEFINITIONS

1.1 Adjusted Capital Account Deficit. . . . . . . . . . . . . . . . . . . 1
1.2 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Aladdin Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Articles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Assumed Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Available Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Bank Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Bank Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 Board Member. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 Board Supermajority . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 Capital Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 Capital Contribution. . . . . . . . . . . . . . . . . . . . . . . . . 3
1.16 Certificate of Shares . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.19 Completion Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.20 Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.21 Covered Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.23 Discount Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.24 Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.25 Employment and Consulting Agreements. . . . . . . . . . . . . . . . . 4
1.26 Executive Management Committee. . . . . . . . . . . . . . . . . . . . 5
1.27 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.28 Gaming Problem. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.29 Gross Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.30 Guaranteed Payment. . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.31 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.32 LCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.33 Member. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.34 Member Nonrecourse Debt . . . . . . . . . . . . . . . . . . . . . . . 6
1.35 Member Nonrecourse Debt Minimum Gain. . . . . . . . . . . . . . . . . 6
1.36 Member Nonrecourse Deductions . . . . . . . . . . . . . . . . . . . . 7

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1.37 Minimum Gain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.38 Nevada Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.39 Nevada Commission . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.40 Nevada Gaming Authorities . . . . . . . . . . . . . . . . . . . . . . 7
1.41 Non-Exercise Notice . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.42 Nonrecourse Deductions. . . . . . . . . . . . . . . . . . . . . . . . 7
1.43 NRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.44 Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.45 Percentage Interest . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.46 Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.47 Profits and Losses. . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.48 Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.49 Purchase Option . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.50 Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.51 Records Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.52 Related Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.53 Required Series A Capital Account Balance . . . . . . . . . . . . . . 9
1.54 Salle Privee Facilities . . . . . . . . . . . . . . . . . . . . . . . 9
1.55 Secretary of State. . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.56 Series A Preferred Return . . . . . . . . . . . . . . . . . . . . . . 9
1.57 Series A Preferred Shares . . . . . . . . . . . . . . . . . . . . . . 9
1.58 Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.59 Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.60 Substituted Member. . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.61 Total Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.62 Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.63 Treasury Regulations. . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE II

INTRODUCTORY MATTERS

2.1 Records Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Other Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3 Resident Agent and Registered Office. . . . . . . . . . . . . . . . . 10
2.4 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.5 No Liability to Third Parties . . . . . . . . . . . . . . . . . . . . 11

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ARTICLE III

INTERESTS

3.1 Member's Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Classes of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 UCC Election. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE IV

CAPITAL ACCOUNTS

4.1 Initial Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.2 Capital Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.5 Additional Capital Contributions. . . . . . . . . . . . . . . . . . . 12

ARTICLE V

PROFITS AND LOSSES

5.1 Profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3 Special Allocation to Series A Preferred Shares . . . . . . . . . . . 13
5.4 Special Allocations . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.5 Section 704(c) Allocation . . . . . . . . . . . . . . . . . . . . . . 15
5.6 Federal Income Tax. . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE VI

DISTRIBUTIONS

6.1 Priority Distributions. . . . . . . . . . . . . . . . . . . . . . . . 16
6.2 Tax Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.3 Distributions on Common Shares. . . . . . . . . . . . . . . . . . . . 16
6.4 Limitations on Distribution . . . . . . . . . . . . . . . . . . . . . 17

iii

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ARTICLE VII

MEMBERS

7.1 Powers of Members . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . 17
7.3 Action by the Members . . . . . . . . . . . . . . . . . . . . . . . . 17
7.4 Meetings of Members . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.5 Waiver of Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.6 Adjourned Meetings and Notice Thereof . . . . . . . . . . . . . . . . 18
7.7 Action by Written Consent . . . . . . . . . . . . . . . . . . . . . . 18
7.8 Telephonic Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.9 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

ARTICLE VIII

RESIGNATION, TRANSFER OF SHARES,
CHANGE IN CONTROL, TRUST MEMBERS

8.1 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.2 Transfers of Interests. . . . . . . . . . . . . . . . . . . . . . . . 19
8.3 Gaming Control Act. . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.4 Further Restriction on Transfer of Shares . . . . . . . . . . . . . . 19
8.5 Gaming Holdings Shares. . . . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE IX

BOARD OF MANAGERS

9.1 Board of Managers . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.2 Powers and Duties of the Board. . . . . . . . . . . . . . . . . . . . 20
9.3 Election of Officers. . . . . . . . . . . . . . . . . . . . . . . . . 21
9.4 Removal, Resignation and Vacancies. . . . . . . . . . . . . . . . . . 21
9.5 Meetings of the Board . . . . . . . . . . . . . . . . . . . . . . . . 21
9.6 Compensation of Board Members; Compensation of Officers . . . . . . . 22
9.7 Expense Reimbursements. . . . . . . . . . . . . . . . . . . . . . . . 22

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ARTICLE X

ACCOUNTING, RECORDS AND BANK ACCOUNTS

10.1 Records and Accounting. . . . . . . . . . . . . . . . . . . . . . . . 23
10.2 Access to Accounting Records. . . . . . . . . . . . . . . . . . . . . 23
10.3 Annual Tax Information. . . . . . . . . . . . . . . . . . . . . . . . 23
10.4 Obligations of Members to Report Allocations. . . . . . . . . . . . . 23
10.5 Tax Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ARTICLE XI

DISSOLUTION OF THE COMPANY AND
TERMINATION OF A MEMBER'S INTEREST

11.1 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.2 Company's Option To Purchase Bankrupt Member's Interest . . . . . . . 24
11.3 Distribution on Dissolution and Liquidation . . . . . . . . . . . . . 24

ARTICLE XII

LIABILITY, EXCULPATION AND INDEMNIFICATION

12.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.2 Fiduciary Duty. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.3 Outside Businesses. . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.4 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12.5 Indemnity for Actions By or In the Right of the Company. . . . . . . 27
12.6 Indemnity If Successful . . . . . . . . . . . . . . . . . . . . . . . 27
12.7 Determination of Right to Indemnification . . . . . . . . . . . . . . 27
12.8 Advance Payment of Expenses . . . . . . . . . . . . . . . . . . . . . 28
12.9 Other Arrangements Not Excluded . . . . . . . . . . . . . . . . . . . 28
12.10 Errors and Omissions Insurance. . . . . . . . . . . . . . . . . . . . 28
12.11 Property of the Company . . . . . . . . . . . . . . . . . . . . . . . 29
12.12 Violation of this Agreement . . . . . . . . . . . . . . . . . . . . . 29

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ARTICLE XIII

MISCELLANEOUS PROVISIONS

13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.2 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.3 Membership Certificates . . . . . . . . . . . . . . . . . . . . . . . 29
13.4 Complete Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.5 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.6 Applicable Law; Jurisdiction. . . . . . . . . . . . . . . . . . . . . 30
13.7 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.9 Facsimile Copies. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.10 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.11 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.12 No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . 31

OPERATING AGREEMENT

ALADDIN GAMING, LLC,
A NEVADA LIMITED LIABILITY COMPANY

This Operating Agreement of Aladdin Gaming, LLC, a Nevada limited
liability company (the "Company") is made and entered into at Las Vegas, Nevada,
as of this 26th day of February, 1998, by and between the Company and Aladdin
Gaming Holdings, LLC, a Nevada limited liability company ("Gaming Holdings").

R E C I T A L S

A. The Company was formed on January 24, 1997 pursuant to the
provisions of Chapter 86 of the Nevada Revised Statutes;

B. On or prior to the date hereof Gaming Holdings has made the Capital
Contributions set forth on Schedule 1 in exchange for the number of Common
Shares set forth on Schedule 1, and has been admitted as the sole member of the
Company.

C. Gaming Holdings and the Company desire by this Agreement to set
forth their agreement as to the relationships between the Company and the
Members, and among the Members themselves and as to the conduct of the business
and the internal affairs of the Company.

THEREFORE, in consideration of the mutual covenants, agreements and
promises made herein, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1 ADJUSTED CAPITAL ACCOUNT DEFICIT. "Adjusted Capital Account
Deficit" means, with respect to any Member, the deficit balance, if any, in such
Member's Capital Account as of the end of the relevant Fiscal Year, after giving
effect to the following adjustments:

(a) increase such Capital Account by any amounts which such
Member is obligated to contribute to the Company pursuant to the terms of this
Agreement or otherwise, or is deemed to be obligated to contribute pursuant to
Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(b) reduce such Capital Account by the amount of the items
described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

1.2 AFFILIATE. "Affiliate" means, with respect to a specified
Person, any other Person who or which is (a) the principal of the specified
Person, (b) directly or indirectly Controlling, Controlled by or under common
Control with the specified Person, or (c) any member, director, officer,
manager, relative or spouse of the specified Person.

1.3 AGREEMENT. "Agreement" means this Operating Agreement, as
amended from time to time.

1.4 ALADDIN ENTERPRISES. "Aladdin Enterprises" means Aladdin
Gaming Enterprises, Inc., a Nevada limited liability company.

1.5 ARTICLES. "Articles" means the Articles of Organization of
the Company, as amended from time to time.

1.6 ASSUMED RATE. "Assumed Rate" shall initially mean 40%. The
Board may adjust this rate upward or downward from time to time to avoid any
material discrepancy between the prevailing Assumed Rate and the effective
average rate of tax applicable to taxable income allocated from the Company to
Gaming Holdings. For this purpose, the effective average rate of tax of Gaming
Holdings or any other pass-through entity for tax purposes shall be determined
by reference to the members thereof.

1.7 AVAILABLE CASH. "Available Cash" means cash available in
the accounts of the Company, less reasonable reserves established by the Board
based on an assessment of the Company's needs for the payment of Company
expenses, operations and contingencies.

1.8 BANK FINANCING. "Bank Financing" means the financing under
a senior credit facility in the amount of $410 million effective as of the date
hereof between the Company as borrower and the Bank Lenders.

1.9 BANK LENDERS. "Bank Lenders" means a syndicate of lenders,
including The Bank of Nova Scotia, Canadian Imperial Bank of Commerce and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation.

1.10 BANKRUPTCY. "Bankruptcy" means, and a Member shall be
referred to as a "Bankrupt Member" upon, (a) the entry of a decree or order for
relief against the Member by a court of competent jurisdiction in any voluntary
or involuntary case brought by or against the Member

under any bankruptcy, insolvency or similar law (collectively, "Debtor Relief
Laws") generally affecting the right of creditors and relief of debtors now or
hereafter in effect; (b) the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent under applicable Debtor
Relief Laws for the Member or for any substantial part of the Member's assets or
property; (c) the ordering of the winding up or liquidation of the Member's
affairs; (d) the filing of a petition by or against the Member in any such
voluntary or involuntary bankruptcy case, which petition remains not dismissed
for a period of 180 days or which is not dismissed or suspended pursuant to
Section 305 of the Federal Bankruptcy Code (or any corresponding provision of
any future United States Bankruptcy Law); (e) the consent by the Member to the
entry of an order for relief in a voluntary or involuntary case under any Debtor
Relief Laws or to the appointment of, or the taking of any possession by, a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar agent under any applicable Debtor Relief Laws for the Member or for any
substantial part of the Member's assets or property; or (f) the making by the
Member of any general assignment for the benefit of the Member's creditors.

1.11 BOARD. "Board" means the Board of Managers of the Company,
as provided for in Section 9.1.

1.12 BOARD MEMBER. "Board Member" means a member of the Board.

1.13 BOARD SUPERMAJORITY. "Board Supermajority" means an
affirmative vote of at least eighty percent of the Board Members.

1.14 CAPITAL ACCOUNT. "Capital Account" means, with respect to
any Member or Disassociated Member, the capital account maintained for such
Member or Disassociated Member as set forth in Section 4.2 after giving effect
to the adjustments set forth in Section 4.3.

1.15 CAPITAL CONTRIBUTION. "Capital Contribution" means the
total amount of cash and the agreed fair market value (net of liabilities) of
any property contributed at any time to the capital of the Company by a Member.

1.16 CERTIFICATE OF SHARES. "Certificate of Shares" means a
certificate of the Company representing Shares in the Company.

1.17 CODE. "Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any corresponding United States federal tax
statute enacted after the date of this Agreement. A reference to a specific
section of the Code refers not only to such specific section but also to any
corresponding provision of any United States federal tax statute enacted after
the date of this Agreement, as such specific section or corresponding provision
is in effect on the date of application of the provisions of this Agreement
containing such reference.

1.18 COMMON SHARES. "Common Shares" means Shares with rights and
obligations as provided in Section 3.2(b).

1.19 COMPLETION GUARANTY. "Completion Guaranty" means any of (a)
the Guaranty of Performance and Completion dated as of the date hereof, made by
the Trust, Aladdin Bazaar Holdings, LLC and LCI Parent in favor of the Bank
Lenders, (b) the Guaranty of Performance and Completion dated as of the date
hereof, made by the Trust, Aladdin Bazaar Holdings, LLC and LCI Parent in favor
of the holders of the Discount Notes or (c) the Guaranty of Performance and
Completion to be entered into after the date hereof by the Trust, Aladdin Bazaar
Holdings, LLC and LCI Parent in respect of the Aladdin development.

1.20 CONTROL. "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through ownership of voting securities, by
contract or otherwise, and "Controlling" and "Controlled" shall have
corresponding meanings.

1.21 COVERED PERSON. "Covered Person" means (a) a Member or any
Affiliate of a Member, (b) any officers, directors, shareholders, members,
controlling Persons, partners, employees, representatives or agents of a Member
or a Board Member, (c) any Board Member, officer, employee, representative or
agent of the Company or its Affiliates, or (d) any Person who was, at the time
of the act or omission in question, a Person described in any of the preceding
clauses (a) through (c).

1.22 CUMULATIVE TAX LIABILITY ACCOUNT. "Cumulative Tax Liability
Account" means, with respect to each Member for any Quarter, the product of (a)
the Assumed Rate and (b) the excess of the cumulative amount of federal taxable
income or gain expected to be allocated to such Member in respect of its Common
Shares for such Quarter and actually allocated or expected to be allocated for
all prior Quarters pursuant to Article V, over the cumulative amount of federal
taxable loss or deduction allocated to such Member in respect of its Common
Shares for such Quarter and actually allocated or expected to be allocated for
all prior Quarters pursuant to Article V.

1.23 DISCOUNT NOTES. "Discount Notes" means 13.5% senior
discount notes accreting to an aggregate principal amount of $221.5 million at
maturity, due 2010 issued by Gaming Holdings and Aladdin Capital Corp. on or
about the date hereof.

1.24 DISTRIBUTION. "Distribution" means a distribution of cash
or other property made by the Company with respect to Shares, including upon
dissolution or liquidation of the Company or in respect of a redemption of
Shares, but shall not mean payments or transfers of cash or other property to
Members for reasons other than their ownership of Shares.

1.25 EMPLOYMENT AND CONSULTING AGREEMENTS. "Employment and
Consulting Agreements" means (a) the Employment and Consulting Agreement
effective January 1, 1997 entered into by and among ▇▇▇▇▇▇▇▇, the Company,
Aladdin Gaming and Aladdin Holdings as amended on January 30, 1998 and February
26, 1998, (b) the Consulting Agreement effective January 1, 1997 entered into by
and among GAI, the Company, Aladdin Gaming and Aladdin

Holdings as amended on January 30, 1998 and February 26, 1998, (c) the
Employment Agreement effective April 15, 1997 entered into by and among
▇▇▇▇▇▇▇▇, the Company, Aladdin Gaming and Aladdin Holdings as amended on
February 26, 1998, (d) the Employment Agreement effective July 1, 1997 entered
into by and among Klerk, the Company, Aladdin Gaming and Aladdin Holdings as
amended on February 26, 1998, (e) the Employment Agreement effective July 1,
1997 entered into by and among ▇▇▇▇▇, the Company, Aladdin Gaming and Aladdin
Holdings as amended on February 26, 1998, (f) the Employment Agreement effective
July 1, 1997 entered into by and among ▇▇▇▇▇▇, the Company, Aladdin Gaming and
Aladdin Holdings as amended on February 26, 1998.

1.26 EXECUTIVE MANAGEMENT COMMITTEE. "Executive Management
Committee" means the committee of the management of the Company with the
day-to-day responsibility for the operation of the Company's business, as
provided for in Section 9.2.

1.27 FISCAL YEAR. "Fiscal Year" means the period commencing on
January 1 of each calendar year and terminating on December 31 of the same
calendar year, or such other period as determined by the Board and permitted by
the Code, the Treasury Regulations or any other applicable laws.

1.28 GAMING PROBLEM. "Gaming Problem" means circumstances such
that any Member, any Affiliate of any Member or any Related Party of any Member
or of any Affiliate of any Member may preclude or materially delay, impede or
impair the ability of the Company to obtain or retain any licenses required by
the Nevada Gaming Authorities for the conduct of business of the Company and its
Subsidiaries, or such as may result in the imposition of materially burdensome
terms and conditions on any such license.

1.29 GROSS ASSET VALUE. "Gross Asset Value" means, with respect
to any Company asset, the asset's adjusted basis for federal income tax
purposes, except as follows:

(a) the initial Gross Asset Value of any asset contributed
by a Member to the Company shall be the fair market value of such asset on the
date of contribution; PROVIDED, that the Gross Asset Value of any asset (other
than cash) contributed by a Member shall be as set forth on Schedule 1;

(b) the Gross Asset Value of all Company assets shall be
adjusted to equal their respective fair market values as of the following times:
(i) the acquisition of an additional Interest by any new or existing Member in
exchange for more than a de minimis Capital Contribution; (ii) the distribution
by the Company to a Member of more than a de minimis amount of Company property
as consideration for an Interest; and (iii) the liquidation of the Company
within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g);
PROVIDED, however, that the adjustment pursuant to clauses (i) and (ii) shall be
made only if the Board reasonably determines that such adjustments are necessary
or appropriate to reflect the relative economic interests of the Members in the
Company;

(c) the Gross Asset Value of any Company asset distributed
to any Member shall be adjusted to equal the fair market value of such asset on
the date of the Distribution; and

(d) the Gross Asset Values of the Company assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m);
PROVIDED, however, that Gross Asset Values shall not be adjusted pursuant to
this paragraph (d) to the extent the Board determines that an adjustment
pursuant to paragraph (b) is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
paragraph (d).

If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraphs (a), (b) or (d) above, such Gross Asset Value shall
thereafter be adjusted by the depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.

1.30 GUARANTEED PAYMENT. "Guaranteed Payment" means a payment
determined without regard to income of the Company, made to a Member for the use
of capital, as described under Section 707(c) of the Code.

1.31 INTEREST. "Interest" means the entire ownership interest of
a Member in the Company at any time, including the right of such Member to any
and all benefits to which a Member may be entitled as provided under the NRS and
in this Agreement and includes the ownership interests in respect of both Common
Shares and Series A Preferred Shares.

1.32 LCI. "LCI" means London Clubs Nevada, Inc., a Nevada
corporation.

1.33 MEMBER. "Member" means a Person who has been admitted to
the Company as a member in accordance with the NRS and this Agreement.

1.34 MEMBER NONRECOURSE DEBT. "Member Nonrecourse Debt" has the
meaning set forth in Treasury Regulations Section 1.704-2(b)(4) for "partner
non-recourse debt".

1.35 MEMBER NONRECOURSE DEBT MINIMUM GAIN. "Member Nonrecourse
Debt Minimum Gain" means an amount, with respect to each Member Nonrecourse
Debt, equal to the Minimum Gain that would result if such Member Nonrecourse
Debt were treated as a nonrecourse liability of the Company, determined in
accordance with Treasury Regulations Sections 1.704-2(i)(3).

1.36 MEMBER NONRECOURSE DEDUCTIONS. "Member Nonrecourse
Deductions" has the meaning set forth in Treasury Regulations Sections
1.704-2(i)(l) and 1.704-2(i)(2) for "partner non-recourse deductions".

1.37 MINIMUM GAIN. "Minimum Gain" means the amount determined by
computing, with respect to each nonrecourse liability of the Company, the amount
of gain (of whatever character), if any, that would be realized by the Company
if it disposed (in a taxable transaction) of the Property subject to such
liability in full satisfaction thereof, and by then aggregating the amounts so
computed as set forth in Treasury Regulations Sections 1.704-2(b)(2) and
1.704-2(d).

1.38 NEVADA ACT. "Nevada Act" means the Nevada Gaming Control
Act (or any successor statute), and any rules or regulations promulgated
thereunder.

1.39 NEVADA COMMISSION. "Nevada Commission" means the Nevada
Gaming Commission.

1.40 NEVADA GAMING AUTHORITIES. "Nevada Gaming Authorities"
means the Nevada Commission, the Nevada State Gaming Control Board and any other
applicable governmental or administrative state or local agency involved in the
regulation of gaming or gaming activities in the State of Nevada.

1.41 NON-EXERCISE NOTICE. "Non-Exercise Notice" has the meaning
ascribed thereto in Section 11.2.

1.42 NONRECOURSE DEDUCTIONS. "Nonrecourse Deductions" has the
meaning set forth in Treasury Regulations Section 1.704-2(b)(1) and 1.704-2(c).

1.43 NRS. "NRS" means the Nevada Revised Statutes, as amended
from time to time.

1.44 OFFICERS. "Officers" means the officers of the Company, as
elected by the Board from time to time.

1.45 PERCENTAGE INTEREST. "Percentage Interest" means, with
respect to a specified Member, the proportionate share of such Member's Common
Shares in the Company, computed by dividing the number of Common Shares held by
such Member by the Total Common Shares.

1.46 PERSON. "Person" means a natural person, any form of
business or social organization and any other nongovernmental legal entity,
whether domestic or foreign, including, but not limited to, a corporation,
partnership, association, trust, unincorporated organization, estate or limited
liability company.

1.47 PROFITS AND LOSSES. "Profits" and "Losses" mean, for any
applicable period, an amount equal to the Company's taxable income or loss for
such year or period, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

(a) any income of the Company that is exempt from gross
income for federal income tax purposes and not otherwise taken into account in
computing Profits or Losses shall be included in computing Profits or Losses;

(b) any expenditures of the Company that are described in
Code Section 705(a)(2)(B) or that are treated as expenditures described in that
Code Section pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i) and
not otherwise taken into account in computing Profits or Losses shall reduce
Profits or Losses;

(c) in the event that the Gross Asset Value of any Company
asset is adjusted pursuant to clause (b), (c) or (d) of the definition thereof,
such adjustment shall be taken into account as gain or loss from disposition of
such asset for purposes of computing Profits and Losses;

(d) gain or loss resulting from a disposition of property
with respect to which gain or loss has been recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the property
disposed of, notwithstanding that the adjusted tax basis of such property
differs from such value;

(e) an amount equal to the depreciation, depletion,
amortization, and gain or loss or other cost recovery reduction allowable with
respect to an asset for such Fiscal Year or other period, determined in a manner
consistent with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) shall be taken
into account in computing Profits or Losses; and

(f) notwithstanding any other provisions of this
definition, any items of income, gain, loss or deduction which are specifically
allocated shall not be taken into account in computing Profits or Losses.

1.48 PROPERTY. "Property" means all assets of the Company,
including all real, personal and intangible property, or any portion thereof.

1.49 PURCHASE OPTION. "Purchase Option" has the meaning ascribed
thereto in Section 11.2.

1.50 QUARTER. "Quarter" means any three month period commencing
on January 1, April 1, July 1 or October 1 of any year during the term of this
Agreement.

1.51 RECORDS OFFICE. "Records Office" means the records office
of the Company maintained in the State of Nevada.

1.52 RELATED PARTY. "Related Party" means, in respect of a
Member, its Affiliates, and the Member's and the Affiliates' respective
shareholders, partners, members, directors and officers.

1.53 REQUIRED SERIES A CAPITAL ACCOUNT BALANCE. "Required Series
A Capital Account Balance" means, as of the date of determination, the sum of
(a) the Capital Contributions with respect to the Series A Preferred Shares,
plus (b) the sum of (i) the cumulative Series A Preferred Return and (ii) any
premium currently due and payable on the Discount Notes, less (c) any actual
Distributions previously made with respect to the Series A Preferred Shares
(other than Distributions made pursuant to Section 6.2). It is anticipated that
the Required Series A Capital Account Balance will be $221,500,000 on March 1,
2003.

1.54 SALLE PRIVEE FACILITIES. "Salle Privee Facilities" means
facilities open to the public at large, consisting of (a) a gaming facility,
containing approximately 20 to 30 high limit tables and approximately 100 high
limit slot devices, located on the mezzanine level directly above the main
gaming floor of the Aladdin hotel and casino;(b) a super-premium gourmet
restaurant facility, located adjacent to and as part of the gaming facility of
the Salle Privee Facilities and containing a separate kitchen, a bar,
approximately 25 dining tables inside the restaurant, as well as several
additional dining tables located in a roof garden accessible through the
restaurant;(c) an exclusive hospitality facility comprising approximately 25
double-module luxury suites, 5 triple-module suites, a concierge facility and
guest bar and lounge, to be located in the main tower of the Aladdin hotel and
casino;(d) a separate entrance and reception area for guests of the Salle Privee
Facilities, offering secure and discrete access for arrivals and departures; and
(e) vertical and horizontal circulation infrastructure providing for private
elevator access to the hospitality facility and private corridor access from the
hospitality facility to the gaming facility of the Salle Privee Facilities.

1.55 SECRETARY OF STATE. "Secretary of State" means the office
of the Nevada Secretary of State.

1.56 SERIES A PREFERRED RETURN. "Series A Preferred Return"
means, as of the date of determination, with respect to a holder of Series A
Preferred Shares, (a) in respect of the first five years after the initial
issuance of the Series A Preferred Interests, an amount equal to the product of
(i) 13.5 % on a semi-annual bond equivalent basis and (ii) the Required Series A
Capital Account Balance, and (b) beginning in the sixth year after the initial
issuance of the Series A Preferred Interests, an amount equal to the product of
(i) 13.5% per annum and (ii) $221.5 million.

1.57 SERIES A PREFERRED SHARES. "Series A Preferred Shares"
means cumulative and compounding preferred Shares with rights and obligations as
provided in Section 3.2(c).

1.58 SHARE. "Share" represents a share of an Interest in the
Company held by a Member, and includes Common Shares and Series A Preferred
Shares.

1.59 SUBSIDIARY. "Subsidiary" means, with respect to a specified
Person, any other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or indirectly
owned by the specified Person. Unless a contrary intention is indicated in this
Agreement, any reference to a Subsidiary shall mean a Subsidiary of the Company.

1.60 SUBSTITUTED MEMBER. "Substituted Member" means the
transferee of a Member's Shares, or a permitted successor or assign of such
Member who is admitted to the Company as a Member.

1.61 TOTAL COMMON SHARES. "Total Common Shares" means all issued
and outstanding Common Shares.

1.62 TRANSFER. "Transfer" means any transfer, sale, conveyance,
distribution, hypothecation, pledge, encumbrance, assignment or other disposal,
either voluntary or involuntary.

1.63 TREASURY REGULATIONS. "Treasury Regulations" means the U.S.
federal income tax regulations promulgated by the U.S. Treasury Department under
the Code and codified at Title 26 of the Code of Federal Regulations, as amended
from time to time.

ARTICLE II

INTRODUCTORY MATTERS

2.1 RECORDS OFFICE. The Company shall continuously maintain in
the state of Nevada a Records Office, which may, but need not be, a place of its
business in the state of Nevada, at which it shall keep all records identified
in NRS 86.241. As of the date hereof, the Records Office shall be ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇. The Records Office
may be changed to another location within the State of Nevada as the Board may
from time to time determine.

2.2 OTHER OFFICES. The Company may establish and maintain other
offices at any time and at any place or places as the Members may designate or
as the business of the Company may require.

2.3 RESIDENT AGENT AND REGISTERED OFFICE. The resident agent
for service of process shall be as set forth in the Articles. The resident
agent may be changed as the Board may from time to time determine. The Company
shall have as its registered office in the state of Nevada the street address of
its resident agent.

2.4 PURPOSE. The Company is organized for the purpose(s) of
developing, constructing, financing, owning and operating hotels and casinos and
related businesses and to engage in such other lawful enterprises as may be
incidental or appurtenant to the foregoing.

2.5 NO LIABILITY TO THIRD PARTIES. No Member shall be liable
for the debts, obligations or liabilities of the Company, including under a
judgment decree or order of a court.
.

ARTICLE III

INTERESTS

3.1 MEMBER'S INTEREST. A Member's Interests shall for all
purposes be personal property. A Member shall have no interest in specific
Company assets or property, including any assets or property contributed to the
Company by such Member as part of any Capital Contribution.

3.2 CLASSES OF SHARES. (a) The Shares shall be divided between
Common Shares and Series A Preferred Shares.

(b) There shall be authorized 10,000,000 Common Shares.
Each of such Shares shall have identical rights and terms in all respects except
as specifically set forth in this Agreement. The Common Shares shall have
rights to an allocation of Profits and Losses and to any Distributions as may be
authorized under this Agreement and under the NRS. Except as specifically
provided in this Agreement or under the NRS, the Common Shares collectively
shall have all management and voting rights of the Company.

(c) There shall be authorized 5,000,000 Series A Preferred
Shares. Each of such Shares shall have identical rights and terms in all
respects. The Series A Preferred Shares shall have rights to an allocation of
Profits and Losses, other allocations and any Distributions as may be authorized
under this Agreement and under the NRS. Except as specifically provided in this
Agreement or the NRS, the Series A Preferred Shares shall not have management or
voting rights under the NRS or otherwise. Notwithstanding anything, express or
implied, to the contrary in this Agreement but subject to the following
sentence, at any relevant date, the aggregate Distribution, redemption and
liquidation preference (without duplication) that the Members holding Series A
Preferred Shares are entitled to receive from the Company prior to any
Distribution with respect to Common (other than tax Distributions and any other
mandatory Distributions provided for in Article IV) shall equal the Required
Series A Capital Account Balance. Nothing in the foregoing sentence shall be
interpreted to override the limitations of Members' liabilities and obligations
to the Company and other Members set forth in Sections 2.5, 4.6 and 7.2. The
Series A Preferred Shares may be redeemed at the option of the Company, but in
no event shall any Series A Preferred Shares be redeemed for an amount less than
the portion of the Required Series A Capital Account Balance attributable to
such Shares.

3.3 UCC ELECTION. The Company hereby irrevocably elects that
all Interests shall be securities governed by Article 8 of the Uniform
Commercial Code. Each Certificate of Shares shall bear the following legend:
"This certificate evidences an interest in Aladdin Gaming, LLC and shall be a
security for purposes of Article 8 of the Uniform Commercial Code." No change
to this provision shall be effective until the all outstanding Certificates of
Shares have been surrendered for cancellation and any new Certificates of Shares
thereafter issued shall not bear the foregoing legend.

ARTICLE IV

CAPITAL ACCOUNTS

4.1 INITIAL CAPITAL. As of the date hereof the capital of the
Company shall be the Capital Contributions of the Members on or prior to the
date hereof in such amounts or value as are set forth opposite the name of each
Member on Schedule 1, such Capital Contributions made in exchange for the Shares
indicated on Schedule 1. No such initial Capital Contributions shall be
accepted by the Company and no Shares shall be issued until all necessary
approvals under the Nevada Act are obtained with respect to such Capital
Contribution and issuance of Shares.

4.2 CAPITAL ACCOUNTS. Capital Accounts shall be established on
the Company's books representing the Members' respective Capital Contributions
to the Company. A separate Capital Account shall be maintained for each Member
and, for book purposes, separated into a contribution account and an income
(loss) account for each class of Shares held by each Member at any time
maintained in accordance with the accounting methods elected to be followed by
the Company. The Capital Account of each contributing Member shall be credited
with the amount of such Member's initial Capital Contribution and any subsequent
Capital Contributions upon receipt thereof by the Company; PROVIDED, however,
that the Capital Account of a Member shall not be credited with the amount of
any Capital Contribution until all necessary approvals under the Nevada Act are
obtained with respect to such initial Capital Contribution.

4.3 ADJUSTMENT OF CAPITAL ACCOUNTS. To the extent consistent
with Section 5.4, the Member's Capital Account shall be maintained and adjusted
in accordance with the Code and the Treasury Regulations, including Treasury
Regulation Section 1.704-1(b)(2)(iv).

4.4 RIGHTS WITH RESPECT TO CAPITAL; INTEREST. No Member shall
have the right to withdraw or receive any return of such Member's Capital
Contribution, and no Capital Contribution must be returned in the form of
property other than cash except as specifically provided herein. No interest
shall be paid or credited to the Members on their Capital Accounts or upon any
undistributed profits left on deposit with the Company.

4.5 ADDITIONAL CAPITAL CONTRIBUTIONS. Except as specifically
provided in this Agreement, the Keep Well Agreement or the Contribution
Agreement,

(a) no Member shall be required to make an additional Capital Contribution to
the Company, or to make any loan (or cause any loan to be made) to the Company,
and (b) no Member shall have the right to make an additional Capital
Contribution to the Company without the consent of the Company.

ARTICLE V

PROFITS AND LOSSES

5.1 PROFITS. After giving effect to the special allocations set
forth in Sections 5.3 and 5.4, Profits for any Fiscal Year shall be allocated
among the Members holding Common Shares in proportion to their Percentage
Interests.

5.2 LOSSES. After giving effect to the special allocations set
forth in Sections 5.3 and 5.4, Losses for any Fiscal Year shall be allocated in
the following order and priority:

(a) first, to the Members holding Common Shares in
proportion to and to the extent of the Members' Capital Accounts with
respect to the Common Shares;

(b) second, to the Members holding Series A Preferred
Shares to the extent of the Members' Capital Account with respect to the
Series A Preferred Shares; and

5.3 SPECIAL ALLOCATION TO SERIES A PREFERRED SHARES. Subsequent
to any allocations pursuant to Section 5.4 but prior to any allocations pursuant
to Sections 5.1 or 5.2, items of gross income of the Company shall be allocated
semi-annually to the Capital Account in respect of the Series A Preferred Shares
in an amount sufficient to cause the Capital Account in respect of the Series A
Preferred Shares to equal the Required Series A Capital Account Balance;
PROVIDED, that if there is insufficient gross income of the Company to satisfy
such allocation, items of gross income, to the extent available, shall be
allocated to the Capital Account in respect of the Series A Preferred Shares
pursuant to the foregoing and then the Company shall make a Guaranteed Payment
to the Series A Preferred Shareholders in the form of an increase in their
capital accounts with respect to such Series A Preferred Shares in an amount
which, together with the gross income allocation under this Section 5.3, causes
the Capital Account in respect of the Series A Preferred Shares to equal the
Required Series A Capital Account Balance before taking into account current
year allocations under Section 5.2.

5.4 SPECIAL ALLOCATIONS. Notwithstanding any other provision of
this Article V, the following special allocations shall be made:

(a) MINIMUM GAIN CHARGEBACK. Except as provided in Treasury
Regulations Section 1.704.2(f), notwithstanding any other provision of this
Article V, if there is a net decrease in Minimum Gain during any Fiscal Year,
each Member shall be specially allocated items of Company income and gain for
such Fiscal Year (and, if necessary, subsequent years) in proportion to and to
the extent of an amount equal to such Member's share of the net decrease in
Minimum Gain determined in accordance with Treasury Regulations Section
1.704-2(g). Items to be so allocated shall be determined in accordance with
Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section
5.4(a) is intended to comply with the "minimum gain chargeback" provisions of
Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.

(b) MEMBER MINIMUM GAIN CHARGEBACK. Except as provided in
Treasury Regulations Section 1.704-2(i)(4), notwithstanding any other provision
of this Article V, if there is a net decrease in Member Nonrecourse Debt Minimum
Gain attributable to a Member Nonrecourse Debt during any Fiscal Year of the
Company, each Member who has a share of the Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt, determined in accordance with
Treasury Regulations Section 1.704-2(i)(5), shall be specially allocated items
of income and gain for such year (and, if necessary, subsequent years) in an
amount equal to such Member's share of the net decrease in Member Nonrecourse
Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Treasury Regulations Sections 1.704-2(i)(4). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The items to
be so allocated shall be determined in accordance with Treasury Regulations
Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.4(b) is intended to
comply with the "minimum gain chargeback" requirement of Treasury Regulations
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(c) QUALIFIED INCOME OFFSET. In the event any Member
unexpectedly receives any adjustments, allocations or distributions described in
clauses (4), (5) or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d),
items of income and gain shall be specially allocated to each such Member in an
amount and manner sufficient to eliminate, to the extent required by the
Treasury Regulations, the Adjusted Capital Account Deficit created by such
adjustments, allocations or distributions of such Member as quickly as possible.
Allocation pursuant to this Section 5.4(c) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Article V have been tentatively made as
if this Section 5.4(c) were not in the Agreement. This Section 5.4(c) is
intended to constitute a "qualified income offset" within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(3).

(d) GROSS INCOME ALLOCATION. In the event any Member has a
deficit Capital Account at the end of any Fiscal Year which is in excess of the
sum of (i) the amount such Member is obligated to restore pursuant to any
provision of the Agreement and (ii) the amount such Member is deemed to be
obligated to restore pursuant to the penultimate sentences of Treasury
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be
specially allocated

items of income and gain in the amount of such excess as quickly as possible,
provided that an allocation pursuant to this Section 5.4(d) shall be made only
if and to the extent that such Member would have a deficit Capital Account in
excess of such sum after all other allocations provided for in this Article V
have been made as if Sections 5.4(c) and 5.4(d) were not in this Agreement.

(e) MEMBER NONRECOURSE DEDUCTIONS. Any Member Nonrecourse
Deductions for any Fiscal Year or other period shall be specially allocated to
the Member who bears (or is deemed to bear) the economic risk of loss with
respect to the Member Nonrecourse Debt to which such Member Nonrecourse
Deductions are attributable in accordance with Treasury Regulations Section
1.704-2(i)(1).

(f) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
year shall be specially allocated among the Members pro rata in proportion to
their Percentage Interests.

(g) REGULATORY ALLOCATIONS. Any special allocation of
items pursuant to this Section 5.4 shall be taken into account in determining
subsequent allocations pursuant to Sections 5.1, 5.2 and 5.3 so that the
cumulative net amount of all items allocated to each Member shall, to the extent
possible, be equal to the amount that would have been allocated to such Member
if there had never been any special allocation pursuant to this Section 5.4.

5.5 SECTION 704(C) ALLOCATION. For tax purposes, all items of
income, gain, loss, deduction, expense and credit, other than tax items
corresponding to items allocated pursuant to Section 5.4, shall be allocated in
the same manner as are Profits and Losses; PROVIDED that in accordance with Code
Section 704(c) and the Treasury Regulations promulgated thereunder, income,
gain, loss and deduction with respect to property contributed to the capital of
the Company shall, solely for tax purposes, be allocated among the Members so as
to take account of any variation between the adjusted basis of such property for
federal income tax purposes and its fair market value. In the event that any
asset of the Company is revalued pursuant to this Agreement in accordance with
Section 704 of the Code and the regulations thereunder, subsequent allocations
of income, gain, loss and deduction with respect to such asset shall take
account of any variation between the adjusted basis of such asset for federal
income tax purposes and its fair market value in the same manner as under Code
Section 704(c) and the Treasury Regulations promulgated thereunder. Any
elections or other decisions relating to allocations referred to in this Section
5.5 shall be made by the Board in any manner that reasonably reflects the
purpose and intention of this Agreement; PROVIDED that the Company elects to
apply the traditional method described in Treasury Regulations Section
1.704-3(b) without curative allocations. Allocations pursuant to this Section
5.5 are solely for purposes of federal, state and local taxes and shall not
affect, or in any way be taken into account in computing, any Member's Capital
Account or share of Profits, Losses, other items, or distributions pursuant to
any provision of this Agreement.

5.6 FEDERAL INCOME TAX. It is the intent of the Company and its
Member, that for so long as the Company has only one Member, the Company shall
be disregarded as an entity

separate from its owner for federal income tax purposes, and all actions
necessary to carry out such intent shall be taken by the Company or its Member.

ARTICLE VI

DISTRIBUTIONS

6.1 PRIORITY DISTRIBUTIONS. Distributions of Available Cash
shall be made on the Series A Preferred Shares from time to time as may be
determined by the Board, PROVIDED that (i) in the 6th and each subsequent year
after initial issuance of the Series A Preferred Shares a Distribution shall be
made in an amount equal to the Series A Preferred Return for such year, and (ii)
prior to the end of the twelfth year after the initial issuance of the Series A
Preferred Shares, a Distribution in redemption of the Series A Preferred Shares
shall be made in an amount equal to the portion of the Required Series A Capital
Account Balance attributable to the Series A Preferred Shares redeemed.

6.2 TAX DISTRIBUTIONS. (a) Subject to having made all
Distributions provided for in Section 6.1, no later than thirty days following
the end of each Quarter, the Company shall, to the extent of Available Cash,
make a Distribution of cash pro-rata to each Member (based on the balance in
each Member's Cumulative Liability Account) to the extent that the balance in
that Member's Cumulative Tax Liability Account (determined as of the end of such
Quarter) exceeds the cumulative Distributions of cash made to such Member
pursuant to Section 6.2.

(b) If and to the extent a Member establishes, to the
reasonable satisfaction of the Board, that such Member or, if such Member is a
pass through entity for federal income tax purposes, its direct or indirect
equity holders, will incur a material tax liability with respect to its income
derived from the Company (including any liability arising under tax
indemnification agreements among the members of Gaming Holdings) in excess of
tax Distributions otherwise receivable, the Board may provide for appropriate
additional Distributions to such Member with respect to its tax liability.

(c) Amounts distributed pursuant to this Section 6.2 shall
be treated as non-interest bearing advances of Distributions under this Article
VI, and shall be taken into account in determining the amount of future
Distributions under this Article VI.

6.3 DISTRIBUTIONS ON COMMON SHARES. (a) the Company shall be
required to distribute any Available Cash (after making all required
Distributions provided for in Sections 6.1 and 6.2) to Gaming Holdings, in
respect of its Common Shares, in an amount sufficient to permit Gaming Holdings
to satisfy any additional obligations it may have to make payments on the
Discount Notes.

(b) Subject to having made all Distributions required by
Sections 6.1, 6.2 and 6.3(a), additional Distributions shall be made Quarterly
as determined by the Board among the Members holding Common Shares in proportion
to their Percentage Interests;

6.4 LIMITATIONS ON DISTRIBUTION. Notwithstanding any other
provision of this Agreement, the Company shall not make any Distribution if such
Distribution would violate the NRS, the Nevada Act or other applicable law or
would cause a breach or default under any agreement or instrument to which the
Company is a party or by which the Company or any of its assets are bound, but
shall instead make such Distribution as soon as practicable after the making of
such Distribution would not cause such violation, breach or default.

ARTICLE VII

MEMBERS

7.1 POWERS OF MEMBERS. Except as provided in Section 7.3,
Members shall not have the authority to bind the Company by virtue of their
status as Members.

7.2 LIMITATION OF LIABILITY. No Member shall be individually
liable under a judgment, decree or order of a court, or in any other manner, for
a debt, obligation or liability of the Company or any other Member, except as
provided by law or in an agreement signed by the Member to be charged. No
Member shall be required to loan any funds to the Company, nor shall any Member
be required to make any contribution to the Company, nor shall any Member be
subject to any liability to the Company, the other Members, or any third party,
solely as a result of a Member's negative Capital Account balance.

7.3 ACTION BY THE MEMBERS. Except as otherwise specifically
provided in this Agreement, all actions of the Members shall be taken by the
Members in proportion to their Percentage Interests at the time of the action
taken. Except as otherwise specifically provided herein, the Members may vote,
approve a matter or take any action by the vote of the Members at a meeting at
which a quorum is present, in person or by proxy, or without a meeting by
written consent as provided in Section 7.7. The vote or written consent of a
majority of the Members shall be required to approve any matter or to take any
action at any meeting of Members at which a quorum is present, unless a greater
or lesser vote or consent is provided for by this Agreement or required by the
NRS.

7.4 MEETINGS OF MEMBERS. Meetings of the Members for any
purpose may be called at any time by the Board or by one or more Members holding
in the aggregate more than a ten percent Percentage Interest. Except in special
cases where other express provision is made by the NRS, written notice of each
meeting, signed by a Board representative or by a Member or Members, as the case
may be, shall be given to each Member entitled to vote. All notices shall be
sent in accordance with Section 13.1 to each Member entitled thereto not less
than ten (except in

respect of an adjournment of a meeting of the Members) nor more than sixty days
before each meeting, and shall specify the place, date and time of such meeting,
as well as the purpose or purposes for which the meeting is called.

7.5 WAIVER OF NOTICE. The transactions carried out at any
meeting of the Members, however called and noticed or wherever held, shall be as
valid as though carried out at a meeting regularly called and noticed if (a) all
of the Members holding Common Shares are present at the meeting or (b) a quorum
of the Members is present and if, either before or after the meeting, each of
the Members holding Common Shares who are not present signs a written waiver of
notice or a consent to holding such meeting or an approval of the minutes
thereof, which waiver, consent or approval shall be filed with the other records
of the Company or made a part of the minutes of the meeting; PROVIDED that no
Member holding Common Shares attending such meeting without notice protests
prior to the meeting or at its commencement that notice was not given to such
Member.

7.6 ADJOURNED MEETINGS AND NOTICE THEREOF. Any Members'
meeting, whether or not a quorum is present, may be adjourned from time to time
by the vote of a majority of Members holding Common Shares present in person or
represented by proxy, but in the absence of a quorum no other business may be
transacted at any such meeting. When any Members' meeting is adjourned for five
days or more, notice of the adjourned meeting shall be given as in the case of
an original meeting, otherwise it shall not be necessary to give any notice of
an adjournment or of the business to be transacted at an adjourned meeting other
than by announcement at the meeting at which such adjournment is taken.

7.7 ACTION BY WRITTEN CONSENT. Any action which may be taken at
a meeting of Members may be taken by the Members without a meeting if authorized
by the written consent of a majority of the Members, or such other greater or
lesser Percentage Interest as is provided for in this Agreement or required by
the NRS. Whenever action is taken by written consent, a meeting of Members need
not be called nor notice of meeting given. The written consent may be executed
in one or more counterparts and by facsimile, and each such consent so executed
shall be deemed an original. A copy of such consent shall be sent to each
Member holding Common Shares.

7.8 TELEPHONIC MEETINGS. Members may participate in a meeting
of the Members by means of a telephone conference or similar method of
communication by which all individuals participating in the meeting can hear
each other. Participation in a meeting pursuant to this Section 7.8 constitutes
presence in person at the meeting.

7.9 QUORUM. Members holding an aggregate fifty percent
Percentage Interest, represented in person or by proxy, shall constitute a
quorum for the transaction of business. Except as specifically provided in this
Agreement, each Member shall be entitled to vote in proportion to such Member's
Percentage Interest, provided that if, pursuant to the NRS or the terms of this
Agreement, a Member is not entitled to vote on a specific matter, then such
Member's vote and Percentage Interest shall not be considered for purposes of
determining whether a quorum is present

or whether approval by the vote of the Members has been obtained in respect of
such specific matter.

ARTICLE VIII

RESIGNATION, TRANSFER OF SHARES,
CHANGE IN CONTROL, TRUST MEMBERS

8.1 RESIGNATION. A Member may not resign from the Company
before the dissolution and winding up of the Company, subject to the provisions
of Chapter 463 of the NRS or other applicable law. Except as specifically
provided in this Agreement, any right of a Member under applicable law to demand
a return of that Member's Capital Contribution prior to dissolution is hereby
waived.

8.2 TRANSFERS OF INTERESTS. (a) Except for any pledge in
connection with the arrangements in respect of the Bank Financing or the
exercise of remedies in respect of such pledge (including, without limitation,
any sale or transfer in connection with the enforcement of such pledge), the
Common Shares of each Member are personal property, and such Shares may not be
Transferred and any attempt to Transfer shall be null and void and of no effect
whatsoever.

(b) Except for a pledge to the holders of the Discount
Notes, the exercise of remedies in respect of such pledge, or any Transfers
after foreclosure under such pledge, the holders of the Series A Preferred
Shares may not Transfer any Series A Preferred Share and any attempt to do so
shall be null and void and of no effect whatsoever.

8.3 GAMING CONTROL ACT. Notwithstanding any other provision of
this Agreement, no Shares or other ownership interest in the Company, and no
Upstream Ownership Interest, shall be issued or Transferred in any manner
whatsoever except in compliance with the provisions of the Nevada Act.

8.4 FURTHER RESTRICTION ON TRANSFER OF SHARES. In addition to
the other restrictions set forth in this Agreement, no Member may assign,
convey, sell, encumber or in any way alienate all or any part of such Member's
Shares, if the Shares to be assigned, conveyed, sold or encumbered, when added
to the total of all other Shares assigned, conveyed, sold or encumbered in the
preceding twelve months, would result in the termination of the Company under
Code Section 708, if such termination will result in adverse tax consequences to
the non-transferring Member.

8.5 GAMING HOLDINGS SHARES. If the Company purchases any shares
in Gaming Holdings pursuant to the Employment and Consulting Agreements, the
parties agree that forthwith thereafter Gaming Holdings shall purchase such
shares from the Company for a total consideration of $1.

ARTICLE IX

BOARD OF MANAGERS

9.1 BOARD OF MANAGERS. (a) Except for matters expressly
requiring the approval of the Members (or a percentage or class of the Members)
pursuant to this Agreement or the NRS, the business and affairs of the Company
shall be managed by a Board of Managers pursuant to this Article IX. Subject to
the provisions of the Nevada Act and except as specifically provided in this
Agreement, the Board Members shall each serve for a three year term or until
such Board Member shall resign or be removed or otherwise disqualified to serve,
or until such Board Member's successor shall have been appointed.

(b) The Board shall be comprised of Board Members appointed
by Gaming Holdings to reflect the same representation that Aladdin Enterprises
and LCI have on the Board of Managers of Gaming Holdings. On the date hereof,
the Board Members shall be: ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ as representatives of Aladdin Enterprises and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and G.
▇▇▇▇▇ ▇. ▇▇▇▇▇ as representatives of LCI.

9.2 POWERS AND DUTIES OF THE BOARD. (a) The Board (or the
Executive Management Committee or any Officer acting at the direction of the
Board) shall manage the business affairs of the Company. The Board shall have
the general powers and duties of management typically vested in a director or
board of directors of a corporation, and all powers and duties necessary,
advisable or convenient to administer and operate the business and affairs of
the Company, and such other powers and duties as may be prescribed by the
Members or implied by law. Subject to the provisions of this Agreement, such
powers and duties shall include, without limitation, the following: (i) to
select and remove all Officers (as more fully described in Section 9.3), agents
and employees of the Company, prescribe such powers and duties for them as may
be consistent with law, the Articles and this Agreement, and fix their
compensation; (ii) to borrow money and incur indebtedness on behalf of the
Company for the purposes of the Company, and to cause to be executed and
delivered therefor, in the name of the Company, promissory notes, bonds,
debentures, deeds of trust, mortgages, pledges, hypothecations or other evidence
of debt and securities; (iii) to change the principal office of the Company from
one location to another within Nevada and to establish from time to time one or
more subsidiary offices of the Company; and (iv) to enter into or commit to any
agreement, contract, commitment, instrument, deed, mortgage or obligation on
behalf of the Company for any Company purpose.

(b) For each Fiscal Year the Board shall adopt an annual
operating budget, capital budget and marketing plan, which shall include a
detailed operating budget and marketing plan in respect of the Salle Privee
Facilities.

(c) The Board shall be responsible for establishing and
overseeing all policies and procedures in connection with the operation of the
Company's business, but shall delegate day-to-day management responsibility to
the Executive Management Committee. The

Executive Management Committee shall include (without limitation) the following
persons: the president and chief executive officer of the Company, the chief
financial officer of the Company, the senior vice president of the Company who
is the president and chief operating officer of the Aladdin hotel and casino,
the senior vice president of the Company who is the president and chief
operating officer of the Second Hotel and casino, the senior vice president
human resources of the Company, the senior vice president electronic gaming of
the Company and the managing director of the Salle Privee Facilities.

9.3 ELECTION OF OFFICERS. Subject to the applicable provisions
of the Nevada Act, the Board may from time to time elect such Officers as the
Board shall deem appropriate. Subject to the provisions of this Agreement, the
Board may confer upon any of the Officers such duties, authority and titles as
the business of the Company may require in the reasonable judgment of the Board
(including the authority to represent and bind the Company in accordance with
the scope of the particular duties involved and such other general powers and
duties of a type similar to those typically vested in an officer of a
corporation). The Officers shall serve at the sole discretion of the Board.

9.4 REMOVAL, RESIGNATION AND VACANCIES. (a) Board Members may
be removed or appointed by Gaming Holdings at any time to ensure that Aladdin
Enterprises and LCI have the same representation of the Board as they have on
the Board of Managers of Gaming Holdings.

(b) In the event any Person elected to serve as a Board
Member at any time is found by the Nevada Gaming Authorities to be unsuitable to
hold a gaming license, such Person shall thereupon automatically cease to be a
Board Member without any further action.

(c) Any Board Member may resign at any time by giving
written notice to the Company and the Members. Any such resignation shall take
effect at the date of the receipt of such notice or at any later time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

9.5 MEETINGS OF THE BOARD. (a) PLACE AND TIME OF MEETINGS.
The meetings of the Board shall be held at least Quarterly at the Records
Office, unless some other place is designated in the notice of the meeting.
Meetings of the Board shall be held at such times as is determined by the Board.
Accurate minutes of any meeting of the Board shall be maintained by the Officer
designated by the Board for such purpose.

(b) SPECIAL MEETINGS; NOTICE. Special meetings of the
Board for any purpose may be called at any time by any Board Member. At least
forty-eight hours written notice of the time and place of a special meeting of
the Board shall be delivered personally to the Board Members at their last known
business addresses as it is shown on the records of the Company or personally
communicated to them by a Board Member or officer of the Company by telegraph or
facsimile. Such telegraphing, faxing or delivery shall be considered due, legal
and personal notice to such Board Member.

(c) WAIVER OF NOTICE. The transactions carried out at any
meeting of the Board, however called and noticed or wherever held, shall be as
valid as though had at a meeting regularly called and noticed if: (i) all Board
Members are present at the meeting or (ii) if a majority of the Board Members
are present and if, either before or after the meeting, those not present sign a
waiver of notice of such meeting or a consent to holding the meeting or an
approval of the minutes thereof, which waiver, consent or approval shall be
filed with the other records of the Company or made a part of the minutes of the
meeting; PROVIDED that no Board Member attending such meeting without notice
protests prior to the meeting or at its commencement that notice was not given
to him or her.

(d) ACTION BY WRITTEN CONSENT. Any action required or
permitted to be taken by the Board may be taken without a meeting and will have
the same force and effect as if taken by a vote of the Board Members at a
meeting properly called and noticed, if authorized by the written consent of
all, but not less than all, of the Board Members. In no instance where action
is authorized by written consent need a meeting of the Board be called or
noticed. A copy of the action taken by written consent shall be filed with the
records of the Company. The written consent may be executed in one or more
counterparts and by facsimile, and each such consent so executed shall be deemed
an original.

(e) QUORUM. Three incumbent Board Members present in
person or by proxy shall be necessary to constitute a quorum for the transaction
of business at any meeting of the Board. Except as otherwise provided in this
Agreement or by the NRS, the action of a majority of the Board Members present
in person or by proxy at any meeting at which there is a quorum, when duly
assembled, is valid. A meeting at which a quorum is initially present may
continue to transact business, notwithstanding the withdrawal of Board Members,
if any action taken is approved by a majority of the required quorum for such
meeting.

(f) TELEPHONIC MEETINGS. Board Members may participate in
a meeting of the Board by means of a telephone conference call or similar method
of communication so long as all Persons participating in the meeting can hear
one another. Participation in a meeting of the Board pursuant to this Section
9.5(f) constitutes presence in person at the meeting.

9.6 COMPENSATION OF BOARD MEMBERS; COMPENSATION OF OFFICERS.
The Company shall not pay any Board Member in their capacity as a Board Member
any salary or other benefits, other than such insurance and/or indemnification
as may be determined by the Board and is permitted under the Articles, this
Agreement and the NRS. The Company shall pay to each Officer such salary and
other benefits as shall be approved from time to time by the Board.

9.7 EXPENSE REIMBURSEMENTS. The Company shall reimburse the
Board Members for all expenses reasonably incurred by the Board Members on
behalf of the Company or in connection with the performance of the obligations
of the Board Members hereunder.

ARTICLE X

ACCOUNTING, RECORDS AND BANK ACCOUNTS

10.1 RECORDS AND ACCOUNTING. The books and records of the
Company shall be kept, and the financial position and the results of its
operations recorded, in accordance with the accounting methods elected to be
followed by the Company for federal income tax purposes. The books and records
of the Company shall reflect all Company transactions and shall be appropriate
and adequate for the Company's business.

10.2 ACCESS TO ACCOUNTING RECORDS. All accounting books and
records of the Company, including files, tax returns and information, shall be
maintained at an office of the Company or at the Records Office. Each Member,
and its duly authorized representative, agent or attorney, upon written demand
providing at least five days notice, shall have access to such books and records
and the right to inspect, examine and copy them (at such Member's expense) at
reasonable times during normal business hours. The rights authorized by this
Section 10.2 may be denied to a Member upon such Member's refusal to provide to
the Company an affidavit stating that such inspection, extracts or audit is not
desired for any purpose not related to the Member's interest in the Company as a
Member.

10.3 ANNUAL TAX INFORMATION. The Board shall use its best
efforts to cause the Company to deliver to each Member within ninety days after
the end of each Fiscal Year all information necessary for the preparation of
such Member's federal income tax return. Federal, state and local tax returns
of the Company, if any are required under applicable law, shall be prepared or
caused to be prepared and filed in a timely manner by the Board.

10.4 OBLIGATIONS OF MEMBERS TO REPORT ALLOCATIONS. The Members
are aware of the income tax consequences of the allocations made by this
Agreement and hereby agree to be bound by the provisions of this Agreement in
reporting their shares of the income and loss for income tax purposes.

10.5 TAX STATUS. For so long as the Company has only one Member,
the Company shall be disregarded as an entity separate from its owner for
federal income tax purposes and the Member agrees not to take any action
inconsistent with such classification for federal income tax purposes.

ARTICLE XI

DISSOLUTION OF THE COMPANY AND
TERMINATION OF A MEMBER'S INTEREST

11.1 DISSOLUTION. The Company shall be dissolved and its affairs
wound up (a) at the time specified in the Articles or (b) upon the written
agreement of all of the Members, in which event the Members will proceed with
reasonable promptness to liquidate the Company. The death, insanity,
retirement, resignation, expulsion, Bankruptcy or dissolution of any Member, or
the occurrence of any other event which terminates a Member's continued
membership in the Company shall not, in and of itself, cause the dissolution of
the Company.

11.2 COMPANY'S OPTION TO PURCHASE BANKRUPT MEMBER'S INTEREST.
Upon the institution of a Bankruptcy by or against a Member, the Company shall
have the option (the "Purchase Option"), exercisable by written notice to all
the Members within 120 days of the date the Bankruptcy petition is filed by or
against the Bankrupt Member, to purchase the Bankrupt Member's Common Shares,
subject, however, to receipt of all required approvals under the Nevada Act
(such approvals to be obtained as soon as reasonably practicable), for an agreed
upon price, or if no price can be agreed upon, for the fair market value of such
Common Shares at the time of such Bankruptcy, as determined by an independent
qualified appraiser appointed by unanimous agreement by the Members and the
Company. If they cannot agree on an appraiser, the Bankrupt Member, on the one
hand, and the Company, on the other hand, shall each select an appraiser, which
appraisers together shall select a third appraiser, which third appraiser shall
determine the fair market value of such Common Shares, which determination shall
be binding upon the parties. If the Company elects to exercise the Purchase
Option, it shall pay the agreed price or the fair market value, as the case may
be, of the Bankrupt Member's Shares to the Bankrupt Member, in cash, within such
120-day period or at such later time as all approvals required under the Nevada
Act are obtained. If the Company elects to not exercise the Purchase Option, the
Company shall notify the Bankrupt Member of its decision in writing (the
"Non-Exercise Notice"), within such 120-day period.

11.3 DISTRIBUTION ON DISSOLUTION AND LIQUIDATION. In the event
of the dissolution of the Company for any reason, the business of the Company
shall be continued to the extent necessary to allow an orderly winding up of its
affairs, including the liquidation and termination of the Company pursuant to
the provisions of this Section 11.3, as promptly as practicable thereafter, and
each of the following shall be accomplished:

(a) holders of a majority of the Common Shares shall elect
or appoint a liquidator;

(b) the liquidator shall cause to be prepared a statement
setting forth the Property and liabilities of the Company as of the date of
dissolution, a copy of which statement shall be furnished to the Members;

(c) the Property of the Company shall be liquidated by the
liquidator as promptly as possible, but in an orderly and businesslike manner.
The liquidator may, in the exercise of its business judgment, determine not to
sell all or any portion of the Property, in which event such Property shall be
distributed in kind based upon fair market value as of the date of such
distribution;

(d) any Profits or Losses realized by the Company upon the
sale of its Property shall be recognized and allocated to the Members in the
manner set forth in Article V; and

(e) the proceeds of sale and all other Property of the
Company shall be applied and distributed as follows and in the following order
of priority:

(i) to the expenses of liquidation;

(ii) to the payment of the debts and liabilities of
the Company (including loans from Members);

(iii) to the setting up of any reserves which the
liquidator shall determine to be reasonably necessary, for such period as
the liquidator shall deem advisable, for contingent, unliquidated or
unforeseen liabilities or obligations of the Company or the Members
arising out of or in connection with the Company. Such reserves shall be
held by the liquidator or paid over to a bank or title company selected
by it, to be held by such bank or title company as escrow holder or
liquidator for the purposes of disbursing such reserves to satisfy the
liabilities and obligations described above;

(iv) to the holders of the Series A Preferred Shares
in an amount equal to the Required Series A Capital Account Balance; and

(v) the balance (including amounts released from any
unnecessary reserves set up pursuant to Section 11.3(e)(iii)), if any,
after giving effect to all contributions, distributions and allocations
for all periods, to the holders of Common Shares pro rata in proportion
to their positive Capital Account balances.

Each Member understands and agrees that by accepting the provisions
of this Section 11.3 setting forth the priority of the distribution of assets of
the Company to be made upon a liquidation, such Member expressly waives any
right which it, as a creditor of the Company, might otherwise have to receive
distributions of assets pari passu with the other creditors of the Company in
connection with a distribution of assets of the Company in satisfaction of any
liability of the Company, and hereby subordinates to said creditors any such
right.

ARTICLE XII

LIABILITY, EXCULPATION AND INDEMNIFICATION

12.1 EXCULPATION. (a) No Covered Person shall be liable to the
Company or any other Covered Person for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Covered Person in
good faith on behalf of the Company and in a manner reasonably believed to be
within the scope of authority conferred on such Covered Person by this
Agreement, the Board or an appropriate Officer or employee of the Company,
except that a Covered Person shall be liable for any such loss, damage or claim
incurred by reason of such Covered Person's gross negligence, fraud or willful
misconduct.

(b) A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such information, opinions,
reports or statements presented to the Company by any Person as to matters the
Covered Person reasonably believes are within such other Person's professional
or expert competence, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, Profits or Losses or any
other facts pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.

12.2 FIDUCIARY DUTY. To the extent that, at law or in equity, a
Covered Person has duties (including fiduciary duties) and liabilities relating
thereto to the Company or to any Member, then, to the fullest extent permitted
by applicable law, a Covered Person acting under this Agreement shall not be
liable to the Company or to any Member for its good faith acts or omissions in
reliance on the provisions of this Agreement. The provisions of this Agreement,
to the extent that they restrict the duties and liabilities of a Covered Person
otherwise existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of such Covered Person.

12.3 OUTSIDE BUSINESSES. Subject to any other agreement to the
contrary, any Covered Person, Member or Affiliate thereof may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Company, and the Company and the Members shall have no rights by virtue of this
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Company, shall not be deemed wrongful or improper. Subject to
any agreement to the contrary, no Covered Person, Member or Affiliate thereof
shall be obligated to present any particular investment opportunity to the
Company even if such opportunity is of a character that, if presented to the
Company, could be taken by the Company, and any Covered Person, Member or
Affiliate thereof shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment opportunity.

12.4 INDEMNITY. The Company does hereby indemnify and hold
harmless each Covered Person who was or is a party or is threatened to be made a
party to any threatened, pending

or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, except an action by or in the right of the Company, by reason
of the fact that he or she is or was a Member, Affiliate, Board Member, Officer,
employee or agent of the Company, or is or was serving at the request of the
Company as manager, member, director, officer, employee or agent of another
limited-liability company, corporation, partnership, joint venture, trust or
other enterprise against expenses, including attorneys' fees, judgment, fines
and amounts paid in settlement actually and reasonably incurred by him or her in
connection with the action, suit or proceeding, if he or she acted in good faith
and in a manner which he or she reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order, settlement
or conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the Covered Person did not act in good faith
and in a manner which he or she reasonably believed to be in or not opposed to
the best interests of the Company, and that, with respect to any criminal action
or proceeding, he or she had reasonable cause to believe that his or her conduct
was unlawful.

12.5 INDEMNITY FOR ACTIONS BY OR IN THE RIGHT OF THE COMPANY.
The Company does hereby indemnify each Covered Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Company to procure a judgment in its favor by
reason of the fact that he or she is or was a Member, Affiliate, manager, Board
Member, Officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, manager, officer, employee or agent of
another limited-liability company, corporation, partnership, joint venture,
trust or other enterprise against expenses, including amounts paid in settlement
and attorneys' fees actually and reasonably incurred by him or her in connection
with the defense or settlement of the action or suit, if he or she acted in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Company. Indemnification may not be made
for any claim, issue or matter as to which such Covered Person has been adjudged
by a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the Company or for amounts paid in settlement to the Company,
unless and only to the extent that the court in which the action or suit was
brought or other court of competent jurisdiction determines upon application
that, in view of all the circumstances of the case, he or she is fairly and
reasonably entitled to indemnity for such expenses as the court deems proper.

12.6 INDEMNITY IF SUCCESSFUL. To the extent that a Covered
Person has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in Sections 12.4 and 12.5, or in defense of any
claim, issue or matter therein, the Company does hereby indemnify such Covered
Person against expenses, including attorneys' fees actually and reasonably
incurred by it in connection with the defense.

12.7 DETERMINATION OF RIGHT TO INDEMNIFICATION. Any
indemnification under Sections 12.4 and 12.5, unless ordered by a court or
advanced pursuant to Section 12.8 below, must be made by the Company only as
authorized in the specific case upon a determination that

indemnification of the Covered Person is proper in the circumstances. The
determination must be made:

12.8 ADVANCE PAYMENT OF EXPENSES. The expenses of Members and
Board Members incurred in defending a civil or criminal action, suit or
proceeding shall be paid by the Company as they are incurred and in advance of
the final disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the Member or Board Member to repay the amount if
it is ultimately determined by a court of competent jurisdiction that he or she
is not entitled to be indemnified by the Company. The provisions of this
subsection do not affect any rights to advancement of expenses to which
personnel of the Company other than Members or Board Members may be entitled
under any contract or otherwise by law.

12.9 OTHER ARRANGEMENTS NOT EXCLUDED. The indemnification and
advancement of expenses authorized in or ordered by a court pursuant to this
Article XII:

(a) do not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be entitled under the
Articles or any agreement, vote of Members, or disinterested Board Members, if
any, or otherwise, for an action in their official capacity or an action in
another capacity while holding their office, except that indemnification, unless
ordered by a court pursuant to Section 12.5 or for the advancement of expenses
made pursuant to Section 12.8, may not be made to or on behalf of any Member or
Board Member if a final adjudication establishes that their acts or omissions
involved intentional misconduct, fraud or a knowing violation of the law which
was material to the cause of action; and

(b) continue for a Person who has ceased to be a Member,
Board Member, Officer, employee or agent and inures to the benefit of his or her
heirs, executors and administrators.

12.10 ERRORS AND OMISSIONS INSURANCE. (a) The Company may
purchase and maintain insurance or (by a Board Supermajority) make other
financial arrangements on behalf of any Covered Person for any liability
asserted against him or her and liability and expenses incurred by him or her in
his or her capacity as a Board Member, an officer, director, employee or agent
of the Company or of another entity at the request of the Company, or arising
out of his or her status as such, whether or not the Company has the authority
to indemnify him or her against such liability and expenses.

(b) The other financial arrangements made by the Company
pursuant to Section 12.10(a) may include (i) the creation of a trust fund; (ii)
the establishment of a program of self-insurance; (iii) the security of its
obligation of indemnification by granting a security interest or other lien on
any assets of the Company; and (iv) the establishment of a letter of credit,
guaranty or surety. No financial arrangement made pursuant hereto may provide
protection for a person adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable for intentional misconduct,
fraud or a knowing violation of law, except with respect to the advancement of
expenses or indemnification ordered by a court.

(c) In the absence of fraud, no Board Member or Member
approving the insurance or financial arrangement made pursuant to this Section
12.10 shall be subject to personal liability for such action, even if the Board
Member approving the insurance or other financial arrangement is a beneficiary
of the insurance or other financial arrangement.

12.11 PROPERTY OF THE COMPANY. Any indemnification under this
Article XII shall be satisfied solely out of the Property of the Company.

12.12 VIOLATION OF THIS AGREEMENT. Any Member who commits fraud
or otherwise violates any of the terms, conditions and provisions of this
Agreement will keep and save harmless the Property and the Company, and will
indemnify the Company and the other Members from any and all claims, demands and
actions of every kind and nature whatsoever which may arise out of or by reason
of such fraud or violation.

ARTICLE XIII

MISCELLANEOUS PROVISIONS

13.1 NOTICES. All notices to be given hereunder shall be in
writing and shall be addressed to the party at such party's last known address
or facsimile number appearing on the books of the Company. If no such address
or facsimile number has been provided, it will be sufficient to address any
notice (or fax any notice that may be faxed) to such party at the Records Office
of the Company. Notice shall, for all purposes, be deemed given and received,
(a) if hand-delivered, when the notice is received, (b) if sent by an
internationally recognized delivery service, when the notice is received, or (c)
if sent by facsimile, when the facsimile is transmitted and confirmation of
complete receipt is received by the transmitting party during normal business
hours. If any notice is sent by facsimile, the transmitting party shall send a
duplicate copy of the notice to the parties to whom it is faxed by regular mail.
If notice is tendered and is refused by the intended recipient, the notice shall
nonetheless be considered to have been given and shall be effective as of the
date of such refusal. The contrary notwithstanding, any notice given in a
manner other than that provided in this Section 13.1 that is actually received
by the intended recipient shall be deemed an effective delivery of such notice.
Any party may, at any time, by giving ten days written notice to the Company,
designate a new address for the giving of notice to such party.

13.2 INSURANCE. The Company shall carry liability insurance in
such amounts as deemed appropriate by the Board.

13.3 MEMBERSHIP CERTIFICATES. The Company shall issue a
Certificate to each Member to represent such Member's Shares in the Company upon
execution of this Agreement and the payment of the Capital Contributions by such
Member. The Company shall issue a new Certificate in place of any previously
issued if the record holder of the Certificate (a) presents proof by affidavit,
in form and substance satisfactory to the Board, that a previously issued
Certificate has

been lost, destroyed or stolen, or (b) if requested by the Board, delivers to
the Company a bond, in form and substance reasonably satisfactory to the Board,
with such surety or sureties and with fixed or open penalty as the Board may
direct in its reasonable discretion, to indemnify the Company against any claim
that may be made on account of the alleged loss, destruction or theft of the
Certificate. If a Member fails to notify the Company within a reasonable time
after it has knowledge of the loss, destruction or theft of a Certificate, and a
transfer of the Member's Shares represented by that Certificate is registered
before receiving such notification, the Company shall have no liability with
respect to any claim against the Company for such transfer or for the issuance
of a new Certificate consistent with such registration.

13.4 COMPLETE AGREEMENT. This Agreement, together with the
Articles to the extent referenced herein, constitute the complete and exclusive
agreement and understanding of the Members with respect to the subject matter
contained herein. This Agreement and the Articles replace and supersede all
prior agreements, negotiations, statements, memoranda and understandings,
whether written or oral, by and among the Members or any of them.

13.5 AMENDMENTS. This Agreement may be amended by the Members
only if all of the Members agree to the proposed amendment and such amendment is
set forth in a writing signed by all Members; PROVIDED that this Agreement,
including Schedule 1, shall be amended to reflect any admission of a new Member,
Transfer of Shares or change in Percentage Interests pursuant to the terms of
this Agreement.

13.6 APPLICABLE LAW; JURISDICTION. This Agreement and the rights
and obligations of the parties hereto shall be interpreted and enforced in
accordance with and governed by the laws of the State of Nevada without regard
to the conflict laws of that State. Each party further agrees that service of
any process, summons, notice or document by U.S. registered mail to its
respective address set forth in this Agreement shall be effective service of
process for any action brought against it in connection with this Agreement in
said court.

13.7 INTERPRETATION. The headings in this Agreement are inserted
for convenience only and are in no way intended to describe, interpret, define,
or limit the scope, extent or intent of this Agreement or any provisions
contained herein. In the interpretation of this Agreement, the singular may be
read as the plural, and VICE VERSA, the neuter gender as the masculine or
feminine, and VICE VERSA, and the future tense as the past or present, and VICE
VERSA, all interchangeably as the context may require in order to fully
effectuate the intent of the parties and the transactions contemplated herein.

13.8 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which shall
be deemed to constitute one and the same instrument, and it shall be sufficient
for each party to have executed at least one, but not necessarily the same,
counterpart.

13.9 FACSIMILE COPIES. Facsimile copies of this Agreement or of
any counterpart, and facsimile signatures hereon or on any counterpart, shall
have the same force and effect as originals.

13.10 SEVERABILITY. If any provision of this Agreement, or any
application thereof, should be held by a court of competent jurisdiction to be
invalid, void, illegal or unenforceable to any extent, that provision shall be
deemed severable and the remainder of this Agreement, and all applications
thereof, shall not be affected, impaired or invalidated thereby, and shall
continue in full force and effect to the fullest extent permitted by law.

13.11 WAIVERS. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver, and
no waiver shall be binding unless evidenced by an instrument in writing and
executed by the party making the waiver.

13.12 NO THIRD PARTY BENEFICIARIES. This Agreement is made solely
among and for the benefit of the Members and their respective successors and
assigns, and no other Person shall have any rights, interest or claims hereunder
or be entitled to any benefits under or on account of this Agreement as a third
party beneficiary or otherwise.

IN WITNESS WHEREOF, this Agreement was executed as of the date
first-above written.

ALADDIN GAMING, LLC

By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman

ALADDIN GAMING HOLDINGS, LLC

By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman

SCHEDULE 1
CAPITAL STRUCTURE

SERIES A
CAPITAL CAPITAL PERCENTAGE COMMON PREFERRED
MEMBER CONTRIBUTION ACCOUNT INTEREST SHARES SHARES
------ ------------ ------- -------- ------ ------

Gaming Holdings $165 million in cash, $322 million 100% 1,000,000 1,150,000
$7 million in pre-
development costs
and 100% of the
Aladdin site.

ARTICLE I DEFINITIONS 1.1 Adjusted Capital Account Deficit. . . . . . . . . . . . . . . . . . . 1 1.2 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.3 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2...

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