Document:

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                                                                   EXHIBIT 10.01

                               FIRST AMENDMENT TO
                              AMENDED AND RESTATED
                                 LEASE AGREEMENT

                                 By and Between

                        RIVERGATE DEVELOPMENT CORPORATION

                                       And

                           JAZZ CASINO COMPANY, L.L.C.

                                       And

                               CITY OF NEW ORLEANS

         This First Amendment to Amended and Restated Lease Agreement (the
"First Amendment") is made and entered into this 28th day of March, 2001, by and
between:

         RIVERGATE DEVELOPMENT CORPORATION ("Landlord"), a Louisiana public
         benefit corporation;

         and

         JAZZ CASINO COMPANY, L.L.C. ("Tenant"), a Louisiana limited liability
         company, successor-in-interest to Grand Palais Casino, Inc. and
         Harrah's Jazz Company, represented herein by its undersigned agent,
         duly authorized;

         and

         CITY OF NEW ORLEANS ("City"), a municipal corporation appearing herein
         as INTERVENOR.

<PAGE>   2

         WHEREAS, Harrah's Jazz Company filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code on November 22, 1995 in
the United States Bankruptcy Court for the Eastern District of Louisiana (the
"Bankruptcy Court"), Case No. 95-14545; and,

         WHEREAS, the Bankruptcy Court as of October 13, 1998 confirmed a Third
Amended Joint Plan of Reorganization, as modified, under Chapter 11 of the
United States Bankruptcy Code as submitted by Harrah's Jazz Company and certain
other parties (the "Plan"), and,

         WHEREAS, as contemplated by the Plan, Tenant succeeded by operation of
law to all rights and obligations of Harrah's Jazz Company under the Original
Amended Lease; and,

         WHEREAS, as of August 15, 1996, Harrah's Jazz Company, Landlord, and
City entered into that certain Agreement Regarding Modifications and Related
Agreements in Respect of Amended and Restated Canal Street Casino Lease,
Termination of Basin Street Casino Lease, Amended and Restated General
Development Agreement, the Conditional Use Ordinances and other Regulatory
Matters (the "City Agreement"), requiring, among other things, the amendment and
restatement of certain terms of the Original Amended Lease as of the effective
date of the Plan (the "Plan Effective Date"); and,

         WHEREAS, an Amended and Restated Lease Agreement (the "Restated Lease")
was entered into by and between Landlord, Tenant and City, dated October 29,
1998, a memorandum of which is filed in the conveyance records of Orleans,
Parish, Louisiana, at Instrument No. 168130, Notarial Archives No. 98-50458,
whereby certain terms of the Original Amended Lease were amended and restated;

         "WHEREAS, Tenant has requested a reduction in payments, taxes,
administrative and operational costs and/or expenses required under the Restated
Lease Agreement to be paid by Tenant to the City, Landlord or other third
parties. In exchange for the City and Landlord

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designating and providing for said reductions, the City and Landlord seek
revisions to the Restated Lease Agreement to provide maintenance of employment
levels and protection of employees in the event of workforce reductions, to
strengthen the Landlord's and City's position in the event of future defaults of
Tenant, to provide direction with respect to the development of the second floor
of the casino, and to provide a means to recover all or a portion of the rent
reduction in the event the casino exceeds Tenant's current projected revenues;"
and

         WHEREAS, Landlord, Tenant and City have agreed to further amend the
Restated Lease in certain particulars as hereinafter set forth, subject to the
following terms and conditions, accordingly;

         NOW THEREFORE, for valuable consideration, the receipt of sufficiency
of which are hereby acknowledged, Landlord, Tenant and City agree that the
Restated Lease is hereby modified and amended in the following particulars,
to-wit:

1.       Capitalized terms utilized herein but not otherwise defined herein have
         the meaning ascribed to them in Restated Lease.

2.       The following language is hereby added to the Restated Lease as new
         Section 4.23:
         2(a) IN ORDER TO EFFECTUATE THE REDUCTIONS REQUESTED BY TENANT, THE
         FOLLOWING LANGUAGE IS HEREBY ADDED TO THE RESTATED LEASE AS NEW
         SECTION 4.23:

         "SECTION 4.23 REDUCTION IN PAYMENTS AND EXPENSES

                  Landlord, City and Tenant hereby agree that the payments,
         taxes, administrative and operational costs and/or any other expenses
         that Tenant currently pays or incurs at least annually under the Lease,
         or as a result of obligations imposed or created by the Lease, whether
         to Landlord, City or others (the "Payments and Expenses"), shall be
         reduced by $5,000,000 per year,

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         effective March 31, 2001. Landlord and City further agree that within
         one hundred twenty (120) days from the adoption of Ordinance No. 23,548
         authorizing the execution of this First Amendment to Amended and
         Restated Lease Agreement, Landlord and City shall designate the
         Payments and Expenses that will be reduced or deleted, and the amounts
         of such reductions. Tenant shall accept without negotiation the sources
         and amounts of the Payments and Expenses designated by the Landlord and
         City as reductions provided that these reductions result in savings to
         Tenant in an amount of at least $5,000,000 per year, beginning with the
         calendar year 2001, and the Lease shall be amended accordingly. Tenant
         hereby agrees to grant a permanent annual credit toward the total
         required reduction of $5,000,000 equal to the property tax savings
         realized by Tenant in an amount equaling $2,100,000.00. Any increased
         assessment directly resulting from new or additional improvements to
         the Development or for any other reason shall not reduce any such
         credits granted by Tenant toward the total required reduction of
         $5,000,000.

                  Notwithstanding any provisions of the Restated Lease or this
         First Amendment to the contrary, including but not limited to the
         sections contained in Article VIII of the Lease, Tenant shall be
         permitted to operate the Development and to conduct its operations with
         respect to lodging, retail merchandise and food services to the full
         extent permitted by applicable state and local law, subject to the
         City's Comprehensive Zoning Ordinance, and the Lease shall be amended
         to conform Article VIII, and any other affected provisions of the
         Lease, to such law. Notwithstanding any of the foregoing provisions,
         nothing contained herein shall:

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         (1) diminish or otherwise affect the City's zoning rights and powers,
         (2) be considered a zoning or conditional use approval, nor amend or
         alter the process and procedures for obtaining conditional uses or
         zoning rights."

         2(b) IN PARTIAL CONSIDERATION FOR THE REDUCTIONS RESULTING FROM THE
INSERTION OF SECTION 4.23 INTO THE RESTATED LEASE AS REQUESTED BY TENANT, THE
FOLLOWING LANGUAGE IS HEREBY ADDED TO THE RESTATED LEASE AS NEW SECTION 32.26:

         SECTION 32.26. TENANT'S AGREEMENT OF FULL EMPLOYMENT

         Subject to all other provisions of this Lease, Tenant agrees that it
will use best efforts to maintain full employment in its currently operating
facilities on the Leased Premises at least at the same level as existed as of
December 31, 2000 for the entire term of the lease and any renewals hereof. For
purposes of measuring Tenant's performance of this obligation, new employees
retained in connection with retail or food service operations in Space Leases on
the second floor of the Development shall be excluded. In the event employment
levels fall below 2550 employees any employee who is involuntarily terminated
other than one who is terminated for cause pursuant to duly authorized
employment procedures, shall be entitled to a severance package, in addition to
any other severance benefits currently provided by Tenant, which shall include
at least the following benefits: (1) a preference of employment in substantially
the same capacity at substantially the same pay and benefits, if available, at
other gaming operations operated by Tenant, Casino Manager, or Affiliates of
either (2) facilitate employee participation in re-employment and retraining
programs to assist to obtain new employment which programs shall be in the form
of a voucher in an amount not less than $200.00 which may be utilized at any
state based university, community, junior college, or trade school; (3) out
placement services for a period of ninety (90) days to assist in obtaining new
employment. The above additional

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severance benefits may not be required in the event of involuntarily
terminations caused by economic downturn.

         2(c) AS FURTHER CONSIDERATION FOR THE REDUCTIONS RESULTING FROM THE
INSERTION OF SECTION 4.23 INTO THE RESTATED LEASE AS REQUESTED BY TENANT, THE
FOLLOWING AMENDMENTS ARE MADE TO THE RESTATED LEASE:

                  (i)      SECTION 1.22 OF THE RESTATED LEASE IS HEREBY DELETED
                           IN ITS ENTIRETY AND THE FOLLOWING IS SUBSTITUTED IN
                           LIEU THEREOF:

                                    "1.22. COC Minimum Payment means the sum due
                                    the State of Louisiana by and through the
                                    LGCB for each COC Fiscal Year as stated in
                                    the Second Amendment to Amended and
                                    Renegotiated Casino Operating Contract of
                                    March 8, 2001."

                  (ii)     SECTION 3.1 OF THE RESTATED LEASE IS HEREBY DELETED
                           IN ITS ENTIRETY AND THE FOLLOWING IS SUBSTITUTED IN
                           LIEU THEREOF:

                           "SECTION 3.1. TERM

                                    The Initial Term of this Lease shall be
                           twenty (20) years plus the amount of time between the
                           Effective Date and the Execution Date commencing on
                           the Effective Date. Tenant shall have the right and
                           option to extend this Lease and concurrently
                           therewith, the Second Floor Non-Gaming Sublease
                           (unless the Second Floor Non-Gaming Sublease shall be
                           sooner terminated pursuant to the terms and
                           conditions set forth therein), for three (3)
                           consecutive Extended Terms

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                           of ten (10) years each unless this Lease shall be
                           sooner terminated pursuant to the terms and
                           conditions set forth herein; provided, however, that
                           the option to extend this Lease and the Second Floor
                           Non-Gaming Sublease for Extended Terms may be
                           exercised only if there is no outstanding Event of
                           Default."

         (iii) SECTION 4.13(a) OF THE RESTATED LEASE IS HEREBY DELETED IN ITS
ENTIRETY AND THE FOLLOWING IS SUBSTITUTED IN LIEU THEREOF:

         "SECTION 4.13. SECOND FLOOR NON-GAMING SUBLEASE

         (a) On the Execution Date, Tenant has entered into the Second Floor
Non-Gaming Sublease. Within a reasonable period of time after the effective date
of this Amendment to Restated Lease, Tenant and JCC Development shall submit an
updated Master Plan in accordance with the Second Floor Non-Gaming Sublease,
which establishes guidelines for the development of the second floor regarding
rent, tenant improvements and concessions, permissible uses, brokerage fees and
an initial capital improvement budget. Once an agreement to the updated Master
Plan is reached among Landlord, Tenant, and JCC Development and all necessary
approvals of governmental agencies have been obtained, Tenant shall cause build
out pursuant to the Second Floor Non-Gaming Sublease to commence within a
reasonable period of time thereafter and build out shall be prosecuted
diligently thereafter to completion. Notwithstanding the above, Tenant shall be
excused from commencing such build out for so long as Tenant is unable to obtain
commercially reasonable financing for the build out. Tenant shall not consent to
any waiver of or modification to the Second Floor Non-Gaming Sublease or the
Master Plan without the prior written consent of Landlord, the City and the City
Council."

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         (iv) SECTION 4.20 OF THE RESTATED LEASE IS HEREBY DELETED IN ITS
ENTIRETY AND THE FOLLOWING IS SUBSTITUTED IN LIEU THEREOF:

         "SECTION 4.20. CHANGE OF USE AND ADJUSTMENT OF RENT AND ADDITIONAL
                        CHARGES UPON CHANGE OF LAW

         (a) If, by reason of a change of law or the enactment of a new law,
either (i) during a time when Tenant is not in default under the Casino
Operating Contract or the Lease, or (ii) during a time when Tenant is in default
under the Casino Operating Contract or the Lease but any applicable cure period
and/or appeal period available has not yet run or expired, and in either case,
while gaming operations are continuing to be legally conducted at the Lease
Premises, Casino Gaming Operations shall no longer be permitted to be conducted
on the Casino Premises or shall be modified, restricted or limited in a manner
that materially diminishes the benefits afforded to Tenant or the gaming
activities permitted to be conducted on the Casino Premises pursuant to LSA R.S.
27:201, et seq., as currently enacted, Landlord and Tenant agree to renegotiate,
modify and re-establish this Lease in good faith and to determine the Highest
and Best Use of the Leased Premises in order to reflect the change in conditions
and permissible uses under prevailing Governmental Requirements (such event
being a "Change in Use"). The Rent and Additional Charges payable under this
Lease shall be renegotiated, modified and re-established in accordance with
Sections 4.20(b) through 4.20(d) of this Lease for any new use made of the
Development by Tenant, effective as of the date of commencement of such new use.
During any period between the effective date of the change of law or new law and
commencement of a new use, the Rent and Additional Charges shall be twenty
percent (20%) of Cash Flow.

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         (b) The parties shall endeavor, for ninety (90) days after a new use is
determined to agree upon the rent and additional charges (the "Adjustment") for
the new use of the Leased Premises.

         (c) If the parties cannot agree upon the Adjustment within the period
described in the previous subsection, then they shall endeavor to agree upon a
Qualified Appraiser to resolve the dispute and determine the Adjustment and
other necessary changes to this Lease. If they cannot agree upon a single
Qualified Appraiser within thirty (30) days, then, within fourteen (14) days
after the occurrence of such failure, each shall appoint a Qualified Appraiser.
The two Qualified Appraisers shall within thirty (30) days after both have been
appointed designate a third Qualified Appraiser; if they do not, then either
party shall be entitled to apply to a court of competent jurisdiction for
designation of the third Qualified Appraiser. The Adjustment and other necessary
changes shall be determined by either the one agreed-upon Qualified Appraiser or
by the three Qualified Appraisers so chosen, as applicable. "Qualified
Appraiser," as used in this Lease, shall mean an appraiser who shall: (i) hold a
general certification from the State of Louisiana Real Estate Appraisal
Subcommittee; (ii) be a designated member of a nationally recognized appraisal
organization with a recognized educational program and code of ethics including
the Uniform Standards of Professional Appraisal Practices; and (iii) have at
least ten (10) years' experience in commercial real estate transactions in
Orleans Parish. Each party shall pay the fees and costs of the Qualified
Appraiser that they appoint. The fees and costs of the third Qualified Appraiser
shall be split equally between Landlord and Tenant.

         (d) Within thirty (30) days after the Qualified Appraiser(s) has been
selected, each party shall submit to the Qualified Appraiser(s) any information
in said parties' possession needed or required by the Qualified Appraiser(s) to
determine the fair and reasonable

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Adjustment and other charges necessary to facilitate the Change in Use for the
duration of such Change in Use. The Qualified Appraiser(s) shall, within sixty
(60) days after having been designated, determine (by majority vote, if three)
the fair and reasonable Adjustment. The determination of the Qualified
Appraiser(s) shall bind the parties from and after the Change in Use, for the
duration of such Change in Use. Nothing in this Lease shall be deemed to require
Tenant to make a Change in Use or to prevent or preclude Tenant from restoring
use of the Leased Premises to the uses originally contemplated by this Lease, at
which time the original Rent and Additional Charges and other terms of this
Lease shall again become fully effective and enforceable.

         (e) Notwithstanding the above, if, by reason of a change of law or the
enactment of a new law during a time when Tenant is either in default under
either the Casino Operating Contract or this Lease, or both, and all applicable
cure periods and appeal periods have run and expired without said default being
cured, Casino Gaming Operations shall no longer be permitted to be conducted on
the Casino Premises or shall be modified, restricted or limited in a manner that
materially diminishes the benefits afforded to Tenant or the gaming activities
permitted to be conducted on the Casino Premises pursuant to LSA R.S. 27:201, et
seq., as currently enacted, Landlord and Tenant agree that Landlord may, upon
thirty (30) days advance written notice to Tenant and to all Leasehold
Mortgagees, terminate this Lease. Upon such termination, all Improvements shall
immediately become the property of Landlord in full ownership, without
compensation of any kind to Tenant, JCC Development or any Mortgagee or any
other person or entity, free and clear of any mortgages or encumbrances;
provided that, notwithstanding the foregoing, any New Lease granted to a
Mortgagee pursuant to Section 23.6 of this Lease shall include a lease of all
such Improvements. Alternatively, if Landlord elects not to terminate the

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Lease as provided herein, the parties may renegotiate, modify and re-establish
this Lease in good faith as set forth in subsections (b) through (d) above."

         (v) SECTION 7.1.(a) OF THE RESTATED LEASE IS HEREBY DELETED IN ITS AND
THE FOLLOWING IS SUBSTITUTED IN LIEU THEREOF:

         "SECTION 7.1. OWNERSHIP OF IMPROVEMENTS

         (a)      Upon the expiration of the Term or earlier termination of the
                  Lease, all Improvements shall immediately become the property
                  of Landlord in full ownership, without compensation of any
                  kind to Tenant, JCC Development or any Leasehold Mortgagee or
                  any other person or entity, free and clear of any mortgages or
                  encumbrances; provided that, notwithstanding the foregoing,
                  any New Lease granted to a Leasehold Mortgagee pursuant to
                  Section 23.6 of this Lease shall include a lease of all such
                  Improvements. During the Term and subject to the terms of the
                  Second Floor Non-Gaming Sublease, Tenant shall own and retain
                  title to all Improvements and Tenant's Property subject to all
                  privileges and liens provided by Louisiana law. After Site
                  Mobilization and subject to the terms of the Second Floor
                  Non-Gaming Sublease, Harrah's Jazz Company, and after the Plan
                  Effective Date, Tenant, shall have the sole and exclusive
                  right and entitlement to claim depreciation on all
                  Improvements and Tenant's Property located on the Leased
                  Premises. Upon the termination of the Lease by default,
                  expiration of the Term or as otherwise provided herein, Tenant
                  will remain the owner of Tenant's Property on the Development
                  subject to all liens and privileges

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                  provided by Louisiana law, including but not limited to all
                  removable temporary buildings, gaming devices and machines."

         (vi) SECTION 21.1(h) OF THE RESTATED LEASE IS HEREBY DELETED IN ITS
ENTIRETY AND THE FOLLOWING IS SUBSTITUTED IN LIEU THEREOF:

         "SECTION 21.1. EVENTS OF DEFAULT

          "The occurrence of any of the following shall constitute a material
          default and breach of this Lease by Tenant (an "Event of Default"):

         (h)      If the Casino Operating Contract is revoked or terminated by a
                  final action of the LGCB, from which all appeals have been
                  exhausted, or an automatic termination of the Casino Operating
                  Contract becomes effective; or if Tenant shall fail to obtain
                  an extension, renewal, or replacement of the Casino Operating
                  Contract prior to its expiration; or"

         (vii) SECTION 22.1. OF THE RESTATED LEASE IS HEREBY DELETED IN ITS
ENTIRETY AND THE FOLLOWING IS SUBSTITUTED IN LIEU THEREOF:

         "SECTION 22.1. LANDLORD APPROVAL OF LEASEHOLD MORTGAGES

         Landlord hereby revokes any and all prior approvals of any Leasehold
Mortgages granted and/or recorded of record prior to the execution and
recordation of this First Amendment to Lease. Tenant shall cause the inscription
of all such previously granted and/or recorded Leasehold Mortgages to be
cancelled and erased from the public records. To the extent required by LSA R.S.
41:1216, but without acknowledging the applicability of that statute, Landlord
hereby approves, without reservation except for the restrictions and conditions
provided in this

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Lease, (a) any mortgage, pledge, hypothecation or other encumbrance of this
Lease and the Improvements granted after and recorded after execution and
recordation of this First Amendment to Restated Lease and (b) any sale or other
assignment thereof to any Leasehold Mortgagee or by any Leasehold Mortgagee, or
any seizure or sale resulting from a Leasehold Mortgagee's exercise of rights
under its Leasehold Mortgage occurring after execution and recordation of the
First Amendment to Restated Lease. Provided, however, all such Leasehold
Mortgages shall only be deemed approved if they contain express language
acknowledging that the rights granted under such Leasehold Mortgages are subject
to and may be exercised and enforced only in conformity with the provisions of
this Lease. This Lease consists of the entirety of all the rights and
obligations by and between the Tenant and the Landlord, and is not limited to
the Tenant's right of occupancy, use or enjoyment. The Landlord's rights
pursuant to the express terms of the Lease and the protections afforded the
Leasehold Mortgagee expressly contained in the Lease shall not be impaired,
altered, or affected by any seizure, foreclosure, attachment, sequestration,
levy or execution on any of the Tenant's interests in the Lease. Any such
seizure, foreclosure, attachment, sequestration, levy or execution on any of the
Tenant's in the interest in the Lease must be in the entirety of the Tenant's
interest in the Lease, including the Tenant's pay rights, duties, and
obligations under the Lease, including but not limited to, the obligation to
Minimum Payments. Nothing herein shall in any way alter or modify the provisions
of the Lease or any Leasehold Mortgage, including but not limited to the
Tenant's obligations to thereunder protect against the filing or enforcement of
any mechanics', materialmen's, contractors', vendor's, laborers' or
subcontractors' liens on any part of the Leased Premises or the Improvements.
Furthermore, any judicial mortgage shall be subject to this Lease and any
seizure, foreclosure, or other execution of any such judicial mortgage must be

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on the entirety of the Lease, including Tenant's duties and obligations under
the Lease, as set forth above.

         (viii) SECTION 23.1. OF THE RESTATED LEASE IS HEREBY DELETED IN ITS
ENTIRETY AND THE FOLLOWING IS SUBSTITUTED IN LIEU THEREOF:

         "SECTION 23.1. GRANTING OF CERTAIN LEASEHOLD MORTGAGES

         Subject to all provisions of this Lease and only in compliance with
Section 22.1 of this Lease, Tenant may mortgage, pledge or otherwise encumber
this Lease and the Improvements in connection with the Construction Credit
Facility, the New Bond Documents and the HET/JCC Agreement; provided that Tenant
shall not be permitted to separately mortgage, pledge or encumber either the
Lease or the Improvements. Subject to Section 23.12, any such mortgage, pledge
or encumbrance shall be in a form that requires any Person, including any
Leasehold Mortgagee, that acquires ownership of either this Lease or the
Improvements by virtue of such mortgage, pledge or encumbrance (whether by
foreclosure, other enforcement proceeding or otherwise) to perform or cause to
be performed all of Tenant's obligations under this Lease. Prior to the
Effective Date and recordation of this First Amendment of Restated Lease, Tenant
shall cause any and all existing mortgages, pledges and encumbrances of its
leasehold interest, this Lease or the Improvements to be canceled and erased
from all applicable public records, including mortgage and conveyance records."

         (ix) SECTION 4.4 OF THE RESTATED LEASE IS HEREBY DELETED IN ITS
ENTIRETY AND AMENDED TO READ AS FOLLOWS:

         SECTION 4.4. GROSS GAMING PAYMENTS

Subject to Section 4.19 of this Lease and in addition to the Rent, commencing on
the Opening Date, Tenant shall pay to Landlord gross gaming payments based on
Gross Gaming Revenues

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(the "Gross Gaming Payments"). The Gross Gaming Payments for each Fiscal Year
shall equal the amount by which the Gross Gaming Percentage Amount for that
Fiscal Year exceeds the Rent payable in the same Fiscal Year.

         (a)      "Gross Gaming Percentage Amount" for a Fiscal Year shall be
                  equal to the sum of the amounts obtained by multiplying the
                  following applicable percentages by the following incremental
                  amounts of the Gross Gaming Revenues received in that Fiscal
                  Year plus One Hundred Thousand Dollars ($100,000.00) per year:

         Gross Gaming Revenues
<TABLE>
<CAPTION>
         (Millions)
         In excess of:       To:              Applicable Percentage
         -------------       ---              ---------------------
<S>                          <C>              <C>
         0                   325.0            3.00%
         325                 350.0            4.50%
         350.0               375.0            5.00%
         375.0               400.0            5.50%
         400.0               425.0            6.00%
         425.0               450.0            6.50%
         450.0               475.0            7.00%
         475.0               500.0            7.50%
         500.0               525.0            8.00%
         525.0               550.0            8.50%
         550.0               575.0            9.00%
         575.0               ----             9.50%
</TABLE>

         "For example, if in Fiscal Year "A" the amount of the Gross Gaming
Revenues is 350,000,000 then the Gross Gaming Percentage Amount in Fiscal Year
"A" would be 10,975,000,000 [(325,000,000 x .0300) + ($25,000,000 x .045) +
($100,000)]. Further

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illustrating, if the Rent payable in the Fiscal Year "A" is $5,000,000, then the
amount of Gross Gaming Payments payable in Fiscal Year "A" would be $5,975,000
($10,975,000 - $5,000,000).

         (b) On or before the twentieth day after the end of each month
beginning with the first full month after the Opening Date, Tenant shall deliver
to Landlord a statement (the "Gaming Percentage Statement") of the Gross Gaming
Revenues for the previous month and for the Fiscal Year to date. At such time as
Gross Gaming Revenues for the Fiscal Year to date exceed Three Hundred Twenty
Five Million Dollars ($325,000,000), as set forth on the Gaming Percentage
Statement, Tenant shall pay to Landlord with the Gaming Percentage Statement for
such month, and for each month thereafter, any unpaid Gross Gaming Percentage
Amount then due in accordance with this Section 4.4. Gross Gaming Payments shall
be computed separately with respect to each Fiscal Year based on the amount of
the Gross Gaming Revenues received in that Fiscal Year, and there shall be no
carry backs or carry forwards with respect to any Fiscal Year.

3.       In the event of any conflict between any of the terms and conditions of
         the Restated Lease and this First Amendment, the terms and conditions
         of the Restated Lease shall prevail unless such interpretation would
         render the provisions of this First Amendment nugatory."

4.       Except as provided in Paragraph 6, the effective date of this First
         Amendment (the "Effective Date") is March 31, 2001.

5.       Except as specifically amended and stipulated herein, the Restated
         Lease, together with each and every prior amendment, extension and
         supplement thereto, continues uninterrupted in full force and effect as
         to all of its terms and conditions, and which said Restated Lease is
         hereby ratified and confirmed in all respects.

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6.       Notwithstanding any provision contained herein, the Restated Lease
         shall not be amended or otherwise modified unless and until the State
         of Louisiana and/or the Louisiana Gaming Control Board ("LGCB") reduces
         the Minimum Compensation as defined by LSA-R.S. 27:241 or the Minimum
         Payment as defined in the Casino Operating Contract and enters into a
         new contract for the continued operation of the casino and such
         contract becomes effective.

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              THUS DONE AND SIGNED on the date first stated above.

ATTEST:

                                            RIVERGATE DEVELOPMENT CORPORATION
--------------------------------

                                            BY: /s/ HELEN S. KOHLMAN, PRESIDENT
---------------------------------               -------------------------------

                                            JAZZ CASINO COMPANY, L.L.C.
--------------------------------

                                            BY: /s/ FREDERICK W. BURFORD
---------------------------------               -------------------------------

                                            CITY OF NEW ORLEANS
--------------------------------

                                            BY:
---------------------------------               -------------------------------
                                                     MARC H. MORIAL, MAYOR

                                       18<PAGE>   1
                                                                   EXHIBIT 10.02

                         SECOND AMENDMENT TO AMENDED AND
                     RENEGOTIATED CASINO OPERATING CONTRACT

         This renegotiation and amendment to the Amended and Renegotiated Casino
Operating Contract (the "Second Amendment") is made and entered into on the 8th
day of March, 2001 and shall become effective as of 11:59:59 PM March 31, 2001
(the "Effective Date"), conditioned upon and subject to the fulfillment and
satisfaction of all of the "Suspensive Conditions" (as defined and set forth in
Paragraph IV below) among the State of Louisiana by and through the Louisiana
Gaming Control Board (the "Gaming Board") and Jazz Casino Company, L,L.C., a
Louisiana limited liability company ("JCC") or the ("Casino Operator").

                                    RECITALS

         A. On October 30, 1998, the Gaming Board, JCC and Harrah's Jazz
Company, a Louisiana general partnership (which has since dissolved in
accordance with and as contemplated by the Joint Plan of Reorganization under
Chapter 11 of the United States Bankruptcy Code filed by Harrah's Jazz Company,
Harrah's Jazz Finance Corp. and Harrah's New Orleans Investment Company) entered
into the Amended and Renegotiated Casino Operating Contract (the "COC").
Effective as of October 19, 1999 the Gaming Board and JCC entered into a First
Amendment to Amended and Renegotiated Casino Operating Contract (the "First
Amendment"). As used herein, the COC and the First Amendment may be referred to
herein collectively as the "Amended COC", and all capitalized terms used herein,
and not otherwise defined herein, shall have the same meaning as such terms have
in the Amended COC.

         B. On January 4, 2001, JCC and several related entities filed a
voluntary petition in the United States Bankruptcy Court for the Eastern
District of Louisiana seeking relief under Chapter 11 of the United States
Bankruptcy Code.

         C. JCC and its related entities have submitted a plan of reorganization
in the bankruptcy proceedings of JCC and said related entities.

         D. Pursuant to R.S. 27:245 and other provisions of law, the Gaming
Board and JCC have agreed to renegotiate and amend the Amended COC, subject to
fulfillment and satisfaction of all of the Suspensive Conditions set forth in
Paragraph IV below.

         NOW, THEREFORE, in consideration of the foregoing, the parties do
hereby agree as follows:

         PARAGRAPH I.1 - AMENDMENTS

         (a) Section 1.3(b)(A)(i)(a)(2) is amended by deleting existing Section
1.3(b)(A)(i)(a)(2) in its entirety and substituting the following in its place
and stead:

                  (2)      permitting riverboats (other than a Permitted
                           Riverboat [as defined below]) to conduct dockside

<PAGE>   2

                           gaming in Orleans Parish beyond the scope of R.S.
                           27:65(B)(1), as in effect January 1, 1997

                  (collectively, a "Change in State Law"); provided, however, a
                  Change in State Law shall not include a change in State law
                  authorizing at any time or from time to time one or more
                  licensed riverboats or permanently moored riverboat vessels
                  (as defined and authorized from time to time) to remain
                  dockside or permanently moored and conduct dockside gaming or
                  gaming while permanently moored beyond the scope of R.S.
                  27:65(B)(1), as in effect January 1, 1997, provided that, with
                  respect to Orleans Parish, the authorization shall be limited
                  to not more than one licensed riverboat or permanently moored
                  riverboat vessel or barge at any time (either being a
                  "Permitted Riverboat") which must be located on Lake
                  Pontchartrain in Orleans Parish, and provided, further, that
                  the authorization (as to Orleans Parish) includes the
                  following prohibitions:

                           (A)      a prohibition against a Permitted Riverboat
                                    conducting gaming activities in an area(s)
                                    exceeding thirty thousand (30,000) square
                                    feet in the aggregate,

                           (B)      a prohibition against the owner or operator
                                    of a Permitted Riverboat participating
                                    directly or indirectly in the ownership,
                                    construction, operation or subsidization of
                                    any hotel of a size exceeding three hundred
                                    ninety-nine (399) guest rooms within a
                                    distance of one (1) mile from the berthing
                                    area of a Permitted Riverboat; and

                           (C)      a prohibition against a Permitted Riverboat
                                    maintaining or offering for patron or public
                                    use on the vessel and at its terminal,
                                    berthing area and any hotel referred to
                                    above, more than eight thousand (8,000)
                                    square feet or restaurant facilities in the
                                    aggregate (exclusive of food operation and
                                    handling areas).

                           Any change in State law authorizing a Permitted
                           Riverboat to remain dockside or permanently moored
                           and conduct dockside gaming or gaming while
                           permanently moored beyond the scope of R.S.
                           27:65(B)(1) as in effect January 1, 1997, and subject
                           to the foregoing prohibitions, shall be a "Permitted
                           Amendment."

         (b) Section 1.3(b)(A)(i)(c) is amended by deleting existing Section
1.3(b)(A)(i)(c) in its entirety and substituting the following in its place and
stead:

                  (c) the Gaming Board and/or the State permitting riverboats
         (other than a Permitted Riverboat subject to the prohibitions set forth
         in Section 1.3(b)(A)(i)(a)(2)(A),(B) and

<PAGE>   3

         (C) of this Casino Operating Contract) to conduct gaming operations in
         the Parish of Orleans if the riverboats do not meet the requirements of
         R.S. 27:44(4) and 27:44(23)(c) and (d), as in effect January 1, 1997,
         or

         (c) Section 2.6 of the Amended COC is amended by deleting the existing
Section 2.6 in its entirety and substituting the following in its place and
stead:

                  2.6 - "Approve," "Approves," "Approved," "Approval" mean, when
         used with respect to the Gaming Board that the Gaming Board shall have
         the right, prior to an action, to approve, confirm, uphold or grant
         permission with respect to the subject matter thereof. Appeals of the
         actions, decisions or orders of the Gaming Board, a hearing examiner or
         the Chairman, when exercising its duty or prerogative to Approve, shall
         be in accordance with the Louisiana Gaming Control Law. When the term
         "approve," "approves," "approved" or approval" is used without an
         initial capital "A," it shall mean the Gaming Board has contractual
         approval rights only. When the term "approve," "approves," "approved"
         or "approval" is used with an initial capital "A" it shall mean the
         Gaming Board has regulatory Approval rights.

         (d) Section 2.104 of the Amended COC is amended by deleting existing
section 2.104 in its entirety and substituting the following in its place and
stead:

                  2.104 - "LEASEHOLD MORTGAGE" means a mortgage on the Casino
         Operator's leasehold interest in the Casino Lease, including all
         immovable improvements so situated on the immovable property,
         including, but not limited to, a lien in favor of the Minimum Payment
         Guarantor, holders of any indebtedness pursuant to the Plan and/or the
         Revised Plan (including related collateral agents, trustees and their
         successors), the Lenders of financing to be obtained by the Casino
         Operator pursuant to the Plan and/or pursuant to the Revised Plan or
         any other creditor holding a Leasehold Mortgage. Every provision of a
         Leasehold Mortgage shall be subject to provisions of the Casino Act and
         this Casino Operating Contract.

         (e) Section 2.105 of the Amended COC is amended by deleting existing
Section 2.105 in its entirety and substituting the following in its place and
stead:

                  2.105 - "LEASEHOLD MORTGAGEE" means the holder, from time to
         time, of a Leasehold Mortgage, including but not limited to the Minimum
         Payment Guarantor, holders of the new notes and new contingent notes
         issued pursuant to the Plan (and related collateral agents and related
         trustees and their successors), the Lenders of the financing to be
         obtained by or provided to the Casino Operator pursuant to the Plan or
         pursuant to the Revised Plan (and related collateral agents and related
         trustees and their successors), or any other creditor holding a
         Leasehold Mortgage. The Gaming Board shall have the right to Approve
         any Leasehold Mortgagee.

<PAGE>   4

         (f) Section 2.115 of the Amended COC is amended by deleting existing
Section 2.115 in its entirety and substituting the following in its place and
stead:

                  2.115 - "MINIMUM PAYMENT" means the sum of Fifty Million
         Dollars ($50,000,000.00) for the Fiscal Year Beginning April 1, 2001
         and Ending March 31, 2002; the sum of Sixty Million Dollars
         ($60,000,000.00) for every Fiscal Year thereafter and for the Last
         Fiscal Year, the Minimum Payment shall be the product of the Daily
         Payment (based on $60,000,000.00) and the number of Days in such Last
         Fiscal Year, which shall be the minimum payment which will be paid each
         Fiscal Year by the Casino Operator.

         (g) Article II "Definitions" is amended by adding Sections 2.152
through 2.155 as follows:

                  2.152 - "REVISED PLAN" means the confirmed Joint Plan of
         Reorganization under Chapter 11 of the United States Bankruptcy Code,
         in consolidated Case Numbers 01-10086, 01-10087, 01-10088, 01-10089,
         and 01-10090 filed by JCC Holding Company, Jazz Casino Company, L.L.C.,
         JCC Canal Development, L.L.C., JCC Fulton Development, L.L.C. and JCC
         Development Company, L.L.C. in the United States Bankruptcy Court,
         Eastern District of Louisiana.

                  2.153 - "REVISED PLAN FINANCING" means the closing of one or
         more transactions contemplated in the Revised Plan necessary to provide
         sufficient money to the Casino Operator in addition to the funds
         otherwise available to the Casino Operator to fund the Casino Bankroll
         and other necessary Casino Operating Expenses and other liabilities
         pursuant to the Revised Plan, including, without limitation, the new
         revolving line of credit to be obtained by the Casino Operator pursuant
         to the Revised Plan.

                  2.154 - "FOUR YEAR UNCONDITIONAL MINIMUM PAYMENT GUARANTY"
         shall have the meaning set forth in Section 25. 1 ("Minimum Payment
         Guaranty Requirements") as amended by this Second Amendment.

                  2.155 - "MINIMUM PAYMENT EXTENSION GUARANTY" shall have the
         meaning set forth in Section 25.1 ("Minimum Payment Guaranty
         Requirements") as amended by this Second Amendment.

         (h) Section 6.2(a) of the Amended COC is amended by deleting the same
in its entirety and substituting the following in its place and stead:

                  6.2 LOUISIANA GROSS GAMING REVENUE SHARE PAYMENTS (a)
         PAYMENTS. In addition to the payment of the Initial Payment previously
         paid by HJC and as further consideration for rights granted to the
         Casino Operator pursuant to this COC, the Casino Operator shall pay an
         amount to the Gaming Board (the "Louisiana Gross Gaming Revenue Share
         Payments") to be calculated in the following manner:

                  Subject to the terms of the relief, if any, from payments set
         forth in Section 1.3(b), (c), (e), and (f), the Louisiana Gross Gaming
         Revenue Share Payments for each Fiscal Year from the

<PAGE>   5

         Casino shall be equal to the greater of (i) the Minimum Payment or (ii)
         21-1/2% of the Gross Gaming Revenues for each Fiscal Year, plus the
         additional override payments set forth below.

                  The Louisiana Gross Gaming Revenue Share Payments will
         increase and the Casino Operator will pay and will be obligated to pay
         an additional percentage of Gross Gaming Revenues as an override on
         Gross Gaming Revenues equal to the following:

                  (1)      an additional 1-1/2% (in addition to 21-1/2%) on
                           Gross Gaming Revenues in excess of $500,000,000 up to
                           $700,000,000;

                  (2)      an additional 3-1/2% (in addition to 21-1/2%) on
                           Gross Gaming Revenues in excess of $700,000,000 up to
                           $800,000,000;

                  (3)      an additional 5-1/2% (in addition to 21-1/2%) on
                           Gross Gaming Revenues in excess of $800,000,000 up to
                           $900,000,000, and

                  (4)      an additional 7-1/2% (in addition to 21-1/2%) on
                           Gross Gaming Revenues in excess of $900,000,000.

                  For example, if the Casino Operator has Gross Gaming Revenues
         from the Casino of $750,000,000 in any Fiscal Year, the Louisiana Gross
         Gaming Revenue Share Payment, and the amount that the Casino Operator
         would owe (and would be obligated to pay) the Gaming Board, would be
         21-1/2% of the first $500,000,000 in Gross Gaming Revenues, 23% of the
         next $200,000,000 in Gross Gaming Revenues above $500,000,000, and 25%
         of the next $50,000,000 in Gross Gaming Revenues above $700,000,000 for
         said Fiscal Year, or a total of $166,000,000.

         (i) Section 6.3(a) of the Amended COC is amended by deleting the same
in its entirety and substituting the following in its place and stead:

         6.3(a) AMOUNT AND PAYMENT OF DAILY PAYMENT. The parties intend that at
all times during each Fiscal Year, the Gaming Board shall be paid an amount not
less than the Daily Payment times the number of Days that have elapsed to date
in the Fiscal Year (the "Required Payments"), with a true-up for any Louisiana
Gross Gaming Revenue Share Payments in excess of the Minimum Payment to occur at
the end of each Fiscal Year in accordance with Section 6.3(c) - Monthly
Report-Adjustments; provided, however, the Required Payments/Daily Payments
shall be suspended if there is an Excusable Temporary Cessation of Business
pursuant to Section 2.58(b) hereof (in no event to exceed six [6] months), or a
business interruption insurance claim period pursuant to Section 15.3 -
"Utilization of Insurance Proceeds". For the Fiscal Year ending March 31, 2002,
the Daily Payment shall be shall be One Hundred Thirty-Six Thousand Nine Hundred
Eighty-Six and 30/100 ($136,986.30). Thereafter, the amount of the Daily Payment
in a non-leap Fiscal Year shall be the sum of $164,383.56, and the amount of the
Daily Payment in a Fiscal Leap Year shall be the sum of $163,934.43. The Daily
Payment shall be paid each Business Day on the terms provided in Section 6.5 -
"Daily Deposits". The Daily Payment for each non-Business Day shall be

<PAGE>   6

carried forward without interest and paid on the next Business Day. The Casino
Operator shall be entitled to setoff against any Daily Payment to be paid
directly into the Louisiana Casino Revenue Account, the amount of any Directed
Payment actually paid to the Parish of Orleans and/or to the Compulsive and
Problem Gaming Fund. Except as provided below in this paragraph, the Casino
Operator waives and renounces any right to, and will not assert a claim for
recovery of, the Three Million, One Hundred Twelve Thousand, Four Hundred
Seventy-Seven and No/100 Dollars ($3,112,477.00) Payment Credit referred to in
the First Amendment, and in particular the Casino Operator will have no right to
set off (offset) against any payments to the State or Gaming Board all and/or
any part of the $3,112,477.00 Payment Credit as provided in the First Amendment;
provided, however, that to the extent that the Casino Operator actually pays to
the State through the Gaming Board more than the required Minimum Payment in any
Fiscal Year beginning on or after April 1, 2002, in making a true-up after the
end of any such Fiscal Year (ending on or after March 31, 2003), the Casino
Operator shall have the right to, and may, set off (offset) an amount during the
Term in any one or more such Fiscal Years not to exceed the aggregate amount of
the $3,112,477.00 Payment Credit, in accordance with making the true-up for any
Louisiana Gross Gaming Revenue Share Payments in excess of the Minimum Payment
to occur at the end of any such Fiscal Year in accordance with Section 6.3(c).
Except as provided hereinabove in this Section 6.3(a) - Amount and Payment of
Daily Payment, there shall be no abatement in, any right of offset, setoff or
recoupment of, or any right to withhold or fail to pay the Daily Payment as
required in Section 6.5-Daily Deposits.

         (j) Section 8.2 of the Amended COC is amended by deleting the last
sentence of that section in its entirety and substituting the following sentence
in its place and stead:

         In connection with the development of the Second Floor, the Casino
         Operator shall deliver a master plan for the initial build-out and
         leasing of the Second Floor, and any subsequent build-out, for the
         Gaming Board's approval based upon the terms of the Gaming Act,
         provided, however, the Casino Operator shall not seek and the Gaming
         Board shall not approve any use that targets, solicits or encourages
         persons under the age of twenty-one (21) to patronize business on the
         Second Floor.

         (k) Section 10.2 and Section 10.3 of the Amended COC are amended by
deleting the same in their entirety and substituting the following in their
place and stead:

                           10.2 FOOD AND RESTAURANT FACILITIES AND SERVICE. To
                  the extent permitted by State law, the Casino Operator shall
                  be allowed to provide food and restaurant facilities in any
                  non-gaming space in the Casino, either as owner/operator or as
                  lessor of such facilities to third parties.

                           10.3 LODGING. To the extent permitted by State law,
                  except as provided below, the Casino Operator shall be allowed
                  to offer lodging in any location, provided however, no lodging
                  may be provided within the Casino (by the Casino Operator or
                  any other Person), it being expressly agreed

<PAGE>   7

                  that lodging may be offered and provided by the Casino
                  Operator or its agents or designees in other facilities, even
                  if those other facilities provide tunnels, walkways and other
                  passageways for ingress and egress to and from the Casino to
                  and from the other facilities.

         (l) Section 10.6 of the Amended COC is amended by deleting same in its
entirety and substituting in its following place and stead:

                           10.6 PROHIBITED SALE OF CERTAIN PRODUCTS. The Casino
                  Operator shall comply with all Rules and Regulations
                  concerning the sale of products within the Casino.

         (m) Section 14.8 of the Amended COC is amended by deleting the second
to last sentence of that section in its entirety and substituting the following
sentence in its place and stead:

         For purposes of this Section 14.8 "Business Interruption Insurance,"
         the Gaming Board's interest in the proceeds of business interruption
         insurance for the Casino, (unless the Minimum Payment Obligations cease
         pursuant to Section 1.3 "Exclusive Contract"), shall be the amount of
         the required Daily Payment per day, minus (in each case) the amount of
         the Louisiana Gross Revenue Share Payments actually paid for the same
         period.

         (n) Section 20.2 of the Amended COC is amended by deleting the same in
its entirety and substituting the following in its place and stead:

                  20.2 NOTICE; OPPORTUNITY TO CURE. The Casino Operator
         acknowledges and agrees that time is of the essence of this Casino
         Operating Contract and of the Casino Operator's observance and
         performance of its duties and obligations under this Casino Operating
         Contract. A default under any of subsections (b), (e), (f), (g), (h),
         (j), (k), (l), or (n) of Section 20.1 - "Events of Default" shall not
         be an Event of Default unless the Casino Operator fails to remedy the
         default within thirty (30) Days after Notice of Default by the Gaming
         Board (subject to such additional period for financial stability
         related issues as set forth in Section 9.5(e) - "Financial Stability"
         hereof); provided however, if the default is not susceptible with due
         diligence of being cured by the Casino Operator within thirty (30) Days
         and the Casino Operator commences to cure the default within thirty
         (30) Days of Notice of default and diligently and continuously
         prosecutes the cure to completion, then the thirty (30) Day period
         shall be extended for the period of time required to complete the cure.
         The occurrence of the events under subsections (a), (c), (d), (i), (m),
         or (o) of Section 20.1 - "Events of Default" shall constitute an Event
         of Default without any other notice or opportunity to cure. The
         occurrence of an event under subsection 20.1(p), being the failure to
         timely provide any required Minimum Payment Guaranty, including the
         failure to provide any required Minimum Payment Extension Guaranty on
         or before the "Renewal Date"(as defined in subsection 25.1(d) "Minimum
         Payment Extension Guaranty"), shall be an Event of Default and a
         Termination Event [as defined in Section 20.6(b)],
<PAGE>   8

         with no right (or opportunity) to cure, which termination shall be
         effective as set forth in Section 25.1(g).

         (o) Section 20.6(b) of the Amended COC is amended by deleting the same
in its entirety and substituting the following in its place and stead:

                  20.6(b) TERMINATION OF CASINO OPERATING CONTRACT. The Casino
         Operator hereby agrees to the automatic termination, effective as
         provided in Section 25.1(g), of this Casino Operating Contract,
         including any rights to operate the Casino, if the Casino Operator
         fails timely to post the Minimum Payment Guaranty, including
         particularly any required Minimum Payment Extension Guaranty, on or
         before each Renewal Date pursuant to the requirements of this Casino
         Operating Contract (a "Termination Event"), and upon the occurrence of
         such Termination Event, this Casino Operating Contract shall be deemed
         terminated without further action, effective as provided in Section
         25.1(g).

                  If any such Termination Event occurs and provided that (i) the
         Gaming Board has received the greater of (a) the Minimum Payment for
         the Fiscal Year ending on the effective date of the Termination Event
         and (b) the Louisiana Gross Gaming Revenue Share Payments for said
         Fiscal Year (plus any Late Payment interest, if any), no later than ten
         (10) days following the end of such Fiscal Year, and (ii) this Casino
         Operating Contract has been terminated, the State and the Gaming Board,
         except as provided below in this Section, shall not seek or assert an
         affirmative claim against the Casino Operator for additional Louisiana
         Gross Gaming Revenue Share Payments for the remaining balance of the
         Term of the terminated Casino Operating Contract.

                  Notwithstanding the above, nothing herein shall limit any
         claims of the Gaming Board for any Additional Charges or for Louisiana
         Gross Gaming Revenue Share Payments due and owing but not paid for a
         prior Fiscal Year and/or indemnity and/or contribution or limit the
         Gaming Board's right to assert such claims as a defense, offset and/or
         recoupment in any action or proceeding.

                  If any one or more of the Casino Operator, JCC Holding, HET,
         Harrah's Operating, the Casino Manager or any of their respective
         successors, or any of their controlled affiliates (as may be determined
         by the court of law in which the litigation is pending) institutes
         legal action against the Gaming Board and/or the State asserting any
         claims related to this Casino Operating Contract, or any such person(s)
         or entity(ies) assert that the Casino Operator has any continuing
         rights to operate the Casino, then the Gaming Board's remedy limitation
         set forth in this Section 20.6(b) shall not apply.

                  In addition, if the Casino Operator, other than as a result of
         an Excusable Temporary Cessation of Operations closes the Casino or
         ceases gaming operations and fails to reopen the Casino and resume
         gaming operations within seven (7) days of demand by the Gaming Board
         (to the Casino Operator) to reopen the Casino, at the option of the
         Gaming Board, this Casino Operating Contract

<PAGE>   9

         may be terminated (a "Termination Closure Event") without any further
         notice or demand and without any right of the Casino Operator or any
         Leasehold Mortgagees or any other Person to cure; provided however, the
         occurrence of such Termination Closure Event, and the termination of
         the Casino Operating Contract, shall not excuse the Casino Operator
         and/or any Minimum Payment Guarantor from making the required Minimum
         Payment and the Louisiana Daily Revenue Payment as provided in the
         Contract, which payments will be required to be paid as liquidated
         damages for the entire period of time during which any Minimum Payment
         Guaranty extends, namely the last day of any Covered Fiscal Year (being
         a Fiscal Year covered by a Minimum Payment Guaranty). It is further
         agreed that this Termination Closure Event will also be a "Termination
         Event" as referred to in Section 23.4 - "Opportunity to Cure".

         (p) Section 25.1 of the Amended COC is amended by deleting the same in
its entirety and substituting the following, such that Section 25.1 "Rolling
Minimum Payment Guaranty" is amended to read in its entirety as follows:

                  25.1 ROLLING MINIMUM PAYMENT GUARANTY

                           (a) Existing Guaranty Requirement. It is acknowledged
                  that the Initial Minimum Payment Guaranty substantially in the
                  form of Exhibit H (to the COC) and the Unconditional Minimum
                  Payment Guaranty for the Fiscal Year ending March 31, 2001
                  (the "2001 Guarantee"), substantially in the form of Exhibit I
                  (to the COC), as required under the Casino Operating Contract
                  have been timely posted, and the 2001 Guarantee remains in
                  full force and effect, in accordance with its terms.

                           (b) Future Guaranty Requirements. Subject to earlier
                  expiration of the Minimum Payment Guaranty requirement
                  pursuant to Section 25.1(i), for each Fiscal Year beginning
                  April 1, 2001 and continuing throughout the entire Term
                  (including any extension), the Casino Operator shall cause to
                  be provided to the Gaming Board a letter of credit, surety
                  arrangement or guaranty of the Minimum Payment, that shall as
                  to form and substance and as to the Person providing such
                  letter of credit, surety arrangement or guaranty, be subject
                  to approval by the Gaming Board, (each such guaranty referred
                  to herein as a "Minimum Payment Guaranty") and each such
                  Person providing such Minimum Payment Guaranty (each a
                  "Minimum Payment Guarantor") shall comply with this Section
                  25.1.

                           (c) Four Year Unconditional Guaranty. The Minimum
                  Payment Guaranty for the period from April 1, 2001 through
                  March 31, 2005 shall be furnished by HET and Harrah's
                  Operating and shall be substantially in the form of the Four
                  Year Unconditional Minimum Payment Guaranty attached hereto as
                  Exhibit "AA" and by this reference incorporated herein (the
                  "Four Year Unconditional Minimum Payment Guaranty").

<PAGE>   10

                           (d) Minimum Payment Extension Guaranty. Subject to
                  earlier expiration of the Minimum Payment Guaranty requirement
                  pursuant to Section 25.1(i), the Casino Operator shall cause
                  to be provided to the Gaming Board on or before March 31, 2003
                  a Minimum Payment Guaranty to guarantee the Minimum Payment
                  due to the Gaming Board for the Fiscal Year commencing April
                  1, 2005, and ending March 31, 2006. Additionally, throughout
                  the Term (including any extension), prior to the end of each
                  Fiscal Year after March 31, 2003 [March 31, 2003 and each
                  anniversary thereof being a "Renewal Date"], the Casino
                  Operator shall cause to be provided to the Gaming Board a
                  Minimum Payment Guaranty for each succeeding third Fiscal Year
                  after each Renewal Date (each such succeeding third Fiscal
                  Year an "Extension Year"). The Minimum Payment Guaranty for
                  each Extension Year shall be provided by a Person who shall be
                  subject to prior approval (as to general suitability, and
                  financial ability to perform) by the Gaming Board, and each
                  such Minimum Payment Guaranty shall be substantially in the
                  form of the Unconditional Minimum Payment Extension Guaranty
                  attached hereto as Exhibit "BB" and by this reference
                  incorporated herein, or in such other form as approved by the
                  Gaming Board (the "Minimum Payment Extension Guaranty").

                           (e) Notice of Failure to Obtain A Minimum Payment
                  Extension Guaranty. The Casino Operator shall provide Notice
                  to the Gaming Board if it has not procured any required
                  Minimum Payment Extension Guaranty at least thirty (30) days
                  prior to any Renewal Date.

                           (f) Default. If the Casino Operator shall have failed
                  to timely provide (on or before each Renewal Date) an approved
                  Minimum Payment Extension Guaranty from an approved, Minimum
                  Payment Guarantor [all of which approvals must occur prior to
                  each Renewal Date], such failure (i) shall be an Event of
                  Default and (ii) (as set forth in this Casino Operating
                  Contract) shall also be a Termination Event.

                           It is understood that if, for example, the Casino
                  Operator fails to provide the required Minimum Payment
                  Extension Guaranty for the Fiscal Year beginning April 1, 2005
                  and ending March 31, 2006 on or before the March 31, 2003
                  Renewal Date, then such an event shall automatically be a
                  Termination Event.

                           (g) Termination After Failure to Provide a Minimum
                  Payment Extension Guaranty. If a Termination Event shall have
                  occurred as a result of the Casino Operator's failure to
                  obtain and post the required Minimum Payment Extension
                  Guaranty on or before any Renewal Date, then this Casino
                  Operating Contract shall automatically terminate effective at
                  12:00 Midnight as of March 31 of the last day of any "Covered
                  Fiscal Year" (as defined below). For example, if the Casino
                  Operator does not timely provide the Minimum Payment Extension
                  Guaranty by March 31, 2003 (for the
<PAGE>   11

                  Fiscal Year beginning April 1, 2005 and ending March 31,
                  2006), then as the Four Year Unconditional Minimum Payment
                  Guaranty extends through the last day of the Fiscal Year
                  ending March 31, 2005, the Termination Event will be effective
                  (and the termination of all rights to operate the Casino will
                  automatically occur) as of 12:00 Midnight March 31, 2005.

                           (h) Scope of Minimum Payment Guarantor Liability. In
                  no event shall a Minimum Payment Guarantor be liable or
                  responsible to the State and/or the Gaming Board for (i) any
                  amount in excess of the difference between the Minimum Payment
                  for any Fiscal Year(s) covered by its Minimum Payment Guaranty
                  (a "Covered Fiscal Year") and the total of the Louisiana Gross
                  Gaming Revenues Share Payments which have been paid to the
                  Gaming Board for the Fiscal Year or Fiscal Years in which
                  there is a Minimum Payment Default or (ii) any Daily Payments
                  in any Fiscal Year after the expiration of its Minimum Payment
                  Guaranty.

                           (i) Expiration of Minimum Payment Guaranty
                  Requirement. Notwithstanding anything to the contrary in this
                  Casino Operating Contract, no further Minimum Payment
                  Extension Guaranty shall be required if on any Renewal Date,
                  (i) Gross Gaming Revenues of the Casino Operator at the Casino
                  for each of the two preceding Fiscal Years shall have exceeded
                  Three Hundred Fifty Million Dollars ($350,000,000), (ii) the
                  Casino Operator shall have made all Daily Payments during such
                  two preceding Fiscal Years, without any drawings on any
                  Minimum Payment Guaranty or any borrowings from, or any
                  borrowings guaranteed by, any Minimum Payment Guarantor or
                  such guarantor's affiliates during such two preceding Fiscal
                  Years, and (iii) there shall have been no uncured default or
                  Event of Default by the Casino Operator, including no uncured
                  financial stability default by the Casino Operator pursuant to
                  Section 9.5(e) -"Financial Stability-Financial Stability
                  Default" during such two preceding Fiscal Years.

         (q) Section 28.15 of the Amended COC is amended by deleting same in its
entirety and substituting the following in its place and stead:

                  28.15 NO THIRD PARTY BENEFICIARY. Except as otherwise provided
         in Article XXIII - "Leasehold Mortgages" or Section 25.4(d) -
         "Reliance", there shall be no third party beneficiaries of this Casino
         Operating Contract. No recipient of any payments made by the Casino
         Operator at the direction of the Gaming Board pursuant to section
         6.5(b) of this Casino Operating Contract shall be a third party
         beneficiary of the Casino Operating Contract, the Casino Completion
         Guarantees, any Minimum Payment Guaranty, or any other guaranty or
         surety of payment provided to the Gaming Board or any third party.

         (r) Article XXVIII - Miscellaneous is hereby amended by adding Section
28.12.1 "Intervention by JCC Holding Company" as follows:

<PAGE>   12

                  28.12.1. INTERVENTION BY JCC HOLDING COMPANY. JCC Holding
         Company intervenes herein to consent to and approve all of the terms
         and conditions of the Casino Operating Contract and does hereby
         unconditionally and in solido guarantee the timely payment and
         performance of all obligations of the Casino Operator under the Casino
         Operating Contract (as amended through the Second Amendment).

         (s) Article XXVIII - Miscellaneous is hereby amended by adding Section
28.19 "Approvals" as follows:

                  28.19. APPROVALS. Without in any way limiting the general
         regulatory authority of the Gaming Board and/or the Rules and
         Regulations, it is expressly acknowledged that the approvals and
         authorizations provided in Section 10.2 "Food and Restaurant Facilities
         and Services," and Section 10.3. "Lodging," are granted subject to the
         general regulatory authority of the Gaming Board and the Rules and
         Regulations.

                  PARAGRAPH I.2 - AFFIRMATION. Except as modified herein, the
         Amended COC shall remain in full force and effect, and no novation is
         intended nor shall any novation occur,

                  PARAGRAPH II - REPRESENTATIONS.

                  PARAGRAPH II.1 - GAMING BOARD WARRANTIES: DUE AUTHORIZATION.
         The Gaming Board warrants to the Casino Operator (i) that it is a duly
         established State regulatory agency under Louisiana law and (ii) that,
         subject to fulfillment and satisfaction of all of the Suspensive
         Conditions set forth in Paragraph IV, pursuant to the Gaming Act it is
         authorized to execute and deliver this Second Amendment on its own
         behalf and on behalf of the State.

                  PARAGRAPH II.2 - CASINO OPERATOR WARRANTIES. The Casino
         Operator and JCC Holding Company each warrant and represent that each
         is duly organized and in good standing under applicable law and has the
         full right, power and authority to execute and deliver this Second
         Amendment.

                  PARAGRAPH III - GENERAL PROVISIONS.

                  PARAGRAPH III.1 - ENTIRE AGREEMENT. The Amended COC, as
         renegotiated and modified by this Second Amendment, constitutes the
         entire agreement of the parties with respect to the subject matter
         hereof, and supersedes all prior and contemporaneous agreements,
         whether written or oral.

                  PARAGRAPH III.2 - EFFECTIVE DATE. This Second Amendment and
         the amendments provided for herein shall be conditioned upon and
         subject to the timely fulfillment and satisfaction of all of the
         Suspensive Conditions set forth in Paragraph IV, and shall take effect
         as of the Effective Date set forth above.

                  PARAGRAPH III.3 - UNENFORCEABILITY. Any provision of this
         Second Amendment which is prohibited or unenforceable shall be deemed
         severed from the Amended COC without invalidating the

<PAGE>   13

         remaining provisions or affecting the validity or enforceability of the
         remainder of the Amended COC, and it is expressly provided that the
         provisions of Paragraphs III.3 of the First Amendment remain in full
         force and effect.

                  PARAGRAPH III.4 COUNTERPART EXECUTION. This Second Amendment
         may be signed in any number of counterparts with the same effect as if
         the signatures thereto were upon the same instrument.

                  PARAGRAPH III.5 - THIRD PARTIES. None of the obligations
         hereunder of either the Casino Operator or the Gaming Board shall inure
         to or be enforceable by any person or entity other than the Casino
         Operator and the Gaming Board.

                  PARAGRAPH III.6 - BINDING EFFECT. This Second Amendment shall
         be binding upon, and shall inure to the benefit of the parties and
         their respective successors in interest and the permitted assigns of
         the parties hereto, if any.

                  PARAGRAPH III.7 - NO NOVATION. This Second Amendment is an
         amendment and renegotiation of the Amended COC and is not, and shall
         not be construed as, a novation of the Amended COC.

                  PARAGRAPH IV - SUSPENSIVE CONDITIONS. The effectiveness and
         enforceability of the Second Amendment is conditioned upon and subject
         to the fulfillment and satisfaction, as evidenced by the written
         acknowledgment as required in Paragraph IV(g), on or before March 31,
         2001, of each and all of the following Suspensive Conditions, to wit:

                           (a) Enactment and effectiveness of a statutory
                  amendment to the Gaming Act reducing the annual minimum
                  compensation due to the Gaming Board from (i) the greater of
                  18-1/2% of gross revenues or One Hundred Million Dollars to
                  (ii) the greater of 18-1/2% of gross revenues or (a) Fifty
                  Million Dollars for the Fiscal Year beginning April 1, 2001,
                  and ending March 31, 2002, and (b) Sixty Million Dollars for
                  each subsequent Fiscal Year.

                           (b) Enactment and effectiveness of a statutory
                  amendment to the Gaming Act to repeal all of the provisions of
                  La. R.S. 27:243(C)(4).

                           (c) Enactment and effectiveness of statutory
                  amendments to the Gaming Act to amend La. R.S. 27:243(C)(1)
                  and La. R.S. 27:243(C)(2) to ease and authorize the
                  restaurant, food and hotel restrictions to conform in all
                  material respects with the provisions of Exhibits "CC" and
                  "DD" attached hereto.

                           (d) The effectiveness of all of the statutory
                  enactments described in Subparagraph (a), (b) and (c) above on
                  the Effective Date of this Second Amendment.

                           (e) (i) Authorization from the United States
                  Bankruptcy Court for the Eastern District of Louisiana for
<PAGE>   14

                  the Casino Operator and JCC Holding Company to enter into this
                  Second Amendment, and (ii) confirmation and consummation of
                  the Revised Plan of the Casino Operating Contract, as amended
                  herein, and (iii) obtaining the Revised Plan Financing.

                           (f) The Casino Operator, JCC Holding Company, the
                  Casino Manager, Harrah's Operating Company, Inc. ("HOC"), and
                  Harrah's Entertainment, Inc. ("HET") obtaining and/or causing
                  to be obtained all necessary and/or appropriate Approvals from
                  the Gaming Board, including particularly the Gaming Board's
                  Approval of the financial suitability of HET and HOC as
                  Minimum Payment Guarantors.

                           (g) Written acknowledgment executed on or before
                  March 31, 2001, (i) by or on behalf of the Gaming Board, JCC,
                  JCC Holding Company, HOC, and HET, each acknowledging that the
                  Suspensive Conditions described in subparagraphs (a), (b),
                  (d), (e) and (f) in this Paragraph IV have been timely
                  fulfilled and satisfied, and (ii) by JCC, JCC Holding Company,
                  HOC and HET each acknowledging that the Suspensive Condition
                  set forth in subparagraph (c) of this Paragraph IV has been
                  timely fulfilled and satisfied, unless such Suspensive
                  Condition in said subparagraph (c) is waived in writing by
                  JCC, JCC Holding Company, HOC and HET.

         PARAGRAPH V - ACKNOWLEDGMENT. JCC, JCC Holding Company, HOC, and HET
(collectively "Jazz/HET") each acknowledge and agree that neither the State nor
the Gaming Board has any obligation or duty, legal or otherwise, express or
implied, to JCC, JCC Holding Company, HOC and HET and/or any of their respective
affiliates or any other third party whatsoever, to obtain, attempt to obtain or
assist in obtaining the fulfillment and satisfaction of the Suspensive
Conditions described in Paragraph IV, of this Second Amendment. In connection
therewith, Jazz/HET hereby acknowledge that the Gaming Board and the State have
informed Jazz/HET, and Jazz/HET agree that Jazz/HET may not assume or infer that
any or all of the Suspensive Conditions will be fulfilled and satisfied, and
Jazz/HET assume full and complete risk of the failure to achieve fulfillment and
satisfaction of all of the Suspensive Conditions (a) through (g).

         PARAGRAPH VI - RESOLUTORY CONDITIONS AND RELEASE. Notwithstanding any
provision of the Amended COC or of this Second Amendment to the contrary, if,
subsequent to the execution and effectiveness of the Second Amendment, (i) the
Amended COC and/or Second Amendment are declared by a final, definitive and
nonappealable judgment(1) of a Louisiana state court of competent jurisdiction
as being violation of Louisiana law and therefore to be null and void and/or
unenforceable, and/or (ii) it is declared by a final, definitive and
nonappealable judgment of a Louisiana state court of competent jurisdiction that
the Gaming Board did not have the legal authority to enter into this Second

----------
(1) A final, definitive and nonappealable judgment is a judgment in which all
appeal rights and all other rights of review, by the same or any other court of
competent jurisdiction, have expired and terminated.

<PAGE>   15

Amendment, each such judgment a "Definitive Judgment", then (a) neither the
State nor the Gaming Board shall have any liability to the Casino Operator, JCC
Holding Company, HOC or HET (collectively "Jazz/HET"), or any of their
respective affiliates (including the Casino Manager), or any of their respective
creditors and/or other third parties for any losses or damages related to or
resulting from the Definitive Judgment (and the effects of said judgment), and
the Casino Operator, JCC Holding Company, HOC and HET do each in solido and on
behalf of each of their respective affiliates release any and all claims,
demands and causes of action, if any, against the State and the Gaming Board
related to or resulting from the Definitive Judgment(and the effects of said
judgment), and (b) provided the Definitive Judgment terminates all rights of the
Casino Operator to operate the Casino and the Casino is actually closed and all
Gaming activities cease, Jazz/HET shall have no liability to the State or the
Gaming Board, and the State and Gaming Board do release any and all claims,
demands and causes of action, if any, against Jazz/HET related to or resulting
from the Definitive Judgment (and the effects of said judgment).

         It is further acknowledged that if there is a judgment by a Louisiana
state court of competent jurisdiction which is not yet a final, definitive and
non appealable judgment (an "Interim Judgment") which declares the COC and/or
the COC Second Amendment as being in violation of Louisiana law and therefore,
to be null and void and/or unenforceable, and/or declaring that the Gaming Board
did not have the legal authority to enter into the Second Amendment, and such
(i) Interim Judgment terminates the rights of the Casino Operator to operate the
Casino, and (ii) pursuant to said Interim Judgment the Casino is closed and
Gaming Activities cease, the parties' and intervenors' obligations under the
Amended COC and this Second Amendment will be suspended, unless and until said
Interim Judgment is reversed or otherwise modified to again authorize the
Company to operate the Casino and resume Gaming activities (an "Authorizing
Judgment"), and the Casino Operator has a reasonable period of time to reopen
the Casino, but in no event shall the suspension period exceed 180 days after
the Authorizing Judgment is rendered, unless such period is extended for
pre-reopening regulatory matters. It is further agreed that any obligations
which are suspended as provided above, will also be excused but only during the
suspension period.

         It is expressly agreed that the release of the Jazz/HET entities in the
event of a Definitive Judgment, or the suspension of obligations in the event of
an Interim Judgment as provided in this Paragraph VI shall be applicable only if
the Definitive Judgment and any Interim Judgment was rendered in (1) litigation
which was not instituted, fomented, assisted or encouraged by any one or more of
the Casino Operator, JCC Holding Company, the Casino Manager, HET and/or HOC
and/or any of their respective affiliates, and (2) litigation in which the
Casino Operator actively and in good faith opposes the claims of the
plaintiff(s) and actively and in good faith attempts to uphold the validity and
enforceability of the COC and the Second Amendment, including appealing and/or
applying for writs from any such Interim Judgment.

         It is expressly agreed that the release of the State and the Gaming
Board in the event of a Definitive Judgment, or the suspension of obligations in
the event of an Interim Judgment as provided in this

<PAGE>   16

Paragraph VI shall be applicable only if the Definitive Judgment and any Interim
Judgment was rendered in (1) litigation which was not instituted, fomented,
assisted or encouraged by any one or more of the Gaming Board, the Governor
and/or the Attorney General of the State of Louisiana, and (2) litigation in
which the Gaming Board actively and in good faith opposes the claims of the
plaintiff(s) and actively and in good faith attempts to uphold the validity and
enforceability of the COC and the Second Amendment, including appealing and/or
applying for writs from any such Interim Judgment.

         IN WITNESS WHEREOF the parties hereto have executed this Second
Amendment on the date(s) set forth below, but effective as of the Effective
Date.

                                         THE STATE OF LOUISIANA, BY AND THROUGH
                                         THE LOUISIANA GAMING CONTROL BOARD

                                         By:     /s/ Robert M. Fleming
                                            ------------------------------------
                                                           Duly Authorized

                                         Date:        March 8, 2001
                                              ----------------------------------

                                         JAZZ CASINO COMPANY, L.L.C.
                                         A Louisiana Limited Liability Company

                                         By:      /s/ Fred W. Burford
                                            ------------------------------------
                                                            Duly Authorized

                                         Date:        March 8, 2001
                                              ----------------------------------

                                         JCC HOLDING COMPANY

                                         By:      /s/ Fred W. Burford
                                            ------------------------------------
                                                             Duly Authorized

                                         Date:        March 8, 2001
                                              ----------------------------------

<PAGE>   17

                 INTERVENTION IN AND CONSENT TO SECOND AMENDMENT
              TO AMENDED AND RENEGOTIATED CASINO OPERATING CONTRACT

         Harrah's Entertainment, Inc. and Harrah's Operating Company, Inc. (each
an "Intervenor"), as in solido guarantors under the Four Year Initial Guaranty,
do each hereby individually and in solido agree and consent to the above (and
attached) Second Amendment to Amended and Renegotiated Casino Operating Contract
("Second Amendment"), and the terms and provisions thereof, and each Intervenor
does further acknowledge and agree that neither the Second Amendment, nor any of
the terms and provisions hereof, shall diminish and/or otherwise affect any of
their respective obligations to the Gaming Board or the State under the
Unconditional Minimum Payment Guaranty Agreement for the Fiscal Year ending
March 31, 2001, or any document or instrument, if any, related thereto.

         IN WITNESS WHEREOF the Intervenors hereto have executed this
intervention in and consent to the Second Amendment as of the dates set forth
below but effective as of the Effective Date of the Second Amendment.

                                         INTERVENORS(S):

                                         HARRAH'S ENTERTAINMENT, INC.

                                         By:      /s/ Steve Brammel
                                            ------------------------------------
                                                             Duly Authorized

                                         Date:        March 8, 2001
                                              ----------------------------------

                                         HARRAH'S OPERATING COMPANY, INC.

                                         By:      /s/ Steve Brammel
                                            ------------------------------------
                                                             Duly Authorized

                                         Date:        March 8, 2001
                                              ----------------------------------

<PAGE>   18

                                  EXHIBIT "AA"

           FOUR YEAR UNCONDITIONAL MINIMUM PAYMENT GUARANTY AGREEMENT
               FOR FOUR FISCAL YEAR PERIOD BEGINNING APRIL 1, 2001
                            AND ENDING MARCH 31, 2005

         THIS UNCONDITIONAL MINIMUM PAYMENT GUARANTY AGREEMENT covering the four
Fiscal Years beginning April 1, 2001 and ending March 31, 2005 (the "Guaranty")
is entered into as of March 31, 2001, by HARRAH'S ENTERTAINMENT, INC., a
Delaware corporation, and HARRAH'S OPERATING COMPANY, INC., a Delaware
corporation (each a "Guarantor" and collectively the "Guarantors") in favor of
the STATE OF LOUISIANA by and through the LOUISIANA GAMING CONTROL BOARD (the
"LGCB").

                                    RECITALS

         A. That certain Casino Operating Contract between Jazz Casino Company,
L.L.C., a Louisiana limited liability company (the "Company"), and the LGCB,
dated as of October 30, 1998, as amended by the First Amendment effective as of
October 19, 1999 and the Second Amendment ("COC Second Amendment") effective as
of March 31, 2001 sets forth the conditions, covenants, obligations,
requirements and terms pursuant to which the Company has the authority to
conduct gaming operations at the Casino (collectively referred to as the "COC").

         B. As used in this Guaranty, all capitalized terms used herein but not
defined herein shall be used herein as defined in the COC.

         C. The Company has caused this Guaranty to be provided to the LGCB for
the four Fiscal Years beginning on April 1, 2001 and ending March 31, 2005, the
first Fiscal Year beginning on April 1, 2001 and ending March 31, 2002, the
second Fiscal Year beginning on April 1, 2002 and ending March 31, 2003,the
third Fiscal Year beginning on April 1, 2003 and ending March 31, 2004 and the
fourth Fiscal Year beginning on April 1, 2004 and ending March 31, 2005 (each a
"Covered Fiscal Year" and collectively the "Four Covered Fiscal Years"), as
required by the COC.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantors, the receipt and sufficiency of which are hereby
acknowledged, the Guarantors hereby solidarily make the following
representations and warranties to the LGCB, and hereby solidarily covenant and
agree for the benefit of the LGCB as follows:

         V. OBLIGATIONS GUARANTEED AND METHOD OF DRAWING.

         1.1 The Guarantors hereby irrevocably, unconditionally, and in solido
with each other and with the Company, guarantee for each of the Four Covered
Fiscal Years:

                  (a) the full, complete and timely payment and performance of
all of the Minimum Payment obligations of the Company to the LGCB under and in
accordance with the provisions of the COC, and

<PAGE>   19

                  (b) the full, complete and timely payment to the LGCB of all
of the Daily Payments, Required Payments and Minimum Payment in accordance with
the provisions of the COC.

         1.2 If there is any delay in timely paying to the LGCB any and/or all
of the Daily Payments, Required Payments and/or Minimum Payment as and when
required under the COC for each of the Four Covered Fiscal Years, the Guarantors
shall also pay to the LGCB interest on such payments due at the Default Interest
Rate (as provided in Section 6.7 of the COC) from the date each payment was due,
until paid to the LGCB.

         1.3 In no event shall the aggregate total of Daily Payments, Required
Payments and the Minimum Payment to the LGCB under this Guaranty for the Fiscal
Year beginning on April 1, 2001 and ending March 31, 2002 exceed FIFTY MILLION
DOLLARS ($50,000,000.00), plus, and in addition thereto, any interest and
attorneys' fees applicable to the Guaranty Obligation provided for in the COC or
in this Guaranty. Further, in no event shall the aggregate total of Daily
Payments, Required Payments and the Minimum Payment to the LGCB under this
Guaranty for the three Fiscal Years beginning on April 1, 2002, April 1, 2003
and April 1, 2004 exceed SIXTY MILLION DOLLARS ($60,000,000.00) for each of the
three Fiscal Years, plus, and in addition thereto, any interest and attorneys'
fees applicable to the Guaranty Obligation provided for in the COC or in this
Guaranty.

         1.4 If the LGCB has not been timely paid any one or more of the
required Daily Payments for any of the Four Covered Fiscal Years, then (a) the
LGCB may make drawings under this Guaranty by providing written notice to the
Guarantors that one or more of the required Daily Payments have not been timely
paid and the principal amount of such Daily Payments then due (the "Notice of
Drawing"), and (b) the Guarantors shall pay to the LGCB all required but unpaid
Daily Payments, plus interest at the Default Interest Rate, upon receipt of the
Notice of Drawing. Guarantors shall make payment by wire or other electronic
transfer as provided in the Notice of Drawing, on or before the time the Daily
Payments are due under Section 6.5 - "Daily Deposits" of the COC.

         1.5 The Guarantors shall not be obligated to make any Daily Payments
due for any day which is twenty (20) days or more prior to the LGCB giving the
Notice of Drawing; provided however, that any payments which are suspended
pursuant to Section 6.3(a) of the COC shall not be due and payable until the
period of the suspension has expired.

         1.6 Once a Minimum Payment Default has occurred and a Notice of Drawing
has been provided to the Guarantors during any of the Four Covered Fiscal Years
of this Guaranty, the Guarantors shall be obligated without any further notice
by the LGCB to pay, and will pay, to the LGCB any required Daily Payments for
the Fiscal Year in which the Minimum Payment Default has occurred on a daily
basis for the remainder of the Fiscal Year (in which a Minimum Payment Default
occurs) to the extent such Daily Payments have not been timely paid.

         1.7 In no event shall the Guarantors be liable to the LGCB under this
Guaranty for any amount in excess of the difference between the Minimum Payment
for each Covered Fiscal Year and the total of the

<PAGE>   20

Louisiana Gross Gaming Revenue Share Payments which have been paid to the LGCB
for said Covered Fiscal Year or liable for any Daily Payments due for and in any
Fiscal Year following the Four Covered Fiscal Years.

         1.8 All of the obligations undertaken hereinabove by the Guarantors in
this Section 1 and any amounts which may be due under Section 6.2 are
hereinafter collectively referred to as the "Guaranty Obligation."

         1.9 Notwithstanding the suspension, under the provisions of Section
6.3(a) of the COC, of the payment of any of the amounts included within the
Guaranty Obligation, it is agreed that the Guaranty Obligation covers all
payments which would have been due and payable during the Four Covered Fiscal
Years except for the fact that such payments were suspended pursuant to Section
6.3(a) of the COC. Any such suspended payments shall be paid in the manner and
within the time provided in the COC, together with Late Payment Interest from
the time the suspended payments become due under the COC, and the Guarantors
guarantee the payment thereof, even after the expiration of the Four Covered
Fiscal Years.

         2. GUARANTORS' ADDITIONAL AGREEMENTS.

         2.1 The Guarantors, in solido with each other and the Company, agree to
perform and comply with their Guaranty Obligation, whether or not the Company is
liable therefor individually or jointly or in solido with others, and whether or
not recovery against the Company is or may become barred by any statute of
limitations or prescriptive or preemptive period or is or may become
unenforceable or discharged, whether in whole or in part, for any reason other
than payment thereof in full. The Guarantors agree that this Guaranty is a
guaranty of payment and not of collection, and that their obligation under this
Guaranty shall be primary, absolute and unconditional, irrespective of, and
unaffected by:

                   (a) the absence of any action to enforce this Guaranty or any
other document or the waiver or consent by the LGCB with respect to any of the
provisions thereof;

                  (b) any release or discharge of the other Guarantor, the
Company or any other party of the Guaranty Obligation; or

                  (c) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.

         Each Guarantor shall be regarded, and shall be in the same position, as
principal debtor with respect to the Guaranty Obligation.

         2.2 Each Guarantor expressly waives all rights it may have now or in
the future under any statute, or at common law, or at law or in equity, or
otherwise, to compel the LGCB to proceed in respect of the Guaranty Obligation
against the Company or any other party or against any security for the payment
of the Guaranty Obligation before proceeding against, or as a condition to
proceeding against, any Guarantor, and without limiting the above, each
Guarantor waives all pleas of division and discussion. Each Guarantor agrees
that any notice

<PAGE>   21

or directive given at any time to the LGCB which is inconsistent with the waiver
in the immediately preceding sentence shall be null and void and may be ignored
by the LGCB, and in addition, may not be pleaded or introduced as evidence in
any litigation relating to this Guaranty for the reason that such pleading or
introduction would be at variance with the written terms of this Guaranty,
unless the LGCB has specifically agreed otherwise in writing.

         2.3 Each Guarantor acknowledges that it has received a copy of and is
familiar with the COC, which to the extent of the Guaranty Obligation is
incorporated herein by reference.

         2.4 Except as expressly provided for in this Guaranty, in no event
shall the Guarantors, as a result of this Guaranty, incur, directly or
indirectly, any obligation, contingent or otherwise, under the COC ("incur"
meaning to create, incur, assume, guaranty or otherwise become liable for).

         3. ALTERATION OF THE GUARANTY OBLIGATION.

         3.1 No exercise or non-exercise of any right hereby given to the LGCB,
no dealing by the LGCB with the Guarantors or any other guarantor or any other
person, and no change, impairment or release of all or any portion of the
Company's COC obligations, or suspension of any right or remedy of the LGCB
against any person, including without limitation the Company or any other such
guarantor or other person, shall in any way affect any part of the Guaranty
Obligation or any security furnished by the Guarantors or give the Guarantors
any recourse against the LGCB.

         3.2 This Guaranty is provided on the express condition that, should the
LGCB and the Company amend or modify the COC so as to increase the Guaranty
Obligation or adversely affect the Guarantors without the prior written
agreement of the Guarantors, any such Amendment or modification entered into
without the prior written agreement of the Guarantors shall not increase the
Guaranty Obligation or adversely affect the Guarantors.

         4. WAIVER.

         4.1 The Guarantors, in solido with each other, represent, warrant and
agree that, as of the date of this Guaranty, the Guaranty Obligation is not
subject to any recoupment, counterclaims, offsets or defenses against the LGCB
or the Company of any kind. The Guarantors further in solido with each other
agree that the Guaranty Obligation shall not be subject to any recoupment,
counterclaims, offsets or defenses against the LGCB or against the Company of
any kind which may arise in the future. Each Guarantor hereby expressly waives
and relinquishes all rights, defenses and remedies accorded by applicable law to
sureties or guarantors and agrees not to assert or take advantage of any such
rights, defenses or remedies, including without limitation:

                 (a) any right to require the LGCB to proceed against the
Company or any other person or to proceed against or exhaust any security held
by the LGCB at any time or to pursue any other remedy in the power of the LGCB
before proceeding against either or both of the

<PAGE>   22

Guarantors, including but not limited to any defense of failure to join or
non-joinder of the Company or any other person whatsoever in any litigation
instituted by the LGCB against either or both of the Guarantors;

                  (b) the defense of any statute of limitation, prescription and
preemption in any action hereunder or in any action for the collection of any of
the Guaranty Obligation;

                  (c) any defense that may arise by reason of the discharge in
bankruptcy, incapacity, lack of authority (subject to the provisions of section
13.11 of the Guaranty), death or disability of any other person (including the
Company) or the failure of the LGCB to file or enforce a claim against the
estate (in administration, bankruptcy or any other proceeding) of any other
person (including the Company);

                  (d) diligence, demand, presentment, protest and notice of any
kind other than notices expressly required in this Guaranty (whether for
nonpayment or protest or of acceptance, maturity, extension of time, change in
nature or form of the Company's obligations under the COC, acceptance of further
security, release of further security, composition or agreement arrived at as to
the amount of, or the terms of, the Company's obligations under the COC, notice
of adverse change in the Company's financial condition or any other fact which
might materially increase the risk to the Guarantors), including without
limitation notice of the existence, creation or incurring of any new or
additional indebtedness or obligation or of any action or non-action on the part
of the Company, the LGCB, any endorser or creditor of the Company or either
Guarantor or on the part of any other person under this or any other instrument
in connection with any obligation or evidence of indebtedness held by the LGCB
in connection with any of the obligations of the Company under the COC;

                  (e) any defense based upon an election of remedies by the LGCB
which destroys or otherwise impairs the subrogation rights of the Guarantors,
the right of the Guarantors to proceed against the Company for reimbursement, or
both, or any defense that the LGCB'S claims against the Guarantors are barred or
diminished or premature to the extent that the LGCB has or may have remedies
available against the Company;

                  (f) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal;

                  (g) any duty on the part of the LGCB to disclose to the
Guarantors any facts the LGCB may now or hereafter know about the Company,
regardless of whether the LGCB has reason to believe that any such facts
materially increase the risk beyond that which the Guarantors intend to assume,
or has reason to believe that such facts are unknown to either Guarantor, or has
a reasonable opportunity to communicate such facts to either Guarantor, since
each Guarantor acknowledges that it is fully responsible for being and keeping
informed of the financial condition of the Company and of all circumstances
bearing on the risk of nonpayment of any of the obligations of the Company under
the COC;

<PAGE>   23

                  (h) waiver or estoppel or any alleged lack of reasonable or
justifiable reliance on the part of the LGCB as to the Guarantors'
representations,

                  (i) lack, failure or insufficiency of consideration;

                  (j) subject to the notice requirements of Sections 1.4 and 1.5
hereof, any alleged failure of the LGCB to mitigate injuries, losses or damages
or any plea that the LGCB has any duty to mitigate injuries, losses, or damages
prior to seeking recovery under this Guaranty; and

                  (k) any defense that the LGCB's claims hereunder are or may be
barred because any adequate remedy at law exists.

         4.2 Following any default by either Guarantor under this Guaranty, each
Guarantor agrees to forbear from exercise of any rights of subrogation,
indemnity, or contribution against each other, the Company or any other person
who may be liable for satisfaction of the Guaranty Obligation until the Guaranty
Obligation has been fully satisfied as to the LGCB.

         5. BANKRUPTCY.

         5.1 In the event of the commencement of a bankruptcy case by or against
any Guarantor, each Guarantor agrees to waive the automatic stay under the
Bankruptcy Code and further agrees to the entry of an immediate order from the
Bankruptcy Court, on the LGCB's ex parte motion granting to the LGCB a
modification of the automatic stay (and/or recognition that the automatic stay
is not applicable) allowing it to fully enforce the provisions of this Guaranty,
the Guarantors hereby agreeing that in such case, "cause," as defined by the
Bankruptcy Code, would exist for the immediate entry by the Bankruptcy Court of
such an order modifying the automatic stay.

         5.2 The Guaranty Obligation shall not be altered, limited or affected
by any proceeding, voluntary or involuntary, involving the bankruptcy,
reorganization, insolvency, receivership, liquidation or arrangement of the
Company, or by any defense which the Company may have by reason of any order,
decree or decision of any court or administrative body resulting from any such
proceeding.

         5.3 This Guaranty shall remain in full force and effect and continue to
be effective should any petition be filed by or against the Company or any
Guarantor for liquidation or reorganization, should the Company or any Guarantor
become insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Company's or any Guarantor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment of the Guaranty
Obligation, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount or must otherwise be restored or returned by the LGCB, whether
as a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the

<PAGE>   24

Guaranty Obligation shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

         6. INTEREST, COSTS AND ATTORNEYS' FEES.

         6.1 If the Guarantors fail to timely pay all or any portion of the
Guaranty Obligation in accordance with the provisions of Section 1 of this
Guaranty, such amount shall bear interest as provided in Section 1.2 of this
Guaranty.

         6.2 If the LGCB refers this Guaranty to an attorney to enforce,
construe, or defend any provision hereof, or as a consequence of any default
hereunder by the Guarantors in connection with:

                  (a) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by the LGCB, the Company, the Guarantors or any other
person) in any way relating to the enforcement of rights or remedies under this
Guaranty;

                  (b) any attempt to enforce any rights of the LGCB hereunder
against the Guarantors or any other person; or

                  (c) any attempt to defend any provision hereof;

then, and in any such event, the attorneys' fees arising from such services,
including those of any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in any way or respect arising
in connection with or relating to any of the events or actions described herein
shall be payable, on demand, by the Guarantors to the LGCB or the Guarantors
shall cause the Company to make such payment, and if not so paid, shall be a
part of the Guaranty Obligation. The reference to "attorneys' fees" in this
Section 6.2 and in all other places in this Guaranty shall also include, without
limitation, such reasonable amounts as may then be charged for legal services
furnished by attorneys retained or employed by the State or the LGCB. Such
attorneys' fees, costs and expenses shall include, without limitation, those
incurred in connection with any bankruptcy, reorganization, insolvency,
receivership, liquidation, arrangement, lawsuits in state or federal court, or
other similar proceedings involving either Guarantor which in any way affect the
exercise by the LGCB of its rights and remedies hereunder.

         7. CUMULATIVE RIGHTS.

         All rights, powers and remedies of the LGCB hereunder and under any
other written agreement now or at any time hereafter in force between the LGCB
and the Guarantors, including without limitation any other guaranty executed by
either Guarantor relating to any indebtedness of the Company, shall be
cumulative and not alternative, and such rights, powers and remedies shall be in
addition to all rights, powers and remedies given to the LGCB by law and shall
not be deemed in any way to extinguish or diminish the LGCB's rights and
remedies. This Guaranty is in addition to and independent of the guaranty of any
guarantor of any other obligations of the Company under the COC or other
indebtedness of the Company.

<PAGE>   25

         8. APPLICATION OF PAYMENTS AND RECOVERIES.

         After a Minimum Payment Default has occurred, as to any payments
received directly from a Guarantor, the LGCB shall apply such payments to
amounts due under the Guaranty Obligation. Daily Payments, Required Payments or
Minimum Payments paid by the Company during any of the Four Covered Fiscal Years
shall be applied to the Minimum Payment for the Fiscal Year in which it is due
during any of the Four Covered Fiscal Years. Any other payments or recoveries
received by the LGCB after a Minimum Payment Default shall be applied, as
directed by the LGCB at its sole option, (a) first, to amounts due for any
Additional Charges, and (b) second, to any Daily Payments, Required Payments, or
Minimum Payment due for any prior Fiscal Year other than the Fiscal Year in
which the Minimum Payment Default has occurred (collectively, the "Other Fiscal
Year Payments"). Only when such Additional Charges and all Other Fiscal Year
Payments are paid current will any payments or recoveries be applied to the
Guaranty Obligation under this Guaranty Agreement.

         9. INDEPENDENT OBLIGATIONS.

         The Guaranty obligation is independent of the obligations of the
Company under the COC, and, in the event of any default hereunder, a separate
action or actions may be brought and prosecuted against either Guarantor,
whether or not the Company is joined therein or a separate action or actions are
brought against the Company. The LGCB's rights hereunder shall not be exhausted
by its exercise of any of its rights or remedies or by any such action or by any
number of successive actions unless and until all Guaranty Obligations have been
satisfied and fully performed.

         10. FINANCIAL STATEMENTS.

         The Guarantors hereby represent and warranty that the information
pertaining to the Guarantors set forth in their most recent filings with the
Securities and Exchange Commission is true and correct in all material respects,
and fairly presents the financial condition of the Guarantors as of the
respective dates indicated therein and for the periods covered thereby, and that
no material adverse change has occurred in the financial condition or prospects
of the Guarantors since the date of the latest information provided therein.

         11. NOTICES.

         Whenever the Guarantors or the LGCB shall desire to give or serve any
notice, demand, request or other communication with respect to this Guaranty,
each such notice shall be in writing and shall be effective only if the same is
delivered by personal service, overnight courier service, or mailed by certified
mail, postage prepaid, return receipt requested, addressed as follows

                  (a) if to either Guarantor

                           (or both Guarantors):

                           HET and Harrah's Operating
                           c/o Harrah's Entertainment, Inc.
                           5100 West Sahara Ave.
                           Las Vegas, Nevada 89146
                           Attention: General Counsel
<PAGE>   26

                  (b) if to the LGCB, as provided in the COC;

or at such other address as shall have been furnished in writing by any person
described above to the party required to give notice hereunder. Any such notice
shall be deemed to have been received upon delivery. Any of the Guarantors or
the LGCB may change its address by giving the others written notice of the new
address as herein provided.

         12. SUCCESSORS AND ASSIGNS.

         This Guaranty shall inure to the benefit of the LGCB, its successors
and assigns, and shall bind the successors and assigns of each Guarantor.
Neither Guarantor may assign or transfer any of its rights, obligations or
interest hereunder without the prior written consent of the LGCB.

         13. MISCELLANEOUS PROVISIONS.

         13.1 This Guaranty shall be governed, interpreted and enforced in
accordance with Louisiana law.

         Each Guarantor hereby submits to the jurisdiction of the State and the
courts thereof and to the jurisdiction of the Nineteenth Judicial District Court
in and for East Baton Rouge Parish ("19th JDC") for purposes of any suit, action
or other proceeding arising out of or relating to this Guaranty and agrees not
to assert by way of motion as a defense or otherwise that such suit, action or
other proceeding is brought in an inconvenient forum or that the venue of such
suit, action or other proceeding is improper or that the subject matter thereof
may not be enforced in or by such court or assert that any suit or action filed
in the 19th JDC may be removed to the Federal Court, and each Guarantor agrees
that the 19th JDC shall have the exclusive jurisdiction for purposes of any
suit, action or other proceeding brought by either of them relating to or
arising out of this Guaranty.

         If at any time during the Term, either Guarantor is not a resident of
the State and has not formally designated or does not continuously maintain an
agent for service of process in Louisiana or has not notified LGCB of the full
name and current street address in Louisiana of such agent for service of
process, such Guarantor hereby designates the Secretary of State of Louisiana as
its agent for service of process in any suit, action or proceeding involving the
LGCB or the State or arising out of or relating to this Guaranty, and such
service shall be made as provided by Louisiana law for service on an insurance
company through the Secretary of State.

         13.2 This Guaranty shall constitute the entire agreement of the
Guarantors with the LGCB with respect to the subject matter hereof, and no
representation, understanding, promise or condition concerning the subject
matter hereof shall be binding upon the LGCB or the Guarantors unless expressed
herein.

         13.3 Should any term, covenant, condition or provision of this Guaranty
be determined to be illegal or unenforceable, it is the intent

<PAGE>   27

of the parties that all other terms, covenants, conditions and provisions hereof
shall nevertheless remain in full force and effect.

         13.4 Time is of the essence to this Guaranty and each of its
provisions.

         13.5 When the context and construction so require, all words used in
the singular herein shall be deemed to include the plural, the masculine shall
include the feminine and neuter, and vice versa.

         13.6 The word "person" as used herein shall include any individual,
company, firm, association, partnership, limited liability company, joint
venture, corporation, trust or other legal entity of any kind whatsoever.

         13.7 No provision of this Guaranty or right granted to the LGCB
hereunder can be waived in whole or in part, nor can either Guarantor be
released from the Guaranty Obligation, except by an express and specific writing
to that effect duly executed by an authorized officer of the LGCB. No provision
of this Guaranty may be amended without the prior written consent of the
Guarantors and the LGCB and the consent of any additional beneficiaries hereof,
if any, shall not be required.

         13.8 The LGCB need not inquire into the power of the Guarantors or the
authority of their officers, shareholders or agents acting or purporting to act
on their behalf.

         13.9 The headings of this Guaranty are inserted for convenience only
and shall have no effect upon the construction or interpretation thereof.

         13.10 All of the representations, warranties, agreements, obligations
and covenants of each Guarantor are in solido with the other Guarantor. This
Guaranty shall be for the sole benefit of the State of Louisiana acting by and
through the LGCB, its successors and assigns. The provisions of this Guaranty
shall not inure to the benefit of any other person, including, without
limitation, the Company.

         13.11 Notwithstanding any provision of this Guaranty to the contrary,
if, subsequent to the execution and effectiveness of the Guaranty, the COC or
the COC Second Amendment are declared by a final, definitive and nonappealable
judgment(1) of a Louisiana state court of competent jurisdiction as being in
violation of Louisiana law and therefore null, void and/or unenforceable and/or
that the Gaming Board lacked legal authority to enter into the Second Amendment
(a "Definitive Judgment"), and (i) such Definitive Judgment terminates all
rights of the Company to operate the Casino, (ii) pursuant to such Definitive
Judgment the Casino is closed and Gaming activities cease, and (iii) the
Guarantors and all of their direct and indirect subsidiaries and all of their
affiliates controlled by the Guarantors waive and renounce any claims against
the State and the LGCB related to the COC and/or the COC Second Amendment and/or
this Guaranty, in form and substance subject to the approval of the LGCB, which
approval will

----------

(1) A final, definitive and nonappealable judgment is a judgment in which all
appeal rights and all other rights of review, by the same or any other court of
competent jurisdiction, have expired and terminated.

<PAGE>   28

not be unreasonably withheld, then, except as provided below, this Guaranty
shall thereupon, without further action, be deemed terminated and not
enforceable against the Minimum Payment Guarantors and such Minimum Payment
Guarantors hereunder shall have no further liability hereunder.

         It is further acknowledged that if there is a judgment by a Louisiana
state court of competent jurisdiction which is not yet a final, definitive and
nonappealable judgment which declares the COC and/or the COC Second Amendment to
be null and void and therefore unenforceable as being in violation of Louisiana
law and/or that the Gaming Board had no legal authority to enter into the Second
Amendment (an "Interim Judgment"), and (i) such Interim Judgment terminates all
rights of the Company to operate the Casino and (ii) pursuant to said Interim
Judgment the Casino is closed and Gaming activities cease, then the Minimum
Payment Guarantors' obligations hereunder will be suspended, unless and until
(1) said Interim Judgment is reversed or otherwise modified to again authorize
the Company to operate the Casino and resume Gaming activities (an "Authorizing
Judgment"), and (2) the Casino has a reasonable period of time to reopen the
Casino, but in no event will the period of suspension exceed 180 days after the
Authorizing Judgment is rendered, unless such period needs to be extended for
pre-opening regulatory matters. It is further agreed that any obligations which
are suspended as provided above, will also be excused for the suspension period
and will not be due or payable under this Guaranty.

         It is expressly agreed that the release of the Minimum Payment
Guarantors and/or the suspension of the Minimum Payment Guarantors obligations
provided in this Section 13.11 shall be applicable only if the Definitive
Judgment and/or Interim Judgment, as applicable, was rendered in (1) litigation
which was not instituted, fomented, assisted or encouraged by any one or more of
the Company, JCC Holding, HET, Harrah's Operating and/or the Casino Manager, or
any of their respective successors or any of their respective affiliates
(collectively the "Jazz Group") and (2) litigation in which the Company actively
and in good faith opposes the claims of the plaintiff(s) and actively and in
good faith attempts to uphold the validity and enforceability of the COC and the
COC Second Amendment. It is further expressly agreed that the release of the
Minimum Payment Guarantors shall not release or excuse any obligations for Daily
Payments which were not suspended as provided in this section 13.11 that were
due or payable, but not paid, as of the effective date of the termination of
this Guaranty.

         13.12 The effectiveness and enforceability of this Guaranty is
conditional upon and subject to the fulfillment and satisfaction by March 31,
2001 of each of the suspensive conditions set forth in Paragraph IV of the
Second Amendment.

         IN WITNESS HEREOF, the undersigned have executed this Guaranty as of
the 8th day of March, 2001

                                            GUARANTORS:

                                            HARRAH'S ENTERTAINMENT, INC.

<PAGE>   29

                                            By:  /s/
                                               ---------------------------------
                                                    Duly Authorized Officer

                                            HARRAH'S OPERATING COMPANY, INC.

                                            By:  /s/
                                               ---------------------------------
                                                    Duly Authorized Officer

<PAGE>   30

Approved and consented to:
JAZZ CASINO COMPANY, L.L.C.

By: /s/
   ------------------------------
      Duly Authorized Officer

Approved and consented to:
JCC HOLDING COMPANY

By: /s/
   ------------------------------
      Duly Authorized Officer

Accepted and agreed to:

LOUISIANA GAMING CONTROL BOARD

By:  /s/ Hillary J. Crain
   ------------------------------
     /s/ Robert M. Fleming
   ------------------------------
Name: Hillary J. Crain/Robert M. Fleming
      ----------------------------------

Title: Chairman/Vice-Chairman
       ---------------------------------

<PAGE>   31

                                  EXHIBIT "BB"

           UNCONDITIONAL MINIMUM PAYMENT EXTENSION GUARANTY AGREEMENT
                  FOR FISCAL YEAR ENDING MARCH 31, ________

         THIS UNCONDITIONAL MINIMUM PAYMENT EXTENSION GUARANTY AGREEMENT for
Fiscal Year ending March 31, _____ (the "Guaranty") is entered into as of
______________, ___________, by ______________, a _____________, and
__________________, a ________________(each a "Guarantor" and collectively the
"Guarantors") in favor of the STATE OF LOUISIANA by and through the LOUISIANA
GAMING CONTROL BOARD (the "LGCB").

                                    RECITALS

         A. That certain Casino Operating Contract (the "COC") between Jazz
Casino Company, L.L.C., a Louisiana limited liability company (the "Company"),
and the LGCB, dated as of October 30 1998, as amended by the First Amendment
effective as of October 19, 1999, and the Second Amendment ("COC Second
Amendment") effective as of March 31, 2001 sets forth the conditions, covenants,
obligations, requirements and terms pursuant to which the Company has the
authority to conduct gaming operations at the Casino (collectively referred to
as the "COC").

         B. As used in this Guaranty, all capitalized terms used herein but not
defined herein shall be used herein as defined in the COC.

         C. The Company has caused this Guaranty to be provided to the LGCB for
Fiscal Year beginning April 1, 2 ___ and ending March 31, _______ (the "Covered
Fiscal Year"), as required by the COC.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantors, the receipt and sufficiency of which are hereby
acknowledged, the Guarantors hereby solidarily make the following
representations and warranties to the LGCB, and hereby solidarily covenant and
agree for the benefit of the LGCB as follows:

         1. OBLIGATIONS GUARANTEED AND METHOD OF DRAWING.

         1.1 The Guarantors hereby irrevocably, unconditionally, and in solido
with each other and with the Company, guarantee for the Covered Fiscal Year:

                  (a) the full, complete and timely payment and performance of
all of the Minimum Payment obligations of the Company to the LGCB under and in
accordance with the provisions of the COC; and

                  (b) the full, complete and timely payment to the LGCB of all
of the Daily Payments, Required Payments and Minimum Payment in accordance with
the provisions of the COC.

<PAGE>   32

         1.2 If there is any delay in timely paying to the LGCB any and/or all
of the Daily Payments, Required Payments and/or Minimum Payment as and when
required under the COC for the Covered Fiscal Year, the Guarantors shall also
pay to the LGCB interest on such payments due at the Default Interest Rate (as
provided in Section 6.7 of the COC) from the date each payment was due, until
paid to the LGCB.

         1.3 In no event shall the aggregate total of Daily Payments, Required
Payments and the Minimum Payment to the LGCB under this Guaranty for the Covered
Fiscal Year exceed SIXTY MILLION DOLLARS ($60,000,000.00), plus, and in addition
thereto, any interest and attorneys' fees applicable to the Guaranty Obligation
provided for in the COC or in this Guaranty.

         1.4 If the LGCB has not been timely paid any one or more of the
required Daily Payments for the Covered Fiscal Year, then (a) the LGCB may make
drawings under this Guaranty by providing written notice to the Guarantors that
one or more of the required Daily Payments have not been timely paid and the
principal amount of such Daily Payments then due (the "Notice of Drawing"),
and (b) the Guarantors shall pay to the LGCB all required but unpaid Daily
Payments, plus interest at the Default Interest Rate, upon receipt of the Notice
of Drawing. Guarantors shall make payment by wire or other electronic transfer
as provided in the Notice of Drawing, on or before the time the Daily Payments
are due under Section 6.5 - "Daily Deposits" of the COC.

         1.5 The Guarantors shall not be obligated to make any Daily Payments
due for any day which is twenty (20) days or more prior to the LGCB giving the
Notice of Drawing; provided however, that any payments which are suspended
pursuant to Section 6.3(a) of the COC shall not be due and payable until the
period of the suspension has expired.

         1.6 Once a Minimum Payment Default has occurred and a Notice of Drawing
has been provided to the Guarantors, the Guarantors shall be obligated without
any further notice by the LGCB to pay, and will pay, to the LGCB any required
Daily Payments for the Covered Fiscal Year on a daily basis for the remainder of
the Covered Fiscal Year (in which a Minimum Payment Default occurs) to the
extent such Daily Payments have not been timely paid.

         1.7 In no event shall the Guarantors be liable to the LGCB under this
Guaranty for any amount in excess of the difference between the Minimum Payment
for the Covered Fiscal Year and the total of the Louisiana Gross Gaming Revenue
Share Payments which have been paid to the LGCB for said Fiscal Year or liable
for any Daily Payments due for and in any Fiscal Year following the Covered
Fiscal Year.

         1.8 All of the obligations undertaken hereinabove by the Guarantors in
this Section 1 and any amounts which may be due under Section 6.2 are
hereinafter collectively referred to as the "Guaranty Obligation."

         1.9 Notwithstanding the suspension, under the provisions of Section 6.3
(a) of the COC, of the payment of any of the amounts included within the
Guaranty Obligation, it is agreed that the Guaranty Obligation covers all
payments which would have been due and payable during the Covered Fiscal Year
except for the fact that such payments

<PAGE>   33

were suspended pursuant to Section 6.3(a) of the COC. Any such suspended
payments shall be paid in the manner and within the time provided in the COC,
together with Late Payment Interest from the time the suspended payments become
due under the COC, and the Guarantors guarantee the payment thereof, even after
the expiration of the Covered Fiscal Year.

         2. GUARANTORS' ADDITIONAL AGREEMENTS.

         2.1 The Guarantors, in solido with each other and the Company, agree to
perform and comply with their Guaranty Obligation, whether or not the Company is
liable therefor individually or jointly or in solido with others, and whether or
not recovery against the Company is or may become barred by any statute of
limitations or prescriptive or preemptive period or is or may become
unenforceable or discharged, whether in whole or in part, for any reason other
than payment thereof in full. The Guarantors agree that this Guaranty is a
guaranty of payment and not of collection, and that their obligation under this
Guaranty shall be primary, absolute and unconditional, irrespective of, and
unaffected by:

                  (a) the absence of any action to enforce this Guaranty or any
other document or the waiver or consent by the LGCB with respect to any of the
provisions thereof;

                  (b) any release or discharge of the other Guarantor, the
Company or any other party of the Guaranty obligation; or

                  (c) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.

Each Guarantor shall be regarded, and shall be in the same position, as
principal debtor with respect to the Guaranty Obligation.

         2.2 Each Guarantor expressly waives all rights it may have now or in
the future under any statute, or at common law, or at law or in equity, or
otherwise, to compel the LGCB to proceed in respect of the Guaranty Obligation
against the Company or any other party or against any security for the payment
of the Guaranty obligation before proceeding against, or as a condition to
proceeding against, any Guarantor; and without limiting the above, each
Guarantor waives all pleas of division and discussion. Each Guarantor agrees
that any notice or directive given at any time to the LGCB which is inconsistent
with the waiver in the immediately preceding sentence shall be null and void and
may be ignored by the LGCB, and in addition, may not be pleaded or introduced as
evidence in any litigation relating to this Guaranty for the reason that such
pleading or introduction would be at variance with the written terms of this
Guaranty, unless the LGCB has specifically agreed otherwise in writing.

         2.3 Each Guarantor acknowledges that it has received a copy of and is
familiar with the COC, which to the extent of the Guaranty Obligation is
incorporated herein by reference.

         2.4 Except as expressly provided for in this Guaranty, in no event
shall the Guarantors, as a result of this Guaranty, incur,

<PAGE>   34

directly or indirectly, any obligation, contingent or otherwise, under the COC
("incur" meaning to create, incur, assume, guaranty or otherwise become liable
for).

         3. ALTERATION OF THE GUARANTY OBLIGATION.

         3.1 No exercise or non-exercise of any right hereby given to the LGCB,
no dealing by the LGCB with the Guarantors or any other guarantor or any other
person, and no change, impairment or release of all or any portion of the
Company's COC obligations, or suspension of any right or remedy of the LGCB
against any person, including without limitation the Company or any other such
guarantor or other person, shall in any way affect any part of the Guaranty
Obligation or any security furnished by the Guarantors or give the Guarantors
any recourse against the LGCB.

         3.2 This Guaranty is provided on the express condition that, should the
LGCB and the Company amend or modify the COC so as to increase the Guaranty
Obligation or adversely affect the Guarantors failure to join or non-joinder of
the Company or any other person whatsoever in any litigation instituted by the
LGCB against either or both of the Guarantors;

                  (b) the defense of any statute of limitation, prescription and
preemption in any action hereunder or in any action for the collection of any of
the Guaranty Obligation;

                  (c) any defense that may arise by reason of the discharge in
bankruptcy, incapacity, lack of authority, death or disability of any other
person (including the Company) or the failure of the LGCB to file or enforce a
claim against the estate (in administration, bankruptcy or any other proceeding)
of any other person (including the Company);

                  (d) diligence, demand, presentment, protest and notice of any
kind other than notices expressly required in this Guaranty (whether for
nonpayment or protest or of acceptance, maturity, extension of time, change in
nature or form of the Company's obligations under the COC, acceptance of further
security, release of further security, composition or agreement arrived at as to
the amount of, or the terms of, the Company's obligations under the COC, notice
of adverse change in the Company's financial condition or any other fact which
might materially increase the risk to the Guarantors), including without
limitation notice of the existence, without the prior written agreement of the
Guarantors, any such amendment or modification entered into without the prior
written agreement of the Guarantors shall not increase the Guaranty obligation
or adversely affect the Guarantors.

         4. WAIVER.

         4.1 The Guarantors, in solido with each other, represent, warrant and
agree that, as of the date of this Guaranty, the Guaranty obligation is not
subject to any recoupment, counterclaims, offsets or defenses against the LGCB
or the Company of any kind. The Guarantors further in solido with each other
agree that the Guaranty Obligation shall not be subject to any recoupment,
counterclaims, offsets or defenses against the LGCB or against the Company of
any kind which may

<PAGE>   35

arise in the future. Each Guarantor hereby expressly waives and relinquishes all
rights, defenses and remedies accorded by applicable law to sureties or
guarantors and agrees not to assert or take advantage of any such rights,
defenses or remedies, including without limitation:

                  (a) any right to require the LGCB to proceed against the
Company or any other person or to proceed against or exhaust any security held
by the LGCB at any time or to pursue any other remedy in the power of the LGCB
before proceeding against either or both of the Guarantors, including but not
limited to any defense of creation or incurring of any new or additional
indebtedness or obligation or of any action or non-action on the part of the
Company, the LGCB, any endorser or creditor of the Company or either Guarantor
or on the part of any other person under this or any other instrument in
connection with any obligation or evidence of indebtedness held by the LGCB in
connection with any of the obligations of the Company under the COC;

                  (e) any defense based upon an election of remedies by the LGCB
which destroys or otherwise impairs the subrogation rights of the Guarantors,
the right of the Guarantors to proceed against the Company for reimbursement, or
both, or any defense that the LGCB's claims against the Guarantors are barred or
diminished or premature to the extent that the LGCB has or may have remedies
available against the Company;

                  (f) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal;

                  (g) any duty on the part of the LGCB to disclose to the
Guarantors any facts the LGCB may now or hereafter know about the Company,
regardless of whether the LGCB has reason to believe that any such facts
materially increase the risk beyond that which the Guarantors intend to assume,
or has reason to believe that such facts are unknown to either Guarantor, or has
a reasonable opportunity to communicate such facts to either Guarantor, since
each Guarantor acknowledges that it is fully responsible for being and keeping
informed of the financial condition of the Company and of all circumstances
bearing on the risk of nonpayment of any of the obligations of the Company under
the COC;

                  (h) waiver or estoppel or any alleged lack of reasonable or
justifiable reliance on the part of the LGC3 as to the Guarantors'
representations;

                  (i) lack, failure or insufficiency of consideration;

                  (j) subject to the notice requirements of Sections 1.4 and 1.5
hereof, any alleged failure of the LGCB to mitigate injuries, losses or damages
or any plea that the LGCB has any duty to mitigate injuries, losses, or damages
prior to seeking recovery under this Guaranty; and

<PAGE>   36

                  (k) any defense that the LGCB's claims hereunder are or may be
barred because any adequate remedy at law exists.

         4.2 Following any default by either Guarantor under this Guaranty, each
Guarantor agrees to forbear from exercise of any rights of subrogation,
indemnity, or contribution against each other, the Company or any other person
who may be liable for satisfaction of the Guaranty obligation until the Guaranty
Obligation has been fully satisfied as to the LGCB.

         5. BANKRUPTCY.

         5.1 In the event of the commencement of a bankruptcy case by or against
any Guarantor, each Guarantor agrees to waive the automatic stay under the
Bankruptcy Code and further agrees to the entry of an immediate order from the
Bankruptcy Court, on the LGCB's ex parte motion granting to the LGCB a
modification of the automatic stay (and/or recognition that the automatic stay
is not applicable) allowing it to fully enforce the provisions of this Guaranty,
the Guarantors hereby agreeing that in such case, "cause," as defined by the
Bankruptcy Code, would exist for the immediate entry by the Bankruptcy Court of
such an order modifying the automatic stay.

         5.2 The Guaranty Obligation shall not be altered, limited or affected
by any proceeding, voluntary or involuntary, involving the bankruptcy,
reorganization, insolvency, receivership, liquidation or arrangement of the
Company, or by any defense which the Company may have by reason of any order,
decree or decision of any court or administrative body resulting from any such
proceeding.

         5.3 This Guaranty shall remain in full force and effect and continue to
be effective should any petition be filed by or against the Company or any
Guarantor for liquidation or reorganization, should the Company or any Guarantor
become insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Company's or any Guarantor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment of the Guaranty
Obligation, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount or must otherwise be restored or returned by the LGCB, whether
as a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Guaranty Obligation
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

         6. INTEREST, COSTS AND ATTORNEYS' FEES.

         6.1 If the Guarantors fail to timely pay all or any portion of the
Guaranty Obligation in accordance with the provisions of Section 1 of this
Guaranty, such amount shall bear interest as provided in Section 1.2 of this
Guaranty.

         6.2 If the LGCB refers this Guaranty to an attorney to enforce,
construe, or defend any provision hereof, or as a consequence of any default
hereunder by the Guarantors in connection with:

<PAGE>   37

                  (a) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by the LGCB, the Company, the Guarantors or any other
person) in any way relating to the enforcement of rights or remedies under this
Guaranty;

                  (b) any attempt to enforce any rights of the LGCB hereunder
against the Guarantors or any other person; or

                  (c) any attempt to defend any provision hereof;

then, and in any such event, the attorneys, fees arising from such services,
including those of any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in any way or respect arising
in connection with or relating to any of the events or actions described herein
shall be payable, on demand, by the Guarantors to the LGCB or the Guarantors
shall cause the Company to make such payment, and if not so paid, shall be a
part of the Guaranty Obligation. The reference to "attorneys' fees" in this
Section 6.2 and in all other places in this Guaranty shall also include, without
limitation, such reasonable amounts as may then be charged for legal services
furnished by attorneys retained or employed by the State or the LGCB. Such
attorneys' fees, costs and expenses shall include, without limitation, those
incurred in connection with any bankruptcy, reorganization, insolvency,
receivership, liquidation, arrangement, lawsuits in state or federal court, or
other similar proceedings involving either Guarantor which in any way affect the
exercise by the LGC3 of its rights and remedies hereunder.

         7. CUMULATIVE RIGHTS.

         All rights, powers and remedies of the LGCB hereunder and under any
other written agreement now or at any time hereafter in force between the LGCB
and the Guarantors, including without limitation any other guaranty executed by
either Guarantor relating to any indebtedness of the Company, shall be
cumulative and not alternative, and such rights, powers and remedies shall be in
addition to all rights, powers and remedies given to the LGCB by law and shall
not be deemed in any way to extinguish or diminish the LGCB's rights and
remedies. This Guaranty is in addition to and independent of the guaranty of any
guarantor of any other obligations of the Company under the COC or other
indebtedness of the Company.

         8. APPLICATION OF PAYMENTS AND RECOVERIES.

         After a Minimum Payment Default has occurred, as to any payments
received directly from a Guarantor, the LGCB shall apply such payments to
amounts due under the Guaranty Obligation. Daily Payments, Required Payments or
Minimum Payments paid by the Company during a Covered Fiscal Year shall be
applied to the Minimum Payment for that Covered Fiscal Year. Any other payments
or recoveries received by the LGCB after a Minimum Payment Default shall be
applied, as directed by the LGC3 at its sole option, (a) first, to amounts due
for any Additional Charges, and (b) second, to any Daily Payments, Required
Payments, or Minimum Payment due for any Fiscal Year other than the Fiscal Year
in which the Minimum Payment Default has occurred (collectively, the "Other
Fiscal Year Payments"). Only when such Additional Charges and

<PAGE>   38

all Other Fiscal Year Payments are paid current will any payments or recoveries
be applied to the Guaranty Obligation under this Guaranty Agreement.

         9. INDEPENDENT OBLIGATIONS.

         The Guaranty obligation is independent of the obligations of the
Company under the COC, and, in the event of any default hereunder, a separate
action or actions may be brought and prosecuted against either Guarantor,
whether or not the Company is joined therein or a separate action or actions are
brought against the Company. The LGCB's rights hereunder shall not be exhausted
by its exercise of any of its rights or remedies or by any such action or by any
number of successive actions unless and until all Guaranty Obligations have been
satisfied and fully performed.

         10. FINANCIAL STATEMENTS.

         The Guarantors hereby represent and warranty that the information
pertaining to the Guarantors set forth in their most recent filings with the
Securities and Exchange Commission is true and correct in all material respects,
and fairly presents the financial condition of the Guarantors as of the
respective dates indicated therein and for the periods covered thereby, and that
no material adverse change has occurred in the financial condition or prospects
of the Guarantors since the date of the latest information provided therein.

         11. NOTICES.

         Whenever the Guarantors or the LGCB shall desire to give or serve any
notice, demand, request or other communication with respect to this Guaranty,
each such notice shall be in writing and shall be effective only if the same is
delivered by personal service, overnight courier service, or mailed by certified
mail, postage prepaid, return receipt requested, addressed as follows:

                   (a) if to either Guarantor
                           (or both Guarantors):

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

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

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

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

                  (b) if to the LGCB, as provided in the COC;

or at such other address as shall have been furnished in writing by any person
described above to the party required to give notice hereunder. Any such notice
shall be deemed to have been received upon delivery. Any of the Guarantors or
the LGCB may change its address by giving the others written notice of the new
address as herein provided.

<PAGE>   39

         12. SUCCESSORS AND ASSIGNS.

         This Guaranty shall inure to the benefit of the LGCB, its successors
and assigns, and shall bind the successors and assigns of each Guarantor.
Neither Guarantor may assign or transfer any of its rights, obligations or
interest hereunder without the prior written consent of the LGCB.

         13. MISCELLANEOUS PROVISIONS.

         13.1 This Guaranty shall be governed, interpreted and enforced in
accordance with Louisiana law.

         Each Guarantor hereby submits to the jurisdiction of the State and the
courts thereof and to the jurisdiction of the Nineteenth Judicial District Court
in and for East Baton Rouge Parish (1119th JDC") for purposes of any suit,
action or other proceeding arising out of or relating to this Guaranty and
agrees not to assert by way of motion as a defense or otherwise that such suit,
action or other proceeding is brought in an inconvenient forum or that the venue
of such suit, action or other proceeding is improper or that the subject matter
thereof may not be enforced in or by such court or assert that any suit or
action filed in the 19th JDC may be removed to the Federal Court, and each
Guarantor agrees that the 19th JDC shall have the exclusive jurisdiction for
purposes of any suit, action or other proceeding brought by either of them
relating to or arising out of this Guaranty.

         If at any time during the Term, either Guarantor is not a resident of
the State and has not formally designated or does not continuously maintain an
agent for service of process in Louisiana or has not notified LGCB of the full
name and current street address in Louisiana of such agent for service of
process, such Guarantor hereby designates the Secretary of State of Louisiana as
its agent for service of process in any suit, action or proceeding involving the
LGCB or the State or arising out of or relating to this Guaranty, and such
service shall be made as provided by Louisiana law for service on an insurance
company through the Secretary of State.

         13.2 This Guaranty shall constitute the entire agreement of the
Guarantors with the LGCB with respect to the subject matter hereof, and no
representation, understanding, promise or condition concerning the subject
matter hereof shall be binding upon the LGCB or the Guarantors unless expressed
herein.

         13.3 Should any term, covenant, condition or provision of this Guaranty
be determined to be illegal or unenforceable, it is the intent of the parties
that all other terms, covenants, conditions and provisions hereof shall
nevertheless remain in full force and effect.

         13.4 Time is of the essence to this Guaranty and each of its
provisions.

         13.5 When the context and construction so require, all words used in
the singular herein shall be deemed to include the plural, the masculine shall
include the feminine and neuter, and vice versa.

<PAGE>   40

         13.6 The word "person" as used herein shall include any individual,
company, firm, association, partnership, limited liability company, joint
venture, corporation, trust or other legal entity of any kind whatsoever.

         13.7 No provision of this Guaranty or right granted to the LGCB
hereunder can be waived in whole or in part, nor can either Guarantor be
released from the Guaranty Obligation, except by an express and specific writing
to that effect duly executed by an authorized officer of the LGCB. No provision
of this Guaranty may be amended without the prior written consent of the
Guarantors and the LGCB and the consent of any additional beneficiaries hereof,
if any, shall not be required.

         13.8 The LGCB need not inquire into the power of the Guarantors or the
authority of their officers, shareholders or agents acting or purporting to act
on their behalf.

         13.9 The headings of this Guaranty are inserted for convenience only
and shall have no effect upon the construction or interpretation thereof.

         13.10 All of the representations, warranties, agreements, obligations
and covenants of each Guarantor are in solido with the other Guarantor. This
Guaranty shall be for the sole benefit of the State of Louisiana acting by and
through the LGCB, its successors and assigns. The provisions of this Guaranty
shall not inure to the benefit of any other person, including, without
limitation, the Company.

         13.11 This Guaranty shall be effective upon execution.

         IN WITNESS HEREOF, the undersigned have executed this Guaranty

as of the _______ day of ________________, 2_____.

                                                 GUARANTORS:

                                                 By:
                                                    ----------------------------
                                                      Duly Authorized Officer

                                                 By:
                                                    ----------------------------
                                                      Duly Authorized Officer

                                                 JCC HOLDING COMPANY

                                                 By:
                                                    ----------------------------
                                                      Duly Authorized Officer

<PAGE>   41

                                                 Approved and consented to:

                                                 JAZZ CASINO COMPANY, L.L.C.

                                                 By:
                                                    ----------------------------
                                                      Duly Authorized Officer

Accepted and agreed to:

LOUISIANA GAMING CONTROL BOARD

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

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

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

<PAGE>   42

                                   EXHIBIT CC

                LOUISIANA RESTAURANT ASSOCIATION/CASINO OPERATOR
                           MEMORANDUM OF UNDERSTANDING

         The following represents the understandings of the Louisiana Restaurant
Association (the "LRA") and the Casino Operator (the "operator"), concerning the
easing of legislative food restrictions imposed upon the operator by the Gaming
Act. the intent of this memorandum is to establish the parameters for certain
amendments to the Gaming Act and for a written agreement to executed by the
parties that will be enforceable by the Louisiana Gaming Control Board in the
event the Bankruptcy Plan of Jazz Casino Company LLC is consummated by March 31,
2001 and the legislature enacts amendments to the Gaming Act for these
agreements to be lawful.

I.       LIMITED BUFFET SEATING - Buffet seating shall be limited to 400 seats.

II.      LIMITED KIOSK SEATING - Kiosk seating shall be limited to 100 seats.

III.     OPERATOR/MANAGER OWNED AND OPERATED RESTAURANT(1) -- The operator may
         directly own and operate a single restaurant that shall be limited to
         150 seats.

IV.      CATERING - The operator may cater within the facility, but shall
         maintain an option to use outside caterers with primary consideration
         to LRA members. For example, the operator may cater to targeted groups
         at events or parties within the facility.

V.       LIMITATIONS ON 2ND FLOOR DEVELOPMENT - To fulfill the objectives of
         both parties, subject to the provisions in this Memorandum of
         Understanding, the operator shall limit the restaurants and other uses
         on the 2nd as provided below:

         a.    No restaurant owned or operated by the operator/manager may be
               located on the 2nd floor (other than the one restaurant
               identified above which may be on the 1st or 2nd floor).

         b.    The operator may lease space to no more than two 3rd party
               restaurant(s) which, when calculated together, shall contain no
               more than 350 seats in total.

         c.    The operator may operate any business/entertainment facility on
               the 2nd floor provided that any food for such operation shall be
               purchased or catered by a 3rd party restaurateur or food preparer
               with purchases at fair market value.

-----------
(1) As per discussion, it is understood that this restaurant to be directly
operated by operator/manager may be located on either the first or second floor
of the Casino depending upon future space availability.

<PAGE>   43

         d.    The operator shall pay fair market value to any 3rd party food
               service operator within the casino facility.

         e.    The operator may lease space to any other 3rd parties to operate
               businesses where the primary purpose of any such business is not
               a restaurant. To meet this requirement, no more than 35% of the
               gross revenue shall be derived from the sale of food.

VI.      LIMITED COMPING AND DISCOUNTING

         a.    The overall rule shall be that the operator shall not comp or
               discount food to the general public. Comping and discounting and
               related advertising shall be permitted only for the following:

               i.   A member of Harrah's customer reward system or a customer on
                    Harrah's Entertainment data base.

               ii.  A known "high roller" or junkets with established play at
                    the casino or with other casinos;

               iii. A person that is not a reward customer or a known high
                    roller but, based upon observed play at the casino, is
                    entitled to a comp or discount (e.g. a person that wins or
                    loses earning a discount or comp in a manner similar to (i)
                    and (ii) above);

               iv.  Targeted prospects outside a 50 mile radius of the casino or
                    any prospect in Mississippi, whether or not such prospect
                    resides within such 50 mile radius.

               v.   A person that has suffered a service foul up or error that
                    requires a comp or discount to rectify the error in service
                    in a manner similar to practices within the restaurant
                    industry; or

               vi.  A vendor or other person visiting the casino for business or
                    educational purposes.

VII.     LIMITATIONS ON PROSPECTING WITH FOOD ADVERTISING -- The operator shall
         not prospect customers by offering discounts or comps to the general
         public that reside: (i) within 50 miles of the casino, and (ii) in
         Louisiana, through any advertising media whether newspaper, television,
         direct mail coupons or billboards. Prospecting to targeted customers
         outside the State or within the State but beyond the 50 mile radius of
         the casino with comps and discount offers shall be permitted, but no by
         means that are not disseminated to the general public such as
         billboards and the print media.

VIII.    CONCIERGE SERVICE - The operator shall continue to provide on-site
         concierge services through VIP and Guest Services with primary
         consideration given to LRA members.

<PAGE>   44

IX.      PAYMENTS TO NEW ORLEANS MARKETING CORP. (to be implemented
         contractually and not through statute)

               o    The operator shall commit to pay up to $1 million annually
                    to the New Orleans Marketing Corp. which benefits New
                    Orleans Restaurants and Hotels as provided below (this
                    payment is not in addition to the commitment to the Hotel
                    Association, but has been dedicated pursuant to the request
                    of both groups).

                    i.   $500,000 shall be payable annually beginning on April
                         1, 2001 (payable in monthly installments) and for each
                         year for the remainder of the term of the Casino
                         Contract.

                    ii.  $500,000 shall be increased to $1 million annually
                         (payable in monthly installments) beginning 3 months
                         after beginning construction or the purchase of a hotel
                         containing 250 or more rooms and such payment shall
                         continue for the remainder of the term of the Casino
                         Contract.

<PAGE>   45

                                   EXHIBIT DD

                        HOTEL ASSOCIATION/CASINO OPERATOR
                           MEMORANDUM OF UNDERSTANDING

         The following represents the understandings of the Greater New Orleans
Hotel-Motel Association (the "Association") and the Casino Operator (the
"operator"), concerning the easing of legislative hotel restrictions imposed
upon the operator by the Gaming Act. The intent of this memorandum is to
establish the parameters for certain amendments to the Gaming Act and for a
written agreement to executed by the parties that will be enforceable by
Louisiana Gaming Control Board in the event the Bankruptcy Plan of Jazz Casino
Company LLC is consummated by March 31, 2001 and the legislature enacts
amendments to the Gaming Act for these agreements to be lawful.

I.       LIMITATION ON NUMBER OF ROOMS

         o        The operator shall be limited to owning, constructing or
               leasing 450 rentable units.

         o        After four years, the Association and the operator shall
               review the limitation on 450 rentable units based upon an
               objective formula to determine whether demand by casino patrons
               under the pricing limitations set forth in Section V below,
               exceeds the 450 rentable units. If so, the parties shall in good
               faith seek agreement on such additional rooms that may be
               necessary to meet such excess demand from casino patrons. If no
               agreement can be reached, the parties shall have any disputes
               submitted to non-binding mediation by a mutually agreeable
               mediator.

II.      SIMILARLY SITUATED LANGUAGE

         o        The "similarly situated" language in the Gaming Act shall be
               removed.

III.     LIMITATION ON HOTEL MEETING SPACE

         o        In the event the operator constructs a new hotel, the meeting
               space in such facility shall be limited to 15,000 square feet.

         o        In the event the operator purchases a hotel facility that
               contains greater than 20,000 square feet of meeting space, the
               operator shall not use more than 20,000 square feet for meeting
               space.

IV.      GOVERNMENTAL IMPOSED RATE GUIDES AND RELATED ADVERTISING

          o       Except for the limited exception for casino customers as set
               forth in Section V below, the operator shall not advertise hotel
               rooms to the general public at rates below market rates. As a
               guide for setting such rates, the operator, under the
               jurisdiction of the Gaming Board and

<PAGE>   46

               pursuant to statutory provisions, shall base room rates on
               average seasonal rates for the preceding year of hotels in the
               Central Business District and French Quarter as compiled by a
               nationally recognized firm such as Smith Travel Research, PKF
               Consulting or such other company agreed to by the parties.

          o       The operator shall not advertise room rates on billboards
               within 50 mile radius of the casino, provided this restriction
               shall not apply to advertising outside the State of Louisiana.

          o       The operator shall not make available to the general public
               print adds or billboards that offer comps or discounted hotel
               rates.

          o       The operator may otherwise prospect/advertise for new
               customers through other media so long as the pricing for rooms is
               consistent with the average seasonal rates as described above.

V.       RESTRICTED COMPING AND DISCOUNTING - Payment of Full Room Taxes

          o       The general rule shall be that the operator shall not comp or
               discount hotel rates to general public.

          o       The operator shall be permitted to comp and/or discount room
               rates for:

               o       A member of Harrah's customer reward system or a customer
                    on Harrah's Entertainment database;

               o       A known "high roller" or junkets with established play at
                    the casino or with other casinos;

               o       A person that is not a reward customer or a known high
                    roller but, based upon observed play at the casino, is
                    entitled to a comp or discount;

               o       A person that has suffered a service foul up or error
                    that requires a comp or discount to rectify the error in
                    service in a manner similar to practices within the hotel
                    industry; or

               o       A vendor or other person visiting the casino for business
                    or educational purposes.

          o       Room taxes shall be paid by the operator on all discounted and
               comped rooms to be paid at the prevailing tax schedules based
               upon average seasonal rates for the preceding year of hotels in
               the Central Business District and French Quarter as compiled by a
               nationally recognized firm such as Smith Travel, PKF Consulting
               or such other company agreed to by the parties.

<PAGE>   47

VI.      PAYMENTS TO NEW ORLEANS MARKETING CORP.

          o       The operator shall commit to pay up to $1 million annually to
               the New Orleans Marketing Corp. as provided below.

          o       $500,000 shall by payable annually beginning on April 1, 2001
               (payable in monthly installments) and for each year for the
               remainder of the term of the Casino Contract.

          o       $500,000 shall be increased to $1 million annually (payable in
               monthly installments) beginning 3 months after beginning
               construction or the purchase of a hotel containing 250 or more
               rooms and such payment shall continue for the remainder of the
               term of the Casino Contract.

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