<PAGE>   1

THIS INSTRUMENT IS EXECUTED AND DELIVERED PURSUANT TO THE ORDER CONFIRMING PLAN
OF REORGANIZATION AUTHORIZING DEBTOR TO OBTAIN POST-PETITION FINANCING IN IN RE:
JCC CANAL DEVELOPMENT, L.L.C., CASE NO. 01-10088, CHAPTER 11, PENDING IN THE
UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF LOUISIANA. SECTION
1146 OF THE BANKRUPTCY CODE EXEMPTS THIS INSTRUMENT, AND THE TRANSACTION
CONSUMMATED PURSUANT HERETO, FROM ALL STAMP, REAL ESTATE TRANSFER, MORTGAGE
RECORDING OR SIMILAR TAX, IMPOSED BY ANY AUTHORITY.

                                                                   EXHIBIT 10.13

UNITED STATES OF AMERICA            )            ACT OF MORTGAGE
                                    )                  AND
STATE OF LOUISIANA                  )         COLLATERAL ASSIGNMENT
                                    )                  BY
PARISH OF ORLEANS                   )      JCC CANAL DEVELOPMENT, L.L.C.
                                    )              IN FAVOR OF
                                    )          THE BANK OF NEW YORK,
                                    )           AS COLLATERAL AGENT
                                    )       FOR THE PRESENT AND FUTURE
                                    )                HOLDERS
                                    )       OF THE SECURED OBLIGATIONS

         BE IT KNOWN, that on this ________ day of _____________, 2001,
effective as of the Plan Effective Date (as defined below);

         BEFORE ME, the first undersigned Notary Public in and for the State of
Louisiana, Parish of Orleans, and in the presence of the undersigned competent
witnesses;

         PERSONALLY CAME AND APPEARED:

         JCC CANAL DEVELOPMENT, L.L.C., a Louisiana limited liability company
(TIN: 62-1650470), whose registered office in the State of Louisiana is located
at 512 South Peters, New Orleans, Louisiana 70130, and whose mailing address is
512 South Peters, New Orleans, Louisiana 70130, appearing herein by and through
L. Camille Fowler, a duly authorized officer thereof pursuant to a resolution of
its sole member, JCC Holding Company, a Delaware corporation, a certified
extract of which is attached hereto ("Mortgagor"); and

         AND BE IT KNOWN, that on this ________ day of _____________, 2001,
effective as of the Plan Effective Date (as defined below);

         BEFORE ME, the second undersigned Notary Public in and for the State of
Louisiana, Parish of Orleans, and in the presence of the undersigned competent
witnesses;

         PERSONALLY CAME AND APPEARED:

         THE BANK OF NEW YORK, a national banking association (TIN: 13-5160382),
not in its individual capacity but solely as Collateral Agent for the present
and future holders of the Secured Obligations (as defined below), whose mailing
address is 10161 Centurion Parkway, Jacksonville, Florida 32256, appearing
herein by and through a duly authorized representative thereof ("Mortgagee");


<PAGE>   2


AND MORTGAGOR AND MORTGAGEE DECLARED THAT:

         DEFINITIONS: The following terms shall have the following meanings when
used herein. Capitalized terms used but not otherwise defined herein shall have
the respective meanings set forth in the Intercreditor Agreement.

         "Advances" means all advances made by Mortgagee for the protection of
the interests of Mortgagee in the Property and the rights and privileges of
Mortgagee hereunder, including any advances identified as "Advances" under this
Mortgage, and shall include all interest payable with respect thereto as set
forth in this Mortgage. Advances under this Mortgage shall include protective
advances that may be made, to the extent permitted by the Intercreditor
Agreement, by any Secured Creditor under any Shared Security Document or any
separate security agreements executed pursuant to any Shared Security Document
and affecting any portion of the Property.

         "Assigned Leases" shall have the meaning assigned in Granting Clause
(e)(iv) hereof.

         "Bankruptcy Code" means the United States Bankruptcy Code, 11
U.S.C.ss.101 et seq.

         "Casino Operating Contract" means that certain Amended and Renegotiated
Casino Operating Contract among HJC, JCC and the State of Louisiana by and
through the LGCB, dated as of October 30, 1998, as amended by that certain First
Amendment to Amended and Renegotiated Casino Operating Contract dated October
19, 1999, and further amended by that certain Second Amendment to Amended and
Renegotiated Casino Operating Contract dated as of March 30, 2001, as the same
may be amended, modified, restated or supplemented from time to time.

         "Collateral Agent" shall have the meaning set forth in the
Intercreditor Agreement.

         "Credit Documents" shall have the meaning set forth in the
Intercreditor Agreement.

         "Event of Default" means (i) any "Event of Default" under, and as
defined in, the Intercreditor Agreement, or (ii) any default under, or breach of
any provision of, this Mortgage after the expiration of any cure period
expressly provided herein (or if no cure period is specified, after notice by
Mortgagee to Mortgagor and, in the case of a non-monetary default, thirty (30)
days opportunity to cure).

         "Harrah's Management Company" means Harrah's New Orleans Management
Company, a Nevada corporation, and its successors.

         "HET" means Harrah's Entertainment, Inc., a Delaware corporation.

         "HET/JCC Agreement" means that certain Amended and Restated HET/JCC
Agreement dated as of March 30, 2001, by and among JCC, HET, HOC and JCC Holding
Company or any successor agreement thereto or any substitute agreement therefor
providing for the furnishing of the Minimum Payment Guaranty, as the same (or
any successor or substitute) may be amended, modified, restated or supplemented
from time to time.



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<PAGE>   3


         "HJC" means Harrah's Jazz Company, a Louisiana general partnership.

         "HOC" means Harrah's Operating Company, Inc., a Delaware corporation,
and its successors.

         "Holders" means individually, collectively and interchangeably the
present and the future holders of the Secured Obligations.

         "Improvements" shall have the meaning assigned in Granting Clause (b)
hereof.

         "Incorporeal Rights" shall have the meaning assigned in Granting Clause
(e) hereof.

         "Indenture" means that certain Indenture pursuant to which JCC has
issued Senior Notes due 2008, entered into by JCC, JCC Holding Company, JCC
Canal Development, L.L.C., JCC Fulton Development, L.L.C., JCC Development
Company, L.L.C., and the Trustee, dated as of the Plan Effective Date, as such
agreement may be amended, modified, restated or supplemented from time to time.

         "Intercreditor Agreement" means that certain Intercreditor Agreement,
dated as of March 30, 2001, among the Trustee, the Collateral Agent and the
Revolver Creditor, and the Minimum Payment Guarantors, as the same may be
amended, modified, restated or supplemented from time to time.

         "JCC" means Jazz Casino Company, L.L.C., a Louisiana limited liability
company.

         "Land" shall have the meaning assigned in Granting Clause (b).

         "Landlord" means Rivergate Development Corporation, a Louisiana public
benefit corporation.

         "LGCB" means, collectively, the Louisiana Gaming Control Board, its
successors and assigns.

         "Louisiana Gaming Regulations" means the Louisiana Economic Development
and Gaming Corporation Act, La. R.S. 27:201 et seq. and the rules and
regulations thereunder and the Louisiana Gaming Control Law, La. R.S. 27:1 et
seq., and the rules and regulations thereunder, collectively, as such statutes
and regulations may be amended from time to time.

         "Minimum Payment Guarantors" means HET and HOC, as obligors, or any
successor or substitute guarantor providing a Minimum Payment Guaranty in
accordance with the requirements of the Casino Operating Contract.

         "Minimum Payment Guaranty" shall have the meaning set forth in the
Intercreditor Agreement.

         "Minimum Payment Guaranty Documents" shall have the meaning set forth
in the Intercreditor Agreement.



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<PAGE>   4


         "Mortgage" means this Act of Mortgage and Collateral Assignment, as
amended, modified, restated or supplemented from time to time.

         "Mortgagor" shall have the meaning set forth in the appearance clause
of this Mortgage.

         "Mortgagee" shall have the meaning set forth in the appearance clause
of this Mortgage.

         "Ordinary Course Leases" means leases or subleases granted to other
persons or entities by Mortgagor in the ordinary course of business which do not
materially interfere with the conduct of the business of Mortgagor or any of its
subsidiaries, or do not materially detract from the nature of the related assets
of Mortgagor or any of its subsidiaries.

         "Permitted Encumbrances" shall have the meaning assigned in Section 1
of this Mortgage.

         "Person" means any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.

         "Plan Effective Date" means the "Effective Date" under and as defined
in the Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, as
of February 8, 2001, as confirmed by order of the United States Bankruptcy Court
for the Eastern District of Louisiana on March 19, 2001, in the following
proceeding: In re: JCC Holding Company, No. 01-10086, jointly administered with
In re: Jazz Casino Company, L.L.C., No. 01-10087, In re: JCC Canal Development,
L.L.C., No. 01-10088, In re: JCC Fulton Development, L.L.C., No. 01-10089, and
In re: JCC Development Company, L.L.C., No. 01-10090, as the same may be
amended, modified or supplemented from time to time.

         "Premises" means the immovable property in the Parish of Orleans more
particularly described on Exhibit "1" hereto annexed.

         "Property" shall have the meaning assigned at the end of the Granting
Clauses of this Mortgage.

         "Rents" shall have the meaning assigned in Granting Clause (e)(iv)
hereof.

         "Revolver Creditor" shall have the meaning set forth in the
Intercreditor Agreement.

         "Revolving Credit Agreement" means that certain Revolving Credit
Agreement dated as of March 30, 2001, among JCC, JCC Holding Company, the
Revolver Creditor, and the other parties thereto, as the same may be amended,
modified, restated, supplemented or extended from time to time.

         "Rights and Privileges" shall have the meaning assigned in Granting
Clause (d) hereof.

         "Secured Creditors" means, collectively, (i) the Minimum Payment
Guarantors, (ii) the Revolver Creditor, and (iii) the Trustee and the holders
from time to time of the Senior Notes.



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<PAGE>   5


         "Secured Obligations" means individually, collectively and
interchangeably, (i) all Protective Advances (as defined in the Intercreditor
Agreement), (ii) all present and future indebtedness, obligations, including,
without limitation, the Minimum Payment Obligations (as defined in the
Intercreditor Agreement), and liabilities owed by JCC to the Minimum Payment
Guarantors under the Minimum Payment Guaranty Documents, including, without
limitation, the HET/JCC Agreement, (iii) all present and future indebtedness,
obligations, including, without limitation, the New Bond Obligations (as defined
in the Intercreditor Agreement), and liabilities owed by JCC to any and all
present and future holders of the Senior Notes under the Indenture, (iv) all
present and future indebtedness, obligations, including, without limitation, the
Revolving Credit Agreement Obligations (as defined in the Intercreditor
Agreement), and liabilities owed by JCC to the Revolver Creditor under the
Credit Documents, including, without limitation, the Revolving Credit Agreement,
and (v) all Other Obligations (as defined in the Intercreditor Agreement), (vi)
all obligations of Mortgagor, as guarantor or otherwise, to the Secured
Creditors with respect to any of the foregoing Secured Obligations, and (vii)
all sums owed by Mortgagor under this Mortgage, including any Advances, or any
one or more of the foregoing, and any and all promissory notes, bonds, loan
agreements, indentures and other instruments or documents evidencing such
present and/or future indebtedness, obligations and liabilities, including any
amendments thereto, extensions, renewals and refinancings thereof, and
replacements, substitutions and consolidations thereof, whether such obligations
are committed or purely discretionary, and whether absolute or contingent,
liquidated or unliquidated, voluntary or involuntary, determined, due or to
become due, and whether now existing or hereafter arising, whether JCC or
Mortgagor is obligated alone or with others on a "solidary" or "joint and
several" basis, as a principal obligor or as a surety, guarantor, or endorser,
all up to a maximum secured amount that may be outstanding at any time and from
time to time of U.S. $10,000,000,000.00, including, but not limited to, all
Advances. NOTWITHSTANDING ANY OTHER PROVISION OF THIS MORTGAGE, THE MAXIMUM
AMOUNT OF THE SECURED OBLIGATIONS SECURED HEREBY SHALL BE LIMITED TO U.S.
$10,000,000,000.00.

         "Senior Notes" means the Senior Notes due 2008 issued pursuant to the
Indenture.

         "Shared Security Documents" shall have the meaning assigned that term
in the Intercreditor Agreement.

         "Taxes" means any taxes, assessments, forced contributions, and other
governmental charges in the nature thereof, general and special, ordinary and
extraordinary, of every nature and kind whatsoever which may be levied, assessed
or imposed upon the Property and payable by Mortgagor, whether any or all of
such Taxes be levied directly or indirectly, including, to the extent
applicable, "in lieu" taxes.

         "Trustee" means Wells Fargo Bank Minnesota, National Association, as
Trustee under the Indenture (together with any successor Trustee).

         "Uniform Commercial Code" means the Louisiana Civil Code Articles 3278
et seq., La. R.S. Section 9:4401, La. R.S. Section 9:5386 and 5388 and La. R.S.
Section 10:9-101 et seq., as such statutes may be amended from time to time.



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<PAGE>   6


         "Wholly-Owned Subsidiary" shall have the meaning set forth in the
Indenture.

         GRANTING CLAUSES.

         To secure the full and prompt payment and performance of the Secured
Obligations, up to a maximum secured amount that may be outstanding at any time
and from time to time of U.S. $10,000,000,000.00, MORTGAGOR HEREBY MORTGAGES,
AFFECTS, AND HYPOTHECATES, IN FAVOR OF MORTGAGEE AND ITS SUCCESSORS AND ASSIGNS
FOR THE BENEFIT OF THE HOLDERS all of Mortgagor's estate, right, title and
interest, whether now owned or hereafter acquired, whether as owner, lessor,
lessee, or otherwise, and whether vested or contingent, and including all of
Mortgagor's rights to perform all obligations under and to receive the benefits
of any leases, in and to all of the following described land (immovable
property) and interests in land (immovable property), leases, leasehold
interests, estates, servitudes, rights, buildings, other constructions,
improvements, property, fixtures, component parts, machinery and equipment to
the full extent that such property is susceptible of mortgage under the
Louisiana Civil Code, Louisiana Revised Statutes, and other provisions of
Louisiana law; grants a continuing security interest in favor of Mortgagee and
its successors and assigns, as secured party for the benefit of the Holders, in
all property and rights described below, whether now owned or hereafter
acquired, that are susceptible of a security interest under the Uniform
Commercial Code or any other provision of Louisiana law; and does further
affect, hypothecate, collaterally assign and pledge unto and in favor of
Mortgagee and its successors and assigns, as collateral assignee for the benefit
of the Holders, all present and future leases and rents, as well as all other
property and rights described below, whether now owned or hereinafter acquired,
that are susceptible of collateral assignment under the Uniform Commercial Code
or any other provision of Louisiana law:

         (a)      all of Mortgagor's present and future right, title and
                  interest, presently or in the future, in and to the Premises,
                  together with Mortgagor's right, title, and interest in all
                  constructions and improvements on the Premises and the
                  component parts thereof;

         (b)      TOGETHER with all buildings, other constructions, structures,
                  improvements, fixtures, additions, enlargements, extensions,
                  modifications or repairs of every kind and description, now or
                  hereafter erected or placed on the Premises, or thereunto
                  belonging or appertaining, which may from time to time be
                  owned or leased by Mortgagor, or which may be used or useable
                  in connection with any present or future use or operations of
                  the Premises, whether now owned or hereinafter acquired by
                  Mortgagor, including all parking areas, roads, driveways,
                  walks, fences, walls, beams, recreation facilities, drainage
                  facilities, lighting facilities and other site improvements,
                  all water, sanitary and storm sewer, drainage, electricity,
                  steam, gas, telephone and other utility equipment and
                  facilities, all plumbing, lighting, heating, ventilating,
                  air-conditioning, refrigerating, incinerating, compacting,
                  fire protection and sprinkler, surveillance and security,
                  vacuum cleaning, public address and communications equipment
                  and systems, all kitchen and laundry appliances, screens,
                  awnings, floor coverings, partitions, elevators, escalators,
                  motors, machinery, pipes, fittings and other types of





                                       6
<PAGE>   7


                  equipment and personal property of every kind and description
                  now or hereafter located on the Premises or attached to the
                  Improvements (as defined below) which by the nature of their
                  location thereon or attachment thereto are deemed real or
                  immovable property under applicable law; and including all
                  materials intended for the construction, reconstruction,
                  repair, replacement, alteration, addition or improvement of or
                  to such buildings, equipment, fixtures, component parts,
                  structures and improvements, all of which materials shall be
                  deemed to be part of the Property immediately upon delivery
                  thereof on the Premises to be part of the Improvements
                  immediately upon their incorporation therein, together with
                  all replacements thereof, substitutions therefor, additions
                  thereto, and any other component parts of any and all such
                  Property (all of the land described in and subject to this
                  Mortgage, including the Premises, whether owned in fee or full
                  ownership by Mortgagor or affected by leases in which
                  Mortgagor has an interest, is collectively referred to as the
                  "Land," and all of the buildings, other constructions,
                  structures, improvements and component parts of the Land are
                  collectively referred to as the "Improvements");

         (c)      TOGETHER with Mortgagor's rights in and to any supplement,
                  modification, amendment, novation, reconduction, restatement,
                  or replacement of any of the leases affecting the Premises;

         (d)      TOGETHER with all of the rights, way, privileges, servitudes,
                  easements, tenements, hereditaments, appurtenances and
                  advantages belonging to or in anywise appertaining to any of
                  the Property or any part thereof (collectively, the "Rights
                  and Privileges"), including, without limitation, the Rights
                  and Privileges, if any, of Mortgagor in and to the land lying
                  in the streets, roads or avenues, open or proposed, in front
                  of or adjoining the Land, and in and to any alleys or
                  passages, rights of ingress or egress, riparian rights, air
                  rights, development rights, and all other Rights and
                  Privileges, whatsoever, in any way belonging, relating or
                  appertaining to any of the Property, or any part thereof,
                  whether now owned or hereafter acquired by Mortgagor; and

         (e)      TOGETHER with the following rights and privileges (the
                  "Incorporeal Rights"):

                  (i)      Any and all present and future leases, subleases or
                           other occupancy agreements affecting the Property,
                           whether or not of record, for the use or occupancy of
                           all or any part of the Property, together with all
                           amendments, supplements, consolidations,
                           replacements, restatements, extensions, renewals and
                           other modifications of any thereof, and together with
                           all guarantees of any of the obligations of the
                           tenants under any of said leases (the "Assigned
                           Leases"), and all rents, fruits, income, and profits
                           therefrom (collectively, the "Rents"), including
                           without limitation, any and all rents, income,
                           profits, bonuses, revenues, royalties, cash or
                           security deposits, advances, rentals and other
                           payments, and further including Mortgagor's rights to
                           enforce all Assigned Leases and to receive and
                           enforce any rights that Mortgagor might have to
                           collect Rent; and



                                       7
<PAGE>   8


                  (ii)     Any and all escrow payments paid to Mortgagor
                           pursuant to any documents executed in connection with
                           the Secured Obligations.

          (f)     All of Mortgagor's right, title and interest, presently or in
                  the future in and to the Land and any other real or immovable
                  property described in this Mortgage, whether as owner, lessee,
                  sublessee or otherwise.

All of the foregoing property and rights described in these Granting Clauses,
individually, collectively and interchangeably, including, without limitation,
any and all of Mortgagor's present and future property and rights subject to
this Mortgage, are referred to herein as the "Property."

         MORTGAGE PROVISIONS.

         Mortgagor hereby declares, acknowledges, covenants and agrees as
follows:

         1. Permitted Encumbrances. This Mortgage is made and accepted subject
to the exceptions set forth on Exhibit "2" hereto annexed and as otherwise
agreed to by Mortgagee in writing (collectively, the "Permitted Encumbrances").

         2. Acknowledgment of Collateral Agent. Mortgagor declares and
acknowledges that the original Mortgagee is contemplated to be Mortgagee in its
capacity as Collateral Agent under the Intercreditor Agreement. Mortgagee
declares that the taxpayer identification number of Mortgagee is accurately set
forth in the appearance clause to this Mortgage. Mortgagor further declares and
acknowledges that the Secured Obligations may be transferred or negotiated one
or more times and that the Holders shall include any and all holder or holders
of the Secured Obligations from time to time.

         3. Future Advances. This Mortgage has been executed by Mortgagor
pursuant to Louisiana Civil Code Article 3298 and other applicable laws,
including the Uniform Commercial Code, for the purpose of securing the Secured
Obligations that may now be existing and/or that may arise in the future as
provided herein, with the preferences and priorities provided under applicable
Louisiana law.

         4. Maximum Amount. In accordance with the requirements of applicable
law, including Louisiana Civil Code Article 3288 and La. R.S. Section 9:4401,
Mortgagor acknowledges, notwithstanding any other provision of this Mortgage or
any other document to the contrary, the maximum amount of Secured Obligations
secured hereby that may be outstanding at any time and from time to time shall
be U.S. $10,000,000,000.00.

         5. Term. This Mortgage will remain in effect until all of the Secured
Obligations are fully satisfied and there is no agreement or commitment to
advance any additional indebtedness or other obligations under any of (i) the
Minimum Payment Guaranty Documents, including, without limitation, the HET/JCC
Agreement, (ii) the Indenture, (iii) the Credit Documents, including, without
limitation, the Revolving Credit Agreement, or (iv) the Shared Security
Documents, including this Mortgage. At such time, upon written request from
Mortgagor, Mortgagee shall execute and deliver to Mortgagor a written
cancellation instrument.



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<PAGE>   9


         6. Recordation and Filing. Mortgagor authorizes Mortgagee to file
multiple originals, or photocopies, carbon copies, or facsimile copies of this
Mortgage and appropriate financing statements with the appropriate filing
officer in the State of Louisiana pursuant to the provisions of the Uniform
Commercial Code. Mortgagor's employer identification number is accurately set
out on the first page of this Mortgage. Mortgagor will not change its employer
identification number or its name, identity or corporate structure or address so
that any financing statement filed in connection herewith may become seriously
misleading unless and until it notifies Mortgagee in writing and executes all
new appropriate financing statements or other such documents as Mortgagee may
reasonably require, with Mortgagor being required to pay the cost of such
documentation and the filing thereof as provided above.

         7. Representations and Warranties. Mortgagor hereby represents and
warrants to Mortgagee that: (a) Mortgagor has a valid and enforceable fee
interest in and to the Premises, subject to the Permitted Encumbrances; (b) none
of the Property has heretofore been alienated by Mortgagor, and there are no
liens or encumbrances against the Property other than the Permitted
Encumbrances; (c) there are no defenses or offsets to this Mortgage or to
Mortgagor's obligations under the Shared Security Documents; (d) Mortgagor has
full power and authority to encumber the Property in the manner and form set
forth in this Mortgage; (e) all consents and approvals to this Mortgage have
been obtained; (f) the Assigned Leases have not been assigned by Mortgagor or,
to the knowledge of Mortgagor, any tenant thereunder; (g) to the knowledge of
Mortgagor, as of the date hereof, the Assigned Leases are in full force and
effect and there is no material default under any Assigned Lease and there is
existing no condition which with the giving of notice or passage of time or both
would cause a material default thereunder; and (h) the execution, delivery and
performance of this Mortgage do not require any consent under, and will not
contravene any provision of or cause a default under, any of the Assigned
Leases. Mortgagor represents and warrants that this Mortgage is and will remain
a valid and enforceable first mortgage on, security interest in and collateral
assignment of the Property pursuant to and in accordance with the terms hereof,
subject only to the Permitted Encumbrances, and Mortgagor will preserve title to
the Property and will forever warrant and defend such title and the validity and
priority of the lien of this Mortgage against the claims of all persons.

         8. Lien. This Mortgage is intended to encumber, effect, and constitute
a lien on all of the Land, including the Premises, the Improvements and all of
Mortgagor's interest therein and all of the other Property, regardless of
whether Mortgagor's interest therein is that of lessee, sublessee, owner or
otherwise, and regardless of whether the nature of such interest changes from
time to time from lessee to sublessee to owner or vice-versa in any
combinations, and in any such event the lien of this Mortgage shall
automatically extend to and cover any and all interest of Mortgagor in the
Property without the need of any amendment, supplement, notice, or action of any
kind by Mortgagee. To the extent that this Mortgage is a mortgage in Mortgagor's
interest in the Land or the Improvements as lessor, this Mortgage will cover and
include all of Mortgagor's rights to perform the obligations of the lessor under
any Assigned Lease as well as all of Mortgagor's right to receive the benefits
accruing to the lessor under any Assigned Lease.

         9. Assignment of Leases and Rents. This Mortgage includes the




                                       9
<PAGE>   10


collateral assignment, as security for the Secured Obligations up to the maximum
secured amount that may be outstanding at any time and from time to time of
$10,000,000,000.00, of all Assigned Leases and all Rents, and further includes
Mortgagor's rights to enforce all Assigned Leases and to receive and enforce any
and all rights that Mortgagor might have to collect Rents.

         10. Remedies. Subject to Section 33 of this Mortgage, upon the
occurrence and during the continuance of any Event of Default, Mortgagor shall
forthwith upon demand of Mortgagee surrender to Mortgagee possession of the
Property, and Mortgagee shall be entitled to take actual possession of the
Property or any part thereof personally or by its agents or attorneys, and
Mortgagee in its discretion may, in addition to any other rights at law or in
equity, with or without force and with or without process of law, enter upon and
take and maintain possession of all or any part of the Property together with
all documents, books, records, papers and accounts of Mortgagor relating
thereto, and may as attorney-in-fact or agent of Mortgagor, or in its own name
as Mortgagee and under the powers herein granted:

         (a)      hold, operate, manage or control the Property and conduct the
                  business, if any, thereof, either personally or by its agents,
                  and with full power to use such measures, legal or equitable,
                  as in its discretion it deems proper or necessary to enforce
                  the payment or security of the income, rents, fruits, issues
                  and profits of the Mortgaged Property, including actions for
                  the recovery of Rents, and direct collection of Rents and
                  other payments from tenants in accordance with the provisions
                  of La. R.S. Section 9:4401, Mortgagor hereby granting
                  Mortgagee full power and authority to exercise each and every
                  one of the rights, privileges and powers herein granted at any
                  and all times hereafter, without notice to Mortgagor;

         (b)      cancel or terminate any sublease for any cause or on any
                  ground which would entitle Mortgagor to cancel the same;

         (c)      enforce any term and provision of any sublease, including
                  actions in specific performance;

         (d)      elect to cancel any sublease made subsequent to this Mortgage
                  or subordinated to the lien hereof unless this Mortgage has
                  specifically been made subordinate to such sublease;

         (e)      extend or modify any then existing subleases in accordance
                  with the terms thereof and make new subleases, which
                  extensions, modifications or new subleases may provide for
                  terms to expire, or for options to lessees to extend or renew
                  terms to expire, beyond the final maturity date of the Secured
                  Obligations and the issuance of a deed or deeds to a purchaser
                  or purchasers at a foreclosure sale, it being understood and
                  agreed that any such subleases, and the options or other such
                  provisions to be contained therein, shall be binding upon
                  Mortgagor and all persons whose interests in the Property are
                  subject to the lien hereof and shall be binding also upon the
                  purchaser or purchasers at any foreclosure sale; and/or



                                       10
<PAGE>   11


         (f)      withdraw any monies on deposit with any financial institution
                  in the name of or on behalf of Mortgagor.

         11. Performance of Lease Obligations; Indemnification. Mortgagee shall
not be obligated to perform or discharge, nor does it hereby undertake to
perform or discharge, any obligation, duty or liability under any Assigned
Lease. Mortgagor shall and does hereby agree to indemnify and to hold Mortgagee
harmless of and from all liability, loss or damage which Mortgagee might incur
under said leases or under or by reason of the assignment of any subleases, and
of and from any and all claims or demands whatsoever which may be asserted
against Mortgagee by reason of any alleged obligations or undertakings to
perform or discharge any of the terms, covenants or agreements contained in said
leases, including without limitation any claims arising out of Mortgagee's
negligence or strict liability, but excluding any such claims arising out of
Mortgagee's gross negligence or willful misconduct. Should Mortgagee incur any
such liability, loss or damage under any of said leases, or under or by reason
of the assignment thereof, or in the defense of any claims or demands, the
amount thereof, including costs, expenses and reasonable attorneys' fees and
costs, including reasonable attorneys' fees and costs on appeal, shall be
secured hereby and Mortgagor shall reimburse Mortgagee therefor immediately upon
demand, together with interest at the rate provided in Section 18 of this
Mortgage to the date of reimbursement.

         12. Payment and Performance of Secured Obligations. Mortgagor shall
satisfy the Secured Obligations when due in accordance with the terms of the
documentation relating to the various items of Secured Obligations, as
applicable, and shall perform and observe each of Mortgagor's covenants,
agreements and obligations hereunder and thereunder with respect to the Secured
Obligations.

         13. Maintenance; Waste. Mortgagor shall not directly or indirectly
commit or suffer any waste or stripping of the Property, and Mortgagor shall
keep the Improvements protected and in good order, repair and condition at all
times, and in connection therewith, Mortgagor shall make or shall cause to be
made all repairs, renewals and replacements, structural and non-structural,
exterior and interior, ordinary and extraordinary and foreseen and unforeseen to
the Improvements. From and after the occurrence of an Event of Default,
Mortgagee, as provided under the Intercreditor Agreement, shall have the right,
but shall not be obligated, to take such actions as Mortgagee may deem necessary
to correct or remedy such failure, and any amounts expended or advanced in
connection therewith shall be Advances hereunder and part of the Secured
Obligations. In such event, Mortgagee and any person designated by Mortgagee
shall have, and is hereby granted, the right to enter upon the Property at
reasonable times and from time to time for the purpose of taking any such
action.

         14. Inspections. Mortgagor hereby authorizes Mortgagee, its agents,
representatives or workmen, to enter (a) without prior notice if an Event of
Default has occurred and is continuing or (b) at any reasonable time during
normal business hours after reasonable advance notice to Mortgagor (except that
with respect to any emergency, Mortgagee, its agents, representatives or workmen
may enter during such time of emergency), upon or in the Land and the
Improvements for the purpose of inspecting the same and for the purpose of
exercising any right, power or remedy which Mortgagee is authorized to exercise
under the terms of this




                                       11
<PAGE>   12


Mortgage; provided, however, that no such entry upon or in the Land or the
Improvements shall be construed to be possession of the Land or the Improvements
or to be a cure of any Event of Default or waiver of any Event of Default.

         15.      Payment of Taxes and Insurance

         (a)      If Mortgagor fails to pay or discharge or cause to be paid or
                  discharged any Taxes within thirty (30) days after the same
                  became due (and unless (i) Mortgagor is contesting such Taxes
                  in good faith by appropriate proceedings, (ii) Mortgagor has
                  established or is maintaining adequate reserve for such Taxes
                  in accordance with generally accepted accounting principles as
                  in effect from time to time, or (iii) the failure to pay or
                  discharge such Taxes will not result in a forfeiture of any
                  portion of the Property which would have a material adverse
                  effect on the business, operations, property, assets,
                  liabilities, condition (financial or otherwise) or prospects
                  of Mortgagor with respect to the Premises or be grounds for
                  declaring a termination of any Assigned Lease (other than
                  Ordinary Course Leases)), Mortgagee, as provided in Section 4
                  of the Intercreditor Agreement, shall be authorized (but shall
                  not be obligated) to pay such Taxes, with full subrogation to
                  all rights of the taxing authorities by reason of such
                  payment, and any amounts so paid by Mortgagee shall be
                  Advances hereunder and part of the Secured Obligations.

         (b)      If Mortgagor, following written notice from Mortgagee to
                  Mortgagor and thirty (30) days opportunity to cure, fails to
                  obtain or maintain any insurance required to be maintained by
                  Mortgagor under the provisions of the Shared Security
                  Documents, as applicable, or any other documents executed in
                  connection with any of the Secured Obligations, Mortgagee, as
                  provided in Section 4 of the Intercreditor Agreement and this
                  Mortgage, shall be authorized (but shall not be obligated) to
                  pay such amounts, including premiums with respect to insurance
                  which protects Mortgagee's interest only and any amounts so
                  paid by Mortgagee shall be included within the Advances
                  hereunder and part of the Secured Obligations.

         16. Default in Compliance with Law. If Mortgagor shall fail to comply
with any laws, rules and regulations (including, but not limited to, the
Louisiana Gaming Regulations, to the extent applicable to Mortgagor) of all
governmental bodies and agencies having jurisdiction over or authority with
respect to the Property (except such instances of compliance as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the Property or the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Mortgagor with
respect to the Premises) and such noncompliance continues for thirty (30) days
(or any shorter period for compliance to the extent required by applicable law)
following written notice thereof by Mortgagee, Mortgagee, at Mortgagee's option,
may (but shall not obligated to) take reasonable steps to comply with such law,
rule or regulation and pay the cost thereof, and any amounts expended or
advanced in connection therewith shall constitute Advances and form part of the
Secured Obligations.



                                       12
<PAGE>   13


         17. Reimbursement for Advances. Within thirty (30) days following
written demand therefor by Mortgagee to Mortgagor, Mortgagor shall reimburse
Mortgagee or any Secured Creditor (to the extent permitted by the applicable
Shared Security Documents and the Intercreditor Agreement) for any amount(s)
paid or advanced by Mortgagee or such Secured Creditor (i) for Taxes pursuant to
Section 15(a) of this Mortgage, (ii) for insurance pursuant to Section 15(b) of
this Mortgage, (iii) for the cost of keeping the Property in good order, repair
and condition pursuant to Section 13 of this Mortgage, (iv) to comply with
applicable laws, rules or regulations pursuant to Section 16 of this Mortgage,
or (v) for any other purposes set forth herein or permitted hereby or by the
Shared Security Documents and the Intercreditor Agreement, or otherwise
reasonably necessary in connection therewith (including, without limitation,
Advances for the preservation of the lien of this Mortgage). All such amounts
shall constitute Advances hereunder, and such amounts, together with the
interest accrued thereon as hereinafter provided, shall form part of the Secured
Obligations and shall be fully secured hereby. Mortgagor shall pay interest on
any Advances at a rate applicable to overdue loan principal pursuant to Section
2.7 of the Revolving Credit Agreement from the date(s) of such Advances until
Mortgagor reimburses Mortgagee therefor.

         18. Mortgagee's Option to Act Hereunder. None of the provisions of this
Mortgage shall be construed as making it obligatory upon Mortgagee to pay Taxes
or to comply with laws or regulations affecting the Property or to do any other
act with regard to the Property or as causing Mortgagee to become liable for
loss, damage or injury which may result from the nonpayment of Taxes or to do
any other act.

         19. Notice of Proceeding Affecting the Property. Mortgagor shall
promptly notify Mortgagee of any knowledge that Mortgagor has or obtains of the
commencement of any legal proceedings (including for condemnation or taking)
which could have a material adverse effect on the Property or the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Mortgagor with respect to the Premises, and Mortgagor shall
immediately, upon service thereof on or by Mortgagor, deliver to Mortgagee a
true copy of each petition, summons, complaint, notice, and all other pleadings
or papers, served in connection with any such legal proceeding, and Mortgagee
may take such action as may be necessary to preserve Mortgagee's rights and
interests affected thereby. Mortgagor shall, at its expense, diligently
prosecute and/or defend (as the case may be) all such proceedings and shall,
upon the request of Mortgagee, deliver to Mortgagee copies of all papers served
in connection therewith, provided that no settlement or compromise of any such
proceeding shall be made by Mortgagor without Mortgagee's prior written consent
if such settlement or compromise could reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Mortgagor with respect to the
Premises.

         20. Additional Documents to Maintain Lien. Mortgagor shall keep valid
and, except for the Permitted Encumbrances, unimpaired the lien and privilege
hereby created or to be created and to that end shall execute at any future time
all further instruments as may be necessary or desirable or that may be
reasonably required by Mortgagee to make and keep valid the lien and privilege
of the Mortgage on the Property and each and every part thereof, and to maintain
the priority of the lien and privilege of the Mortgage on the Property.



                                       13
<PAGE>   14


         21. Authentic Evidence. In the event any proceedings are taken
hereunder by way of executory or other process, any and all declarations of
facts made by authentic act before a notary public and in the presence of two
witnesses by a person or persons declaring that such facts lie within his, her
or their knowledge shall constitute authentic evidence of such facts for the
purposes of such executory or other process and also for purposes of La. R.S.
9:3504(D)(6) and La. R.S. 10:9-508, where applicable.

         22.      Acceleration; Enforcement; Confession of Judgment

         (a)      Upon an Event of Default, Mortgagee shall have the right to
                  accelerate the maturity and demand immediate payment of all
                  Secured Obligations. It shall be lawful for Mortgagee (and
                  Mortgagor does hereby authorize Mortgagee without notice or
                  putting Mortgagor in default, a putting in default being
                  hereby expressly waived), to cause all or singular the
                  Property to be seized and sold under executory or other legal
                  process, issued by any court of competent jurisdiction,
                  without appraisement, and to the highest bidder for cash or on
                  such terms as Mortgagee may direct; and Mortgagor consents
                  that the Property may be sold, either as a whole or in such
                  lots or parcels as Mortgagee may direct in any such
                  proceedings. Mortgagor hereby expressly waives: (a) the
                  benefit of appraisement, as provided in Articles 2332, 2336,
                  2723 and 2724, Louisiana Code of Civil Procedure, and all
                  other laws conferring the same; (b) the demand and three (3)
                  days delay accorded by Articles 2639 and 2721, Louisiana Code
                  of Civil Procedure; (c) the three (3) days delay provided by
                  Articles 2331 and 2722, Louisiana Code of Civil Procedure; and
                  (d) the benefit of the other provisions of Articles 2331, 2722
                  and 2723, Louisiana Code of Civil Procedure, and any other
                  Articles not specifically mentioned above which would prevent
                  the immediate seizure and sale of any or all of the Property,
                  and Mortgagor expressly agrees to the immediate seizure of the
                  Property in the event of suit hereon.

         (b)      Mortgagor does hereby name, constitute, and appoint Mortgagee
                  and Mortgagee's agents as Mortgagor's true and lawful agent
                  and attorney-in-fact with full power of substitution and with
                  power for Mortgagee in its name and capacity or in the name
                  and capacity of Mortgagor to carry out and enforce following
                  an Event of Default, any or all of the Incorporeal Rights
                  collaterally assigned and pledged or otherwise encumbered
                  under this Mortgage and at Mortgagee's sole discretion to file
                  any claim or to take any other action or proceedings and to
                  make any settlement of claims, either in its own name or in
                  the name of Mortgagor or otherwise, that Mortgagee may deem
                  necessary or desirable in order to collect and enforce the
                  payment and performance of the obligations owed to Mortgagor
                  under the Incorporeal Rights. Upon receipt of a written notice
                  from Mortgagee that an Event of Default exists, the parties to
                  the Incorporeal Rights are hereby expressly and irrevocably
                  authorized and directed to pay any and all amounts and perform
                  any duties, liabilities, or obligations due to Mortgagor
                  pursuant to any of the Incorporeal Rights to and for Mortgagee
                  or such nominee as Mortgagee may designate in such notice. The
                  power of attorney granted to Mortgagee and its agents is
                  coupled with an interest and may not be



                                       14
<PAGE>   15


                  revoked by Mortgagor as long as this Mortgage remains in
                  effect. Mortgagor specifically declares that nothing in this
                  Mortgage shall operate (i) to place any responsibility for the
                  control, care, management, or repair of the Property upon
                  Mortgagee or for the carrying out of any of the terms or
                  conditions of any present or future lease that may affect the
                  Property, or (ii) to make Mortgagee responsible or liable for
                  (A) any waste committed on the Property by any lessee or by
                  any other party, (B) the dangerous or defective condition of
                  the Property, including but not limited to liability as
                  described in Louisiana Civil Code Articles 2315 through 2324,
                  or (C) any negligence in the management, upkeep, repair, or
                  control of the Property that may result in loss, injury, or
                  death to any lessee or other party. If the Property is
                  transferred by virtue of any judicial foreclosure proceeding,
                  the Property may, in Mortgagee's sole discretion, be
                  transferred free and clear of, and unencumbered by, any and
                  all subordinate leases, assignments, and contracts. Upon
                  request by Mortgagee following an Event of Default, Mortgagor
                  will immediately notify individual obligors and debtors under
                  the Incorporeal Rights, advising such obligors and debtors of
                  the fact that their respective agreements and/or obligations
                  have been collaterally assigned and pledged to Mortgagee. In
                  the event that Mortgagor should fail to provide such notices
                  for any reason upon request by Mortgagee, Mortgagor agrees
                  that Mortgagee may forward appropriate notices to such
                  obligors and debtors, either in Mortgagee's name or the name
                  of Mortgagor.

         (c)      Should one or more Events of Default occur or exist, Mortgagee
                  shall have the additional right, at its sole option, to
                  separately sell the aforesaid Incorporeal Rights, or any part
                  or parts thereof, at private or public sale, at such price or
                  prices as Mortgagee may deem best, either for cash or for any
                  other compensation, or on credit, or for future delivery,
                  without the assumption of any credit risk. The sale of the
                  aforesaid Incorporeal Rights may be without appraisement, the
                  benefit of which is also expressly waived by Mortgagor.
                  Mortgagee may exercise any other remedies with regard to
                  Mortgagor's rights as may be authorized under the Uniform
                  Commercial Code or under the applicable laws of any other
                  applicable state. The sale, lease or other disposition of the
                  Incorporeal Rights after default may be for cash, credit, or
                  any combination thereof. Mortgagee may purchase all or any
                  part of such Incorporeal Rights at public sale (or if
                  permitted by law, at private sale) and in lieu of actual
                  payment of any such purchase price, may set-off the amount of
                  such price against the then outstanding Secured Obligations.

         (d)      To the full extent permitted by applicable law, Mortgagor
                  hereby waives and releases Mortgagee and each Secured Creditor
                  of and from any and all liability and penalties for failure of
                  Mortgagee to comply with any statutory or other requirement
                  imposed upon Mortgagee relating to notices of sale, holding of
                  sale, or reporting of any sale. Mortgagee shall have the right
                  to postpone or adjourn any sale or other disposition of the
                  Incorporeal Rights at any time without giving of notice of any
                  such postponed or adjourned dates. In the event Mortgagee
                  seeks to take possession of any or all of the Incorporeal
                  Rights by




                                       15
<PAGE>   16


                  court process, or otherwise, Mortgagor hereby irrevocably
                  waives any bonds and surety or security relating thereto
                  required by any statute, court rule or otherwise as an
                  incident to such possession. Mortgagor further waives any
                  demand for possession prior to the commencement of any suit or
                  action and waives the right to trial by jury with respect
                  thereto, and any other action in which Mortgagee is a party.

         (e)      Nothing herein shall prevent Mortgagee from pursuing any other
                  remedies available to Mortgagee at law or in equity, including
                  but not limited to, specific performance, appointment of a
                  receiver and right of entry and possession.

         (f)      For purposes of foreclosure under Louisiana executory process
                  procedures, Mortgagor acknowledges the Secured Obligations and
                  confesses judgment in favor of Mortgagee in the full amount of
                  the Secured Obligations, in principal, interest, costs,
                  expenses, and reasonable attorneys' fees.

         23. Appointment of Keeper. If the Property or any part thereof is
seized as an incident to an action for the recognition or the enforcement of
this Mortgage by executory process, ordinary process, sequestration, writ of
fiere facias, or otherwise, and to the extent that the receiver of the Property
is not appointed pursuant to La. R.S. 27:275 et seq., Mortgagor and Mortgagee
hereby agree that the court issuing any such order shall, if petitioned for by
Mortgagee, direct the sheriff to appoint as a keeper of the Property Mortgagee
or any agent designated by Mortgagee, or any person or entity named by Mortgagee
at the time such seizure is requested, or any time thereafter. This designation
is made pursuant to La. R.S. 9:5136 through 5140.2, inclusive, as the same may
be amended, and Mortgagee shall be entitled to all the rights and benefits
afforded thereunder including reasonable compensation, which compensation shall
be secured by this Mortgage.

         24. Partial Invalidity. If for any reason any of the provisions of this
Mortgage shall be judicially declared invalid or unenforceable, such declaration
shall not affect the validity or enforceability of the other provisions hereof.

         25. Covenants to Abide by Leases. Subject to the terms of this
Mortgage, with respect to all leases now or hereafter mortgaged or required to
be mortgaged hereunder or pursuant to a supplement to or amendment of this
Mortgage (other than Ordinary Course Leases), as of the date such lease becomes
subject to the lien of this Mortgage, Mortgagor does specially covenant as
follows:

         (a)      Mortgagor shall pay, by no later than the end of any
                  applicable cure periods granted to Mortgagor under such lease
                  (with respect to such payment), all rents, additional rents
                  and other sums required to be paid by Mortgagor under and
                  pursuant to the provisions of such lease;

         (b)      Mortgagor shall at all times promptly and faithfully keep and
                  perform, or cause to be kept and performed, by no later than
                  the end of any applicable cure periods granted to Mortgagor
                  under such lease (with respect to




                                       16
<PAGE>   17


                  such performance), all the covenants and conditions contained
                  in such lease to be kept and performed and in all respects
                  conform to and comply with the terms and conditions of such
                  lease, by no later than the end of any applicable cure periods
                  granted to Mortgagor thereunder (with respect to such
                  performance), to the end that all things shall be done which
                  are necessary to keep unimpaired the rights of Mortgagor, as
                  tenant under such lease, and Mortgagor further covenants that
                  it shall not do or permit anything which will impair or tend
                  to impair the security of this Mortgage or will be grounds for
                  declaring a termination of such lease;

         (c)      Mortgagor shall not, without the prior written consent of
                  Mortgagee, modify, extend or in any way alter the terms of
                  such lease or cancel or surrender such lease, or waive,
                  execute, condone or in any way release or discharge the lessor
                  thereunder of or from the obligations covenants, conditions
                  and agreements by said lessor to be done and performed, which,
                  in any case, would have a material adverse effect on the
                  business, operations, property, assets, liabilities, condition
                  (financial or otherwise) or prospects of Mortgagor with
                  respect to the Premises;

         (d)      Mortgagor shall promptly give Mortgagee notice of any default
                  under such lease or of the receipt by Mortgagor of any notice
                  of default from the lessor thereunder, shall furnish to
                  Mortgagee any and all information which it may request
                  concerning the performance by Mortgagee of the covenants of
                  such lease, and shall permit Mortgagee or its representative
                  at all reasonable times to make investigation or examination
                  concerning the performance by Mortgagor of the covenants of
                  such lease. To the extent it is within Mortgagor's control to
                  do so, Mortgagor shall deliver to Mortgagee a copy of such
                  lease certified by Mortgagor as a true and complete copy
                  thereof, an estoppel certificate from the lessor under such
                  lease within twenty (20) days after request by Mortgagee and
                  in such form and content as shall be satisfactory to
                  Mortgagee, as well as any and all documentary evidence
                  received by it showing compliance by Mortgagor with the
                  provisions of such lease. Mortgagor shall also promptly
                  deliver to Mortgagee an exact copy of any material notice,
                  communication, plan, specification or other instrument or
                  document received or given by it in any way relating to or
                  affecting such lease;

         (e)      If Mortgagor shall default in the performance or observation
                  of any term, covenant or condition of such lease on the part
                  of Mortgagor as tenant thereunder, to be performed or
                  observed, then, without limiting the generality of the other
                  provisions of this Mortgage, and without waiving or releasing
                  Mortgagor from any of its obligations hereunder, Mortgagee
                  shall, to the extent permitted by such lease, have the right,
                  but shall be under no obligation, after the expiration of all
                  applicable cure periods granted to Mortgagor under such lease
                  to pay such sum or to perform such term, covenant, or
                  condition as may be in default, to pay any sums and to perform
                  any act or take any action as may be appropriate to cause all
                  of the terms, covenants and conditions of such lease on the
                  part of Mortgagor to be performed or observed to be promptly
                  performed or observed on behalf of



                                       17
<PAGE>   18


                  Mortgagor, to the end that the rights of Mortgagor in, to and
                  under such lease shall be kept unimpaired and free from
                  default; provided that, to the extent Mortgagee is not
                  entitled under such lease to cure rights on a consecutive
                  basis to those granted to Mortgagor, Mortgagee may exercise
                  its rights under this paragraph at any time within the five
                  (5) day period prior to the expiration of such cure period
                  upon written notice from Mortgagee to Mortgagor. If Mortgagee
                  shall make any payment or perform any act or take action in
                  accordance with the preceding sentence, Mortgagee will notify
                  Mortgagor of the making of any such payment, the performance
                  of any such act, or the taking of any such action. In any such
                  event, Mortgagee and any person designated by Mortgagee shall
                  have and are hereby granted, the right to enter upon the Land
                  at any time and from time to time for the purpose of taking
                  any such action. If the lessor under such lease shall deliver
                  to Mortgagee a copy of any notice of default sent by said
                  lessor to Mortgagor under such lease, such notice shall
                  constitute full protection to Mortgagee for any action taken
                  or omitted to be taken by Mortgagee, in good faith, in
                  reliance thereon;

         (f)      Mortgagor shall exercise each individual option, if any, to
                  extend or renew the term of such lease, and Mortgagor hereby
                  expressly authorizes and appoints Mortgagee as its
                  attorney-in-fact to exercise, either jointly or individually,
                  any such option in the name and upon behalf of Mortgagor,
                  which power of attorney shall be irrevocable and shall be
                  deemed to be coupled with an interest;

         (g)      In the event of any failure by Mortgagor to perform any
                  covenant to be observed and performed under such lease, the
                  performance by Mortgagee on behalf of Mortgagor of such
                  covenant shall not remove or waive, as between Mortgagor and
                  Mortgagee, the corresponding breach of any covenant by
                  Mortgagor hereunder, and any amount so advanced by Mortgagee
                  or any costs incurred in connection therewith, shall be paid
                  by Mortgagor to Mortgagee with interest thereon at the rate
                  set forth in Section 17 of this Mortgage within thirty (30)
                  days after written demand by Mortgagee to Mortgagor therefor
                  and shall also be Advances forming part of the Secured
                  Obligations and shall be fully secured hereby;

         (h)      Mortgagor covenants and agrees that, if Mortgagor is permitted
                  by Mortgagee to acquire the lessor's interest under such
                  lease, or any other estate, title or interest in the premises
                  covered by such lease, all of Mortgagor's interest in such
                  premises shall be considered as mortgaged, hypothecated,
                  collaterally assigned and pledged to Mortgagee and the lien
                  hereof shall encumber all of such interest with the same force
                  and effect as though specifically herein mortgaged,
                  hypothecated, collaterally assigned and pledged, without the
                  need for any further mortgage, assignment, amendment,
                  supplement, or other writing. Notwithstanding the foregoing,
                  if Mortgagee so requests following Mortgagor's acquisition of
                  the lessor's interest or any other estate, title, or interest
                  in the leased premises, Mortgagor shall promptly execute and
                  deliver all further instruments, writings, and other
                  assurances as Mortgagee may request to confirm the foregoing;



                                       18
<PAGE>   19


         (i)      In the event such lease is rejected or disaffirmed by the
                  lessor thereunder (or by any receiver, trustee, keeper,
                  custodian or other party who succeeds to the rights of such
                  landlord) pursuant to any bankruptcy, insolvency,
                  reorganization, moratorium or similar law, Mortgagor covenants
                  that it will not elect to treat such lease or sublease as
                  terminated under 11 U.S.C. Section 365(h) or any similar or
                  successor law or right and hereby assigns to Mortgagee the
                  sole and exclusive right to make or to refrain from making any
                  such election, and Mortgagor agrees that any such election, if
                  made by Mortgagor, shall be void and of no force or effect;

         (j)      If the lessor under such lease (or any receiver, keeper,
                  trustee, custodian or other party who succeeds to the rights
                  of such lessor) rejects or disaffirms such lease pursuant to
                  any bankruptcy, insolvency, reorganization, moratorium or
                  similar law and Mortgagee elects to have Mortgagor remain in
                  possession under any legal right Mortgagor may have to occupy
                  the premises leased pursuant to such lease, (i) Mortgagor
                  shall remain in such possession and shall perform all acts
                  necessary for Mortgagor to retain its legal rights and to
                  remain in such possession for the unexpired term of such lease
                  (including all renewals thereof), whether such acts are
                  required under the then existing terms and provisions of such
                  lease or otherwise, and (ii) all of the terms and provisions
                  of this Mortgage and the lien created hereby shall remain in
                  full force and effect and shall be extended automatically to
                  such possession, occupancy and interest of Mortgagor; and

         (k)      Mortgagor immediately upon obtaining knowledge of a breach by
                  the lessor under such lease (or by any receiver, keeper,
                  trustee, custodian or other party who succeeds to the rights
                  of such lessor) or any inability of such lessor (or any such
                  receiver, trustee, custodian or other party) to perform the
                  terms and provisions of such lease (including by reason of a
                  rejection or disaffirmance of such lease pursuant to any
                  bankruptcy, insolvency, reorganization, moratorium or similar
                  law), will notify Mortgagee of any such breach or inability.
                  Mortgagor shall, at its expense, diligently commence and
                  prosecute any proceedings as may be necessary or advisable
                  against such lessor in connection with such breach and shall,
                  upon the request of Mortgagee, deliver to Mortgagee copies of
                  all papers served in connection therewith; provided that no
                  settlement or compromise of any such proceeding shall be made
                  by Mortgagor without Mortgagee's prior written consent if such
                  settlement or compromise could have a material adverse effect
                  on the business, operations, property, assets, liabilities,
                  condition (financial or otherwise) or prospects of Mortgagor
                  with respect to the Premises.

         26. Power of Decision. Wherever Mortgagee exercises any right pursuant
to this Mortgage to approve, disapprove or consent, or any arrangement or term
is to be satisfactory to Mortgagee, the decision of Mortgagee to approve or
disapprove or to decide that arrangements or terms are satisfactory or not
satisfactory shall be in the sole discretion of Mortgagee and shall be final and
conclusive.



                                       19
<PAGE>   20


         27. Binding Effect. The covenants herein contained shall bind, and the
benefits and advantages shall inure to, the respective successors and/or assigns
of Mortgagor and Mortgagee.

         28. Amendments, Consents and Waivers in Writing and Related Matters

         (a)      No amendment or waiver of any provision of this Mortgage, nor
                  any consent by Mortgagee hereunder (including but not limited
                  to any consent to any departure by Mortgagee therefrom), shall
                  in any event be effective unless the same shall be in writing
                  and signed by Mortgagee and, with respect to an amendment, by
                  all of the parties thereto, and then such waiver or consent
                  shall be effective only in the specific instance and for the
                  specific purpose for which given.

         (b)      The provisions of this Mortgage shall be construed as a whole
                  according to their common meaning, not strictly for or against
                  any party and consistent with the provisions herein contained,
                  in order to achieve the objectives and purposes of this
                  document. Each party and its counsel have reviewed and revised
                  this Mortgage. Each party agrees that the normal rule of
                  construction to the effect that any ambiguities are to be
                  resolved against the drafting party shall not be employed in
                  the interpretation of this Mortgage.

         (c)      Any failure of Mortgagee to insist upon the strict performance
                  by Mortgagor of any of the terms and provisions hereof shall
                  not be deemed to be a waiver of any of the terms and
                  provisions hereof, and Mortgagee, notwithstanding any such
                  failure, shall have the right thereafter to insist upon the
                  strict performance by Mortgagor of any and all of the terms
                  and provisions of this Mortgage to be performed by Mortgagor.
                  Neither Mortgagor nor any person now or hereafter obligated
                  for the payment of the whole or any part of the sums now or
                  hereafter secured by this Mortgage shall be relieved of such
                  obligation by reason of the failure of Mortgagee to comply
                  with any request of Mortgagor, or of any other person so
                  obligated, to take action to foreclose or otherwise enforce
                  any of the provisions of this Mortgage or any obligations
                  secured by this Mortgage, or by reason of the release,
                  regardless of consideration, of the whole or any part of the
                  security held for the indebtedness secured by this Mortgage,
                  or by reason of any agreement or stipulation between any
                  subsequent owner or owners of the Property and Mortgagee
                  extending the time of payment or modifying the terms of the
                  indebtedness secured hereby or this Mortgage without first
                  having obtained the consent of Mortgagor or such other person,
                  and in the latter event, Mortgagor and all such other persons
                  shall continue to be liable to make such payment according to
                  the terms of any such agreement of extension or modification
                  unless expressly released and discharged in writing by
                  Mortgagee.

         (d)      Regardless of consideration and without the necessity for any
                  notice to or consent by the holder of any subordinate lien or
                  encumbrance on the Property, Mortgagee may release the
                  obligation of anyone at any time liable for



                                       20
<PAGE>   21


                  any of the Secured Obligations secured by this Mortgage or any
                  part of the security held for such Secured Obligations and
                  grant or agree to such extensions, indulgences and
                  modifications in relation to the Secured Obligations as
                  Mortgagee may determine, without the consent of the holder of
                  any such subordinate lien or encumbrance and without any
                  obligation to give notice of any kind thereto and without, as
                  to the security or the remainder thereof, in any way impairing
                  or affecting the lien hereof or the priority thereof over any
                  subordinate lien or encumbrance. Any subsequent encumbrances
                  of the Property are hereby, by virtue of this Section 28(d),
                  specifically given notice of the foregoing reservation of
                  rights.

         (e)      Mortgagee may resort for the payment and/or satisfaction of
                  the Secured Obligations to any other security therefor held by
                  Mortgagee in such order and manner as Mortgagee may elect.

         29. Notices. Except as otherwise expressly provided herein, all notices
or other communications required or permitted to be given or delivered pursuant
to this Mortgage shall be in writing and shall be given by hand delivery,
certified United States mail, prepaid, with return receipt requested, overnight
courier service or facsimile transmission with receipt confirmed. Any party
hereto may from time to time, by notice in writing served upon the other parties
hereto pursuant to this Section 29 designate a different address or person to
whose attention notices shall be given. Notices hereunder shall be deemed given
upon receipt. The addresses of the parties hereto for notices are:

                  Mortgagor:        JCC Canal Development, L.L.C.
                                    c/o JCC Holding Company
                                    365 Canal Street, Suite 900
                                    New Orleans, LA  70130
                                    Attention:  President

                  Mortgagee:        The Bank of New York, as Collateral Agent
                                    10161 Centurion Parkway
                                    Jacksonville, Florida 32256
                                    Attention:  Trust Department

         30. Remedies Cumulative. Each right, power, and remedy of Mortgagee
provided for herein and now or hereafter existing at law, in equity, by statute,
pursuant to any other loan document or otherwise shall be cumulative, and the
exercise by Mortgagee of any one or more of said rights, powers, or remedies
shall not preclude the simultaneous or later exercise by Mortgagee of any or all
of such other rights, powers, or remedies. Nothing in this Mortgage shall be
deemed to limit or modify any security interests or rights or remedies under any
other documents executed in connection with any of the Secured Obligations.

         31.      Reinscription of Mortgage



                                       21
<PAGE>   22


         (a)      Mortgagor shall reinscribe this Mortgage prior to the date on
                  which the lien of this Mortgage may prescribe by any
                  applicable prescriptive period.

         (b)      During the term of this Mortgage, Mortgagor shall cause this
                  Mortgage to be reinscribed in the manner provided by law in
                  the records of the Recorder of Mortgages for the Parish of
                  Orleans at least forty-five (45) days prior to the tenth
                  (10th) anniversary of the date of this Mortgage and within the
                  reinscription or continuation period provided in La. R.S.
                  ss.9:4401 and Louisiana Civil Code Article 3328, as the same
                  may be amended from time to time.

         (c)      The parties to this Mortgage hereby waive the production of
                  mortgage, conveyance, tax, assignment of accounts receivable
                  and other certificates and relieve and release the Notary
                  before whom this Mortgage was passed from all responsibilities
                  and liabilities in connection therewith.

         32.      [Intentionally omitted.]

         33. Intercreditor Agreement. Notwithstanding any other provision of
this Mortgage or any document or instrument executed by Mortgagor, this Mortgage
and all liens and security interests and rights granted herein, and the priority
thereof, are expressly subject to the provisions of the Intercreditor Agreement
which are incorporated herein by reference and made applicable hereto. In
addition, Mortgagee is the Collateral Agent, as defined in and pursuant to the
terms of the Intercreditor Agreement, and, notwithstanding anything herein to
the contrary, the rights, powers, remedies and obligations of Mortgagee
hereunder shall be subject to the provisions of the Intercreditor Agreement. Any
exercise or waiver by Mortgagee of any of its rights, powers or remedies
hereunder or any other act by Mortgagee hereunder shall be conclusive evidence
of Mortgagee's authority pursuant to the Intercreditor Agreement against all
persons other than the Secured Creditors.

         34. GOVERNING LAW. THIS MORTGAGE SHALL BE DEEMED TO BE A NEW YORK
CONTRACT AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (EXCLUDING MATTERS OF CONFLICT OF LAWS), EXCEPT THAT
MATTERS OF TITLE TO THE PROPERTY AND THE CREATION, PERFECTION, PRIORITY AND (TO
THE EXTENT REQUIRED) FORECLOSURE OF ANY MORTGAGES OR OTHER LIENS ON, AND
SECURITY INTERESTS IN, ANY PROPERTY AND MATTERS RELATING TO THE LOUISIANA GAMING
REGULATIONS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF LOUISIANA.

         35. Indemnification. Mortgagor shall indemnify and defend the Mortgagee
and its directors, officers, employees, agents and representatives (each an
"Indemnified Party") from and against all liabilities (including any
environmental liabilities), obligations, claims, losses, damages, penalties,
suits, actions, proceedings, judgments, costs and expenses (including reasonable
attorneys' fees and expenses) (collectively, "Liabilities"), imposed upon,
incurred by or asserted against any Indemnified Party in connection with the
Property or this Mortgage, except to the extent caused by the gross negligence
or willful misconduct of such Indemnified Party. In the




                                       22
<PAGE>   23


event any suit, action or proceeding (including any investigation or proceeding
initiated or conducted by any governmental authority or agency) is brought
against any Indemnified Party in connection with any Liability, such Indemnified
Party shall promptly notify Mortgagor and Mortgagor shall promptly retain
counsel in connection therewith, which counsel shall be reasonably acceptable to
such Indemnified Party, and shall pay the fees and expenses of such counsel
related to such suit, action or proceeding. The obligations of Mortgagor under
this Section 35 shall survive the release or termination of this Mortgage or the
foreclosure or transfer in lieu of foreclosure of the Property to the extent any
Liability relates to any action or event occurring prior to such release,
termination, foreclosure or transfer.

                            [Signature page follows]




                                       23
<PAGE>   24


         THUS DONE AND PASSED, on the day, month and year first written above,
in the State and County/Parish aforesaid, by the undersigned Mortgagor in the
presence of the undersigned first Notary and the undersigned competent
witnesses, who hereunto sign their names with Mortgagor after reading of the
whole.

WITNESSES:                          JCC CANAL DEVELOPMENT, L.L.C., a Louisiana
                                    limited liability company

                                    By:
------------------------------         ------------------------------------
                                    Name:
                                         ----------------------------------

                                    Title:
------------------------------            ---------------------------------


                      ------------------------------------
                                     Notary

                          (Commission issued for life.)



                                       24
<PAGE>   25


         THUS DONE AND PASSED, on the day, month and year first written above,
in the State and County/Parish aforesaid, by the undersigned Mortgagee in the
presence of the undersigned second Notary and the undersigned competent
witnesses, who hereunto sign their names with Mortgagee after reading of the
whole.

WITNESSES:                          THE BANK OF NEW YORK, not in its individual
                                    capacity, but solely as Collateral Agent

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

                                    Name:
                                          ---------------------------------

                                    Title:
------------------------------            ---------------------------------


                      ------------------------------------
                                     Notary

                          (Commission issued for life.)





                                       25
<PAGE>   26


                                   Exhibit "1"

                                Legal Description


A CERTAIN PIECE OR PORTION OF GROUND, situated in the Second District, City of
New Orleans, designated as Lot 3CP (Canal Place) on a plan of resubdivision by
the office of Gandolfo, Kuhn, Luecke & Associates, dated March 15, 1982 (Dwg.
No. E-170-12), approved by the City Planning Commission on July 8, 1982,
registered as Declaration of Title Change under Conveyance Office Book 783,
folio 63, and more particularly described as follows in accord with a survey
plat by Gandolfo, Kuhn & Associates (Dwg. No. T-182-5), dated October 20, 1998,
as follows:

Commence at the intersection of the northerly line of Canal Street and the
easterly line of North Peters Street, said point being designated by the letter
B; thence along the northerly line of Canal Street South 52 degrees 44 minutes
02 seconds East, 398.18 feet to the division line between Lots 2CP and 3CP and
being the point of beginning; thence along said division line North 37 degrees
15 minutes 58 seconds East, 169.50 feet; thence along said division line South
52 degrees 44 minutes 02 seconds East, 129.37 feet to the division line between
Lots 3CP and S-1; thence along said division line South 8 degrees 17 minutes 09
seconds West, 193.76 feet to the northerly line of Canal Street, thence along
said line, North 52 degrees 44 minutes 02 seconds West, 223.25 feet to the point
of beginning.



                                       26
<PAGE>   27


                                   Exhibit "2"


                             Permitted Encumbrances


1.       Servitudes created by Act of Destination of the owner on Lot 3CP, dated
         December 11, 1984, filed December 13, 1984, under Notarial Archives No.
         581425, Conveyance Office Book 798E, folio 150, and as shown on survey
         by Gandolfo, Kuhn & Associates on survey T-182-5, dated October 20,
         1998.

2.       The restrictions on the use and development of Lot 3CP, resulting from
         its inclusion in a Central Business Planned Community District (CBPCD)
         approved by City Planning Commission, Docket No. 51/80, evidenced by
         the recordation of Approved Plans registered at Conveyance Office Book
         769, folio 664, and approved by the New Orleans City Council under
         Ordinance No. 8046 MCS, Calendar No. 9715, adopted on March 19, 1981,
         as subsequently amended by Ordinance No. 8437 MCS, Calendar No. 10150,
         adopted on December 17, 1981, and Ordinance No. 10413 MCS, Calendar No.
         12376, adopted on March 21, 1985, and Ordinance No. 12167 MCS, Calendar
         No. 14,418, adopted December 17, 1987.

3.       Encroachments onto Lot 3CP by improvements appurtenant to Lot 2CP, as
         shown on survey of Gandolfo, Kuhn, & Associates, Dwg. No. T-182-5,
         dated October 20, 1998.

4.       Apparent servitude of passage as evidenced by the brick walk and
         concrete walk appurtenant to the land, as shown on the plat of survey
         by Gandolfo, Kuhn & Associates, Drawing No. T-182-3, dated October 20,
         1998.

5.       Encroachment upon Lot 2CP by the concrete slab appurtenant to the land,
         as shown on the plat of survey by Gandolfo, Kuhn & Associates, Drawing
         No. T-182-3, dated October 20, 1998.

6.       Encroachment upon Lot S-1 by the concrete for the parking attendant
         booth appurtenant to Lot 3CP, as shown on the plat of survey by
         Gandolfo, Kuhn & Associates, Drawing No. T-182-3, dated October 20,
         1998.