Document:

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                                                                   EXHIBIT 4.07

                                PLEDGE AGREEMENT

                  PLEDGE AGREEMENT (as amended, modified or supplemented from
time to time, this "Agreement"), dated as of March 30, 2001, among each of the
undersigned pledgors (each a "Pledgor" and, collectively, the "Pledgors"), The
Bank of New York, in its individual capacity acting in respect of any Collateral
(as defined below) credited on the books of a Clearing Corporation (as defined
below) as Securities Intermediary (as defined below) with respect to each
Pledgor (the "Custodian"), and The Bank of New York, not in its individual
capacity but solely as Collateral Agent (the "Pledgee") for the benefit of (w)
Harrah's Entertainment, Inc., a Delaware Corporation ("HET"), and Harrah's
Operating Company, Inc., a Delaware Corporation ("HOC"), or any successor or
substitute Minimum Payment Guarantor under any other Minimum Payment Guarantor
Documents referred to below, (x) HET, HOC and Harrah's New Orleans Management
Company ("HNOMC"), as lenders under the Revolving Credit Agreement hereinafter
referred to, together with any successor and other lenders and letter of credit
issuers under the Revolving Credit Agreement hereinafter referred to (HET, HOC,
HNOMC and any other such lenders or letter of credit issuers, if any, are
hereinafter called the "Revolver Creditors"), and (y) the holders from time to
time of the Senior Notes hereinafter referred to (such holders of the Senior
Notes are hereinafter called the "Senior Note Holders") and the Senior Note
Trustee referred to below (the Senior Note Holders, and together with the Senior
Note Trustee, in its capacity as such, are hereinafter called the "Senior Note
Creditors" and, together with the Minimum Payment Guarantors and the Revolver
Creditors, are hereinafter called the "Secured Creditors"). Except as otherwise
defined herein, terms used herein and defined in the Intercreditor Agreement (as
in effect on the date hereof and without giving effect to any termination
thereof) shall be used herein as so defined.

                                   WITNESSETH:

                  WHEREAS, HET and HOC have jointly and severally provided the
initial Minimum Payment Guaranty (and HET and HOC and/or one or more other
Minimum Payment Guarantors may hereafter provide one or more substitute or
replacement Minimum Payment Guaranties) and in connection therewith Jazz Casino
Company, L.L.C., a Louisiana limited liability company ("JCC"), HET and HOC have
entered into that certain Amended and Restated HET/JCC Agreement dated March 30,
2001 (as amended, modified or supplemented from time to time, the "HET/JCC
Agreement");

                  WHEREAS, JCC, as borrower, JCC Holding, Canal Development,
Fulton Development and JCC Development, as guarantors, and HET, HOC and HNOMC,
as lenders, have entered into a Revolving Credit Agreement, dated as of March
30, 2001, providing for the

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making of loans and the issuance of, and participation in, letters of credit as
contemplated therein (as used herein, the term "Revolving Credit Agreement"
means the Revolving Credit Agreement described above in this paragraph, as the
same may be amended, modified, extended, renewed, replaced, restated,
supplemented or refinanced from time to time, and including any agreement
extending the maturity of, or refinancing or restructuring (including, but not
limited to, the inclusion of additional borrowers or guarantors thereunder or
any increase in the amount borrowed) all or any portion of, the indebtedness
under such agreement or any successor agreements, whether or not with the same
agent, trustee, representative, lenders or holders; provided that, with respect
to any agreement providing for the refinancing or replacement of indebtedness
under the Revolving Credit Agreement, such agreement shall only be treated as,
or as part of, the Revolving Credit Agreement hereunder if (i) either (A) all
obligations under the Revolving Credit Agreement being refinanced or replaced
(if then outstanding) shall be paid in full at the time of such refinancing or
replacement, and all commitments and letters of credit issued pursuant to the
refinanced or replaced Revolving Credit Agreement shall have terminated in
accordance with their terms or (B) the Required Revolver Creditors shall have
consented in writing to the refinancing or replacement indebtedness being
treated as indebtedness pursuant to the Revolving Credit Agreement, (ii) the
refinancing or replacement indebtedness shall be permitted to be incurred under
the Revolving Credit Agreement being refinanced or replaced (if such Revolving
Credit Agreement is to remain outstanding) and the other Revolving Credit
Documents then in effect, and under the Senior Note Documents (if any Senior
Notes remain outstanding) and (iii) a notice to the effect that the refinancing
or replacement indebtedness shall be treated as issued under the Revolving
Credit Agreement shall be delivered by JCC to the Collateral Agent);

                  WHEREAS, JCC, as issuer, JCC Holding, Canal Development,
Fulton Development and JCC Development, as guarantors, and the Senior Note
Trustee have executed an Indenture, dated as of March 30, 2001 (as amended,
modified or supplemented from time to time, the "Senior Note Indenture," and
together with the Senior Notes and all other documents and agreements relating
thereto are herein called the "Senior Note Documents"), pursuant to which JCC
(x) will initially issue $124,520,000 in aggregate principal amount of its
Senior Notes due 2008 and (y) may, in accordance with the terms of the Senior
Note Indenture, issue additional principal amounts of its Senior Notes due 2008
as a result of its payment of interest in Secondary Securities, as defined in
the Senior Note Indenture (with all Senior Notes issued as contemplated by
preceding clauses (x) and (y), together with any securities issued in
replacement or substitution therefor, being herein called the "Senior Notes");

                  WHEREAS, JCC Holding and each other Pledgor (other than JCC)
has jointly and severally guaranteed to the Revolver Creditors the payment when
due of all obligations and liabilities of JCC under or with respect to the
Revolving Credit Documents;

                  WHEREAS, pursuant to Article X of the Senior Note Indenture,
JCC Holding and each other Pledgor (other than JCC) have jointly and severally
guaranteed (the "Senior Note Guaranty") to the Senior Note Creditors the payment
when due of all obligations and liabilities of JCC under or with respect to the
Senior Note Documents;

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                  WHEREAS, it is a condition precedent to each of the
above-described extensions of credit to JCC that each Pledgor shall have
executed and delivered to the Pledgee this Agreement; and

                  WHEREAS, the Secured Creditors and the Pledgee have entered
into that certain Intercreditor Agreement dated March 30, 2001 (the
"Intercreditor Agreement") setting forth the respective rights of the Secured
Creditors in the Collateral referred to in this Agreement, the Security
Agreement (as defined in the Intercreditor Agreement) and the Mortgages (as
defined in the Intercreditor Agreement);

                  WHEREAS, each Pledgor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;

                  NOW, THEREFORE, in consideration of the above-described
extensions of credit to be made to JCC and the other benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
for the benefit of the Secured Creditors and hereby covenants and agrees with
the Pledgee for the benefit of the Secured Creditors as follows:

                  1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:

                  (i) the full and prompt payment when due (whether at the
         stated maturity, by acceleration or otherwise) of (x) the principal of
         and interest on all Protective Advances (as defined in the
         Intercreditor Agreement) made in accordance with the requirements of
         Section 4(e) of the Intercreditor Agreement and (y) all other
         obligations and indebtedness (including, without limitation,
         indemnities, fees and expenses, enforcement costs (including reasonable
         attorneys' fees) and interest on such obligations and indebtedness), of
         each Pledgor to the Secured Creditors, whether now existing or
         hereafter incurred, to the extent relating to Protective Advances made
         in accordance with Section 4(e) of the Intercreditor Agreement and the
         due performance and compliance by each Pledgor with all the terms,
         conditions and agreements relating to such Protective Advances (all
         such principal, interest, obligations and liabilities described in this
         clause (i) being herein collectively called the "Protective Advance
         Obligations");

                  (ii) the full and prompt payment when due (whether at the date
         of maturity, by acceleration or otherwise) of all obligations and
         indebtedness (including, without limitation, indemnities, fees,
         expenses, enforcement costs (including reasonable attorneys' fees) and
         interest on such obligations and indebtedness) of such Pledgor to the
         Minimum Payment Guarantors now existing or hereafter incurred under,
         arising out of, or in connection with any Minimum Payment Guaranty
         Document (in each case, to the extent such obligations and indebtedness
         relate to any Minimum Payment Guaranty) to which it is a party
         (including, without limitation, all such obligations and indebtedness
         under the HET/JCC Agreement) and the due performance and compliance by
         such Pledgor with all of the terms, conditions and agreements contained
         in each such Minimum Payment

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         Guaranty Document (all such principal, interest, obligations and
         liabilities described in this clause (ii) being herein collectively
         called the "Minimum Payment Obligations");

                  (iii) the full and prompt payment when due (whether at the
         stated maturity, by acceleration or otherwise) of all obligations and
         indebtedness (including, without limitation, indemnities, fees,
         expenses, enforcement costs (including reasonable attorneys' fees) and
         interest on such obligations and indebtedness) of such Pledgor to the
         Revolver Creditors now existing or hereafter incurred under, arising
         out of, or in connection with any Revolving Credit Document to which it
         is a party (including, without limitation, all such obligations and
         indebtedness under the Revolving Credit Agreement and the guarantees by
         the Pledgors thereof) and the due performance and compliance by such
         Pledgor with all of the terms, conditions and agreements contained in
         each such Revolving Credit Document (all such principal, interest,
         obligations and liabilities described in this clause (iii) being herein
         collectively called the "Revolving Credit Agreement Obligations");

                  (iv) the full and prompt payment when due (whether at the
         stated maturity, by acceleration or otherwise) of all obligations and
         indebtedness (including, without limitation, indemnities, fees,
         expenses, enforcement costs (including reasonable attorneys' fees) and
         interest on such obligations and indebtedness) of such Pledgor to the
         Senior Note Creditors, arising out of, or in connection with the Senior
         Notes and the Senior Note Documents (including, without limitation, all
         such obligations and indebtedness under the Senior Note Guaranty) and
         the due performance and compliance by such Pledgor with all of the
         terms, conditions and agreements contained therein (all such principal,
         interest, obligations and liabilities described in this clause (iv)
         being herein collectively called the "Senior Note Obligations");

                  (v) any and all sums advanced by the Pledgee in order to
         preserve the Collateral (as hereinafter defined) or preserve its
         security interest in the Collateral, and any and all amounts (but
         without any interest thereon) owing by JCC to the Minimum Payment
         Guarantors to reimburse the Minimum Payment Guarantors for amounts paid
         by the Minimum Payment Guarantors to the Collateral Agent pursuant to
         the indemnity provisions contained in Section 6(c) and (d) of the
         Intercreditor Agreement;

                  (vi) in the event of any proceeding for the collection or
         enforcement of any indebtedness, obligations or liabilities of such
         Pledgor referred to in clauses (i) through (iv) above, after an Event
         of Default (as hereinafter defined) shall have occurred and be
         continuing, the reasonable expenses of the Pledgee in retaking,
         holding, preparing for sale or lease, selling or otherwise disposing of
         or realizing on the Collateral, or of any exercise by the Pledgee of
         its rights hereunder, together with reasonable attorneys' fees and
         court costs; and

                  (vii) all amounts paid by any Indemnitee (as hereinafter
         defined) as to which such Indemnitee has the right to reimbursement
         under Section 11 hereof;

all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (vii) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed

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that the "Obligations" shall include extensions of credit described above,
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement. As used herein the term "Event of Default"
shall mean any "Event of Default" under, and as defined in, the Intercreditor
Agreement, or any other default hereunder after notice from the Pledgee and 30
days opportunity to cure, as the case may be, and shall in any event include any
payment default on the Obligations after the expiration of any applicable grace
period.

                  2. DEFINITIONS; ANNEXES. (a) Reference to singular terms shall
include the plural and vice versa.

                  (b) The following capitalized terms used herein shall have the
definitions specified below:

                  "Adverse Claim" has the meaning given such term in Section
8-102(a)(1) of the UCC.

                  "Agreement" has the meaning set forth in the first paragraph
hereof.

                  "Certificated Security" has the meaning given such term in
Section 8-102(a)(4) of the UCC.

                  "Clearing Corporation" has the meaning given such term in
Section 8-102(a)(5) of the UCC.

                  "Collateral" has the meaning set forth in Section 3.1 hereof.

                  "Collateral Accounts" means any and all accounts established
and maintained by the Pledgee or a Securities Intermediary in the name of any
Pledgor, including, without limitation, the Custodian Account, to which
Collateral may be credited.

                  "Custodian" has the meaning set forth in the first paragraph
hereof.

                  "Custodian Account" means any account established and
maintained by the Custodian in the name of any Pledgor to which Collateral also
credited on the books of a Clearing Corporation may be credited.

                  "Domestic Corporation" has the meaning set forth in the
definition of "Stock."

                  "Entitlement Order" has the meaning given such term in Section
8-102(a)(8) of the UCC.

                  "Event of Default" has the meaning set forth in Section 1
hereof.

                  "Excluded Collateral" means (i) the Casino Operating Contract;
(ii) the House Bank; and (iii) the Louisiana Gross Gaming Revenue Share
Payments, including the State's Interest in Daily Collections (as such terms are
defined in the Casino Operating Contract).

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                  "Financial Asset" has the meaning given such term in Section
8-102(a)(9) of the UCC.

                  "Foreign Corporation" has the meaning set forth in the
definition of "Stock."

                  "Gaming Patron Indebtedness" means all patron gaming
indebtedness owed to any Pledgor, including without limitation any marker,
patron promissory note or other evidence of patron gaming indebtedness.

                  "HET" has the meaning set forth in the first paragraph hereof.

                  "HET/JCC Agreement" has the meaning set forth in the Recitals
hereto.

                  "HNOMC" has the meaning set forth in the first paragraph
hereof.

                  "HOC" has the meaning set forth in the first paragraph hereof.

                  "Indemnitees" has the meaning set forth in Section 11 hereof.

                  "Instrument" has the meaning given such term in Section
9-105(1)(i) of the UCC.

                  "Intercreditor Agreement" has the meaning set forth in the
Recitals hereto.

                  "Interest Rate Protection Agreements" has the meaning provided
in the Senior Note Indenture.

                  "Investment Property" has the meaning given such term in
Section 9-115(1)(f) of the UCC.

                  "JCC" has the meaning set forth in the first paragraph hereof.

                  "JCC Holding" has the meaning provided in the Senior Note
Indenture.

                  "Limited Liability Company Assets" means all assets, whether
tangible or intangible and whether real, personal or mixed (including, without
limitation, all limited liability company capital and interest in other limited
liability companies), at any time owned or represented by any Limited Liability
Company Interest.

                  "Limited Liability Company Interests" means the entire limited
liability company membership interest at any time owned by any Pledgor in any
limited liability company.

                  "Louisiana Gaming Regulations" has the meaning provided in
Section 27.

                  "Louisiana UCC" shall have the meaning provided in Section
7(b).

                  "Minimum Payment Guarantors" shall mean and include HET, HOC
and any substitute or successor Minimum Payment Guarantor from time to time
party to, and as defined in, the Intercreditor Agreement.

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                  "Minimum Payment Guaranty" shall have the meaning assigned
that term in the Intercreditor Agreement.

                  "Minimum Payment Guaranty Documents" shall have the meaning
assigned that term in the Intercreditor Agreement.

                  "Minimum Payment Obligations" has the meaning provided in
Section 1 hereof.

                  "Notes" mean all promissory notes between or among JCC Holding
and its Subsidiaries and all other promissory notes from time to time issued to,
or held by, any Pledgor.

                  "Notice of Adverse Claim" has the meaning given such term in
Section 8-105 of the UCC.

                  "Obligations" has the meaning set forth in Section 1 hereof.

                  "Participant" has the meaning set forth in Section 3.2(a)
hereof.

                  "Partnership Assets" means all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all partnership capital and interest in other partnerships), at any time owned
or represented by any Partnership Interest.

                  "Partnership Interest" means the entire general partnership
interest or limited partnership interest at any time owned by any Pledgor in any
general partnership or limited partnership.

                  "Pledged Instruments" has the meaning set forth in Section 3.5
hereof.

                  "Pledged Notes" has the meaning set forth in Section 3.5
hereof.

                  "Pledgee" has the meaning set forth in the first paragraph
hereof.

                  "Pledgor" has the meaning set forth in the first paragraph
hereof.

                  "Proceeds" has the meaning given such term in Section 9-306(l)
of the UCC.

                  "Protective Advance Obligations" has the meaning set forth in
Section 1.

                  "Revolver Creditors" has the meaning set forth in the first
paragraph hereof.

                  "Revolving Credit Agreement" has the meaning set forth in the
Recitals hereto.

                  "Revolving Credit Agreement Obligations" has the meaning set
forth in Section 1 hereof.

                  "Secured Creditors" has the meaning set forth in the first
paragraph hereof.

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                  "Secured Debt Documents" means each of this Agreement, the
Revolving Credit Agreement, any other Revolving Credit Document, any Senior Note
Document, any Minimum Payment Guaranty Document or any Shared Security Document
(as defined in the Intercreditor Agreement).

                  "Securities Account" has the meaning given such term in
Section 8-501(a) of the UCC.

                  "Securities Act" means the Securities Act of 1933, as amended,
as in effect from time to time.

                  "Securities Intermediary" has the meaning given such term in
Section 8-102(a)(14) of the UCC.

                  "Security" has the meaning given such term in Section
8-102(a)(15) of the UCC and shall in any event include all Stock and Notes.

                  "Security Entitlement" has the meaning given such term in
Section 8-102(a)(17) of the UCC.

                  "Senior Note Creditors" has the meaning set forth in the first
paragraph hereof.

                  "Senior Note Documents" has the meaning set forth in the
Recitals hereto.

                  "Senior Note Guaranty" has the meaning set forth in the
Recitals hereto.

                  "Senior Note Holders" has the meaning set forth in the first
paragraph hereof.

                  "Senior Note Indenture" has the meaning set forth in the
Recitals hereto.

                  "Senior Note Obligations" has the meaning set forth in Section
1 hereof.

                  "Senior Note Trustee" shall mean Wells Fargo Bank Minnesota,
National Association, in its capacity as trustee pursuant to the Senior Note
Indenture, and any successor thereof as such trustee.

                  "Senior Notes" has the meaning set forth in the Recitals
hereto.

                  "Stock" means (x) with respect to corporations incorporated
under the laws of the United States or any State or territory thereof (each a
"Domestic Corporation"), all of the issued and outstanding shares of capital
stock at any time owned by any Pledgor of any Domestic Corporation and (y) with
respect to corporations not Domestic Corporations (each a "Foreign
Corporation"), all of the issued and outstanding shares of capital stock at any
time owned by any Pledgor of any Foreign Corporation.

                  "Termination Date" has the meaning set forth in Section 17
hereof.

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                  "UCC" means the Uniform Commercial Code as in effect in the
State of New York from time to time; provided that all references herein to
specific sections or subsections of the UCC are references to such sections or
subsections, as the case may be, of the Uniform Commercial Code as in effect in
the State of New York on the date hereof.

                  "Uncertificated Security" has the meaning given such term in
Section 8-102(a)(18) of the UCC.

                  3. PLEDGE AND GRANT OF SECURITY INTEREST, ETC.

                  3.1. Pledge. To secure the Obligations now or hereafter owed
or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and
assign to the Pledgee for the benefit of the Secured Creditors, and does hereby
create a continuing security interest (subject to those Liens permitted to exist
with respect to the Collateral pursuant to the terms of all Secured Debt
Documents then in effect) in favor of the Pledgee for the benefit of the Secured
Creditors in, all of the right, title and interest (but none of the Pledgor's
obligations) in and to the following, whether now existing or hereafter from
time to time acquired (collectively, but in each case except to the extent
constituting Excluded Collateral, the "Collateral"), upon the terms and subject
to the conditions of this Agreement, and further subject to the provisions of
the Intercreditor Agreement:

                  (a) each of the Collateral Accounts, including any and all
         assets of whatever type or kind deposited by such Pledgor in a
         Collateral Account, whether now owned or hereafter acquired, existing
         or arising, including, without limitation, all Financial Assets,
         Investment Property, moneys, checks, drafts, Instruments, Securities or
         interests therein of any type or nature deposited, or required by any
         Secured Debt Document to be deposited, in such Collateral Account, and
         all investments and all certificates and other Instruments (including
         depository receipts, if any) from time to time representing or
         evidencing the same, and all dividends, interest, distributions, cash
         and other property from time to time received, receivable or otherwise
         distributed in respect of or in exchange for any or all of the
         foregoing;

                  (b) all Securities (including, without limitation, all Stock
         and all Notes) of such Pledgor from time to time;

                  (c) all Limited Liability Company Interests of such Pledgor
         from time to time and all of its right, title and interest in each
         limited liability company to which each such interest relates, whether
         now existing or hereafter acquired, including, without limitation:

                           (A) all the capital thereof and its interest in all
                  profits, losses, Limited Liability Company Assets and other
                  distributions to which such Pledgor shall at any time be
                  entitled in respect of such Limited Liability Company
                  Interests;

                           (B) all other payments due or to become due to such
                  Pledgor in respect of Limited Liability Company Interests,
                  whether under any limited liability

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                  company or operating agreement or otherwise, whether as
                  contractual obligations, damages, insurance proceeds or
                  otherwise;

                           (C) all of its claims, rights, powers, privileges,
                  authority, options, security interests, liens and remedies, if
                  any, under any limited liability company agreement or
                  operating agreement, or at law or otherwise in respect of such
                  Limited Liability Company Interests;

                           (D) all present and future claims, if any, of such
                  Pledgor against any such limited liability company for moneys
                  loaned or advanced, for services rendered or otherwise;

                           (E) all of such Pledgor's rights under any limited
                  liability company agreement or operating agreement or at law
                  to exercise and enforce every right, power, remedy, authority,
                  option and privilege of such Pledgor relating to such Limited
                  Liability Company Interests, including any power to terminate,
                  cancel or modify any limited liability company agreement or
                  operating agreement, to execute any instruments and to take
                  any and all other action on behalf of and in the name of any
                  of such Pledgor in respect of such Limited Liability Company
                  Interests and any such limited liability company, to make
                  determinations, to exercise any election (including, but not
                  limited to, election of remedies) or option or to give or
                  receive any notice, consent, amendment, waiver or approval,
                  together with full power and authority to demand, receive,
                  enforce, collect or receipt for any of the foregoing or for
                  any Limited Liability Company Asset, to enforce or execute any
                  checks, or other instruments or orders, to file any claims and
                  to take any action in connection with any of the foregoing
                  (with all of the foregoing rights only to be exercisable upon
                  the occurrence and during the continuation of an Event of
                  Default); and

                           (F) all other property hereafter delivered in
                  substitution for or in addition to any of the foregoing, all
                  certificates and instruments representing or evidencing such
                  other property and all cash, securities, interest, dividends,
                  rights and other property at any time and from time to time
                  received, receivable or otherwise distributed in respect of or
                  in exchange for any or all thereof;

                  (d) all Partnership Interests of such Pledgor from time to
         time and all of its right, title and interest in each partnership to
         which each such interest relates, whether now existing or hereafter
         acquired, including, without limitation:

                           (A) all the capital thereof and its interest in all
                  profits, losses, Partnership Assets and other distributions to
                  which such Pledgor shall at any time be entitled in respect of
                  such Partnership Interests;

                           (B) all other payments due or to become due to such
                  Pledgor in respect of Partnership Interests, whether under any
                  partnership agreement, operating agreement or otherwise,
                  whether as contractual obligations, damages, insurance
                  proceeds or otherwise;

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                           (C) all of its claims, rights, powers, privileges,
                  authority, options, security interests, liens and remedies, if
                  any, under any partnership agreement or operating agreement,
                  or at law or otherwise in respect of such Partnership
                  Interests;

                           (D) all present and future claims, if any, of such
                  Pledgor against any such partnership for moneys loaned or
                  advanced, for services rendered or otherwise;

                           (E) all of such Pledgor's rights under any
                  partnership agreement or operating agreement or at law to
                  exercise and enforce every right, power, remedy, authority,
                  option and privilege of such Pledgor relating to such
                  Partnership Interests, including any power to terminate,
                  cancel or modify any partnership agreement or operating
                  agreement, to execute any instruments and to take any and all
                  other action on behalf of and in the name of any of such
                  Pledgor in respect of such Partnership Interests and any such
                  partnership, to make determinations, to exercise any election
                  (including, but not limited to, election of remedies) or
                  option or to give or receive any notice, consent, amendment,
                  waiver or approval, together with full power and authority to
                  demand, receive, enforce, collect or receipt for any of the
                  foregoing or for any Partnership Asset, to enforce or execute
                  any checks, or other instruments or orders, to file any claims
                  and to take any action in connection with any of the foregoing
                  (with all of the foregoing rights only to be exercisable upon
                  the occurrence and during the continuation of an Event of
                  Default); and

                           (F) all other property hereafter delivered in
                  substitution for or in addition to any of the foregoing, all
                  certificates and instruments representing or evidencing such
                  other property and all cash, securities, interest, dividends,
                  rights and other property at any time and from time to time
                  received, receivable or otherwise distributed in respect of or
                  in exchange for any or all thereof;

                  (e) all Instruments and Notes of such Pledgor from time to
         time;

                  (f) all Security Entitlements of such Pledgor from time to
         time in any and all of the foregoing;

                  (g) all Financial Assets and Investment Property of such
         Pledgor from time to time;

                  (h) all Gaming Patron Indebtedness and any marker, patron
         promissory note or other evidence thereof; and

                  (i) all Proceeds of any and all of the foregoing.

                  3.2. Procedures. (a) To the extent that any Pledgor at any
time or from time to time owns, acquires or obtains any right, title or interest
in any Collateral, such Collateral

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(including, without limitation, any Collateral owned, acquired or obtained prior
to or as of the date hereof) shall automatically (and without the taking of any
action by the respective Pledgor) be pledged pursuant to Section 3.1 of this
Agreement and, in addition thereto, such Pledgor shall (to the extent provided
below) take the following actions as set forth below (as promptly as practicable
and, in any event, within 10 days after it obtains such Collateral) for the
benefit of the Pledgee and the Secured Creditors:

                  (i) with respect to a Certificated Security (other than a
         Certificated Security credited on the books of a Clearing Corporation),
         the respective Pledgor shall physically deliver such Certificated
         Security to the Pledgee, indorsed to the Pledgee or indorsed in blank
         by an effective indorsement;

                  (ii) with respect to an Uncertificated Security (other than an
         Uncertificated Security credited on the books of a Clearing
         Corporation), the respective Pledgor shall cause the issuer of such
         Uncertificated Security to duly authorize and execute, and deliver to
         the Pledgee, an agreement for the benefit of the Pledgee and the
         Secured Creditors substantially in the form of Annex G hereto
         (appropriately completed to the satisfaction of the Pledgee and with
         such modifications, if any, as shall be satisfactory to the Pledgee)
         pursuant to which such issuer agrees to comply with any and all
         instructions originated by the Pledgee without further consent by the
         registered owner and not to comply with instructions regarding such
         Uncertificated Security (and any Partnership Interests and Limited
         Liability Company Interests issued by such issuer) originated by any
         other Person other than a court of competent jurisdiction;

                  (iii) with respect to an Instrument, Certificated Security,
         Uncertificated Security, Partnership Interest or Limited Liability
         Company Interest credited on the books of a Clearing Corporation
         (including a Federal Reserve Bank, Participants Trust Company or The
         Depository Trust Company), (1) compliance with the applicable rules of
         such Clearing Corporation, (2) the crediting by such Clearing
         Corporation of such Instrument, Security, Partnership Interest or
         Limited Liability Company Interest, as the case may be, to a Securities
         Account maintained by such Clearing Corporation in the name of the
         Custodian, or, if the Custodian is not a participant in such Clearing
         Corporation, the crediting by such Clearing Corporation of such
         Instrument, Security, Partnership Interest or Limited Liability Company
         Interest, as the case may be, to a Securities Account maintained by
         such Clearing Corporation in the name of another Securities
         Intermediary who is a participant in such Clearing Corporation (the
         "Participant") and the crediting by the Participant of such Instrument,
         Security, Partnership Interest or Limited Liability Company Interest,
         as the case may be, to a Securities Account maintained by the
         Participant in the name of the Pledgee and (3) the Pledgee crediting
         such Security, Instrument, Partnership Interest or Limited Liability
         Company Interest, as the case may be, to the Custodian Account;

                  (iv) with respect to a Partnership Interest or a Limited
         Liability Company Interest (other than a Partnership Interest or
         Limited Liability Interest credited on the books of a Clearing
         Corporation), (1) if such Partnership Interest or Limited Liability
         Company Interest is represented by a certificate, the procedure set
         forth in Section

                                      -12-
<PAGE>   13

         3.2(a)(i), and (2) whether or not such Partnership Interest or Limited
         Liability Company Interest is represented by a certificate, the
         procedure set forth in Section 3.2(a)(ii);

                  (v) with respect to an Instrument (other than an Instrument
         credited on the books of a Clearing Corporation) or any Note, physical
         delivery of such Instrument or Note to the Pledgee, indorsed to the
         Pledgee or indorsed in blank; and

                  (vi) with respect to cash, (i) establishment by the Pledgee of
         a Collateral Account in the name of such Pledgor over which the Pledgee
         shall have exclusive and absolute control and dominion (and no
         withdrawals or transfers may be made therefrom by any Person except
         with the prior written consent of the Pledgee) and (ii) deposit of such
         cash in such Collateral Account (it being expressly understood and
         agreed that this Agreement shall be deemed to constitute an
         indispensable instrument with respect to such Collateral Account held
         exclusively by the Pledgee for the benefit of the Secured Creditors).

                  (b) In addition to the actions required to be taken pursuant
to the preceding Section 3.2(a), each Pledgor shall take the following
additional actions with respect to the Collateral:

                  (i) with respect to all Collateral of such Pledgor whereby or
         with respect to which the Pledgee may obtain "control" thereof within
         the meaning of Section 8-106 of the UCC (or under any provision of the
         UCC as same may be amended or supplemented from time to time, or under
         the laws of any relevant State other than the State of New York), the
         respective Pledgor shall take all actions as may be requested from time
         to time by the Pledgee so that "control" of such Collateral is obtained
         and at all times held by the Pledgee; and

                  (ii) each Pledgor shall from time to time cause appropriate
         financing statements (on form UCC-1 or other appropriate form) under
         the Uniform Commercial Code as in effect in the various relevant
         States, and as each such Uniform Commercial Code may be amended from
         time to time, on a form covering all Collateral hereunder (with the
         form of such financing statements to be satisfactory to the Pledgee),
         to be filed in the relevant filing offices so that at all times the
         Pledgee has a security interest in all Investment Property and other
         Collateral which is perfected by the filing of such financing
         statements (in each case to the maximum extent perfection by filing may
         be obtained under the laws of the relevant States, including, without
         limitation, Section 9-115(4)(b) of the UCC).

                  (c) In addition to the actions otherwise required to be taken
above, and notwithstanding anything to the contrary contained elsewhere in this
Agreement, with respect to each Wholly-Owned Subsidiary of JCC Holding (other
than JCC and JCC Development), JCC Holding shall take all action as may be
required so that all equity interests therein are certificated, with the actions
described in Section 3.2(a)(i) being taken with respect thereto.

                  (d) Notwithstanding anything to contrary contained above or in
any of the other Shared Security Documents, unless and until an Event of Default
has occurred and is

                                      -13-
<PAGE>   14

continuing, no Pledgor shall be required to deliver any Gaming Patron
Indebtedness or any evidence thereof to the Pledgee, and shall be required to
take no other actions to perfect security interests therein other than the
filing of appropriate financing statements on Form UCC-1 (or the appropriate
equivalent in the relevant jurisdiction); it being understood and agreed by the
Pledgee and the Secured Creditors that the filing of such financing statements
may not (under applicable Louisiana law) be sufficient to perfect the security
interests in the Gaming Patron Indebtedness. Upon the occurrence and during the
continuance of any Event of Default, each Pledgor covenants and agrees to take
such actions with respect to the Gaming Patron Indebtedness from time to time
held by them as may be requested by the Pledgee or the Required Secured
Creditors to perfect or protect the Pledgee's security interests therein,
including without limitation (i) delivering all markers, patron promissory notes
or other evidences of patron gaming indebtedness to the Pledgee, (ii) stamping
all evidences of Gaming Patron Indebtedness with a legend meeting the
requirements of Louisiana Revised Statutes 9:4330-4334 denoting the assignment,
pledge and security interests granted herein on all then existing Gaming Patron
Indebtedness and all Gaming Patron Indebtedness acquired in the future (and
indicating that such Gaming Patron Indebtedness is subject to the security
interests created pursuant to this Agreement) or (iii) taking such other actions
as may be requested by the Pledgee or the Required Secured Creditors to perfect
and protect the security interests granted pursuant to this Agreement in all
Gaming Patron Indebtedness. It is understood and agreed by the parties hereto
(and the Secured Creditors) that, except for the actions required to be taken as
provided above, no Pledgor shall have any obligation to perfect the Pledgee's
security interest in Gaming Patron Indebtedness. To induce the Secured Creditors
to agree to the foregoing, each Pledgor hereby covenants and agrees for the
benefit of the Secured Creditors that it shall not assign, collaterally assign,
pledge, grant a security interest in or otherwise encumber in any way (other
than pursuant to the Shared Security Documents ) any present or future Gaming
Patron Indebtedness.

                  3.3. Subsequently Acquired Collateral. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Collateral at
any time or from time to time after the date hereof, such Collateral shall
automatically (and without any further action being required to be taken) be
subject to the pledge and security interests created pursuant to Section 3.1
and, furthermore, the Pledgor will promptly thereafter take (or cause to be
taken) all action with respect to such Collateral in accordance with the
procedures set forth in Section 3.2, and will promptly thereafter deliver to the
Pledgee (i) a certificate executed by a principal executive officer of such
Pledgor describing such Collateral and certifying that the same has been duly
pledged in favor of the Pledgee (for the benefit of the Secured Creditors)
hereunder and (ii) supplements to Annexes A through E hereto as are necessary to
cause such annexes to be complete and accurate at such time.

                  3.4. Transfer Taxes. Each pledge of Collateral under Section
3.1 or Section 3.3 shall be accompanied by any transfer tax stamps required in
connection with the pledge of such Collateral.

                  3.5. Definitions of Pledged Notes and Pledged Instruments. All
Notes at any time pledged or required to be pledged hereunder are hereinafter
called the "Pledged Notes", and all Instruments at any time pledged or required
to be pledged hereunder are hereinafter called "Pledged Instruments."

                                      -14-
<PAGE>   15

                  3.6. Certain Representations and Warranties Regarding the
Collateral. Each Pledgor represents and warrants to the Pledgee and the Secured
Creditors that on the date hereof (i) each Subsidiary of such Pledgor, and the
direct ownership thereof, is listed in Annex A hereto; (ii) the Stock held by
such Pledgor consists of the number and type of shares of the stock of the
corporations as described in Annex A hereto; (iii) such Stock constitutes that
percentage of the issued and outstanding capital stock of the issuing
corporation as is set forth in Annex A hereto; (iv) the Notes held by such
Pledgor consist of the promissory notes described in Annex B hereto where such
Pledgor is listed as the lender; (v) the Limited Liability Company Interests
held by such Pledgor consist of the number and type of interests of the Persons
described in Annex C hereto; (vi) each such Limited Liability Company Interest
constitutes that percentage of the issued and outstanding equity interest of the
issuing Person as set forth in Annex C hereto; (vii) the Partnership Interests
held by such Pledgor consist of the number and type of interests of the Persons
described in Annex D hereto; (viii) each such Partnership Interest constitutes
that percentage or portion of the entire partnership interest of the respective
partnership as set forth in Annex D hereto; (ix) the Instruments held by such
Pledgor are set forth in Annex E hereto; (x) the reference to Section 3.2(a) set
forth with respect to each item of Collateral described in Annexes A through E
hereto is the procedure followed by such Pledgor to perfect the security
interest in such Collateral; and (xi) on the date hereof, such Pledgor owns no
other Securities, Limited Liability Company Interests, Partnership Interests or
Instruments.

                  4. APPOINTMENT OF SUB-AGENTS; INDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents (including, but not
limited to, the Custodian) for the purpose of retaining physical possession of
the Collateral, which may be held (in the discretion of the Pledgee) in the name
of the relevant Pledgor, indorsed or assigned in blank or in favor of the
Pledgee or any nominee or nominees of the Pledgee or a sub-agent (including, but
not limited to, the Custodian) appointed by the Pledgee. The Pledgee shall
promptly notify the Pledgor of any such sub-agent appointed by the Pledgee,
although the failure to give such notice shall not affect the validity of such
appointment.

                  5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
there shall have occurred and be continuing an Event of Default, each Pledgor
shall be entitled to exercise any and all voting and other rights pertaining to
the Collateral and to give consents, waivers or ratifications in respect
thereof, provided that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Agreement, any Secured Debt Documents or any other
instrument or agreement referred to herein or therein, or which would have the
effect of impairing the position or interests of the Pledgee or any Secured
Creditor. All such rights of each Pledgor to vote and to give consents, waivers
and ratifications shall cease in case an Event of Default has occurred and is
continuing, and Section 7 hereof shall become applicable.

                  6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there
shall have occurred and be continuing an Event of Default, all cash dividends,
cash distributions, cash Proceeds and other cash payments payable in respect of
Collateral shall be paid to the respective Pledgor; provided, that all cash
dividends payable in respect of the Pledged Stock which are determined by the
Pledgee to represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid, to the extent so determined to
represent an

                                      -15-
<PAGE>   16

extraordinary, liquidating or other distribution in return of capital, to the
Pledgee and retained by it as part of the Collateral, provided further, that
such dividends or other distributions shall be applied by the Pledgee, upon its
receipt of written instructions from the Required Secured Creditors pursuant to
and in accordance with the Intercreditor Agreement, to the repayment of all
Obligations then due and payable and, to the extent in excess thereof shall, if
no Default or Event of Default has occurred and is then continuing, be released
to the Pledgor. The Pledgee shall be entitled to receive directly, and to retain
as part of the Collateral:

                  (i) all other or additional stock, notes, limited liability
         company interests, partnership interests, instruments or other
         securities or property (other than cash) paid or distributed by way of
         dividend or otherwise, as the case may be, in respect of the
         Collateral;

                  (ii) all other or additional stock, notes, limited liability
         company interests, partnership interests, instruments or other
         securities or property (other than cash) paid or distributed in respect
         of the Collateral by way of stock-split, spin-off, split-up,
         reclassification, combination of shares or similar rearrangement;

                  (iii) all other or additional stock, notes, limited liability
         company interests, partnership interests, instruments or other
         securities or property (other than cash) which may be paid in respect
         of the Collateral by reason of any consolidation, merger, exchange of
         stock, conveyance of assets, liquidation or similar corporate
         reorganization; and

                  (iv) any other property or assets (other than cash) which
         would constitute Collateral in accordance with the definition thereof
         contained herein.

Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive Proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions, Proceeds or
other payments which are received by any Pledgor contrary to the provisions of
this Section 6 and Section 7 hereof shall be received in trust for the benefit
of the Pledgee, shall be segregated from other property or funds of such Pledgor
and shall be promptly paid over to the Pledgee as Collateral in the same form as
so received (with any necessary indorsement).

                  7. REMEDIES IN CASE OF EVENTS OF DEFAULT. (a) If there shall
have occurred and be continuing an Event of Default, then and in every such
case, the Pledgee shall be entitled to (i) exercise all of the rights, powers
and remedies (whether vested in it by this Agreement, any Secured Debt Document
or by law) for the protection and enforcement of its rights in respect of the
Collateral, (ii) exercise all the rights and remedies of a secured party under
the Uniform Commercial Code and (iii) without limitation, exercise the following
rights, which each Pledgor hereby agrees to be commercially reasonable:

                  (1) to receive all amounts payable in respect of the
         Collateral otherwise payable under Section 6 hereof to the Pledgor;

                                      -16-
<PAGE>   17

                  (2) to transfer all or any part of the Collateral into the
         Pledgee's name or the name of its nominee or nominees;

                  (3) to accelerate any Pledged Note which may be accelerated in
         accordance with its terms, and take any other action to collect upon
         any Pledged Note (including, without limitation, to make any demand for
         payment thereon);

                  (4) to vote all or any part of the Collateral (whether or not
         transferred into the name of the Pledgee) and give all consents,
         waivers and ratifications in respect of the Collateral and otherwise
         act with respect thereto as though it were the outright owner thereof
         (each Pledgor hereby constituting and appointing the Pledgee the proxy
         and attorney-in-fact of such Pledgor for such purpose, with full power
         of substitution, such appointment is coupled with an interest and is
         irrevocable);

                  (5) at any time and from time to time to sell, assign and
         deliver, or grant options to purchase, all or any part of the
         Collateral, or any interest therein, at any public or private sale,
         without demand of performance, advertisement or notice of intention to
         sell or of the time or place of sale or adjournment thereof or to
         redeem or otherwise (all of which are hereby waived by each Pledgor),
         for cash, on credit or for other property, for immediate or future
         delivery without any assumption of credit risk, and for such price or
         prices and on such terms as the Pledgee in its absolute discretion may
         determine, provided that at least 10 days' written prior notice of the
         time and place of any such sale shall be given to such Pledgor. The
         Pledgee shall not be obligated to make any such sale of Collateral
         regardless of whether any such notice of sale has theretofore been
         given. Each Pledgor hereby waives and releases to the fullest extent
         permitted by law any right or equity of redemption with respect to the
         Collateral, whether before or after sale hereunder, and all rights, if
         any, of marshalling the Collateral and any other security for the
         Obligations or otherwise. At any such sale, unless prohibited by
         applicable law, the Pledgee on behalf of the Secured Creditors may bid
         for and purchase all or any part of the Collateral so sold free from
         any such right or equity of redemption. Neither the Pledgee nor any
         other Secured Creditor shall be liable for failure to collect or
         realize upon any or all of the Collateral or for any delay in so doing
         nor shall any of them be under any obligation to take any action
         whatsoever with regard thereto; and

                  (6) to set-off any and all Collateral against any and all
         Obligations, and to withdraw any and all cash and other Collateral from
         any and all Collateral Accounts and to apply such cash and other
         Collateral to the payment of any and all Obligations, in the manner
         provided by Section 11 of the Intercreditor Agreement.

                  (b) Notwithstanding anything contained in this Agreement to
the contrary, this Agreement shall be governed by Chapters 8 and 9 of the
Louisiana Commercial Laws, Louisiana R.S. 10:8-101 et seq. and 10:9-101 et seq.,
as amended from time to time hereinafter, (collectively, the "Louisiana UCC") to
the extent that any security interest in any of the Collateral located in the
State of Louisiana, and any remedies hereunder with respect thereto, are
required to be governed by, and interpreted in accordance with, the laws of the
State of Louisiana.

                                      -17-
<PAGE>   18

                  (c) If an Event of Default shall occur and be continuing, the
Pledgee shall have all remedies available to a secured party under the Louisiana
UCC in addition to the other remedies provided elsewhere in this Agreement,
including, without limitation, the right to elect to assume the Limited
Liability Company Interests or Partnership Interests of any Pledgor upon notice
to such Pledgor to the extent provided by applicable law and the documents
creating such interests. For purposes of executory process under the laws of the
State of Louisiana, each Pledgor hereby acknowledges the Obligations and
confesses judgment in favor of the Pledgee for the benefit of the Secured
Creditors, for the full amount of the Obligations, including, without
limitation, principal, interest, attorneys' fees, court costs, and all other
fees, expenses and charges.

                  (d) Each Pledgor hereby expressly waives, to the fullest
extent permitted by Louisiana law, the benefit of appraisement provided for in
Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of Civil Procedure and
all other laws of the State of Louisiana conferring such benefits and the demand
and three days' delay accorded by Articles 2639 and 2721 of the Louisiana Code
of Civil Procedure.

                  (e) Pursuant to Louisiana R.S. 27:275 et seq., the Collateral
Agent is hereby authorized and empowered to file a petition to foreclose the
liens created hereby in which the Louisiana Gaming Control Board is named a
nominal defendant and, in such event, the Pledgors request the appointment of a
receiver as contemplated by and in accordance with the provisions of the cited
statutes. The filing of a verified petition by the Pledgee shall constitute
prima facie proof of the Pledgee's right to enforce the liens created hereby in
executory or ordinary proceedings, at the Pledgee's option, and to appointment
of a receiver pursuant to the cited statutes.

                  (f) In the event the Collateral or any part thereof is seized
as an incident to an action for the recognition or the enforcement of this
Agreement by executory process, ordinary process, sequestration, writ of fieri
facias, or otherwise, the Pledgors and the Pledgee hereby agree that the court
issuing any such order shall, if petitioned for by the Pledgee, direct the
Sheriff to appoint as a keeper of the Collateral, the Pledgee or any agent
designated by the Pledgee or any person named by the Pledgee at the time such
seizure is effected. This designation is made pursuant to La. R.S. 9:5136
through 5140.2, inclusive, as the same may be amended, and the Pledgee shall be
entitled to all the rights and benefits afforded thereunder, including
reasonable compensation, which compensation shall be secured by this Agreement,
and which reasonable compensation shall not exceed $10,000 per annum.

                  8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and
remedy of the Pledgee provided for in this Agreement or in the other Secured
Debt Documents, or now or hereafter existing at law or in equity or by statute
shall be cumulative and concurrent and shall be in addition to every other such
right, power or remedy. The exercise or beginning of the exercise by the Pledgee
or any Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or in the other Secured Debt Documents or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any Secured Creditor to exercise any such right,
power or remedy shall operate as a waiver thereof. No notice to or demand on any
Pledgor in any case shall entitle it to any other or further notice or demand in
similar or other

                                      -18-
<PAGE>   19

circumstances or constitute a waiver of any of the rights of the Pledgee or any
Secured Creditor to any other or further action in any circumstances without
notice or demand. The Secured Creditors agree that this Agreement may be
enforced only by the action of the Pledgee, acting upon the instructions of the
Required Secured Creditors (as defined in the Intercreditor Agreement) and that
no Secured Creditor, unless otherwise provided in the Intercreditor Agreement
shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Pledgee for the benefit of the Secured Creditors upon the terms of this
Agreement and the Intercreditor Agreement.

                  9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral, together with all
other moneys received by the Pledgee hereunder, shall be applied to the payment
of the Obligations in the manner provided by Section 11 of the Intercreditor
Agreement.

                  (b) It is understood and agreed that each Pledgor shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral hereunder and the aggregate amount of its Obligations; provided that,
unless otherwise provided in this Agreement or by any Secured Debt Document or
other document or instrument to which such Pledgor is a party executed in
connection herewith or therewith, no Pledgor shall be liable for the Obligations
owed to any Secured Creditor by any other Pledgor.

                  10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.

                  11. INDEMNITY. Each Pledgor jointly, severally and solidarily
agrees to indemnify and hold harmless the Pledgee, the Custodian and each
Secured Creditor and their respective successors, assigns, employees, agents and
servants (individually an "Indemnitee," and collectively the "Indemnitees") from
and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and to
reimburse each Indemnitee for all costs and expenses, including reasonable
attorneys' fees, growing out of or resulting from this Agreement or the exercise
by any Indemnitee of any right or remedy granted to it hereunder or under the
other Secured Debt Documents, but excluding any such claims, demands, losses,
judgments, liabilities, costs and expenses to the extent incurred by reason of
the gross negligence or willful misconduct of such Indemnitee. In no event shall
any Indemnitee be liable for any matter or thing in connection with this
Agreement other than to account for and apply moneys actually received by it in
accordance with the terms hereof and of the Intercreditor Agreement. If and to
the extent that the obligations of any Pledgor under this Section 11 are
unenforceable for any reason, such Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.

                                      -19-
<PAGE>   20

                  12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor
agrees that it will execute and, at its own expense, file and refile under the
Uniform Commercial Code or other applicable law, and in accordance with such
laws as amended from time to time hereinafter, such financing statements,
continuation statements and other documents in such offices as such Pledgor (or
the Pledgee (acting on its own or as provided in the Intercreditor Agreement))
may deem necessary or appropriate and wherever required by law in order to
perfect and preserve the Pledgee's security interest in the Collateral and
hereby authorizes the Pledgee to file financing statements and amendments
thereto relative to all or any part of the Collateral without the signature of
such Pledgor where permitted by law, and agrees to do such further acts and
things and to execute and deliver to the Pledgee such additional conveyances,
assignments, agreements and instruments as the Pledgee or the Secured Creditors
may reasonably require or deem advisable to carry into effect the purposes of
this Agreement or to further assure and confirm unto the Pledgee its rights,
powers and remedies hereunder.

                  (b) Each Pledgor hereby appoints the Pledgee as such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's discretion
to take any action and to execute any instrument which the Pledgee may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement. This appointment is coupled with an interest and is irrevocable.

                  13. TRANSFER BY THE PLEDGORS. No Pledgor will sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except as may
be permitted in accordance with the terms of the Secured Debt Documents).

                  14. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
Each Pledgor represents, warrants and covenants to the Pledgee and the Secured
Creditors (and is deemed to represent, warrant and covenant each time any
Collateral is pledged hereunder) that: (i) it is the legal, record and
beneficial owner of, and has good and marketable title to, all the Collateral,
subject to no Lien (except the Lien created by this Agreement and other Liens to
the extent permitted to be in existence pursuant to the terms of all Secured
Debt Documents from time to time in effect) and no Adverse Claim; (ii) it has
full power, authority and legal right to pledge all Collateral pledged by it
pursuant to this Agreement; (iii) this Agreement has been duly authorized,
executed and delivered by such Pledgor and constitutes a legal, valid and
binding obligation of such Pledgor enforceable in accordance with its terms
except to the extent that the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law); (iv) except to the extent
already obtained or made (and other than pursuant to the Gaming Regulations in
the case of any exercise of remedies hereunder), no consent of any other party
(including, without limitation, any stockholder, partner, member or creditor of
such Pledgor or any of its Subsidiaries) and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
to be obtained by such Pledgor in connection with the execution, delivery or
performance of this Agreement, the validity or enforceability of this Agreement,
the perfection or enforceability of the Pledgee's

                                      -20-
<PAGE>   21

security interest in the Collateral, except for compliance with or as may be
required by applicable securities laws, the exercise by the Pledgee of any of
its rights or remedies provided herein; (v) the execution, delivery and
performance of this Agreement by such Pledgor will not violate any provision of
any applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator or governmental authority, domestic or foreign,
applicable to such Pledgor, or of the certificate of incorporation, operating
agreement, limited liability company agreement or by-laws (or equivalent
organizational documents) of such Pledgor or of any securities issued by such
Pledgor or any of its Subsidiaries, or of any mortgage, indenture, lease, deed
of trust, loan agreement, credit agreement or other material agreement,
contract, or instrument to which such Pledgor or any of its Subsidiaries is a
party or which purports to be binding upon such Pledgor or any of its
Subsidiaries or upon any of their respective assets and will not result in the
creation or imposition of (or the obligation to create or impose) any lien or
encumbrance on any of the assets of such Pledgor or any of its Subsidiaries
except as contemplated by this Agreement and the Secured Debt Documents; (vi)
all of the Collateral consisting of Securities, Limited Liability Company
Interests, Partnership Interests or Instruments has been duly and validly
issued, is fully paid and non-assessable and is subject to no options to
purchase or similar rights; (vii) each of the Pledged Notes, to the extent
issued by JCC Holding or any of its Subsidiaries, constitutes, or when executed
by the obligor thereof will constitute, the legal, valid and binding obligation
of such obligor, enforceable in accordance with its terms; (viii) this Agreement
creates, as security for the Obligations, a valid and enforceable perfected
first priority security interest in all of the Collateral, and the Proceeds
thereof, in favor of the Pledgee for the benefit of the Secured Creditors,
subject to no Lien (other than Permitted Liens) or to any agreement made by a
Pledgor purporting to grant to any third party a Lien on the property or assets
of the Pledgor which would include any Collateral and such security interest is
entitled to all the rights, priorities and benefits afforded by the UCC or other
relevant law as enacted in any relevant jurisdiction to perfected security
interests; and (ix) "control" (as defined in Section 8-106 of the UCC or,
consequent to any amendment to the UCC, as may be defined in a correlative
section of the so amended UCC) has been obtained by the Pledgee with respect to
all Collateral of a type with respect to which such "control" may be obtained
pursuant to Section 8-106 of the UCC or, consequent to any amendment to the UCC,
as may be defined in a correlative section of the so amended UCC. Each Pledgor
covenants and agrees that (i) it will defend the Pledgee's right, title and
security interest in and to the Collateral, and the Proceeds thereof, against
the claims and demands of all Persons whomsoever, (ii) it will have like title
to and right to pledge any other property at any time hereafter pledged to the
Pledgee as Collateral hereunder and will likewise defend the right thereto and
security interest therein of the Pledgee and the other Secured Creditors, (iii)
except as permitted pursuant to the Secured Debt Documents, it will not sell or
otherwise dispose of, grant any option with respect to, any Collateral and (iv)
it will not create, incur, assume or suffer to exist any Lien on any portion of
the Collateral (except the Lien created by this Agreement and other Liens to the
extent same are permitted pursuant to the terms of all Secured Debt Documents
then in effect).

                  15. CHIEF EXECUTIVE OFFICE; JURISDICTION OF ORGANIZATION;
RECORDS. The chief executive office of each Pledgor is located at the address
specified in Annex F, and the organizational structure and the jurisdiction of
incorporation or organization, as the case may be, of each Pledgor is specified
in Annex F hereto. No Pledgor will move its chief

                                      -21-
<PAGE>   22

executive office or change, or permit the change, of its organizational
structure or its jurisdiction of organization (whether by merger,
re-incorporation or otherwise), except to such new location, new organization
structure or jurisdiction, as the case may be, as such Pledgor may establish in
accordance with the following provisions of this Section 15. The originals of
all documents in the possession of such Pledgor evidencing all Collateral,
including but not limited to all Limited Liability Company Interests and
Partnership Interests, and the only original books of account and records of the
Pledgor relating thereto are, and will continue to be, kept at such chief
executive office at the location specified in Annex F hereto, or at such new
locations as the Pledgor may establish in accordance with the last sentence of
this Section 15. All Limited Liability Company Interests and Partnership
Interests are, and will continue to be, maintained at, and controlled and
directed (including, without limitation, for general accounting purposes) from,
such chief executive office location specified in Annex F hereto, or such new
locations as the Pledgor may establish in accordance with the following
provisions of this Section 15. No Pledgor shall establish, or permit to be
established, a new location for such offices, organizational structure or
jurisdiction of organization until (i) it shall have given to the Pledgee not
less than 20 days' prior written notice of its intention so to do, clearly
describing such new location, organizational structure or jurisdiction and
providing such other information in connection therewith as the Pledgee may
reasonably request and (ii) with respect to such new location, organizational
structure or jurisdiction, it shall have taken all action, satisfactory to the
Pledgee, to maintain the security interest of the Pledgee in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect. Promptly after (x) establishing a new location for such offices in
accordance with the immediately preceding sentence or (y) any change in the
organizational structure or jurisdiction of organization of any Pledgor, the
respective Pledgor shall deliver to the Pledgee a supplement to Annex F hereto
so as to cause such Annex F hereto to be complete and accurate.

                  16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. To the maximum extent
permitted by law, the obligations of each Pledgor under this Agreement shall be
absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation: (i) any renewal, extension, amendment or modification of or
addition or supplement to or deletion from any Secured Debt Document or any
other instrument or agreement referred to therein, or any assignment or transfer
of any thereof; (ii) any waiver, consent, extension, indulgence or other action
or inaction under or in respect of any such agreement or instrument (including,
without limitation, this Agreement) or any exercise or non-exercise of any
right, remedy, power or privilege under or in respect of this Agreement or the
Secured Debt Documents; (iii) any furnishing of any additional security to the
Pledgee or its assignee or any acceptance thereof or any release of any security
by the Pledgee or its assignee; (iv) any limitation on any party's liability or
obligations under any such instrument or agreement or any invalidity,
irregularity or unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof or any Obligation or any security therefor; or (v)
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to any Pledgor or any
Subsidiary of any Pledgor, or any action taken with respect to this Agreement by
any trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.

                                      -22-
<PAGE>   23

                  17. TERMINATION; RELEASE. (a) After the Termination Date, this
Agreement and the security interests created hereby shall terminate (provided
that all indemnities set forth herein including, without limitation, in Section
11 hereof shall survive any such termination), and the Pledgee, at the request
and expense of any Pledgor, will execute and deliver to such Pledgor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on Form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
has not theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any moneys at the time held by the Pledgee or any of
its sub-agents hereunder and, with respect to any Collateral consisting of an
Uncertificated Security (other than an Uncertificated Security credited on the
books of a Clearing Corporation), a Partnership Interest or a Limited Liability
Company Interest, a termination of the agreement relating thereto executed and
delivered by the issuer of such Uncertificated Security pursuant to Section
3.2(a)(ii) or by the respective partnership or limited liability company
pursuant to Section 3(a)(iv). As used in this Agreement, "Termination Date"
shall mean the date upon which no obligations remain pursuant to the HEC/JCC
Agreement or any other Minimum Payment Guaranty Documents and all Minimum
Payment Guaranties have been terminated, the total commitments under the
Revolving Credit Agreement have terminated, no Senior Note under the Senior Note
Indenture is outstanding (and all Senior Notes have been repaid in full), all
letters of credit under the Revolving Credit Agreement have been terminated, and
all other Obligations (excluding normal continuing indemnity obligations which
survive in accordance with their terms, so long as no amounts are then due and
payable in respect thereof) have been indefeasibly paid in full.

                  (b) Notwithstanding anything to the contrary contained above,
upon the presentment of satisfactory evidence to the Pledgee in its sole
discretion that all obligations evidenced by any Pledged Note or Pledged
Instrument have been repaid in full and that any payments received by the
Pledgor are permitted to be received by the Pledgor pursuant to Section 6
hereof, the Pledgee shall, upon the request and at the expense of the respective
Pledgor, duly assign, transfer and deliver to such Pledgor (without recourse and
without any representation or warranty) such Pledged Note or Pledged Instrument
if same is then in possession of the Pledgee and has not been sold or otherwise
applied or released pursuant to this Agreement.

                  (c) The Pledgee shall release any or all of the Collateral
hereunder in accordance with the terms of Section 17 of the Intercreditor
Agreement. Furthermore, one or more Pledgors (other than JCC Holding and JCC)
may be released from time to time as Pledgors hereunder in accordance with the
terms of Section 17 of the Intercreditor Agreement.

                  (d) The Pledgee shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it in accordance
with this Section 17.

                  18. NOTICES, ETC. All notices and communications hereunder
shall be sent or delivered by mail, telex, telecopy or overnight courier service
and all such notices and communications shall, when mailed, telexed, telecopied
or sent by overnight courier, be effective when deposited in the mails or
delivered to the overnight courier, prepaid and properly addressed for delivery
on such or the next Business Day, or sent by telex or telecopier, except that
notices

                                      -23-
<PAGE>   24

and communications to the Pledgee shall not be effective until received by the
Pledgee. All notices and other communications shall be in writing and addressed
as follows:

                  (a)      if to any Pledgor:

                           c/o Jazz Casino Company, L.L.C.
                           512 S. Peters
                           New Orleans, Louisiana  70130
                           Attention:  President
                           Telephone No.: (504) 533-6000

                  (b)      if to the Pledgee:

                           The Bank of New York
                           10161 Centurion Parkway
                           Jacksonville, FL
                           Attention:  Vice President
                           Telephone No.:  1-800-705-0384

                  (c)      if to the Custodian:

                           The Bank of New York
                           10161 Centurion Parkway
                           Jacksonville, FL
                           Attention:  Vice President
                           Telephone No.:  1-800-705-0384

                  (d)      if to any Minimum Payment Guarantor, at such address
                           as specified in the Intercreditor Agreement:

                  (e)      if to any Senior Note Creditor, to the Senior Note
                           Trustee at such address as Senior Note Trustee shall
                           have specified in the Intercreditor Agreement;

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 or, as to any
Secured Creditor, as may otherwise be specified in the applicable Secured Debt
Document.

                  19. THE PLEDGEE AND THE CUSTODIAN. Each of the Pledgee and, in
the case of Collateral credited on the books of a Clearing Corporation, the
Custodian, will hold, directly or indirectly in accordance with this Agreement,
all items of the Collateral at any time received by it under this Agreement. It
is expressly understood and agreed that the obligations of the Pledgee and the
Custodian with respect to the Collateral, interests therein and the disposition
thereof, and otherwise under this Agreement, are only those expressly set forth
in the UCC, this Agreement and the Intercreditor Agreement.

                  20. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
CUSTODIAN. The Custodian shall be deemed to represent and warrant to, and agree
with the

                                      -24-
<PAGE>   25

Pledgee, for the benefit of the Secured Creditors, that each time any
Certificated Security, Uncertificated Security, Instrument, Partnership Interest
or Limited Liability Company Interest credited on the books of a Clearing
Corporation (including, without limitation, any Security Entitlement therein) is
credited to the Custodian Account that:

                  (i) such Financial Asset has been credited to the Custodian
         Account;

                  (ii) the Custodian is a Securities Intermediary and is acting
         in that capacity with respect to the respective Pledgor;

                  (iii) the Custodian Account is a Securities Account;

                  (iv) the Custodian will maintain the Custodian Account in the
         name of the Pledgor, subject to the control of the Pledgee, during the
         term of this Agreement;

                  (v) the Custodian will treat such Instrument, Security,
         Partnership Interest, Limited Liability Company Interest and Security
         Entitlement credited to the Custodian Account as a Financial Asset;

                  (vi) the Custodian has not and will not identify any of the
         Collateral credited to the Custodian Account as belonging to any Person
         other than the Pledgor or the Pledgee, for the benefit of the Secured
         Creditors;

                  (vii) the Custodian shall at all times comply strictly with
         any and all Entitlement Orders relating to the Custodian Account or any
         and all of the Collateral originated by the Pledgee without the further
         consent by the Pledgor or any other Person. The Custodian shall not
         accept or comply with any Entitlement Order relating to any such
         Collateral originated by any Person other than the Pledgee (or its
         successor or assignee) or any court of competent jurisdiction;

                  (viii) the Custodian has not entered into any agreement (other
         than this Agreement) with any Person under which the Custodian would be
         obligated to comply with any Entitlement Order with respect to the
         Custodian Account or any Collateral consisting of a Certificated
         Security, Uncertificated Security, Instrument, Limited Liability
         Company Interest or Partnership Interest credited to the Custodian
         Account or which purports to limit or condition the obligation of the
         Custodian to comply with any Entitlement Order originated by the
         Pledgee relating to the Custodian Account or any such Collateral, and
         agrees not to enter into any such agreement without the prior written
         consent of the Pledgee; and

                  (ix) the Custodian shall promptly notify the Pledgee if at any
         time the Custodian has any Notice of Adverse Claim with respect to the
         Custodian Account or any Collateral consisting of a Certificated
         Security, Uncertificated Security, Instrument, Limited Liability
         Company Interest or Partnership Interest credited to the Custodian
         Account.

                  Notwithstanding anything to the contrary contained above, the
Custodian shall have no liability pursuant to this Agreement or otherwise
(including, without limitation, for any

                                      -25-
<PAGE>   26

inaccuracy of, or failure of the Custodian to comply with, the foregoing
representations, warranties and agreements) in each case in the absence of gross
negligence or willful misconduct by the Custodian.

                  21. WAIVER; AMENDMENT. Except as contemplated by Section 24,
none of the terms and conditions of this Agreement may be changed, waived,
modified or varied in any manner whatsoever except in accordance with the terms
of Section 16 of the Intercreditor Agreement.

                  22. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of each Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns; provided that no
Pledgor may assign any of its rights or obligations hereunder except pursuant to
an amendment executed in accordance with the requirements of Section 21. The
headings in this Agreement are for purposes of reference only and shall not
limit or define the meaning hereof. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
constitute one instrument. In the event that any provision of this Agreement
shall prove to be invalid or unenforceable, such provision shall be deemed to be
severable from the other provisions of this Agreement which shall remain binding
on all parties hereto.

                  23. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgors contained herein, in the other
Secured Debt Documents and otherwise in writing in connection herewith or
therewith.

                  24. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of JCC Holding that is required to execute a counterpart of this
Agreement after the date hereof pursuant to any Secured Debt Document shall
automatically become a Pledgor hereunder by executing a counterpart hereof and
delivering the same to the Pledgee and, upon such execution and delivery, each
such Subsidiary shall be deemed to make each of the representations, warranties
and agreements of a Pledgor under this Agreement and this Agreement shall
constitute the valid and binding obligation of such Subsidiary enforceable
against such Subsidiary in accordance with its terms.

                  25. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER.
(a) Nothing herein shall be construed to make the Pledgee (all references to the
Pledgee in this Section 25 shall apply equally to the Custodian) or any other
Secured Creditor liable as a member of any limited liability company or
partnership and neither the Pledgee nor any other Secured Creditor by virtue of
this Agreement or otherwise (except as referred to in the following sentence)
shall have any of the duties, obligations or liabilities of a member of any
limited liability company or partnership. The parties hereto expressly agree
that, unless the Pledgee shall become the absolute owner of Collateral
consisting of a Limited Liability Company Interest or Pledged Partnership
Interest pursuant hereto, this Agreement shall not be construed as creating a
partnership or joint venture among the Pledgee, any other Secured Creditor
and/or any Pledgor.

                                      -26-
<PAGE>   27

                  (b) Except as provided in the last sentence of paragraph (a)
of this Section 25, the Pledgee, by accepting this Agreement, did not intend to
become a member of any limited liability company or partnership or otherwise be
deemed to be a co-venturer with respect to any Pledgor or any limited liability
company or partnership either before or after a Default or an Event of Default
shall have occurred. The Pledgee shall have only those powers set forth herein
and neither the Pledgee nor any Secured Creditor shall assume any of the duties,
obligations or liabilities of a member of any limited liability company or
partnership or any Pledgor except as provided in the last sentence of paragraph
(a) of this Section 25.

                  (c) The Pledgee and the Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge and security interest hereby effected.

                  (d) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee or any Secured Creditor to appear in or
defend any action or proceeding relating to the Collateral to which it is not a
party, or to take any action hereunder or thereunder, or to expend any money or
incur any expenses or perform or discharge any obligation, duty or liability
under the Collateral.

                  26. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE
ESTABLISHMENT AND MAINTENANCE OF THE COLLATERAL ACCOUNTS AND ALL INTERESTS,
DUTIES AND OBLIGATIONS RELATING THERETO) AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE REQUIRED PURSUANT TO SECTIONS 7(b) THROUGH 7(f), BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. REGARDLESS
OF ANY PROVISION IN ANY OTHER AGREEMENT, THE STATE OF NEW YORK SHALL BE DEEMED
TO BE THE JURISDICTION OF THE CUSTODIAN WITHIN THE MEANING OF SECTION 8-110(e)
OF THE UCC. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. EACH PLEDGOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT
ANY SUCH COURTS LACK JURISDICTION OVER SUCH PLEDGOR, AND AGREES NOT TO PLEAD OR
CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
SECURED DEBT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH
COURT LACKS JURISDICTION OVER SUCH PLEDGOR. EACH PLEDGOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES

                                      -27-
<PAGE>   28

THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH PLEDGOR AT
ITS ADDRESS SET FORTH IN SECTION 18, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER SECURED
DEBT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PLEDGEE UNDER THIS
AGREEMENT OR ANY OTHER SECURED CREDITOR TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY PLEDGOR IN ANY OTHER JURISDICTION.

                  (b) EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH, DIRECTLY OR
INDIRECTLY, THIS AGREEMENT, ANY OTHER SECURED DEBT DOCUMENT, ANY COLLATERAL
ACCOUNT OR ANY OF THE COLLATERAL BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a)
ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

                  (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO, DIRECTLY OR INDIRECTLY, THIS AGREEMENT (INCLUDING
ANY COLLATERAL ACCOUNT OR ANY OF THE COLLATERAL), ANY OTHER SECURED DEBT
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                  27. GAMING STATUTES. This Agreement, and the pledge and
security interests granted hereby and any remedies contemplated hereby, are and
shall remain subject to the Louisiana Economic Development and Gaming
Corporation Act, La. R.S. 27:1 et seq., La. R.S. 27:201 et seq. and the rules
and regulations thereunder, as amended from time to time (collectively, the
"Louisiana Gaming Regulations"), and the exercise of remedies hereunder will be
subject to the Louisiana Gaming Regulations.

                  28. INTERCREDITOR AGREEMENT. Notwithstanding any other
provision of this Agreement or any document or instrument executed by any
Pledgor, this Agreement and all liens and security interests and rights granted
herein, and the priority thereof, are expressly subject to the provisions of the
Intercreditor Agreement which are incorporated herein by reference and made
applicable hereto. In addition, the Pledgee is the Collateral Agent, as defined
in and pursuant to the terms of the Intercreditor Agreement, and notwithstanding
anything herein to the contrary, the rights, powers, remedies and obligations of
the Pledgee hereunder shall be

                                      -28-
<PAGE>   29

subject to the provisions of the Intercreditor Agreement. Any exercise or waiver
by the Pledgee of any of its rights, powers or remedies hereunder or any other
act by the Pledgee hereunder shall be conclusive evidence of the Pledgee's
authority pursuant to the Intercreditor Agreement against all persons other than
the Secured Creditors.

                  29. NO THIRD PARTY BENEFICIARIES. This Agreement is entered
into solely for the benefit of the parties hereto and their respective
successors and assigns and for the benefit of the Secured Creditors from time to
time and their respective successors and assigns and, except for the Secured
Creditors and their successors and assigns, there shall be no third party
beneficiaries hereof, nor shall any Person other than the parties hereto and
their respective successors and assigns, and the Secured Creditors and their
respective successors and assigns, be entitled to enforce the provisions hereof
or have any claims against any party hereto (or any Secured Creditor) or their
successors and assigns arising from, or under, this Agreement.

                                    *  *  *

                                      -29-
<PAGE>   30

                  IN WITNESS WHEREOF, each Pledgor, the Custodian and the
Pledgee have caused this Agreement to be executed by their duly elected officers
duly authorized as of the date first above written.

                                            JCC HOLDING COMPANY,
                                                 as a Pledgor

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

                                            JAZZ CASINO COMPANY, L.L.C.,
                                                 as a Pledgor

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

                                            JCC CANAL DEVELOPMENT, L.L.C.,
                                                 as a Pledgor

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

                                            JCC FULTON DEVELOPMENT, L.L.C.,
                                                 as a Pledgor

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

                                            JCC DEVELOPMENT COMPANY,
                                                 L.L.C., as a Pledgor

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

<PAGE>   31

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

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

                                            THE BANK OF NEW YORK,
                                                 in its individual capacity as
                                                 Custodian

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

<PAGE>   32

                                                                    ANNEX A
                                                                       TO
                                                                PLEDGE AGREEMENT

                                  LIST OF STOCK

<TABLE>
<CAPTION>
                                                 Sub-clause of Section 3.2(a) of
                                                  Pledge Agreement Pursuant to
                                                    Which Required Procedures
Name of Pledgor        Description of Stock                Will Be Taken
---------------        --------------------      -------------------------------
<S>                    <C>                       <C>
None.
</TABLE>

<PAGE>   33

                                                                    ANNEX B
                                                                       TO
                                                                PLEDGE AGREEMENT

                                  LIST OF NOTES

<TABLE>
<CAPTION>
                                            Sub-clause of Section 3.2(a) of
                                              Pledge Agreement Pursuant to
                                                Which Required Procedures
Name of Pledgor      Description of Notes              Will Be Taken
---------------      --------------------    ------------------------------
<S>                  <C>                     <C>
None.
</TABLE>

<PAGE>   34

                                                                     ANNEX C
                                                                       TO
                                                                PLEDGE AGREEMENT

                   LIST OF LIMITED LIABILITY COMPANY INTERESTS

<TABLE>
<CAPTION>
                                                                   Sub-clause of Section 3.2(a) of
                                       Description of                Pledge Agreement Pursuant to
                                     Limited Liability                 Which Required Procedures
Name of Pledgor                      Company Interests                       Will Be Taken
-------------------      ------------------------------------      -------------------------------
<S>                      <C>                                                 <C>
JCC Holding Company      o    Ownership of 100% of membership                3.2(a)(ii)
                              interests in Jazz Casino
                              Company, L.L.C.
                                                                             3.2(a)(ii)
                         o    Ownership of 100% of membership
                              interests in JCC Development
                              Company, L.L.C.
                                                                             3.2(a)(i)
                         o    Ownership of 100% of membership
                              interests in JCC Canal
                              Development, L.L.C.
                                                                             3.2(a)(i)
                         o    Ownership of 100% of membership
                              interests in JCC Fulton
                              Development, L.L.C.
</TABLE>

<PAGE>   35

                                                                    ANNEX D
                                                                      TO
                                                                PLEDGE AGREEMENT

                          LIST OF PARTNERSHIP INTERESTS

<TABLE>
<CAPTION>
                                                Sub-clause of Section 3.2(a) of
                                                 Pledge Agreement Pursuant to
                         Description of            Which Required Procedures
Name of Pledgor       Partnership Interests              Will Be Taken
---------------       ---------------------     -------------------------------
<S>                   <C>                       <C>
None.
</TABLE>

<PAGE>   36

                                                                     ANNEX E
                                                                       TO
                                                                PLEDGE AGREEMENT

                               LIST OF INSTRUMENTS

<TABLE>
<CAPTION>
                                                    Sub-clause of Section 3.2(a) of
                                                     Pledge Agreement Pursuant to
                                                       Which Required Procedures
Name of Pledgor     Description of Instruments               Will Be Taken
---------------     --------------------------      -------------------------------
<S>                 <C>                             <C>
None.
</TABLE>

<PAGE>   37

                                                                    ANNEX F
                                                                      TO
                                                                PLEDGE AGREEMENT

                         LIST OF CHIEF EXECUTIVE OFFICES

I.       JCC Holding Company
         512 South Peters
         New Orleans, Louisiana  70130

II.      Jazz Casino Company, L.L.C.
         512 South Peters
         New Orleans, Louisiana  70130

III.     JCC Canal Development, L.L.C.
         512 South Peters
         New Orleans, Louisiana  70130

IV.      JCC Fulton Development, L.L.C.
         512 South Peters
         New Orleans, Louisiana  70130

V.       JCC Development Company, L.L.C.
         512 South Peters
         New Orleans, Louisiana  70130

<PAGE>   38

                                                                      ANNEX G TO
                                                                PLEDGE AGREEMENT

    Form of Agreement Regarding Uncertificated Securities, Limited Liability
                   Company Interests and Partnership Interests

                  THIS AGREEMENT (as amended, modified or supplemented from time
to time, this "Agreement"), dated as of __________, ____, among each of the
undersigned pledgors (each a "Pledgor" and, collectively, the "Pledgors"), The
Bank of New York, not in its individual capacity but solely as Collateral Agent
(the "Pledgee"), and The Bank of New York, as the issuer of the Uncertificated
Securities, Limited Liability Company Interests and/or Partnership Interests
(each as defined below) (the "Issuer").

                                   WITNESSETH:

                  WHEREAS, each Pledgor, the Pledgee, and The Bank of New York,
in its individual capacity as Custodian, have entered into the Pledge Agreement,
dated as of March 30, 2001 (as amended, amended and restated, modified or
supplemented from time to time, the "Pledge Agreement"), under which, among
other things, in order to secure the payment of the Obligations (as defined in
the Pledge Agreement), each Pledgor will pledge to the Pledgee for the benefit
of the Secured Creditors (as defined in the Pledge Agreement), and grant a
security interest in favor of the Pledgee for the benefit of the Secured
Creditors in, all of the right, title and interest of such Pledgor in and to any
and all (1) "uncertificated securities" (as defined in the Pledge Agreement)
("Uncertificated Securities"), (2) Partnership Interests (as defined in the
Pledge Agreement) and (3) Limited Liability Company Interests (as defined in the
Pledge Agreement), in each case issued from time to time by the Issuer, whether
now existing or hereafter from time to time acquired by such Pledgor (with all
of such Uncertificated Securities, Partnership Interests and Limited Liability
Company Interests being herein collectively called the "Issuer Pledged
Interests"); and

                  WHEREAS, each Pledgor desires the Issuer to enter into this
Agreement in order to perfect the security interest of the Pledgee under the
Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control
of the Issuer Pledge Interests and to provide for the rights of the parties
under this Agreement;

                  NOW THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                  1. Each Pledgor hereby irrevocably authorizes and directs the
Issuer, and the Issuer hereby agrees, to comply with any and all instructions
and orders originated by the Pledgee (and its successors and assigns) in
accordance with the terms of the Pledge Agreement regarding any and all of the
Issuer Pledged Interests without the further consent by the registered owner
(including the respective Pledgor), and not to comply with any instructions or
orders regarding

<PAGE>   39
                                                                          Page 2

any or all of the Issuer Pledged Interests originated by any person or entity
other than the Pledgee (and its successors and assigns) or a court of competent
jurisdiction.

                  2. The Issuer hereby certifies that (i) no notice of any
security interest, lien or other encumbrance or claim affecting the Issuer
Pledged Interests (other than the security interest of the Pledgee) has been
received by it, and (ii) the security interest of the Pledgee in the Issuer
Pledged Interests has been registered in the books and records of the Issuer.
The Issuer hereby waives any contractual or statutory security interest and/or
right of offset it has in the Issuer Pledged Interests and does further
acknowledge receipt of the Pledge Agreement. The undersigned further agrees not
to acknowledge or accept any other parties' security interest in the Issuer
Pledged Interests or to enter into any other agreement granting or acknowledging
any other parties' control over or right to make entitlement orders with respect
to the Issuer Pledged Interests.

                  3. The Issuer hereby represents and warrants that (i) the
pledge by the Pledgors of, and the granting by the Pledgors of a security
interest in, the Issuer Pledged Interests to the Pledgee, for the benefit of the
Secured Creditors, does not violate the charter, by-laws, partnership agreement,
membership agreement or any other agreement governing the Issuer or the Issuer
Pledged Interests, and (ii) the Issuer Pledged Interests are fully paid and
nonassessable.

                  4. Until the Pledgee shall have delivered written notice to
the Issuer that all of the Obligations have been paid in full and this Agreement
is terminated, the Issuer will send any and all redemptions, distributions,
interest or other payments in respect of the Issuer Pledged Interests from the
Issuer for the account of the respective Pledgor only by wire transfers to the
applicable address set forth on Annex I hereto.

                  5. Except as expressly provided otherwise in Sections 4 and 5,
all notices, instructions, orders and communications hereunder shall be sent or
delivered by mail, telex, telecopy or overnight courier service and all such
notices and communications shall, when mailed, telexed, telecopied or sent by
overnight courier, be effective when deposited in the mails or delivered to the
overnight courier, prepaid and properly addressed for delivery on such or the
next Business Day, or sent by telex or telecopier, except that notices and
communications to the Pledgee shall not be effective until received by the
Pledgee. All notices and other communications shall be in writing and addressed
as follows:

                  (a)      if to any Pledgor:

                           c/o Jazz Casino Company, L.L.C.
                           512 S. Peters
                           New Orleans, Louisiana  70130
                           Attention:  President
                           Telephone No.: 504-533-6000

<PAGE>   40
                                                                          Page 3

                  (b)      if to the Pledgee:

                           The Bank of New York
                           10161 Centurion Parkway
                           Jacksonville, FL
                           Attention:  Vice President
                           Telephone No.:  1-800-705-0384

                  (c)      if to the Issuer:

                           c/o Jazz Casino Company, L.L.C.
                           512 S. Peters
                           New Orleans, Louisiana
                           Attention:  President
                           Telephone No.:  504-533-6000

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. As used in this
Section 6, "Business Day" means any day other than a Saturday, Sunday, or other
day in which banks in New York are authorized to remain closed.

                  6. This Agreement shall be binding upon the successors and
assigns of each Pledgor and the Issuer and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever except in writing signed by the Pledgee, the Issuer and any Pledgor
which at such time owns any Issuer Pledged Interests.

                  7. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
principles of conflict of laws.

<PAGE>   41

                                                                          Page 4

                  IN WITNESS WHEREOF, each Pledgor, the Pledgee and the Issuer
have caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.

                                     JCC HOLDING COMPANY,
                                        as a Pledgor

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

                                     JAZZ CASINO COMPANY, L.L.C.,
                                        as a Pledgor

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

                                     JCC CANAL DEVELOPMENT, L.L.C.,
                                        as a Pledgor

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

                                     JCC FULTON  DEVELOPMENT, L.L.C.,
                                        as a Pledgor

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

                                     JCC DEVELOPMENT COMPANY, L.L.C.,
                                        as a Pledgor

                                     By
                                       -----------------------------------------
                                       Title:<PAGE>   1
                                                                  EXHIBIT 4.08

                               SECURITY AGREEMENT

                                      among

                              JCC HOLDING COMPANY,
                          JAZZ CASINO COMPANY, L.L.C.,
                          CERTAIN OF THEIR SUBSIDIARIES

                                       and

                              THE BANK OF NEW YORK,
                               as Collateral Agent

                           Dated as of March 30, 2001

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                           ----
<S>             <C>                                                                                        <C>
ARTICLE I       SECURITY INTERESTS..........................................................................3

         1.1.   Grant of Security Interests.................................................................3
         1.2.   Power of Attorney...........................................................................4

ARTICLE II      GENERAL REPRESENTATIONS, WARRANTIES AND
                   COVENANTS................................................................................4

         2.1.   Necessary Filings...........................................................................4
         2.2.   No Liens....................................................................................4
         2.3.   Other Financing Statements..................................................................5
         2.4.   Chief Executive Office; Jurisdiction of Organization; Records...............................5
         2.5.   Location of Inventory and Equipment.........................................................5
         2.6.   Pledged Accounts............................................................................6
         2.7.   Trade Names; Change of Name.................................................................7
         2.8.   Recourse....................................................................................7

ARTICLE III     SPECIAL PROVISIONS CONCERNING RECEIVABLES;
                   CONTRACT RIGHTS..........................................................................7

         3.1.   Maintenance of Records......................................................................7
         3.2.   Direction to Account Debtors; Contracting Parties; etc......................................8
         3.3.   Modification of Terms; etc..................................................................8
         3.4.   Collection..................................................................................8
         3.5.   The Assignors Remain Liable.................................................................8
         3.6.   Further Actions.............................................................................9

ARTICLE IV      SPECIAL PROVISIONS CONCERNING MARKS.........................................................9

         4.1.   Additional Representations and Warranties...................................................9
         4.2.   Licenses and Assignments....................................................................9
         4.3.   Infringements...............................................................................9
         4.4.   Preservation of Marks......................................................................10
         4.5.   Maintenance of Registration................................................................10
         4.6.   Future Registered Marks....................................................................10

ARTICLE V       SPECIAL PROVISIONS CONCERNING
                   PATENTS AND COPYRIGHTS..................................................................10

         5.1.   Additional Representations and Warranties..................................................10
         5.2.   Licenses and Assignments...................................................................10
         5.3.   Infringements..............................................................................11
         5.4.   Maintenance of Patents.....................................................................11
</TABLE>

                                      (i)

<PAGE>   3

<TABLE>
<S>             <C>                                                                                        <C>
         5.5.   Prosecution of Patent Application..........................................................11
         5.6.   Other Patents and Copyrights...............................................................11

ARTICLE VI      PROVISIONS CONCERNING ALL COLLATERAL.......................................................11

         6.1.   Protection of Collateral Agent's Security..................................................11
         6.2.   Warehouse Receipts Non-negotiable..........................................................12
         6.3.   Further Actions; Louisiana Matters.........................................................12
         6.4.   Financing Statements.......................................................................13

ARTICLE VII     REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT...............................................13

         7.1.   Remedies; Obtaining the Collateral Upon Default............................................13
         7.2.   Remedies; Disposition of the Collateral....................................................15
         7.3.   Waiver of Claims...........................................................................15
         7.4.   Application of Proceeds....................................................................16
         7.5.   Remedies Cumulative........................................................................16
         7.6.   Discontinuance of Proceedings..............................................................17

ARTICLE VIII    INDEMNITY..................................................................................17

         8.1.   Indemnity..................................................................................17
         8.2.   Indemnity Obligations Secured by Collateral; Survival......................................18

ARTICLE IX      DEFINITIONS................................................................................19

ARTICLE X       MISCELLANEOUS..............................................................................26

         10.1.  Notices....................................................................................26
         10.2.  Waiver; Amendment..........................................................................26
         10.3.  Obligations Absolute.......................................................................27
         10.4.  Successors and Assigns.....................................................................27
         10.5.  Headings...................................................................................27
         10.6.  Severability...............................................................................27
         10.7.  GOVERNING LAW..............................................................................27
         10.8.  Assignors' Duties..........................................................................27
         10.9.  Termination; Release.......................................................................27
         10.10  Counterparts...............................................................................28
         10.11. The Collateral Agent.......................................................................28
         10.12. Gaming Regulations.........................................................................28
         10.13. Additional Assignors.......................................................................28
         10.14. Intercreditor Agreement....................................................................29
         10.15. No Third Party Beneficiaries...............................................................29
</TABLE>

ANNEX A  Schedule of Permitted Liens
ANNEX B  Schedule of Chief Executive Office and Record Locations
ANNEX C  Schedule of Inventory and Equipment Locations
ANNEX D  Form of Consent of Depositary Bank

                                      (ii)
<PAGE>   4

ANNEX E Pledged Accounts
ANNEX F Schedule of Trade, Fictions and Other Names
ANNEX G Schedule of Marks
ANNEX H Schedule of License Agreements and Assignments
ANNEX I Schedule of Patents and Applications
ANNEX J Schedule of Copyrights and Applications
ANNEX K Assignment of Security Interest in United States Trademarks and Patents
ANNEX L Assignment of Security Interest in United States Copyrights

                                     (iii)
<PAGE>   5
                                                                       EXHIBIT F

                               SECURITY AGREEMENT

               SECURITY AGREEMENT, dated as of March 30, 2001, among each of the
undersigned (each an "Assignor" and, together with any other entity that becomes
a party hereto pursuant to Section 10.13 hereof, the "Assignors") and The Bank
of New York, as Collateral Agent (the "Collateral Agent") for the benefit of (w)
Harrah's Entertainment, Inc., a Delaware corporation ("HET"), and Harrah's
Operating Company, Inc., a Delaware corporation ("HOC"), or any successor or
substitute Minimum Payment Guarantor under any other Minimum Payment Guarantor
Documents referred to below (the "Minimum Payment Guarantors"), (x) HET, HOC and
Harrah's New Orleans Management Company ("HNOMC"), as lenders under the
Revolving Credit Agreement hereinafter referred to, together with any successor
and other lenders and letter of credit issuers under the Revolving Credit
Agreement hereinafter referred to (HET, HOC, HNOMC and any other such lenders or
letter of credit issuers, if any, are hereinafter called the "Revolver
Creditors"), and (y) the holders from time to time of the Senior Notes
hereinafter referred to (such holders of the Senior Notes hereinafter called the
"Senior Note Holders") and the Senior Note Trustee referred to below (the Senior
Note Holders, together with the Senior Note Trustee in its capacity as such, are
hereinafter called the "Senior Note Creditors" and, together with the Minimum
Payment Guarantors and the Revolver Creditors, are hereinafter called the
"Secured Creditors"). Except as otherwise defined herein, terms used herein and
defined in the Intercreditor Agreement (as in effect on the date hereof and
without giving effect to any termination thereof) shall be used herein as so
defined.

                                   WITNESSETH:

               WHEREAS, HET and HOC have jointly and severally provided the
initial Minimum Payment Guaranty (and HET and HOC and/or one or more other
Minimum Payment Guarantors may hereafter provide one or more substitute or
replacement Minimum Payment Guaranties) and in connection therewith Jazz Casino
Company, L.L.C., a Louisiana limited liability company ("JCC"), HET and HOC have
entered into that certain Amended and Restated HET/JCC Agreement dated as of
March 30, 2001 (as amended, modified or supplemented from time to time, the
"HET/JCC Agreement");

               WHEREAS, JCC, as borrower, JCC Holding Company ("JCC Holding"),
Canal Development, Fulton Development and JCC Development, as guarantors, and
HET, HOC and HNOMC, as lenders, have entered into a Revolving Credit Agreement,
dated as of March 30, 2001, providing for the making of loans and the issuance
of, and participation in, letters of credit as contemplated therein (as used
herein, the term "Revolving Credit Agreement" means the Revolving Credit
Agreement described above in this paragraph, as the same may be amended,
modified, extended, renewed, replaced, restated, supplemented or refinanced from
time to time, and including any agreement extending the maturity of, or
refinancing or restructuring (including, but not limited to, the inclusion of
additional borrowers or guarantors thereunder or any increase in the amount
borrowed) all or any portion of, the indebtedness under such agreement or any
successor agreements, whether or not with the same agent, trustee,
representative, lenders or holders; provided that, with respect to any agreement
providing for the refinancing or replacement

<PAGE>   6

                                                                         Page 2

of indebtedness under the Revolving Credit Agreement, such agreement shall only
be treated as, or as part of, the Revolving Credit Agreement hereunder if (i)
either (A) all obligations under the Revolving Credit Agreement being refinanced
or replaced (if then outstanding) shall be paid in full at the time of such
refinancing or replacement, and all commitments and letters of credit issued
pursuant to the refinanced or replaced Revolving Credit Agreement shall have
terminated in accordance with their terms or (B) the Required Revolver Creditors
shall have consented in writing to the refinancing or replacement indebtedness
being treated as indebtedness pursuant to the Revolving Credit Agreement, (ii)
the refinancing or replacement indebtedness shall be permitted to be incurred
under the Revolving Credit Agreement being refinanced or replaced (if such
Revolving Credit Agreement is to remain outstanding) and the other Revolving
Credit Documents then in effect, and under the Senior Note Documents referred to
below (if any Senior Notes remain outstanding) and (iii) a notice to the effect
that the refinancing or replacement indebtedness shall be treated as issued
under the Revolving Credit Agreement shall be delivered by JCC to the Collateral
Agent;

               WHEREAS, JCC, as issuer, JCC Holding, Canal Development, Fulton
Development and JCC Development, as guarantors, and the Senior Note Trustee have
executed an Indenture, dated as of March 30, 2001 (as amended, modified or
supplemented from time to time, the "Senior Note Indenture," and together with
the Senior Notes and all other documents and agreements relating thereto are
herein called the "Senior Note Documents"), pursuant to which the Company (x)
will initially issue $124,520,000 in aggregate principal amount of its Senior
Notes due 2008 and (y) may, in accordance with the terms of the Senior Note
Indenture, issue additional principal amounts of its Senior Notes due 2008 as a
result of its payment of interest in Secondary Securities, as defined in the
Senior Note Indenture (with all Senior Notes issued as contemplated by preceding
clauses (x) and (y), together with any securities issued in replacement or
substitution therefor, being herein called the "Senior Notes");

               WHEREAS, JCC Holding and each other Assignor (other than JCC) has
jointly and severally guaranteed to the Revolver Creditors the payment when due
of all obligations and liabilities of JCC under or with respect to the Revolving
Credit Documents;

               WHEREAS, pursuant to Article X of the Senior Note Indenture, JCC
Holding and each other Assignor (other than JCC) have jointly and severally
guaranteed (the "Senior Note Guaranty") to the Senior Note Creditors the payment
when due of all obligations and liabilities of JCC under or with respect to the
Senior Note Documents;

               WHEREAS, the Secured Creditors and the Collateral Agent have
entered into that certain Intercreditor Agreement dated as of March 30, 2001
(the "Intercreditor Agreement") setting forth the respective rights of the
Secured Creditors in the Collateral referred to in this Agreement, the Pledge
Agreement and the Mortgages;

               WHEREAS, it is a condition precedent to each of the
above-described extensions of credit to JCC that the Assignors shall have
executed and delivered to the Collateral Agent this Agreement; and

<PAGE>   7

                                                                          Page 3

               WHEREAS, each Assignor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;

               NOW, THEREFORE, in consideration of the extensions of credit to
be made to JCC and other benefits accruing to each Assignor, the receipt and
sufficiency of which are hereby acknowledged, each Assignor hereby makes the
following representations and warranties to the Collateral Agent for the benefit
of the Secured Creditors and hereby covenants and agrees with the Collateral
Agent for the benefit of the Secured Creditors as follows:

                                    ARTICLE I

                               SECURITY INTERESTS

               1.1. Grant of Security Interests. (a) As security for the prompt
and complete payment and performance when due of all of the Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and does
hereby grant to the Collateral Agent for the benefit of the Secured Creditors,
upon the terms and subject to the conditions of this Agreement and further
subject to the provisions of the Intercreditor Agreement, a continuing security
interest (subject to Liens to the extent permitted under the terms of all
Secured Debt Documents from time to time in effect) in, all of the right, title
and interest of such Assignor in, to and under all of the following, whether now
existing or hereafter from time to time acquired: (i) each and every Receivable,
(ii) all Contracts, together with all Contract Rights arising thereunder (in
each case except to the extent constituting Excluded Collateral), (iii) all
Inventory, (iv) the Cash Collateral Account established with the Collateral
Agent for such Assignor and all monies, securities, investments and instruments
deposited or required to be deposited in such Cash Collateral Account, (v) all
present and future bank accounts of such Assignor including, without limitation,
any demand, time savings, passbook, certificates of deposit, or like accounts
maintained by such Assignor with any bank, savings and loan association, credit
union or other organization, all money, cash and checks, drafts, notes, bills,
bills of exchange, securities, investments, bonds or other instruments, writings
or property of such Assignor from time to time received, receivable or otherwise
distributed in respect thereof, in renewal or extension thereof, or in exchange
therefor, whether or not deposited in any such deposit account (collectively, in
each case, except to the extent constituting Excluded Collateral, the "Pledged
Accounts"), (vi) all Equipment, (vii) all Fixtures, (viii) all Marks, together
with the registrations and right to all renewals thereof, and the goodwill of
the business of such Assignor symbolized by the Marks, and all licenses of
rights associated therewith, (ix) all Patents and Copyrights, and all reissues,
renewals or extensions thereof, (x) all computer programs of such Assignor and
all intellectual property rights therein and all other proprietary information
of such Assignor, including, but not limited to, trade secrets, (xi) all other
Goods, General Intangibles, Permits (other than the Casino Operating Contract),
Chattel Paper, Investment Property and Documents, (xii) all Proceeds and
products of any and all of the foregoing and (xiii) all other personal property
of any Assignor of any nature whatsoever, including, without limitation, all
accounts, bank accounts, deposits, credit balances, contract rights, inventory,
general intangibles, goods, equipment, instruments, chattel paper, machinery,
furniture, furnishings, fixtures, tools, supplies, appliances, plans and
drawings and all property from time to

<PAGE>   8

                                                                          Page 4

time described in any financing statement (UCC-1) signed by any Assignor naming
the Collateral Agent as secured party for the benefit of the Secured Creditors
(all of the above, collectively, the "Collateral"). Notwithstanding the
foregoing, the term "Collateral" shall not include any Excluded Collateral.

               (b) The security interests of the Collateral Agent under this
Agreement extend to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.

               1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney-in-fact, with full
power after the occurrence of and during the continuance of an Event of Default
(in the name of such Assignor or otherwise), in the Collateral Agent's
discretion, to take any action and to execute any instrument or document which
the Collateral Agent may reasonably deem necessary or advisable to accomplish
the purposes of this Agreement, which appointment as attorney is coupled with an
interest. This appointment is coupled with an interest and is irrevocable.

                                   ARTICLE II

                GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

               Each Assignor represents, warrants and covenants to the
Collateral Agent, for the benefit of the Secured Creditors, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:

               2.1. Necessary Filings. All filings, registrations and recordings
necessary or appropriate to create, preserve, protect and perfect the security
interest granted by such Assignor to the Collateral Agent hereby in respect of
the Collateral have been accomplished and the security interest granted to the
Collateral Agent pursuant to this Agreement in and to the Collateral constitutes
a perfected security interest therein prior to the rights of all other Persons
therein and subject to no other Liens (except that the Collateral may be subject
to the security interests evidenced by the financing statements disclosed on
Annex A hereto (the "Permitted Filings") and to other Liens permitted under all
the Secured Debt Documents from time to time in effect) and is entitled to all
the rights, priorities and benefits afforded by the Uniform Commercial Code or
other relevant law as enacted in any relevant jurisdiction, from time to time,
to perfected security interests.

               2.2. No Liens. Such Assignor is, and as to Collateral acquired by
it from time to time after the date hereof such Assignor will be, the owner of
all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Liens created hereby, Liens
permitted under all the Secured Debt Documents from time to time in effect and
Liens evidenced by the Permitted Filings), and such Assignor shall defend the
Collateral against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to the Collateral Agent.

<PAGE>   9
                                                                         Page 5

               2.3. Other Financing Statements. As of the date hereof, there is
no financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) on file or of record in any relevant jurisdiction
covering or purporting to cover any interest of any kind in the Collateral
except as disclosed in Annex A hereto and so long as the Termination Date has
not occurred, unless otherwise permitted under the terms of all the Secured Debt
Documents from time to time in effect, such Assignor will not execute or
authorize to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction) or
statements relating to the Collateral, except financing statements filed or to
be filed in respect of and covering the security interests granted hereby by the
Assignor.

               2.4. Chief Executive Office; Jurisdiction of Organization;
Records. The chief executive office of each Assignor is located, as of the date
hereof, at the address or addresses indicated on Annex B for such Assignor, and
the organizational structure and the jurisdiction of incorporation or
organization, as the case may be, for each Assignor, as of the date hereof, is
listed on Annex B for such Assignor. No Assignor will move its chief executive
office or change, or permit the change of, its organizational structure or its
jurisdiction of organization (whether by merger, reincorporation or otherwise),
except to such new location, organizational structure or jurisdiction, as the
case may be, as such Assignor may establish in accordance with the following
provisions of this Section 2.4. The originals of all documents evidencing all
Receivables and Contract Rights of such Assignor and the only original books of
account and records of such Assignor relating thereto are, and will continue to
be, kept at such chief executive office, at such other locations shown on Annex
B hereto or at such new locations as such Assignor may establish in accordance
with the remaining sentences of this Section 2.4. No Assignor shall establish
new locations for such offices, new organizational structure or new jurisdiction
of organization until (i) it shall have given to the Collateral Agent not less
than 20 days' prior written notice of its intention so to do, clearly describing
such new location, organizational structure or jurisdiction and providing such
other information in connection therewith as the Collateral Agent may reasonably
request, (ii) with respect to such new location, organizational structure or
jurisdiction, it shall have taken all action to maintain the security interest
of the Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect and (iii) it shall have
furnished an opinion of counsel acceptable to the Collateral Agent to the effect
that all financing or continuation statements and amendments or supplements
thereto have been filed in the appropriate filing office or offices (and shall
have previously furnished any such forms or statements to the Collateral Agent
for execution), and all other actions (including, without limitation, the
payment of all filing fees and taxes, if any, payable in connection with such
filings) have been taken, in order to perfect (and maintain the perfection and
priority of) the security interests granted hereby. Promptly after (x)
establishing a new location for such offices in accordance with the immediately
preceding sentence or (y) any change in the organizational structure or
jurisdiction of organization of any Assignor, the respective Assignor shall
deliver to the Collateral Agent a supplement to Annex B hereto so as to cause
such Annex B to be complete and accurate.

               2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations for such Assignor shown on Annex C hereto. Each Assignor agrees that
all Inventory and all Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations for such

<PAGE>   10

                                                                          Page 6

Assignor shown on Annex C hereto, or such new location as such Assignor may
establish in accordance with the last sentence of this Section 2.5. Any Assignor
may establish a new location for Inventory and Equipment only if (i) it shall
have given to the Collateral Agent not less than 30 days' prior written notice
of its intention so to do, clearly describing such new location and providing
such other information in connection therewith as the Collateral Agent may
reasonably request, (ii) with respect to such new location, as promptly as
practicable and in no event later than 30 days after the establishment thereof,
it shall have taken all action to maintain the security interests of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect and (iii) it shall have furnished
an opinion of counsel acceptable to the Collateral Agent to the effect that all
financing or continuation statements and amendments or supplements thereto have
been filed in the appropriate filing office or offices, and all other actions
(including, without limitation, the payment of all filing fees and taxes, if
any, payable in connection with such filings) have been taken, in order to
perfect (and maintain the perfection and priority of) the security interests
granted hereby.

                  2.6. Pledged Accounts. (a) The Pledged Accounts are, and will
continue to be, maintained at, and controlled and directed from, the respective
offices of those institutions set forth on Annex E hereto (such institutions,
the "Pledged Account Banks"). Concurrently with the establishment of any Pledged
Account, each Assignor will cause the applicable Pledged Account Bank to execute
and deliver to the Collateral Agent a consent substantially in the form of Annex
D hereto. No Assignor shall establish any additional Pledged Account until (i)
it shall have given to the Collateral Agent prior written notice of intention so
to do, clearly describing such new account and providing such other information
in connection therewith as Collateral Agent may reasonably request and (ii) with
respect to such new account, it shall have taken all action to maintain the
security interest of the Collateral Agent in such Collateral intended to be
granted hereby at all times fully perfected and in full force and effect,
including by having any bank or other institution which maintains such account
to execute and deliver to the Collateral Agent a consent substantially in the
form Annex D hereto.

                  (b) Upon the occurrence and during the continuance of any
Event of Default, and upon notice by the Collateral Agent to each Assignor
(although no such notice shall be required to be so given in the case of an
Event of Default of the types described in Sections 6.1(e), (f), (g) and (h) of
the Revolving Credit Agreement or Sections 6.1(f) and (g) of the Senior Note
Indenture), the Assignors shall no longer have the right to withdraw funds from
any Pledged Account, and, subject to (i) the terms of the Intercreditor
Agreement, (ii) the rights of the landlord under the Casino Lease to certain of
the funds in the Pledged Accounts pursuant to Sections 5.3(e), 7.1(c) and
19.8(d) of the Casino Lease and (iii) the rights of the landlord in and to a
portion of the rent under Section 3.1 of the Second Floor Sublease (as defined
in the Senior Note Indenture), the Collateral Agent shall have the sole right to
make withdrawals from the Pledged Accounts, provided that (subject to the rights
of the Collateral Agent under Section 7.1(d) to withdraw such funds) (x) the
Assignors may continue to withdraw funds from the Pledged Accounts (to the
extent that such funds have not been withdrawn as permitted by Section 7.1 of
this Agreement) to make payments and pay operating expenses required under the
terms of the Casino Lease and the Casino Operating Contract and the Collateral
Agent may rely on a certificate of the Assignor as to such amounts and (y) the
Manager may continue to withdraw funds from the accounts referred to in Section
8.03 of the Management Agreement to pay

<PAGE>   11

                                                                          Page 7

operating expenses of the Casino pursuant to the Annual Plan (under and as
defined in the Management Agreement) then in effect. All Collateral held in the
Pledged Accounts shall be held therein in accordance with the terms of this
Agreement.

               2.7. Trade Names; Change of Name. No Assignor has or operates in
any jurisdiction under, or in the preceding 12 months has had or has operated in
any jurisdiction under, any trade names, fictitious names or other names
(including, without limitation, any names of divisions or operations) except its
legal name and such other trade, fictitious or other names as are listed on
Annex F hereto. No Assignor shall change its legal name or assume or operate in
any jurisdiction under any trade, fictitious or other name except those names
listed on Annex F hereto and new names (including, without limitation, any names
of divisions or operations) established in accordance with the last sentence of
this Section 2.7. No Assignor shall assume or operate in any jurisdiction under
any new trade, fictitious or other name until (i) it shall have given to the
Collateral Agent not less than 30 days' prior written notice of its intention so
to do, clearly describing such new name and the jurisdictions in which such new
name shall be used and providing such other information in connection therewith
as the Collateral Agent may reasonably request, (ii) with respect to such new
name, it shall have taken all action to maintain the security interests of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect and (iii) at the request of the
Collateral Agent, it shall have furnished an opinion of counsel acceptable to
the Collateral Agent to the effect that all financing or continuation statements
and amendments or supplements thereto have been filed in the appropriate filing
office or offices, and all other actions (including, without limitation, the
payment of all filing fees and taxes, if any, payable in connection with such
filings) have been taken, in order to perfect (and maintain the perfection and
priority of) the security interest granted hereby.

               2.8. Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the Secured
Debt Documents and otherwise in writing in connection herewith or therewith. No
Assignor shall assert against the Collateral Agent any claim or defense which
such Assignor may have against any seller of the Collateral or any part thereof
or against any person with respect to the Collateral or any part thereof.

                                   ARTICLE III

                          SPECIAL PROVISIONS CONCERNING
                          RECEIVABLES; CONTRACT RIGHTS

               3.1. Maintenance of Records. Each Assignor will keep and maintain
at its own cost and expense records of its Receivables and Contracts in
accordance with good business practice, and such Assignor will make the same
available on its premises to the Collateral Agent for inspection, at such
Assignor's own cost and expense, at any and all reasonable times upon demand.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent (acting on the instructions of the Required Secured
Creditors under the Intercreditor Agreement) so directs, each Assignor shall
legend, in form and manner reasonably satisfactory to the Collateral Agent, the
Receivables and the Contracts, as well as books, records

<PAGE>   12

                                                                          Page 8

and documents of such Assignor evidencing or pertaining to such Receivables and
Contracts with an appropriate reference to the fact that such Receivables and
Contracts have been assigned to the Collateral Agent and that the Collateral
Agent has a security interest therein.

               3.2. Direction to Account Debtors; Contracting Parties; etc. Upon
the occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all
payments on account of the Receivables and Contracts to be made directly to the
Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in the preceding
clause (x) and (y) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent that such Assignor
might have done. Without notice to or assent by any Assignor, the Collateral
Agent may apply any or all amounts then in, or thereafter deposited in, the Cash
Collateral Account in the manner provided in Section 7.4 of this Agreement. The
costs and expenses (including reasonable attorneys' fees) of collection, whether
incurred by any Assignor or the Collateral Agent, shall be borne by the relevant
Assignor.

               3.3. Modification of Terms; etc. No Assignor shall rescind or
cancel any indebtedness evidenced by any Receivable or under any Contract, or
modify any term relating to such indebtedness or make any adjustment with
respect thereto, or extend or renew the same, or compromise or settle any
material dispute, claim, suit or legal proceeding relating thereto, or sell any
Receivable or Contract, or interest therein, without the prior written consent
of the Collateral Agent, except as permitted by Section 3.4. Each Assignor will
duly fulfill all obligations on its part to be fulfilled under or in connection
with the Receivables and Contracts and will do nothing to impair the rights of
the Collateral Agent in the Receivables or Contracts.

               3.4. Collection. Each Assignor shall endeavor to cause to be
collected from the account debtor named in each of its Receivables or obligor
under any Contract, as and when due (including, without limitation, amounts
which are delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such Receivable or Contract, and apply forthwith upon receipt thereof
all such amounts as are so collected to the outstanding balance of such
Receivable or under such Contract, except that, prior to the occurrence of an
Event of Default, any Assignor may allow in the ordinary course of business as
adjustments to amounts owing under its Receivables and Contracts (i) an
extension or renewal of the time or times of payment, or settlement for less
than the total unpaid balance, which the Assignor finds appropriate in
accordance with sound business judgment and (ii) a refund or credit due as a
result of returned or damaged merchandise or improperly performed services. The
costs and expenses (including, without limitation, attorneys' fees) of
collection, whether incurred by any Assignor or the Collateral Agent, shall be
borne by such Assignor.

               3.5. The Assignors Remain Liable. Notwithstanding anything to the
contrary contained herein, (x) each Assignor shall remain liable under the
Contracts to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (y) the exercise by the Collateral Agent of any of the rights

<PAGE>   13

                                                                         Page 9

hereunder shall not release any Assignor from any of its duties or obligations
under the Contracts and (z) the Collateral Agent and the Secured Creditors shall
not have any obligation or liability under the Contracts by reason of this
Agreement, nor shall the Collateral Agent or any Secured Creditor be obligated
to perform any of the obligations or duties of any Assignor thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder.

               3.6. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts and other property or rights
covered by the security interest hereby granted, as may be required to maintain
the perfection and priority of the security interests granted hereby, and to
carry out its obligations and covenants hereunder, or as the Collateral Agent
may reasonably require.

                                   ARTICLE IV

                       SPECIAL PROVISIONS CONCERNING MARKS

               4.1. Additional Representations and Warranties. Each Assignor
represents and warrants to the Collateral Agent, for the benefit of the Secured
Creditors, that it is the true and lawful exclusive owner of the Marks listed in
Annex G hereto and that said listed Marks include all the United States federal
registrations or applications registered in the United States Patent and
Trademark Office. The Assignor represents and warrants that it owns or is
licensed to use or is not prohibited from using all Marks that it uses. Each
Assignor further warrants that it is aware of no third party claim that any
aspect of such Assignor's present or contemplated business operations infringes
or will infringe any Mark. Each Assignor represents and warrants that it is the
owner of record of all United States registrations and applications listed in
Annex G hereto and that said registrations are valid, subsisting, have not been
cancelled and that such Assignor is not aware of any third-party claim that any
of said registrations is invalid or unenforceable.

               4.2. Licenses and Assignments. Other than the license agreements
listed on Annex H hereto and any extensions or renewals thereof, each Assignor
hereby agrees not to divest itself of any right under any Mark that such
Assignor is required to maintain under Section 4.5 hereof absent prior written
approval of the Collateral Agent.

               4.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is infringing or otherwise violating any of
such Assignor's rights in and to any Mark, or with respect to any party claiming
that such Assignor's use of any Mark violates in any material respect any
property right of that party. Each Assignor further agrees, unless otherwise
agreed by the Collateral Agent, diligently to prosecute any Person infringing
any material Mark.

<PAGE>   14

                                                                        Page 10

               4.4. Preservation of Marks. Each Assignor agrees to use those
Marks that such Assignor is required to maintain under Section 4.5 hereof in
interstate commerce during the time in which this Agreement is in effect,
sufficiently to preserve such Marks as trademarks or service marks registered
under the laws of the United States.

               4.5. Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. Sections 1051 et seq. to maintain trademark registration, including
but not limited to affidavits of use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
registered Marks pursuant to 15 U.S.C. Sections 1058(a), 1059 and 1065, and
shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the Collateral Agent; provided that no Assignor shall
be obligated to maintain any Mark in the event that such Assignor determines, in
its reasonable business judgment, that the maintenance of such Mark is no longer
necessary or desirable in the conduct of its business. Each Assignor agrees to
notify the Collateral Agent three (3) months prior to the date on which the
affidavits of use or the applications for renewal registration are due with
respect to any registered Mark that the affidavits of use or the renewal is
being processed or being abandoned, as the case may be.

               4.6. Future Registered Marks. If any Mark registration issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within thirty (30)
days of receipt of such certificate such Assignor shall deliver a copy of such
certificate, and a grant of security in such mark to the Collateral Agent,
confirming the grant thereof hereunder.

                                    ARTICLE V

                          SPECIAL PROVISIONS CONCERNING
                             PATENTS AND COPYRIGHTS

               5.1. Additional Representations and Warranties. Each Assignor
represents and warrants to the Collateral Agent, for the benefit of the Secured
Creditors, that it is the true and lawful exclusive owner of all rights in the
Patents listed in Annex I hereto and in the Copyrights listed in Annex J hereto,
that said Patents include all the United States patents and applications for
United States patents that such Assignor now owns and that said Copyrights
constitute all the United States copyrights registered with the United States
Copyright Office and applications for United States copyrights that such
Assignor now owns. Each Assignor represents and warrants that it owns or is
licensed to practice under all Patents and Copyrights that it now uses or
practices under. Each Assignor further warrants that it is aware of no third
party claim that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any Patent or any Copyright.

               5.2. Licenses and Assignments. Other than the license agreements
listed on Annex H hereto and any extensions or renewals thereof, each Assignor
hereby agrees not to

<PAGE>   15

                                                                        Page 11

divest itself of any right under any significant Patent or significant Copyright
absent prior written approval of the Collateral Agent.

               5.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement or other
violation of such Assignor's rights in any Patent or Copyright, or with respect
to any claim that practice of any Patent or use of any Copyright violates any
property right of a third party. Each Assignor further agrees, absent direction
of the Collateral Agent to the contrary, diligently to prosecute any Person
infringing any Patent or Copyright.

               5.4. Maintenance of Patents. At its own expense, each Assignor
shall make timely payment of all post-issuance fees required pursuant to 35
U.S.C. Section 41 to maintain in force rights under each significant Patent.

               5.5. Prosecution of Patent Application. At its own expense, each
Assignor shall diligently prosecute all applications for Patents listed in Annex
G hereto and shall not abandon any such application prior to exhaustion of all
administrative and judicial remedies, absent written consent of the Collateral
Agent, unless such Assignor determines, in its reasonable discretion, that
prosecuting such application is no longer necessary or desirable in the conduct
of its business.

               5.6. Other Patents and Copyrights. Within 30 days of acquisition
of a Patent or Copyright, or of filing of an application for a Patent or
Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of
said Patent or Copyright or such application, as the case may be, with a grant
of security as to such Patent or Copyright, as the case may be, confirming the
grant thereof hereunder.

                                   ARTICLE VI

                      PROVISIONS CONCERNING ALL COLLATERAL

               6.1. Protection of Collateral Agent's Security. (a) Each Assignor
will do nothing to impair the rights of the Collateral Agent in the Collateral.
Each Assignor will at all times keep its Inventory and Equipment insured in
favor of the Collateral Agent, at such Assignor's own expense to the extent and
in the manner provided in the Secured Debt Documents from time to time in
effect. Each Assignor assumes all liability and responsibility in connection
with the Collateral acquired by it and the liability of such Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Assignor.

               (b) Each Assignor shall furnish to the Collateral Agent from time
to time, without notice or demand by the Collateral Agent, (i) not later than 10
Business Days prior to the expiration date of each insurance policy maintained
pursuant to this Section 6.1, a binding commitment (issued by the insurer or an
insurance agent for the insurer authorized to issue such certificate who shall
certify its authority) evidencing the issuance of a replacement policy or the

<PAGE>   16

                                                                        Page 12

extension of such existing policy and that such new or extended insurance policy
is in full force and effect and (ii) evidence satisfactory to the Collateral
Agent of payment of the premium therefor within 30 days of any request by the
Collateral Agent and (iii) within 30 days of any request by the Collateral
Agent, a certificate as to the coverage of any such new or extended insurance
policy required to be maintained hereunder (issued by the insurer or an
insurance agent for the insurer authorized to issue such certificate who shall
certify its authority) to the effect that such insurance policy is in force and
effect.

               6.2. Warehouse Receipts Non-negotiable. Each Assignor agrees that
if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued with respect to any of its Inventory, such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law from time to time hereinafter).

               6.3. Further Actions; Louisiana Matters. (a) Each Assignor will,
at its own expense, make, execute, endorse, acknowledge, file and/or deliver to
the Collateral Agent from time to time such lists, descriptions and designations
of its Collateral, warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the Collateral and other
property or rights covered by the security interest hereby granted, are
reasonably appropriate or advisable to perfect, preserve or protect the security
interest of the Collateral Agent in the Collateral.

               (b) Notwithstanding anything contained in this Agreement to the
contrary, this Agreement shall be governed by Chapters 8 and 9 of the Louisiana
Commercial Laws, Louisiana R.S. 10:8-101 et seq. and 10:9-101 et seq., as may be
amended from time to time hereinafter (collectively, the "Louisiana UCC"), to
the extent that any security interest in any of the Collateral located in the
State of Louisiana, and any remedies hereunder with respect thereto, are
required to be governed by, and interpreted in accordance with, the laws of the
State of Louisiana.

               (c) If an Event of Default shall occur and be continuing, the
Collateral Agent shall have all remedies available to a secured party under the
Louisiana UCC in addition to the other remedies provided elsewhere in this
Agreement. For purposes of executory process under the laws of the State of
Louisiana, each Assignor hereby acknowledges the Obligations and confesses
judgment in favor of the Collateral Agent for the benefit of the Secured
Creditors, for the full amount of the Obligations, including, without
limitation, principal, interest, attorneys' fees, court costs, and all other
fees, expenses and charges.

               (d) Each Assignor hereby expressly waives, to the fullest extent
permitted by Louisiana law, the benefit of appraisement provided for in Articles
2332, 2336, 2723 and 2724 of the Louisiana Code of Civil Procedure and all other
laws of the State of Louisiana conferring such benefits and the demand and three
days' delay accorded by Articles 2639 and 2721 of the Louisiana Code of Civil
Procedure.

<PAGE>   17

                                                                        Page 13

               (e) Pursuant to Louisiana R.S. 27:275 et seq., the Collateral
Agent is hereby authorized and empowered to file a petition to foreclose the
liens created hereby in which the Louisiana Gaming Control Board is named a
nominal defendant and the Assignors request the appointment of a receiver as
contemplated by and in accordance with the provisions of the cited statutes. The
filing of a verified petition by the Collateral Agent shall constitute prima
facie proof of the Collateral Agent's right to enforce the liens created hereby
in executory or ordinary proceedings, at the Collateral Agent's option, and to
appointment of a receiver pursuant to the cited statutes.

               (f) In the event the Collateral or any part thereof is seized as
an incident to an action for the recognition or the enforcement of this
Agreement by executory process, ordinary process, sequestration, writ of fieri
facias, or otherwise, the Assignors and the Collateral Agent hereby agree that
the court issuing any such order shall, if petitioned for by the Collateral
Agent, direct the Sheriff to appoint as a keeper of the Collateral, the
Collateral Agent or any agent designated by the Collateral Agent or any person
named by the Collateral Agent at the time such seizure is effected. This
designation is made pursuant to La. R.S. 9:5136 through 5140.2, inclusive, as
the same may be amended, and the Collateral Agent shall be entitled to all the
rights and benefits afforded thereunder, including reasonable compensation,
which compensation shall be secured by this Agreement, and which reasonable
compensation shall not exceed one-tenth of one percent (0.1%) of the amount due
or sued for or claimed or sought to be protected, preserved or enforced in the
proceeding for the recognition of the liens created hereby.

               6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, as are necessary or
desirable to establish and maintain a valid, enforceable and perfected security
interest in the Collateral as provided herein and the other rights and security
contemplated hereby all in accordance with the Uniform Commercial Code as
enacted in any and all relevant jurisdictions or any other relevant law. Each
Assignor will pay any applicable filing fees, recordation taxes and related
expenses. Each Assignor authorizes the Collateral Agent to file any such
financing statements without the signature of such Assignor where permitted by
law.

                                   ARTICLE VII

                  REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT

               7.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, subject to any mandatory requirements
of applicable law then in effect and further subject to the terms of the
Intercreditor Agreement, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions, as the
same may be amended from time to time hereinafter, and may also:

                  (a) personally, or by agents or attorneys, immediately retake
         possession of the Collateral or any part thereof, from such Assignor or
         any other Person who then has

<PAGE>   18

                                                                        Page 14

         possession of any part thereof with or without notice or process of
         law, and for that purpose may enter upon such Assignor's premises where
         any of the Collateral is located and remove the same and use in
         connection with such removal any and all services, supplies, aids and
         other facilities of such Assignor; and

                  (b) instruct the obligor or obligors on any agreement,
         instrument or other obligation (including, without limitation, the
         Receivables and the Contracts and, as contemplated by such terms, any
         policy of insurance or any payment or performance bond) constituting
         the Collateral to make any payment required by the terms of such
         agreement, instrument or other obligation directly to the Collateral
         Agent and may exercise any and all rights and remedies of such Assignor
         in respect of such Collateral; and

                  (c) withdraw all monies, securities and instruments in the
         Cash Collateral Account for application to the Obligations in
         accordance with Section 7.4 hereof; and

                  (d) withdraw all monies, securities and instruments in the
         Reserve Fund (subject to the rights of the landlord under the Casino
         Lease pursuant to Sections 5.3(e), 7.1(c) and 19.8(d) of the Casino
         Lease) and the other Pledged Accounts for application to the
         Obligations in accordance with Section 7.4 hereof, and in connection
         therewith, deliver to the Reserve Fund Bank and the Pledged Account
         Banks the notice referred to in the form of consent attached hereto as
         Annex D; and

                  (e) sell, assign or otherwise liquidate, or direct such
         Assignor to sell, assign or otherwise liquidate, any or all of the
         Collateral or any part thereof, and take possession of the proceeds of
         any such sale or liquidation; and

                  (f) take possession of the Collateral or any part thereof, by
         directing such Assignor in writing to deliver the same to the
         Collateral Agent at any place or places designated by the Collateral
         Agent, in which event such Assignor shall at its own expense forthwith
         cause the same to be moved to the place or places so designated by the
         Collateral Agent and there delivered to the Collateral Agent; and

                  (g) effect an absolute assignment of all of such Assignor's
         right, title and interest in and to each Mark (and the goodwill of the
         business of such Assignor associated therewith), Patent and Copyright;

it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Collateral Agent acting upon the instructions of the Required Secured
Creditors (as defined in the Intercreditor Agreement) and that no Secured
Creditor, except as otherwise provided in the Intercreditor Agreement, shall
have any right individually to seek to enforce this Agreement or to realize upon
the security to be granted hereby, it being understood and agreed that such
rights and remedies may be exercised by the Collateral Agent for the benefit of
the Secured Creditors upon the terms of this Agreement and the Intercreditor
Agreement.

<PAGE>   19

                                                                        Page 15

               7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair which the Collateral Agent
shall determine to be commercially reasonable. Any such disposition which shall
be a private sale or other private proceedings permitted by such requirements
shall be made upon not less than 10 days' written notice to the relevant
Assignor specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of the relevant
Assignor or any nominee of such Assignor to acquire the Collateral involved at a
price or for such other consideration at least equal to the intended sale price
or other consideration so specified. Any such disposition which shall be a
public sale permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time and place of
such sale and, in the absence of applicable requirements of law, shall be by
public auction (which may, at the Collateral Agent's option, be subject to
reserve), after publication of notice of such auction not less than 10 days
prior thereto in two newspapers in general circulation in the City of New York.
The Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. To the extent permitted by any such
requirement of law, the Collateral Agent and the Secured Creditors may bid for
and become the purchaser of the Collateral or any item thereof, offered for sale
in accordance with this Section without accountability to the relevant Assignor.
If, under mandatory requirements of applicable law, the Collateral Agent shall
be required to make disposition of the Collateral within a period of time which
does not permit the giving of notice to any Assignor as hereinabove specified,
the Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such mandatory requirements of
applicable law. Each Assignor agrees to do or cause to be done all such other
acts and things as may be reasonably necessary to make such sale or sales of all
or any portion of the Collateral valid and binding and in compliance with any
and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at
such Assignor's expense.

               7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE

<PAGE>   20

                                                                        Page 16

UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and,
except as otherwise provided in this Agreement, such Assignor hereby further
waives, to the extent permitted by law:

                  (a) all damages occasioned by such taking of possession except
         any damages which are the direct result of the Collateral Agent's gross
         negligence or willful misconduct;

                  (b) all other requirements as to the time, place and terms of
         sale or other requirements with respect to the enforcement of the
         Collateral Agent's rights hereunder; and

                  (c) all rights of redemption, appraisement, valuation, stay,
         extension or moratorium now or hereafter in force under any applicable
         law in order to prevent or delay the enforcement of this Agreement or
         the absolute sale of the Collateral or any portion thereof, and each
         Assignor, for itself and all who may claim under it, insofar as it or
         they now or hereafter lawfully may, hereby waives the benefit of all
         such laws.

Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.

               7.4. Application of Proceeds. All moneys collected by the
Collateral Agent upon any sale or other disposition of the Collateral, together
with all other moneys received by the Collateral Agent hereunder, shall be
applied in the manner provided in Section 11 of the Intercreditor Agreement.

               7.5. Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, the other
Secured Debt Documents or now or hereafter existing at law or in equity, or by
statute and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time or simultaneously
and as often and in such order as may be deemed expedient by the Collateral
Agent. All such rights, powers and remedies shall be cumulative and the exercise
or the beginning of exercise of one shall not be deemed a waiver of the right to
exercise of any other or others. No delay or omission of the Collateral Agent in
the exercise of any such right, power or remedy, renewal or extension of any of
the Obligations and no course of dealing between any Assignor and the Collateral
Agent or any holder of any of the Obligations shall impair any such right, power
or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on any Assignor in
any case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights

<PAGE>   21

                                                                        Page 17

hereunder and shall be entitled to judgment, then in such suit the Collateral
Agent may recover reasonable expenses, including attorneys' fees, and the
amounts thereof shall be included in such judgment.

               7.6. Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.

                                  ARTICLE VIII

                                    INDEMNITY

               8.1. Indemnity. (a) Each Assignor agrees to indemnify, reimburse
and hold the Collateral Agent, each Secured Creditor and their respective
successors, assigns, employees, agents and servants (hereinafter in this Section
8.1 referred to individually as "Indemnitee," and collectively as "Indemnitees")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable attorneys' fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement or any other document executed in connection herewith or in any other
way connected with the administration of the transactions contemplated hereby or
the enforcement of any of the terms of, or the preservation of any rights under
any thereof, or in any way relating to or arising out of (a) the manufacture,
ownership, ordering, purchase, delivery, control, acceptance, lease, financing,
possession, operation, condition, sale, return or other disposition, or use of
the Collateral (including, without limitation, latent or other defects, whether
or not discoverable), any contract claim or, to the maximum extent permitted
under applicable law, the violation of the laws of any country, state or other
governmental body or unit, or any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage) or (b) the actual or alleged presence of hazardous materials in the air,
surface water or groundwater or on the surface or subsurface of any real
property owned, leased or at any time operated by such Assignor or any of its
Subsidiaries, the release, generation, storage, transportation, handling or
disposal of hazardous materials at any location, whether or not owned or
operated by such Assignor or any of their Subsidiaries, the non-compliance of
any real property with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any real
property, or any environmental claim relating in any way to such Assignor or any
of its Subsidiaries, their operations, or any real property owned, leased or at
any time operated by such Assignor or any of its Subsidiaries, including, in
each case, without limitation, the reasonable fees and disbursements of counsel
and other consultants incurred in connection with any such

<PAGE>   22

                                                                        Page 18

investigation, litigation or other proceeding; provided that no Indemnitee shall
be indemnified pursuant to this Section 8.1(a) for expenses to the extent caused
by the gross negligence or willful misconduct of such Indemnitee. Each Assignor
agrees that upon written notice by any Indemnitee of the assertion of such a
liability, obligation, damage, injury, penalty, claim, demand, action, suit or
judgment, such Assignor shall assume full responsibility for the defense
thereof. Each Indemnitee agrees to use its best efforts to promptly notify the
relevant Assignor of any such assertion of which such Indemnitee has knowledge.

               (b) Without limiting the application of Section 8.1(a) hereof,
each Assignor, jointly and severally, agrees to pay, or reimburse the Collateral
Agent for any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.

               (c) Without limiting the application of Section 8.1(a) or (b)
hereof, each Assignor, jointly and severally, agrees to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by any Assignor in this Agreement or in any writing
contemplated by or made or delivered pursuant to or in connection with this
Agreement.

               (d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, any Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.

               8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Revolving Credit Agreement, all of the Senior Notes
issued under the Senior Note Indenture and all obligations under the HET/JCC
Agreement or any other Minimum Payment Guaranty Documents and the payment of all
other Obligations and notwithstanding the discharge thereof.

<PAGE>   23

                                                                        Page 19

                                   ARTICLE IX

                                   DEFINITIONS

               The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.

               "Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.

               "Assignor" shall have the meaning provided in the first paragraph
of this Agreement.

               "Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with the Collateral Agent for the benefit of the
Secured Creditors.

               "Casino Operating Contract" shall have the meaning provided in
the Senior Note Indenture.

               "Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.

               "Class" shall have the meaning provided in the Intercreditor
Agreement.

               "Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.

               "Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.

               "Component Parts" shall mean those things or goods which after
they are incorporated or permanently attached into a tract of land, a building
or other construction become an integral part of it, and/or those things or
goods which after they are permanently attached to a building or other
construction cannot be removed without substantial damage to themselves or to
the immovable property to which they are attached.

               "Contract Rights" shall mean all rights of any Assignor
(including, without limitation, all rights to payment) under each Contract.

               "Contracts" shall mean (i) the Management Agreement, (ii) all
construction contracts and sub-contracts relating thereto and all payment and
performance bonds related thereto, (iii) all architectural, engineering,
maintenance, management, leasing and service documents and franchise contracts,
and (iv) all other contracts between any Assignor and one or more additional
parties. Notwithstanding the foregoing, the definition of "Contracts" shall not
include the Casino Operating Contract.

               "Copyrights" shall mean any United States copyright which any
Assignor now or hereafter has registered with the United States Copyright
Office, as well as any application for a

<PAGE>   24

                                                                        Page 20

United States copyright registration now or hereafter made with the United
States Copyright Office by any Assignor.

               "Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.

               "Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.

               "Equipment" shall mean any "equipment," as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all machinery, equipment (including,
without limitation, all gaming equipment, gaming devices, appliances, chattels,
furnishings, furniture, fixtures, accessories, apparatus, building or
construction materials and supplies, china, glassware, silverware, pots, pans,
linens, stoves, refrigerators, freezers and other restaurant, bar, food service
or kitchen appliances and equipment), furnishings, movable trade fixtures and
vehicles now or hereafter owned by any Assignor and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.

               "Event of Default" shall mean any Event of Default under, and as
defined in, the Intercreditor Agreement or any other default hereunder not
constituting an Event of Default enumerated above in this definition after
notice and 30 days' opportunity to cure, and shall in any event, include,
without limitation, any payment default on any of the Obligations after the
expiration of any applicable grace period.

               "Excluded Collateral" shall mean (i) the Casino Operating
Contract, (ii) the House Bank, (iii) the Louisiana Gross Gaming Revenue Share
Payments, including the States' Interest in Daily Collections, each as defined
in the Casino Operating Contract, and (iv) the Casino Lease (it being understood
and agreed that the security interests in the relevant Mortgage in respect to
the Casino Lease exist and will not otherwise be effected by the inclusion of
this paragraph (iv) herein).

               "Fixtures" shall mean those things which after placement on any
real estate or immovable property, become Component Parts of the respective
land, buildings and other constructions, and which are used in the conduct of
business on such land or in such building or other constructions.

               "General Intangibles" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New York
and shall in any event include, without limitation, any and all of the relevant
Assignor's present and future contract rights, instruments, documents and
general intangibles necessary for use in connection with the operation of the
Casino or the ownership of any Collateral, whether now existing or hereinafter
created, or otherwise owned or acquired by such Assignor, and all liens,
security interests, guaranties, remedies, privileges and other rights pertaining
to such general intangibles, and all of the relevant Assignor's claims, rights,
powers, privileges, authority, options, security interests, liens and

<PAGE>   25

                                                                        Page 21

remedies under any partnership or limited liability company agreement to which
such Assignor is a party or with respect to any partnership or limited liability
company of which such Assignor is a partner or member, respectively, and all
inventions, processes, production methods, proprietary information and
knowledge, and all licenses or other agreements granted to such Assignor with
respect to the foregoing; all information, customer lists, identification of
suppliers, data, plans, blueprints, specifications, designs, drawings, recorded
knowledge, surveys, engineering reports, test reports, manuals, materials
standards, processing standards, performance standards, catalogs, books,
records, computer and automatic machinery software and programs and the like
pertaining to operations by or the business of such Assignor; all field repair
data, sales data and other information relating to sales or service of products
manufactured or sold by such Assignor; all present and future Permits (other
than the Casino Operating Contract) of governmental agencies held by such
Assignor pertaining to its operations or business, except for licenses that
cannot be transferred or encumbered by such Assignor without causing a default
thereunder or termination thereof, including, without limitation, liquor and
gaming licenses of such type; all rights of such Assignor to receive return of
deposits and trust payments; all rights of such Assignor to payment under
letters of credit and similar agreements; all tax refunds (including, without
limitation, all foreign, federal, state and local income tax and property tax
refunds) owed to such Assignor; all causes of action, rights, claims and
warranties of such Assignor; all rights of such Assignor as lessor or lessee
under any lease or rental agreement; all rights of such Assignor under any
insurance, surety or similar contract or arrangement; all written guaranties and
express or implied warranties regarding the Collateral and any part or parts
thereof; and all goodwill.

               "Goods" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.

               "HET" shall have the meaning provided in the first paragraph of
this Agreement.

               "HET/JCC Agreement" shall have the meaning provided in the
Recitals to this Agreement.

               "HNOMC" shall have the meaning provided in the first paragraph of
this Agreement.

               "HOC" shall have the meaning provided in the first paragraph of
this Agreement.

               "House Bank" shall have the meaning provided in the Management
Agreement.

               "Indemnitee" shall have the meaning provided in Section 8.1 of
this Agreement.

               "Intercreditor Agreement" shall have the meaning provided in the
Recitals to this Agreement.

               "Inventory" shall mean merchandise, inventory, goods and other
assets (including, without limitation, gaming equipment and gaming devices to
the extent not included in the definition of "Equipment" and food and food
products), and all additions, substitutions and replacements thereof, wherever
located, together with all goods, supplies, incidentals, packaging materials,
labels, materials and any other items used or usable in manufacturing,
processing,

<PAGE>   26

                                                                        Page 22

packaging or shipping same; in all stages of production -- from raw materials
through work-in-process to finished goods -- and all products and proceeds of
whatever sort and wherever located and any portion thereof which may be
returned, rejected, reclaimed or repossessed by the Collateral Agent from any
Assignor's customers, and shall specifically include all "inventory" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York, now or hereafter owned by any Assignor.

               "Investment Property" shall mean any "investment property" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.

               "JCC" shall have the meaning provided in the Recitals to this
Agreement.

               "JCC Holding" shall have the meaning provided in the Recitals to
this Agreement.

               "Lien" shall have the meaning provided in the Senior Note
Indenture.

               "Louisiana Gaming Regulations" shall have the meaning provided in
Section 10.12.

               "Louisiana UCC" shall have the meaning provided in Section 6.3.

               "Management Agreement" shall have the meaning provided in the
Senior Note Indenture.

               "Marks" shall mean any trademarks and service marks now held or
hereafter acquired by any Assignor, which are registered in the United States
Patent and Trademark Office or in any similar office or agency of the United
States or any state thereof or any political subdivision thereof and any
application for such trademarks and service marks, as well as any unregistered
marks used by any Assignor in the United States and trade dress including logos,
designs, trade names, company names, business names, fictitious business names
and other business identifiers in connection with which any of these registered
or unregistered marks are used in the United States.

               "Minimum Payment Guarantors" shall have the meaning provided in
the first paragraph of this Agreement.

               "Minimum Payment Guaranty" shall have the meaning assigned that
term in the Intercreditor Agreement.

               "Minimum Payment Guaranty Documents" shall have the meaning
assigned that term in the Intercreditor Agreement.

               "Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of (x) the
principal of and interest on all Protective Advances (as defined in the
Intercreditor Agreement) made in accordance with the requirements of Section
4(e) of the Intercreditor Agreement and (y) all other obligations and
indebtedness (including, without limitation, indemnities, fees, expenses,
enforcement costs (including reasonable

<PAGE>   27

                                                                        Page 23

attorneys' fees) and interest on such obligations and indebtedness), of each
Credit Party to the Secured Creditors, whether now existing or hereafter
incurred, to the extent relating to Protective Advances made in accordance with
Section 4(e) of the Intercreditor Agreement and the due performance and
compliance by each Credit Party with all the terms, conditions and agreements
relating to such Protective Advances; (ii) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, indemnities, fees,
expenses, enforcement costs (including reasonable attorneys' fees) and interest
on such obligations and indebtedness) of such Assignor to the Minimum Payment
Guarantors now existing or hereafter incurred under, arising out of, or in
connection with any Minimum Payment Guaranty Document (in each case, to the
extent such obligations and indebtedness relate to the Minimum Payment Guaranty)
to which it is a party (including, without limitation, all such obligations and
indebtedness under the HET/JCC Agreement) and the due performance and compliance
by such Assignor with all of the terms, conditions and agreements contained in
each such Minimum Payment Guaranty Document; (iii) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, the principal of
and interest on the notes issued, and Loans made, under the Revolving Credit
Agreement, all reimbursement obligations and unpaid drawings with respect to
letters of credit issued under the Revolving Credit Agreement, and all
indemnities, fees, expenses, enforcement costs (including reasonable attorneys'
fees) and interest on such obligations and indebtedness) of each Assignor to the
Revolver Creditors now existing or hereafter incurred under, arising out of, or
in connection with any Revolving Credit Document (including, without limitation,
all such obligations and indebtedness under the Revolving Credit Agreement, and
any guaranties thereof) to which such Assignor is a party and the due
performance and compliance by each Assignor with all of the terms, conditions
and agreements contained in the Revolving Credit Agreement and the other
Revolving Credit Documents; (iv) the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, the principal of, premium, if any,
and interest on, the Senior Notes, and all indemnities, fees, expenses,
enforcement costs (including reasonable attorneys' fees) and interest on such
obligations and indebtedness) of each Assignor to the Senior Note Creditors now
existing or hereafter incurred under, arising out of or in connection with the
Senior Notes, the other Senior Note Documents and the Security Documents
(including, without limitation, all such obligations and indebtedness under the
Senior Note Guaranty) to which such Assignor is a party and the due performance
and compliance by each Assignor with all of the terms, conditions and agreements
contained therein; (v) any and all sums advanced by the Collateral Agent in
order to preserve the Collateral or preserve its security interest in the
Collateral, and any and all amounts (but without any interest thereon) owing to
the Minimum Payment Guarantors to reimburse the Minimum Payment Guarantors for
amounts paid by the Minimum Payment Guarantors to the Collateral Agent pursuant
to the indemnity provisions contained in Section 6(c) and (d) of the
Intercreditor Agreement; (vi) in the event of any proceeding for the collection
or enforcement of any indebtedness, obligations, or liabilities of any Assignor
referred to in clauses (i), (ii), (iii) and (iv), after an Event of Default
shall have occurred and be continuing, the reasonable expenses of the Collateral
Agent in re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (vii) all amounts paid by any

<PAGE>   28

                                                                        Page 24

Indemnitee as to which such Indemnitee has the right to reimbursement under
Section 8.1 of this Agreement. It is acknowledged and agreed that the
"Obligations" shall include extensions of credit described above, whether
outstanding on the date of this Agreement or extended from time to time after
the date of this Agreement.

               "Patents" shall mean any United States patent to which any
Assignor now or hereafter has title and any divisions or continuations thereof,
as well as any application for a United States patent now or hereafter made by
any Assignor.

               "Permits" shall mean any and all actions, approvals,
certificates, consents, waivers, exemptions, variances, franchises, orders,
permits, authorizations, rights or licenses of or from any governmental
authority or agency, including, without limitation the Casino Operating
Contract.

               "Permitted Filings" shall have the meaning provided in Section
2.1 of this Agreement.

               "Pledged Account Bank" shall have the meaning provided in Section
2.6(a) of this Agreement.

               "Pledged Accounts" shall have the meaning provided in Section
1.1(a) of this Agreement.

               "Proceeds" shall have the meaning provided in the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.

               "Receivables" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York (and, to the extent not otherwise included within the aforementioned
definition, "Receivables" shall also include all additional property or assets
as may constitute "accounts" as defined in the Uniform Commercial Code as it may
be amended from time to time hereinafter in the State of New York), now or
hereafter owned by any Assignor and, in any event, shall include, but shall not
be limited to, all of such Assignor's rights to payment for goods sold or leased
or services performed by such Assignor, whether now in existence or arising from
time to time hereafter, including, without limitation, rights evidenced by an
account, note, contract, security agreement, chattel paper, or other evidence of
indebtedness or security, together with (i) all security pledged, assigned,
hypothecated or granted to or held by such Assignor to secure the foregoing,
(ii) all of such Assignor's right, title and interest in and to any goods, the
sale of which gave rise thereto, (iii) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (iv) all powers of attorney
for the execution of any evidence of indebtedness or security or other writing
in connection therewith,

<PAGE>   29

                                                                        Page 25

(v) all books, records, ledger cards, and invoices relating thereto, (vi) all
evidences of the filing of financing statements and other statements and the
registration of other instruments in connection therewith and amendments
thereto, notices to other creditors or secured parties, and certificates from
filing or other registration officers, (vii) all credit information, reports and
memoranda relating thereto, (viii) all claims, rights, powers or privileges and
remedies of any Assignor relating thereto or arising in connection therewith,
including, without limitation, all rights of such Assignor to make
determinations, to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any notice, consent,
waiver or approval, together with full power and authority to demand, receive,
enforce, collect or give receipt for any of the foregoing, to enforce or execute
any checks, or other instruments or orders, to file any claims and to take any
action which in the reasonable discretion of the Collateral Agent may be
necessary or advisable in connection with any of the foregoing, and (ix) all
other writings related in any way to the foregoing.

               "Reserve Fund" shall have the meaning provided in the Senior Note
Indenture.

               "Revolver Creditors" shall have the meaning provided in the first
paragraph of this Agreement.

               "Revolving Credit Agreement" shall have the meaning provided in
the Recitals to this Agreement.

               "Secured Creditors" shall have the meaning provided in the first
paragraph of this Agreement.

               "Secured Debt Documents" shall mean and include each of this
Agreement, the Revolving Credit Agreement, the other Revolving Credit Documents,
the Senior Note Documents, the HET/JCC Agreement and the other Minimum Payment
Guaranty Documents and all Shared Security Documents.

               "Senior Note Creditors" shall have the meaning provided in the
first paragraph of this Agreement.

               "Senior Note Documents" shall have the meaning provided in the
Recitals to this Agreement.

               "Senior Note Guaranty" shall have the meaning provided in the
Recitals to this Agreement.

               "Senior Note Holders" shall have the meaning provided in the
first paragraph of this Agreement.

               "Senior Note Indenture" shall have the meaning provided in the
Recitals to this Agreement.

<PAGE>   30

                                                                        Page 26

               "Senior Note Trustee" shall mean Wells Fargo Bank Minnesota,
National Association, in its capacity as trustee, pursuant to the Senior Note
Indenture, and any successor thereof as such trustee.

               "Senior Notes" shall have the meaning provided in the Recitals to
this Agreement.

               "Termination Date" shall have the meaning provided in Section
10.9 of this Agreement.

                                    ARTICLE X

                                  MISCELLANEOUS

               10.1. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed as follows:

                  (a) if to any Assignor, at the address set forth opposite its
         signature below;

                  (b) if to the Collateral Agent:

                      Attention: The Bank of New York
                      10161 Centurion Parkway
                      Jacksonville, FL
                      Attention:  Cynthia Moore
                      Telephone No.:  1-800-705-0384

                  (c) if to any Minimum Payment Guarantor, at the address set
         forth in the Intercreditor Agreement;

                  (d) if to any Revolver Creditor, at the address set forth in
         the Intercreditor Agreement;

                  (e) if to any Senior Note Creditor, to the Senior Note Trustee
         at the address set forth in the Intercreditor Agreement;

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 or, as to any
Secured Creditor, as may otherwise be specified in the applicable Secured Debt
Document.

               10.2. Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
except in accordance with the terms of Section 16 of the Intercreditor
Agreement.

<PAGE>   31

                                                                        Page 27

               10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, the Intercreditor Agreement or
any other Secured Debt Document except as specifically set forth in a waiver
granted pursuant to Section 10.2 hereof; (c) any amendment to or modification of
any Secured Debt Document or any security for any of the Obligations; whether or
not any Assignor shall have notice or knowledge of any of the foregoing; or (d)
any defect or any invalidity of this Agreement as same applies to any Assignor.

               10.4. Successors and Assigns. This Agreement shall be binding
upon each Assignor and its successors and assigns and shall inure to the benefit
of the Collateral Agent and each Secured Creditor and their respective
successors and assigns, provided that no Assignor may transfer or assign any or
all of its rights or obligations hereunder except pursuant to an amendment to
the terms of this Agreement effected in accordance with the requirements of
Section 10.2 hereof. All agreements, statements, representations and warranties
made by each Assignor herein or in any certificate or other instrument delivered
by such Assignor or on its behalf under this Agreement shall be considered to
have been relied upon by the Secured Creditors and shall survive the execution
and delivery of this Agreement and the other Secured Debt Documents regardless
of any investigation made by the Secured Creditors or on their behalf.

               10.5. Headings. The headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.

               10.6. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

               10.7. GOVERNING LAW. EXCEPT AS MAY BE REQUIRED PURSUANT TO
SECTIONS 6.3(b) THROUGH 6.3(f) HEREOF, THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

               10.8. Assignors' Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral.

               10.9. Termination; Release. (a) After the Termination Date, this
Agreement and the security interests created hereby shall terminate (provided
that all indemnities set forth herein

<PAGE>   32

                                                                        Page 28

including, without limitation, in Article VIII hereof, shall survive any such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral of
such Assignor as may be in the possession of the Collateral Agent and as has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement. As used in this Agreement, "Termination Date" shall mean the date
upon which no obligations remain pursuant to the HET/JCC Agreement or any other
Minimum Payment Guaranty Documents and all Minimum Payment Guaranties have been
terminated, the total commitments under the Revolving Credit Agreement have been
terminated, all Minimum Payment Guaranties have been terminated, no Note under
the Revolving Credit Agreement is outstanding (and all Loans thereunder have
been repaid in full), all letters of credit issued under the Revolving Credit
Agreement have been terminated, no Senior Notes are outstanding and all
Obligations then owing have been paid in full.

               (b) The Collateral Agent shall release any or all of the
Collateral in accordance with the terms of Section 17 of the Intercreditor
Agreement. Furthermore, one or more Assignors (other than JCC Holding and JCC)
may be released from time to time as Assignors hereunder in accordance with the
terms of Section 17 of the Intercreditor Agreement.

               10.10. Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with JCC and the
Collateral Agent.

               10.11. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement and the Intercreditor Agreement all items of the
Collateral at any time received under this Agreement. It is expressly understood
and agreed that the obligations of the Collateral Agent as holder of the
Collateral and interest therein and with respect to the disposition thereof, and
otherwise under this Agreement, are only those expressly set forth in this
Agreement and the Intercreditor Agreement.

               10.12. Gaming Regulations. This Agreement and the security
interests granted hereby and any remedies contemplated hereby, are and shall
remain subject to the Louisiana Economic Development and Gaming Corporation Act,
La. R.S. 27:1 et seq., La. R.S. 27:201 et seq. and the rules and regulations
thereunder, as amended from time to time (collectively, the "Louisiana Gaming
Regulations"), and the exercise of remedies hereunder will be subject to the
Louisiana Gaming Regulations.

               10.13. Additional Assignors. It is understood and agreed that any
Subsidiary of JCC Holding that is required to execute a counterpart of this
Agreement after the date hereof pursuant to any Secured Debt Document shall
automatically become an Assignor hereunder by executing a counterpart hereof and
by delivering the same to the Collateral Agent.

<PAGE>   33

                                                                        Page 29

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

               10.15. No Third Party Beneficiaries. This Agreement is entered
into solely for the benefit of the parties hereto and their respective
successors and assigns and for the benefit of the Secured Creditors from time to
time and their respective successors and assigns and, except for the Secured
Creditors and their successors and assigns, there shall be no third party
beneficiaries hereof, nor shall any Person other than the parties hereto and
their respective successors and assigns, and the Secured Creditors and their
respective successors and assigns, be entitled to enforce the provisions hereof
or have any claims against any party hereto (or any Secured Creditor) or their
successors and assigns arising from, or under, this agreement.

<PAGE>   34

                                                                        Page 30

               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered by their duly authorized officers, as the case may
be, as of the date first above written.

                                   JCC HOLDING COMPANY,
                                     as Assignor

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

                                   JAZZ CASINO COMPANY, L.L.C.,
                                     as Assignor

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

                                   JCC CANAL DEVELOPMENT, L.L.C.,
                                        as Assignor

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

                                   JCC FULTON DEVELOPMENT, L.L.C.,
                                        as Assignor

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

<PAGE>   35

                                                                        Page 31

                                   JCC DEVELOPMENT COMPANY, L.L.C.,
                                        as Assignor

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

<PAGE>   36

                                                                        Page 32

                                   THE BANK OF NEW YORK,
                                     as Collateral Agent

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

<PAGE>   37

                                                               ANNEX A
                                                                 to
                                                         Security Agreement

                           SCHEDULE OF PERMITTED LIENS

1.   UCC-1     Financing Statement 09-986447, Lease
               Filed: March 31, 2000, Caddo Parish, Louisiana
               Debtor: Jazz Casino Company
               Secured Party: Conseco Finance Vendor Services Corp.

                 - Assignment 09-995126, filed February 14, 2001
                   Secured Party: Wells Fargo Financial Leasing, Inc.

2.   UCC-1     Financing Statement 09-985628, Lease
               Filed: February 29, 2000, Caddo Parish, Louisiana
               Debtor: Jazz Casino Company, LLC
               Secured Party: Conseco Finance Vendor Services Corp.

                 - Assignment 09-995115, filed February 14, 2001
                   Secured Party: Wells Fargo Financial Leasing, Inc.
<PAGE>   38

                                                                   ANNEX B
                                                                      to
                                                              Security Agreement

            SCHEDULE OF CHIEF EXECUTIVE OFFICES AND RECORD LOCATIONS
                                 (Section 2.4)

<TABLE>
<CAPTION>
                                                                                   Jurisdiction of
                                                               Organizational      Organization or
Assignor                               Address                    Structure         Incorporation
--------                               -------                 --------------      ---------------
<S>                          <C>                               <C>                 <C>
JCC Holding Company          One Canal Place, Suite 900          Corporation          Delaware
                             New Orleans, Louisiana 70130

Jazz Casino Company          One Canal Place, Suite 900          Limited              Louisiana
L.L.C.                       New Orleans, Louisiana 70130        liability
                                                                 company

JCC Canal Development,       One Canal Place, Suite 900          Limited              Louisiana
L.L.C.                       New Orleans, Louisiana 70130        liability
                                                                 company

JCC Fulton                   One Canal Place, Suite 900          Limited              Louisiana
Development, LLC             New Orleans, Louisiana 70130        liability
                                                                 company

JCC Development,             One Canal Place, Suite 900          Limited              Louisiana
L.L.C.                       New Orleans, Louisiana 70130        liability
                                                                 company
</TABLE>
<PAGE>   39

                                                                   ANNEX C
                                                                     to
                                                              Security Agreement

                  SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
                                 (Section 2.5)

All Assignors have Inventory and Equipment at the locations set forth below.

<TABLE>
<CAPTION>
NAME OF ASSIGNOR                  LOCATION                            ADDRESS                             FUNCTION
----------------                  --------                            -------                             --------
<S>                       <C>                               <C>                                        <C>

                          Offices of Jazz Casino            One Canal Place, Suite 900                 Casino Owner
                          Company, L.L.C.                   New Orleans, Louisiana 70130               offices

                          Offices of Harrah's New           One Canal Place, Suite 900                 Casino Manager
                          Orleans Management                New Orleans, Louisiana 70130               offices
                          Company

                          Harrah's New Orleans Casino       4 Canal Place                              Casino premises
                          Premises                          New Orleans, Louisiana 70130

                          Poydras Street Support            On the site bounded by Fulton              Casino parking
                          Facility Premises                 Street, Poydras Street,                    facility
                                                            Convention Center Boulevard
                                                            and Girod Street
                                                            New Orleans, Louisiana 70130

                          Employee and Bus Parking          On the site bounded by St.                 Ancillary parking
                          Support Facility Premises         Louis Street, Lafitte Street and           facilities
                                                            N. Claiborne and N. Prieur
                                                            Street

                          Warehouse                         925 S. White                               Storage
                                                            New Orleans, Louisiana 70125

                          CP3 Parking Lot at Canal          3 Canal Place                              Parking Lot
                                                            New Orleans, Louisiana 70130

                          Recruiting Office                 512 S. Peters                              Recruiting and
                                                            New Orleans, Louisiana 70130               Human Resources

                          Dealer School                     201 Tchopitoulis                           Dealer School
                                                            New Orleans, Louisiana 70130

</TABLE>

<PAGE>   40

                                                                       ANNEX D

                       FORM OF CONSENT OF DEPOSITARY BANK

                                                            ------------, ----

[Name and Address of Pledged Account Bank]

re Security Agreement

Ladies and Gentlemen:

               This will confirm the arrangements regarding the account of [name
of Assignor] (the "Assignor"), Account Number ______, which is currently
maintained with you (the "Account").

               Pursuant to a Security Agreement, dated as of March 30, 2001, as
amended from time to time (the "Agreement"), between the Assignor, various other
Assignors and , as Collateral Agent (the "Collateral Agent"), the Assignor has
granted to the Collateral Agent a security interest in all cash, securities,
certificates, checks, drafts, investments and instruments from time to time
deposited in the Account.

               All monies, securities, certificates, checks, drafts, investments
and instruments in the Account will become subject to the security interest
under the Agreement and subject to the terms of this letter arrangement as soon
as deposited therein. The Account shall not be subject to deduction, setoff,
banker's lien, or any other right in favor of any person other than the
Collateral Agent. The undersigned hereby waives any contractual or statutory
security interest, banker's lien and/or right of offset the undersigned has in
the Account and acknowledges receipt of the Security Agreement. The undersigned
further agrees to mark its records to reflect the security interest in favor of
the Collateral Agent in accordance with the Security Agreement and confirms that
its records indicate that no other party has been granted a security interest in
the Account The undersigned further agrees not to acknowledge or accept any
other parties' security interest in the Account or to enter into any other
agreement granting or acknowledging any other parties' control over or right to
make entitlement orders with respect to the Account.

               Notwithstanding the security interest in favor of the Collateral
Agent, if the conditions set forth in Sections 5.3(e), 7.1(c) and 19.8 of the
Casino Lease (as defined the Senior Note Indenture) between Assignors and
Landlord occur, Landlord shall become the assignee and shall have the sole right
to draw upon and use all funds held in the Capital Replacement Fund for the
purposes, to the extent, and subject to the limitations, set forth in the
aforesaid Casino Lease. The Landlord's right to draw upon and use the Capital
Replacement Fund, as assignee upon the occurrence of such conditions shall be
superior to the rights of the Collateral Agent as set forth in

<PAGE>   41
                                                                        Page 2

Section 19.15 of the Casino Lease. Nothing in this paragraph shall act to
acknowledge any interest or right of Landlord in any Account other than the
Capital Replacement Account.

               Pursuant to the Agreement, the Assignor also has granted the
Collateral Agent an irrevocable power of attorney to give the notice referred to
in the immediately succeeding sentence. Until you have received written notice
from an officer of the Collateral Agent stating that an Event of Default as
defined in the Agreement has occurred, the Assignor shall be entitled to make
withdrawals from the Account and to invest the funds therein. Upon your receipt
of such a written notice from an officer of the Collateral Agent directing you
to do so, at the end of each business day until further written notice only from
an officer of the Collateral Agent, each day's deposit to the Account are to be
sent by wire and intact to the account designated below or to such other account
designated in writing by an officer of the Collateral Agent:

               [Address of Account]

               For Credit: [name of Assignor]

               Account #

               This new arrangement will start upon your agreement to the
foregoing. This agreement cannot be amended or terminated without at least
thirty (30) days prior written notice to the Collateral Agent.

                                            Very truly yours,

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

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

ACCEPTED this ____ day of

----------------, ----:

[name of Assignor],
  as Assignor

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

[NAME OF PLEDGED ACCOUNT BANK]

<PAGE>   42
                                                                        Page 3

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

<PAGE>   43
                                                                    ANNEX E
                                                                      to
                                                              Security Agreement

                                PLEDGED ACCOUNTS
                                (Section 2.6(a))

BANK ACCOUNTS

<TABLE>
<CAPTION>
                                                                Account
    Financial Institution              Account Title            Number         GL Number
    ---------------------              -------------           ---------       ---------
<S>                            <C>                             <C>         <C>
Jazz Casino Company, LLC; Casino Accounts (E30)

Chase Manhattan Bank           Jazz Casino Co LLC Medical      475006070   E30-0000-1030-020
Church Street Station          Benefits Account
P.O. 932
New York, NY 10008-0932

Chase Manhattan Bank           Jazz Casino Co LLC Dental       475002709   E30-0000-1030-021
Church Street Station          Benefits Account
P.O. 932
New York, NY 10008-0932

Hibernia National Bank         Jazz Casino Company, LLC        812534211   E30-0000-1030-000
313 Carondelet Street          Project Disbursement Account
New Orleans, LA 70130

Hibernia National Bank         Jazz Casino Company, LLC        542028035   E30-0000-1030-010
313 Carondelet Street          Casino A/P Disbursement
New Orleans, LA 70130          Account

Hibernia National Bank         Jazz Casino Company, LLC        812533665   E30-0000-1030-038
313 Carondelet Street          Project Account
New Orleans, LA 70130

Hibernia National Bank         Jazz Casino Company, LLC        542028043   E30-0000-1030-062
313 Carondelet Street          Casino Cage Disbursement
New Orleans, LA 70130

Hibernia National Bank         Jazz Casino Company, LLC        812533975   E30-0000-1030-070
313 Carondelet Street          Casino Operating Account
New Orleans, LA 70130

Hibernia National Bank         Jazz Casino Company, LLC        882130002   E30-0000-1030-100
313 Carondelet Street          Casino Telecheck Account
New Orleans, LA 70130

Hibernia National Bank         Jazz Casino Company, LLC        542028069   E30-0000-1030-585
313 Carondelet Street          Casino Payroll Disbursement
New Orleans, LA 70130

Hibernia National Bank         Jazz Casino Company, LLC        812534203   E30-0000-1030-585
313 Carondelet Street          Project Payroll Disbursement
New Orleans, LA 70130          Account

Hibernia National Bank         Jazz Casino Company, LLC        882129748   E30-0000-1040-010
313 Carondelet Street          Capital Reserve Account
New Orleans, LA 70130

Hibernia National Bank         Jazz Casino Company, LLC        542029724
313 Carondelet Street          Medical Insurance
New Orleans, LA 70130          Disbursement Account

Hibernia National Bank         Jazz Casino Company, LLC        882129721   E31-0000-1030-000
313 Carondelet Street          Corporate Operating Account
New Orleans, LA 70130

Hibernia National Bank         Jazz Casino Company, LLC        882294722
313 Carondelet Street          Net Cash Proceeds Account
New Orleans, LA 70130

Hibernia National Bank         Jazz Casino Company, LLC        542028077   E31-0000-1030-010
313 Carondelet Street          Corporate A/P Disbursement
New Orleans, LA 70130          Account

Dryades Savings Bank           Jazz Casino Company, LLC        800103797
P.O. Box 56009                 C.O.P.E. Grant Disbursement
New Orleans, LA 70156          Account Checking

Dryades Savings Bank           Jazz Casino Company, LLC        840100375
P.O. Box 56009                 C.O.P.E. Grant Disbursement
New Orleans, LA 70156          Account Money Market

JCC Holding Company

Hibernia National Bank         Jazz Casino Company, LLC        812533835   01-10100-00-00
313 Carondelet Street
New Orleans, LA 70130

JCC Development, L.L.C.

Hibernia National Bank         JCC Development A/P             542028086   20-10100-00-00
313 Carondelet Street          Disbursement Account
New Orleans, LA 70130

Hibernia National Bank         JCC Development                 812512978   20-10100-00-00
313 Carondelet Street          Operating Account
New Orleans, LA 70130

JCC Fulton Development, L.L.C.

Hibernia National Bank         JCC Fulton Development          812533592   30-10100-00-00
313 Carondelet Street          Operating Account
New Orleans, LA 70130

JCC Canal Development, L.L.C.

Hibernia National Bank         JCC Canal Development           812533606   40-10100-00-00
313 Carondelet Street          Operating Account
New Orleans, LA 70130
</TABLE>
<PAGE>   44

                                                                  ANNEX F
                                                                     to
                                                             Security Agreement

                   SCHEDULE OF TRADE, FICTIONS AND OTHER NAMES

Harrah's New Orleans Casino

Harrah's Jazz Casino

Harrah's New Orleans Jazz Casino
<PAGE>   45

                                                                  ANNEX G
                                                                     to
                                                             Security Agreement

                   I. SCHEDULE OF U.S. TRADEMARK REGISTRATIONS

                      None

             II. SCHEDULE OF PENDING APPLICATIONS FOR U.S. TRADEMARK
                  REGISTRATIONS ON THE BASIS OF USE IN COMMERCE
                             UNDER 17 USC SECTION 1051(a)

                      None

             III. SCHEDULE OF PENDING APPLICATION FOR U.S. TRADEMARK
                 REGISTRATION ON THE BASIS OF INTENT TO USE THE
                    MARK IN COMMERCE UNDER 17 USC SECTION 1051(b)

                     None

<PAGE>   46

                                                                  ANNEX H
                                                                     to
                                                             Security Agreement

                 SCHEDULE OF LICENSE AGREEMENTS AND ASSIGNMENTS

        I.   License Agreements
             ------------------
             None

        II.  Assignments
             -----------
             None
<PAGE>   47

                                                                   ANNEX I
                                                                     to
                                                              Security Agreement

                      SCHEDULE OF PATENTS AND APPLICATIONS

          I.   Patents
               -------

               None

          II.  Patent Applications
               -------------------

               None

<PAGE>   48

                                                                       Page 2

Application Serial No.                      Date Filed
----------------------                      ----------

<PAGE>   49

                                                                    ANNEX J
                                                                      to
                                                              Security Agreement

                     SCHEDULE OF COPYRIGHTS AND APPLICATIONS

          I.   Copyrights
               ----------

               None

          II.  Copyright Applications
               ----------------------

               None
<PAGE>   50

                                                                   ANNEX K
                                                                     to
                                                              Security Agreement

                         ASSIGNMENT OF SECURITY INTEREST
                     IN UNITED STATES TRADEMARKS AND PATENTS

               FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of
which are hereby acknowledged, [Assignor], a ___________
[corporation/partnership/limited liability company] (the "Assignor") with
principal offices at _____________, hereby assigns and grants to The Bank of New
York, as Collateral Agent, with principal offices at 10161 Centurion Prkwy.,
Jacksonville, FL 32256 (the "Assignee"), a security interest in (i) all of the
Assignor's right, title and interest in and to the United States trademarks,
trademark registrations and trademark applications (the "Marks") set forth on
Schedule A attached hereto, (ii) all of the Assignor's right, title and interest
in and to the United States patents (the "Patents") set forth on Schedule B
attached, in each case together with (iii) all Proceeds (as such term is defined
in the Security Agreement referred to below) and products of the Marks and
Patents, (iv) the goodwill of the businesses symbolized by the Marks and (v) all
causes of action arising prior to or after the date hereof for infringement of
any of the Marks and Patents or unfair competition regarding the same.

               THIS ASSIGNMENT is made to secure the full and prompt performance
and payment of all the Obligations, as such term is defined in the Security
Agreement among the Assignor, the other assignors from time to time party
thereto and the Assignee, dated as of March 30, 2001 (as amended, restated or
otherwise modified, from time to time, the "Security Agreement"). Upon the
occurrence of the Termination Date (as defined in the Security Agreement), the
Assignee shall, upon such satisfaction, execute, acknowledge, and deliver to the

<PAGE>   51
                                                                    Page 2

Assignor an instrument in writing releasing the security interest in the Marks
and Patents acquired under this Assignment.

               This Assignment has been granted in conjunction with the security
interest granted to the Assignee under the Security Agreement. The rights and
remedies of the Assignee with respect to the security interest granted herein
are without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Assignment are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.

<PAGE>   52
                                                                    Page 3

               IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the ____ day of ____________, 200_.

                                     [ASSIGNOR], as Assignor

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

                                     THE BANK OF NEW YORK
                                       as Collateral Agent, Assignee

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

<PAGE>   53

STATE OF NEW YORK             )
                              )  ss.:
COUNTY OF NEW YORK            )

               On this ____ day of __________, 200_ before me personally came
_________________ who, being by me duly sworn, did state as follows: that he is
_______________ of [Assignor], that he is authorized to execute the foregoing
Assignment on behalf of said corporation and that he did so by authority of the
Board of Directors of said corporation.

                                        -------------------------
                                              Notary Public

<PAGE>   54

STATE OF NEW YORK             )
                              ) ss.:
COUNTY OF NEW YORK            )

                  On this ____ day of ___________, 200_, before me personally
came _____________________ who, being by me duly sworn, did state as follows:
that he is __________________ of The Bank of New York, that he is authorized to
execute the foregoing Assignment on behalf of said corporation and that he did
so by authority of the Board of Directors of said corporation.

                                        -------------------------
                                              Notary Public

<PAGE>   55

                                                                    SCHEDULE A

<TABLE>
<CAPTION>
          MARK                   REG. NO.                   REG. DATE
          ----                   --------                   ---------
<S>                              <C>                        <C>
</TABLE>

<PAGE>   56

                                                                    SCHEDULE B

<TABLE>
<CAPTION>
PATENT                         PATENT NO.                   ISSUE DATE
------                         ----------                   ----------
<S>                            <C>                          <C>
</TABLE>

<PAGE>   57

                                                                   ANNEX L
                                                                     to
                                                              Security Agreement

                         ASSIGNMENT OF SECURITY INTEREST
                           IN UNITED STATES COPYRIGHTS

               WHEREAS, [Assignor], a ____________
[corporation/partnership/limited liability company] (the "Assignor"), having its
chief executive office at ________________, is the owner of all right, title and
interest in and to the United States copyrights and associated United States
copyright registrations and applications for registration set forth in Schedule
A attached hereto;

               WHEREAS, The Bank of New York, as Collateral Agent, having its
principal offices at 10161 Centurion Prkwy., Jacksonville, FL 32256 (the
"Assignee"), desires to acquire a security interest in, and lien on, said
copyrights and copyright registrations and applications therefor and the
goodwill of the business symbolized by said copyrights; and

               WHEREAS, the Assignor is willing to assign to the Assignee, and
to grant to the Assignee a security interest in and lien upon the copyrights and
copyright registrations and applications therefor described above;

               NOW, THEREFORE, for good and valuable consideration, the receipt
of which is hereby acknowledged, and subject to the terms and conditions of the
Security Agreement, dated as of March 30, 2001, among the Assignor, the other
assignors from time to time party thereto and the Assignee (as amended, restated
or otherwise modified, from time to time, the "Security Agreement"), the
Assignor hereby assigns to the Assignee, and grants to the Assignee a security
interest in and a lien upon, the copyrights and copyright registrations and
applications therefor set forth in Schedule A attached hereto and the goodwill
of the business symbolized by said copyrights.

               This Assignment has been granted in conjunction with the security
interest granted to the Assignee under the Security Agreement. The rights and
remedies of the Assignee with respect to the security interest granted herein
are without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Assignment are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.

<PAGE>   58
                                                                        Page 2

               Executed at New York, New York, the __ day of _________, 200_.

                                     [ASSIGNOR], as Assignor

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

                                     THE BANK OF NEW YORK,
                                       as Assignee

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

<PAGE>   59

STATE OF NEW YORK                   )
                                    )  ss.:
COUNTY OF NEW YORK                  )

               On this __ day of ___________, 200_ before me personally came
_______________, who being duly sworn, did depose and say that he is
___________________ of [Assignor], that he is authorized to execute the
foregoing Assignment on behalf of said corporation and that he did so by
authority of the Board of Directors of said corporation.

                                                  -------------------------
                                                         Notary Public

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