Document:

<PAGE>

                                                                     EXHIBIT 4.3

               COLLATERAL ASSIGNMENT OF CONTRACTS AND DOCUMENTS
               ------------------------------------------------

     THIS COLLATERAL ASSIGNMENT OF CONTRACTS AND DOCUMENTS (the "Assignment") is
                                                                 ----------
made as of June 15, 2001, by HOLLYWOOD CASINO SHREVEPORT, a Louisiana general
partnership (the "Company"), in favor of STATE STREET BANK AND TRUST COMPANY, a
                  -------
Massachusetts chartered trust company, acting on behalf of the Holders of the
Notes under (and as defined in) the Indenture described below ("Trustee").
                                                                -------

                                   Recitals
                                   --------

     A. The Company and Shreveport Capital Corporation, a Louisiana corporation
("Shreveport Capital", and together with the Company, the "Issuers"), have
  ------------------                                       -------
entered into an Indenture dated as of June 15, 2001 (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the "Indenture")
                                                                     ---------
with the Trustee, pursuant to which the Issuers will issue up to $39,000,000 of
their 13% Senior Secured Notes due 2006 With Contingent Interest (as the same
may be amended, supplemented, restated, exchanged, replaced or otherwise
modified from time to time, collectively, the "Notes").
                                               -----

     B. The parties have entered into this Assignment to evidence the Company's
collateral assignment for security of certain contracts and documents related to
the operation of the Shreveport Resort.  Capitalized terms used herein without
definition shall have the meanings assigned to such terms in the Indenture.

                                   Agreement
                                   ---------

     NOW, THEREFORE, in consideration of the foregoing premises and in order to
induce the Holders of the Notes to purchase the Notes, the Company agrees as
follows:

     1.   Assignment.  As security for the due and punctual payment and
          ----------
performance of all indebtedness and obligations of the Issuers, now or hereafter
due under the Indenture, the Notes or any Collateral Documents, whether or not
arising after the commencement of a proceeding under Bankruptcy Law (including
post-petition interest) and whether or not recovery of any such obligation or
liability may be barred by a statute of limitations or prescriptive period or
such obligation or liability may otherwise be unenforceable (collectively, the

"Obligations"), the Company hereby assigns and transfers to the Trustee and
 -----------
hereby grants to the Trustee a security interest in all of the Company's right,
title and interest, whether now existing or hereafter arising and whether now
owned or hereafter acquired, in and to (a) all contracts, including without
limitation, service agreements, supply agreements and other such contracts and
agreements between the Company and other persons, and all amendments,
modifications, additions and changes thereto, related to the Shreveport Resort,
(b) the Management Agreement, (c) the License Agreement, (d) all other
contracts, agreements, documents and instruments now existing or hereafter
arising related to the operation of the Shreveport Resort, including without
limitation, any and all bonds, permits, licenses and other governmental
approvals and (e) all proceeds of the foregoing (all items described in
subsections (a) thorough (e), collectively, the "Contracts and Documents").
                                                 -----------------------
Notwithstanding the foregoing, the amount of Obligations secured by this
Assignment and the amount of proceeds from any enforcement or exercise of any
right or
<PAGE>

remedy with respect to the collateral secured pursuant to this Assignment shall
be limited to an amount equal to the sum of $10,000,000 in principal amount of
the Notes plus all related Obligations. Notwithstanding the foregoing, the
Contracts and Documents shall not include any license, permit, contract,
document or other approval of or by any Governmental Authority or person or
entity to the extent that, under the terms and conditions of such approval,
contract, document or under applicable law, it cannot be subjected to a Lien in
favor of the Trustee without the approval of the relevant Governmental Authority
or person or entity, as the case may be, to the extent that such approval has
not been obtained (collectively, the "Excluded Assets"); provided further, that
                                      ---------------
(i) any such Excluded Asset now or hereafter acquired by the Company shall
automatically become part of the Contracts and Documents when and to the extent
it may subsequently be made subject to such a Lien and/or such approval has been
obtained and (ii) proceeds of any Excluded Assets, such as Gaming Licenses,
shall nevertheless be subject to the assignment hereunder. The Contracts and
Documents include, without limitation, those certain contracts and agreements
described in Exhibit A attached hereto (the "Major Documents").
                                             ---------------

     2.   Rights of the Company.  This Assignment is an absolute assignment for
          ---------------------
security purposes only.  Accordingly, notwithstanding anything to the contrary
set forth herein, the Company is hereby granted a license and shall retain all
rights with respect to the Contracts and Documents, including, without
limitation, the right to enforce all rights of the Company thereunder, except
during a period when an Event of Default has occurred and is continuing.

     3.   Representations and Warranties of the Company.  The Company represents
          ---------------------------------------------
and warrants to the Trustee (a) other than as granted by the Collateral
Assignment of Contracts and Documents granted to the Existing Notes Trustee
pursuant to the Existing Indenture, it has not assigned or granted a security
interest in any of the Contracts and Documents or the proceeds thereof to
anyone, and has not executed any instrument which might prevent or limit Trustee
from operating under the terms and conditions of the assignment contemplated
hereby, and (b) that it is not in default and that no event has occurred that
with notice or lapse of time or both would constitute a default by the Company,
or to its knowledge any other party, under any of the Contracts and Documents.

     4.   Covenants of the Company.  The Company covenants and agrees in favor
          ------------------------
of the Trustee that (a) it will not further assign, encumber or suffer the
assignment or encumbrance of any of the Contracts and Documents or the proceeds
thereof without the prior written consent of the Trustee pursuant to or as
expressly permitted under the Indenture, (b) it will perform and discharge each
and every material obligation, covenant and agreement of the Company under the
Major Documents and (c) to the extent prohibited by the Indenture, it will not
modify, amend, supplement or in any way join in the release or discharge of any
obligations or rights of the Company under any of the Major Documents in any
material way.

     5.   Limitation of Trustee's Obligations.  Nothing in this Assignment shall
          -----------------------------------
constitute an assumption of any obligation by the Trustee under the Contracts
and Documents.  The Company shall continue to be liable for all obligations
thereunder, and to take such steps as it deems reasonably necessary or
appropriate to secure performance by all other parties thereto.  The Company
shall defend, indemnify and hold the Trustee harmless from and against all
losses, costs, liabilities and expenses, including reasonable attorneys' fees,
arising from or related to any

                                       2
<PAGE>

failure by the Company to perform any obligation of the Company under any of the
Contracts and Documents, such indemnity and hold harmless agreement to survive
the payment and performance of the Obligations.

     6.   Cure by Trustee.  At any time upon and during the continuation of an
          ---------------
Event of Default, the Trustee shall have the right, but shall have no
obligation, to take all actions that the Trustee may determine to be necessary
or appropriate to cure any default under any of the Contracts and Documents and
to protect the rights of the Company or the Trustee thereunder, and may do so in
the Trustee's name, in the name of the Company or otherwise.  If any such action
taken by the Trustee shall prove to be inadequate or invalid in whole or in
part, the Trustee shall not incur any liability on account thereof, and the
Company hereby agrees to defend, indemnify and hold the Trustee harmless from
and against all losses, costs, liabilities and expenses, including reasonable
attorneys' fees, which the Trustee may incur or to which it may become subject
in exercising any of its rights under this Assignment, except for those arising
from the gross negligence or willful misconduct of the Trustee, such indemnity
and hold harmless agreement to survive the payment and performance of the
Obligations.

     7.   Rights and Remedies
          -------------------

     (a)  Upon the occurrence and during the continuance of an Event of Default
under the Indenture irrespective of whether a notice of default has been given
with respect to such Event of Default (unless required by the Indenture or any
other Collateral Document), and with or without bringing any action or
proceeding, the Trustee may, at its option, succeed to and proceed to enforce
all of the rights, interests and remedies of the Company under the Contracts and
Documents, amend, modify, cancel, terminate or replace the same, reassign the
Company's right, title and interest therein to any other person, and exercise
any and all other rights of the Company under the Contracts and Documents,
either in person or through an agent, receiver or keeper, without further notice
to or consent by the Company, and without regard to the adequacy of security for
the Obligations or the availability of any other remedies.  The exercise of any
of the foregoing rights or remedies shall not cure or waive any Default under
the Indenture, or waive, modify or affect any notice of default thereunder, or
invalidate any act done pursuant to any such notice.  In addition to the rights
and remedies of the Trustee as set forth in this Assignment, the Trustee shall
be entitled to the benefit of all other rights and remedies set forth in the
Indenture, in other Collateral Documents, at law or in equity.

     (b)  The provisions of this Subparagraph 7(b) shall, without limiting the
generality of any other provision of this Assignment, be applicable in the event
any foreclosure shall take place in Louisiana on any right, title or interest of
the Company in and to the Contracts and Documents or any proceeds thereof or, in
connection with any foreclosure hereunder, Louisiana law shall otherwise be
applicable.  Trustee may proceed by a suit or suits at law or in equity to
foreclose this Assignment and sell its right, title and interest to the
Contracts and Documents and the proceeds, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.  For the
purposes of Louisiana executory process procedures, the Company does hereby
acknowledge the Obligations and confess judgment in favor of Trustee for the
full amount of such Obligations.  The Company does by these presents consent and
agree that during the continuance of an Event of Default under the Indenture it
shall be lawful for Trustee to cause all

                                       3
<PAGE>

of its right, title and interest to the Contract and Documents and the proceeds,
or any portion thereof, to be seized and sold under executory or ordinary
process, at Trustee's sole option, without appraisement, appraisement being
hereby expressly waived, to the highest bidder, and otherwise exercise the
rights, powers and remedies afforded herein and under applicable Louisiana law.
Any and all declarations of fact made by authentic act before a Notary Public in
the presence of two (2) witnesses by a person declaring that such facts lie
within his knowledge shall constitute authentic evidence of such facts for the
purpose of executory process. The Company hereby waives in favor of Trustee: (a)
the benefit of appraisement as provided in Louisiana Code of Civil Procedure
Articles 2332, 2336, 2723 and 2724, and all other laws conferring the same; (b)
the demand and three (3) days delay accorded by Louisiana Code of Civil
Procedure Articles 2639 and 2721; (c) the notice of seizure required by
Louisiana Code of Civil Procedure Articles 2293 and 2721; (d) the three (3) days
delay provided by Louisiana Code of Civil Procedure Articles 2331, and 2722; and
(e) benefit of the other provisions of Louisiana Code of Civil Procedure
Articles 2331, 2722 and 2723 not specifically mentioned above. In the event the
Company's right, title or interest in and to the Contracts and Documents or any
proceeds thereof, or any part thereof, is seized as an incident to an action for
the recognition or enforcement of this Assignment by executory process, ordinary
process, sequestration, writ of fieri facias, or otherwise, the Company and
Trustee agree that the court issuing any such order shall, if petitioned for by
Trustee, direct the applicable sheriff or marshal to appoint as a keeper of the
Company's right, title or interest in and to the Contracts and Documents and the
proceeds, if applicable, Trustee or any agent designated by Trustee or any
Person named by Trustee at the time such seizure is effected. This designation
is pursuant to Louisiana Revised Statutes 9:5136-9:5140.2 and Trustee shall be
entitled to all the rights and benefits afforded thereunder as the same may be
amended. It is hereby agreed that the keeper shall be entitled to receive as
compensation, in excess of its reasonable costs and expenses incurred in the
administration or preservation of the Company's right, title or interest in and
to the Contracts and Documents and the proceeds, an amount equal to $250.00 per
day payable on a monthly basis. The designation of keeper made herein shall not
be deemed to require Trustee to provoke the appointment of such a keeper.

     8.   Additional Instruments.  With respect to both existing and future
          ----------------------
Contracts and Documents, the Company hereby agrees to execute and deliver such
additional assignments and other documents as the Trustee may reasonably request
in order to implement the purpose and intent of this Assignment.

     9.   Miscellaneous.  This Assignment shall inure to the benefit of and be
          -------------
binding upon the parties hereto and their respective heirs, legal
representatives, successors and assigns.  In any action or proceeding arising
from or related to this Assignment, the prevailing party shall be entitled to
recover its reasonable costs and attorneys' fees.  The reference to "attorneys'
fees" in this Paragraph and in all other places in this Assignment shall include
without limitation such reasonable amounts as may then be charged by the Trustee
for legal services furnished by attorneys in the employ of the Trustee, at rates
not exceeding those that would be charged by outside attorneys for comparable
services.  This Assignment shall be governed by the laws of the State of New
York.

                                       4
<PAGE>

     10.  Gaming Laws and Regulations.  To the extent required under applicable
          ---------------------------
law, the consummation of the transactions contemplated hereby and the exercise
of remedies hereunder may be subject to the Louisiana Riverboat Economic
Development and Gaming Control Act, La. R.S. 27:41, et seq., and the Louisiana
                                                    -- ----
Gaming Control Law, La. R.S. 27:1, and the regulations promulgated pursuant to
each such law, all as amended from time to time.  The Gaming License held by the
Company is not part of the Collateral of this Assignment and, under the above
described legislation and rules promulgated thereunder, the Trustee may be
precluded from or otherwise limited in taking possession of or in selling the
Collateral of this Assignment under the defaults and remedies provisions of this
Assignment.  Due to various legal restrictions, including, without limitation,
licensing of operators of gaming facilities and prior approval of the sale or
disposition of assets of a licensed gaming operation, the sale of Collateral may
be denied by Gaming Authorities or delayed pending Gaming Authority approval.

     11.  Conflicts with Indenture.  Notwithstanding any other provision of this
          ------------------------
Assignment, the terms and provisions of this Assignment shall be subject and
subordinate to the terms of the Indenture.  To the extent that the Indenture
provides the Company with a particular cure or notice period, or establishes any
limitations or conditions on Trustee's actions with regard to a particular set
of facts, the Company shall be entitled to the same cure periods and notice
periods, and Trustee shall be subject to the same limitations and conditions in
place of the cure periods, notice periods, limitations and conditions provided
for under the Indenture; provided, however, such cure periods, notice periods,
limitations and conditions shall not be cumulative as between the Indenture and
this Assignment.  In the event of any conflict or provisions of this Assignment
and those of the Indenture, including, without limitation, any conflicts or
inconsistencies in any definitions herein or therein, the provisions or
definitions of the Indenture shall govern.

     12.  Trustee.  State Street Bank and Trust Company is acting hereunder
          -------
solely in its capacity as Trustee under the Indenture, and all of the rights of
Trustee set forth in the Indenture shall apply to Trustee's actions hereunder.
To the extent this Agreement contemplates payments by the Trustee, the Trustee
shall have no liability therefor, such liability continuing to be the liability
of Company or realized through the value of any collateral for the obligations
under the Indenture.

     13.  Intercreditor Agreement.  Notwithstanding anything to the contrary
          -----------------------
contained herein, the Trustee acknowledges solely with respect to the Pari Passu
Collateral (a) its status as a Pari Passu Party (as defined in the Pari Passu
Intercreditor Agreement) and (b) that this Agreement is subject to the terms of
the Pari Passu Intercreditor Agreement.

                                       5
<PAGE>

     IN WITNESS WHEREOF, the Company has executed this Assignment as of the date
first above written.
                              HOLLYWOOD CASINO SHREVEPORT, a Louisiana general
                              partnership

                              By: HCS I, Inc., a Louisiana corporation, its
                                  managing general partner

                                  By: ______________________________________
                                  Name:   Edward T. Pratt III
                                  Title:  President

     [Signature Page to Collateral Assignment of Contracts and Documents]

                                      S-1
<PAGE>

                                   EXHIBIT A

                            CONTRACTS AND DOCUMENTS
                            -----------------------

1.   License Agreement dated as of August 10, 1999 by and between Company and
     Hollywood Casino Corporation, a Delaware corporation.

2.   Management Services Agreement dated as of September 22, 1998, as amended,
     by and between Company and HWCC-Shreveport, Inc., a Louisiana corporation.

                                      A-1<PAGE>
                                                                     EXHIBIT 4.4

                              SECURITY AGREEMENT
                              ------------------
                                 (Partnership)

                                    Made by

                         HOLLYWOOD CASINO SHREVEPORT,

                                   as Debtor

                                      to

                     STATE STREET BANK AND TRUST COMPANY,
                       as New Trustee and Secured Party

               Acting on behalf of the Holders of the New Notes

                                 June 15, 2001
<PAGE>

                              SECURITY AGREEMENT
                              ------------------
                                 (Partnership)

          THIS SECURITY AGREEMENT (this "Agreement") is made as of June 15,
                                         ---------
2001, by HOLLYWOOD CASINO SHREVEPORT, a Louisiana general partnership (the
"Debtor"), in favor of STATE STREET BANK AND TRUST COMPANY, a Massachusetts
 ------
trust company, as trustee (the "New Trustee"), acting on behalf of the holders
                                -----------
of the New Notes under the New Indenture referred to and defined below (the
"Secured Party").
 -------------

                             W I T N E S S E T H:
                             - - - - - - - - - -

          A.   Debtor and Shreveport Capital Corporation, a Louisiana
corporation ("Shreveport Capital," and together with the Debtor, the "Issuers"),
              ------------------                                      -------
have entered into an Indenture dated as of the date hereof (as may be amended,
supplemented, restated or otherwise modified from time to time, the "New
                                                                     ---
Indenture") with the New Trustee, pursuant to which the Issuers will issue
---------
$39,000,000 in the aggregate principal amount of 13% Senior Secured Notes due
2006 with Contingent Interest (as the same may be amended, supplemented,
restated, exchanged, replaced or otherwise modified from time to time,
collectively, the "New Notes").
                   ---------

          B.   Previously, the Issuers and certain Guarantors (as defined in the
Existing Indenture) entered into an indenture dated as of August 10, 1999 (the
"Existing Indenture") with State Street Bank and Trust Company, a Massachusetts
 ------------------
trust company, as trustee, acting on behalf of the holders of the Existing Notes
under the Existing Indenture (the "Existing Trustee"), pursuant to which the
                                   ----------------
Issuers issued $150,000,000 of their 13% First Mortgage Notes due 2006 with
Contingent Interest (as amended, supplemented, restated, exchanged, replaced or
otherwise modified from time to time, collectively, the "Existing Notes").
                                                         --------------

          C.   As a condition precedent to the purchase of the New Notes under
the New Indenture, Debtor must execute and deliver this Agreement granting
Secured Party a security interest in the Collateral (as hereinafter defined).

          D.   Certain of the Collateral is subject to one or more Liens in
favor of the holders of the Existing Notes. The nature and priority of the Liens
in favor of the holders of the New Notes and the holders of the Existing Notes
are governed in certain respects by the Intercreditor Agreements (as hereinafter
defined).

          E.   Based on the foregoing premises, and in order to comply with the
terms and conditions of the New Indenture and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Debtor hereby agrees with Secured Party as follows:
<PAGE>

                                   ARTICLE 1
                                  DEFINITIONS
                                  -----------

     Section 1.01  Definitions.  When used herein, (a) the terms Certificated
                   -----------
Security, Chattel Paper, Deposit Account, Document, Equipment, Financial Asset,
Fixture, Goods, Inventory, Instrument, Investment Property, Security, Security
Entitlement and Uncertificated Security have the respective meanings assigned
thereto in the Code (as defined below); (b) capitalized terms which are not
otherwise defined have the respective meanings assigned thereto in the New
Indenture; and (c) the following terms have the following meanings (such
definitions to be applicable to both the singular and plural forms of such
terms):

          Account Debtor means the party who is obligated on or under any
          --------------
Account Receivable, Contract Right or General Intangible.

          Account Receivable means any right of Debtor to payment for goods sold
          ------------------
or leased or for services rendered.

          Code means the Uniform Commercial Code as in effect from time to time
          ----
in the State of New York; provided that, if by reason of mandatory provisions of
                          -------- ----
law, the perfection or the effect of perfection or non-perfection of the
security interests in any Collateral is governed by the Uniform Commercial Code
as in effect in any jurisdiction other than the State of New York, "Code" means
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection or the effect of perfection
or non-perfection.

          Collateral means all property and rights of Debtor in which a security
          ----------
interest is granted hereunder.

          Computer Hardware and Software means all of Debtor's rights (including
          ------------------------------
rights as licensee and lessee) with respect to (i) computer and other electronic
data processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (ii) all software programs designed for use on
the computers and electronic data processing hardware described in clause (i)
                                                                   ----------
above, including all operating system software, utilities and application
programs in whatsoever form (source code and object code in magnetic tape, disk
or hard copy format or any other listings whatsoever); (iii) any firmware
associated with any of the foregoing; and (iv) any documentation for hardware,
software and firmware described in clauses (i), (ii) and (iii) above, including
                                   -----------  ----     -----
flow charts, logic diagrams, manuals, specifications, training materials, charts
and pseudo codes.

          Contract Rights means any rights of Debtor (including, without
          ---------------
limitation, all rights to payment) under each Contract.

          Contracts means all contracts or other agreements between Debtor and
          ---------
one or more additional parties, including, without limitation, all of the
contracts described on Exhibit C attached hereto.
                       ---------

                                       2
<PAGE>

          Event of Default has the meaning set forth in Section 7.01 hereof.
          ----------------

          Existing Collateral Documents means the Collateral Documents (as
          -----------------------------
defined in the Existing Indenture).

          FF&E Collateral or FF&E means all of Debtor's furniture, fixtures and
          ---------------    ----
equipment as generally described on Part 1 of Schedule A attached hereto and
                                              ----------
more specifically described on Part 2 of Schedule A attached hereto (as may be
                                         ----------
supplemented, amended or modified from time to time), whether now or hereafter
deemed to be (i) a movable, (ii) affixed to the immovable (real) property such
that it may be deemed a component part of the immovable (real) property, or
(iii) an appurtenance of the Vessel, in each case, under applicable Louisiana or
federal law, or otherwise, and, in each such case, together with all
substitutions therefor, replacements thereof and additions thereto, and all
proceeds of and from any and all of the foregoing, excluding the New FF&E.

          General Intangibles means all of Debtor's "general intangibles" as
          -------------------
defined in the Code and, in any event, includes (without limitation) all of
Debtor's trademarks and goodwill of the business relating thereto, trade names,
patents, copyrights, trade secrets, customer lists, inventions, designs,
software programs, mask works, registrations, licenses, franchises, tax refund
claims, guarantee claims, security interests, rights to indemnification, all
contractual rights and obligations or indebtedness owing to Debtor from whatever
source arising, all things in action, rights represented by judgments, claims
arising out of tort and other claims relating to the Collateral (including the
right to assert and otherwise be the proper party of interest to commence and
prosecute actions), and all rights in respect of any pension plan or similar
arrangement maintained for employees of Debtor.

          Intellectual Property means all past, present and future:  trade
          ---------------------
secrets and other proprietary information; trademarks, service marks, business
names, designs, logos, indicia and other source and/or business identifiers, and
the goodwill of the business relating thereto and all registrations or
applications for registrations which have heretofore been or may hereafter be
issued thereon throughout the world; copyrights (including copyrights for
computer programs) and copyright registrations or applications for registrations
which have heretofore been or may hereafter be issued throughout the world and
all tangible property embodying the copyrights; unpatented inventions (whether
or not patentable); patent applications and patents; industrial designs,
industrial design applications and registered industrial designs; license
agreements related to any of the foregoing and income therefrom; books, records,
writings, computer tapes or disks, flow diagrams, specification sheets, source
codes, object codes and other physical manifestations, embodiments or
incorporations of any of the foregoing; the right to sue for all past, present
and future infringements of any of the foregoing; and all common law and other
rights throughout the world in and to all of the foregoing.

          Intercreditor Agreements means (i) the Pari Passu Intercreditor
          ------------------------
Agreement and (ii) that certain FF&E Intercreditor Agreement, dated as of June
15, 2001, among the New Trustee,

                                       3
<PAGE>

the Existing Trustee and the debtor, as amended, supplemented or otherwise
modified from time to time.

          New Collateral Documents means this Agreement and all other Collateral
          ------------------------
Documents (as defined in the New Indenture).

          New FF&E means such items of furniture, fixtures and equipment
          --------
acquired by the Debtor after the date hereof, the acquisition of which has been
financed by the proceeds of New FF&E Financing.

          New FF&E Financing means purchase money financing (including any
          ------------------
refinancing thereof constituting Permitted Refinancing Indebtedness) permitted
under the New Indenture used to acquire the New FF&E.

          Non-Tangible Collateral means collectively, Debtor's Accounts
          -----------------------
Receivable, Contract Rights and General Intangibles.

          Obligations means (i) the payment when due of indebtedness evidenced
          -----------
by the New Notes in the principal sum not to exceed at any time outstanding of
$39,000,000, interest (including post-petition interest) as set forth in the New
Indenture and the New Notes, and premiums, penalties, and late charges thereon;
(ii) all other indebtedness and other sums (including, without limitation, all
expenses, attorneys' fees, other fees, indemnifications, reimbursements,
damages, other monetary liabilities, and other charges) and obligations that may
or shall become due hereunder or under the New Notes, the New Indenture or the
Collateral Documents; and (iii) any and all renewals, modifications, amendments,
extensions for any period, supplements or restatements of any of the foregoing.

          Obligor means any Person, other than Debtor, liable (whether directly
          -------
or indirectly, primarily or secondarily) for the payment or performance of any
of the Obligations whether as maker, co-maker, endorser, guarantor,
accommodation party, general partner or otherwise.

          Pari Passu Intercreditor Agreement means that certain Pari Passu
          ----------------------------------
Intercreditor Agreement, dated as of June 15, 2001, among the Existing Trustee,
the New Trustee and the Debtor, as amended, supplemented or otherwise modified
from time to time.

          Permitted Liens means "Permitted Liens" as defined in Section 1.01 of
          ---------------
the New Indenture; provided, however, that with respect to FF&E, "Permitted
Liens" shall only mean and be limited to (i) the Liens described in clauses (6),
(9) and (10) of such definition, (ii) Liens to secure the performance of
statutory obligations incurred in the ordinary course of business, (iii) Liens
incurred in the ordinary course of business in connection with workers'
compensation, unemployment insurance and social security benefits, and (iv) the
Liens arising from the Existing Collateral Documents (as in effect on the date
hereof), only to the extent a court of competent jurisdiction determines that
any particular item of FF&E is a component part of the immovable (real) property
or an appurtenance of the Vessel for purposes of applicable Louisiana or federal
law ("Fixed FF&E"), and, in such case, only with respect to such item of Fixed
      ----------
FF&E.

                                       4
<PAGE>

          Restricted FF&E Amount has the meaning set forth in Section 2.01
          ----------------------
hereof.

          Restricted Pari Passu Amount has the meaning set forth in Section 2.01
          ----------------------------
hereof.

          Vessel means any vessel owned by Debtor (including, without
          ------
limitation, that certain riverboat owned by Debtor, Official No. 1099497),
whether now owned or acquired or delivered to Debtor in the future, whether or
not such Vessel is a vessel within the meaning of 46 U.S.C. (S) 31322(a), and
all rights of the Debtor therein, including all equipment, parts and
accessories, including, but not limited to, all of its boilers, engines,
generators, air compressors, machinery, masts, spars, sails, riggings, boats,
anchors, cables, chains, tackle, tools, pumps and pumping equipment, motors,
apparel, furniture, computer equipment, electronic equipment used in connection
with the operation of the Vessel and belonging to the Vessel, all machinery,
equipment, engines, appliances and fixtures for generating or distributing air,
water, heat, electricity, light, fuel or refrigeration, or for ventilating or
sanitary purposes, fittings and equipment, supplies, spare parts, fuel, and all
other appurtenances thereunto appertaining or belonging, whether now owned or
hereafter acquired, whether or not on board said Vessel, and all extensions,
additions, accessions, improvements, renewals, substitutions, and replacements
hereafter made in or to said Vessel or any part thereof, or in or to any said
appurtenances.

                                   ARTICLE 2
                               SECURITY INTEREST
                               -----------------

       Section 2.01  Grant of Security Interest. As security for the prompt and
                     --------------------------
complete payment and performance of the Obligations, Debtor grants to Secured
Party a continuing security interest in, Lien upon, and right of set-off against
the following, whether now or hereafter existing or acquired:

          All of Debtor's right, title and interest in, to and under the
following:

          (i)    Accounts Receivable;

          (ii)   Certificated Securities;

          (iii)  Chattel Paper;

          (iv)   Computer Hardware and Software and all rights with respect
                 thereto, including, any and all licenses, options, warranties,
                 service contracts, program services, test rights, maintenance
                 rights, support rights, improvement rights, renewal rights and
                 indemnifications, and any substitutions, replacements,
                 additions or model conversions of any of the foregoing;

          (v)    all Contracts, together with all Contract Rights arising
                 thereunder;

          (vi)   Deposit Accounts;

          (vii)  Documents;

                                       5
<PAGE>

          (viii)  Financial Assets;

          (ix)    General Intangibles;

          (x)     Goods (including all of its Equipment, Fixtures and Inventory)
                  and all accessions, additions, attachments, improvements,
                  substitutions and replacements thereto and therefor;

          (xi)    Instruments;

          (xii)   Intellectual Property;

          (xiii)  Investment Property;

          (xiv)   letters of credit and letter of credit rights;

          (xv)    money (of every jurisdiction whatsoever);

          (xvi)   proceeds of any litigation, arbitration or similar proceeding;

          (xvii)  Security Entitlements;

          (xviii) Uncertificated Securities;

          (xix)   the FF&E, and all indemnities, warranties and guaranties
                  payable by reason of loss or damage to or with respect to any
                  FF&E;

          (xx)    the Vessel; and

          (xxi)   to the extent not included in the foregoing, all other
                  personal property of any kind or description, wherever located
                  and whenever acquired;

          together with all books, records, writings, data bases, information
          and other property relating to, used or useful in connection with, or
          evidencing, embodying, incorporating or referring to any of the
          foregoing, and all proceeds, products, offspring, rents, issues,
          profits and returns of and from any of the foregoing; provided that to
                                                                --------
          the extent that the provisions of any lease or license of Computer
          Hardware and Software or Intellectual Property expressly prohibit
          (which prohibition is enforceable under applicable law) the grant of a
          security interest therein, Debtor's rights in such lease or license
          shall be excluded from the foregoing grant for so long as such
          prohibition continues, it being understood that upon request of the
                                 -------------------
          New Trustee, Debtor will in good faith use reasonable efforts to
          obtain consent for the creation of a security interest in favor of the
          New Trustee in Debtor's rights under such lease or license.

          Notwithstanding the foregoing provisions of this Section 2.01, such
          grant of security interest shall not extend to, and the term
          "Collateral" shall not include (i) any of the New FF&E, and (ii) any
          of the foregoing property that is, pursuant to

                                       6
<PAGE>

          mandatory provisions of applicable law, prohibited from being pledged
          as security; provided that, with respect to this clause (ii), upon the
                       --------
          termination of such prohibitions for any reason whatsoever or in the
          event such prohibitions are or become unenforceable under applicable
          law, such foregoing property shall automatically become Collateral
          hereunder and, provided further, that upon request of the New Trustee,
                         -------- -------
          Debtor will in good faith use reasonable efforts to obtain consent for
          the creation of a security interest in favor of the New Trustee in
          Debtor's rights under such lease or license. Notwithstanding the
          foregoing, so long as no Event of Default shall have occurred and be
          continuing, all dividends, distributions, interest and principal
          payments, cash, instruments, and other property and proceeds made upon
          or with respect to or of the Collateral may be used by such Debtor
          subject to the terms and conditions of the New Indenture. Upon the
          occurrence and during the continuance of an Event of Default, all
          rights of such Debtor to receive all such dividends, distributions,
          interest and principal payments, cash, instruments and other property
          and proceeds shall cease, and such dividends, distributions, interest
          and principal payments, cash, instruments and other property and
          proceeds shall be paid or otherwise delivered to the Secured Party. It
          is expressly contemplated that additional property may from time to
          time be pledged, assigned or granted to Secured Party as additional
          security for the Obligations, and the term "Collateral" as used herein
          shall be deemed for all purposes hereof to include all such additional
          property, together with all other property of the types described
          above related thereto.

          Notwithstanding the foregoing provisions of this Section 2.01, the
          amount of Obligations secured by the Collateral other than the FF&E
          Collateral (the "Pari Passu Collateral") and the amount of proceeds
          from any enforcement or exercise of any right or remedy with respect
          to the Pari Passu Collateral pursuant to Section 7.02 of this
          Agreement or pursuant to the corresponding provisions of any other New
          Collateral Document that may be applied to the Obligations pursuant to
          such provisions shall be limited to an amount equal to the sum of
          $10,000,000 in principal amount of the New Notes plus all related
          Obligations (the "Restricted Pari Passu Amount"); and the amount of
          Obligations secured by the FF&E Collateral and the amount of proceeds
          from any enforcement or exercise of any right or remedy with respect
          to the FF&E Collateral pursuant to Section 7.02 of this Agreement or
          pursuant to the corresponding provisions of any other New Collateral
          Document that may be applied to the Obligations pursuant to such
          provisions shall be limited to an amount equal to the sum of
          $29,000,000 in principal amount of the New Notes plus all related
          Obligations (the "Restricted FF&E Amount").

                                       7
<PAGE>

                                   ARTICLE 3
                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

          In order to induce Secured Party to accept this Agreement, Debtor
represents and warrants to Secured Party (which representations and warranties
will survive the creation and payment of the Obligations) that:

     Section 3.01  Ownership of Collateral; Absence of Encumbrances and
                   ----------------------------------------------------
Restrictions.  After giving effect to the use of the proceeds of the New Notes,
------------
Debtor is, and in the case of property acquired after the date hereof, will be,
the sole legal and beneficial owner of the Collateral (including, without
limitation, the FF&E) holding good and indefeasible title to the same, free and
clear of all Liens except for Permitted Liens and Debtor has full right, power
and authority to assign and grant a security interest in the Collateral to
Secured Party.

     Section 3.02  No Required Consent. Except for such authorizations, consents
                   -------------------
or approvals previously obtained and in effect, no authorization, consent,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body (other than the filing of financing statements and
the other documents required to perfect or maintain the perfection of the Liens
granted hereby) is required for (i) the due execution, delivery and performance
by Debtor of this Agreement, (ii) the grant by Debtor of the security interest
granted by this Agreement, (iii) the perfection of such security interest or
(iv) the exercise by Secured Party of its rights and remedies under this
Agreement, except as may be required by applicable gaming laws or in connection
with the disposition of Collateral or by federal or state securities laws or
antitrust laws.

     Section 3.03  Security Interest. After giving effect to the use of proceeds
                   -----------------
of the New Notes, the grant of the security interest in and Lien on the
Collateral pursuant to this Agreement creates a valid and continuing security
interest in and Lien on the Collateral, enforceable against Debtor, and, upon
the filing of financing statements in the appropriate office for the locations
of the Collateral described on Exhibit A hereof, the security interests granted
                               ---------
hereby will be perfected, prior to all other Liens except Permitted Liens,
enforceable against third parties and securing payment of the Obligations.

     Section 3.04  No Filings By Third Parties. After giving effect to the use
                   ---------------------------
of proceeds of the New Notes, and other than any financing statement or other
public notice or recording naming Secured Party as the secured party therein or
financing statements with respect to Permitted Liens, no financing statement or
other public notice or recording covering the Collateral is on file in any
public office and Debtor has not signed any document or agreement authorizing
the filing of any such financing statement or other public notice or recording
so long as any of the Obligations are outstanding.

     Section 3.05  Name; No Name Changes.  The name of the Debtor set forth on
                   ---------------------
Exhibit A hereto is the true and correct legal name of the Debtor, and, except
---------
as described on Exhibit A hereto, Debtor has not, during the preceding five (5)
                ---------
years, entered into any contract, agreement, security instrument or other
document using a name other than, or been known by or otherwise used any name
other than, the name used by Debtor herein.

                                       8
<PAGE>

     Section 3.06  Location of Debtor and Collateral; Intellectual Property.
                   --------------------------------------------------------
Debtor's chief executive office, principal place of business and the locations
of Debtor's records concerning the Collateral are set forth on Exhibit A hereto.
                                                               ---------
Any Collateral not at such location(s) nevertheless remains subject to Secured
Party's security interest.  Except as disclosed on Exhibit A hereto, all
                                                   ---------
tangible Collateral of Debtor are located at the locations set forth on Exhibit
                                                                        -------
A hereto.  Exhibit B hereto contains a true, correct and complete listing of all
-          ---------
of Debtor's Intellectual Property which have been registered or for which
applications for registration are pending.

     Section 3.07  Collateral.  All statements or other information provided by
                   ----------
Debtor to Secured Party describing or with respect to the Collateral is (or, in
the case of subsequently furnished information, will be when provided) correct
and complete in all material respects.  Schedule A contains a true, correct and
                                        ----------
complete list of all furnitures, fixtures and equipment immediately prior to
issuance of the New Notes subject to the Lease Intended as Security dated as of
March 31, 2000 by and between First Security Bank, NA, as trustee and lessor,
and Debtor, as lessee.  The delivery at any time by Debtor to Secured Party of
additional descriptions of Collateral shall constitute a representation and
warranty by Debtor to Secured Party hereunder that the representations and
warranties of this Article 3 are correct in all material respects insofar as
they would pertain to such Collateral or the descriptions thereof, except as
indicated therein.

     Section 3.08  Delivery of Documents. All FF&E Collateral subject to
                   ---------------------
applicable certificate of title statutes are covered by effective certificates
of title which identify the Secured Party's security interest therein and which
further provide that such items of FF&E Collateral will not be subject to any
other certificates of title. With respect to any Collateral covered by one or
more certificates of title or other documents of title evidencing ownership or
possession thereof, each of such certificates or documents of title shall, after
the occurrence and during the continuance of an Event of Default and upon the
request of the Secured Party, be delivered to Secured Party (provided that all
certificates of title and documents of title referred to in Article 2 hereof
shall be subject to the security interest created by this Agreement irrespective
of whether or not such delivery shall have been made).

     Section 3.09  Taxpayer Identification Number.  The federal taxpayer
                   ------------------------------
identification number of Debtor is set forth on Exhibit A hereto.
                                                ---------

                                   ARTICLE 4
                           COVENANTS AND AGREEMENTS
                           ------------------------

          Debtor will at all times comply with the covenants and agreements
contained in this Article 4, from the date hereof and for so long as any part of
the Obligations are outstanding.

     Section 4.01  Change in Location of Collateral or Debtor. Except with
                   ------------------------------------------
respect to Collateral under repair or temporarily in transit between locations
(and in any such case, for a period not to exceed four (4) months), Debtor will
not change the location of the Collateral (except for (a) Collateral held by the
New Trustee, (b) motor vehicles and rolling stock, and (c) Collateral
temporarily in transit between locations) to any state, county or other
jurisdiction in which Secured Party has not already filed a financing statement
or taken other necessary steps to perfect or maintain its security interests in
the Collateral without Secured Party's prior written

                                       9
<PAGE>

consent and the delivery of such new financing statements or other documentation
as may be reasonably necessary or required by Secured Party to ensure the
continued perfection and priority of its security interest in the Collateral.
Debtor will not change the location of Debtor's chief executive office,
principal place of business or the locations of Debtor's records concerning the
Collateral unless Debtor shall have given Secured Party at least thirty (30)
days prior written notice thereof and shall have delivered to Secured Party such
new financing statements or other documentation as may be reasonably necessary
or required by Secured Party to ensure the continued perfection and priority of
its security interest in the Collateral.

     Section 4.02  Change in Debtor's Name or Corporate Structure. Debtor will
                   ----------------------------------------------
not change its name, identity, state of organization, or corporate structure
(including, without limitation, any merger, consolidation or sale of
substantially all of its assets) unless Debtor shall have given Secured Party at
least thirty (30) days prior written notice thereof and shall have delivered to
Secured Party such new financing statements or other documentation as may be
reasonably necessary or required by Secured Party to ensure the continued
perfection and priority of its security interest on the Collateral.

     Section 4.03  Documents; Collateral in Possession of Third Parties.  If
                   ----------------------------------------------------
certificates of title or other documents evidencing ownership or possession of
the Collateral are issued or outstanding, Debtor will, after the occurrence and
during the continuance of an Event of Default and upon the request of the
Secured Party, cause the interest of Secured Party to be properly noted thereon
and will, forthwith upon receipt, deliver same to Secured Party.  If any
material portion of the Collateral is at any time in the possession or control
of any warehouseman, bailee, agent or independent contractor, Debtor shall
notify such Person of Secured Party's security interest in such Collateral.
Upon Secured Party's request, Debtor shall instruct any such Person to hold all
such Collateral for Secured Party's account subject to Debtor's instructions,
or, if an Event of Default shall have occurred, subject to Secured Party's
instructions.

     Section 4.04  Delivery of Letters of Credit and Instruments.  After the
                   ---------------------------------------------
occurrence and during the continuance of an Event of  Default and upon the
request of the Secured Party, Debtor will deliver each letter of credit, if any,
included in the Collateral to Secured Party, in each case forthwith upon receipt
by or for the account of Debtor.  After the occurrence and during the
continuance of an Event of Default and upon the request of the Secured Party, if
any Non-Tangible Collateral becomes evidenced by a promissory note, trade
acceptance or any other instrument for the payment of money (other than checks
or drafts in payment of Non-Tangible Collateral collected by Debtor in the
ordinary course of business prior to notification by Secured Party under Section
7.02(g)), Debtor will immediately deliver such instrument to Secured Party
appropriately endorsed and, regardless of the form of presentment, demand,
notice of dishonor, protest and notice of protest with respect thereto, Debtor
will remain liable thereon until such instrument is paid in full.

     Section 4.05  Sale, Disposition or Encumbrance of Collateral.  Except as
                   ----------------------------------------------
expressly permitted pursuant to the provisions of the New Indenture and Article
5 of this Agreement or with Secured Party's prior written consent, Debtor will
not in any way encumber any of the Collateral (or permit or suffer any of the
Collateral to be encumbered) or sell, assign, substitute,

                                       10
<PAGE>

replace, lend, rent, lease or otherwise dispose of or transfer any of the
Collateral to or in favor of any Person other than Secured Party.

     Section 4.06  Records and Information. Debtor shall keep accurate and
                   -----------------------
complete records of the Collateral (including proceeds). Secured Party may at
any time upon reasonable prior notice have access during normal business hours
to examine, audit, make extracts from and inspect without hindrance or delay
Debtor's records, files and the Collateral. Debtor will promptly provide written
notice to Secured Party of all information which in any way relates to or
affects the filing of any financing statement or other public notices or
recordings, or the delivery and possession of items of Collateral, for the
purpose of perfecting a security interest in the Collateral. Debtor will also
promptly furnish such information as Secured Party may from time to time
reasonably request regarding the Collateral or Secured Party's rights or
remedies with respect thereto.

     Section 4.07  Reimbursement of Expenses. Debtor hereby assumes all
                   -------------------------
liability for the Collateral, the security interests created hereunder and any
use, possession, maintenance, management, enforcement or collection of any or
all of the Collateral. Debtor agrees to indemnify and hold Secured Party
harmless from and against and covenants to defend Secured Party against any and
all losses, damages, claims, costs, penalties, liabilities and expenses,
including, without limitation, court costs and reasonable attorneys' fees,
incurred because of, incident to, or with respect to the Collateral (including,
without limitation, any use, possession, maintenance or management thereof, or
any injuries to or deaths of Persons or damage to property, except to the extent
caused by the gross negligence or willful misconduct of the Secured Party). All
amounts for which Debtor is liable pursuant to this Section 4.07 shall be due
and payable by Debtor to Secured Party upon demand. If Debtor fails to make such
payment upon demand (or if demand is not made due to an injunction or stay
arising from bankruptcy or other proceedings) and Secured Party pays such
amount, the same shall be due and payable by Debtor to Secured Party, plus
interest thereon from the date of Secured Party's demand (or from the date of
Secured Party's payment if demand is not made due to such proceedings) at the
interest rate applicable to overdue principal as provided in the New Notes.

     Section 4.08  Further Assurances. Upon the request of Secured Party, Debtor
                   ------------------
shall (at Debtor's expense) execute and deliver all such assignments,
certificates, financing statements or other documents and give further
assurances and do all other acts and things as Secured Party may reasonably
request to perfect Secured Party's interest in the Collateral or to protect,
enforce or otherwise effect Secured Party's rights and remedies hereunder.

     Section 4.09  Inventory. Debtor may use the Inventory in any lawful manner
                   ---------
not inconsistent with this Agreement and the New Indenture and with the
terms of insurance thereon.

     Section 4.10  Use, Possession and Control of Collateral. Debtor will not
                   -----------------------------------------
use any Collateral in violation in any material respect of any law, statute,
ordinance, regulation or administrative order, or suffer it to be so used.
Debtor shall procure and maintain in effect all material licenses,
registrations, certificates, permits, approvals and consents required of it by
applicable law or any governmental authority in connection with the ownership,
delivery, installation, use and/or operation of the Collateral (including,
without limitation, the FF&E). The

                                       11
<PAGE>

Collateral will at all times be and remain in the possession and control of
Debtor, subject, however, to Section 4.01 and Article 5 of this Agreement.

     Section 4.11  Collateral Attached to Other Property.  In the event that the
                   -------------------------------------
Collateral may be considered attached or affixed to any immovable (real)
property or may be considered an appurtenance of the Vessel, Debtor hereby
agrees that this Agreement may be filed for record in any appropriate records as
a financing statement which is a fixture filing, and the interests granted
herein may be further perfected by the filing of a mortgage and a ship mortgage
(as contemplated by the New Indenture).  In connection therewith, Debtor will
take whatever action is required by Section 4.08.  If Debtor is not the record
owner of such immovable (real) property, Debtor will provide Secured Party with
any additional security agreements or financing statements necessary for the
perfection of Secured Party's security interest in the Collateral.  If the
Collateral is wholly or partly affixed to the immovable (real) property or
installed in or affixed to other goods, Debtor will, on demand of Secured Party,
use its commercially reasonable efforts to furnish Secured Party with landlord's
waivers, signed by all Persons having an interest in the immovable (real)
property or other goods to which the Collateral may have become affixed,
permitting the Secured Party to have access to the Collateral at all reasonable
times and granting the Secured Party a reasonable period of time in which to
remove the Collateral after the occurrence and during the continuance of an
Event of Default.

                                   ARTICLE 5
               MAINTENANCE AND REPAIR; ALTERATION AND ADDITIONS
               ------------------------------------------------

          With respect to the FF&E Collateral, Debtor covenants and agrees:

     Section 5.01  Maintenance and Repair; Compliance with Law.
                   -------------------------------------------

                   (a)  Debtor, at its own expense, shall at all times
maintain the FF&E in good and safe order, operating condition and repair
(ordinary wear and tear excepted), substantially in conformance with the
maintenance and repair standards and procedures as are set forth in the
manufacturer's manuals pertaining to same (and in any event to at least as high
a standard of maintenance and repair as Debtor and/or its Affiliates observe
with respect to similar equipment owned or leased by Debtor or any such
Affiliate) and as otherwise required to enforce claims against each vendor or
manufacturer of each item of FF&E and in compliance in all material respects
with applicable laws and the standards imposed by insurance policies required to
be maintained under the New Indenture and this Agreement with respect to the
FF&E.

                   (b)  In addition, Debtor shall make all necessary or
appropriate repairs, replacements, substitutions and modifications in respect of
the FF&E (or any component thereof) which may be required to keep the FF&E in
the condition required above.

     Section 5.02  Alterations.
                   -----------

                   (a)  If any item of FF&E or individual component thereof is
required to be altered, added to, replaced, improved or modified in order to
comply with applicable laws (a

                                       12
<PAGE>

"Required Alteration"), Debtor shall diligently proceed to make such Required
 -------------------
Alterations at its own expense.

                   (b)  Debtor, at its own expense, may make any alteration,
addition, replacement, improvement or modification to any item of FF&E (a
"Permitted Alteration"), or remove any part that becomes worn out, broken or
 --------------------
obsolete, if Debtor continues to be in compliance with Section 5.01 above and
                                                       ------------
such action, when completed, will be of such character as not to materially
adversely affect (i) the current fair market value of the item of FF&E, (ii) the
originally anticipated use or function thereof, as applicable, and (iii) the
originally anticipated residual value of the item of FF&E.

                   (c)  All Alterations shall be completed in a commercially
reasonable manner and shall not, when completed, violate the terms of any
restriction, easement, servitude, condition, covenant or other matter affecting
the FF&E.

                   (d)  Secured Party is not responsible for confirming that
Alterations were made in conformity with the requirements of this Section 5.02.

     Section 5.03  Replacement and Substitution.  Debtor may replace an item or
                   ----------------------------
items of FF&E with a replacement item or items of furniture, fixtures or
equipment that meets the suitability standards set forth in the last sentence of
this Section 5.03.  To the extent Debtor desires to replace FF&E with a fair
market value of $10,000 or more (or in the case of slot machines, $5,000 or
more), individually, or $75,000 or more, in the aggregate, in one transaction or
a series of related transactions, Debtor must deliver (i) a replacement notice
to Secured Party at least fifteen (15) days prior to the date of the proposed
substitution, (ii) an Officers' Certificate certifying that the replacement
items meet the suitability standard set forth below, and (iii) an amended
Schedule A reflecting in sufficient detail the specific items of replacement
----------
FF&E.  Upon a permitted replacement of FF&E pursuant to this Section 5.03, New
                                                             ------------
Trustee, upon Debtor's request, shall execute and deliver to Debtor any
necessary amendments, modifications or terminations to the UCC Financing
Statements, Fixture Filings, and other recordings and/or filings made to perfect
the interest granted to Secured Party under this Agreement that may be required
to release the replaced item from the terms of this Agreement, all at Debtor's
expense.  Replacement items of FF&E shall be owned by the Debtor, and title
thereto shall be vested in Debtor upon such permitted replacement.  Debtor shall
record and/or file any and all UCC Financing Statements, Fixture Filings or
other documents (including any modifications or amendments to same) necessary to
perfect Secured Party's Lien on such replacement item or items.  Upon such
permitted replacement, Schedule A attached hereto shall be promptly amended to
                       ----------
reflect such replacement.  To be suitable as a replacement, such replacement
item or items of furniture, fixtures or equipment must (i) be within one of the
general categories described on Part 1 of Schedule A hereto and used or useful
in the business of the Partnership, (ii) have substantially equivalent value to
Debtor, in Debtor's reasonable business judgment, as the value to Debtor of the
item or items of FF&E  being replaced, and (iii) be free and clear of all Liens
other than Permitted Liens (as such definition apples to FF&E).  Notwithstanding
the foregoing, Debtor may replace FF&E with New FF&E.

                                       13
<PAGE>

     Section 5.04  Maintenance and Repair Reports. Debtor shall keep maintenance
                   ------------------------------
and repair reports as are customary for owners or operators of casinos, to
indicate the nature and date of major work done to (or that affects) the FF&E.
Such reports shall be kept on file by Debtor at its offices during the term of
the New Indenture, and shall be made available to Secured Party upon reasonable
request.

                                   ARTICLE 6
                  RIGHTS, DUTIES AND POWERS OF SECURED PARTY
                  ------------------------------------------

          Secured Party shall have the following rights, duties and powers:

     Section 6.01  Discharge Encumbrances.  After the occurrence and during the
                   ----------------------
continuance of an Event of Default, Secured Party may, at its option, discharge
any taxes, Liens, security interests or other encumbrances at any time levied or
placed on the Collateral, and may pay for insurance on the Collateral to the
extent required by this Agreement or the New Indenture and not obtained by
Debtor.  Debtor agrees to reimburse Secured Party upon demand for any payment so
made, plus interest thereon from the date of Secured Party's demand at the
interest rate applicable to overdue principal as provided in the New Notes.

     Section 6.02  Licenses and Rights to Use Collateral. After the occurrence
                   -------------------------------------
and during the continuance of an Event of Default, in connection with any
transfer or sale (to Secured Party or any other Person) of the Collateral,
Secured Party is hereby granted a transferable license or other right to use,
without any charge, any of Debtor's Intellectual Property in completing
production, advertising or selling such Collateral except any of the foregoing
property which is expressly prohibited by its terms from being assigned or
licensed. After the occurrence and during the continuance of an Event of
Default, Debtor's rights under all licenses and franchise agreements shall inure
to the benefit of Secured Party and any transferee of all or any part of the
Collateral.

     Section 6.03  Cumulative and Other Rights. The rights, powers and remedies
                   ---------------------------
of Secured Party hereunder are in addition to all rights, powers and remedies
given by law or in equity. The exercise by Secured Party of any one or more of
the rights, powers and remedies herein shall not be construed as a waiver of any
other rights, powers and remedies, including, without limitation, any other
rights of set-off (which set-off rights may be exercised only after the
occurrence and during the continuance of an Event of Default). If any of the
Obligations are given in renewal, extension for any period or rearrangement, or
applied toward the payment of debt secured by any Lien, Secured Party shall be,
and is hereby, subrogated to all the rights, titles, interests and liens
securing the debt so renewed, extended, rearranged or paid.

     Section 6.04  Disclaimer of Certain Duties.
                   ----------------------------

             (a)   The powers conferred upon Secured Party by this Agreement are
     to protect its interest in the Collateral and shall not impose any duty
     upon Secured Party to exercise any such powers. Debtor hereby agrees that
     Secured Party shall not be liable for, nor shall the indebtedness evidenced
     by the Obligations be diminished by, Secured Party's delay or failure to
     collect upon, foreclose, sell, take possession of or otherwise obtain

                                       14
<PAGE>

     value for the Collateral. Nothing herein shall affect any obligation of
     Secured Party to the Holders under the New Indenture or under applicable
     law.

              (b)  Except as may be required by the New Indenture, and to the
     fullest extent permitted by applicable law, Secured Party shall be under no
     duty whatsoever to make or give any presentment, notice of dishonor,
     protest, demand for performance, notice of non-performance, notice of
     intent to accelerate, notice of acceleration, or other notice or demand in
     connection with any Collateral or the Obligations, or to take any steps
     reasonably necessary to preserve any rights against any Obligor, Account
     Debtor or other Person. Debtor waives any right of marshaling in respect of
     any and all Collateral, and waives any right to require Secured Party to
     proceed against any Obligor, Account Debtor or other Person, exhaust any
     Collateral or enforce any other remedy which Secured Party now has or may
     hereafter have against any Obligor or other Person.

     Section 6.05  Modification of Obligations; Other Security.  Except as
                   -------------------------------------------
specifically provided for in the New Indenture, Debtor waives (i) any and all
notice of acceptance, creation, modification, rearrangement, renewal or
extension for any period of any instrument executed by any Obligor in connection
with the Obligations and (ii) any defense of any Obligor by reason of
disability, lack of authorization, cessation of the liability of any Obligor or
for any other reason.  Debtor authorizes Secured Party, without notice or demand
and without any reservation of rights against Debtor and without affecting
Debtor's liability hereunder or on the Obligations, from time to time to (x)
after the occurrence and during the continuance of an Event of Default and after
the acceleration of the New Notes, apply the Collateral in the manner permitted
by this Agreement or New Indenture and (y) after the occurrence and during the
continuance of an Event of Default and after the acceleration of the New Notes,
renew, extend for any period, accelerate, amend or modify, supplement, enforce,
compromise, settle, waive or release the obligations of any Obligor or any
instrument or agreement of such other Person with respect to any or all of the
Obligations or Collateral.

                                   ARTICLE 7
                               EVENTS OF DEFAULT
                               -----------------

     Section 7.01  Events of Default. It shall constitute an Event of Default
                   -----------------
under this Agreement if an Event of Default occurs and is continuing under the
New Indenture.

     Section 7.02  Remedies. Upon the occurrence and during the continuance of
                   --------
an Event of Default, Secured Party may (with no obligation to do so) take any or
all of the following actions without notice (except where expressly required
below or in the New Indenture) or demand to Debtor:

             (a)   Take possession of the Collateral, or at Secured Party's
     request Debtor shall, at Debtor's cost, assemble the Collateral and make it
     available at a location to be specified by Secured Party which is
     reasonably convenient to Debtor and Secured Party. In any event, Debtor
     shall bear the risk of accidental loss or damage to or diminution in value
     of the Collateral, and Secured Party shall have no liability whatsoever for
     failure to

                                       15
<PAGE>

     obtain or maintain insurance, nor to determine whether any insurance ever
     in force is adequate as to amount or as to risk insured.

             (b)   Sell, in one or more sales and in one or more parcels, or
     otherwise dispose of any or all of the Collateral in its then condition or
     in any other commercially reasonable manner as Secured Party may elect, in
     a public or private transaction, at any location as deemed reasonable by
     Secured Party (including, without limitation, Debtor's premises), for cash
     at such price as Secured Party may deem fair, and (unless prohibited by the
     Code, as adopted in any applicable jurisdiction) Secured Party may be the
     purchaser of any or all Collateral so sold and may apply upon the purchase
     price therefor any Obligations secured hereby. Any such sale or transfer by
     Secured Party either to itself or to any other Person shall be absolutely
     free from any claim of right by Debtor, including any equity or right of
     redemption, stay or appraisal which Debtor has or may have under any rule
     of law, regulation or statute now existing or hereafter adopted. Upon any
     such sale or transfer, Secured Party shall have the right to deliver,
     assign and transfer to the purchaser or transferee thereof the Collateral
     so sold or transferred. It shall not be necessary that the Collateral or
     any part thereof be present at the location of any such sale or transfer.
     Secured Party may, at its discretion, provide for a public sale, and any
     such public sale shall be held at such time or times within ordinary
     business hours and at such place or places as Secured Party may fix in the
     notice of such sale. Secured Party shall not be obligated to make any sale
     pursuant to any such notice. Secured Party may, without notice or
     publication, adjourn any public or private sale by announcement at any time
     and place fixed for such sale, and such sale may be made at any time or
     place to which the same may be so adjourned. In the event any sale or
     transfer hereunder is not completed or is defective in the opinion of
     Secured Party, such sale or transfer shall not exhaust the rights of
     Secured Party hereunder, and Secured Party shall have the right to cause
     one or more subsequent sales or transfers to be made hereunder. If only
     part of the Collateral is sold or transferred such that the Obligations
     remain outstanding (in whole or in part), Secured Party's rights and
     remedies hereunder shall not be exhausted, waived or modified, and Secured
     Party is specifically empowered to make one or more successive sales or
     transfers until all the Collateral shall be sold or transferred and all the
     Obligations are paid. In the event that Secured Party elects not to sell
     the Collateral, Secured Party retains its rights to lease or otherwise
     dispose of or utilize the Collateral or any part or parts thereof in any
     manner authorized or permitted by law or in equity, and to apply the
     proceeds of the same towards payment of the Obligations. Each and every
     method of disposition of the Collateral described in this subsection or in
     subsection (e) shall constitute disposition in a commercially reasonable
     manner.

             (c)   Take possession of all books and records of Debtor pertaining
     to the Collateral. Secured Party shall have the authority to enter upon any
     real property or improvements thereon in order to obtain any such books or
     records, or any Collateral located thereon, and remove the same therefrom
     without liability.

             (d)   Apply proceeds of the disposition of the Collateral to the
     Obligations in any manner elected by Secured Party and permitted by the
     Code or otherwise permitted by law or in equity and in accordance with the
     provisions of the New Indenture.  Such

                                       16
<PAGE>

     application may include, without limitation, the reasonable expenses of
     retaking, holding, preparing for sale or other disposition, and the
     reasonable attorneys' fees and legal expenses incurred by Secured Party.

             (e)   Appoint any Person as agent to perform any act or acts
     necessary or incident to any sale or transfer by Secured Party of the
     Collateral. Additionally, any sale or transfer hereunder may be conducted
     by an auctioneer or any officer or agent of Secured Party.

             (f)   Execute, assign and endorse negotiable and other instruments
     for the payment of money, documents of title or other evidences of payment,
     shipment or storage for any form of Collateral on behalf of and in the name
     of Debtor; provided, however, Secured Party may specifically disclaim any
     warranties of title.

             (g)   Notify or require Debtor to notify Account Debtors that the
     Non-Tangible Collateral been assigned to Secured Party and direct such
     Account Debtors to make payments on the Non-Tangible Collateral directly to
     Secured Party. To the extent Secured Party does not so elect, Debtor shall
     continue to collect the Non-Tangible Collateral. Secured Party or its
     designee shall also have the right, in its own name or in the name of
     Debtor, to do any of the following: (i) to demand, collect, receipt for,
     settle, compromise any amounts due, give acquittances for, prosecute or
     defend any action which may be in relation to any monies due, or to become
     due by virtue of, the Non-Tangible Collateral; (ii) to sell, transfer or
     assign or otherwise deal in the Non-Tangible Collateral or the proceeds
     thereof or the related goods, as fully and effectively as if Secured Party
     were the absolute owner thereof; (iii) to extend the time of payment of any
     of the Non-Tangible Collateral, to grant waivers and make any allowance or
     other adjustment with reference thereto; (iv) to take control of cash and
     other proceeds of any Collateral; (v) to send a request for verification of
     the Non-Tangible Collateral to any Account Debtor; and (vi) to do all other
     acts and things necessary to carry out the intent of this Agreement.

             (h)   The Secured Party, instead of exercising the power of sale
     herein conferred upon it, may proceed by a suit or suits to foreclose the
     security interest and sell the Collateral or any portion thereof under a
     judgment of a court or courts of competent jurisdiction. For purposes of
     Louisiana executory process procedures, Debtor acknowledges the Obligations
     and does hereby confess judgment in favor of the Secured Party for the full
     amount of the Obligations. Debtor agrees that during the continuance of an
     Event of Default the Secured Party may cause the Collateral to be seized
     and sold under executory or ordinary process, at the Secured Party's sole
     option, without appraisement, appraisement hereby being expressly waived,
     as an entirety or in parcels as the Secured Party may determine, to the
     highest bidder for cash, and otherwise exercise the rights, powers and
     remedies afforded herein and under applicable Louisiana law. Any and all
     declarations of fact made by authentic act before a Notary Public in the
     presence of two witnesses by a person declaring that such facts lie within
     his knowledge shall constitute authentic evidence of such facts for the
     purpose of executory process. Debtor hereby waives in favor of the Secured
     Party: (i) the benefit of appraisement as provided

                                       17
<PAGE>

     in Louisiana Code of Civil Procedure Articles 2332, 2336, 2723 and 2724,
     and all other laws conferring the same; (ii) the demand and three (3) days
     delay accorded by Louisiana Code of Civil Procedure Articles 2639 and 2721;
     (iii) the notice of seizure required by Louisiana Code of Civil Procedure
     Articles 2293 and 2721; (iv) the three (3) days delay provided by Louisiana
     Code of Civil Procedure Articles 2331 and 2722; and (v) the benefit of the
     other provisions of Louisiana Code of Civil Procedure Articles 2331, 2722
     and 2723 not specifically mentioned above. In the event the Collateral or
     any part thereof is seized as an incident to an action for the recognition
     or enforcement of this Agreement by executory process, ordinary process,
     sequestration, writ of fieri facias, or otherwise, Debtor and Secured Party
     agree that the court issuing such order shall, if petitioned for by Secured
     Party, direct the applicable sheriff to appoint as a keeper of the
     Collateral the Secured Party or any agent designated by the Secured Party
     at the time such seizure is effected. This designation is pursuant to
     Louisiana Revised Statutes 9:5136-9:5140.2 and the Secured Party shall be
     entitled to all of the rights and benefits afforded thereunder, as the same
     may be amended. It is hereby agreed that the keeper shall be entitled to
     receive as compensation, in excess of its costs and expenses incurred in
     the administration or preservation of the Collateral, an amount equal to
     $250.00 per day, which shall be payable monthly on the first day of each
     month. The designation of keeper made herein shall not be deemed to require
     the Secured Party to provoke the appointment of such a keeper.

             (i)   Exercise all other rights and remedies permitted by law or in
     equity.

     Section 7.03  Attorney-in-Fact.  Debtor hereby irrevocably appoints Secured
                   ----------------
Party as Debtor's attorney-in-fact, with full authority in the place and stead
of Debtor and in the name of Debtor or otherwise, from time to time in Secured
Party's discretion upon the occurrence and during the continuance of an Event of
Default, but at Debtor's cost and expense and without notice to Debtor:

             (a)  To obtain, adjust, sell and cancel any insurance with respect
     to the Collateral, and endorse any draft drawn by insurers of the
     Collateral. Secured Party may apply any proceeds or unearned premiums of
     such insurance to the Obligations (whether or not due).

             (b)  To take any action and to execute any assignment, certificate,
     financing statement, notification, document or instrument which Secured
     Party may reasonably deem necessary or advisable to accomplish the purposes
     of this Agreement, including, without limitation, to receive, endorse and
     collect all instruments made payable to Debtor representing any payment or
     other distribution in respect of the Collateral or any part thereof and to
     give full discharge for the same.

     Section 7.04  Account Debtors.  Any payment or settlement of Non-Tangible
                   ---------------
Collateral made by an Account Debtor will be, to the extent of such payment or
to the extent provided under such settlement, a release, discharge and
acquittance of the Account Debtor with respect to such Non-Tangible Collateral,
and Debtor shall take any action as may reasonably be required by Secured Party
in connection therewith.  No Account Debtor on any Non-Tangible Collateral will

                                       18
<PAGE>

ever be bound to make inquiry as to the termination of this Agreement or the
rights of Secured Party to act hereunder, but shall be fully protected by Debtor
in making payment directly to Secured Party.

     Section 7.05  Liability for Deficiency. If any sale or other disposition of
                   ------------------------
Collateral by Secured Party or any other action of Secured Party hereunder
results in reduction of the Obligations, such action will not release Debtor
from its liability to Secured Party for any unpaid Obligations, including costs,
charges and expenses incurred in the liquidation of Collateral, together with
interest thereon at the rate then applicable under the New Indenture, and the
same shall be immediately due and payable to Secured Party at Secured Party's
address set forth in the New Indenture.

     Section 7.06  Reasonable Notice.  If any applicable provision of any law
                   -----------------
requires Secured Party to give reasonable notice of any sale or disposition or
other action, Debtor hereby agrees that ten days' prior written notice shall
constitute reasonable notice thereof.  Such notice, in the case of public sale,
shall state the time and place fixed for such sale and in the case of private
sale, the time after which such sale is to be made.

     Section 7.07  Non-judicial Enforcement. Secured Party may enforce its
                   ------------------------
rights hereunder without prior judicial process or judicial hearing, and to the
extent permitted by law Debtor expressly waives any and all legal rights which
might otherwise require Secured Party to enforce its rights by judicial process.

                                   ARTICLE 8
                           MISCELLANEOUS PROVISIONS
                           ------------------------

     Section 8.01  Notices. Any notice required or permitted to be given under
                   -------
or in connection with this Agreement shall be given in accordance with the
notice provisions of the New Indenture.

     Section 8.02  Amendments and Waivers. Secured Party's acceptance of partial
                   ----------------------
or delinquent payments or any forbearance, failure or delay by Secured Party in
exercising any right, power or remedy hereunder shall not be deemed a waiver of
any obligation of Debtor or any Obligor, or of any right, power or remedy of
Secured Party, and no partial exercise of any right, power or remedy shall
preclude any other or further exercise thereof Secured Party may remedy any
Event of Default hereunder or in connection with the Obligations without waiving
the Event of Default so remedied. Debtor hereby agrees that if Secured Party
agrees to a waiver of any provision hereunder, or an exchange of or release of
the Collateral or the addition or release of any Obligor or other Person, any
such action shall not constitute a waiver of any of Secured Party's other rights
or of Debtor's obligations hereunder. This Agreement may be amended only by an
instrument in writing executed jointly by Debtor and Secured Party and may be
supplemented only by documents delivered or to be delivered in accordance with
the express terms hereof.

     Section 8.03  Copy as Financing Statement. A photocopy or other
                   ---------------------------
reproduction of this Agreement or any financing statement covering the
Collateral is sufficient as a financing

                                       19
<PAGE>

statement, and the same may be filed with any appropriate filing authority for
the purpose of perfecting Secured Party's security interest in the Collateral.

     Section 8.04  Possession of Collateral. Secured Party shall be deemed to
                   ------------------------
have possession of any Collateral in transit to it or set apart for it (or, in
either case, any of its agents, affiliates or correspondents).

     Section 8.05  Redelivery of Collateral. If any sale or transfer of
                   ------------------------
Collateral by Secured Party results in full satisfaction of the Obligations, and
after such sale or transfer and discharge there remains a surplus of proceeds,
Secured Party will deliver to Debtor such excess proceeds in a commercially
reasonable time; provided, however, that Secured Party shall not be liable for
any interest, cost or expense in connection with any reasonable delay in
delivering such proceeds to Debtor.

     Section 8.06  Governing Law; Jurisdiction.  This Agreement and the security
                   ---------------------------
interest granted hereby shall be construed in accordance with and governed by
the laws of the State of New York (except to the extent that the laws of any
other jurisdiction govern the perfection and priority of the security interests
granted hereby).

     Section 8.07  Gaming Laws and Regulations.  (a) Each of the provisions of
                   ---------------------------
this Agreement is subject to, and shall be enforced in compliance with, any
requirements imposed by any applicable Gaming Authority.

             (b)   To the extent required under applicable law, the consummation
of the transactions contemplated hereby and the exercise of remedies hereunder
may be subject to the Louisiana Riverboat Economic Development and Gaming
Control Act, La. R.S. 27:41, et seq., and the Louisiana Gaming Control Law, La.
                             -- ----
R.S. 27:1, and the regulations promulgated pursuant to each such law, all as
amended from time to time. The Gaming License held by Debtor is not part of the
Collateral of this Agreement and, under the above described legislation and
rules promulgated thereunder, the New Trustee may be precluded from or otherwise
limited in taking possession of or in selling the Collateral of this Agreement
under the defaults and remedies provisions of this Agreement. Due to various
legal restrictions, including, without limitation, licensing of operators of
gaming facilities and prior approval of the sale or disposition of assets of a
licensed gaming operation, the sale of Collateral may be denied by Gaming
Authorities or delayed pending Gaming Authority approval.

     Section 8.08  Continuing Security Agreement
                   -----------------------------

             (a)   Except as may be expressly applicable pursuant to Section 9-
     505 of the Code (or any successor provision), no action taken or omission
     to act by Secured Party hereunder, including, without limitation, any
     action taken or inaction pursuant to Section 7.02 hereof, shall be deemed
     to constitute a retention of the Collateral in satisfaction of the
     Obligations or otherwise to be in full satisfaction of the Obligations, and
     the Obligations shall remain in full force and effect, until Secured Party
     shall have applied payments (including, without limitation, collections
     from Collateral) towards the

                                       20
<PAGE>

     Obligations in the full amount then outstanding or until such subsequent
     time as is hereinafter provided in subsection (b) below.

             (b)  To the extent that any payments on the Obligations or proceeds
     of the Collateral are subsequently invalidated, declared to be fraudulent
     or preferential set aside or required to be repaid to a trustee, debtor in
     possession, receiver or other Person under any bankruptcy law, common law
     or equitable cause, then to such extent the Obligations so satisfied shall
     be revived and continue as if such payment or proceeds had not been
     received by Secured Party, and Secured Party's security interests, rights,
     powers and remedies hereunder shall continue in full force and effect. In
     such event, this Agreement shall be automatically reinstated if it shall
     theretofore have been terminated pursuant to Section 8.09.

     Section 8.09  Termination. The grant of a security interest hereunder and
                   -----------
all of Secured Party's rights, powers and remedies in connection therewith shall
unless otherwise provided in the New Indenture or this Agreement, remain in full
force and effect until payment in full of (A) the New Notes under the terms of
the New Indenture, (B) all obligations then due and owing under the New
Indenture, the New Notes and the Collateral Documents and (C) all other
Obligations; provided, however, (i) the security interest hereunder in Pari
             --------  -------
Passu Collateral shall terminate upon application of proceeds from the Pari
Passu Collateral to the Obligations pursuant to Section 7.02 of this Agreement
or the corresponding provisions of any other New Collateral Document in an
amount equal to the Restricted Pari Passu Amount, (ii) the security interest
hereunder in the FF&E Collateral shall terminate upon application of proceeds
from the FF&E Collateral to the Obligations pursuant to Section 7.02 of this
Agreement or the corresponding provisions of any other New Collateral Document
in an amount equal to the Restricted FF&E Amount, and (iii) that after receipt
from the Debtor by the New Trustee of a request for a release of any Collateral
permitted under the New Indenture upon the sale, transfer, assignment, exchange
or other disposition of such Collateral not prohibited by the New Indenture or
this Agreement (and upon receipt by the New Trustee of all proceeds of such
sale, transfer, assignment, exchange or other disposition to the extent required
to be remitted to the New Trustee under the New Indenture or otherwise), such
Collateral shall be released from the lien and security interest created
hereunder in accordance with the provisions of the New Indenture and shall no
longer constitute Collateral.  Upon the payment in full of (A) the New Notes
under the terms of the New Indenture (B) all obligations then due and owing
under the New Indenture and the Collateral Documents, and (C) all other
Obligations, the Debtor shall be entitled to the return, upon its request and at
its expense, of such of the Collateral pledged by it as shall not have been sold
or otherwise applied pursuant to the terms hereof.  Notwithstanding the
foregoing, the reimbursement and indemnification provisions of Section 4.07 and
the provisions of subsection 8.08(b) shall survive the termination of this
Agreement.

          Upon any termination of this Agreement or release of any Collateral as
permitted by the New Indenture the New Trustee will, at the expense of the
Debtor, execute and deliver to the Debtor such documents and take such other
actions as the Debtor shall reasonably request to evidence the termination of
this Agreement or the release of such Collateral, as the case may be.  Any such
action taken by the New Trustee shall be without warranty by or recourse to the
New Trustee, except as to the absence of any prior assignments by the New
Trustee of its interests in

                                       21
<PAGE>

the Collateral, and shall be at the expense of the Debtor. The New Trustee may
conclusively rely on any certificate delivered to it by the Debtor stating that
the execution of such documents and release of the Collateral is in accordance
with and permitted by the terms of the New Indenture and this Agreement.

     Section 8.10  Counterparts; Effectiveness. This Agreement may be executed
                   ---------------------------
in two or more counterparts. Each counterpart is deemed an original, but all
such counterparts taken together constitute one and the same instrument. This
Agreement becomes effective upon the execution hereof by Debtor and delivery of
the same to Secured Party, and it is not necessary for Secured Party to execute
any acceptance hereof or otherwise signify or express its acceptance hereof.

     Section 8.11  New Indenture.  This Agreement is subject to the terms,
                   -------------
conditions and provisions of the New Indenture.  To the extent a term or
provision of this Agreement conflicts with the New Indenture, the New Indenture
shall control with respect to the subject matter of such term or provision.

     Section 8.12  Rights of Noteholders. No Holder of a New Note shall have any
                   ---------------------
independent rights hereunder other than those rights granted to individual
Holders of New Notes pursuant to Section 6.07 of the New Indenture; provided
that nothing in this Section 8.12 shall limit any rights granted to the New
Trustee under the New Notes, the New Indenture or the Collateral Documents.

     Section 8.13  No Personal Liability of Directors, Officers, Employees and
                   -----------------------------------------------------------
Stockholders.  No past, present or future director, officer, employee,
------------
incorporator or stockholder of the Debtor as such or any successor Person, as
such, shall have any liability for any obligations of the Debtor under the New
Notes, the Collateral Documents, this Agreement or for any claim based on, in
respect of, or by reason of, such obligations or their creation.

     Section 8.14  New Trustee.  State Street Bank and Trust Company is acting
                   -----------
hereunder solely in its capacity as New Trustee under the New Indenture, and all
of the rights of New Trustee set forth in the New Indenture shall apply to New
Trustee's actions hereunder.  To the extent this agreement contemplates payments
by the Secured Party, the New Trustee shall have no liability therefor, such
liability continuing to be the liability of Debtor or realized through the value
of any collateral for the Obligations.

     Section 8.15  Intercreditor Agreement.  Notwithstanding anything to the
                   -----------------------
contrary contained herein, Secured Party acknowledges solely with respect to the
Pari Passu Collateral (a) its status as a Pari Passu Party (as defined in the
Pari Passu Intercreditor Agreement) and (b) that this Agreement is subject to
the terms of the Pari Passu Intercreditor Agreement.

                           [SIGNATURE PAGE FOLLOWS]

                                       22
<PAGE>

          IN WITNESS WHEREOF, Debtor has caused this Security Agreement to be
executed and delivered as of the date first set forth above.

DEBTOR:                       HOLLYWOOD CASINO SHREVEPORT, a
------                        Louisiana general partnership

                              By:  HCS I, Inc., a Louisiana corporation, its
                                   managing general partner

                                   By:    ________________________________
                                   Name:  Edward T. Pratt III
                                   Title: President

             [Signature Page to Security Agreement (Partnership)]
<PAGE>

                                  SCHEDULE A
                                  ----------

                                 List of FF&E

1. General Description of Categories of FF&E

     Gaming Equipment:

          Slot Machines
          Table Games
          Cage Equipment

     Operating Equipment:

          Kitchen Equipment
          Distributed Audio System
          CCTV Equipment
          Telephone System
          Computers and Peripherals
          Switchgear and Generators
          Fire Pumps
          HVAC Equipment
          Elevators
          Escalators
          Exterior Signage
          Interior Signage

     Furniture and Furnishings

          Guestrooms
          Casino
          Food & Beverage
          Public Areas
          Back of House

2. Specific Description

                    [see attached]
<PAGE>

                                   EXHIBIT A
                                   ---------

                                  PERFECTION
                                  ----------

(a)     Legal Name of Debtor:
        --------------------

        Hollywood Casino Shreveport, a Louisiana general partnership

(b)     Other Names:
        -----------

        QNOV
        Queen of New Orleans at the Hilton Joint Venture
        The Queen of New Orleans at the Hilton Joint Venture

(c) (i) Chief Executive Office and Principal Place of Business of Debtor:
        ----------------------------------------------------------------

        Chief Executive Office:       Dallas County, Texas
        Principal Place of Business:  Caddo Parish, Louisiana
                                      Bossier Parish, Louisiana

    (ii) Other Premises at which Collateral is Stored or Located:
         -------------------------------------------------------

        None

    (iii) Locations of Records Concerning Collateral:
          ------------------------------------------

        Dallas County, Texas
        Caddo Parish, Louisiana
        Bossier Parish, Louisiana

(d)     Federal Taxpayer Identification Number:
        --------------------------------------

        72-1225563

                                      A-1
<PAGE>

                                   EXHIBIT B
                                   ---------

                             INTELLECTUAL PROPERTY
                             ---------------------

                                     None

                                      B-1
<PAGE>

                                   EXHIBIT C
                                   ---------

                                   CONTRACTS
                                   ---------

1.   License Agreement dated as of August 10, 1999 by and between Company and
     Hollywood Casino Corporation, a Delaware corporation.

2.   Management Services Agreement dated as of September 22, 1998, as amended,
     by and between Company and HWCC-Shreveport, Inc., a Louisiana corporation.

                                      C-1

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