Document:

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                                                                     Exhibit 4.7

MORTGAGE, LEASEHOLD MORTGAGE          *    UNITED STATES OF AMERICA
     AND ASSIGNMENTS OF
      LEASES AND RENTS                *    STATE OF TEXAS
 LEASEHOLD MORTGAGE

          BY                          *    COUNTY OF DALLAS

HOLLYWOOD CASINO SHREVEPORT           *

***************************************

          BE IT KNOWN, that on this 14th day of June, 2001, but effective as of
June 15, 2001, before the undersigned Notary Public commissioned and qualified,
and in the presence of the undersigned witnesses, personally came and appeared:

               HOLLYWOOD CASINO SHREVEPORT, a Louisiana
               general partnership, having a mailing address
               of Two Galleria Tower, Suite 2200, 13455 Noel
               Road, Dallas, Texas 75240 and a federal
               taxpayer identification number of 72-1225563,
               appearing herein through its undersigned
               representative, duly authorized hereunto
               pursuant to a resolution of its managing
               general partner, HCS I, Inc., a Louisiana
               corporation, a certified extract of which is
               attached hereto as Exhibit "A",

(the "Mortgagor"), who declared that Mortgagor does by these presents declare
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and acknowledge an indebtedness unto:

               STATE STREET BANK AND TRUST COMPANY, a
               Massachusetts trust company, as trustee for
               the benefit of the holders of the New Notes
               (as hereinafter defined) issued pursuant to
               that certain Indenture dated as of June 15,
               2001 (as amended, supplemented, restated or
               otherwise modified from time to time, the
               "New Indenture"), by and among Mortgagor and
                -------------
               Shreveport Capital Corporation, as issuers
               (the "Issuers"), and Mortgagee (as
                     -------
               hereinafter defined), as trustee, having a
               mailing address of Two Avenue De Lafayette,
               Boston, Massachusetts 02111-1724, Attention:
               Corporate Trust Administration, and a federal
               taxpayer identification number of 04-1867445,

(in such capacity, and together with any successor in such capacity, the
"Mortgagee"), as Mortgagee for the benefit of the holders of those certain
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$39,000,000 in the aggregate principal amount of 13% Senior Secured Notes with
Contingent Interest due 2006 ( the "New Notes," and
                                    ---------
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such holders the "Noteholders") issued pursuant to the New Indenture, which
                  -----------
accepts this Mortgage (as hereinafter defined).

                                   RECITALS

A.      Mortgagor is an issuer of the New Notes pursuant to the New Indenture.

A.      Previously, the Issuers and certain Guarantors (as defined therein)
entered into an Indenture dated as of August 10, 1999 (the "Existing Indenture")
                                                            ------------------
with State Street Bank and Trust Company, a Massachusetts trust company (the
"Existing Trustee") pursuant to which the Issuers issued $150,000,000 of their
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13% First Mortgage Notes due 2006 with Contingent Interest (as amended,
supplemented, restated, exchanged, replaced or otherwise modified from time to
time, collectively, the "Existing Notes").
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A.      Certain of the Mortgaged Property (as hereinafter defined) is subject to
one or more liens in favor of the holders of the Existing Notes.  The nature and
priority of the liens in favor of the holders of the New Notes and the holders
of the Existing Notes are governed in certain respects by the Intercreditor
Agreements (as hereinafter defined).

A.      As a material inducement to the Noteholders to purchase the New Notes
and to Mortgagee to enter into the New Indenture and in order to secure the full
and punctual payment and performance of the Obligations (as hereinafter
defined), Mortgagor has agreed to execute and deliver this Mortgage and to grant
a mortgage lien and assignment in and to the collateral described herein.

                                   ARTICLE 1

                             PURPOSES: DEFINITIONS
                             ---------------------

     1.1  Purposes.  Mortgagor declares that this Mortgage is granted to
          --------
secure the due and punctual payment and performance of the Obligations (as
hereinafter defined).  This Mortgage may be construed and enforced variously
simultaneously as a mortgage, assignment, pledge or contract as may be
appropriate under applicable law from time to time in order to effectuate fully
the purposes and agreements set forth herein.

          The maximum amount of the Obligations that may be outstanding at any
time and from time to time that this Mortgage secures, including, without
limitation, as an assignment of Space Leases (as hereinafter defined) and Rents
(as hereinafter defined), is $75,000,000.00, including all principal plus
interest and any expenses and advances incurred by Mortgagee and all other
amounts included within the indebtedness secured hereunder.  This Mortgage is
and shall remain effective, even though the amount of the Obligations secured
hereunder may now be zero or may be reduced to zero, until all of the amounts,
liabilities and obligations, present and future, comprising the Obligations have
been incurred and are extinguished.  When no Obligations exist and Mortgagee is
not bound to permit any Obligations to be incurred, this

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Mortgage may be terminated by Mortgagor in any manner permitted by this Mortgage
or the New Indenture.

     1.2  Definitions.  As used in this Mortgage, the following terms have the
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meanings hereinafter set forth:

          "Appurtenant Rights" means all single tenements, hereditaments, rights
(including all batture rights, rights of accretion and riparian rights),
reversions, remainders, development rights, privileges, benefits, servitudes
(including, without limitation, that certain Grant of Right of Use (Personal
Servitude) by the City of Shreveport in favor of Mortgagor dated as of May 20,
1999, recorded in the Conveyance Records of Caddo Parish, Louisiana on September
21, 1999 as Registry No. 1670766 and the Conveyance Records of Bossier Parish,
Louisiana on September 3, 1999 as Registry No. 686937, the "Personal
                                                            --------
Servitude"), easements (in gross or appurtenant), rights-of-way, privileges,
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prescriptions, advantages, strips of land, streets, ways, alleys, passages,
sewer rights, water courses, water rights and powers, and all appurtenances
whatsoever and claims or demands of Mortgagor at law or in equity in any way
belonging, benefitting, relating, attaching or appertaining to the Land, the
airspace over the Land, the Improvements or any of the Mortgaged Property
encumbered by this Mortgage, or which hereafter shall in any way belong, relate
or be appurtenant thereto, whether now owned or hereafter acquired by Mortgagor.

          "Bankruptcy" means any proceeding under Bankruptcy Law.

          "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for  the relief of debtors.

          "Casino Ground Lease" means that certain Ground Lease dated as of May
19, 1999 by and between the City of Shreveport, as landlord, and Mortgagor
(formerly known as QNOV), as tenant, recorded on July 13, 1999, under Registry
No. 1663803 of the records of Caddo Parish, Louisiana, and under Registry No.
683243 of the records of Bossier Parish, Louisiana.

          "Environmental Laws" means any and all laws and Legal Requirements
relating to environmental matters, pollution, or hazardous substances,
including: the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. (S)(S) 9601-9657; the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. (S)(S) 6901 et seq.; the Hazardous Materials
Transportation Act (49 U.S.C. (S)(S) 1801 et seq.); the Louisiana Environmental
Quality Act, La. R.S. 30:2001-2376; the Louisiana Air Control Law, La. R.S.
30:2051-2063, the Louisiana Water Control Law, La. R.S. 30: 2071-2088; the
Louisiana Hazardous Waste Control Law, La. R.S. 30:2171-2207; the Louisiana
Inactive and Abandoned Hazardous Waste Site Law, La. R.S. 30:2221-2226; the
Liability for Hazardous Substance Remedial Action, La. R.S. 30:2271-2290; any
other laws that may form the basis of any claim, action, demand, suit,

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proceeding, hearing, or notice of violation that is based on or related to the
generation, manufacture, processing, distribution, use, existence, treatment,
storage, disposal, transport, or handling, or the emission, discharge, release,
or threatened release into the environment, of any hazardous substance, or other
threat to the environment.

          "Event of Default" has the meaning set forth in Section 7.1 hereof.

          "FF&E Collateral" or "FF&E" has the meaning set forth in the Security
Agreement.

          "Governmental Authority" means any agency, authority, board, bureau,
commission, department, office, public entity, or instrumentality of any nature
whatsoever of the United State federal or foreign government, any state,
province or any city or other political subdivision or otherwise, whether now or
hereafter in existence, or any officer or official thereof, including, without
limitation, any Gaming Authority.

          "Hazardous Materials" means hazardous wastes, hazardous substances,
hazardous  constituents, toxic substances or related materials, whether solids,
liquids or gases, including but not  limited to substances defined as "hazardous
wastes," "hazardous substances," "toxic substances,"  "pollutants,"
"contaminants," chemicals known to cause cancer or reproductive toxicity,
"radioactive materials," or other similar designations in, or otherwise subject
to regulation under any Environmental Laws now or hereafter in effect.

          "Holder" means a Person in whose name a New Note is registered.

          "Hollywood Riverboat" means that certain riverboat gaming vessel known
as "Hollywood Dreams", Official Number 1099497.

          "Imposition" means any taxes, assessments, water rates, sewer rates,
maintenance charges, other governmental impositions and other charges now or
hereafter levied or assessed or imposed against the Mortgaged Property or any
part thereof.

          "Improvements" means (1) all the buildings, structures, other
constructions, facilities and improvements of every nature whatsoever now or
hereafter situated on the Land or on any real or immovable property encumbered
hereby, and (2) all fixtures, machinery, appliances, goods, building or other
materials, equipment, including without limitation all gaming equipment and
devices, and all machinery, equipment, engines, appliances and fixtures for
generating or distributing air, water, heat, electricity, light, fuel or
refrigeration, or for ventilating or sanitary purposes, or for the exclusion of
vermin or insects, or for the removal of dust, refuse or garbage; all wall-beds,
wall-safes, built-in furniture and installations, shelving, lockers, partitions,
doorstops, vaults, motors, elevators, dumb-waiters, awnings, window shades,
venetian blinds, light fixtures, fire hoses and brackets and boxes for the same,
fire sprinklers, alarm, surveillance and security system, computers, drapes,
drapery rods and brackets, mirrors,

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mantels, screens, linoleum, carpets and carpeting, plumbing, bathtubs, sinks,
basins, pipes, faucets, water closets, laundry equipment, washers, dryers, ice-
boxes and heating units; all kitchen and restaurant equipment, including but not
limited to silverware, dishes, menus, cooking utensils, stoves, refrigerators,
ovens, ranges, dishwashers, disposals, water heaters, incinerators, furniture,
fixtures and furnishings, communication systems, and equipment; all cocktail
lounge supplies, including but not limited to bars, glassware, bottles and
tables used in connection with the Land; all chaise lounges, hot tubs, swimming
pool heaters and equipment and all other recreational equipment (computerized
and otherwise), beauty and barber equipment, and maintenance supplies used in
connection with the Land; all amusement rides and attractions attached to the
Land, all specifically designed installations and furnishings, and all
furniture, furnishings and personal property of every nature whatsoever now or
hereafter owned or leased by Mortgagor or in which Mortgagor has any rights or
interest and located in or on, or attached to, or used or intended to be used or
which are now or may hereafter be appropriated for use on or in connection with
the operation of the Land or any real or personal property encumbered hereby or
any other Improvements, or in connection with any construction being conducted
or which may be conducted thereon, and all extensions, additions, accessions,
improvements, betterments, renewals, substitutions, and replacements to any of
the foregoing, and all of the right, title and interest of Mortgagor in and to
any such property, which, to the fullest extent permitted by law, shall be
conclusively deemed fixtures and improvements and a part of the real or
immovable property hereby encumbered. Without limiting the generality of the
foregoing, Improvements shall include: (i) any Vessel and its now existing or
hereafter arising components and appurtenances, including, without limitation,
the Hollywood Riverboat, to the extent such Vessel is or may be deemed to be a
building or a component part of a building, or otherwise to be an improvement to
or on the Land or any other real or immovable property encumbered hereby; and
(ii) all buildings, improvements and other constructions situated on the Land,
and all component parts of the Land, and all component parts of any building,
improvement or other construction located on the Land, now or hereafter a part
of or attached to the foregoing or used in connection therewith.

          "Indemnified Parties" means Mortgagee, the Noteholders and their
respective officers, directors, employees, agents, and attorneys.

          "Insolvent" means with respect to any Person or entity, that such
Person or entity shall be deemed to be insolvent if he or it is unable to pay
his or its debts a they become due and/or if the fair market value of his or its
assets does not exceed his or its aggregate liabilities.

          "Intercreditor Agreements" means (i) that certain Pari Passu
Intercreditor Agreement, dated as of June 15, 2001, among the Existing Trustee,
the Mortgagee and the Mortgagor, and (ii) that certain FF&E Intercreditor
Agreement, dated as of June 15, 2001, among the Existing Trustee, the Mortgagee
and the Mortgagor.

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          "Land" means the real property situated in the State of Louisiana,
Parish of Bossier and/or Parish of Caddo, more specifically described in
"Exhibit B" attached hereto and incorporated herein by this reference, including
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any after acquired title thereto.

          "Legal Requirements" means all applicable restrictive covenants,
applicable zoning and subdivision ordinances and building codes, all applicable
health and Environmental Laws and regulations, all applicable gaming laws and
regulations, and all other applicable laws, ordinances, rules, regulations,
judicial decisions, administrative orders, and other requirements of any
Governmental Authority having jurisdiction over Mortgagor, the Mortgaged
Property and/or any Affiliate of Mortgagor, in effect either at the time of
execution of this Mortgage or at any time during the term hereof, including,
without limitation, all Environmental Laws and Gaming Laws.

          "Mortgage" means this Mortgage, Leasehold Mortgage  and Assignment of
Leases and Rents, as it may be increased, amended, restated, supplemented  or
modified from time to time.

          "Mortgaged Property" means all of the property described in Section
2.1 hereof, excluding the New FF&E.

          "Mortgagee" means State Street Bank and Trust Company, a Massachusetts
trust company, as trustee under the New Indenture, and any substitute trustee
designated from time to time under the New Indenture.

          "Mortgagor" means Hollywood Casino Shreveport, a Louisiana general
partnership, and  includes not only the original Mortgagor hereunder, but also
any successors or assigns of the Mortgaged Property, or any part thereof, at any
time and from time to time, as the case requires.

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

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

          "Noteholders" means the holders of the New Notes.

          "Obligations" means (i) the payment when due of indebtedness evidenced
by the New Notes in the principal sum not to exceed at any time outstanding of
$39,000,000.00, interest (including post-petition interest) as set forth in the
New Indenture and the New Notes, and premiums, penalties, and late charges
thereon; (ii) all other indebtedness and other sums

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(including, without limitation, all expenses, attorneys' fees, other fees,
indemnifications, reimbursements, damages, other monetary liabilities, and other
charges) and obligations that may or shall become due hereunder or under the New
Notes, the New Indenture or the other Collateral Documents; and (iii) any and
all renewals, modifications, amendments, extensions for any period, supplements
or restatements of any of the foregoing.

          "Permits" means all applicable authorizations, consents, licenses,
approvals, identification numbers and permits required under Legal Requirements
(including, without limitation, Environmental Laws) required for construction,
operation and occupancy of the Mortgaged Property.

          "Permitted Liens" has the meaning set forth in the Security Agreement.

          "Proceeds" has the meaning assigned to it under the UCC and, in any
event, shall include but not be limited to (i) any and all proceeds of any
insurance (including without limitation property casualty and title insurance),
indemnity, warranty or guaranty payable from time to time with respect to any of
the Mortgaged Property (including without limitation, proceeds attributable to
the insurance loss of the Land, the Improvements and the Appurtenant Rights as
provided under La. R.S. 9:5386); (ii) any and all proceeds in the form of
accounts, security deposits, tax escrows (if any), down payments (to the extent
the same may be pledged under applicable law), collections, contract rights,
documents, instruments, chattel paper, liens and security instruments,
guarantees or general intangibles relating in whole or in part to the Shreveport
Resort and all rights and remedies of whatever kind or nature Mortgagor may hold
or acquire for the purpose of securing or enforcing any obligation due Mortgagor
thereunder; (iii) any and all payments in any form whatsoever made or due and
payable from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Mortgaged Property
by any Governmental Authority; (iv) subject to the absolute assignment contained
herein, the Rents or other benefits arising out of, in connection with or
pursuant to any Space Lease of the Mortgaged Property; and (v) any and all other
amounts from time to time paid or payable in connection with any of the
Mortgaged Property.

          "Rents" means all rents, room revenues, income, receipts, issues,
profits, revenues and maintenance fees, room, food and beverage revenues,
license and concession fees, proceeds and other benefits to which Mortgagor may
now or hereafter be entitled from the Land, the Improvements, the Space Lease or
any property encumbered hereby or any business or other activity conducted by
Mortgagor at the Land or the Improvements.

          "Security Agreement" means that certain Security Agreement dated as of
the date hereof by and between Mortgagor and Mortgagee.

          "Space Leases" means any and all present and future leases, subleases
(including without limitation, that certain Retail Space Lease by and between
Mortgagor, as landlord, and

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Red River Entertainment Company, L.L.C., as tenant, dated as of June 3, 1999, a
memorandum of which was recorded in the records of Caddo Parish, Louisiana as
Registry No. 1674971, and in the records of Bossier Parish, Louisiana as
Registry No. 688884), lettings, licenses, concessions, operating agreements,
management agreements, and all other agreements affecting the Mortgaged Property
that Mortgagor has entered into, taken by assignment, taken subject to, or
assumed, or has otherwise become bound by, now or in the future, that give any
Person the right to conduct its business on, or otherwise use, operate or
occupy, all or any portion of the Land or Improvements, and all guaranties,
letters of credit or other credit enhancement documents of any of the foregoing,
and any leases, agreements or arrangements permitting anyone to enter upon or
use any of the Mortgaged Property to extract or remove natural resources of any
kind, together with all amendments, extensions, and renewals of the foregoing
entered into in compliance with this Mortgage, together with all rental,
occupancy, service, maintenance or any other similar agreements pertaining to
use or occupation of, or the rendering of services of the Land, the Improvements
or any part thereof.

          "Space Lessee(s)" means any and all present and future tenants,
licensees, or other grantees of the Space Leases and any and all guarantors,
sureties, endorsers or others having primary or secondary liability with respect
to such Space Lease.

          "UCC" means Uniform Commercial Code, Commercial Laws - Secured
Transactions La. R.S. 10:9-101-9-605) in the State of Louisiana, as amended from
time to time.

          "Vessel" means any vessel and its now existing or hereafter arising
components and appurtenances, including, without limitation, Hollywood
Riverboat, and all other riverboat gaming vessels or other vessels now or
hereafter owned by Mortgagor.

     1.3  Undefined Terms.  Any capitalized terms used in this Mortgage which
          ---------------
are not otherwise defined herein shall have the meaning ascribed to such terms
in the New Indenture.

     1.4  Amendment of Defined Instruments.  Unless the context otherwise
          --------------------------------
requires or unless otherwise provided herein, references in this Mortgage to a
particular agreement, instrument or document also refer to and include all
renewals, extensions, amendments, modifications, supplements or restatements of
any such agreement, instrument or document, provided that nothing contained in
this Section shall be construed to authorize any Person to execute or enter into
any such renewal, extension, amendment, modification, supplement or restatement.

                                   ARTICLE 2

                          LIENS AND SECURITY INTEREST
                          ---------------------------

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     2.1   Hypothecation.  FOR THE PURPOSE OF SECURING in favor of Mortgagee
           -------------
and its successors and assigns for the benefit of the Noteholders the due and
punctual payment and performance of the Obligations, Mortgagor, in consideration
of the premises, and for the purposes aforesaid, does hereby MORTGAGE, ASSIGN,
BARGAIN, PLEDGE, RELEASE, HYPOTHECATE AND WARRANT UNTO MORTGAGEE AND ITS
SUCCESSORS AND ASSIGNS FOR THE BENEFIT OF THE NOTEHOLDERS all of Mortgagor's
estate, right, title and interest whether now owned or hereafter acquired,
whether as owner, lessor, lessee, or otherwise, and whether vested or
contingent, and including all of Mortgagor's rights to perform all obligations
under and to receive the benefits of any leases, in and to all of the following
described land (immovable property) and interests in land (immovable property),
leases, leasehold interests, estates, servitudes, rights, buildings, other
constructions, improvements, property, fixtures, component parts, machinery and
equipment to the full extent that such property is susceptible of mortgage under
the Louisiana Civil Code, Louisiana Revised Statutes, and other provisions of
Louisiana law; grants a continuing security interest in favor of Mortgagee and
its successors and assigns, as secured party for the benefit of the Noteholders,
in all property and rights described below, whether now owned or hereafter
acquired that are susceptible of a security interest under the UCC or any other
provision of Louisiana law; and does further affect, hypothecate, pledge and
assign unto and in favor of Mortgagee and its successors and assigns, for the
benefit of the Noteholders, all present and future leases and rents, as well as
all other property and rights described below, whether now owned or hereafter
acquired, that are susceptible of assignment under the UCC or any other
provision of Louisiana law:

(A)       The entire Casino Ground Lease, including without limitation, all of
Mortgagor's present and future right, title and interest, as such may be amended
from time to time, in, to and under the Casino Ground Lease, and any other lease
and sublease agreements and amendments thereof, affecting the Land, together
with Mortgagor's right, title, and interest in the buildings and other
constructions and improvements on the leased premises and the component parts
thereof;

(B)       TOGETHER WITH the Improvements;

(C)       TOGETHER WITH all Appurtenant Rights;

(D)       TOGETHER WITH (1) all the estate, right, title and interest of
Mortgagor of, in and to all judgments and decrees, insurance proceeds (including
without limitation, the right to receive proceeds attributable to the insurance
loss of the Land, the Improvements and the Appurtenant Rights, all as provided
in La. R.S. 9:5386), awards of damages and settlements hereafter made resulting
from condemnation proceedings or the taking of any of the property described in
Granting Clauses (A), (B) and (C) hereof or any part thereof under the power of
eminent domain, or for any damage (whether caused by such taking or otherwise)
to the property described in Granting Clauses (A), (B) and (C) hereof or any
part thereof, or to any Appurtenant Rights thereto, and Mortgagee is hereby
authorized, subject to the provisions and limitations

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contained in the New Indenture, to collect and receive said awards and proceeds
and to give proper receipts and acquittance therefor, and (subject to the terms
hereof) to apply the same toward the payment of the Obligations, notwithstanding
the fact that the amount owing thereon may not then be due and payable; (ii)
subject to the provisions and limitations contained in the New Indenture, all
proceeds of any sales or other dispositions of the property or rights described
in Granting Clause (A), (B) and (C) hereof or any part thereof whether voluntary
or involuntary, provided, however , that the foregoing shall not be deemed to
permit such sales, transfers, or other dispositions except as specifically
permitted herein; and (iii) subject to the provisions and limitations contained
in the New Indenture, whether arising from any voluntary or involuntary
disposition of the property described in Granting Clauses (A), (B) and (C), all
Proceeds, products, replacements, additions, substitutions, renewals and
accessions, remainders, reversions and after-acquired interest in, of and to
such property;

(E)       TOGETHER WITH the absolute assignment of any Space Leases or any part
thereof that Mortgagor has entered into, taken by assignment, taken subject to,
or assumed, or has otherwise become bound by, now or in the future, together
with all of the following (including all "Cash Collateral" within the meaning of
the Bankruptcy Law) arising from the Space Leases: (a) Rents (subject, however,
to the aforesaid absolute assignment to Mortgagee and the conditional permission
hereinbelow given to Mortgagor to collect the Rents), (b) all security deposits,
and (c) all of Mortgagor's right, title, and interest under the Space Leases,
including the following: (i) the right to receive and collect the Rents from the
lessee, sublessee, guarantors thereof or licensee, or their Successor(s), under
any Space Lease(s) and (ii) the right to enforce against any tenants thereunder
and otherwise any and all remedies under the Space Leases, including Mortgagor's
right to evict from possession any tenant thereunder or to retain, apply, use,
draw upon, pursue, enforce or realize upon any guaranty of any Space Lease; to
terminate, modify, or amend the Space Leases; to obtain possession of, use, or
occupy, any of the real or personal property subject to the Space Leases; and to
enforce or exercise, whether at law or in equity or by any other means, all
provisions of the Space Leases and all obligations of the tenants thereunder and
guarantors thereof based upon (A) any breach by any such tenant or guarantor
thereof under the applicable Space Lease (including any claim that Mortgagor may
have by reason of a termination, rejection, or disaffirmance of such Space Lease
pursuant to any Bankruptcy Law) and (B) the use and occupancy of the premises
demised, whether or not pursuant to the applicable Space Lease (including any
claim for use and occupancy arising under landlord-tenant law of the State of
Louisiana or any Bankruptcy Law);

          Notwithstanding anything to the contrary contained herein, the
foregoing provisions of this Paragraph (E) shall not constitute an assignment
for purposes of security but shall constitute an absolute and present assignment
of the Rents to Mortgagee, subject, however, to the conditional license given to
Mortgagor to collect and use the Rents as hereinabove provided; and the
existence or exercise of such right of Mortgagor shall not operate to
subordinate this assignment to any subsequent assignment, in whole or in part,
by Mortgagor;

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(F)       TOGETHER WITH, to the extent permitted by applicable law, all of
Mortgagor's right, title, and interest in and to any and all licenses, permits,
variances, special permits, franchises, certificates, rulings, certifications,
validations, exemptions, filings, registrations, authorizations, consents,
approvals, waivers, orders, rights and agreements (including, without
limitation, options, option rights and contract rights) now or hereafter
obtained by Mortgagor from any Governmental Authority having or claiming
jurisdiction over the Land, the Improvements, the Shreveport Resort, or any
other element of the Mortgaged Property or providing access thereto, or the
operation of any business on, at, or from the Land;

(G)       TOGETHER WITH all of Mortgagor's right, title and interest in and to
all water stock, water permits and other water or riparian rights relating to
the Land;

(H)       TOGETHER WITH all of Mortgagor's rights, title and interest in and to
oil and gas and other mineral rights, if any, in or pertaining to the Land and
all royalty, leasehold and other rights of Mortgagor pertaining thereto;

(I)       TOGETHER WITH any and all monies and other property, real or personal,
which may from time to time be subjected to the lien hereof by Mortgagor or by
anyone on its behalf or with its consent, or which may come into the possession
or be subject to the control of Mortgagee pursuant to this Mortgage or any
Collateral Document, including, without limitation, any protective advances
under this Mortgage (provided that the maximum amount of principal secured does
not exceed the amount set forth in Section 1.1 hereof); and all of the
Mortgagor's right, title, and interest in and to all extensions, improvements,
betterments, renewals, substitutes for and replacements of, and all additions,
accessions, and appurtenances to, any of the foregoing that Mortgagor may
subsequently acquire or obtain by any means, or construct, assemble, or
otherwise place on any of the Mortgaged Property, and all conversions of any of
the foregoing; it being the intention of Mortgagor that all property hereafter
acquired by Mortgagor and required by any Collateral Document or this Mortgage
to be subject to the lien of this Mortgage or intended so to be shall forthwith
upon the acquisition thereof by Mortgagor be subject to the lien of this
Mortgage as if such property were now owned by Mortgagor and were specifically
described in this Mortgage and granted hereby or pursuant hereto, and Mortgagee
is hereby authorized, subject to Gaming Laws, to receive any and all such
property as and for additional security for the obligations secured or intended
to be secured hereby. Mortgagor agrees to take any action as may reasonably be
necessary to evidence and perfect such liens or security interests, including,
without limitation, the execution of any documents necessary to evidence and
perfect such liens or security interests;

(J)       TOGETHER WITH Proceeds of the foregoing property described in Granting
Clauses (A) through (I) and Proceeds of any and all Gaming Licenses even if such
Gaming Licenses are not subject to the liens granted hereunder;

                                       11
<PAGE>

(K)       TOGETHER WITH (i) Mortgagor's rights further to assign, sell, lease,
encumber or otherwise transfer or dispose of the property described in Granting
Clause (A) through (J) inclusive, above, for debt or otherwise, except to the
extent expressly reserved by Mortgagor pursuant to the New Indenture; and

(L)       EXPRESSLY EXCLUDING, HOWEVER, (1) the New FF&E and (2) any of the
foregoing property that is, pursuant to restrictions enforceable under
applicable law, prohibited from being pledged as security or mortgaged property;
provided that, with respect to this clause (2) , upon the termination of such
--------
prohibitions for any reason whatsoever or in the event such prohibitions are or
become unenforceable under applicable law, such foregoing property shall
automatically become "Mortgaged Property" hereunder, it being understood that
                                                     -------------------
upon request of Mortgagee, Mortgagor will in good faith use reasonable efforts
to obtain consent for the creation of a mortgage and security interest in favor
of Mortgagee in Mortgagor's rights in such property referred to in this clause
(2).

          Notwithstanding the foregoing provisions of this Section 2.1, the
amount of the proceeds from any of the foregoing collateral other than the FF&E
Collateral (the "Pari Passu Collateral") from any enforcement or exercise of any
right or remedy with respect to the Mortgaged Property pursuant to Article 7 of
this Mortgage or pursuant to the corresponding provisions of any other
collateral document that may be applied to the Obligations pursuant to such
provisions shall be limited to an amount equal to the sum of $10,000,000 in
principal amount of the New Notes plus all related Obligations (the "Restricted
Pari Passu Amount"); and the amount of proceeds from the FF&E Collateral from
any enforcement or exercise of any right or remedy with respect to the Mortgaged
Property pursuant to Article 7 of this Mortgage or pursuant to the corresponding
provisions of any other collateral document that may be applied to the
Obligations pursuant to such provisions shall be limited to an amount equal to
the sum of $29,000,000 in principal amount of the New Notes plus all related
Obligations (the "Restricted FF&E Amount").  Nothing in the foregoing sentence
shall be interpreted to mean that this Mortgage applies to less than the whole
of the Mortgaged Property.

          So long as no Event of Default shall occur and be continuing, all
dividends, distributions, interest and principal payments, cash, instruments,
and other property and proceeds made upon or with respect to or of the Mortgaged
Property (including Rents) may be used by the Mortgagor subject to the terms and
conditions of the New Indenture.  Upon the occurrence and during the continuance
of an Event of Default, all rights of the Mortgagor to receive all dividends,
distributions, interest or principal payments, cash, instruments and other
property and proceeds (including Rents) shall cease and such dividends,
distributions, interest and principal payments, cash, instruments and other
property and proceeds (including Rents) shall be paid or otherwise delivered to
the Mortgagee.  As used in this Mortgage, the term "Mortgaged Property" shall be
                                                    ------------------
expressly defined as meaning all or, where the context permits or requires, any
portion of the above, and all or, where the context permits or requires, any
interest therein.

                                       12
<PAGE>

          Mortgagor, for itself and its successors and assigns, covenants and
agrees to and with Mortgagee that, at the time or times of the execution of and
delivery of these presents or any instrument of further assurance with respect
thereto, Mortgagor has good right, full power and lawful authority to assign,
grant, convey, warrant, transfer, bargain or sell its interests in the Mortgaged
Property in the manner and form as aforesaid, and that the Mortgaged Property is
free and clear of all liens and encumbrances whatsoever, except the Permitted
Liens, and Mortgagor shall warrant and forever defend the Mortgaged Property in
the quiet and peaceable possession of Mortgagee and its successors and assigns
against all and every Person or Persons lawfully or otherwise claiming or to
claim the whole or any part thereof, except for the Permitted Liens.  Mortgagor
agrees that any greater title to the Mortgaged Property hereafter acquired by
Mortgagor during the term hereof, including without limitation, the acquisition
of the lessor's interest under the Casino Ground Lease (if permitted by
Mortgagee and the New Indenture), or any other estate, title or interest in the
premises covered by such lease, shall be automatically subject hereto without
the need for any further mortgage, assignment, amendment, supplement, or other
writing.

     2.2  Mortgagor's License to Collect Rents Until Default. Mortgagor and
          --------------------------------------------------
Mortgagee agree that this Mortgage is an absolute and present assignment of
Space Leases and Rents. Prior to the occurrence and continuance of an Event of
Default, Mortgagor shall have the right under a license granted hereby and
Mortgagee hereby grants to Mortgagor a license (but limited by the remedies of
Mortgagee set forth herein and in the New Indenture) to collect, but not more
than one (1) month in advance, all of the Rents due or to become due under the
Space Leases, and, subject to the restrictions set forth in the New Indenture,
if any, to exercise the rights of landlord under the Space Leases. The license
granted hereby may be revoked at Mortgagee's option upon written notice from
Mortgagee to Mortgagor after the occurrence and during the continuance of an
Event of Default. Mortgagor hereby agrees with Mortgagee that the other parties
under the Space Leases may, upon notice from Mortgagee of the occurrence of an
Event of Default that is then continuing, thereafter pay direct to Mortgagee the
Rents due and to become due under the Space Leases and attorn all other
obligations thereunder directly to Mortgagee without any obligation on their
part to determine whether an Event of Default does in fact exist. Additionally,
upon the occurrence and during the continuance of an Event of Default, Mortgagor
hereby constitutes and appoints Mortgagee its true and lawful attorney-in-fact
with full power of substitution to collect Rents and other sums due and to
become due under the Space Leases and to endorse, either in the name of
Mortgagor or in the name of Mortgagee, any check made payable to Mortgagor or
any assumed business name of Mortgagor representing Rents and other sums due and
to become due under the Space Leases. Following the occurrence and during the
continuance of an Event of Default and the acceleration of the New Notes, any
such Rent and other sums shall be applied in accordance with the provisions of
the New Indenture. It is understood and agreed that this power is coupled with
an interest which cannot be revoked.

                                   ARTICLE 3

                                       13
<PAGE>

                 REPRESENTATIONS AND, WARRANTIES OF MORTGAGOR
                 --------------------------------------------

          Mortgagor hereby unconditionally represents and warrants to Mortgagee
as follows:

     3.1  General Representations and Warranties.  Mortgagor represents and
          --------------------------------------
warrants that: (a) pursuant to the Casino Ground Lease, Mortgagor has a valid
and enforceable leasehold interest in and to the Land, the Appurtenant Rights
and other immovable property covered by the Casino Ground Lease and has or will
have good and valid title to the Improvements constructed or to be constructed
thereon so long as such Casino Ground Lease is in full force and effect, subject
to the Permitted Liens; (b) the Space Leases, the Rents and the other Mortgaged
Property, are free and clear of all encumbrances except Permitted Liens, and
that it has the right to hold, occupy and enjoy its interest in the Mortgaged
Property, and has good right, full power and lawful authority to subject the
Mortgaged Property to the Lien of this Mortgage and pledge the same as provided
herein and Mortgagee may at all times peaceably and quietly enter upon, hold,
occupy and enjoy the entire Mortgaged Property in accordance with the terms
hereof; (c) Mortgagor is not Insolvent and no bankruptcy proceedings are pending
or contemplated by or, to the best of Mortgagor's knowledge, against Mortgagor;
(d) the Land has frontage on, and direct access for ingress and egress to
dedicated street(s); (e) no material part of the Mortgaged Property has been
damaged, destroyed, condemned or abandoned; (f) no part of the Mortgaged
Property is the subject of condemnation proceedings, and Mortgagor has no
knowledge of any contemplated or pending condemnation proceeding with respect to
any portion of the Mortgaged Property; (g) the Mortgaged Property and all
activities thereon are in compliance in all material respects with all
applicable zoning and land use ordinances and regulations, building codes, and
fire codes; and (h) the execution delivery and performance of this Mortgage does
not require any consent under, and will not contravene any provision of or cause
a default under, the Casino Ground Lease.

     3.2  Space Leases.
          ------------

          Mortgagor represents and warrants that

               (i)   Mortgagor has delivered to Mortgagee true, correct and
complete copies of all Space Leases, including all amendments and modifications,
written or oral existing of the date hereof;

               (ii)  Mortgagor has not executed or entered into any
modifications or amendments of the Space Leases, either orally or in writing,
other than amendments that have been disclosed to Mortgagee in writing;

               (iii) to the best of its knowledge, no material default now
exists under any Space Lease;

                                       14
<PAGE>

               (iv)  to the best of its knowledge, no event has occurred that,
with the giving of notice or the passage of time or both, would constitute such
a material default or would entitle Mortgagor or any other party under such
Space Lease to cancel the same or otherwise avoid its obligation;

               (v)   Mortgagor has not accepted prepayments of installments of
Rent under any Space Leases, except for security deposits not in excess of one
month's Rent;

               (vi)  except for the assignment effected hereby, Mortgagor has
not executed any assignment or pledge of any of Space Leases, the Rents, or of
Mortgagor's right, title and interest in the same; and

               (vii) this Mortgage conforms and complies with all Space Leases,
does not constitute a violation or default under any Space Lease, and is and
shall at all times constitute a valid lien on Mortgagor's interests in the Space
Leases.

                                   ARTICLE 4

                             AFFIRMATIVE COVENANTS
                             ---------------------

     Mortgagor hereby unconditionally covenants and agrees with Mortgagee
as follows:

     4.1  Compliance with Legal Requirements.  Mortgagor shall promptly, fully,
          ----------------------------------
and faithfully comply in all material respects with all Legal Requirements and
shall cause all portions of the Mortgaged Property and its use and occupancy to
fully comply in all material respects with Legal Requirements at all times.

     4.2  Condemnation.  Mortgagee is hereby authorized, at its option, to
          ------------
commence, appear in and prosecute in its own or Mortgagor's name any action or
proceeding relating to any condemnation, seizure or taking by the exercise of
the power of eminent domain of any of the Mortgaged Property and to settle or
compromise any claim in connection therewith, and Mortgagor hereby appoints
Mortgagee as its attorney-in-fact to take any action in Mortgagor's name
pursuant to Mortgagee's rights hereunder.  Immediately upon obtaining knowledge
of the institution of any proceedings for the condemnation of the Mortgaged
Property or any portion thereof, Mortgagor shall notify Mortgagee of the
pendency of such proceedings.  Mortgagor from time to time shall execute and
deliver to Mortgagee all instruments requested by it to permit such
participation; provided, however, that such instruments shall be deemed as
               --------  -------
supplemental to the foregoing grant of permission to Mortgagee, and unless
otherwise required, the foregoing permission shall, without more, be deemed
sufficient to permit Mortgagee to participate in such proceedings on behalf of
Mortgagor.  All such compensation awards, damages, claims, rights of

                                       15
<PAGE>

action and Proceeds, and any other payments or relief, and the right thereto,
are included in the Mortgaged Property. To the extent such condemnation, seizure
or taking constitutes an Event of Loss, Mortgagee, after deducting therefrom all
its expenses, including reasonable attorneys fees, shall, or shall authorize
Mortgagor to apply such Proceeds in accordance with the provisions of the New
Indenture.

     4.3  Lien Status.  Mortgagor will protect the Lien and security interest
          -----------
status (subject to Permitted Liens) of this Mortgage and, except to the extent
permitted by the provisions of the New Indenture or hereunder, will not place,
or permit to be placed, or otherwise mortgage, hypothecate or encumber the
Mortgaged Property with, any other Lien or security interest of any nature
whatsoever (statutory, constitutional or contractual) regardless of whether same
is allegedly or expressly inferior to the Lien and security interest created by
this Mortgage, and, if any such Lien or security interest is asserted against
the Mortgaged Property (unless such Lien or encumbrance constitutes a Permitted
Lien), Mortgagor will promptly, at its own cost and expense, (a) pay the
underlying claim in full or take such other action so as to cause same to be
released or bonded around and (b) within five (5) days from the date such Lien
or security interest is so asserted, give Mortgagee notice of such Lien or
security interest. Such notice shall specify who is asserting such Lien or
security interest and shall detail the origin and nature of the underlying claim
giving rise to such asserted Lien or security interest.

     4.4. Payment of Impositions.  Mortgagor will duly pay and discharge, or
          ----------------------
cause to be paid and discharged, all material Impositions not later than the day
any fine or penalty may be added thereto or imposed, except such as are
contested in good faith and by appropriate proceedings or where the failure to
effect such payment is not adverse in any material respect to the Noteholders;
provided, however, that Mortgagor may, if permitted by law and if such
--------  -------
installment payment would not create or permit the filing of a Lien against the
Mortgaged Property, pay such Impositions in installments whether or not interest
shall accrue on the unpaid balance of such Impositions.

     4.5. Repair.  Mortgagor will keep the Mortgaged Property in good condition,
          ------
ordinary wear and tear excepted, and will make all necessary repairs,
replacements, renewals, betterments and improvements and alterations thereof and
thereto, interior and exterior, structural and non-structural, ordinary and
extraordinary, foreseen and unforeseen all as in the judgment of the Mortgagor
may be reasonably necessary for the proper conduct of the business carried in
connection therewith, provided that nothing in this Section 4.5 shall prevent
                                                    -----------
the Mortgagor from discontinuing the maintenance of any of such properties if
such discontinuance is, in the judgment of the Mortgagor, desirable in the
conduct of the business of the Mortgagor and its Subsidiaries taken as a whole.
Notwithstanding the foregoing, nothing contained in this Section 4.5 shall limit
                                                         -----------
the right of the Mortgagor to dispose of properties in any manner otherwise
permitted by the New Indenture.

                                       16
<PAGE>

     4.6.  Insurance. Mortgagor will obtain and maintain insurance upon and
           ---------
relating to the Mortgaged Property insuring against personal injury and death,
loss by fire and such other hazards, casualties and contingencies (including
business interruptions insurance and builder's all risk coverage) in accordance
with the New Indenture.

     4.7.  Application of Insurance Proceeds.  The proceeds of the insurance of
           ---------------------------------
Mortgagor shall be applied in accordance with the provisions of the New
Indenture.

     4.8.  Performance of Leases.  Mortgagor covenants (a) not to assign or
           ---------------------
grant a security interest in and to any of the Space Leases to any party other
than Mortgagee without the prior written consent of Mortgagee, (b) at the
request of Mortgagee, to execute and deliver all such further assurances and
assignments in and to the Mortgaged Property as Mortgagee shall from time to
time reasonably require, and (c) to deliver to Mortgagee copies of all Space
Leases, regardless of whether such Space Leases were or are executed before or
after the date hereof.

     4.9.  Inspection.  Mortgagor, at all reasonable times and upon reasonable
           ----------
prior notice, will permit the Mortgagee and its agents, representatives and
employees to inspect the Mortgaged Property.

     4.10. Books and Records.  Mortgagor will maintain full and accurate books
           -----------------
of account and other records reflecting in all material respects the results of
its operations of the Mortgaged Property. At any time and from time to time
Mortgagor shall deliver to Mortgagee such other financial data as Mortgagee
shall reasonably request with respect to the ownership, maintenance, use and
operation of the Mortgaged Property, and Mortgagee shall have the right, at
reasonable times and upon reasonable notice, to examine and make copies or
extracts of Mortgagor's books of account and records relating to the Mortgaged
Property.

     4.11. Maintenance of Rights of Way, Servitudes, and Licenses.  Mortgagor
           ------------------------------------------------------
will maintain, preserve and renew all rights of way, servitudes, easements,
grants, privileges, licenses and franchises reasonably necessary for the use of
the Mortgaged Property from time to time. Mortgagor shall comply in all material
respects with all restrictive covenants which may at any time affect the
Mortgaged Property, zoning ordinances and other public or private restrictions
as to the use of the Mortgaged Property.

          (a)  Mortgagor shall (i) comply in all material respects with all
applicable Environmental Laws and obtain, keep and comply with Permits
applicable to the operations of Mortgagor and the ownership, lease, or use of
any Mortgaged Property; (ii) use commercially reasonable efforts to cause all
Persons occupying any Mortgaged Property to comply with all such Environmental
Laws and Permits; (iii) keep or cause to be kept all such Mortgaged Property
free and clear of any Liens imposed pursuant to such Environmental Laws; and
(iv) obtain and renew all material Permits required for ownership or use of any
Mortgaged Property.

                                       17
<PAGE>

          (b)   Mortgagor shall conduct any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action necessary
to remove and cleanup all Hazardous Materials from any Mortgaged Property in
accordance in all material respects with the requirements of all applicable
Environmental Laws and any Legal Requirements.

          4.12. Environmental Indemnification and Hold Harmless.
                -----------------------------------------------

                (a)   Mortgagor agrees to defend, indemnify and hold harmless
the Indemnified Parties from and against any and all claims, demands, judgments,
settlements, damages, actions, causes of action, injuries, administrative
orders, consent agreements and orders, liabilities, penalties, costs, including
but not limited to any cleanup costs, mediation costs, response costs, and all
expenses of any kind whatsoever, including claims arising out of loss of life,
injury to persons, property, or business or damage to natural resources in
connection with the activities of Mortgagor, its predecessors in interest, third
parties who have trespassed on the Mortgaged Property, or parties in a
contractual relationship with Mortgagor, or any of them, whether or not
occasioned wholly or in part by any condition, accident or event caused by any
act or omission of Indemnified Parties, which:

                (i)   Arises out of the actual, alleged or threatened migration,
spill, leach, pour, empty, inject, discharge, dispersal, release, storage,
treatment, generation, disposal or escape of pollutants or other toxic or
hazardous substances, including any solid, liquid, gaseous or thermal irritant
or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals,
and waste (including materials to be recycled, reconditioned or reclaimed); or

                (ii)  Actually or allegedly arises out of the use,
specification, or inclusion of any product, material or process containing
chemicals, the failure to detect the existence or proportion of chemicals in the
soil, air, surface water or ground water, or the performance or failure to
perform the abatement of any pollution source or the replacement or removal of
any soil, water, surface water, or ground water containing chemicals;

                (iii) Arises out of the breach of any covenant, warranty, or
representation of Mortgagor as it relates to the provisions of this Section
                                                                    -------
4.12; or
----

                (iv)  Arises out of a judicial or administrative action brought
pursuant to any Environmental Law that relates to the Mortgaged Property.

          (b)   Mortgagor, its successors and assigns, shall bear, pay and
discharge when and as the same become due and payable, any and all such
judgments or claims for damages, penalties or otherwise against Indemnified
Parties, shall hold Indemnified Parties harmless for those judgments or claims,
and shall assume the burden and expense of defending all suits, administrative
proceedings, and negotiations of any description with any and all persons,
political

                                       18
<PAGE>

subdivisions or Governmental Authorities arising out of indemnified matters as
set forth in Section 4.12(a) above.

          (c)  Mortgagor's indemnifications and representations made herein
shall survive any termination or expiration of the documents relating to the New
Notes and/or the repayment of the Obligations, including, but not limited to,
any foreclosure under this Mortgage or deed-in-lieu of foreclosure, it being
understood and agreed that the indemnity given herein is independent of the
Obligations and the New Notes, the New Indenture, the Guarantees or any of the
Collateral Documents.

     4.13 Further Assurances.
          ------------------

(a)       At its sole cost and without expense to Mortgagee, Mortgagor shall do,
execute, acknowledge and deliver any and all such further reasonable acts,
deeds, conveyances, notices, requests for notices, financing statements,
continuation statements, certificates, assignments, notices of assignments,
agreements, instruments and further assurances, and shall mark any chattel
paper, deliver any chattel paper or instruments to Mortgagee and take any other
actions that are reasonably necessary, prudent, or requested by Mortgagee to
perfect or continue the perfection and first priority of Mortgagee's security
interest in the Mortgaged Property, to protect the Mortgaged Property against
the rights, claims, or interests of third Persons other than holders of
Permitted Liens or to effect the purposes of this Mortgage, including the
security agreement and the absolute assignment of Rents contained herein, or for
the filing, registering or recording thereof.

(b)       Mortgagor shall forthwith upon the execution and delivery of this
Mortgage, and thereafter from time to time, cause this Mortgage and each
instrument of further assurance to be filed, indexed, registered, recorded,
given or delivered in such manner and in such places as may be required by any
present or future law in order to publish notice of and fully to protect the
lien hereof upon, and the title of Mortgagee to, the Mortgaged Property.

     4.14 Mortgagee's Cure of Mortgagor's Default.  If Mortgagor defaults in the
          ---------------------------------------
payment of any tax, assessment, lien, encumbrance or other Imposition, in its
obligation to furnish insurance hereunder, or in the performance or observance
of any other covenant, condition or term of this Mortgage or any Collateral
Document, unless Mortgagor is contesting such Imposition in accordance with the
New Indenture, Mortgagee may, but is not obligated to, in order to preserve its
interest in the Mortgaged Property, perform or observe the same, and all
payments made (whether such payments are regular or accelerated payments) and
reasonable costs and expenses incurred or paid by Mortgagee in connection
therewith shall become due and payable immediately. The amounts so incurred or
paid by Mortgagee, together with interest thereon at the rate applicable to
overdue principal pursuant to the New Indenture from the date incurred until
paid by Mortgagor, shall be added to the Obligations and secured by the lien of
this Mortgage. Mortgagee is hereby empowered to enter and to authorize others to
enter upon the

                                       19
<PAGE>

Land or any part thereof for the purpose of performing or observing any such
defaulted covenant, condition or term, without thereby becoming liable to
Mortgagor or any Person in possession holding under Mortgagor. No exercise of
any rights under this Section by Mortgagee shall cure or waive any Default or
Event of Default or notice of default hereunder or invalidate any act done
pursuant hereto or to any such notice, but shall be cumulative of all other
rights and remedies.

     4.15  Defense of Actions.  Mortgagor shall appear in and defend any action
           ------------------
or proceeding affecting or purporting to affect the security hereof or the
rights or powers of Mortgagee, and shall pay all costs and expenses, including
cost of title search and insurance or other evidence of title, preparation of
survey, and reasonable attorneys' fees in any such action or proceeding in which
Mortgagee may appear or may be joined as a party and in any suit brought by
Mortgagee based upon or in connection with this Mortgage or any Collateral
Document. Nothing contained in this section shall, however, limit the right of
Mortgagee to appear in such action or proceeding with counsel of its own choice,
either on its own behalf or on behalf of Mortgagor, and all payments made and
reasonable costs incurred or paid by Mortgagee in connection therewith
(including without limitation, attorneys' fees and expenses) shall be payable by
Mortgagor on demand, accruing interest thereon from the date(s) incurred until
paid at the rate applicable to overdue principal pursuant to the New Indenture,
and such amounts shall be included in the Obligations secured hereby.

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

     4.17  Consents.  Mortgagor will use commercially reasonable efforts to
           --------
obtain and deliver to Mortgagee as promptly as possible, a written
acknowledgment from the City of Shreveport pursuant to the provisions of the
Casino Ground Lease confirming that Mortgagee has all of the rights of a
"Leasehold Mortgagee" under (and as defined in) Exhibit G to the Casino Ground
Lease.

                                       20
<PAGE>

                                   ARTICLE 5
                                   ---------

                              NEGATIVE COVENANTS

     Mortgagor hereby covenants and agrees with Mortgagee that, until the entire
Obligations shall have been paid in full and shall have been fully performed and
discharged:

     5.01.  Alterations.   Mortgagor will not commit or permit any waste of the
            -----------
Mortgaged Property that materially impairs Mortgagee's security hereunder.

     5.02.  Replacement of Improvements.  Except as permitted by this Mortgage
            ----------------------------
and the New Indenture and except in the ordinary course of its business,
Mortgagor will not, without the prior written consent of Mortgagee, permit any
of the Improvements to be removed at any time from the Land unless the removed
item is removed temporarily for maintenance and repair or, if removed
permanently, such removal and disposition does not affect materially and
adversely the value of Mortgagor's casino and the Mortgaged Property taken as a
whole or the removed item is replaced by an article of substantially equal
utility and value, owned by Mortgagor and subject to the Liens created hereby,
and free and clear of any other Lien or security interest except Permitted Liens
or such as may be first approved in writing by Mortgagee.

     5.03.  No Further Encumbrances.  Except to the extent permitted by the
            -----------------------
provisions of the New Indenture, Mortgagor will not, without the prior written
consent of Mortgagee, create, place or permit to be created or placed, or
through any act or failure to act, acquiesce in the placing of, or allow to
remain, any mortgage, pledge, Lien (statutory, constitutional or contractual),
security interest, encumbrance or charge on, or conditional sale or other title
retention agreement (regardless of whether same are expressly subordinate to the
Liens of this Mortgage) with respect to the Mortgaged Property, other than the
Permitted Liens.

                                   ARTICLE 6

                           CORPORATE LOAN PROVISIONS

     6.1    Interaction with New Indenture.  Notwithstanding any other
            ------------------------------
provision of this Mortgage, the terms and provisions of this Mortgage shall be
subject and subordinate to the terms of the New Indenture.  To the extent that
the New Indenture provides Mortgagor with a particular cure or notice period, or
establishes any limitations or conditions on Mortgagee's actions with regard to
a particular set of facts, Mortgagor shall be entitled to the same cure periods
and notice periods, and Mortgagee shall be subject to the same limitations and
conditions, under this Mortgage, as under the New Indenture, in place of the
cure periods, notice periods, limitations and conditions provided for under this
Mortgage; provided, however, that
          --------  -------

                                       21
<PAGE>

such cure periods, notice periods, limitations and conditions shall not be
cumulative as between the New Indenture and this Mortgage. In the event of any
conflict or inconsistency between the provisions of this Mortgage and those of
the New Indenture, including, without limitation, any conflicts or
inconsistencies in any definitions herein or therein, the provisions or
definitions of the New Indenture shall govern.

     6.2  Other Collateral.  This Mortgage is one of a number of security
          ----------------
agreements to secure the debt delivered by or on behalf of Mortgagor pursuant to
the New Indenture and the other Collateral Documents and securing the
Obligations secured hereunder.  All potential junior Lien claimants are placed
on notice that, under any of the Collateral Documents or otherwise (such as by
separate future unrecorded agreement between Mortgagor and Mortgagee), other
collateral for the Obligations secured hereunder (i.e., collateral other than
the Mortgaged Property) may, under certain circumstances, be released without a
corresponding reduction in the total principal amount secured by this Mortgage.
Such a release would decrease the amount of collateral securing the same
indebtedness, thereby increasing the burden on the remaining Mortgaged Property
created and continued by this Mortgage.  No such release shall impair the
priority of the lien of this Mortgage.  By accepting its interest in the
Mortgaged Property, each and every junior Lien claimant shall be deemed to have
acknowledged the possibility of, and consented to, any such release.  Nothing in
this paragraph shall impose any obligation upon Mortgagee.

                                   ARTICLE 7

                             DEFAULTS AND REMEDIES

     7.1  Event of Default.  The terms "Default" and "Event of Default,"
          ----------------
wherever used in this Mortgage, shall mean any one or more of the defaults or
events of default listed in the New Indenture, subject to such cure rights as
may be expressly set forth in the New Indenture.

     7.2  Acceleration of Maturity.  If an Event of Default occurs and is
          ------------------------
continuing, Mortgagee may, in accordance with the New Indenture, declare the New
Notes and all indebtedness or sums secured hereby, to be due and payable
immediately, and upon such declaration such principal and interest and other
sums shall immediately become due and payable without demand, presentment,
notice or other requirements of any kind (all of which Mortgagor waives)
notwithstanding anything in this Mortgage or any Collateral Document or
applicable law to the contrary.

     7.3  Institution of Equity Proceedings.  If an Event of Default occurs and
          ---------------------------------
is continuing, Mortgagee may institute an action, suit or proceeding in equity
for specific performance of this Mortgage, the New Notes or any Collateral
Document, all of which shall be

                                       22
<PAGE>

specifically enforceable by injunction or other equitable remedy. Mortgagor
waives any defense based on laches or any applicable statute of limitations.

     7.4  Mortgagee's Power of Enforcement.
          --------------------------------

          (a)  If any Event of Default occurs and is continuing, Mortgagee may,
without regard to whether or not the Obligations secured hereby shall be due and
without prejudice to the right of Mortgagee thereafter to bring an action or
proceeding to foreclose or any other action for any default existing at the time
such earlier action was commenced, proceed by any appropriate action or
proceeding: (1) to enforce payment of the New Notes, to the extent permitted by
law, or the performance of any term hereof or any other right; (2) to foreclose
this Mortgage in any manner provided by law for the foreclosure of mortgages or
deeds of trust on real property or security agreements concerning personal
property and to sell, as an entirety or in separate lots or parcels, the
Mortgaged Property or any portion thereof pursuant to the laws of the State of
Louisiana or under the judgment or decree of a court or courts of competent
jurisdiction, and Mortgagee shall be entitled to recover in any such proceeding
all costs and expenses incident thereto, including reasonable attorneys' fees in
such amount as shall be awarded by the court; (3) to exercise any or all of the
rights and remedies available to it under the New Indenture; and (4) to pursue
any other remedy available to it.  Mortgagee shall take action either by such
proceedings or by the exercise of its powers with respect to entry or taking
possession, or both, as Mortgagee may determine.

          (b)  It shall be lawful for Mortgagee (and Mortgagor does hereby
authorize Mortgagee without notice or putting in default, a putting in default
being hereby expressly waived), to cause all or singular the Mortgaged Property
to be seized and sold under executory or other legal process, issued by any
court of competent jurisdiction, without appraisement, and to the highest bidder
for cash or on such terms as Mortgagee may direct; and Mortgagor consents that
the Mortgaged Property may be sold, either as a whole or in such lots or parcels
as Mortgagee may direct in any such proceedings.

     7.5  Mortgagee's Right to Enter and Take Possession, Operate and Apply
          -----------------------------------------------------------------
Income.
------

          (a)  If an Event of Default occurs and is continuing, (i) Mortgagor,
upon demand of Mortgagee, shall forthwith surrender to Mortgagee the actual
possession and, if and to the extent permitted by law, Mortgagee itself, or such
officers or agents as it may appoint, may enter and take possession of all the
Mortgaged Property, without liability for trespass, damages or otherwise, and
may exclude Mortgagor and its agent sand employees wholly therefrom and may have
joint access with Mortgagor to the books, papers and accounts of Mortgagor; and
(ii) Mortgagor shall pay monthly in advance to Mortgagee on Mortgagee's entry
into possession, or to any receiver appointed to collect the Rents, all Rents
then due and payable.

                                       23
<PAGE>

          (b)  If Mortgagor shall for any reason fail to surrender or deliver
the Mortgaged Property or any part there of after Mortgagee's demand, Mortgagee
may obtain a judgment or decree conferring on Mortgagee the right to immediate
possession or requiring Mortgagor to deliver immediate possession of all or part
of such property to Mortgagee and Mortgagor hereby specifically consents to the
entry of such judgment or decree. Mortgagor shall pay to Mortgagee, upon demand,
all costs and expenses of obtaining such judgment or decree and reasonable
compensation to Mortgagee, their attorneys and agents, and all such costs,
expenses and compensation shall, until paid, be secured by the lien of this
Mortgage.

          (c)  Upon every such entering upon or taking of possession, Mortgagee
may hold, store, use, operate, manage and control the Mortgaged Property and
conduct the business thereof, and,  from time to time in its sole and absolute
discretion and without being under any duty to so act:

               (i)   make any necessary and proper maintenance, repairs,
renewals, replacements, additions, betterments and improvements thereto and
thereon and purchase or otherwise acquire additional fixtures personalty and
other property;

               (ii)  insure or keep the Mortgaged Property insured;

               (iii) manage and operate the Mortgaged Property and exercise all
the rights and powers of Mortgagor in their name or otherwise with respect to
the same;

               (iv)  enter into agreements with others to exercise the powers
herein granted Mortgagee, all as Mortgagee from time to time may determine; and,
subject to the absolute assignment of the Space Leases and Rents to Mortgagee,
Mortgagee may collect and receive all the Rents, including those past due as
well as those accruing thereafter (and in connection therewith, further
reference is made hereby to Section 2.2 hereof); and shall apply the monies so
received by Mortgagee in such priority as Mortgagee may determine to (1) the
payment of interest and principal due and payable on the New Notes; (2) the
deposits for taxes and assessments and insurance premiums due; (3) the cost of
insurance, taxes, assessments and other proper charges upon the Mortgaged
Property or any part thereof; (4) the compensation, expenses and disbursements
of the agents, attorneys and other representatives of Mortgagee; and (5) any
other charges or costs required to be paid by Mortgagor under the terms hereof;
or

               (v)   rent or sublet the Mortgaged Property or any portion
thereof for any purposes permitted by this Mortgage.

          Mortgagee shall surrender possession of the Mortgaged Property to
Mortgagor only when all that is due upon such interest and principal, tax and
insurance deposits, and all amounts under any of the terms of the New Indenture
or this Mortgage, shall have been paid and

                                       24
<PAGE>

all defaults made good. The same right of taking possession, however, shall
exist if any subsequent Event of Default shall occur and be continuing.

     7.6  Waiver of Appraisement, Valuation, Stay, Extension and Redemption
          -----------------------------------------------------------------
Laws.  Mortgagor agrees to the full extent permitted by law that if an Event of
----
Default occurs and is continuing, neither Mortgagor nor anyone claiming through
or under it shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension or redemption laws now or hereafter in
force.  Mortgagor hereby waives the benefit of appraisement as provided in
Louisiana Code of Civil Procedure Articles 2332, 2336, 2723 and 2724 and all
other laws conferring the same, the demand and three (3) days delay accorded by
Louisiana Code of Civil Procedure Articles 2639 and 2721, the notice of seizure
required by Louisiana Code of Civil Procedure Articles 2293 and 2721, the three
(3) days delay provided by Louisiana Code of Civil Procedure Articles 2331 and
2722, and the benefits of the other provisions of Louisiana Code of Civil
Procedure Article 2331, 2722 and 2723 not specifically mentioned above, in order
to prevent or hinder the enforcement or foreclosure of this Mortgage or the
absolute sale of the Mortgaged Property or any portion thereof or the final and
absolute putting into possession thereof, immediately after such sale, of the
purchasers thereof, and Mortgagor for itself and all who may at any time claim
through or under it, hereby waives, to the full extent that it may lawfully so
do, the benefit of all such laws, and any and all right to have the assets
comprising the Mortgaged Property marshaled upon any foreclosure of the lien
hereof and agrees that Mortgagee or any court having jurisdiction to foreclose
such lien may sell the Managed Property in part or as an entirety.

     7.7  Confession of Judgment.  Solely for purposes of executory process
          ----------------------
under Louisiana law, Mortgagor does hereby acknowledge the Obligations and
CONFESS JUDGMENT in favor of Mortgagee for the full amount of the Obligations.

     7.8  Space Leases.  Mortgagee is authorized to foreclose this Mortgage
          ------------
subject to the rights, if any, of any tenants of the Mortgaged Property, and the
failure to make any such tenants parties defendant to any such foreclosure
proceedings and to foreclose their rights shall not be, nor be asserted by
Mortgagor to be, a defense to any proceedings instituted by Mortgagee to collect
the sums secured hereby or to collect any deficiency remaining unpaid after the
foreclosure sale of the Mortgaged Property, or any portion thereof.  Unless
otherwise agreed by Mortgagee in writing, all Space Leases executed subsequent
to the date hereof, or any part thereof, shall be subordinate and inferior to
the lien of this Mortgage; provided, however, that (i) Mortgagee may execute a
                           --------  -------
non-disturbance and attornment agreement in connection with certain lease
transactions in form and substance satisfactory to Mortgagee; and (ii) from time
to time Mortgagee may execute  and record among the conveyance records of the
jurisdiction where this Mortgage is recorded, subordination statements with
respect to such of said Space Leases as Mortgagee may designate in its sole
discretion, whereby the Space Leases so designated by Mortgagee shall be made
superior to the lien of this Mortgage for the term set forth in such
subordination statement.  From and after the recordation of such subordination
statements, and

                                       25
<PAGE>

for the respective periods as may be set forth therein, the Space Leases therein
referred to shall be superior to the lien of this Mortgage and shall not be
affected by any foreclosure hereof. All such Space Leases shall contain a
provision to the effect that the Mortgagor and Space Lessee recognize the right
of Mortgagee to elect and to effect such subordination of this Mortgage and each
of them consents thereto.

     7.9   Purchase by Mortgagee.  Upon any foreclosure sale (whether judicial
           ---------------------
or nonjudicial), Mortgagee may bid for and purchase the property subject to such
sale and, upon compliance with the terms of sale, may hold, retain and possess
and dispose of such property in its own absolute right without further
accountability.

     7.10  Suits to Protect the Mortgaged Property.  Mortgagee shall have the
           ---------------------------------------
power and authority to institute and maintain any suits and proceedings as
Mortgagee, in its reasonable discretion, may deem advisable (a) to prevent any
impairment of the Mortgaged Property by any acts which may be unlawful or any
violation of this Mortgage, (b) to preserve or protect its interest in the
Mortgaged Property, or (c) to restrain the enforcement of or compliance with any
legislation or other Legal Requirement that may be unconstitutional or otherwise
invalid, if the enforcement of or compliance with such enactment, rule or order
might impair the security hereunder or be prejudicial to Mortgagee's interest.

     7.11  Proofs of Claim.  In the case of any receivership, Bankruptcy,
           ---------------
reorganization, arrangement, adjustment, composition or other judicial
proceedings affecting Mortgagor, any Affiliate or any co-maker or endorser of
any of Mortgagor's obligations, its creditors or its property, Mortgagee, to the
extent permitted by law, shall be entitled to file such proofs of claim or other
documents as it may deem be necessary or advisable in order to have its claims
allowed in such proceedings for the entire amount due and payable by Mortgagor
under the New Notes or any other Collateral Document, at the date of the
institution of such proceedings, and for any additional amounts which may become
due and payable by Mortgagor after such date.

     7.12  Mortgagor to Pay the New Notes on Any Default in Payment; Application
           ---------------------------------------------------------------------
           of Monies by Mortgagee.
           ----------------------

           (a)  In case of a foreclosure sale of all or any part of the
Mortgaged Property and of the application of the proceeds of sale to the payment
of the sums secured hereby, Mortgagee shall be entitled to enforce payment from
Mortgagor of any additional amounts then remaining due and unpaid and to recover
judgment against Mortgagor for any portion thereof remaining unpaid, with
interest at the interest rate on the New Notes.

           (b)  Mortgagor hereby agrees to the extent permitted by law, that no
recovery of any such judgment by Mortgagee or other action by Mortgagee and no
attachment or levy of any execution upon any of the Mortgaged Property or any
other property shall in any way affect the Lien and security interest of this
Mortgage upon the Mortgaged Property or any part thereof

                                       26
<PAGE>

or any Lien, rights, powers or remedies of Mortgagee hereunder, but such Lien,
rights, powers and remedies shall continue unimpaired as before.

           (c)  Any monies collected or received by Mortgagee under this Section
7.12 shall be first applied to the payment of compensation, expenses and
disbursements of the agents, attorneys and other representatives of Mortgagee,
and the balance remaining shall be applied to the payment of amounts due and
unpaid under the New Notes.

           (d)  The provisions of this Section shall not be deemed to limit or
otherwise modify the provisions of any guaranty of the indebtedness evidenced by
the New Notes.

     7.13  Delay or Omission; No Waiver.  No delay or omission of Mortgagee or
           ----------------------------
Noteholder to exercise any right, power or remedy upon any Default or Event
of Default shall exhaust or impair any such right, power or remedy or shall be
construed to waive any such Default or Event of Default or to constitute
acquiescence therein.  Every right, power and remedy given to Mortgagee whether
contained herein or in the New Indenture or otherwise available to Mortgagee may
be exercised from time to time and as often as may be deemed expedient by
Mortgagee.

     7.14  No Waiver of One Default to Affect Another.  No waiver of any
           ------------------------------------------
Default or Event of Default hereunder shall extend to or affect any subsequent
or any other Default or Event of Default then existing, or impair any rights,
powers or remedies consequent thereon.  If Mortgagee or a majority of
Noteholders, to the extent applicable under the New Indenture, (a) grants
forbearance or an extension of time for the payment of any sums secured hereby;
(b) takes other or additional security for the payment thereof; (c) waives or
does not exercise any right granted in the New Notes, the New Indenture, this
Mortgage or any other Collateral Document; (d) releases any part of the
Mortgaged Property from the lien or security interest of this Mortgage or any
other instrument securing the New Notes; (e) makes or consents to any agreement
changing the terms of this Mortgage or any Collateral Document subordinating the
lien or any charge hereof, no such act or omission shall release, discharge,
modify, change or affect the original liability under the New Notes, this
Mortgage or any other Collateral Document or otherwise of Mortgagor, or any
subsequent purchaser of the Mortgaged Property or any part thereof or any maker,
co-signer or surety.  No such act or omission shall preclude Mortgagee from
exercising any right, power or privilege herein granted or intended to be
granted in case of Default or Event of Default then existing or of any
subsequent Default or Event of Default, nor, except as otherwise expressly
provided in an instrument or instruments executed by Mortgagee, shall the lien
or security interest of this Mortgage be altered thereby, except to the extent
expressly provided in any releases, or subordinations described in clause (d) or
(e) above of this Section 7.14.  In the event of the sale or transfer by
operation of law or otherwise of all or any part of the Mortgaged Property,
Mortgagee, without notice to any Person, firm or corporation, is hereby
authorized and empowered to deal with any such vendee or transferee with
reference to the Mortgaged Property or the Obligations secured hereby, or with
reference to any of the terms

                                       27
<PAGE>

or conditions hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any of
the liabilities or undertakings hereunder, or waiving its right to declare such
sale or transfer a Default or an Event of Default as provided herein.

     7.15  Discontinuance of Proceedings; Position of Parties Restored.  If
           -----------------------------------------------------------
Mortgagee shall have proceeded to enforce any right or remedy under this
Mortgage by foreclosure, entry of judgment or otherwise and such proceedings
shall have been discontinued or abandoned for any reason, or such proceedings
shall have resulted in a final determination adverse to Mortgagee, then and in
every such case Mortgagor and Mortgagee shall be restored to their former
positions and rights hereunder, and all rights, powers and remedies of Mortgagee
shall continue as if no such proceedings had occurred or had been taken.

     7.16  Remedies Cumulative.  No right, power or remedy, including without
           -------------------
limitation remedies with respect to any security for the New Notes, conferred
upon or reserved to Mortgagee by the Guarantees, this Mortgage or any other
Collateral Document is exclusive of any other right, power or remedy, but each
and every such right, power and remedy shall be cumulative and concurrent and
shall be in addition to any other right, power and remedy given hereunder or
under any Collateral Document, now or hereafter existing at law, in equity or by
statute, and Mortgagee shall be entitled to resort to such rights, powers,
remedies or security as Mortgagee shall in its sole and absolute discretion deem
advisable. The rights and remedies of Mortgagee upon the occurrence of one or
more defaults by Mortgagor may be exercised by Mortgagee, in the sole discretion
of Mortgagee, either alternatively, concurrently, or consecutively in any order.
The exercise by Mortgagee of any one or more of such rights and remedies shall
not be construed to be an election of remedies nor a waiver of any other rights
and remedies Mortgagee might have unless, and limited to the extent that,
Mortgagee shall so elect. Without limiting the generality of the foregoing, to
the extent that this Mortgage or any other Collateral Document covers the real
property and personal property, Mortgagee may, in the sole discretion of
Mortgagee, either alternatively, concurrently or consecutively in any order:

           (a)  Proceed as to both the real property, the personal property and
other collateral in accordance with Mortgagee's rights and remedies in respect
to the real property; or

           (b)  Proceed as to the real property in accordance with Mortgagee's
rights and remedies in respect to the real property and proceed as to the
personal property and other collateral in accordance with Mortgagee's rights and
remedies in respect to the personal property and other collateral.

           If Mortgagee should elect to proceed as to both the real property,
the personal property and other collateral in accordance with Mortgagee's rights
and remedies in respect to real property:

                                       28
<PAGE>

           (x)  All the real property and all the personal property and other
collateral may be sold, in the manner and at the time and place provided in this
Mortgage or in any other Collateral Document, as the case may be, in one lot, or
in separate lots consisting of any combination or combinations of the real
property, the personal property and other collateral, as Mortgagee may elect, in
the sole discretion of Mortgagee; and

           (y)  Mortgagor acknowledges and agrees that a disposition of the
personal property and other collateral in accordance with Mortgagee's rights and
remedies in respect to real property, as hereinabove provided, is a commercially
reasonable disposition of the collateral.

           If Mortgagee should elect to proceed as to the personal property and
other collateral in accordance with Mortgagee's rights and remedies in respect
to personal property and other collateral, Mortgagee shall have all the rights
and remedies conferred on a secured party by any Collateral Document relating
thereto or otherwise by applicable law.

     7.17  Foreclosure; Expense of Litigation.  If Mortgagee forecloses,
           ----------------------------------
reasonable attorneys' fees for services in the supervision of said foreclosure
proceeding shall be allowed to Mortgagee as part of the foreclosure costs.  In
the event of foreclosure of the lien hereof, there shall be allowed and included
as additional indebtedness all reasonable expenditures and expenses which may be
paid or incurred by or on behalf of Mortgagee for attorneys' fees, appraiser's
fees, outlays for documentary and expert evidence, stenographers' charges,
publication costs, and costs (which may be estimated as to items to be expended
after foreclosure sale or entry of the decree) of procuring all such abstracts
of title, title searches and examinations, title insurance policies and
guarantees, and similar data and assurances with respect to title as Mortgagee
may deem reasonably advisable either to prosecute such suit or to evidence to a
bidder at any sale which may be had pursuant to such decree the true condition
of the title to or the value of the Mortgaged Property or any portion thereof.
All expenditures and expenses of the nature in this section mentioned, and such
expenses and fees as may be incurred in the protection of the Mortgaged Property
and the maintenance of the lien and security interest of this Mortgage,
including the fees of any attorney employed by Mortgagee in any litigation or
proceeding affecting this Mortgage or any Collateral Document, the Mortgaged
Property or any portion thereof, including, without limitation, civil, probate,
appellate and bankruptcy proceedings, or in preparation for the commencement or
defense of any proceeding or threatened suit or proceeding, shall be immediately
due and payable by Mortgagor, with interest thereon at the interest rate on the
New Notes, and shall be secured by this Mortgage.  Mortgagee waives its right to
any statutory fee in connection with any judicial or nonjudicial foreclosure of
the lien hereof and agrees to accept a reasonable fee for such services.

     7.18  Deficiency Judgments.  If after foreclosure of this Mortgage or
           --------------------
Mortgagee's sale hereunder, there shall remain any deficiency with respect to
any amounts payable under the New Notes or hereunder or any amounts secured
hereby, and Mortgagee shall institute any proceedings to recover such deficiency
or deficiencies, all such amounts shall continue to bear

                                       29
<PAGE>

interest at the rate applicable to overdue principal pursuant to the New
Indenture. Mortgagor waives any defense to Mortgagee's recovery against
Mortgagor of any deficiency after any foreclosure sale of the Mortgaged
Property. Mortgagor expressly waives any defense or benefits that may be derived
from any statute granting Mortgagor any defense to any such recovery by
Mortgagee. In addition, Mortgagee shall be entitled to recovery of all of its
reasonable costs and expenditures (including without limitation any court
imposed costs) in connection with such proceedings, including its reasonable
attorneys' fees, appraisal fees and the other costs, fees and expenditures
referred to in Section 7.17 above. This provision shall survive any foreclosure
or sale of the Mortgaged Property, any portion thereof and/or the extinguishment
of the lien hereof.

     7.19  Waiver of Jury Trial.  TO THE FULLEST EXTENT PERMITTED BY LAW,
           --------------------
MORTGAGEE AND MORTGAGOR EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ARISING
OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THE NEW NOTES, THIS MORTGAGE OR ANY OTHER
COLLATERAL DOCUMENT  ANY SUCH DISPUTES SHALL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.

     7.20  Exculpation of Mortgagee.  The acceptance by Mortgagee of the
           ------------------------
assignment contained herein with all of the rights, powers, privileges and
authority created hereby shall not, prior to entry upon and taking possession of
the Mortgaged Property by Mortgagee, be deemed or construed to make Mortgagee a
"mortgagee in possession"; nor thereafter or at any time or in any event
obligate Mortgagee to appear in or defend any action or proceeding relating to
the Casino Ground Lease, the Space Leases, the Rents or the Mortgaged Property,
or to take any action hereunder or to expend any money or incur any expenses or
perform or discharge any obligation, duty or liability under any Space Lease or
the Casino Ground Lease or to assume any obligation or responsibility for any
security deposits or other deposits except to the extent such deposits are
actually received by Mortgagee, nor shall Mortgagee, prior to such entry and
taking, be liable in any way for any injury or damage to person or property
sustained by any Person in or about the Mortgaged Property.

     7.21  Keeper.  In the event the Mortgaged Property, or any part
           ------
thereof, is seized as an incident to an action for the recognition or
enforcement of this Mortgage by executory process, ordinary process,
sequestration writ of fieri facias or otherwise, Mortgagor and the Mortgagee
agree that the court issuing any such order shall if petitioned for by
Mortgagee, direct the applicable sheriff to appoint as a keeper of the Mortgaged
Property, the Mortgagee or any agent designated by Mortgagee or any person named
by Mortgagee at the time such seizure is effected.  This designation is pursuant
to Louisiana revised Statues 9:5136 through 5140.2, inclusive, as the same may
be amended, and the Mortgagee shall be entitled to all the rights and benefits
afforded thereunder.  It is hereby agreed that the keeper shall be entitled to
receive as compensation, in excess of its reasonable costs and expenses incurred
in the administration or preservation of the

                                       30
<PAGE>

Mortgaged Property, an amount equal to $250.00 per day, which shall be payable
monthly on the first day of each month and shall be included as Obligations
secured by this Mortgage. The designation of keeper made herein shall not be
deemed to require the Mortgagee to provoke the appointment of such a keeper.

     7.22  Authentic Evidence.  Any and all declarations of fact made by
           ------------------
authentic act before a notary public in the presence of two (2) witnesses by a
person declaring that such facts lie within his knowledge, shall constitute
authentic evidence of such facts for the purpose of executory process. Mortgagor
specifically agrees that such an affidavit by a representative of Mortgagee as
to the existence, amount, terms and maturity of the Obligations secured
hereunder and of a Default or an Event of Default hereunder shall constitute
authentic evidence of such fact for the purpose of executory process.

     7.23  Reinscription of Mortgage.  Mortgagor shall reinscribe this Mortgage
           -------------------------
prior to the date on which the lien of this Mortgage may prescribe by any
applicable prescriptive period.

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

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

     7.24. Environmental Matters.   Mortgagee, in its sole discretion, may
           ---------------------
require, as a prerequisite to the commencement of any proceeding or the exercise
of any remedy with respect to the Mortgaged Property, that it be provided
evidence reasonably satisfactory to Mortgagee that the Mortgaged Property is not
contaminated by Hazardous Materials and that Mortgagee shall not be subject to
any material liability for any contamination if it undertakes such proceeding or
remedy. Mortgagee shall have the authority (but shall not be required) to (i)
conduct environmental assessments, audits and site monitoring to determine
compliance with Environmental Laws; (ii) take all appropriate remedial action to
contain, clean up and remove any Hazardous Materials either on its own or in
response to an actual violation of any Environmental Laws or proceeding with
respect thereto; (iii) institute legal proceedings concerning environmental
damage or contest and settle proceedings brought by any local, state or federal
agency litigant; (iv) comply with any local, state or federal agency or court
order directing an assessment, abatement or cleanup of Hazardous Materials; and
(v) employ agents, consultants and legal counsel to assist or perform the above
undertakings or actions. Mortgagor shall indemnify Mortgagee for all reasonable
costs, expenses and liabilities reasonably incurred by

                                       31
<PAGE>

Mortgagee in connection with any such undertaking or action unless such costs,
expenses and liabilities are caused by the gross negligence or willful
misconduct of the Mortgagee.

     7.25  Disclaimer of Certain Duties.
           ----------------------------

           (a)  The powers conferred upon Mortgagee by this Mortgage are to
protect its interests in the Mortgaged Property and shall not impose any duty
upon Mortgagee to exercise any such powers.  Mortgagor hereby agrees that
Mortgagee shall not be liable for, nor shall the indebtedness evidenced by the
Obligations be diminished by, Mortgagee's delay or failure to collect upon,
foreclose, sell, take possession of or otherwise obtain value for the Mortgaged
Property.  Nothing herein shall affect any obligation of Mortgagee to the
Noteholders under the New Indenture or under applicable law.

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

                                   ARTICLE 8

                           MISCELLANEOUS PROVISIONS
                           ------------------------

     8.1  Heirs, Successors and Assigns Included in Parties.  Whenever one of
          -------------------------------------------------
the parties hereto is named or referred to herein the heirs, successors and
assigns of such party shall be included, and all covenants and agreements
contained in this Mortgage, by or on behalf of Mortgagor or Mortgagee shall bind
and inure to the benefits of their respective heirs, successors and assigns,
whether so expressed or not.

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

     8.3  Headings.  The headings of the articles, sections, paragraphs and
          --------
subdivisions of this Mortgage are for convenience of reference only, are not to
be considered a part hereof, and shall not limit or expand or otherwise affect
any of the terms hereof.

                                       32
<PAGE>

     8.4  Invalid Provisions to Affect No Others.  In the event that any of the
          --------------------------------------
covenants, agreements, terms or provisions contained herein or in the New Notes,
the New Indenture or any other Collateral Document shall be invalid, illegal or
unenforceable in any respect, the validity of the lien hereof and the remaining
covenants, agreements, terms or provisions contained herein or in the New Notes,
the New Indenture, or any other Collateral Document shall be in no way affected,
prejudiced or disturbed thereby. To the extent permitted by law, Mortgagor
waives any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.

     8.5  Changes and Priority Over Intervening Liens.  Neither this Mortgage
          -------------------------------------------
nor any terms hereof may be changed, waived, discharged or terminated orally, or
by any action or inaction, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought pursuant to the provisions of the New Indenture. Any agreement
hereafter made by Mortgagor and Mortgagee relating to this Mortgage shall be
superior to the rights of the holder of any intervening lien or encumbrance.

     8.6  Governing Law.  This Mortgage shall be construed, interpreted,
          -------------
enforced and governed by and in accordance with the laws of the State of
Louisiana, without regard to its choice of law provisions.

     8.7  Prescription.  To the fullest extent allowed by the law, the right to
          ------------
plead, use or assert any statute of limitations or defense of prescription as a
plea or defense or bar of any kind, or for any purpose, to any debt, demand or
obligation secured or to be secured hereby, or to any complaint or other
pleading or proceeding filed, instituted or maintained for the purpose of
enforcing this Mortgage or any rights hereunder, is hereby waived by Mortgagor.

     8.8  Subrogation.  Should the Obligations, repayment of which is hereby
          -----------
secured, or any part thereof, be used directly or indirectly to pay off,
discharge, or satisfy, in whole or in part, any prior or superior lien or
encumbrance upon the Mortgaged Property, or any part thereof, then, as
additional security hereunder, Mortgagee shall be subrogated to any and all
rights, superior titles, liens, and equities owned or claimed by any owner or
holder of said outstanding liens, charges, and indebtedness, however remote,
regardless of whether said liens, charges, and indebtedness are acquired by
assignment or have been released of record by the holder thereof upon payment.

     8.9  Joint and Several Liability.  All obligations of Mortgagor hereunder,
          ---------------------------
if more than one, are joint and several (i.e., solidary). Recourse for
deficiency after sale hereunder may be had against the property of Mortgagor,
without, however, creating a present or other lien or charge thereon.

     8.10  Context.  In this Mortgage, whenever the context so requires, the
           -------
neuter includes the masculine and feminine, and the singular including the
plural, and vice versa.

                                       33
<PAGE>

     8.11  Time.  Time is of the essence of each and every term, covenant and
           ----
condition hereof. Unless otherwise specified herein, any reference to "days" in
this Mortgage shall be deemed to mean "calendar days."

     8.12  Interpretation.  As used in this Mortgage unless the context clearly
           --------------
requires otherwise: the terms "herein" or "hereunder" and similar terms without
reference to a particular section shall refer to the entire Mortgage and not
just to the section in which such terms appear; the term "lien" shall also mean
a security interest, and the term "security interest" shall also mean a lien.

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

                                       34
<PAGE>

     8.14  Leasehold Provisions
           --------------------

           (a)  Mortgagor and the City of Shreveport ("Lessor") are parties to
the Casino Ground Lease. Mortgagor will at all times fully perform and comply in
all material respects with all agreements, covenants, terms and conditions
imposed upon or assumed by it as lessee under the Casino Ground Lease and
Mortgagor further covenants that it will not do or permit anything to be done,
the doing of which, or refrain from doing anything, the omission of which, will
impair or would reasonably be expected to impair the security of this Mortgage.
If Mortgagor shall fail so to do Mortgagee may (but shall not be obligated to)
take any action Mortgagee deems reasonably necessary or desirable to prevent or
to cure any default by Mortgagor in the performance of or compliance with any of
Mortgagor's covenants or obligations under said Casino Ground Lease after
reasonable prior notice to Mortgagor. Upon receipt by Mortgagee from the Lessor
of any written notice of default by the lessee thereunder, Mortgagee may rely
thereon and take any action as aforesaid after reasonable prior notice to
Mortgagor to cure such default even though the existence of such default or the
nature thereof be questioned or denied by Mortgagor or by any party on behalf of
Mortgagor. Mortgagor hereby expressly grants to Mortgagee, and agrees that
Mortgagee shall have, the absolute and immediate right to enter in and upon the
real property described herein or any part thereof to such extent and as often
as Mortgagee in its sole discretion deems reasonably necessary or desirable in
order to prevent or to cure any such default by Mortgagor. Mortgagee may pay and
expend such sums of money as Mortgagee in its sole discretion deems reasonably
necessary for any such purpose, and Mortgagor hereby agrees to pay to Mortgagee,
immediately and without demand, all such sums so paid and expended by Mortgagee,
together with interest thereon from the date of each such payment at the rate
applicable to overdue principal pursuant to the New Indenture. All sums so paid
and expended by Mortgagee and the interest thereon shall be added to the
Obligations and be secured by the Lien of this Mortgage.

           (b)  Except as permitted by the New Indenture, Mortgagor will not
surrender the leasehold estate and interest hereinabove described or terminate
or cancel the Casino Ground Lease.  If the Casino Ground Lease is for any reason
terminated prior to the natural expiration of its term, and if, pursuant to any
provision of the Casino Ground Lease or otherwise, Mortgagee or its designee
shall acquire from the Lessor a new lease of all of any portion of the Land,
Mortgagor shall have no right, title or interest in or to such new lease or the
leasehold estate created thereof.

           (c)  Mortgagee, by accepting this Mortgage, consents to the terms and
provisions of the Casino Ground Lease, and the rights, titles and interests
created in favor of the Lessor thereunder shall not constitute a default under
any provisions of this Mortgage.

           (d)  Except as specifically provided in the New Indenture, and as
would not be adverse in any material respect to Mortgagee or the Noteholders,
Mortgagor also covenants that it

                                       35
<PAGE>

will not waive, modify or in any way alter the material terms of the Casino
Ground Lease or cancel or surrender the Casino Ground Lease, or waive, excuse,
condone or in any way release or discharge Lessor of or from the material
obligations, covenants, conditions and agreements to be done and performed by
Lessor under the terms of the Casino Ground Lease; and Mortgagor does by these
presents expressly release, relinquish and surrender unto Mortgagee all its
right, power and authority to cancel, surrender, amend, modify, waive or alter
in any material way the terms and provisions of the Casino Ground Lease and any
attempt on the part of Mortgagor to exercise any such right without the written
authority and consent of Mortgagee thereto being first had and obtained (which
consent shall not unreasonably be withheld, conditioned or delayed) shall
constitute an Event of Default hereunder.

          (e)  Mortgagor hereby covenants (i) to give Mortgagee prompt notice
in writing of any receipt by it of any notice of default from Lessor; (ii) to
furnish to Mortgagee any and all information which it may reasonably request
concerning the performance by Mortgagor of the material covenants imposed on
Mortgagor under the Casino Ground Lease promptly after such request; and (iii)
to permit forthwith Mortgagee or its representative at all reasonable times on
reasonable notice and so long as the same shall not unreasonably interfere with
the use or business at the Mortgaged Property by Mortgagor, to make
investigation or examination concerning such performance.

          (f)  The following shall apply to any Bankruptcy in which Lessor is
the debtor:

               (i)    Mortgagor shall notify Mortgagee promptly after learning
of the commencement or threat of commencement of any Bankruptcy affecting
Lessor. Mortgagor promptly shall deliver to Mortgagee copies of any and all
material notices, summonses, pleadings, applications, and other documents that
Mortgagor receives in connection with any such Bankruptcy and any related
proceedings.

               (ii)   If Lessor rejects or disaffirms, or seeks or purports to
reject or disaffirm, the Casino Ground Lease pursuant to any Bankruptcy Law,
then Mortgagor shall not exercise its right to treat the Casino Ground Lease as
terminated under (S) 365(h) of the Federal Bankruptcy Code or any similar
Bankruptcy Law, or any comparable right provided under any other Bankruptcy Law
without Mortgagee's prior written consent, such consent not to be unreasonably
withheld. Mortgagor's right under such circumstances to elect either to treat
the Casino Ground Lease as terminated or to retain its rights under the Casino
Ground Lease pursuant to Section 365(h) of the Federal Bankruptcy Code or any
similar Bankruptcy Law, or any comparable right provided under any other
Bankruptcy Law, shall be hereinafter referred to as the "365(h) Election".

               (iii)  Unless Mortgagee directs otherwise in writing, Mortgagor
shall exercise the 365(h) Election in favor of Mortgagor's remaining in
possession under the Casino Ground Lease at least five (5) Business Days prior
to the last day on which the 365(h) Election may be

                                       36
<PAGE>

exercised. Mortgagor hereby constitutes and appoints Mortgagee the true and
lawful attorney-in-fact, coupled with an interest, of Mortgagor, empowered and
authorized in the name, place and stead of Mortgagor to exercise the 365(h)
Election in favor of Mortgagor's remaining in possession under the Casino Ground
Lease in the event Mortgagor fails to do so within the time period set forth
above. The foregoing appointment is irrevocable and continuing and such rights,
powers and privileges shall be exclusive in Mortgagee, its successors and
permitted assigns, so long as any part of the Obligations secured hereby remain
unpaid or undischarged. Mortgagor acknowledges that Mortgagor's resulting
occupancy and other rights, as adjusted by the effect of Federal Bankruptcy Code
Section 365, are part of the Mortgaged Property and subject to the Lien of this
Mortgage. Mortgagor further acknowledges that exercise of the 365(h) Election in
favor of terminating the Casino Ground Lease would constitute waste prohibited
by this Mortgage unless Mortgagee shall have consented to such termination, such
consent not to be unreasonably withheld. Mortgagor acknowledges and agrees that
the 365(h) Election is in the nature of a remedy available to Mortgagor under
the Casino Ground Lease and is not a property interest that Mortgagor can
separate from the Casino Ground Lease as to which it arises. Therefore,
Mortgagor agrees and acknowledges that exercise of the 365(h) Election in favor
of preserving the right to possession under the Casino Ground Lease shall not be
deemed to constitute Mortgagee's taking or sale of the Mortgaged Property (or
any element thereof) and shall not entitle Mortgagor to any credit against the
Obligations secured hereby or otherwise impair Mortgagee's remedies hereunder or
under the New Indenture.

               (iv)  If Lessor rejects or disaffirms the Casino Ground Lease or
purports or seeks to disaffirm the Casino Ground Lease pursuant to any
Bankruptcy Law, then: (1) Mortgagor shall remain in possession of the premises
demised under the Casino Ground Lease and shall perform all acts necessary for
Mortgagor to remain in such possession for the unexpired term of the Casino
Ground Lease (including all renewals available at the sole option of Mortgagor);
and (2) all terms and provisions of this Mortgage and the Lien created hereby
shall remain in full force and effect and shall extend automatically to all of
Mortgagor's rights and remedies arising at any time under, or pursuant to,
Federal Bankruptcy Code (S) 365(h), including all of Mortgagor's rights to
remain in possession of the premises demised under the Casino Ground Lease.

               (v)   Following the occurrence and during the continuance of an
Event of Default, if pursuant to Federal Bankruptcy Code (S) 365(h), or any
other similar Bankruptcy Law, Mortgagor seeks to offset against rent owing under
the Casino Ground Lease ("Ground Rent") the amount of any claim for the payment
                          -----------
of damages from Lessor's failure to perform under the Casino Ground Lease, or
rejection of the Casino Ground Lease under any Bankruptcy Law (a "Lease Damage
                                                                  ------------
Claim"), then Mortgagor shall notify Mortgagee of its intent to do so at least
-----
twenty (20) days before effecting such offset. Such notice shall set forth the
amounts proposed to be so offset and the basis for such offset. If Mortgagee
reasonably believes that such offset is likely to materially adversely affect
the security interest of Mortgagee in the Casino Ground Lease or otherwise
materially adversely affect the Mortgaged Property, Mortgagee may object to

                                       37
<PAGE>

all or any part of such offset, in which event Mortgagor shall not effect any
offset of the amounts to which Mortgagee objects. If Mortgagee fails to object
within such twenty (20) day period to such offset, then Mortgagor may effect
such offset as set forth in Mortgagor's notice. Mortgagor shall indemnify
Mortgagee against any loss or damage suffered by Mortgagee with respect to any
offset by Mortgagor against Ground Rent, except to the extent of any loss or
damage resulting from Mortgagee's gross negligence or willful misconduct.

                    (g)  Mortgagor hereby irrevocably appoints Mortgagee, during
the existence of an Event of Default, as its true and lawful attorney-in-fact,
to do, in its name or otherwise, any and all acts and to execute any and all
documents which are necessary to preserve any rights of Mortgagee under or with
respect to the Casino Ground Lease, including, without limitation, the right to
effect any extension or renewal of the Casino Ground Lease, or to preserve any
rights of Mortgagee whatsoever in respect of any part of the Casino Ground Lease
(and the above powers granted to Mortgagee are coupled with an interest and
shall be irrevocable.)

               The generality of the provisions of this Section 8.14 relating to
                                                        ------------
the Casino Ground Lease shall not be limited by other provisions of this
Mortgage and the New Indenture setting forth particular obligations of Mortgagor
which are also required of Mortgagor with respect to the Casino Ground Lease,
the Improvements, or the Land.

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

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

                                   ARTICLE 9

                               POWER OF ATTORNEY
                               -----------------

     9.1  Grant of Power.  Mortgagor irrevocably appoints Mortgagee and any
          --------------
successor thereto as its attorney-in-fact, with full power and authority,
including the power of substitution,

                                       38
<PAGE>

exercisable only during the occurrence and continuance of an Event of Default to
act for Mortgagor in its name, place and stead as hereinafter provided:

          (a)  Possession and Completion.  To take possession of the Land under
               -------------------------
the Casino Ground Lease and the Shreveport Resort, remove all employees,
contractors and agents of Mortgagor therefrom, complete or attempt to complete
the work of construction of the Shreveport Resort, and market, sell or sublease
the Land and the Shreveport Resort.

          (b)  Plans.  To make such additions, changes and corrections in the
               -----
current Plans as may be necessary or desirable, in Mortgagee's reasonable
discretion, or as it deems proper to complete the restoration of the Shreveport
Resort.
          (c)  Employment of Others.  To employ such contractors,
               --------------------
subcontractors, suppliers, architects, inspectors, consultants, property
managers and other agents as Mortgagee, in its discretion, deems proper for the
restoration of the Shreveport Resort, for the protection or clearance of title
to the Land or for the protection of Mortgagee's interests with respect thereto.

          (d)  Security Guards.  To employ watchmen to protect the Shreveport
               ---------------
Resort from injury.

          (e)  Compromise Claims.  To pay, settle or compromise all bills and
               -----------------
claims then existing or thereafter arising against Mortgagor, which Mortgagee,
in its discretion, deems proper for the protection or clearance of title to the
Land or for the protection of Mortgagee's interests with respect thereto.

          (f)  Legal Proceedings.  To prosecute and defend all actions and
               -----------------
proceedings in connection with the land or the Shreveport Resort.

          (g)  Other Acts.  To execute, acknowledge and deliver all other
               ----------
instruments and documents in the name of Mortgagor that are necessary or
desirable, to exercise Mortgagor's rights under all contracts concerning the
Land or the Shreveport Resort, including, without limitation, under the Casino
Ground Lease or any Space Leases, and to do all other acts with respect to the
Land or the Shreveport Resort that Mortgagor might do on its own behalf, as
Mortgagee, in its reasonable discretion, deems proper.

                           [Signature page follows.]

                                       39
<PAGE>

     THIS DONE AND PASSED, in multiple originals, on the day and in the month
and year hereinabove first written, in the presence of the undersigned competent
witnesses who hereunto sign their names with Mortgagor and me, Notary, after due
reading of the whole.

WITNESSES:                            MORTGAGOR:

______________________________        HOLLYWOOD CASINO SHREVEPORT

                                      BY:  HCS I, INC., a Louisiana corporation
                                           its Managing General Partner
______________________________

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

                      ___________________________________
                                 NOTARY PUBLIC

                                       40
<PAGE>

                                  EXHIBIT "A"

               RESOLUTIONS OF MORTGAGOR AUTHORIZING TRANSACTION
               ------------------------------------------------

                                       41
<PAGE>

                                  EXHIBIT "B"

                            DESCRIPTION OF THE LAND
                            -----------------------

                                       42<PAGE>

                                                                    Exhibit 10.1

                        MANAGER SUBORDINATION AGREEMENT
                        -------------------------------

          THIS MANAGER SUBORDINATION AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement") is made as of June 15,
2001, by and among STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, as trustee (in such capacity, together with its successors and assigns,
the "Trustee"), for the benefit of itself and the holders of the Notes (as
defined below), HWCC-SHREVEPORT, INC., a Louisiana corporation (the "Manager"),
and HOLLYWOOD CASINO SHREVEPORT, a Louisiana partnership (f/k/a QNOV and Queen
of New Orleans at the Hilton Joint Venture) (the "Company").

                                    RECITALS

     A.   The Company and Shreveport Capital Corporation, a Louisiana
corporation ("Shreveport Capital", and together with the Company, the
"Issuers"), shall issue up to $39,000,000 of their 13% Senior Secured Notes due
2006 with Contingent Interest (the "Original Notes" and together with any new
notes issued in replacement of and exchange therefor, the "Notes") pursuant to
that certain Indenture dated as of even date herewith (as amended, supplemented
or otherwise modified from time to time, the "Indenture"), by and among the
Issuers, the Trustee and certain other parties. All terms used and not otherwise
defined herein shall have the meanings given in the Indenture.

     B.   The Manager and the Company are parties to that certain Management
Services Agreement dated as of September 22, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Management Agreement"), pursuant to
which the Company shall pay the Manager a management fee in consideration of the
Manager's services relating to the management and operation of the Shreveport
Resort and reimburse the Manager for services supplied to the Company in
accordance with the terms thereof.

     C.   As a condition to the purchase of the Notes, the parties have agreed
to enter into this Agreement.

                                   AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing recitals and the
provisions set forth herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Trustee, the
Manager and the Company agree as follows:

          1.   Subordination to Senior Debt.  Notwithstanding any other
               ----------------------------
provision of the Management Agreement, all fees payable to the Manager pursuant
to the Management Agreement (other than expense reimbursement payable to the
Manager in accordance with the terms of the Management Agreement) (the
"Management Fees") are and shall be subordinate and junior in right of payment,
to the extent and in the manner hereinafter set forth, to the prior
<PAGE>

indefeasible payment in full, satisfaction and discharge or defeasance in
accordance with the Indenture of all Senior Debt (as defined below).

          "Senior Debt" means (a) all indebtedness, liabilities and obligations
of every kind or nature, absolute or contingent, now existing or hereafter
arising, of the Company, its successors and assigns, under the Indenture, the
Notes, any Collateral Documents or any other documents, instruments or
agreements executed in connection with any of the foregoing (the foregoing,
collectively, the "Transaction Documents"), to the Trustee or any holder of
Notes and their successors and assigns, including without limitation the
principal of, and interest on (including any interest accruing after the
commencement of any bankruptcy, insolvency or similar proceeding with respect to
the Company and any interest which would have accrued but for the commencement
of any such proceeding whether or not allowed as a claim in that proceeding),
and all premiums, fees, charges, expenses and indemnities arising under or in
connection with the Indenture, the Notes or any other Transaction Document; and
(b) any modifications, amendments or extensions of any indebtedness or
obligation described in clause (a) above.  Except as and to the extent provided
hereinafter, the Manager will not ask, demand, sue for, take or receive from the
Company, by set-off or in any other manner, direct or indirect payment (whether
in cash or property), of the whole or any part of the Management Fees, or any
transfer of any property in payment of or as security therefor, so long as there
exists an Event of Default under the Indenture.

          2.   Distributions in Liquidation and Bankruptcy.  In the event of any
               -------------------------------------------
distribution, division or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any part of the assets
of the Company or the proceeds thereof (including any assets now or hereafter
securing any Management Fees) to creditors of the Company or upon any
indebtedness of the Company, by reason of the liquidation, dissolution or other
winding up, partial or complete, of the Company, or any receivership, insolvency
or bankruptcy proceeding, or assignment for the benefit of creditors or
marshalling of assets, or any proceeding by or against the Company for any
relief under any bankruptcy or insolvency law or laws relating to the relief of
debtors, readjustment of indebtedness, arrangements, reorganizations,
compositions or extensions (each of the foregoing, a "Liquidation Event"), then
and in any such event:

               (a)  The holders of Senior Debt shall be entitled to receive
     payment in full in cash of all Senior Debt before the Manager shall be
     entitled to receive any payment or other distributions on, or with respect
     to, the Management Fees;

               (b)  Any payment or distribution of any kind or character,
     whether in cash, securities or other property, which but for these
     provisions would be payable or deliverable upon or with respect to the
     Management Fees shall instead be paid or delivered directly to the Trustee
     for the benefit of the holders of the Senior Debt for application on the
     Senior Debt, whether then due or not due, until the Senior Debt shall have
     first been fully and indefeasibly paid in cash, satisfied and discharged or
     otherwise defeased under the Indenture, subject to the rights of the
     Existing Notes Trustee with respect to the same;

                                       2
<PAGE>

               (c)  The Manager hereby irrevocably authorizes and empowers the
     Trustee, and appoints the Trustee as attorney-in-fact, to demand, sue for,
     collect and receive every such payment or distribution and give acquittance
     therefor, and to file and vote claims (in bankruptcy proceedings or
     otherwise) and take such other actions, in the Trustee's own name or
     otherwise, as the Trustee may deem necessary or advisable for the
     enforcement of these provisions. The Manager shall duly and promptly take
     such action as may be reasonably requested by the Trustee to assist in the
     collection of the Management Fees for the account of any holder of the
     Senior Debt, and to file appropriate proofs of claim with respect to the
     Management Fees and to vote the same, and to execute and deliver to the
     Trustee on demand such powers of attorney, proofs of claim, assignments of
     claim or other instruments as may be reasonably requested by the Trustee to
     enable the Trustee or any other holder of the Senior Debt to enforce any
     and all claims upon or with respect to the Management Fees and to collect
     and receive any and all payments or distributions which may be payable or
     deliverable at any time upon or with respect to the Management Fees,
     subject to the rights of the Existing Notes Trustee with respect to the
     same. In addition, the Manager shall take no action (whether oral, written
     or otherwise) in contravention of any action of the Trustee duly taken and
     permitted hereunder. Such appointment as attorney-in-fact pursuant to this
     Section 2(c) is irrevocable and coupled with an interest until payment in
     ------------
     full and complete performance of all the Senior Debt.  The Trustee may
     appoint a substitute attorney-in-fact.  The Manager ratifies all actions
     reasonably taken by the attorney-in-fact but, nevertheless, if the Trustee
     requests, the Manager will specifically ratify any action taken by the
     attorney-in-fact by executing and delivering to the attorney-in-fact or to
     any entity designated by the attorney-in-fact all documents necessary to
     effect such ratification;

               (d)  The Manager will forthwith deliver any direct or indirect
     payment made to the Manager upon or with respect to the Management Fees
     prior to the payment in full, satisfaction and discharge or defeasance of
     the Senior Debt in accordance with the Indenture and following any
     Liquidation Event or Default or Event of Default to the Trustee in
     precisely the form received (except for the endorsement or assignment of
     the Manager where necessary) for application on the Senior Debt, whether
     then due or not due, subject to the rights of the Existing Notes Trustee
     with respect to the same. Until so delivered, the payment or distribution
     shall be held in trust by the Manager as property of the holders of the
     Senior Debt. In the event of the failure of the Manager to make any such
     endorsement or assignment, the Trustee, or any of its officers or
     employees, are hereby irrevocably authorized to make the same; and

               (e)  Each of the parties hereby agrees that it shall be bound by
     the terms and provisions hereof, notwithstanding the confirmation of a plan
     of reorganization of the Company under Section 1129(b) of the Bankruptcy
     Code.

          3.   Permitted Payments.  Subject to the provisions of Paragraphs 2
               ------------------                                ------------
and 4 of this Agreement, the Company may pay to and the Manager may accept
    -
payment of amounts due under the Management Agreement, a true and correct copy
of which is attached hereto as Exhibit A.  Any amounts not permitted to be paid
                               ---------
pursuant to the provisions of Paragraph 4 of
                              -----------

                                       3
<PAGE>

this Agreement shall be deferred and shall accrue and may be paid only at such
time as such amounts would otherwise be permitted to be paid pursuant to the
provisions of this Agreement. Except as otherwise expressly provided in the
Indenture, the Company and the Manager shall not change, alter, amend, waive or
otherwise modify the Management Agreement without the Trustee's prior written
consent.

          4.   Default on Senior Debt; Other Subordinated Obligation Payment
               -------------------------------------------------------------
Restrictions.
------------

               (a)  In the event that any Default or Event of Default shall
     occur and be continuing with respect to any Senior Debt, or if any payment
     of Management Fees would create a Default or Event of Default, unless and
     until all Senior Debt shall have been indefeasibly paid in full in cash,
     satisfied and discharged or otherwise defeased under the Indenture, the
     right of the Manager to receive any payments or other distributions with
     respect to Management Fees shall be deferred during the continuance of such
     Default or Event of Default.

               (b)  Unless and until all Senior Debt shall have been
     indefeasibly paid in full in cash, satisfied and discharged or otherwise
     defeased under the Indenture, the right of the Manager to receive any
     payments or other distributions with respect to the Management Fees shall
     be deferred if and to the extent that, as of the date which such Management
     Fees are to be paid, the payment of such Management Fees would cause the
     Company's Fixed Charge Coverage Ratio for its most recently ended four (4)
     full fiscal quarters for which internal financial statements are available
     immediately preceding the date on which such Management Fee is proposed to
     be paid to be less than 1.5 to 1 (calculated on a pro forma basis after
     adding back Management Fees that were deducted in arriving at Consolidated
     Cash Flow during such period and deducting to arrive at Consolidated Cash
     Flow Management Fees to be paid pursuant to this Section 4(b)); provided,
                                                                     --------
     however, that with respect to periods prior to the time when internal
     -------
     financial statements are available for four (4) full fiscal quarters, such
     Fixed Charge Coverage Ratio shall be calculated with respect to the actual
     number of full fiscal quarters (but in no event less than one (1) full
     fiscal quarter) for which internal financial statements are available for
     the fiscal year 2001.

               If, notwithstanding the foregoing provisions of this Paragraph 4,
                                                                    -----------
     the Manager shall receive any payment or distribution of any kind with
     respect to the Management Fees (whether from any collateral securing the
     Management Fees or otherwise) following any Event of Default until cured,
     such payment or distribution shall be received in trust for, and shall be
     delivered to the Trustee promptly in precisely the form received (except
     for the endorsement or assignment of the Manager where necessary) for
     application on the Senior Debt, whether then due or not due, subject to the
     rights of the Existing Notes Trustee with respect to the same.  Until so
     delivered, the payment or distribution shall be held in trust by the
     Manager as property of the holders of Senior Debt.

                                       4
<PAGE>

               (c)  Manager agrees that any deferral pursuant hereto of payments
     under the Management Agreement shall not constitute a default under the
     Management Agreement.

               (d)  No amounts payable pursuant to the Management Agreement
     shall be prepaid.

          5.   No Acceleration or Exercise of Remedies.  So long as any Senior
               ---------------------------------------
Debt remains unpaid, the Manager will not (a) cause any portion of the
Management Fees to become due prior to the due date for such Management Fees as
set forth in the Management Agreement; (b) accept any payment, prepayment or
defeasance of any portion of the Management Fees prior to the due date for such
Management Fees as set forth in the Management Agreement or in violation of this
Agreement; (c) modify or alter in any way the provisions of the Management
Agreement if the effect of such is to accelerate the payments of the Management
Fees due thereon; or (d) exercise any remedies with respect to the Management
Fees or any collateral at any time securing payment or performance thereof
unless and until, in each such case, all of the Senior Debt shall have
indefeasibly paid in full in cash, satisfied and discharged or otherwise
defeased under the Indenture, or the Trustee shall have otherwise consented in
writing.

          6.   Bankruptcy.  Until the Senior Debt shall have been indefeasibly
               ----------
paid in full in cash, satisfied and discharged or otherwise defeased under the
Indenture, the Manager will not, without the prior consent of the Trustee,
commence, or join with any other person in commencing, any proceeding against
any Person with respect to the Management Fees under any bankruptcy,
reorganization, readjustment of debt, dissolution, receivership, liquidation or
insolvency law or statute now or hereafter in effect in any jurisdiction.

          7.   Continuing Subordination.  The subordination effected by these
               ------------------------
provisions is a continuing subordination and may not be modified or terminated
by the Manager or any other holder of any Management Fees until all of the
Senior Debt shall have been indefeasibly paid in full in cash, satisfied and
discharged or otherwise defeased under the Indenture.  At any time and from time
to time, without consent of or notice to the Manager or any other holder of the
Management Fees, and without impairing or affecting the obligations of any of
them hereunder:

               (a)  The time for the Company's performance of, or compliance
     with, any of its agreements contained in the Indenture, the Notes or the
     other Transaction Documents, or any other agreement, instrument or document
     relating to the Senior Debt, may be modified or extended or such
     performance or compliance may be waived;

               (b)  The Trustee may exercise or refrain from exercising any
     rights under the Indenture, the Notes or the other Transaction Documents,
     or any other agreement, instrument or document relating to the Senior Debt;

               (c)  The Indenture, the Notes or the other Transaction Documents,
     or any other agreement, instrument or document relating to the Senior Debt,
     may be revised, amended or otherwise modified for the purpose of adding or
     changing any provisions

                                       5
<PAGE>

     thereof (including, but not limited to, an increase in the interest
     charges), or changing in any manner the rights of the Trustee or the
     Company;

               (d)  Payment of the Senior Debt or any portion thereof may be
     extended or refunded or any notes evidencing such Senior Debt may be
     renewed in whole or in part;

               (e)  The maturity of the Senior Debt may be accelerated, and any
     collateral security therefor or any other rights of the Trustee may be
     exchanged, sold, surrendered, released or otherwise dealt with in
     accordance with the terms of any present or future agreement with the
     Company and any other agreement of subordination (and the debt covered
     thereby) may be surrendered, released or discharged, or the terms thereof
     modified or otherwise dealt with in any manner;

               (f)  Any person liable in any manner for payment of the Senior
     Debt may be released by holders of Senior Debt; and

               (g)  Notwithstanding the occurrence of any of the foregoing,
     these subordination provisions shall remain in full force and effect with
     respect to the Senior Debt, as the same shall have been extended, renewed,
     modified or refunded.

          8.   Waivers.  The Manager hereby waives, and agrees not to assert (a)
               -------
any right, now or hereafter existing, to require the Trustee to proceed against
or exhaust any collateral at any time securing the Senior Debt, or to marshal
any assets in favor of the Manager or any other holder of any Management Fees;
(b) any notice of the incurrence of Senior Debt, it being understood advances
may be made under the Indenture, or any other agreement, document or instrument
now or hereafter relating to the Senior Debt, without notice to or authorization
of the Manager in reliance upon these subordination provisions.

          It is not the intent of this Agreement to cause the Manager to become
a surety.  However, in the event this Agreement may cause the Manager to be
deemed a surety, the following provisions apply; provided, however, that nothing
                                                 --------  -------
contained herein shall be deemed to be a guarantee by the obligor of any
obligations for the payment of principal and interest of the Issuers under the
Notes.  The Manager hereby waives and relinquishes all rights and remedies
accorded by applicable law to sureties or guarantors and agrees not to assert or
take advantage of any such rights or remedies, including, without limitation,
(a) any right to require the Trustee or any of the Holders (each a "Benefitted
Party") to proceed against the Company or any other Person or to proceed against
or exhaust any security held by a Benefitted Party at any time or to pursue any
other remedy in the power of a Benefitted Party before proceeding against the
Manager with respect to the Management Fees or other Person, (b) the defense of
the statute of limitations in any action with respect to the Management Fees
hereunder or in any action for the collection or performance of the obligations
owing on account of the Senior Debt, (c) any defense that may arise by reason of
the incapacity, lack of authority, death or disability of any Person or the
failure of a Benefitted Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any Person, (d)
appraisal, valuation, stay,

                                       6
<PAGE>

extension, marshalling of assets, redemption, exemption, demand, presentment,
protest and notice of any kind, including, without limitation, notice of the
existence, creation or incurring of any new or additional indebtedness or
obligation or of any action or non-action on the part of a Benefitted Party, the
Company, any endorser, guarantor or creditor of the Company or on the part of
any Person under this or any other instrument or document in connection with any
obligation or evidence of indebtedness held by a Benefitted Party as collateral
or in connection with the Senior Debt, (e) any defense based upon an election of
remedies by a Benefitted Party, including, without limitation, an election to
proceed by non-judicial rather than judicial foreclosure, which destroys or
otherwise impairs the subrogation rights of the Manager, the right of the
Manager to proceed against the Company or any other Person for reimbursement, or
both, (f) any defense based upon any statute or rule of law which provides that
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal, (g) any duty on the part of
a Benefitted Party to disclose to the Manager any facts a Benefitted Party may
now or hereafter know about the Company or any other Person, regardless of
whether a Benefitted Party has reason to believe that any such facts materially
increase the risk beyond that which the Manager intends to assume, or has reason
to believe that such facts are unknown to the Manager, or has a reasonable
opportunity to communicate such facts to the Manager, because the Manager
acknowledges that the Manager is fully responsible for being and keeping
informed of the financial condition of the Company of any other Person and of
all circumstances bearing on the risk of non-payment of any Senior Debt, (h) any
defense arising because of the election of a Benefitted Party, in any proceeding
instituted under the Federal Bankruptcy Code, of the application of Section
1111(b)(2) of the Federal Bankruptcy Code, (i) any defense based upon any
borrowing or grant of a security interest under Section 364 of the Federal
Bankruptcy Code, (j) any claim or other rights which it may now or hereafter
acquire against the Company or any other Person that arises from the existence
of performance obligations under the Indenture, the Notes or any Collateral
Document, including, without limitation, any right of subrogation,
reimbursement. Notwithstanding the foregoing, nothing in this Section 8 shall be
                                                              ---------
deemed to impair the rights otherwise expressly given to the Manager in any of
the Transaction Documents. No failure or delay on the Trustee's part in
exercising any power, right or privilege under this Agreement shall impair or
waive any such power, right or privilege. The Manager acknowledges and agrees
that any nonrecourse or exculpation provided for in the Indenture, the Notes or
any Collateral Document, or any other provision of this Indenture, the Notes or
any Collateral Document, limiting the Benefitted Parties' recourse to specific
collateral, or limiting the Benefitted Parties' right to enforce a deficiency
judgment against the Company, shall have absolutely no application to the
Manager's or the Company's liability under the Indenture, the Notes or any
Collateral Documents.

          9.   Lien Subordination.  Any Lien, security interest, encumbrance,
               ------------------
charge or claim of the Manager on any assets or property of the Company or any
proceeds or revenues therefrom which the Manager may have at any time as
security for any Management Fees shall be, and hereby is, subordinated to all
Liens, security interests, or encumbrances now or hereafter granted to the
Trustee by the Company or by law, notwithstanding the date or order of
attachment or perfection of any such Lien, security interest, encumbrance or
claim or charge or the provision of any applicable law.  Until all holders of
Senior Debt have received payment in full in cash of the Senior Debt, or the
Senior Debt is satisfied and discharged or defeased under the Indenture,

                                       7
<PAGE>

the Manager agrees that the Manager will not assert or seek to enforce against
the Company the Management Fees or any interest of the Manager in any collateral
for any portion of the Management Fees and that the Trustee may dispose of any
or all of the collateral for the Senior Debt free of any and all Liens,
including, but not limited to, Liens created in favor of the Manager, through
judicial or non-judicial proceedings, in accordance with applicable law
including taking title, after five (5) days written notice to the Manager. The
Manager hereby acknowledges that such notice if given five (5) days prior to
such disposition of any of all of the collateral for the Senior Debt is
sufficient and commercially reasonable. The Manager hereby agrees that any such
sale or other disposition of so much of the collateral for the Senior Debt as is
necessary to satisfy in full in cash all of the Senior Debt shall be free and
clear of any security interest granted to the Manager; provided that the entire
                                                       --------
proceeds (after deducting reasonable expenses of sale) are applied in reduction
of the Senior Debt. Upon the Trustee's request, the Manager shall execute and
deliver any releases or other documents and agreements that the Trustee in its
reasonable discretion deems necessary to dispose of the collateral for the
Senior Debt free of the Manager's interest in same. The Manager retains all of
its rights as a junior secured creditor with respect to the surplus, if any,
arising from any such disposition of the collateral for the Senior Debt.

          10.  Default by Company Under Management Agreement.  In the event of a
               ---------------------------------------------
default by the Company under the Management Agreement, Manager shall promptly
give written notice thereof to Trustee, and Trustee shall have the right (but
not the obligation) to cure such default within the cure periods provided to the
Company under the Management Agreement.  Manager shall not take any action with
respect to such default under the Management Agreement, including without
limitation any action to terminate the Management Agreement, unless and until
Trustee fails to cure such default within the applicable cure periods provided
therefor.

          11.  Subrogation.  The Manager hereby subordinates all rights of
               -----------
subrogation to the rights of the holders of Senior Debt to receive payments or
distributions, and any rights of subrogation to any collateral for the Senior
Debt, until the Senior Debt shall have been indefeasibly paid in full in cash,
satisfied and discharged or defeased in accordance with the Indenture.  Upon
such payment in full, the Manager shall be subrogated to all rights of the
holders of Senior Debt.

          12.  Subordination Not Impaired by the Company.  No right of the
               -----------------------------------------
Trustee or any holder of Senior Debt to enforce the subordination of the
Management Fees shall be impaired by any act or failure to act by the Company or
by its failure to comply with these provisions.

          13.  No Third Party Beneficiaries.  This Agreement is not intended to
               ----------------------------
give or confer any rights to any Person other than the holders of the Senior
Debt.  No other party, including the Company, is intended to be a third party
beneficiary of this Agreement.

                                       8
<PAGE>

          14.  Legend on Note.  If any portion of the Management Fees is
               --------------
evidenced by a promissory note, stock certificate or other instrument, the
Manager agrees to promptly add a legend thereto stating that the rights of any
holder thereof are subject to this Agreement.

          15.  Representations and Warranties.  The Manager hereby represents
               ------------------------------
and warrants that (a) the execution and delivery of this Agreement and the
performance by the Manager of its obligations hereunder have received all
necessary approvals and do not and will not contravene or conflict with any
provision of law or of any indenture, instrument or other agreement to which the
Manager is a party or by which it or its property may be bound or affected or
result in or require the creation or imposition of any mortgage, Lien, pledge,
security interest, charge or other encumbrance in, upon or of any of its
properties or assets under any such indenture, instrument or other agreement,
(b) the Manager has full power, authority and legal right to make and perform
this Agreement, (c) the Manager has not assigned or transferred any indebtedness
owing by the Company or any of the collateral for the Management Fees and that
the Manager will not assign or transfer same, (d) this Agreement is the legal,
valid and binding obligation of the Manager, enforceable against the Manager in
accordance with its terms, and (e) the Management Fees are not subject to any
other subordination agreement, other than in favor of the Existing Notes
Trustee.

          16.  No Waiver.  No failure on the part of the Trustee to exercise, no
               ---------
delay in exercising, and no course of dealing with respect to, any right or
remedy hereunder will operate as a waiver thereof; nor will any single or
partial exercise of any right or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right or remedy.  This Agreement
may not be amended or modified except by written agreement of the Trustee, the
Manager, and the Company, and no consent or waiver hereunder shall be valid
unless in writing and signed by the Trustee.

          17.  Successors and Assigns.  This Agreement, and the terms, covenants
               ----------------------
and conditions hereof, shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and assigns.

          18.  GOVERNING LAW.  THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE
               -------------
WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO CHOICE OF LAW PRINCIPLES.

          19.  Counterparts.  This Agreement may be executed in one or more
               ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

          20.  Severability.  The invalidity, illegality or unenforceability in
               ------------
any jurisdiction of any provision in or obligation under this Agreement shall
not affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Agreement or of such provision or
obligation in any other jurisdiction.

                                       9
<PAGE>

          21.  Consent.  Manager hereby consents to the collateral assignment by
               -------
the Company of its right, title and interest under the Management Agreement to
the Trustee, and any exercise of remedies pursuant thereto.

                           [SIGNATURE PAGE FOLLOWS]

                                      10
<PAGE>

          IN WITNESS WHEREOF, this Manager Subordination Agreement has been duly
executed as of the day and year first above written.

                             MANAGER:

                                  HWCC-SHREVEPORT, INC., a Louisiana
                                  corporation

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

                             COMPANY:

                                  HOLLYWOOD CASINO SHREVEPORT, a Louisiana
                                  general partnership

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

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

                             TRUSTEE:

                                  STATE STREET BANK AND TRUST COMPANY, a
                                  Massachusetts trust company

                                  By:___________________________________
                                  Name:
                                  Title:

              [Signature Page to Manager Subordination Agreement]
<PAGE>

                                   EXHIBIT A
                                      TO
                        MANAGER SUBORDINATION AGREEMENT

                              Management Agreement
                              --------------------

                              [Previously filed]

                                      A-1

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