Document:

<PAGE>   1

                                                                   EXHIBIT 10.03

                         THIRD AMENDMENT TO AMENDED AND
                     RENEGOTIATED CASINO OPERATING CONTRACT

         This renegotiation and amendment to the Amended and Renegotiated Casino
Operating Contract (the "Third Amendment") is made, entered into and effective
on the 29th day of March, 2001 (the "Effective Date"), conditioned upon and
subject to the fulfillment and satisfaction of all of the "Suspensive
Conditions" (as defined and set forth in Paragraph IV below) among the State of
Louisiana by and through the Louisiana Gaming Control Board (the "Gaming Board")
and Jazz Casino Company, L.L.C., a Louisiana limited liability company ("JCC" or
the "Casino Operator").

                                    RECITALS

         A. On October 30, 1998, the Gaming Board, JCC and Harrah's Jazz
Company, a Louisiana general partnership (which has since dissolved in
accordance with and as contemplated by the Joint Plan of Reorganization under
Chapter 11 of the United States Bankruptcy Code filed by Harrah's Jazz Company,
Harrah's Jazz Finance Corp. and Harrah's New Orleans Investment Company) entered
into the Amended and Renegotiated Casino Operating Contract (the "COC").
Effective as of October 19, 1999 the Gaming Board and JCC entered into a First
Amendment to Amended and Renegotiated Casino Operating Contract (the "First
Amendment"). On March 8, 2001, the Gaming Board and JCC entered into a Second
Amendment to Amended and Renegotiated Casino Operating Contract (the "Second
Amendment") conditioned upon and subject to the fulfillment and satisfaction of
certain suspensive conditions. As used herein, the COC, the First Amendment and
the Second Amendment may be referred to herein collectively as the "Amended
COC," and all capitalized terms used herein, and not otherwise defined herein,
shall have the same meaning as such terms have in the Amended COC.

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

         C. JCC and its related entities have submitted a plan of reorganization
in the bankruptcy proceedings of JCC and said related entities, and an order
confirming the plan was entered by the bankruptcy court on March 19, 2001.

         D. On March 21, 2001, Act 1 of the First Extraordinary Session of 2001
of the Louisiana Legislature became effective (the "Amending Legislation"),
which has satisfied various of the Suspensive Conditions set forth in Paragraph
IV of the Second Amendment, and various other of the Suspensive Conditions set
forth in Paragraph IV of the Second Amendment have also been timely fulfilled
and satisfied.

                                      -1-
<PAGE>   2

         E. Pursuant to R.S. 27:245 (including Section 3.A of the Amending
Legislation), and other provisions of law, the Gaming Board and JCC have agreed
to renegotiate and amend the Amended COC, subject to fulfillment and
satisfaction of all of the Suspensive Conditions set forth in Paragraph IV
hereinbelow.

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

         PARAGRAPH I.1 - AMENDMENTS

         (a) Article X "Casino Operator's Negative Covenants" is hereby amended
by adding Sections 10.10 and 10.11 as follows:

                  10.10 REDUCTION IN PERSONNEL. The Casino Operator shall not
                  reduce its total operating force or personnel level below
                  ninety percent of the force or level as such existed on March
                  8, 2001.

                  10.11 REDUCTION IN COMPENSATION. The Casino Operator shall not
                  reduce the total salary levels or compensation of its
                  operating force or personnel by more than ten percent of the
                  salary level of compensation as such existed on March 8, 2001.

         (b) Section 6.2(a) of the Amended COC is hereby amended by adding the
         following paragraph at the end of said section:

                  In the event it is held at any time that the 21-1/2% Louisiana
         Gross Gaming Revenue Share Payments and/or any or all of the "override"
         payments provided for above are for any reason null and void and/or
         unenforceable as a result of a final, definitive and nonappealable
         judgment(1) of a Louisiana state court of competent jurisdiction, then
         in such event, the Casino Operator agrees that the 18-1/2% Louisiana
         Gross Gaming Revenue Share Payments in effect and payable under the COC
         prior to the Gaming Board and JCC having entered into the Second
         Amendment and the additional increased percentage Louisiana Gross
         Gaming Revenue Share Payments in effect and payable under the COC prior
         to the Gaming Board and JCC having entered into the Second Amendment
         shall at such time or times become in full force and effect and shall
         be owed and payable by the Casino Operator to the Gaming Board under
         the Amended COC until such time that the said increased percentages
         agreed to in the Second Amendment become enforceable and no longer null
         and void as a result of enforceable legislative enactments or
         otherwise.

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

----------

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

                                      -2-
<PAGE>   3

         PARAGRAPH II - REPRESENTATIONS.

         PARAGRAPH II.1 - GAMING BOARD WARRANTIES: DUE AUTHORIZATION. The Gaming
Board warrants to the Casino Operator (i) that it is a duly established State
regulatory agency under Louisiana law and (ii) that pursuant to the Gaming Act
it is authorized to execute and deliver this Third Amendment on its own behalf
and on behalf of the State.

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

         PARAGRAPH III - GENERAL PROVISIONS.

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

         PARAGRAPH III.2 - EFFECTIVE DATE. The "Effective Date" of the Second
Amendment is amended to be the Effective Date set forth above (in this Third
Amendment), and therefore the Second Amendment and the Third Amendment and the
amendments provided for therein and herein shall be conditioned upon and subject
to the timely fulfillment and satisfaction of the Suspensive Conditions set
forth in Paragraph IV herein, and both amendments shall take effect as of the
Effective Date set forth above, provided, however, the amended provisions of
Sections 2.115, 6.2 and 6.3(a) shall not become operative until April 1, 2001.

         PARAGRAPH III.3 - UNENFORCEABILITY. Any provision of this Third
Amendment which is prohibited or unenforceable shall be deemed severed from the
Amended COC without invalidating the remaining provisions or affecting the
validity or enforceability of the remainder of the Amended COC, and it is
expressly provided that the provisions of Paragraphs III.3 of the First
Amendment remain in full force and effect.

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

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

                                      -3-
<PAGE>   4

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

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

         PARAGRAPH IV - SUSPENSIVE CONDITIONS. JCC Holding Company, Harrah's
Operating Company, Inc. ("HOC") and Harrah's Entertainment, Inc. ("HET") each an
intervenor to this Third Amendment and the Casino Operator, collectively
"Jazz/HET," along with the Gaming Board, acknowledge that the Amending
Legislation satisfies the Suspensive Conditions of subparagraph (a) and (b) of
Paragraph IV of the Second Amendment and that said Amending Legislation also
satisfies subparagraph (c) of Paragraph IV of the Second Amendment, and that
said Amending Legislation has been enacted and is effective. Jazz/HET further
acknowledge and certify that (i) the Casino Operator and JCC Holding Company
have obtained authorization from the United States Bankruptcy Court for the
Eastern District of Louisiana to enter into the Second Amendment and this Third
Amendment; and (ii) the Revised Plan has been confirmed.

         It is further acknowledged that the Gaming Board this date entered an
order granting certain necessary and appropriate Approvals for the Casino
Operator which are required under the Gaming Laws, the Amended COC and this
Third Amendment, including particularly the Gaming Board's Approval of the
financial suitability of HET and HOC as Minimum Payment Guarantors, and
acknowledge that said order and the Approvals granted therein fulfill and
satisfy the Suspensive Condition required by subparagraph (f) of Paragraph IV of
the Second Amendment.

         Therefore, Paragraph IV of the Second Amendment is hereby amended by
deleting the provisions of Paragraph IV of the Second Amendment in their
entirety and substituting the following provisions in their place and, said
paragraph IV of the Second Amendment is amended and restated in its entirety as
follows, and Paragraph IV of this Third Amendment is set forth as follows:

         It is agreed that the effectiveness and enforceability of the Second
Amendment and this Third Amendment is conditioned upon and subject to the
fulfillment and satisfaction, on or before March 31, 2001, of only the following
Suspensive Conditions, to wit:

         (a) Consummation of the Revised Plan, including obtaining the Revised
Plan Financing;

         (b) Written acknowledgment executed on or before March 31, 2001, by or
on behalf of the Casino Operator, JCC Holding Company, HOC, and HET, directly or
through their respective counsel, acknowledging that the Revised Plan has been
consummated, including obtaining the Revised Plan Financing and acknowledging

                                      -4-
<PAGE>   5

that the Amending Legislation was effective as of the time of execution and
delivery of the Third Amendment; and

         (c) The written acknowledgment executed on or before March 31, 2001 by
the Gaming Board directly or through a representative of the Attorney General of
the State of Louisiana ("AG") acknowledging that the Amending Legislation was
effective as of the time of execution and delivery of this Third Amendment, and
the written acknowledgment on or before March 31, 2001 from a representative of
the AG that all required guarantees and other documents affecting the State of
Louisiana and the Board related to the Second Amendment and the Third Amendment
have been executed and delivered.

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

         PARAGRAPH VI - RESOLUTORY CONDITIONS AND RELEASE. Notwithstanding any
provision of the Amended COC or of this Third Amendment to the contrary, if,
subsequent to the execution and effectiveness of the Third Amendment, (i) the
Amended COC and/or Third Amendment are declared by a final, definitive and
nonappealable judgment(2) of a Louisiana state court of competent jurisdiction
as being in violation of Louisiana law and therefore to be null and void and/or
unenforceable, and/or (ii) it is declared by a final, definitive and
nonappealable judgment of a Louisiana state court of competent jurisdiction that
the Gaming Board did not have the legal authority to enter into this Third
Amendment, each such judgment a "Definitive Judgment", then (a) neither the
State nor the Gaming Board shall have any liability to the Casino Operator, JCC
Holding Company, HOC or HET (collectively "Jazz/HET"), or any of their
respective affiliates (including the Casino Manager), or any of their respective
creditors and/or other third parties for any losses or damages related to or
resulting from the Definitive Judgment (and the effects of said judgment), and
the Casino Operator, JCC Holding Company, HOC and HET do each in solido and on
behalf of each of their respective affiliates release any and all claims,
demands and causes of action, if any, against the State and the Gaming Board
related to or resulting from the Definitive Judgment (and the effects of said
judgment); and (b) provided the Definitive Judgment terminates all rights of the
Casino Operator to operate the Casino and the Casino is actually closed and all
Gaming activities cease, Jazz/HET shall have no liability to the State or the
Gaming

----------

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

                                   -5-
<PAGE>   6

Board, and the State and Gaming Board do release any and all claims, demands and
causes of action, if any, against Jazz/HET related to or resulting from the
Definitive Judgment (and the effects of said judgment).

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

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

         It is expressly agreed that the release of the State and the Gaming
Board in the event of a Definitive Judgment, or the suspension of obligations in
the event of an Interim Judgment as provided in this Paragraph VI shall be
applicable only if the Definitive Judgment and any Interim Judgment was rendered
in (1) litigation which was not instituted, fomented, assisted or encouraged by
any one or more the Gaming Board, the Governor and/or the Attorney General of
the State of Louisiana; and (2) litigation in which the Gaming Board actively
and in good faith opposes the claims of the plaintiff(s) and actively and in
good faith attempts to uphold the validity and enforceability of the COC and the
Third Amendment, including appealing and/or applying for writs from any such
Interim Judgment.

         PARAGRAPH VII - INTERVENTION BY JCC HOLDING COMPANY. JCC Holding
Company intervenes herein to consent to and approve all of the terms and
conditions of the Amended COC and this Third Amendment and does hereby
unconditionally and in

                                      -6-
<PAGE>   7

solido guarantee the timely payment and performance of all obligations of the
Casino Operator under the Amended COC, as amended through the Third Amendment.

         IN WITNESS WHEREOF the parties have executed this Third Amendment on
the date(s) set forth below.

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

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

                                      Date: March 29, 2001
                                            ----------------------------------

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

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

                                      Date: March 29, 2001
                                            ----------------------------------

                                       JCC HOLDING COMPANY

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

                                       Date: March 29, 2001
                                             ---------------------------------

                                       -7-
<PAGE>   8

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

         Harrah's Entertainment, Inc. and Harrah's Operating Company, Inc. (each
an "Intervenor"), as in solido guarantors under the Four Year Initial Guaranty,
dated March 8, 2001 ("Four Year Guaranty"), do each hereby individually and in
solido agree and consent to the above (and attached) Third Amendment to Amended
and Renegotiated Casino Operating Contract ("Third Amendment"), and the terms
and provisions thereof, and each Intervenor does further acknowledge and agree
that neither the Third Amendment, nor any of the terms and provisions hereof,
shall diminish and/or otherwise affect any of their respective obligations to
the Gaming Board or the State (i) under the Unconditional Minimum Payment
Guaranty Agreement for the Fiscal Year ending March 31, 2001, or any document or
instrument, if any, related thereto, and/or (ii) under the Four Year Guaranty or
any document or instrument, if any, related thereto. Said Intervenors do further
expressly acknowledge their in solido obligations to unconditionally guarantee
the Minimum Payment for the four Fiscal Years ending March 31, 2002, 2003, 2004
and 2005, and agree to execute an amendment of the Four Year Guaranty in
conformity with this Third Amendment.

                                      -8-
<PAGE>   9

         IN WITNESS WHEREOF the Intervenors hereto have executed this
intervention in and consent to the Third Amendment as of the dates set forth
below.

                                         INTERVENORS(S):

                                         HARRAH'S ENTERTAINMENT, INC.

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

                                         Date:  March 29, 2001
                                                --------------------------------

                                         HARRAH'S OPERATING COMPANY, INC.

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

                                         Date: March 29, 2001
                                               ---------------------------------

                                      -9-<PAGE>   1
                                                                   EXHIBIT 10.04

                 THIRD AMENDED AND RESTATED MANAGEMENT AGREEMENT

                                 BY AND BETWEEN

                     HARRAH'S NEW ORLEANS MANAGEMENT COMPANY

                                       AND

                           JAZZ CASINO COMPANY, L.L.C.

                              Dated: March 30, 2001

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
<S>                   <C>                                                                                      <C>
ARTICLE 1 DEFINITIONS.............................................................................................1

              1.01    Definitions.................................................................................1

ARTICLE 2 SCOPE OF AGREEMENT.....................................................................................12

              2.01    Amendment and Restatement..................................................................12
              2.02    Subject Matter.............................................................................12
              2.03    Grant and Acceptance of Management Responsibility..........................................13
              2.04    Funding....................................................................................13
              2.05    Limitation on Expenditures.................................................................13

ARTICLE 3 TERM AND RENEWALS......................................................................................13

              3.01    Initial Term...............................................................................13
              3.02    Extension Term.............................................................................13
              3.03    Early Termination; Termination of Authorized Lease.........................................13

ARTICLE 4 COVENANTS OF OWNER.....................................................................................13

              4.01    Licensing and Permitting...................................................................13
              4.02    Title; Quiet Enjoyment.....................................................................14
              4.03    Manager Subordination Agreements; Mortgages................................................14

ARTICLE 5 STANDARDS AND MANAGER'S CONTROL........................................................................15

              5.01    Casino Operational Standards...............................................................15
              5.02    Owner Self-Help............................................................................15
              5.03    Payments...................................................................................15
              5.04    Manager's Control..........................................................................15

ARTICLE 6 MANAGER AND OWNER MATTERS..............................................................................15

              6.01    Manager's Obligations......................................................................15
              6.02    Owner's Obligations........................................................................18

ARTICLE 7 OPERATION OF THE CASINO................................................................................21

              7.01    Permits....................................................................................21
              7.02    Equipment and Supplies.....................................................................21
              7.03    Employees..................................................................................21
              7.04    Sales, Marketing and Advertising...........................................................24
              7.05    Maintenance and Repairs....................................................................24
              7.06    Capital Improvement and Replacements.......................................................25
              7.07    Capital Replacement Fund for Capital Replacements and Improvements.........................25
</TABLE>

<PAGE>   3

<TABLE>
<S>                   <C>                                                                                      <C>
              7.08    Periodic Contributions to Capital Replacement Fund.........................................25
              7.09    Use and Allocation of Capital Replacement Fund.............................................25
              7.10    Emergency Expenditures.....................................................................26
              7.11    Compliance with Legal Requirements.........................................................26
              7.12    Disbursement on Termination or Expiration..................................................26
              7.13    Occupancy Agreements.......................................................................27

ARTICLE 8 FISCAL MATTERS.........................................................................................28

              8.01    Accounting Matters and Fiscal Periods......................................................28
              8.02    Approved Budget............................................................................30
              8.03    Bank Account(s); House Bank................................................................34
              8.04    Internal Controls..........................................................................35

ARTICLE 9 FEES TO MANAGER........................................................................................35

              9.01    Management Fee.............................................................................35
              9.02    Property Tax, Income Tax, Insurance, Benefit Plan Administration and Other Services........37
              9.03    Proprietary Systems........................................................................37

ARTICLE 10 DISBURSEMENTS.........................................................................................37

              10.01   Disbursements of Net Revenues..............................................................37
              10.02   Adjustment to Bank Account(s)..............................................................38
              10.03   Payment of Ownership Costs.................................................................38
              10.04   Payment of Gaming, Sales and Other Operational Payments and Taxes..........................38

ARTICLE 11 HARRAH'S SERVICES.....................................................................................39

              11.01   Provision of Harrah's Services.............................................................39
              11.02   Harrah's Services..........................................................................39
              11.03   Limitations................................................................................39

ARTICLE 12 SIGNS, SYSTEM MARKS AND PROPRIETARY MATTERS...........................................................39

              12.01   Signs......................................................................................39
              12.02   System Marks and Proprietary Matters.......................................................39
              12.03   Litigation.................................................................................41

ARTICLE 13 INSURANCE.............................................................................................42

              13.01   Coverage...................................................................................42
              13.02   Policies and Endorsements..................................................................44
              13.03   Waivers....................................................................................45

ARTICLE 14 INDEMNIFICATION AND RELATED MATTERS...................................................................45

              14.01   Scope......................................................................................45
              14.02   Defense....................................................................................46
</TABLE>

                                       ii
<PAGE>   4

<TABLE>
<S>                   <C>                                                                                      <C>
ARTICLE 15 DAMAGE TO AND DESTRUCTION OF THE CASINO...............................................................47

              15.01   Obligation to Restore......................................................................47
              15.02   Termination................................................................................47

ARTICLE 16 CONDEMNATION..........................................................................................48

              16.01   Termination................................................................................48
              16.02   Restoration and Continuation...............................................................49

ARTICLE 17 DEFAULT AND TERMINATION...............................................................................51

              17.01   Events of Default..........................................................................50
              17.02   Termination Upon An Event of Default; Termination Fee......................................51
              17.03   Termination by Owner Based on Performance Standard.........................................52

ARTICLE 18 NOTICES...............................................................................................54

              18.01   Procedure..................................................................................54
              18.02   Landlord and LGCB Notice...................................................................55

ARTICLE 19 RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS...........................................................55

              19.01   Relationship...............................................................................55
              19.02   Contractual Authority......................................................................55
              19.03   Further Actions............................................................................55

ARTICLE 20 APPLICABLE LAW AND ARBITRATION........................................................................56

              20.01   Scope......................................................................................56
              20.02   Arbitration................................................................................56

ARTICLE 21 SUCCESSORS AND ASSIGNS................................................................................57

              21.01   Assignment by Manager......................................................................57
              21.02   Termination Rights Upon Certain Assignments or Transfers by Owner..........................58
              21.03   Manager's Termination Right................................................................59
              21.04   Binding Effect.............................................................................59

ARTICLE 22 RECORDING OF MEMORANDUM...............................................................................60

              22.01   Amended Memorandum of Agreement............................................................60

ARTICLE 23 FORCE MAJEURE.........................................................................................60

              23.01   Operation of Casino........................................................................60
              23.02   Extension of Time..........................................................................60

ARTICLE 24 TERMINATION...........................................................................................60

              24.01   Surviving Obligations......................................................................60
              24.02   Termination; Expiration....................................................................61
</TABLE>

                                      iii
<PAGE>   5

<TABLE>
<S>                   <C>                                                                                      <C>
ARTICLE 25 GENERAL PROVISIONS....................................................................................63

              25.01   Authorization..............................................................................63
              25.02   Interest...................................................................................63
              25.03   Formalities................................................................................63
              25.04   Documents..................................................................................63
              25.05   Personal Service Contract..................................................................64
              25.06   Exhibits...................................................................................64

ARTICLE 26 RESTRICTIVE COVENANTS.................................................................................64

              26.01   Other Use of Site or Building..............................................................64
              26.02   Diversion of Business......................................................................64
              26.03   Competition................................................................................64

ARTICLE 27 CONFLICTS BETWEEN AGREEMENTS, JURISDICTION AND THIRD PARTY BENEFICIARIES..............................65

              27.01   Conflicts Between Agreements...............................................................65
              27.02   Jurisdiction...............................................................................65
              27.03   Third Party Beneficiaries..................................................................65
</TABLE>

EXHIBITS

A   --   Form of Memorandum of Management Agreement

                                       iv
<PAGE>   6

                 THIRD AMENDED AND RESTATED MANAGEMENT AGREEMENT

                  THIS THIRD AMENDED AND RESTATED MANAGEMENT AGREEMENT (this
"Agreement") is entered into this 30th day of March, 2001, by and between JAZZ
CASINO COMPANY, L.L.C., a Louisiana limited liability company ("Owner"), and
HARRAH'S NEW ORLEANS MANAGEMENT COMPANY, a Nevada corporation ("Manager").

                                    RECITALS

         A. Owner filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code on January 4, 2001, in the United States
Bankruptcy Court for the Eastern District of Louisiana (the "Bankruptcy Court"),
which is being consummated pursuant to the Plan (as defined below).

         B. Owner and certain other parties have submitted, and the Bankruptcy
Court has confirmed, the Plan.

         C. Owner and Manager have previously entered into that certain Second
Amended and Restated Management Agreement dated October 29, 1998 (the "Prior
Management Agreement").

         D. The Plan requires the amendment and restatement of the Prior
Management Agreement in its entirety in accordance with the terms hereof.

         E. The parties desire to amend and restate the Prior Management
Agreement on the terms and conditions set forth herein.

                                    AGREEMENT

                  NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1
                                   DEFINITIONS

         1.01 Definitions. As used herein the following terms shall have the
respective meanings indicated below:

              Accountants - as defined in Article 8.01(b).

              Adjusted EBITDAM - means, with respect to Owner for any
Performance Period, EBITDAM for such Performance Period plus the EBITDAM
Adjustments for such Performance

<PAGE>   7

Period to the extent such EBITDAM Adjustments were deducted in determining
EBITDAM for such Performance Period.

              Adjustment Date - the date on which an applicable percentage
designated herein is adjusted to reflect a change in the CPI from the
Commencement Date until the date of such adjustment.

              Administrative Services Agreement - as defined in Section 9.02.

              Affiliate - as to any person the affiliates of whom are relevant
for purposes of any provisions of this Agreement, (i) any corporation,
partnership, limited liability company, joint venture, trust or individual
controlled by, under common control with, or which controls, directly or
indirectly, such person, (ii) a trust of which the person, or a direct or
indirect shareholder of such person, is a trustee, or which has as its principal
beneficiaries such person, or any direct or indirect shareholder of such person,
or members of the immediate family of such direct or indirect shareholder or
other person, and (iii) any members of such person's immediate family, or the
member of the immediate family of any direct or indirect shareholder of such
person. For purposes hereof, shares or other ownership interests held by a trust
shall be deemed to be owned pro-rata by the beneficiaries of such trust, and
members of the immediate family of any person shall include all collateral
relatives of such person having a common linear ancestor with such person, and
the spouse or any former spouse of such person or any such collateral relatives.

              Agreement - this Third Amended and Restated Management Agreement
by and between Owner and Manager, as the same may be amended, supplemented or
otherwise modified from time to time.

              Annual Plan - as defined in Article 8.02(a).

              Annual Report - any Annual Report filed by any person or entity on
Form 10-K with the United States Securities and Exchange Commission or any
successor thereof.

              Arbitrating Accountants - as defined in Article 20.02(b).

              Authorized GDA - that certain Amended and Restated General
Development Agreement by and among Owner, Landlord and the City of New Orleans,
as intervenor, dated October 28, 1998.

              Authorized Lease - that certain Amended and Restated Lease
Agreement by and among Owner, Landlord and the City of New Orleans, as
intervenor, dated as of October 28, 1998, and as amended of even date herewith.

              Authorized Mortgage - (i) the Mortgage, and (ii) any other
mortgage(s), deed(s) of trust, security agreements, or other forms of agreements
securing payment of indebtedness, the proceeds of which are used solely to
improve, restore, or repair the Casino, or to refinance any indebtedness in
connection with any Authorized Mortgage, with a lien or equivalent security
interest against the Casino, provided that the holder of any Authorized Mortgage
referred to in

                                       2
<PAGE>   8

this clause (ii) has executed and delivered to Manager and has agreed in writing
to be bound by a Subordination, Non-Disturbance and Attornment Agreement or such
other similar document, in either case in such form as may be negotiated between
Manager and the holder of an Authorized Mortgage.

              Bank Account(s) - as defined in Article 8.03(a).

              Bankruptcy Court - as defined in Recital A.

              Budget - as defined in Article 8.02(a).

              Budget Report - as defined in Article 8.02(e)(ii)

              Budget Revision Threshold - as defined in Article 8.02(e)(i)

              Building - all buildings, structures and improvements now located
or hereafter constructed on the Site and all fixtures, Furnishings and Equipment
attached to, forming a part of, or necessary for the operation of such
buildings, structures and improvements as a casino and parking garages, or any
non-gaming development on the second floor of the building on the Site, and all:

              (i)      restaurants, bars and other public areas, if any,

              (ii)     commercial space, including concessions and shops;

              (iii)    storage, parking and service areas;

              (iv)     permanently affixed signage; and

              (v)      other buildings, facilities and appurtenances, as may now
                       or hereafter, pursuant to this Agreement or with
                       Manager's advance written approval, replace, be attached
                       to and form a part of the Building.

              Capital Improvements - any addition to the Building following its
initial construction, furnishing and equipping, the cost of which is capitalized
and depreciated, rather than being expensed, applying generally accepted
accounting principles.

              Capital Replacement - any alteration, rebuilding or renovation of
the Building, and any replacement of Furnishings and Equipment, the cost of
which is capitalized and depreciated, rather than being expensed, applying
generally accepted accounting principles.

              Capital Replacement Fund - as defined in Article 7.07.

              Casino - a collective term for the Site, the Building, the
Furnishings and Equipment, the Operating Equipment and the Operating Supplies.
The non-gaming development on the second floor of the building on the Casino
premises subleased pursuant to the Second

                                       3
<PAGE>   9

Floor Non-Gaming Sublease shall not be included in this definition of the Casino
unless converted into Gaming Space in accordance with the provisions of the
Second Floor Non-Gaming Sublease.

              Casino Employees - all employees retained to perform duties
required in the operation of the Casino or other related properties, including
Key Casino Personnel.

              Casino Employment Policies - as defined in Article 7.03(f).

              Casino Operating Contract - that certain Amended and Renegotiated
Casino Operating Contract among Owner, Harrah's Jazz Company and the State of
Louisiana by and through the LGCB authorizing and regulating activities at the
Casino, dated as of October 28, 1998, as amended of even date herewith.

              Casino Operational Standards - those standards and policies
described herein, all as may be amended or modified from time to time by
agreement between Owner and Manager. The standard by which the physical plant of
the Casino is gauged shall be its present condition. The standard by which
operational practices are gauged shall be the operational practices presently
applied at the Casino. Casino Operational Standards may include requirements
that the Owner purchase, lease or otherwise obtain, either through Manager or
Manager's designated suppliers, certain computer and other systems that Manager
determines to be necessary for Manager's operation of the Casino. Such systems
may include, but not be limited to, a slot data system, time and attendance
system, scheduling and forecasting system and a reservation and ticketing
system.

              Casino Site - the parcel of land at 4 Canal Place formerly known
as the Rivergate on which the casino building is situated bounded by Poydras
Street, Convention Center Boulevard, Canal Street, and South Peters Street.

              Casino Standard Accounting Principles - generally accepted
accounting principles as applied by and subject to such elections and variations
consistent therewith as may be adopted by Manager and Manager's Affiliates in
accounting for casinos managed by Manager and Manager's Affiliates, which
accounting principles shall include the guidance as set forth in the Audit and
Accounting Guide for Audits of Casinos, with conforming changes as of May 1,
1999 prepared by the American Institute of Certified Public Accountants, as
amended from time to time.

              Claim - any action or actions, cause or causes of action, in law
or in equity, suits, debts, liens, liabilities, claims, demands, damages,
punitive damages, losses, costs or expenses, and reasonable attorneys' fees of
any nature whatsoever (including, without limitation, claims based upon legal
fault, negligence, offense, quasi-offense, contract, quasi-contract, or any
other theory) whether fixed or contingent.

              Commencement Date - means October 28, 1998.

              Compensation - the direct salaries and wages paid to, or accrued
for the benefit of, any Casino Employee, including incentive compensation,
together with all fringe benefits payable

                                       4
<PAGE>   10

to or accrued for the benefit of such executive or other employee, including
employer's contribution under F.I.C.A., unemployment compensation or other
employment taxes, pension fund contributions, workers' compensation, group life,
accident and health insurance premiums and costs, and profit sharing, severance,
retirement, disability, relocation, housing and other similar benefits.

              Confidential and Proprietary Information - as defined in Article
12.02(d).

              Controlled Affiliate - has the meaning provided in that certain
Amended and Restated Certificate of Incorporation of JCC Holding as in effect as
of the date hereof.

              Continuing Directors - the directors of JCC Holding on the
effective date of the Plan and each other director, if such other director's
nomination for election to the Board of Directors of JCC Holding is recommended
by (i) a majority of the then Continuing Directors, (ii) any directors nominated
or appointed by HET or its affiliates, or (iii) any directors nominated or
appointed by the Creditor's Committee (as defined in the Articles of
Incorporation of JCC Holding as presently in effect).

              CPI - the Consumer Price Index for All Urban Consumers published
by the Bureau of Labor Statistics of the United States Department of Labor, U.S.
City Average, all items, (1982-84 = 100), or any successor or replacement index
thereto. If the CPI shall, after the date hereof, be converted to a different
standard reference base or shall otherwise be revised, any determination
hereunder which uses the CPI shall be made with the use of such conversion
factor, formula or table for converting the CPI as may be published by the
Bureau of Labor Statistics, or, if said Bureau shall not publish the same, then
with the use of such conversion factor, formula or table as may be published by
Prentice Hall, Inc., or, having such publication, by any other nationally
recognized publisher of similar statistical information. If the CPI shall cease
to be published, then for the purpose of this Agreement there shall be
substituted for the CPI such other similar index as Manager shall reasonably
determine which measures changes in the relative purchasing power of United
States currency over the term of this Agreement.

              Defaulting Party - as defined in Article 17.01.

              Department - those general divisional categories shown in the
Annual Plan (e.g. slot machines, table games, other games, beverages or food),
but not the subcategories (e.g. tax & license, labor) appearing in each such
divisional category.

              EBITDAM - as defined in Section 9.01(b)(i).

              EBITDAM Adjustments - means (A) the cost of all insurance
maintained pursuant to Article 13, (B) any payments, charges, impositions or
other amounts paid to the City by Owner pursuant to the Authorized Lease and
exhibits thereto or the Authorized GDA or exhibits thereto, (C) any payments,
charges or impositions paid to the State by Owner pursuant to the Casino
Operating Contract other than fines or penalties incurred as a result of
Manager's failure to perform its duties under this Agreement, (D) corporate and
administrative expenses of JCC

                                       5
<PAGE>   11

Holding, (E) ad valorem taxes, water and sewer use assessments, stand pipe
assessments, or other assessments imposed on the then real and personal property
comprising the Casino and real estate and tangible personal property tax
assessments against the Casino, (F) any payments under any operating leases
hereafter entered into by Owner without the consent of the Manager, and (G) as
submitted to Owner by Manager and approved by Owner, any other expenditures over
which Manager does not exercise control.

              Ensuing Year - as defined in Article 7.09.

              Extension Term - as defined in Article 3.02.

              Event of Default - as defined in Article 17.01.

              Fiscal Period, Fiscal Quarter, Fiscal Month, Fiscal Year - as
defined in Article 8.01(c).

              Force Majeure - as defined in Article 17.03(d).

              Furnishings and Equipment - all furniture, furnishings and
equipment (except Operating Equipment) required for the operation of the Casino
in accordance with the Casino Operational Standards, including, without
limitation:

              (i)   cashier, money sorting and money counting equipment,
                    surveillance and communication equipment, and security
                    equipment;

              (ii)  slot machines, video games of chance, table games, keno
                    equipment and other gaming equipment;

              (iii) office furnishings and equipment;

              (iv)  specialized equipment necessary for the operation of any
                    portion of the Casino for non-gaming or accessory purposes,
                    including equipment for kitchens, laundries, dry cleaning,
                    cocktail lounges, restaurants, public rooms, commercial and
                    parking spaces, and recreational facilities; and

              (v)   all other furnishings and equipment hereafter located and
                    installed in or about the Casino which are used in the
                    operation of the Casino in accordance with the Casino
                    Operational Standards.

              Gaming Act - the Louisiana Economic Development and Gaming
Corporation Act as set forth in LSA R.S. 27:201 et seq. (redesignated from LSA
R.S. 4:601 et seq. by Acts 1996, First Extraordinary Session), adopted by the
Legislature of the State of Louisiana as No. 384, Acts 1992, as amended, and the
regulations adopted thereunder, amendments and reenactments of LSA R.S.
36:801.1(A) and enactment of LSA R.S. 27:1 et seq., adopted by the Legislature
of the State of Louisiana as Act 7, First Extraordinary Session, 1996, as
amended, and the regulations adopted thereunder, the Local Option Gaming
Election set forth in LSA R.S. 18:1300.21,

                                       6
<PAGE>   12

adopted by the Legislature of the State of Louisiana as Act 57, First
Extraordinary Session, 1996, the act adopted by the Legislature of the State of
Louisiana as Act 98, First Extraordinary Session, 1996, and the Minimum Payment
relief adopted pursuant to the Plan in the First Extraordinary Session, 2001.

              Gaming Space - that area of the Casino in which gaming activity
takes place, not including support, storage, entertainment, service and other
such areas.

              Governmental Authority - as defined in Article 17.03(d)(iv).

              Gross Revenues - all revenues and income of any nature derived
directly or indirectly from the Casino or from the use or operation thereof,
including, without limitation, (i) Win (Gaming), (ii) food and beverage revenue,
(iii) telephone, telegraph, satellite or cable video and telex revenue, (iv)
entertainment revenue, (v) parking revenue, (vi) rental payment from any lessees
or concessionaires, and (vii) merchandise sales revenue, interest income, and
the actual cash proceeds of business interruption, increased cost of operation,
use, occupancy or similar insurance. Notwithstanding the foregoing, Gross
Revenues shall expressly exclude:

              (i)   proceeds from the sale or other disposition of the Casino or
                    other assets of Owner;

              (ii)  proceeds of property insurance payable in connection with
                    any damage to the Casino except for business interruption,
                    increased cost of operations, use, occupancy or similar
                    insurance proceeds;

              (iii) condemnation awards other than awards for either temporary
                    takings (i.e. condemnations of twelve (12) months or less)
                    or regulatory takings;

              (iv)  proceeds of financing or refinancing of the Casino;

              (v)   sales taxes, excise taxes, use taxes, gross receipts taxes,
                    admission taxes, entertainment taxes, tourist taxes or
                    charges and similar charges required by law to be collected
                    from patrons or guests of the Casino or as part of the sales
                    price for goods, services or entertainment at the Casino
                    which must be remitted to governmental authorities; and

              (vi)  any amounts or credits received for lost or damaged Casino
                    merchandise.

              Harrah's Casinos - a collective term for the casinos owned or
managed by Manager or Manager's Affiliates or licensed to operate under the name
"Harrah's(C)" or under System Marks.

              Harrah's Services - as defined in Article 11.02.

                                       7
<PAGE>   13

              Harrah's System - a collective term for the casinos and casino
services provided to the public by Manager or Manager's Affiliates, or their
successors or assigns, through management or license of Harrah's Casinos.

              HET - Harrah's Entertainment, Inc., a Delaware corporation.

              HOCI - Harrah's Operating Company, Inc., a Delaware corporation.

              House Bank - the amount of cash, chips, tokens and plaques that
Manager from time to time determines necessary to have at the Casino daily to
meet the Casino's cash needs.

              Impositions - shall mean and include:

              (i)   all ad valorem taxes, water and sewer use charges or
                    assessments, stand pipe charges and assessments, or other
                    charges or assessments imposed upon the real and personal
                    property comprising the Casino; and

              (ii)  annual consideration payable under the Casino Operating
                    Contract or other charge or assessment imposed by
                    governmental or quasi governmental authority or by any other
                    entity empowered by law to assess charges against the Casino
                    or the activities conducted thereat, with or without lien
                    rights for the enforcement thereof.

              Initial Term - as defined in Article 3.01.

              Interest Charges - as defined in Article 9.01(b)(ii).

              Interest Rate - as defined in Article 25.02.

              JCC Holding - JCC Holding Company, a Delaware corporation and the
parent of Owner.

              Key Casino Personnel - as defined in Article 7.03(a)(iii).

              Landlord - as defined in the Authorized Lease.

              Legal Requirements - as defined in Article 7.11.

              LGCB - the Louisiana Gaming Control Board or any successor entity.

              Licenses and Permits - as defined in Article 4.01(a).

              Management Fee - as defined in Article 9.01(a).

              Manager's Affiliate - Manager's ultimate parent entity (currently
HET) and any of its Affiliates.

                                       8
<PAGE>   14

              Manager Matters - as defined in Article 6.01.

              Manager Subordination Agreements - as defined in Article 4.03.

              Minimum Balance - as defined in Article 8.03(a).

              Monetary Default - any failure of Owner to make any payment to
Manager or to a third party as required by this Agreement or to perform any
other obligation required of Owner by this Agreement which might be satisfied by
the payment of money. The amount of a Monetary Default shall be the amount of
the payment required, the liquidated amount of any liquidated obligation, or the
estimated amount of any unliquidated obligation determined by mutual agreement
of Owner and Manager or, if Owner and Manager do not agree upon the estimated
amount of any unliquidated obligation, arbitration pursuant to Article 20.02. An
obligation shall be deemed liquidated if the amount is fixed and determined
without further action of Manager or by Manager's incurring such cost.

              Mortgage - that certain Mortgage of even date herewith in favor of
the lenders providing financing to Owner pursuant to the Plan.

              Net Income - as defined in Article 9.02(b)(iii).

              Net Revenues - Gross Revenues less:

              (i)    the retail value of Promotional Allowances;

              (ii)   any gratuities or service charges added to a customer's
                     bill; and

              (iii)  any credits or refunds made to customers, guests or
                     patrons.

              Non-Defaulting Party - as defined in Article 17.01.

              Non-Qualified Person - any person or entity that would, if
associated with Owner, JCC Holding, Manager or any Affiliate of Manager, in the
reasonable judgment of Manager or any licensing authority, impair or cause the
denial, suspension or revocation of any gaming registration, permit, license,
right or entitlement or any alcoholic beverage registration, permit, license,
right or entitlement held or applied for by Owner, Manager, JCC Holding or any
Affiliate of Manager.

              Non-Qualified Purchaser - as defined in Article 21.02(c).

              Occupancy Agreements - as defined in Article 7.13(a).

              Open Access Program - as defined in the Authorized Lease.

              Operating Agreements - all agreements for the delivery of goods
and/or services to the Casino and all Occupancy Agreements.

                                       9
<PAGE>   15

              Operating Costs - the following costs and expenses incurred by
Manager in connection with the operation of the Casino:

              (i)      the cost of replacement of Operating Supplies and
                       Operating Equipment in the ordinary course of Casino
                       operations (but not the cost of initial inventories of
                       such property);

              (ii)     the cost of Promotional Allowances;

              (iii)    the cost of Compensation;

              (iv)     the cost of advertising for the Casino;

              (v)      the cost of employee training programs; (vi) the cost of
                       utilities and energy;

              (vii)    the fees for Licenses and Permits required for the
                       operation of the Casino;

              (viii)   all expenditures made by Manager for maintenance and
                       repairs to keep the Casino in good condition and repair
                       pursuant to Article 7.05;

              (ix)     the Management Fee;

              (x)      uninsured liabilities for which Manager is entitled to
                       indemnity pursuant to Article 14 relating to injury to
                       persons or property incurred by Manager in connection
                       with the operation of the Casino; and

              (xi)     such other costs incurred by Manager in connection with
                       the operation of the Casino as are treated as operating
                       costs under Casino Standard Accounting Principles.

              Operating Equipment - all equipment required for the operation of
a casino, including accessory gaming table equipment, chinaware, glassware,
linens, silverware, utensils, uniforms, and all other similar items.

              Operating Supplies - food and beverages (alcoholic and
non-alcoholic) and other consumable items used in the operation of a casino,
such as playing cards, tokens, chips, plaques, dice, fuel, soap, cleaning
materials, matches, paper goods, stationery and all other similar items.

              Owner Matters - as defined in Article 6.02.

              Ownership Costs - the following costs and expenses incurred by
Owner in connection with the operation of the Casino:

              (i)      required contributions to the Capital Replacement Fund;

                                       10
<PAGE>   16

              (ii)     rent or other charges under the Authorized Lease;

              (iii)    Impositions affecting the Casino;

              (iv)     expenditures under Articles 7.06, 7.10, 7.11, 15 and
                       16.02, including costs for Capital Replacements;

              (v)      audit, legal and other professional or special fees with
                       respect to the Casino;

              (vi)     insurance premiums with respect to the Casino;

              (vii)    costs of leasing any Furnishings and Equipment or other
                       goods incorporated into or used in connection with the
                       Casino (whether pursuant to operating leases or Capital
                       Lease Obligations);

              (viii)   costs of amortization and depreciation with respect to
                       the Casino;

              (ix)     any gaming, sales and other operational payments and
                       taxes set forth in Article 10.04;

              (x)      such other Casino costs or expenses which are normally
                       treated as capital expenditures under Casino Standard
                       Accounting Principles; and

              (xi)     any other costs or expenses incurred in connection with
                       Owner Matters.

              Performance Period - as defined in Article 17.03(a).

              Permitted Exceptions - (i) the Authorized Lease; (ii) any
Authorized Mortgage; (iii) liens for Impositions not yet delinquent; (iv)
undetermined or inchoate liens or charges for labor or materials supplied to the
Casino in connection with the construction or operation thereof, which have not
been filed or recorded in the public records and the payment for which is not
yet delinquent; and (v) easements, restrictions, rights of way or other title
matters which do not, in the aggregate or individually, impair the use of the
Casino for its intended purpose or adversely affect the amount of fees payable
to Manager hereunder. Permitted Exceptions shall, without limiting the
foregoing, include all of those matters set forth as exceptions to the title
insurance policy or title commitment provided to Owner in connection with the
October, 1998 bankruptcy reorganization of Owner.

              Plan - the Plan of Reorganization under Chapter 11 of the United
States Bankruptcy Code of Owner, confirmed by the Bankruptcy Court on March 19,
2001 for that certain case captioned In re JCC Holding Company, Case No.
01-10086.

              Plans and Specifications - as defined in the Authorized GDA.

              Projected Adjusted EBITDAM - as defined in Article 17.03(c).

                                       11
<PAGE>   17

                  Prior Management Agreement - as defined in Recital C.

                  Promotional Allowance - goods and services, such as
complimentary rooms, food, beverages, entertainment and parking, given to
customers of the Casino as an inducement to gamble at the Casino.

                  Proprietary Systems - as defined in Article 6.01(m).

                  Qualified Purchaser - as defined in Article 21.02(c).

                  Second Floor Non-Gaming Sublease - the Second Floor Non-Gaming
Sublease entered into by and between Owner and JCC Development Company, L.L.C.,
a Louisiana limited liability company dated as of October 28, 1998, as amended
of even date herewith.

                  Site - the Casino Site, the tunnel under Poydras Street and
the parcels of land on which parking garages are situated connected to the
Casino Site by said tunnel under Poydras Street, and all other parcel(s) of
land, together with all easements and rights appurtenant thereto owned by the
Owner in New Orleans, Louisiana.

                  Suitable Lender - has the meaning provided in the Casino
Operating Contract.

                  System Fee - as defined in Article 11.01(a).

                  System Marks - as defined in Article 12.02(a).

                  Term - a collective term for the Initial Term and the
Extension Term, if elected by Manager.

                  Termination Fee - as defined in Article 17.02(b).

                  Win (Gaming) - the difference between gaming wins and losses
before deducting costs and expenses determined according to Casino Standard
Accounting Principles.

                                   ARTICLE 2
                               SCOPE OF AGREEMENT

         2.01 Amendment and Restatement. This Agreement amends, restates and
supersedes the Prior Management Agreement in its entirety.

         2.02 Subject Matter. The subject matter of this Agreement is the
Casino. The Casino may be operated under the name and style "Harrah's New
Orleans Casino." The non-gaming development on the second floor of the building
on the Casino Site and any space which is from time to time included as demised
premises pursuant to the Second Floor Non-Gaming Sublease is expressly excluded
from this Agreement.

                                       12
<PAGE>   18

         2.03 Grant and Acceptance of Management Responsibility. Owner grants to
Manager the right to supervise and direct the Casino Employees regarding the
management and operation of the Casino for the account of Owner subject to the
terms of this Agreement. Manager accepts said grant and agrees that it will
supervise and direct the management and operation of the Casino subject to the
terms of this Agreement.

         2.04 Funding. Owner agrees to provide all funds, both initially and
throughout the term of this Agreement, as shall be necessary to perform and
satisfy Owner's covenants and responsibilities under this Agreement.
Notwithstanding any provision of this Agreement to the contrary, except pursuant
to any revolving credit facility provided pursuant to the Plan or other
agreement to lend money provided by Manager or its Affiliates separate from this
Agreement pursuant to written agreement hereafter entered into by the parties in
their respective sole discretion and without any obligation under this Agreement
to do so, under no circumstance shall Manager be obligated to advance any of its
funds to pay for Ownership Costs or Operating Costs, and Manager shall be
excused from performing any act under this Agreement for which Owner has failed
to make available or provide sufficient money.

         2.05 Limitation on Expenditures. Notwithstanding anything to the
contrary set forth herein, any expenditure of funds by Manager pursuant to this
Agreement may only be made if and to the extent such expenditures are permitted
by the Budget or otherwise permitted pursuant to Article 8.02(c), (d) and (e).

                                   ARTICLE 3
                                TERM AND RENEWALS

         3.01 Initial Term. The initial term ("Initial Term") of this Agreement
shall be deemed to have begun on the Commencement Date, and shall continue for a
period of twenty (20) years after the Commencement Date.

         3.02 Extension Term. Manager shall have the option to extend the term
of this Agreement for four (4) consecutive extension terms of ten (10) years
each ("Extension Term") and the term of this Agreement shall be so extended,
provided Manager is not in default under this Agreement at the time any such
Extension Term is to commence. Manager shall be deemed to have exercised its
option to extend the term of this Agreement for each Extension Term unless it
shall have delivered to Owner written notice to the contrary at least twelve
(12) months prior to the date on which the respective Extension Term is to
commence.

         3.03 Early Termination; Termination of Authorized Lease. This Agreement
may be terminated prior to the expiration of the Initial Term or any then
current Extension Term as provided in Articles 15, 16 and 17.

                                   ARTICLE 4
                               COVENANTS OF OWNER

         4.01 Licensing and Permitting

                                       13
<PAGE>   19

         (a) Owner's Licenses and Permits. Owner represents and covenants that
throughout the Term it will maintain the Casino Operating Contract and all
federal, state and local decrees, acts, orders, consents, licenses and permits,
other than those described in Article 4.01(b) but including without limitation,
suitability for Casino Employees (including Key Casino Personnel), gaming,
restaurant and alcoholic beverage licenses, required to enable Owner to own the
Casino and to operate the Casino with Manager's assistance (including without
limitation, all casino facilities, kitchens, laundry, restaurant, and alcoholic
beverage facilities) (collectively, the "Licenses and Permits"). If the Casino
Operating Contract, once issued, shall be revoked through no fault of the Owner,
such event shall not be a violation of this Article 4.01, but shall be treated
as a condemnation under Article 16.01.

         (b) Manager's Licenses and Permits. Manager represents and covenants
that throughout the Term it will maintain all casino gaming licenses or other
licenses or permits (other than those described in Article 4.01(a)) necessary or
required to enable Manager to manage the Casino and to perform its duties as
Casino manager under this Agreement and will cooperate with Owner for purposes
of Owner obtaining any suitability determination necessary for Casino Employees
(including Key Casino Personnel).

         4.02 Title; Quiet Enjoyment. Owner represents and covenants that it has
acquired, and throughout the Term will maintain, a valid and continuing
leasehold estate (pursuant to the Authorized Lease) to the Casino, subject only
to the Permitted Exceptions and the provisions of Article 4.03. Owner covenants
that during the Term Manager shall and may peaceably possess and quietly enjoy
the Casino in accordance with the terms of this Agreement, free from
molestation, eviction and disturbance by Owner or by any other person or entity
(other than any person or entity claiming through Manager to the extent such
claims relate to Manager). Owner shall, at Owner's expense, undertake and
prosecute all actions, judicial or otherwise, required to assure such quiet
enjoyment and peaceable possession by Manager. Notwithstanding the foregoing,
any termination of the Authorized Lease that is not caused by any act or
omission of Owner, shall not be a violation of this Article 4.02 but shall be
treated as a casualty for purposes of Article 15.

         4.03 Manager Subordination Agreements; Mortgages. Owner and Manager
acknowledge that (i) Wells Fargo Bank Minnesota, National Association, as
Trustee, and Manager have entered into that certain Manager Subordination
Agreement (Noteholders) of even date herewith, and (ii) Landlord, the City of
New Orleans and Manager have entered into that certain Manager Subordination
Agreement (Landlord) of even date herewith (collectively, the "Manager
Subordination Agreements"). Any party (other than the holder of the Mortgage)
holding a mortgage, deed of trust, security agreement, assignment of rents,
revenues or profits, lease (including any sale leaseback or like arrangement),
or other form of security interest in or affecting the Casino shall, as a
condition to the effectiveness of such interest and/or qualification thereof as
an Authorized Mortgage, enter into a Subordination, Non-Disturbance and
Attornment Agreement, in such form as may be negotiated between Manager and the
holder of the Authorized Mortgage. Upon any foreclosure upon the Mortgage,
Manager's rights hereunder in relation to the holder of the Mortgage shall not
be disturbed or affected by any such foreclosure other than as set forth in the
Manager Subordination Agreements referred to in this Article 4.03.

                                       14
<PAGE>   20

                                   ARTICLE 5
                         STANDARDS AND MANAGER'S CONTROL

         5.01 Casino Operational Standards. Manager shall operate the Casino,
including the performance of its obligations set forth in Article 6.01, at the
expense of Owner in accordance with Casino Operational Standards, applicable
Legal Requirements and applicable provisions of the Casino Operating Contract
and the Authorized Lease, but only if required funds are made available by Owner
and Owner cooperates in such compliance as to any matters within Owner's
responsibility or control. If any Casino Operational Standard is violative of
Legal Requirements, such Casino Operational Standard as applied to the Casino
shall be modified so as to comport with Legal Requirements.

         5.02 Owner Self-Help. If Manager should fail to protect: (i) the safety
of the patrons or employees of the Casino from harm, or (ii) tangible real or
personal property at the Casino from destruction, following written notice from
Owner and opportunity to cure, as provided in Article 17.01(a), delivery by
Owner to Manager of all funds required to effect cure and giving by Owner to
Manager of all cooperation and assistance necessary to effect cure of such
circumstance, Owner may enter the Casino and take reasonable action necessary to
provide the needed protection; provided that such entry and action shall be
undertaken in a manner that does not unreasonably interfere with the operations
conducted by Manager at the Casino.

         5.03 Payments. Manager shall have the right to pay from the Bank
Account(s) on a timely basis, in accordance with Article 10.01, all costs,
expenses, or charges incurred by Manager, Manager's Affiliates or Owner in
accordance with the terms of this Agreement.

         5.04 Manager's Control. Manager will have uninterrupted control over
the operation of the Casino. Owner agrees not to interfere or involve itself in
any way with the day-to-day operation of the Casino; provided, however, nothing
contained in this Article 5.04 is intended to interfere with any rights of Owner
set forth in this Agreement.

                                   ARTICLE 6
                            MANAGER AND OWNER MATTERS

         6.01 Manager's Obligations. The items listed in clauses (a)-(v) below
shall be "Manager Matters." Manager shall have the obligation, and the sole and
exclusive authority, throughout the Term, with respect to:

         (a)      Employees - as more particularly provided in Article 7.03,
                  hiring of Casino Employees, supervision of Casino Employees,
                  establishing levels of Compensation for Casino Employees,
                  negotiating collective bargaining agreements (if applicable)
                  for Casino Employees, establishing labor policies with respect
                  to Casino Employees, paying Casino Employees from Casino funds
                  and discharge (as Manager deems appropriate) of Casino
                  Employees; administration of compliance with the requirements
                  of the Open Access Program and any open access plans adopted
                  pursuant thereto relating to

                                       15
<PAGE>   21

                  hiring, purchasing and contracting for goods and services with
                  respect to the operation of the Casino (specifically excluding
                  any construction-related compliance) and, at Owner's request,
                  reporting to Owner's designated open access representative(s)
                  with respect thereto for purposes of Owner's reporting
                  requirements to the applicable governmental or municipal
                  authority pursuant to Article 6.02(j);

         (b)      Gaming Policies - gaming and entertainment policies, food and
                  beverage menu prices and charges for the Casino;

         (c)      Security - security and internal control procedures for the
                  Casino and terms of guest admittance to the Casino;

         (d)      Advertising - policies relating to advertising and marketing
                  of the Casino, as more particularly provided in Article 7.04,
                  including determining, based on a best cost/time factor basis,
                  which entity shall provide advertising and market research and
                  certain national marketing functions and overseeing such
                  services;

         (e)      Promotions - policies regarding the granting of discounts,
                  complimentary goods or services, and other Promotional
                  Allowances with respect to the Casino;

         (f)      Suppliers - selection of suppliers of goods and services for
                  the Casino (except with respect to the initial construction,
                  furnishing and equipping of the Casino). In purchasing or
                  contracting for goods and services, Manager shall administer
                  and comply with the Open Access Program and any open access
                  plans adopted pursuant thereto and shall give preference and
                  priority to Louisiana residents, except where not reasonably
                  possible to do so without added expense, substantial
                  inconvenience, or sacrifice in operational efficiency;

         (g)      Bank Accounts - control and management of the Bank Account(s)
                  established by Owner for the Casino, as more particularly
                  provided in Article 8.03;

         (h)      Capital Replacement Fund - management of the Capital
                  Replacement Fund established by Owner for the Casino, as more
                  particularly provided in Articles 7.07 and 7.08;

         (i)      Accounting - management or performance of casino level
                  accounting and annual budgeting (but not ownership level
                  accounting) for the Casino, as more particularly provided in
                  Article 8.01;

                                       16
<PAGE>   22

         (j)      Maintenance - supervision and effecting, or causing to be
                  effected, ordinary maintenance and repairs required to
                  maintain the Casino in compliance with Casino Operational
                  Standards, as determined by Manager or any successor
                  representatives of Manager, in their sole and absolute
                  discretion, as more particularly provided in Article 7.05;

         (k)      Necessary Contracts - negotiating and, pursuant to Article
                  19.02, entering into any contracts deemed by Manager to be
                  necessary or advisable in carrying out and placing in effect
                  the terms and conditions of this Agreement, the cost of which
                  for any Fiscal Year does not cause Manager to exceed the
                  fiscal limitations of this Agreement;

         (l)      Gross Revenue - collection and disbursement of Gross Revenues
                  on behalf of Owner in accordance with Article 10;

         (m)      Proprietary Systems; Customer-Related Services - determining
                  (i) the use of the Casino Management System and WINet and any
                  other operations and/or customer-related proprietary systems
                  owned by Manager or licensed to Manager by any of Manager's
                  Affiliates for use in the Casino and any data and information
                  thereon related to any casinos other than the Casino
                  ("Proprietary Systems"), (ii) the use of a slot management
                  system and any other operations and/or customer-related
                  proprietary systems licensed from a third party and any data
                  and information thereon related to any casinos other than the
                  Casino, and (iii) the use of certain "Harrah's(C)" brand
                  customer-related services and promotions, including the
                  "Harrah's(C)" Gold Card services, "Harrah's Total Gold," the
                  1-800-"Harrah's(C)" reservation center and distribution of
                  "Harrah's(C)" World and "Harrah's(C)" Gift Certificates;
                  managing Owner's use of such systems, services, promotions and
                  data and information related to any casinos other than the
                  Casino and administering the provision of accounting and the
                  payment by and reimbursement by Owner for the costs and
                  benefits of such systems, services, promotions, data and
                  information;

         (n)      Regulatory Matters - assisting Owner with any matters set
                  forth in Article 6.02(h) to the extent requested by Owner and
                  accepted by Manager and managing any other regulatory matters
                  related to the operation of the Casino;

         (o)      Required Expenditures and Reimbursement - at Manager's
                  election, after providing written notice and opportunity to
                  cure as provided in Article 17.01(a), making any expenditures
                  required of Owner under this Agreement and recovering, as a
                  reimbursable expense, the cost thereof with interest from the
                  date of advancement to the date of repayment at the Interest
                  Rate from Owner, on demand;

                                       17
<PAGE>   23

         (p)      Litigation - subject to the oversight of the Owner pursuant to
                  Article 6.02(r), managing and assisting Owner in connection
                  with any litigation as may be requested by Owner and accepted
                  by Manager;

         (q)      Payment of Impositions - paying all Impositions assessed
                  against the Casino as same become due;

         (r)      Renovations - renovating, refurbishing, reconstructing and
                  improving the Casino from time to time as required by Article
                  7.06;

         (s)      Enforcement of Operating Agreements and Collective Bargaining
                  Agreements - enforcing or waiving enforcement of all Operating
                  Agreements and collective bargaining agreements, subject to
                  applicable Legal Requirements, provided that Manager shall not
                  waive application of the Gaming Act's licensing or suitability
                  requirements in effect with respect to the Casino;

         (t)      Licenses - obtaining and maintaining all licenses, permits,
                  authorizations and consents necessary or required to enable
                  Manager to manage the Casino and to perform its duties as
                  Casino manager under this Agreement, as more particularly
                  provided in Article 4.01(b); and

         (u)      Administrative Services - performing the administrative
                  services provided pursuant to Article 9.02; and

         (v)      Other Manager Matters - assisting Owner with respect to any
                  Owner Matters or any matters set forth in Article 9.03 if
                  requested in writing by Owner and accepted by Manager.

Notwithstanding the foregoing, performance of items (o) through and including
(u) above shall be undertaken on behalf of and as the obligation of the Owner
and shall not subject Manager to risk except as provided in Article 14.

         6.02 Owner's Obligations. The items listed in clauses (a)-(r) below
shall be "Owner Matters." Owner and JCC Holding shall have the sole
responsibility and obligation throughout the Term with respect to:

         (a)      Budgets; Casino Employment Policies - approving or
                  disapproving Budgets presented by Manager as part of each
                  Annual Plan or proposed revision thereof, as more particularly
                  provided in Article 8.02, or other forecasting, budgeting or
                  financial planning matters; approving or disapproving Casino
                  Employment Policies proposed by Manager pursuant to Article
                  7.03(f);

         (b)      Operating Funds - providing all funds required by Manager for
                  the operation of the Casino, as and when required by this
                  Agreement;

                                       18
<PAGE>   24

         (c)      Title - maintaining Owner's leasehold estate in the Casino
                  pursuant to the Authorized Lease to the Casino and all legal
                  or beneficial interests therein, assuring Manager's quiet
                  enjoyment of the Casino free from all exceptions other than
                  Permitted Exceptions and free from interference by any party
                  having rights under any Permitted Exception, matters relating
                  to Permitted Exceptions, title insurance, the leasehold estate
                  for the Casino and title to the Building and Casino and
                  compliance with Article 4.02, or any other title-related
                  matters;

         (d)      Development Properties - the development and financing of, or
                  any other matters with respect to, the 3CP property, the
                  Fulton Street Properties and any other non-Casino land or
                  assets owned by JCC Holding and its subsidiaries (other than
                  Owner);

         (e)      Dispositions - any sale, leasing or other disposition of the
                  Casino or any other land or assets of Owner or its affiliates;

         (f)      Development and Construction - repairing, restoring,
                  rebuilding, replacing any damage to (or impairment or
                  destruction of), reconstructing or reconfiguring, furnishing
                  and equipping the Casino, as required by the terms of Articles
                  15 and 16; any other development or construction matters; and
                  hiring, supervision and other matters related to any program
                  manager or construction consultants, and any
                  construction-related contractors, consultants or
                  subcontractors;

         (g)      Financing - matters relating to the financing of the Casino;

         (h)      Licenses and Permits; Governmental Affairs - obtaining and
                  maintaining all Licenses and Permits required for Owner's
                  continued legal existence, authorization to conduct business,
                  ownership of the Casino, and continued operation of all
                  facilities at the Site, as more particularly provided in
                  Article 4.01(a), handling governmental affairs, including
                  without limitation acting as a liaison, negotiating,
                  participating in hearings, meetings and administrative
                  proceedings, and otherwise acting in respect of the Authorized
                  Lease, the Authorized GDA, Landlord, the City of New Orleans,
                  the State of Louisiana, the Casino Operating Contract,
                  compliance with the Gaming Act, conditional use proceedings,
                  suitability applications or any other licensing, permitting,
                  governmental or administrative matters;

         (i)      Second Floor - matters relating to the Second Floor Non-Gaming
                  Sublease and the development, leasing, financing, operation
                  and other matters relating to the second floor of the building
                  on the Casino Site;

         (j)      Open Access - matters relating to the Open Access Program,
                  including any open access plans adopted pursuant thereto;
                  governmental and municipal

                                       19
<PAGE>   25

                  relations regarding Open Access matters, including, without
                  limitation, preparing and submitting reports to the City of
                  New Orleans, the New Orleans City Council and/or the Office of
                  the Mayor of the City of New Orleans as required by the Open
                  Access Program and any open access plans adopted pursuant
                  thereto; supervising compliance-related efforts with respect
                  to Open Access matters, including, without limitation, efforts
                  by Manager relating to hiring, purchasing and contracting for
                  goods and services with respect to the operation of the Casino
                  as provided in Article 6.01(a) and by construction
                  contractors, subcontractors and unions relating to
                  construction-related matters;

         (k)      Payment of Debts - paying all indebtedness from time to time
                  encumbering the Casino as and when such indebtedness becomes
                  due;

         (l)      Plan - matters relating to the Plan (except as such matters
                  relate to Manager) or any other reorganization of Owner or JCC
                  Holding or its subsidiaries;

         (m)      Books and Records - maintaining the books and records and the
                  preparation of the audited and unaudited financial statements
                  for Owner based on the operating statements furnished by
                  Manager pursuant to Article 8.01(c) and for JCC Holding and
                  its subsidiaries (other than Owner);

         (n)      Securities Laws - preparation and filing of the Annual Report
                  and any other filings, proceedings or matters relating to the
                  United States Securities and Exchange Commission or Federal or
                  state securities laws;

         (o)      Investor Relations - investor relations and other matters
                  relating to the shareholders or ownership of JCC Holding;

         (p)      Community and Public Relations - handling Casino community and
                  public relations other than advertising, marketing and
                  promotions;

         (q)      Employee Benefits - establishing and administering employee
                  benefits and savings and retirement plans for Casino
                  Employees, ensuring compliance with Sections 5.5 (Fringe
                  Benefit Plan; Salary Practices) and 19.3 (Savings and
                  Retirement Plan) of the Authorized Lease and other employee
                  benefit matters relating to Casino Employees;

         (r)      Counsel and Litigation - hiring, approving settlements and
                  supervision of counsel to represent Owner regarding any Owner
                  Matters and hiring counsel and overseeing Manager's management
                  of litigation pursuant to Article 6.01(p); and

                                       20
<PAGE>   26

         (s)      Other Owner Matters - assisting Manager with respect to any
                  Manager Matters if requested in writing by Manager and
                  accepted by Owner; all corporate, administrative and other
                  business activities of Owner and any other matters not
                  expressly set forth in Article 6.01.

                                   ARTICLE 7
                             OPERATION OF THE CASINO

         7.01 Permits. Manager agrees to use all reasonable efforts within its
control to comply with any conditions or requirements set out in or imposed by
Legal Requirements or imposed by any Licenses and Permits, for so long as the
expense of such compliance shall be paid for by Owner; provided, however,
nothing contained in this Agreement shall be deemed or construed to require
Owner to pay for any cost or expense incurred by Manager in obtaining or
maintaining any licenses, permits, authorizations or consents described in
Article 4.01(b) required of Manager. In the event such expense is not paid by
Owner, Manager shall have the right to pay such expenses from the Bank
Account(s). To the extent Manager elects to pay such expenses from the Bank
Account(s), Owner shall replenish such amounts to the Bank Account(s)
immediately upon presentation of an invoice for such expenses.

         7.02 Equipment and Supplies. Manager shall be responsible and
authorized to obtain, on behalf of Owner and at Owner's cost, subject to the
fiscal limitations of this Agreement, all replacement Operating Supplies and
Operating Equipment inventories necessary or advisable in connection with the
operation of the Casino. Owner shall be solely responsible to supply Operating
Supplies, Operating Equipment and Furnishings and Equipment, and such Capital
Improvements as from time to time are required to comply with Casino Operational
Standards. In purchasing or contracting for goods and services, Manager shall
give preference and priority to Louisiana residents, except where not reasonably
possible to do so without added expense, substantial inconvenience, or sacrifice
in operational efficiency.

         7.03 Employees

         (a) Authority of Manager

                  (i)      Employees Generally. Manager, as agent for Owner, but
                           acting in Manager's sole discretion within the
                           financial parameters established in the Annual Plan
                           pursuant to Article 8.02(a) and consistent with the
                           Casino Employment Policies, will hire, supervise,
                           direct, judge the fitness and qualification of, and
                           discharge and determine the Compensation and terms of
                           employment of all Casino Employees. In hiring,
                           Manager (i) shall give preference and priority to
                           Louisiana residents, except where not reasonably
                           possible to do so without added expense, substantial
                           inconvenience, or sacrifice in operational efficiency
                           and (ii) shall comply with the provisions of Sections
                           5.1 (Open Access Program), 5.2 (Residency
                           Requirements), 5.3(b) (Open Access and

                                       21
<PAGE>   27

                           Former Employees), 5.5 (Fringe Benefits; Salary
                           Practices), 19.3 (Savings and Retirement Plan), and
                           Exhibit J (JCC Benefits Summary) of the Authorized
                           Lease. All Casino Employees other than Key Casino
                           Personnel shall be employed by Owner. At Owner's
                           request, Manager shall advise and consult with Owner
                           regarding employee-related matters.

                  (ii)     Collective Bargaining. Manager shall be Owner's
                           bargaining agent with respect to all collective
                           bargaining agreements and other Casino Employee
                           matters with full power and authority to negotiate
                           collective bargaining agreements (which may extend
                           beyond the Term and exceed the Compensation
                           authorized by the then-current Annual Plan) and to
                           settle all employee grievances and claims. Manager
                           will keep Owner advised with respect to such
                           negotiations and any material grievances or claims
                           and will obtain Owner's consent prior to entering
                           into any collective bargaining agreements or
                           settlements of any such material grievances or
                           claims.

                  (iii)    Key Casino Personnel. The General Manager, Vice
                           President of Operations, Vice President of Marketing,
                           Vice President and General Counsel, Vice President of
                           Services, and Vice President of Finance and any other
                           full time employees of the Casino involved in the
                           management of the Casino who currently are employed
                           by the Manager for so long as such employment
                           continues or who are hereafter hired by Manager as
                           Key Casino Personnel with Owner's consent
                           (collectively, "Key Casino Personnel"), may be hired
                           by Manager, at Owner's expense, as employees of
                           Manager and assigned to the Casino at such time as
                           Manager, in its discretion, deems necessary. Owner
                           shall reimburse Manager for all Compensation and any
                           and all expenses, costs, liabilities and claims
                           related to Key Casino Personnel (including, by way of
                           example only, all salaries, vacation, sick leave,
                           severance or termination benefits, pension plan
                           liabilities, savings and retirement plan
                           contributions, workers' compensation benefits or
                           claims, health, disability or life insurance
                           contributions, state, federal or local payroll or
                           other employer paid or collected taxes, injury,
                           discrimination, back pay, grievance or wrongful
                           termination awards); excluding, however, any
                           severance or relocation costs of Key Casino Personnel
                           relocated to another casino facility of any of
                           Manager's Affiliates or any damages resulting from a
                           determination of discrimination throughout the
                           Harrah's System.

         (b) Status as an Employer. Manager and Owner acknowledge and agree
that, for purposes of LSA R.S. 23:1021 et seq.:

                                       22
<PAGE>   28

                  (i)      Owner shall be considered the immediate or general
                           employer, and Manager shall be the borrowing or
                           special employer, of all Casino Employees (other than
                           the Key Casino Personnel). In any event, the services
                           provided by the Casino Employees (other than the Key
                           Casino Personnel) are an integral part of and are
                           essential to the business, services and operations of
                           Owner. Alternative to any other status as an employer
                           pursuant to applicable worker's compensation laws,
                           Owner shall be considered the statutory employer of
                           any such Casino Employees;

                  (ii)     Manager shall be the immediate or general employer of
                           the Key Casino Personnel. The services provided by
                           the Key Casino Personnel are an integral part of and
                           are essential to the business, services and
                           operations of Owner. Owner shall be considered the
                           statutory employer of the Key Casino Personnel; and

                  (iii)    Owner and Manager agree that, notwithstanding any
                           characterization of Manager as the immediate,
                           general, borrowing, special or statutory employer of
                           the Casino Employees (including the Key Casino
                           Personnel), for purposes of this Agreement, including
                           the indemnification set forth in this Article
                           7.02(b)(iii) and as between Owner and Manager, Owner
                           shall be responsible for the payment of applicable
                           workers' compensation benefits to the Casino
                           Employees (including the Key Casino Personnel) and
                           shall indemnify and save Manager harmless for any
                           payments to the Casino Employees (including the Key
                           Casino Personnel) of worker's compensation benefits
                           or any other employee Claims in accordance with
                           Article 14.

         (c) Employee Cost Indemnity. Except as otherwise provided in Article
14.01(c), Owner shall be solely responsible for and shall pay, reimburse,
indemnify, defend and hold Manager harmless from and against any and all
expenses, costs, liabilities and claims related or incidental to any Casino
Employee (including, by way of example only, all salaries, vacation, sick leave,
severance or termination benefits, pension plan liabilities, savings and
retirement plan contributions, workers' compensation benefits or claims, health,
disability or life insurance contributions, state, federal or local payroll or
other employer paid or collected taxes, injury, discrimination, back pay,
grievance or wrongful termination awards and any other costs and benefits for
Casino Employees however designated). To the extent Manager elects to disburse
such costs from the Bank Account(s), Owner shall replenish such amounts to the
Bank Account(s) immediately upon presentation of an invoice for such costs. If
Manager shall pay or cause any such amounts to be paid other than from Casino
funds, Owner shall reimburse such amount to Manager, subject to the provisions
of Article 10.01, immediately upon presentation of an invoice for such services.

                                       23
<PAGE>   29

         (d) Professional Consultants. The costs, fees, compensation or other
expenses of any persons engaged by Owner or by Manager (to the extent consistent
with the Annual Plan) to perform duties of a special nature, related to the
operation of the Casino, such as attorneys, engineers and the like, shall be a
direct expense of Owner and need not be paid by Manager. To the extent Manager
elects to disburse such costs from the Bank Account(s), Owner, immediately upon
presentation of an invoice for such costs, shall replenish such amounts to the
Bank Account(s). If Manager shall pay or cause any such amounts to be paid other
than from Casino funds, Owner shall reimburse such amounts to Manager
immediately upon presentation of an invoice for such services.

         (e) Employee Fringe Benefit Program. Owner shall provide Casino
Employees a fringe benefit program that complies with the appropriate provisions
of the Authorized Lease and the Open Access Program. All costs and expenses
related to such employee fringe benefit program shall be paid by Owner.

         (f) Casino Employment Policies. Manager shall propose to Owner, subject
to Owner's approval, policies and procedures with respect to the hiring,
promotion, training, retention and discharge of the Casino Employees which such
policies and procedures shall foster and encourage, and shall not impair or
frustrate, Manager's ability to (i) manage the Casino in accordance with Casino
Operational Standards, and (ii) provide a customer casino experience and
customer services consistent with such experience and services provided in other
casinos in the Harrah's System (as revised from time to time by Manager and
approved by Owner, the "Casino Employment Policies"). Manager agrees that in the
exercise of its authority set forth in Article 7.03(a), Manager will comply with
(i) the Casino Employment Policies, and (ii) applicable Legal Requirements,
including, but not limited to, Title VII of the Civil Rights Act, as amended,
Americans with Disabilities Act of 1990, as amended, Age Discrimination in
Employment Act (42 U.S.C. ss. 1981 et seq.), Occupational Safety and Health Act,
National Labor Relations Act, Labor Management Relations Act, Fair Labor
Standards Act, Worker Adjustment and Retraining Notification Act, Employee
Retirement Income Security Act, Family and Medical Leave Act, the Louisiana
Employment Discrimination Law and the Louisiana Worker's Compensation Act.

         7.04 Sales, Marketing and Advertising. Manager shall and is authorized
to advertise and promote the business of the Casino, institute and supervise a
sales and marketing program, and coordinate and cooperate with the marketing
programs of the Harrah's System and other casinos in the Harrah's System, and
tour programs marketed by airlines, travel agents and government tourist
departments, whenever Manager deems the same to be advisable. Manager may also
cause the Casino to participate in sales and promotional campaigns and
activities involving Promotional Allowances, provided such participation is
customary in the casino industry or Manager's or Manager's Affiliates'
practices. In purchasing or contracting for goods and services, Manager shall
give preference and priority to Louisiana residents, except where not reasonably
possible to do so without added expense, substantial inconvenience, or sacrifice
in operational efficiency.

         7.05 Maintenance and Repairs. At Owner's expense, Manager shall make or
cause to be made all repairs and maintenance as shall be required to comply with
Casino Operational

                                       24
<PAGE>   30

Standards and Legal Requirements. All work shall be performed in a time and
manner which will assure continuous compliance of the Casino with Legal
Requirements and Casino Operational Standards and minimize interference with or
disturbance of ongoing Casino operations.

         7.06 Capital Improvement and Replacements. Manager shall effect all
Capital Improvements and Capital Replacements as shall be required to maintain
the Casino in compliance with all Legal Requirements and Casino Operational
Standards and to comply with Manager's recommended programs, approved in the
Annual Plan, for renovation, modernization and improvement intended to keep the
Casino competitive in its market.

         7.07 Capital Replacement Fund for Capital Replacements and
Improvements. Manager has established and shall maintain a reserve for Capital
Replacements and Capital Improvements on the books of account of the Casino, and
the cash contributions required by Article 7.08 shall be placed into a
segregated account (the "Capital Replacement Fund") established in Owner's name
at a bank designated by Owner and subject to Manager's approval, which approval
shall not be unreasonably withheld or delayed. Subject to the terms of the
Authorized Lease, designees of Manager shall be the only signatories authorized
to withdraw funds from the Capital Replacement Fund. All amounts in the Capital
Replacement Fund shall be invested, to the extent that availability of funds,
when required, is not thereby impaired, in interest-bearing investments in
securities issued or guaranteed by the United States government or in securities
issued by any state or federally chartered bank and insured by the United States
government or, subject to Owner's consent, any other investment proposed by
Manager. Interest earned on amounts deposited in the Capital Replacement Fund
shall be credited to the Capital Replacement Fund and shall be available for
payment of expenditures for Capital Replacements or Capital Improvements to the
Casino. This Capital Replacement Fund shall be the "Capital Replacement Fund"
specified in Article 19.8 of the Authorized Lease and Section 13.7(a) of the
Casino Operating Contract.

         7.08 Periodic Contributions to Capital Replacement Fund. Manager on
behalf of Owner has been depositing and shall continue to deposit into the
Capital Replacement Fund (i) one-twelfth (1/12th) of THREE MILLION AND 00/100
DOLLARS ($3,000,000) for each of the first twelve (12) months following the
opening of the Casino on October 29, 1999, (ii) one-twelfth (1/12th) of FOUR
MILLION AND 00/100 DOLLARS ($4,000,000) for each of the second twelve (12)
months following the Commencement Date, (iii) one-twelfth (1/12th) of FIVE
MILLION AND 00/100 DOLLARS ($5,000,000) for each of the third twelve (12) months
following the Commencement Date, and (iv) two percent (2%) of monthly Gross
Revenues for each Fiscal Month thereafter. The cash amounts required to be so
deposited shall be calculated and deposited into the Capital Replacement Fund,
in arrears, no later than the tenth (10th) day of the Fiscal Month immediately
following the Fiscal Month with respect to which a deposit is made. In addition,
all proceeds from the sale of capital items no longer needed for the operation
of the Casino, and the proceeds of any insurance received in reimbursement for
any items previously paid for from the Capital Replacement Fund, shall be
deposited into the Capital Replacement Fund upon receipt by Owner.

         7.09 Use and Allocation of Capital Replacement Fund. Any expenditures
for Capital Replacements or Capital Improvements which have been budgeted in an
Annual Plan may be paid

                                       25
<PAGE>   31

from the Capital Replacement Fund without further approval from Owner. Any
amounts remaining in the Capital Replacement Fund at the close of any Fiscal
Year shall be carried forward and retained in the Capital Replacement Fund until
fully used. If amounts in the Capital Replacement Fund at the end of any Fiscal
Year plus the anticipated contributions to the Capital Replacement Fund for the
year following the date of such contribution (the "Ensuing Year") are not
sufficient to pay for Capital Replacements or Capital Improvements authorized by
the Annual Plan for such Ensuing Year, then Owner shall supply additional funds,
in the amount of the projected deficiency, at the time the Annual Plan for such
Ensuing Year is approved.

         7.10 Emergency Expenditures. If a condition should exist of an
emergency nature which, in Manager's reasonable discretion, requires immediate
action to preserve and protect the Casino, assure its continued operation,
and/or protect the comfort, health, safety and/or welfare of Casino guests or
employees, Manager is authorized to take all steps and to make all expenditures
from the Bank Account(s), or the Capital Replacement Fund (in the case of
expenditures for Capital Replacements or Capital Improvements) as it deems
necessary to repair and correct any such condition, without regard to whether
provisions have been made in the Annual Plan for any such expenditures, and the
cost thereof shall be paid or reimbursed by Owner on demand. Manager shall
provide Owner reasonable notice of any such actions or expenditures as soon as
possible thereafter.

         7.11 Compliance with Legal Requirements. If, at any time, repairs to or
additions, changes or corrections in the Casino of any nature shall be required
by reason of any laws, ordinances, rules or regulations now or hereafter in
force, or by order of any governmental or municipal power, department, agency,
authority or officer ("Legal Requirements"), such repairs, additions, changes or
corrections may, whether or not provided for in the Annual Plan, be made by or
at the direction of Manager and paid for from the Bank Account(s), the Capital
Replacement Fund (in the case of expenditures for Capital Replacements or
Capital Improvements) or other sources if such Legal Requirement was not known
to Manager at the time of submission of the then effective Annual Plan, and the
cost thereof shall be paid by Owner, or Owner shall replenish the Bank
Account(s), the Capital Replacement Fund or such other source, as the case may
be, on demand.

         7.12 Disbursement on Termination or Expiration. All amounts held in the
Capital Replacement Fund shall be distributed pursuant to the provisions in the
Authorized Lease and Casino Operating Contract regarding the Capital Replacement
Fund. Upon the expiration or termination of this Agreement, all amounts then
held in the Capital Replacement Fund shall be distributed pursuant to the
provisions in the Authorized Lease and Casino Operating Contract regarding the
Capital Replacement Fund and following such distribution, any sums remaining may
be applied to any amounts then due and payable to Manager under this Agreement,
and thereafter, any sums remaining shall be paid over to Owner. If Manager
receives any conflicting or adverse claims or demands made in connection with
the application of any or all of the amounts held in the Capital Replacement
Fund pursuant to this Agreement, the Casino Operating Contract or the Authorized
Lease, Manager shall be entitled, at its option, to refuse to comply with any
such claims or demands so long as the disagreement shall continue and in so
doing Manager shall not be liable for its failure or refusal to comply with such
conflicting or adverse claims or demands

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<PAGE>   32

until the rights of the claimants have been adjudicated finally or the
differences adjusted among the claimants and Manager shall have been notified
thereof in writing signed by all such claimants. Manager also shall have the
right to bring an action in interpleader to obtain the right to pay all or any
such portion of the amount then held in the Capital Replacement Fund to a court
of competent jurisdiction, deducting from said sum the costs incurred in
bringing such an action.

         7.13 Occupancy Agreements

         (a) Terms of Occupancy Agreements. Manager shall have full authority to
enter into leases, concessions, licenses and other forms of agreement for the
occupancy (collectively and separately, "Occupancy Agreements") of commercial
areas of the Casino (including without limitation, restaurant, cocktail lounge,
retail shops, automobile parking and other accessory services) in the name of
and on behalf of Owner. Manager's authority with respect to the Occupancy
Agreements is subject to the following provisions, unless Owner otherwise
consents to a modification thereof:

                  (i)      the term of such Occupancy Agreements shall not
                           extend beyond the scheduled expiration of this
                           Agreement;

                  (ii)     such Occupancy Agreements may be terminated by Owner,
                           at Owner's option, without penalty or premium, upon
                           not more than ninety (90) days' notice in the case of
                           any termination of this Agreement prior to its
                           scheduled expiration;

                  (iii)    such Occupancy Agreements shall require the occupant
                           to be solely responsible for all damage to persons or
                           property occurring within its premises and to waive
                           any claim against Owner with respect thereto;

                  (iv)     such Occupancy Agreements shall require the occupant
                           to maintain commercial general liability insurance,
                           and, if alcoholic beverages are served on such
                           premises, liquor liability insurance in an amount not
                           less than FIVE MILLION AND 00/100 DOLLARS
                           ($5,000,000), naming Owner, Landlord and the City of
                           New Orleans as additional insureds; and shall further
                           require that all insurance maintained by the occupant
                           be primary to any insurance maintained by Owner and
                           waive any right of subrogation against the Owner;

                  (v)      such Occupancy Agreements shall require the occupant
                           to indemnify, defend and hold Owner harmless from and
                           against any and all claims, losses, liabilities and
                           damages resulting or arising in any manner, in whole
                           or in part, out of its use or occupancy of its
                           premises;

                                       27
<PAGE>   33

                  (vi)     such Occupancy Agreements shall require the occupant
                           to recognize any and all prior rights granted by
                           Owner pursuant to any Authorized Mortgage, including
                           without limitation the Mortgage; and

                  (vii)    such Occupancy Agreements shall require the occupant
                           to comply with all Legal Requirements applicable to
                           the conduct of its business at the Casino, and shall
                           be terminable by Owner or Manager if the occupant
                           breaches or fails to perform any material obligation
                           or undertaking to be performed by occupant thereunder
                           after reasonable opportunity to cure any such breach
                           or default.

         (b) Effects of Occupancy Agreements on this Agreement. If any Occupancy
Agreements should be entered into by Manager on behalf of the Owner, then, for
so long as such Occupancy Agreements may remain in effect:

                  (i)      only the rent paid by the occupant shall be deemed
                           Gross Revenues under this Agreement;

                  (ii)     there shall be excluded from the definitions of
                           Operating Costs and Ownership Costs any such costs as
                           are paid by the occupant;

                  (iii)    employees of the occupied premises shall not be
                           required to be employees of Manager or Owner; and

                  (iv)     Owner agrees to look solely to the occupant, and any
                           insurance which may be maintained by the occupant, or
                           to Owner's own insurance, for any loss, cost or
                           damage relating to or arising out of the premises
                           thereby affected, and shall not hold Manager
                           responsible therefor in any respect.

                                   ARTICLE 8
                                 FISCAL MATTERS

         8.01 Accounting Matters and Fiscal Periods

         (a) Books and Records. Books and records reflecting Casino operations
shall be kept by Manager at the Casino or at Manager's offices in New Orleans,
Louisiana in accordance with Casino Standard Accounting Principles and the
following:

                  (i)      Manager recognizes the rights of Landlord's Accepted
                           Auditor pursuant to the Authorized Lease and the LGCB
                           and its authorized representatives pursuant to the
                           Casino Operating Contract to inspect such books and
                           records;

                                       28
<PAGE>   34

                  (ii)     as a condition to Landlord and the City of New
                           Orleans being third party beneficiaries hereof
                           pursuant to Article 27.03, it shall be required that
                           Landlord and the City of New Orleans agree that, for
                           so long as such books and records are made available
                           to Landlord's Accepted Auditor as provided in the
                           Authorized Lease and the reasonable travel and
                           lodging expenses of the Accepted Auditor are paid by
                           Owner, such books and records, to the extent
                           permitted by the LGCB and the Authorized Lease, may
                           be kept or maintained at the national or regional
                           offices of Manager's Affiliates;

                  (iii)    Owner shall be solely responsible to maintain
                           ownership level books and accounts reflecting
                           Ownership Costs and Owner's tax and accounting
                           matters; provided, however, that if Owner elects or
                           consents to have Manager's Affiliate maintain such
                           books and accounts for an agreed accounting fee, such
                           books and accounts may, if and to the extent legally
                           permitted, be maintained at the offices of Manager's
                           Affiliate as provided above; and

                  (iv)     Owner's and Manager's respective independent
                           accounting firms shall each have the right and
                           privilege of examining said books and records (during
                           normal working hours (Monday-Friday) upon no less
                           than forty eight (48) hours advance written notice).

         (b) Audit. A certified audit of Casino operations shall be performed
within ninety (90) days after the end of each Fiscal Year, and upon termination
or expiration of this Agreement. Additionally, a certified audit of Gross Gaming
Revenue (as defined in the Casino Operating Contract) shall be performed
quarterly within thirty (30) days after the end of each Fiscal Quarter. Such
audit of Gross Gaming Revenue shall be performed by Deloitte & Touche LLP, or
such other accounting firm as may be selected by Owner and approved by Manager
in writing, such approval not to be unreasonably withheld (the "Accountants");
provided that nothing herein shall restrict Owner from hiring any other
accounting firm or firms to perform any accounting, audit or other services.
During such audit and review periods, Manager agrees that each of the LGCB and
its authorized representatives pursuant to the Casino Operating Contract and
Landlord's Accepted Auditor shall have the right to retain an independent
auditor to participate with the selected Accountant to examine, audit, inspect
and transcribe the Casino's books and records. The determination of such
accounting shall, unless appealed to arbitration, be conclusive and binding on
the parties as to all matters properly addressed thereby, and Owner and/or
Manager shall, promptly upon receipt thereof, adjust between them, any over or
underpayment made or received by either of them, as the case may be, during the
audited period. The cost of accounting services delivered by the Accountants
shall be an Ownership Cost.

         (c) Fiscal Year. The fiscal year (the "Fiscal Year") of the Casino
shall be the calendar year; the fiscal quarter (the "Fiscal Quarter") of the
Casino shall be the calendar quarter; and the fiscal month (the "Fiscal Month")
of the Casino shall be the calendar month. On or before the fifteenth (15th) day
of each full Fiscal Month (except for January), Manager shall furnish Owner

                                       29
<PAGE>   35

with a detailed operating statement setting forth the results of Casino
operations for the preceding Fiscal Month, and the operating statement delivered
in January of each Fiscal Year for the preceding December shall be delivered on
or before the twenty-fifth (25th) day of January. The form of the operating
statement may be modified from time to time by Manager at its discretion to
reflect changes adopted by Manager's Affiliates for accounting for casinos
managed by Manager's Affiliates. The fiscal periods adopted by Manager are
referenced in this Agreement as "Fiscal Month," "Fiscal Quarter," and "Fiscal
Year," respectively. The term "Fiscal Period" shall mean a Fiscal Year, Fiscal
Quarter or Fiscal Month, as the context requires.

         8.02 Approved Budget

         (a) Annual Plan. Manager annually shall prepare, for Owner's review and
approval, an annual plan (as proposed by Manager and approved by Owner, or
revised from time to time pursuant to this Article 8.02, the "Annual Plan") for
the Casino for each Fiscal Year. The Annual Plan for each Fiscal Year shall be
prepared and submitted to Owner not later than sixty (60) days before the
beginning of each Fiscal Year. The Annual Plan for the Casino will consist of
the following:

                  (i)      a statement of the estimated income and expenses for
                           the coming Fiscal Year, including estimates as to
                           Gross Revenues, Operating Costs, EBITDAM and the
                           amount of each line item for EBITDAM Adjustments for
                           such Fiscal Year, such operating budget to reflect
                           the estimated results of the operation during each
                           Fiscal Month of the subject Fiscal Year;

                  (ii)     either as part of the statement of the estimated
                           income and expenses referred to in the preceding
                           clause (i), or separately, budgets (and timetables
                           and requirements of Manager) reflecting budgeted
                           amounts and a comparison to actual results for the
                           prior Fiscal Year for:

                           (A)      repairs and maintenance;

                           (B)      Capital Replacements;

                           (C)      Operating Equipment;

                           (D)      advertising and business promotion programs
                                    for the Casino;

                           (E)      the estimated cost of Promotional
                                    Allowances;

                           (F)      a staffing schedule providing staffing
                                    levels, compensation and benefits;

                           (G)      detailed departmental operating statements;

                                       30
<PAGE>   36

                  (iii)    a business and marketing plan for the subject Fiscal
                           Year; and

                  (iv)     the Minimum Balance which must remain in the Bank
                           Account(s) and the House Bank as of the end of each
                           Fiscal Month during the Fiscal Year to assure
                           sufficient monies for working capital purposes, the
                           House Bank and other expenditures authorized under
                           the Annual Plan subject to adjustment pursuant to
                           Article 8.03(a).

The estimates of Gross Revenues, Operating Costs, EBITDAM and Projected Adjusted
EBITDAM in each Annual Plan shall represent the Manager's good faith estimate of
reasonably attainable financial performance levels based on business and
competitive conditions existing at the time of preparation of the Annual Plan.
The "Budget" shall mean the estimated income and expense EBITDAM, Adjusted
EBITDAM, and Operating Costs pursuant to Article 8.02(a)(i) and budgeted amounts
pursuant to Article 8.02(a)(ii) contained in the Annual Plan.

         (b) Review. In connection with the submission of the Annual Plan to
Owner, Owner will meet with Manager within twenty (20) days from the date the
proposed Annual Plan is delivered to Owner to have an in-depth review,
including, a comparison with the previous Fiscal Year's performance of the
Casino and a discussion of marketing strategy, identification of markets and the
proposed expenditures contained in the Annual Plan. In addition, after the
Annual Business Plan (as defined in the Authorized Lease) has been submitted to
Landlord, Owner and Manager will meet with Landlord to discuss those items of
the Annual Business Plan, as provided in the Authorized Lease, addressing
marketing, city revenues, and other relevant issues.

         (c) Owner's Approval. The Annual Plan will be subject to the approval
of Owner, which will not be unreasonably withheld or delayed. The Annual Plan
for 2001 has previously been submitted to Owner by Manager and approved by Owner
through March 31, 2001. Owner shall approve an Annual Plan for the last three
quarters of 2001 on or before the March 31, 2001. It is the intention of the
parties to complete the review and approval of each proposed Annual Plan no
later than thirty (30) days prior to the commencement of each Fiscal Year. Owner
shall be required to approve or disapprove each proposed Annual Plan within
thirty (30) days after the date of delivery to Owner of each such proposed
Annual Plan by providing written notice to Manager. To be effective, any notice
which disapproves a proposed Annual Plan must contain specific line item
objections thereto in reasonable detail. If Owner fails to provide such written
notice to Manager of any specific objections to a proposed Annual Plan within
such thirty (30) day period, such Annual Plan shall be deemed to have been
approved as submitted. Owner shall review the Budgets contained in the Annual
Plan on a line-by-line basis. If Owner disapproves or raises any objections to
any line items contained in any proposed Budget for Fiscal Year 2002 and
thereafter or in the proposed Annual Plan for Fiscal Year 2002 and thereafter or
any revisions to any Annual Plan or Budget after approval thereof, until
otherwise mutually agreed, the undisputed portions of the proposed Annual Plan
shall be deemed to be adopted and approved. In each instance where portions of
the Annual Plan from the preceding Fiscal Year are deemed to be the Annual Plan
in effect until a new Annual Plan is approved, the Budget items contained in the
Annual Plan for the preceding Fiscal Year shall be automatically increased or
decreased by a

                                       31
<PAGE>   37

percentage equal to the percent of increase or decrease in the CPI during the
preceding Fiscal Year. Calculation of the percent of increase or decrease in the
CPI shall be made by Manager based upon the then most recently published CPI
data at the time the calculation is made. If, notwithstanding such CPI increase,
Manager and Owner do not reach agreement as to mutually acceptable Budgets
within thirty (30) days after delivery of objection by Owner, the line item(s)
in the Budget in the Annual Plan objected to by Owner shall be submitted to and
resolved by arbitration in accordance with Article 20.02 and Manager shall
provide Landlord with notice of the submission to arbitration.

         (d) Compliance. Manager shall be permitted to reallocate part or all of
the amount budgeted with respect to any line item in the Budget to another line
item in the same Department, but may not reallocate from one Department to
another Department. Manager shall also be entitled to make expenditures on
behalf of Owner not authorized under the Budget in the then applicable Annual
Plan, subject to reimbursement by Owner on demand, only (unless otherwise
approved by Owner):

                  (i)      in case of emergencies;

                  (ii)     to the extent necessary to comply with Legal
                           Requirements or Casino Operational Standards;

                  (iii)    to pay for the actual cost of any utilities, fuel,
                           fees for Licenses or Permits, insurance or
                           Impositions;

                  (iv)     to pay for uninsured liabilities, including without
                           limitation, uninsurable claims (such as employee
                           claims, environmental and civil rights claims), the
                           amount of any uninsured or deductible portion of any
                           insured claim, and any assessments relating to health
                           or other insurance programs having cost-plus or self
                           insurance features;

                  (v)      to pay for additional Compensation paid pursuant to
                           any collective bargaining agreement negotiated with a
                           union or changes in Key Casino Personnel or Casino
                           employee Compensation levels;

                  (vi)     to pay for Ownership Costs incurred after approval of
                           an Annual Plan;

                  (vii)    to pay for any gaming, sales or use tax deficiencies
                           assessed by a taxing authority; and

                  (viii)   to pay for additional costs permitted by Article
                           8.02(e).

         (e)      Adjustment to Annual Plan

                                       32
<PAGE>   38

                  (i)      If Manager encounters circumstances which require
                           unbudgeted and unexpected expenditures not foreseen
                           at the time of preparation of the Annual Plan and
                           which Manager deems reasonably necessary, in addition
                           to and without limiting the instances described in
                           Article 8.02(d) and without regard to the
                           requirements of Article 8.02(c), Manager may, without
                           Owner's approval, make such expenditures so long as
                           the same do not, in any Fiscal Quarter, exceed the
                           greater of (A) one hundred fifteen percent (115%) of
                           the amount in the Annual Plan for such Fiscal Quarter
                           for the Department to which such expenditures relate
                           or for items pursuant to Article 8.02(a)(ii)(A)
                           through (G), or (B) with respect to expenditures for
                           slot, table games, other games, food and/or beverage
                           Departments, such expenditures will not exceed an
                           amount such that the ratio of the amount actually so
                           expended to the actual revenues of the affected
                           Department does not exceed the ratio (expressed as a
                           percentage) of the expenses in the Budget to the
                           revenues in the Annual Plan for such Fiscal Quarter,
                           rounded up to the next full percentage point (the
                           "Budget Revision Threshold").

                  (ii)     As soon as Manager becomes aware of any items which
                           exceed the Budget Revision Threshold in any Fiscal
                           Quarter, Manager will promptly submit to Owner a
                           report (the "Budget Report") with a summary and
                           explanation of variances between expenditures set
                           forth in the Annual Plan for such Fiscal Quarter and
                           actual expenditures for such Fiscal Quarter, which
                           report shall be subject to Owner's review and
                           approval, which approval shall not be unreasonably
                           withheld or delayed.

                  (iii)    If Manager expects that expenditures will in future
                           Fiscal Quarter exceed the Budget Revision Threshold,
                           Manager shall have the right, from time to time
                           during such Fiscal Year, to submit a proposed
                           revision to the Annual Plan to Owner for approval,
                           which approval shall not be unreasonably withheld or
                           delayed.

                  (iv)     Owner will review any Budget Report or any proposed
                           revisions to an Annual Plan on a line-by-line basis
                           in the same manner as the initial Annual Plan. If
                           Owner shall disapprove or raise any objections to any
                           items contained in a Budget Report or revisions to an
                           Annual Plan, Manager shall continue to use all
                           reasonable efforts to comply with the Annual Plan
                           until a proposed revision has been approved or this
                           Agreement is terminated. If the Budget Report or any
                           proposed revision to the Annual Plan is not approved
                           before the expiration of thirty (30) days after any
                           Budget Report or revision is submitted to Owner for
                           approval, the revision shall not

                                       33
<PAGE>   39

                           be deemed approved, and any disagreement between
                           Owner and Manager with respect to the Budget Report
                           or proposed revision shall be resolved by arbitration
                           in accordance with Article 20.02.

         (f) No Guarantee. Manager shall not be deemed to have made any
guarantee or warranty of the fiscal estimations set forth in the Annual Plan.
The parties acknowledge that the Annual Plan is intended to set forth objectives
and goals based on Manager's best judgment of the facts and circumstances known
by Manager at the time of preparation.

         (g) Meetings. Manager and Owner agree to meet monthly to discuss (i)
the then-existing Annual Plan, (ii) any adverse variances of revenues or
expenditures from the Annual Plan, (iii) Manager's recommendations for
modifications to the Annual Plan in view of any adverse variances of revenues or
expenditures from the Annual Plan, and (iv) any other modifications to the
Annual Plan anticipated by Manager or Owner.

         8.03 Bank Account(s); House Bank

         (a) Bank Account(s). Owner has established and shall maintain an
operating account(s) in its name at a bank (with retail offices in the immediate
geographic vicinity of the Casino) approved by Manager (the "Bank Account(s)")
as Manager determines to be necessary or convenient for the operation of the
Casino. Manager's designees shall be the only parties authorized to draw upon
the Bank Account(s). At the opening of the Casino on October 29, 1999, Owner had
an aggregate amount of not less than TEN MILLION AND 00/100 DOLLARS
($10,000,000) (or such other amount as was required by the Gaming Act or any
regulations or orders issued by the LGCB) on deposit in the Bank Account(s)
and/or available under its revolving credit facility which then served as
working capital, excluding the House Bank, for Casino operations. Owner
established a House Bank which included at least FIVE MILLION AND 00/100 DOLLARS
($5,000,000) in cash on the opening of the Casino on October 29, 1999. Subject
to the requirements of the Gaming Act or any regulations or orders issued by the
LGCB, (i) the TEN MILLION AND 00/100 DOLLAR ($10,000,000) amount referred to
above may be adjusted jointly by Manager or Owner at any time (as so adjusted,
the "Minimum Balance") and (ii) the House Bank may be adjusted jointly by
Manager and Owner at any time. Owner shall furnish Manager immediately, upon
demand, with sufficient funds to make up any deficiency in the Minimum Balance
and/or House Bank (as so adjusted) or to pay any Ownership Costs or Operating
Costs of the Casino then due to the extent there are insufficient funds in the
Bank Account(s). Manager acknowledges that it is advantageous to Owner to have
advance notice of funding needs so that borrowings under its credit facilities
may be arranged at lowest costs. Manager agrees to use commercially reasonable
efforts to provide advance notice to Owner of anticipated needs for additional
funds to be deposited in the Bank Account(s) or House Bank not less than five
(5) days prior to the actual need for such funds.

         (b) Control of Bank Account(s). Manager shall have absolute control of
the Bank Account(s). Manager shall have absolute control of the House Bank. All
Gross Revenues shall pass through the Bank Account(s). All amounts on deposit in
the Bank Account(s) shall be invested in interest-bearing investments, to the
extent that availability of funds, when required, is

                                       34
<PAGE>   40

not thereby impaired, in securities issued or guaranteed by the United States
government or in securities issued by any state or federally chartered bank and
insured by the United States government or, subject to Owner's consent, any
other investment proposed by Manager. Interest earned on amounts deposited in
the Bank Account(s) shall be credited to the Bank Account(s) and shall be for
the benefit of Owner.

         (c) No Commingling of Funds. Manager shall not commingle any funds in
the Bank Account(s), the Capital Replacement Fund, the House Bank, any payroll
accounts, petty cash funds or other Casino funds with any funds of Manager or
any Affiliate of Manager.

         (d) Reconciliation of Bank Account(s). Manager shall provide Owner
copies of bank statements with respect to the Bank Account(s) as and when
received by Manager from the applicable bank(s), and shall provide Owner a
reconciliation of such bank statements to the books and records reflecting
Casino operations within twenty (20) days of Manager's receipt of such bank
statements.

         8.04 Internal Controls

         (a) System. Manager shall establish a system of internal controls to
perform the administrative and accounting procedures required by Section 9.27 of
the Casino Operating Contract.

         (b) Compliance Report. Owner shall cause the Accountants to prepare an
annual compliance report addressing the adequacy of the design of such internal
control system and the effectiveness of the implementation thereof as required
by Section 9.27 of the Casino Operating Contract. Manager agrees to cooperate
with Owner and the Accountants in the preparation of such compliance report.

         (c) Manager's Assistance. Upon Owner's request, Manager shall assist
Owner in (i) advising the LGCB in writing as to the manner in which each
material matter or material item of non-compliance identified in the compliance
report has been corrected or is proposed to be corrected, and (ii) providing a
timetable for completing each material matter or material item of non-compliance
not then corrected.

                                    ARTICLE 9
                                 FEES TO MANAGER

         9.01 Management Fee

         (a) Payment and Amount. Commencing as of the date of this Agreement,
Owner shall pay to Manager on a quarterly basis a management fee (the
"Management Fee") in an amount equal to thirty percent (30%) of EBITDAM;
provided that the Management Fee shall be reduced by the amount of the System
Fee. The Management Fee shall be in consideration of all of Manager's and its
Affiliate's Services pursuant to this Agreement, it being understood that the
Travel Fee under the Prior Agreement has been eliminated.

                                       35
<PAGE>   41

         (b) Definitions. For purposes of this Article 9.01, the following
definitions apply:

                  (i)      "EBITDAM" means, with respect to Owner, for any
                           period, the Net Income of Owner for such period
                           adjusted to add thereto (to the extent deducted in
                           determining Net Income for such period), without
                           duplication, the sum of (i) Interest Charges, (ii)
                           income taxes payable by Owner in respect of any
                           casino revenues (not including any Impositions or
                           payments pursuant to the Casino Operating Contract);
                           (iii) depreciation and amortization expense; and (iv)
                           Management Fees.

                  (ii)     "Interest Charges" means, with respect to Owner, for
                           any period, the aggregate amount (without
                           duplication) of interest expensed in accordance with
                           Casino Standard Accounting Principles during such
                           period in respect of all indebtedness of Owner
                           including the interest portion of all deferred
                           payment obligations calculated in accordance with
                           Casino Standard Accounting Principles.

                  (iii)    "Net Income" means, with respect to Owner, for any
                           period, the net income (or loss) of Owner (determined
                           in accordance with Casino Standard Accounting
                           Principles) for such period, adjusted to exclude
                           (only to the extent included in computing such net
                           income (or loss) and without duplication) all gains
                           or losses which are either extraordinary (as
                           determined in accordance with Casino Standard
                           Accounting Principles) or are either unusual or
                           nonrecurring (including from the sale of assets
                           outside of the ordinary course of business or from
                           the issuance or sale of capital stock).

         (c) Time of Payment. Within thirty (30) days after the end of each
Fiscal Quarter, Manager shall submit to Owner a calculation of the Management
Fee and System Fee due to Manager for such Fiscal Quarter. Owner shall pay to
Manager the amount of such Management Fee and System Fee on or before the later
of forty-five (45) days after the end of each Fiscal Quarter or fifteen (15)
days after delivery to Owner by Manager of said calculation. If Owner disputes
the amount of any such Management Fee or System Fee and such dispute is
submitted to arbitration pursuant to Article 20.02, Owner shall pay to Manager
the undisputed portion thereof and may withhold the disputed portion pending the
outcome of the arbitration. Owner and Manager agree to make any payments
necessary to settle any amounts owed to the other (i) as a result of any such
arbitration within ten (10) days of the decision in such arbitration or (ii) as
a result of any adjustment to the Management Fee or System Fee determined after
audited financial statements are provided pursuant to Article 8.01(b) within ten
(10) days of the provision of such audited financial statements. If Owner shall
fail timely to pay any amounts due to Manager pursuant to this Article 9.01(c),
Manager may pay itself such amounts from the Bank Accounts.

                                       36
<PAGE>   42

         9.02 Property Tax, Income Tax, Insurance, Benefit Plan Administration
and Other Services. Owner and HOCI have entered into that certain Administrative
Services Agreement dated as of October 30, 1998 and thereafter amended Schedule
1 thereto (as amended, the "Administrative Services Agreement"). The
Administrative Services Agreement has been terminated concurrently herewith.
From and after the date hereof, as a part of its management services, Manager
shall provide or cause its Affiliates to provide to Owner services for (i)
placing insurance for the Casino at Owner's cost and administering insurance
related services, (ii) monitoring and paying at Owner's cost real estate and
tangible personal property tax assessments against the Casino, (iii)
administering any employee benefit plan or savings and retirement plan
established and maintained by Owner and making payments pursuant thereto at
Owner's cost, and (iv) providing all other services as provided by HOCI pursuant
to the Administrative Services Agreement as of the date hereof. Manager shall
provide or cause to be provided such administrative services to the same extent
as such services were being provided pursuant to the Administrative Services
Agreement immediately prior to execution of this Agreement. Such administrative
services shall not include insurance premiums, tax payments, employee benefit or
retirement payments or other payments to third parties in connection with such
administrative services consistent with reimbursements to Manager for payments
to third parties in accordance with the Administrative Services Agreement
immediately prior to the execution of this Agreement. Owner shall reimburse
Manager for any premiums, taxes, payments or other such out-of-pocket expenses
incurred by Manager. Except for such reimbursements, Manager and its Affiliates
shall not receive any compensation or any corporate or overhead allocations or
other consideration for such administrative services other than the Management
Fee.

         9.03 Proprietary Systems. The Proprietary Systems owned by Manager or
licensed by Manager, when used in the Casino, shall be provided by Manager in
consideration of the Management Fee and without additional charge to Owner.

                                   ARTICLE 10
                                  DISBURSEMENTS

         10.01 Disbursements of Net Revenues. As and when received by Manager,
Gross Revenues shall be deposited in the Bank Account(s). Manager shall disburse
on a monthly basis, for and on behalf of Owner as invoices are received or
amounts become due, funds from the Bank Account(s) to pay:

         (a) any reimbursable expenses due Manager under this Agreement;

         (b) other Operating Costs;

         (c) other Ownership Costs (as directed by Owner); and

         (d) to Owner all amounts necessary to pay debt service (interest and
principal) relating to the Casino, whether unsecured or secured by any mortgage
or deed of trust encumbering the Casino.

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<PAGE>   43

         10.02 Adjustment to Bank Account(s). After the disbursements pursuant
to Article 10.01 and establishment of any reasonable reserves for future
disbursements pursuant to Article 10.01 as Manager deems necessary, taking into
account anticipated cash flow and Operating Costs and Ownership Costs at the
Casino, any excess funds remaining in the Bank Account(s) over the Minimum
Balance (and such reserves) shall be disbursed to Owner on a daily basis or
other periodic basis as frequently as may be mutually agreed by Owner and
Manager. Correspondingly, and without limiting Owner's obligation to provide any
funds required by this Agreement at all times, if the Bank Account(s) do not
contain sufficient funds to pay all obligations of Owner under this Agreement
when and as due, Manager may pay any or all such obligations on behalf of Owner.
To the extent Manager elects to pay such expenses on behalf of the Owner, Owner
shall reimburse such amount to Manager immediately upon presentation of an
invoice for such expense.

         10.03 Payment of Ownership Costs. Except when paid by Manager, Owner
shall pay for all Ownership Costs (and, should Net Revenues be insufficient to
pay for same, all Operating Costs) as same become due and payable and before any
interest or penalty may attach for non-payment thereof, or action be commenced
against the Manager for enforcement thereof, or foreclosure of any lien therefor
against the Casino. Owner shall be entitled to contest any Imposition so long as
no liability to Manager results therefrom, the expenses to contest such
Impositions are not deducted from Net Revenue to determine Net Income, no lien
against the Casino is foreclosed, and no interest or penalty results.

         10.04 Payment of Gaming, Sales and Other Operational Payments and
Taxes. Manager shall be responsible to file all necessary returns and remit from
Gross Revenues to the governmental authorities having jurisdiction over the
Casino all compensation owed to the LGCB under the Casino Operating Contract,
all sales taxes, excise taxes, use taxes, gross receipts taxes, admission taxes,
entertainment taxes, tourist taxes and similar taxes and charges required by law
to be collected from patrons or guests as part of the sales price for goods,
services or entertainment at the Casino. Manager reserves the right to contest
the amount of any such payments or taxes; provided that Owner shall be permitted
to participate in any such contest. Manager shall have no liability for the
payment of any fines, penalties, interest or other charges or assessments for
any underpayment or overpayment or miscalculation of such payments or taxes
unless caused by the gross negligence or willful misconduct of Manager's or
Manager's Affiliate's employees charged to administer such payments, recognizing
that the manner of calculating and reporting such taxes is often vague and
subject to broad administrative discretion. All costs of any contest and all
such fines, penalties, interest or other charges or assessments shall be
Ownership Costs. Owner shall pay to Manager any sales, gross receipts or similar
tax imposed upon Manager, calculated on any payment or payments required of
Owner under this Agreement, unless the tax is an alternative to an income tax
otherwise payable by Manager. Any such payment shall be made at the time of each
payment to Manager, or, if not so paid, within ten (10) days of any request by
Manager therefor.

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<PAGE>   44

                                   ARTICLE 11
                                HARRAH'S SERVICES

         11.01 Provision of Harrah's Services. Harrah's Services described in
this Article 11.01 shall be provided by Manager and accepted by Owner for a fee
(the "System Fee") of one and one half percent (1 1/2%) of quarterly Net
Revenues. The System Fee shall be paid to Manager concurrently with payment of
the Management Fee. To the extent that in any Fiscal Quarter the System Fee
shall be in excess of thirty percent (30%) of EBITDAM for any such Fiscal
Quarter the portion of the System Fee equal to any such excess is hereby waived
by Manager. If EBITDAM is not a positive number, in any Fiscal Quarter, there
shall be no System Fee for such Fiscal Quarter.

         11.02 Harrah's Services. "Harrah's Services" shall mean advertising
services; special promotions which may target particular casinos; public
relations, including without limitation, guest utilization and satisfaction
surveys and general or specific market research; 800 number telephone technology
and services; data base/direct marketing; and administration of the foregoing.
The treatment of the Casino with respect to Harrah's Services will be no less
favorable than is granted to other participating casinos owned or managed by
Manager's Affiliates or licensed to operate under the System Marks.

         11.03 Limitations. The Harrah's Services shall be provided on the same
basis as provided to Harrah's Casinos; provided that, owing to the different
characteristics of certain casinos (for example, casinos having hotel rooms
versus casinos not having such rooms; riverboat casinos versus land based
casinos) certain Harrah's Services may not apply to all casinos. Increases,
decreases, additions or deletions in charges for Harrah's Services may be made
from time to time on a system-wide basis for casinos having similar
characteristics. If Manager extends other services to casinos on a system-wide
basis to other Harrah's Casinos having characteristics similar to the Casino,
then such other services shall also be made available to the Casino.

                                   ARTICLE 12
                  SIGNS, SYSTEM MARKS AND PROPRIETARY MATTERS

         12.01 Signs. Owner agrees to maintain, in accordance with Legal
Requirements, all System Marks signs required by Manager. Owner is solely
responsible for all costs of purchasing, leasing, transporting, constructing
and/or installing the required System Marks signs, as well as for all costs of
dismantling and removing such signs at the end of the Term or earlier
termination hereof (if the Casino should cease to be authorized to use the
System Marks).

         12.02 System Marks and Proprietary Matters

         (a) Ownership. It is understood that no rights or interests in the
names "Harrah's(C)," "Harrah's Total Gold," "Harrah's Gold Card," "WINet",
"Harrah's Total Rewards", or any other proprietary names or marks owned by
Manager or any of Manager's Affiliates or any service marks, trademarks,
copyrights, trade names, patents or similar rights or registrations now or
hereafter held or applied for in connection therewith, including all such marks,
rights, names,

                                       39
<PAGE>   45

patents or registrations associated with Harrah's Casinos (the "System Marks"),
the Harrah's System, Proprietary Systems or Confidential and Proprietary
Information are being granted to Owner by this Agreement. Owner agrees to
recognize the exclusive right, title and ownership of Manager in and to the
System Marks, Harrah's System, Proprietary Systems and Confidential and
Proprietary Information. Manager agrees that the Casino has and will, from and
after the Commencement Date, and subject to Owner's compliance with all of its
obligations under this Agreement, be operated by Manager under the "Harrah's(C)"
brand name utilizing the System Marks, the Harrah's Systems, the Proprietary
System and Confidential and Proprietary Information. Owner acknowledges and
agrees that the use of the System Marks, the Harrah's Systems, the Proprietary
System and Confidential and Proprietary Information in connection with the
operation and management of the Casino is vested solely in Manager. Owner
disclaims any right or interest in the System Marks, the Harrah's Systems, the
Proprietary System and Confidential and Proprietary Information, regardless of
the legal protection afforded thereto.

         (b) After Termination. In the event of expiration or termination of
this Agreement, whether as a result of default by Manager, Owner or otherwise,
(i) Owner shall not hold itself out, or continue operation of the Casino, as a
Harrah's Casino, without the express prior written consent of Manager, (ii)
unless Manager shall have so consented to the continued use thereof, Manager may
enter the Casino and may remove all signs, furnishings, printed material,
emblems, slogans or other distinguishing characteristics which are now or may
hereafter be connected or identified with any Harrah's Casino and remove all
Proprietary Systems and Confidential and Proprietary Information (such removal
to be at Owner's expense unless such termination is the result of a default by
Manager, in which case such removal shall be at Manager's expense), and (iii)
Owner shall discontinue the use of any and all System Marks, Proprietary Systems
and Confidential and Proprietary Information and remove any and all items of
Operating Equipment used in connection with Harrah's Services and any Operating
Supplies that bear any System Marks which have not been removed by Manager.
Owner shall not convey such property to any person or entity unless such person
or entity is specifically authorized in writing by Manager (whether under
license from Manager or otherwise) to use property bearing any System Marks.

         (c) Use of Name. Owner shall not use the name "Harrah's(C)," any other
System Marks, or any variant thereof in the name of any partnership, corporation
or other business entity, nor allow the use thereof by others, without the
express prior written consent of Manager. Except for factual references in
connection with the registration of the JCC Holding Common Stock and New Notes
pursuant to the Plan or any sale or disposition of such securities by or on
behalf of the holders thereof from time to time, Owner shall not make reference
to the name "Harrah's(C)," any other System Marks, or any variant thereof,
directly or indirectly, in connection with a public sale or private placement of
securities or other comparable means of financing without obtaining, in each
instance the prior written approval of Manager.

         (d) Confidential and Proprietary Information. "Confidential and
Proprietary Information" shall mean, as used by Manager and its Affiliates in
connection with the Casino: (i) techniques and methods of operating gaming
businesses; (ii) techniques and methods of designing games used in gaming
businesses; (iii) techniques and methods of training employees in the gaming
business; (iv) techniques and methods of marketing, advertising, promotion and
its

                                       40
<PAGE>   46

technology plans, strategies and systems; and (v) the data and information on
the Proprietary Systems related to any casinos other than the Casino and the
"Harrah's(C)" Gold Card services and other customer-related services and
promotions. The Confidential and Proprietary Information has been developed
and/or acquired over many years through the expenditure of time, money and
effort, and Manager and Manager's Affiliates maintain the Confidential and
Proprietary Information as confidential and as a trade secret(s). Manager (or
Manager's Affiliate) has, over time, identified systems, data and information
that Manager (or Manager's Affiliate) considers integral to the management of
casinos and such systems, data and information shall be incorporated into the
Casino in accordance with standards established in other Harrah's Casinos.

         (e) Casino Customer Data; Confidentiality. Owner and Manager agree that
any Casino-related data and information on the Proprietary Systems or otherwise
concerning customers of the Casino shall be jointly owned by Owner and Manager
and may be separately used by each of Owner and Manager following any
termination of this Agreement. Owner and Manager agree to maintain the
confidentiality of such data and information during the term of this Agreement
and following any termination of this Agreement.

         (f) Return of Confidential and Proprietary Information. Upon
termination of this Agreement, Owner agrees to discontinue use of, and maintain
the confidentiality of, the Confidential and Proprietary Information and to
return to Manager any documents, notes, memoranda, lists, computer programs,
summaries and data and information which is a part of such Confidential and
Proprietary Information. Any data and information from customers of the Casino
which is related to other casinos or otherwise not Casino-related, but obtained
by Manager through management of the Casino, shall be maintained as confidential
by Owner and Manager during the term of this Agreement and following any
termination of this Agreement.

         12.03 Litigation. Owner and Manager agree that in the event Owner
and/or Manager is or are the subject of any litigation or action brought by any
party seeking to restrain the use by Owner or Manager, or either of them, of any
System Marks, the Harrah's System, Proprietary Systems, or Confidential and
Proprietary Information used by Manager for or on or in connection with the
Casino, any such litigation or action shall be defended entirely by and at the
expense of Manager, notwithstanding that Manager may not be named as a party
thereto. Owner shall not have the right to bring suit against any user of any of
the System Marks, the Harrah's System, Proprietary Systems, or Confidential and
Proprietary Information. In all cases, the conduct of any suit, whether brought
by Manager or instituted against Owner and/or Manager shall be under the
absolute control of counsel to be nominated and retained by Manager,
notwithstanding that Manager may not be a party to such suit. Manager agrees and
covenants to defend and hold Owner free and harmless from, and to indemnify
Owner against, any judgments or awards of any court or administrative agency of
competent jurisdiction, whether such awards be in the form of damages, costs or
otherwise, imposed against Owner and arising from the use by Manager of any
System Marks, the Harrah's System, Proprietary Systems, or Confidential and
Proprietary Information for, on or in connection with the Casino in accordance
with the terms of this Agreement.

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<PAGE>   47

                                   ARTICLE 13
                                    INSURANCE

         13.01 Coverage

         (a) Required Insurance. Owner shall comply with the insurance
provisions of the Authorized Lease. The following insurance will be maintained
by Owner with respect to the Casino at all times during the Term:

                  (i)      All-risk property insurance, including flood (if the
                           Building or Site is located in a Federal Emergency
                           Management Area flood hazard district) and earthquake
                           insurance, on the Building in commercially reasonable
                           amount based on availability and cost thereof.
                           Manager agrees that such policy of insurance may
                           contain a so-called deductible not to exceed ONE
                           MILLION AND 00/100 DOLLARS ($1,000,000), subject to
                           change with Owner and Manager approval, not to be
                           unreasonably withheld, due to market conditions and
                           industry standards, provided that Owner shall be a
                           self-insurer of any risk and shall pay any loss which
                           would have been required to be insured hereunder, but
                           for such deductible;

                  (ii)     All-risk business interruption insurance (with
                           extended period of indemnity endorsement) and
                           increased cost of operation insurance for full
                           recovery of the actual loss sustained (net operating
                           income plus all continuing expenses) of the Casino
                           (or, if greater, the projected Operating Costs and
                           Ownership Costs for the Casino which are anticipated)
                           for the period from the date of any casualty until
                           the Casino is fully restored and operational, or such
                           additional period as Owner may elect;

                  (iii)    Insurance against loss from accidental damage to, or
                           from the explosion of, boilers in an amount equal to
                           fifty percent (50%) of the full replacement value of
                           the Building, and damage to adjacent property and
                           property of others, in amounts acceptable to Manager;

                  (iv)     Business interruption insurance against loss from
                           accidental damage to, or from the explosion of,
                           boilers for full recovery of the projected Net
                           Revenue (or if greater, projected Operating Costs and
                           Ownership Costs) for the entire period of any such
                           business interruption but not less than one year from
                           the date of such casualty, or such additional period
                           as Owner may elect;

                  (v)      Commercial general liability insurance naming Owner
                           and Manager as insureds, covering bodily injury,
                           personal injury (including humiliation), broad form
                           property damage (including completed

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<PAGE>   48

                           operations), automobile liability (including owned,
                           non-owned and leased automobiles), Innkeeper's
                           liability, and including liquor liability in
                           applicable statutory amounts, products liability and
                           contractual liability in an amount equal to not less
                           than TWO HUNDRED MILLION AND 00/100 DOLLARS
                           ($200,000,000) single limit per occurrence.

                  (vi)     Comprehensive crime insurance in an amount equal to
                           not less than FIVE MILLION AND 00/100 DOLLARS
                           ($5,000,000);

                  (vii)    Statutory worker's compensation insurance; and

                  (viii)   The amount of the minimum coverage in the above
                           clause (v) may be lowered if an umbrella policy is
                           furnished covering any excess of the liabilities
                           described in clause (v) with a combined limit of
                           liability of not less than TWO HUNDRED MILLION AND
                           00/100 DOLLARS ($200,000,000) per occurrence.

         (b) Responsibility to Maintain. The obligation to maintain the
insurance policies required by this Agreement shall lie solely with Owner. At
least ten (10) business days prior to the expiration of any policy period,
unless Manager shall have theretofore obtained continuing policies on behalf of
Owner, Owner shall submit to Manager for its approval a schedule setting forth
the kinds and amounts of such insurance to be maintained by it during the
ensuing policy year, together with a paid receipt evidencing prepayment of the
applicable premiums in full for such ensuing policy year or other applicable
billing period (but not less than quarter year).

         (c) Changes in Coverage. Owner shall have the right to raise the
minimum amount of insurance to be maintained, with Manager's approval not to be
unreasonably withheld, and to change the limits on any deductibles for such
insurance, with respect to the Casino under Article 13.01(a) and/or to require
the insurance of additional risks not specified herein in order to make such
insurance and deductibles compatible with prudent industry standards (including,
without limitation, consideration of the incremental cost thereof), and to
reflect increases in liability exposures, taking into account the size and
location of the Casino.

         (d) Requirements. All policies of insurance shall, to the extent such
coverage is commercially available, be written on an "occurrence" basis. To the
extent that any insurance required hereby is or becomes available only on a
"claims made" basis, Owner shall, as an Ownership Cost, purchase satisfactory
extended reporting period endorsements to policies placed during the term of the
Agreement or, in the alternative, continue to insure Manager as an additional
insured party under policies of insurance placed after termination of the
Agreement until the expiration, without claim, of all applicable statutes of
limitation as may be necessary to assure that Manager has the benefit of the
required insurance for causes of action arising out of events occurring with
respect to the Casino during the term of this Agreement, whether or not any such
claim is actually asserted prior to the expiration or earlier termination
thereof.

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<PAGE>   49

         13.02 Policies and Endorsements

         (a) Policies. All insurance coverage provided for under this Agreement
shall be effected by policies issued by insurance companies authorized to do
business in the state where the Casino is located that are of good reputation
and of sound and adequate financial responsibility, having an A.M. Best's
("Best") Rating of B+ VII, or better, or a comparable rating if Best ceases to
publish its ratings or materially changes its rating standards or procedures.
Manager shall be entitled to object to an insurance company which meets this
standard, but only for reasonable cause based upon rates, claim experience and
other similar pertinent considerations. Owner shall deliver to Manager duplicate
copies of the insurance policies and certificates of insurance with respect to
all of the policies of insurance so procured, including existing, additional and
renewal policies, and in the case of insurance about to expire, shall deliver
duplicate copies of the insurance policies and certificates of insurance with
respect to the renewal policies to the other party not less than ten (10)
business days prior to the respective dates of expiration. Certificates and
duplicate copies of insurance shall be sent to Manager at the following address,
or at such future address as Manager may specify by means of written notice to
Owner:

         Manager:     Harrah's New Orleans Management Company
                      One Harrah's Court
                      Las Vegas, Nevada  89193-8905
                      Attention:  Director of Risk Management

                      with a copy to:

                      Harrah's New Orleans Management Company
                      1023 Cherry Road
                      Memphis, TN  38117-5423
                      Attention:  Director of Risk Management

         (b) Endorsements. All policies of insurance provided for under this
Agreement shall, to the extent obtainable, have attached thereto (a) an
endorsement that such policy shall not be cancelled or materially changed
without at least thirty (30) days' prior written notice to Manager, and (b) an
endorsement to the effect that no act or omission of Owner or Manager, other
than non-payment, after written notice thereof, of the premiums for such policy,
shall affect the obligation of the insurer to pay the full amount of any loss
sustained (but not to exceed, in any event, the policy limits). All insurance
policies required under clauses (v), and (vi) of Article 13.01(a) shall contain
an endorsement to the effect that such insurance shall be primary, not excess,
and not contributory to any similar insurance carried by Manager.

         (c) Additional Insureds. All policies of insurance required under
Article 13.01(a) shall name Owner's mortgagees as additional insureds, or, as
appropriate, mortgagees having the benefit of the standard New York form of
mortgagee endorsement. Losses thereunder shall be payable to the parties as
their respective interests may appear. Notwithstanding the foregoing, if

                                       44
<PAGE>   50

the holder of an Authorized Mortgage so requires, losses under any fire or
casualty policy may be made payable to such mortgagee, or to a bank or trust
company qualified to do business in the state where the Casino is located, in
either instance as trustee for the custody and disposition of the proceeds
therefrom. All liability policies shall name Manager, and in each case any
Affiliates which Manager may specify, and their respective directors, officers,
agents, employees and partners as additional insureds.

         13.03 Waivers. To the extent any loss is covered by insurance proceeds
actually paid, but not otherwise, Manager and Owner each waive, release and
discharge the other from all claims or demands which each may have or acquire
against the other, or against each other's directors, officers, agents,
employees or partners, with respect to any claims for any losses, damages,
liability or expenses (including attorneys' fees) incurred or sustained by
either of them on account of damage to their respective property, personal
injury, death or property damage suffered by third parties, arising out of the
ownership, management, operation and maintenance of the Casino, regardless
whether any such claim or demand may arise because of the fault or negligence of
the other party or its officers, partners, agents and employees. Each policy of
insurance shall contain a specific waiver of subrogation reflecting the
provisions of this Article 13.03, or a provision to the effect that the
existence of the preceding waiver shall not affect the validity of any such
policy or the obligation of the insurer to pay the full amount of any loss
sustained. Although Manager shall be named as an additional insured party under
any primary liability insurance required to be maintained for the Casino, it
shall not be a requirement that any primary or any excess liability insurance
policy maintained by Manager contain a waiver of the insurer's right of
subrogation, and the waiver contained herein shall not apply as to any losses
insured and paid pursuant to such policies.

                                   ARTICLE 14
                       INDEMNIFICATION AND RELATED MATTERS

         14.01 Scope

         (a) Owner's Indemnity. Owner agrees to indemnify and hold Manager free
and harmless from any and all Claims for injury to persons or damage to property
by reason of any cause whatsoever, either in and about the Casino or elsewhere,
including, without limitation, any such loss, cost or damage occurring as a
result of the performance of this Agreement by Manager, its agents, employees or
independent contractors, subject to the provisions of Article 14.01(c).

         (b) Reimbursement of Indemnified Amounts. Subject to the provisions of
Article 14.01(c), Owner agrees to reimburse Manager, upon demand, for any money
or other property which Manager is required or authorized by this Agreement to
pay out for any reason whatsoever, whether the payment is for Operating Costs,
Ownership Costs or any other costs, charges or debts incurred or assumed by
Manager, or any other party, or for judgments, settlements or expenses in
defense of any Claim, civil or criminal action, proceeding, charge or
prosecution made, instituted or maintained against Manager or Owner, jointly or
severally, affecting or because of the condition or use of the Casino, or acts
or failure to act of Manager, employees, agents or independent contractors of
Manager, Owner, employees, agents or independent

                                       45
<PAGE>   51

contractors of Owner, or arising out of or based upon any Legal Requirement,
contract or award (including without limitation any such matter relating to the
hours of employment, working conditions, wages and/or compensation of Casino
Employees or former Casino Employees, or any severance or termination benefits
of such Casino Employees), or for any other cause in connection with the Casino;
provided, however, any litigation or action of the type described in Article
12.03 shall be excluded from this Article 14.01(b).

         (c) Limitation on Owner's Indemnity. Notwithstanding the provisions of
Articles 14.01(a), 14.01(b) and 7.03(c), Owner shall not be liable to indemnify
and hold Manager free and harmless from any such Claim not covered by insurance
and which results solely from the proven gross negligence or willful misconduct
of any of the Key Casino Personnel or the Las Vegas, Nevada-based corporate
officers of Manager or Manager's Affiliate (if and to the extent that their
gross negligence or willful misconduct involves the directing of the activity in
the operation of the Casino or in Manager's performance of its obligations under
this Agreement that results in such Claim and such Claim is proximately caused
by such direction).

         (d) Manager's Indemnity. Manager shall indemnify and hold Owner free
and harmless from any and all Claims not covered by insurance and which results
solely from the proven gross negligence or willful misconduct of any of the Key
Casino Personnel or the Las Vegas, Nevada-based corporate officers of Manager or
Manager's Affiliates (if and to the extent that their gross negligence or
willful misconduct involves the directing of the activity in the operation of
the Casino or in Manager's performance of its obligations under this Agreement
that results in such Claim and such Claim is proximately caused by such
direction).

         14.02 Defense. Owner agrees to defend, promptly and diligently, at
Owner's expense, any Claim, action or proceeding brought against Manager or
Owner, jointly or severally, arising out of or connected with any of the matters
referred to in Article 14.01, and, to the extent required by Article 14.01(a),
(b) and (c), to hold harmless and fully indemnify Manager from any judgment,
liability, loss or settlement on account thereof. Defense of any such Claim
shall be accepted within ten (10) days after the date written notice is tendered
by Manager, or if sooner, when the first action in response to any such Claim is
required. Defense shall be with counsel approved by Manager. Failure to accept
any tender of a Claim in writing within such period shall entitle Manager to
conduct such defense at Owner's sole cost and expense. If Manager is defending a
Claim pursuant to this Article 14.02 and if Manager desires to settle such
Claim, Manager shall first make a written request to Owner for authority to
settle, specifying the proposed terms and conditions of such settlement. If
Owner fails to respond in writing within ten (10) days after such notice,
Manager shall have the right to enter into such settlement at Owner's cost and
expense. The allegation of facts which would excuse Owner's indemnification
obligation pursuant to Article 14.01(c) shall not excuse Owner's defense
obligation, and such obligation shall continue until gross negligence or willful
misconduct of the type described in Article 14.01(c) is proven by final
unappealable judgment to have been the sole cause of liability (in which case
Owner shall be entitled to reimbursement from Manager of, and Manager hereby
undertakes to reimburse Owner for, all reasonable attorneys' fees and costs
incurred in such defense and indemnification by Manager as provided in Article
14.01(d)).

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<PAGE>   52

                                   ARTICLE 15
                     DAMAGE TO AND DESTRUCTION OF THE CASINO

         15.01 Obligation to Restore. At its sole cost and subject to the
provisions of this Article 15, Owner agrees to repair, restore, rebuild or
replace any damage to, or impairment or destruction of, the Casino from fire or
other casualty.

         15.02 Termination

         (a) Fully Insured Casualties. In the event during the Term the Building
shall be destroyed or substantially destroyed by fire or other casualty or title
to the Site or Building or the Authorized Lease shall be impaired by any matter
other than a Permitted Exception and:

                  (i)      Owner shall have maintained insurance as required by
                           Article 13 and shall not have committed or omitted or
                           suffered any other person or entity to commit or omit
                           any act or omission resulting in any denial of
                           coverage or payment thereunder; and

                  (ii)     the cost of repairing, restoring, rebuilding and
                           replacing the same, or curing such title impairment,
                           as the case may be, shall exceed an amount equal to
                           one hundred percent (100%) of the proceeds of the
                           insurance collectible by Owner with respect to such
                           fire, other casualty or title impairment, as the case
                           may be, plus the amount of any deductible provided
                           for in such insurance policies;

or if such fire, other casualty or title impairment, as the case may be, shall
cause the termination of the Authorized Lease, or proceeds of property insurance
shall be applied to any indebtedness secured by an Authorized Mortgage, then, in
any of such events, Owner and Manager shall each have the right and option, upon
notice served upon the other within thirty (30) days after such fire, other
casualty or title impairment, as the case may be, to terminate this Agreement.

         (b) Owner-Funded Reconstruction. Anything contained in the preceding
sentence to the contrary notwithstanding, in the case of Article 15.02(a)(i) and
(ii) above, Manager shall not have the right to terminate this Agreement if:

                  (i)      within fifteen (15) days after Owner receives
                           Manager's notice of termination, Owner undertakes to
                           pay to the insurance trustee designated by the holder
                           of the Authorized Mortgage with the highest priority
                           among Authorized Mortgages an amount sufficient to
                           cover the deficiency between available insurance
                           proceeds and the cost of repairing, restoring,
                           rebuilding and replacing the Building and the Site;
                           and

                  (ii)     within sixty (60) days after Owner receives Manager's
                           notice of termination, Owner deposits the amount
                           described in Article

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<PAGE>   53

                           15.02(b)(i) above or provides other assurances
                           acceptable to Manager and the holders of any
                           Authorized Mortgage.

         (c) Consequences of Termination. In the event of any permitted
termination by Owner or Manager pursuant to Article 15.02(a), Manager shall be
entitled to receive from Owner any amounts due or owing with respect to events
occurring prior to or in connection with termination of this Agreement (and
Owner's obligations with regard thereto shall survive such termination) but
Manager shall not be entitled to receive any Termination Fee provided in Article
17.02.

         (d) Other Than Fully Insured Casualties. If the cost of curing,
repairing, restoring, rebuilding or replacing the damage, impairment or
destruction resulting from such fire, other casualty or title impairment, as the
case may be, shall be less than one hundred percent (100%) of the proceeds of
the insurance collectible by Owner with respect to such fire, other casualty or
title impairment, as the case may be, plus the amount of any deductible, or
Owner has elected to and has in fact deposited an amount equal to the deficiency
or provided other assurances as described above, and the Authorized Lease is not
terminated, and property insurance proceeds are not applied to repay any
Authorized Mortgage; or such cost is greater and neither party shall have served
such notice within the time aforesaid; or, in the case of Owner, if Owner shall
not have maintained or caused to be maintained adequate insurance as required by
Article 13 or shall have caused or suffered to occur any commission or omission
resulting in any denial of coverage or payment, Owner shall be obligated, at its
cost, to repair, restore, cure, rebuild or replace such damage, impairment or
destruction.

         (e) Failure to Complete Reconstruction. If Owner for any reason, fails
to complete any obligatory cure, repair, restoration, rebuilding or replacement
as required by Article 15.02(d) within ten (10) months after the date of
occurrence of the fire, other casualty or title impairment, as the case may be,
Manager may, at its election, terminate this Agreement due to Owner's default by
delivery of written notice to Owner without any other notice or opportunity by
Owner to cure such default and shall be entitled to collect the Termination Fee
provided in Article 17.02.

                                   ARTICLE 16
                                  CONDEMNATION

         16.01 Termination

         (a) Closing of Casino. If the whole of the Casino shall be taken or
condemned in any eminent domain, condemnation, compulsory acquisition or like
proceeding by any competent authority for any public or quasi-public use or
purpose, or if such a portion thereof shall be taken or condemned so as to cause
the termination of the Authorized Lease, result in the acceleration of any
Authorized Mortgage, or make it imprudent or unreasonable, in Owner's opinion
(provided to Manager in writing on or before the date of such taking or
condemnation), to use the remaining portion as a casino of the type and class as
the Casino immediately preceding such taking or condemnation, or if the Casino
Operating Contract is revoked through no fault of Owner, then, in any of such
events, this Agreement shall cease and terminate as of the date of such taking,

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<PAGE>   54

condemnation or revocation, as the case may be. Manager, in any such event,
shall not be entitled to receive the Termination Fee provided in Article 17.02
following the condemnation of the Casino, but Manager shall be entitled (i) to
receive any amounts due or owing to Manager with respect to events occurring
prior to or in connection with termination of this Agreement (and Owner's
obligations with regard thereto shall survive termination) and (ii) to take any
and all actions it determines in its sole discretion to be necessary or
beneficial to obtain compensation from such condemning or revoking authority for
Manager's loss of property rights in respect of this Agreement resulting from
any such termination. Owner hereby agrees not to take any actions with the
purpose or effect of interfering with Manager's right to seek compensation in
respect of any condemnation of the Casino pursuant to this Article 16.01(a), and
Manager hereby agrees not to take any actions with the purpose or effect of
interfering with Owner's right to seek compensation in respect of any
condemnation of the Casino.

         (b) Payments to Manager. To the extent not theretofore paid by Owner,
any amounts due and owing from Owner to Manager with respect to events occurring
prior to or in connection with the termination of this Agreement, shall be paid
from Owner's share of the proceeds of any award for such condemnation or
compensation for such revocation of the Casino Operating Contract, as the case
may be, (i) unless applied to indebtedness secured by an Authorized Mortgage or
to restore, rebuild, replace or repair the Casino and (ii) in all cases subject
to the priorities set forth in Article 9.01(b). Should any such award or
compensation be inadequate, applied to reduce any indebtedness secured by an
Authorized Mortgage, or otherwise applied to other purposes, Owner's obligation
to pay amounts due Manager from Owner shall continue unabated and shall not be
limited to the amount of the award or compensation made available to Owner.

         16.02 Restoration and Continuation

         (a) Partial Loss of Casino. If only a part of the Casino is taken or
condemned, and the taking or condemnation of such part does not result in
termination of the Authorized Lease or acceleration of any Authorized Mortgage
or make it unreasonable or imprudent in the opinion of Owner (noticed to Manager
in writing on or before the date of such condemnation) to operate the remaining
portion thereof as a casino of the type and class as the Casino immediately
preceding such taking or condemnation, this Agreement shall not terminate. An
amount as shall be reasonably necessary to reconstruct the Casino, or any part
thereof, or to reconfigure the Casino, or any part thereof, so as to render the
Casino a complete and satisfactory architectural unit as a casino of the same
type and class as it was immediately preceding the taking or condemnation, shall
be made available out of any award to Owner for that purpose. Owner shall
promptly, and without awaiting recovery of such award, pay any funds which are
needed to accomplish such work. The balance of such award, if any, after
deduction of bona fide costs of restoration by Owner, and any sums then due by
Owner to Manager, shall be fairly and equitably apportioned between Owner and
Manager so as to compensate Owner and Manager for any loss of income resulting
or to result from the taking or condemnation.

         (b) Failure to Complete Reconstruction. Subject to Article 23.02,
failure of Owner to effect repair and restoration of the Casino within ten (10)
months after the date of any partial

                                       49
<PAGE>   55

condemnation which Owner has not deemed sufficient to render further operation
of the Casino unreasonable or imprudent, shall be an Event of Default entitling
Manager to terminate this Agreement without further notice to Owner or
opportunity by Owner to cure such default, and Manager shall be entitled to
collect the Termination Fee provided in Article 17.02.

                                   ARTICLE 17
                             DEFAULT AND TERMINATION

         17.01 Events of Default. It shall be an event of default hereunder (an
"Event of Default") if any one or more of the following events shall occur:

         (a) if there should occur a breach, default or non-compliance by a
party hereto with any covenants, obligations or agreements to be performed by
such party under this Agreement, followed by written notice of such breach,
default or non-compliance from the Non-Defaulting Party to such Defaulting Party
and failure of such Defaulting Party to remedy or correct such breach, default
or non-compliance within ten (10) days after receipt of such notice, provided
that, if such breach, default or non-compliance is other than a Monetary Default
or failure to insure, and is also of a nature such that it cannot reasonably be
cured within such ten (10) day period, then an Event of Default shall not be
deemed to have occurred for so long as the Defaulting Party commences the curing
of such default within such ten (10) day period, pursues the completion thereof
with diligence and continuity, and completes such cure within forty (40) days of
such notice;

         (b) if Owner should fail to effect any required reconstruction of the
Building following casualty or partial condemnation, as and within the time
provided in Articles 15 and 16;

         (c) if a party shall voluntarily or involuntarily be dissolved; apply
for or consent to the appointment of a receiver, trustee or liquidator of all or
a substantial part of its assets; file a voluntary petition in bankruptcy (or
have filed against it any such petition which shall not have been dismissed
within sixty (60) days after filing) or otherwise seek protection of state laws
for the relief of debtors; admit in writing its inability to pay its debts as
they become due; make a general assignment for the benefit of creditors; file a
petition (or have filed against it any such petition which shall not have been
dismissed within sixty (60) days after filing) or an answer seeking to be
reorganized or arrangement with creditors or to take advantage of any insolvency
law or file an answer admitting the material allegations of any petition filed
against it in any bankruptcy, reorganization or insolvency proceeding; or

         (d) if an order, judgment or decree shall be entered by any court of
competent jurisdiction, on the application of any one or more creditors of such
party, adjudicating such party a bankrupt or insolvent or approving a petition
seeking reorganization or appointing a receiver, trustee or liquidator of all or
a substantial part of its assets, and such order, judgment or decree shall
become final; or

                                       50
<PAGE>   56

         (e) if a party shall be directly or indirectly owned or controlled by
another company or entity and an event described in Article 17.01(c) or (d)
shall occur with respect to any company or entity owning or controlling such
party; or

         (f) if Owner passes title to the Casino or any part thereof in lieu of
foreclosure of any lien or other security interest in the Casino; or

         (g) if an action to foreclose any mortgage, deed of trust or other
security interest in the Casino or any part thereof is instituted against Owner
and is not discharged or dismissed within thirty (30) days thereafter.

The party responsible for the occurrence of an Event of Default or on account of
whom an Event of Default shall have occurred shall be a "Defaulting Party." The
remaining party (so long as not a Defaulting Party), as to such Event of
Default, shall be a "Non-Defaulting Party." The waiver of any one Event of
Default shall not be construed as the waiver of any other Event of Default. No
waiver shall be effective unless embodied in a writing signed by the
Non-Defaulting Party.

         17.02 Termination Upon An Event of Default; Termination Fee

         (a) Termination. If an Event of Default occurs and has not been cured
within any cure period provided in Article 17.01, this Agreement shall terminate
at the election of the Non-Defaulting Party. Notice of termination pursuant to
this Article 17.02 may be given at any time prior to the curing of such Event of
Default, and such termination shall be effective as of the date specified in
such notice of termination, which such date shall be not less than ten (10) and
not more than forty five (45) days after the date of such notice; provided, that
any such termination shall not be effective earlier than forty five (45) days
after the date of such notice unless a successor manager has been obtained to
manage the Casino and maintain continuous and uninterrupted operations of the
Casino.

         (b) Termination Fee. Upon termination of this Agreement due to an Event
of Default by Owner or by Owner in contravention of this Agreement or in those
other circumstances provided in Articles 15.02(e) (failure to complete
reconstruction after casualty), 16.02(b) (failure to complete reconstruction
after condemnation) and 21.03 (transfer to Non-Qualified Person), Owner shall,
in addition to all other amounts due and payable hereunder, pay to Manager a fee
(the "Termination Fee") as set forth below as liquidated damages for its
default. Owner's obligation to pay for all indemnification and defense claims
(subject to Articles 14.01(c) and 14.02), to maintain insurance after
termination (with respect to occurrences before termination) and to pay for all
costs of operating the Casino prior to termination shall be in addition to and
shall survive termination of this Agreement and payment of the Termination Fee.
The Termination Fee that shall be payable by Owner to Manager in the event of,
and at the time of, termination of this Agreement due to any Event of Default by
Owner and in certain other circumstances provided for in this Agreement shall be
an amount equal to three (3) times the average amount of annual Management Fees
earned in the twenty-four (24) Fiscal Months preceding termination, but, until
the end of the third full Fiscal Year following the date hereof, not less than
THIRTY TWO MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS

                                       51
<PAGE>   57

($32,500,000), increased by the percentage increase in the CPI occurring between
the date hereof and the date of termination. Notwithstanding the foregoing, if
any default or event, action or omission by Owner giving rise to a termination
by Manager results solely from an action or omission of Manager's Affiliate in
its capacity as shareholder of Owner, or the action or omission of the directors
of Owner elected by Manager's Affiliate, Manager shall not in any such event
receive a Termination Fee in connection with such Event of Default or resulting
termination. OWNER RECOGNIZES AND AGREES THAT IF THIS AGREEMENT IS TERMINATED
FOR THE REASONS SPECIFIED HEREIN AS ENTITLING MANAGER TO RECEIVE A TERMINATION
FEE, MANAGER WOULD SUFFER AN ECONOMIC LOSS BY VIRTUE OF THE RESULTING LOSS OF
MANAGEMENT FEES WHICH WOULD OTHERWISE HAVE BEEN EARNED UNDER THIS AGREEMENT.
BECAUSE SUCH FEES VARY IN AMOUNT DEPENDING ON THE GROSS REVENUES EARNED AT THE
CASINO AND ACCORDINGLY WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN
WITH CERTAINTY, THE PARTIES AGREE THAT THE TERMINATION FEE PROVIDED IN THIS
AGREEMENT HAS BEEN DETERMINED TO CONSTITUTE A REASONABLE ESTIMATE OF LIQUIDATED
DAMAGES TO MANAGER. IT IS AGREED THAT MANAGER SHALL NOT BE ENTITLED TO MAINTAIN
A CAUSE OF ACTION AGAINST OWNER FOR SPECIFIC PERFORMANCE OF THIS AGREEMENT OR
ACTUAL DAMAGES IN EXCESS OF THE TERMINATION FEE IN ANY CONTEXT WHERE THE
TERMINATION FEE IS PROVIDED BY THIS AGREEMENT TO BE MANAGER'S REMEDY, AND
RECEIPT OF SUCH FEE TOGETHER WITH ALL OTHER AMOUNTS DUE AND PAYABLE BY OWNER TO
MANAGER WITH RESPECT TO EVENTS OCCURRING PRIOR TO OR IN CONNECTION WITH THE
TERMINATION OF THIS AGREEMENT AND MANAGER'S CONTINUING RIGHT TO INSURANCE
COVERAGE, INDEMNIFICATION FOR PRE- AND POST-TERMINATION OCCURRENCES, AND
PROTECTION OF ITS PROPRIETARY SYSTEM MARKS BY INJUNCTIVE AND OTHER APPROPRIATE
RELIEF SHALL BE MANAGER'S SOLE REMEDY AGAINST OWNER IN ANY SUCH CASE.

         (c) Reservation of Rights. In the event this Agreement is terminated
due to an Event of Default by Manager, Owner shall be free to pursue any remedy
available hereunder or at law or equity.

         (d) Gaming Suitability of Manager. If Manager, or any Manager's
Affiliate that is a shareholder of Owner, is determined, by final unappealable
action of the LGCB and any court to which appeal may be taken, to be unsuitable
to conduct gaming operations at the Casino, Owner shall be entitled to terminate
this Agreement by giving Manager thirty (30) days' advance written notice and
opportunity to cure.

         17.03 Termination by Owner Based on Performance Standard.

         (a) Termination Right. Unless any failure to achieve such Adjusted
EBITDAM is the result of Force Majeure, Owner may terminate this Agreement by
written notice to Manager given within ninety (90) days after the end of any
Performance Period, if actual Adjusted EBITDAM at the end of such Performance
Period shall be less than eighty-five percent (85%) of Projected

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<PAGE>   58

Adjusted EBITDAM for the Performance Period ending March 31, 2002, eighty-four
percent (84%) of Projected Adjusted EBITDAM for the Performance Period ending
March 31, 2003, and eighty three percent (83%) of Projected Adjusted EBITDAM for
the Performance Period ending March 31, 2004 and each Performance Period
thereafter. As used herein, "Performance Period" shall mean each annual twelve
month period ending on March 31. The effective date of any such termination
shall be specified in any such written notice of termination to be effective not
earlier than twelve (12) months after the date of such written notice and not
later than the end of the twelfth (12th) Fiscal Month after the date of such
written notice.

         (b) Conditions to Termination. As a condition to the effectiveness of
any such termination, Owner shall have (i) obtained not less than ninety (90)
days prior to the effective date of any such termination either (A) a
replacement Minimum Payment Guaranty (as defined in the Casino Operating
Contract) and a release of HET and HOCI from any liability in connection with
any Minimum Payment Guaranty previously provided by HET or HOCI and then in
effect, or (B) an irrevocable letter of credit from a financial institution
satisfactory to HET and HOCI for an amount not less than all contingent loss,
cost, liability, expenses or claims against HET and HOCI with respect to any
Minimum Payment Guaranty previously provided by HET or HOCI and then in effect,
(ii) repaid to HET or HOCI any amounts paid to the State or Owner pursuant to
any Minimum Payment Guaranty together with all interest due thereon, (iii) repay
all amounts outstanding pursuant to any revolving line of credit provided by
HET, HOCI or Manager to Owner within twelve (12) months after the effective date
of any such termination, (iv) paid to HET or HOCI any deferred or unpaid fees
due with respect to the Minimum Payment Guaranty, (v) repaid any other cash
amount due and owing to HET, HOCI, Manager or their Affiliates, and (vi)
satisfied all of Owner's obligations pursuant to Article 24.02.

         (c) Projected Adjusted EBITDAM. For purposes of this Article 17.03,
"Projected Adjusted EBITDAM" shall be One Hundred Fifteen Million One Hundred
Eighty Thousand Dollars ($115,180,000) for the Performance Period ending March
31, 2002, One Hundred Twenty-Seven Million Four Hundred Ten Thousand Dollars
($127,410,000) for the Performance Period ending March 31, 2003, One Hundred
Thirty-Four Million Seven Hundred Ninety Thousand Dollars ($134,790,000) and the
Performance Period ending March 31, 2004, and as set forth in the Annual Plan in
effect for each subsequent Performance Period EBITDAM plus EBITDAM Adjustments
for such Performance Period to the extent deducted in determining EBITDAM in the
Annual Plan for such Performance Period.

         (d) Force Majeure. "Force Majeure" shall mean any of the following
events or circumstances, but only to the extent they are not caused or fomented
by the Manager or any affiliates of the Manager and they materially and
adversely affect the operations or financial performance of the Company beyond
the reasonable control of the Manager:

                  (i)      strikes, lockouts, labor disputes, inability to
                           procure materials (for which there is no suitable
                           substitute or alternative that can be timely obtained
                           on reasonable commercial terms), or failure of power;

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<PAGE>   59

                  (ii)     changes in any Legal Requirements applicable to the
                           Casino or its operations, or changes in any orders
                           (applicable to the Casino) of any federal, state,
                           parish or municipal governmental authority, including
                           all executive, legislative, judicial and
                           administrative bodies thereof having jurisdiction
                           over the Owner, Manager, Casino or Casino operations
                           ("Governmental Authority");

                  (iii)    any unforeseen Impositions, taxes, levies, charges,
                           fees, or financial burdens on the Casino by any
                           Governmental Authority;

                  (iv)     the breach by the LGCB of the Casino Operating
                           Contract or other action of the LGCB or the breach by
                           the Landlord under the Authorized Lease or other
                           action by said Landlord or the City of New Orleans;

                  (v)      acts of God, tornadoes, hurricanes, floods,
                           sinkholes, fires and other casualties, landslides,
                           earthquakes, epidemics, quarantine, pestilence, or
                           abnormal inclement weather;

                  (vi)     acts of public enemy, acts of war, terrorism, effects
                           of nuclear radiation, blockades, insurrections,
                           riots, civil disturbances, governmental preemption in
                           connection with a national emergency, or national or
                           international calamity; or

                  (vii)    any judgment, injunction, restraining order,
                           directive, ruling or order that is entered by any
                           judicial, regulatory or administrative body which
                           restrains or interferes with the operations or
                           financial performance of the Casino.

                                   ARTICLE 18
                                     NOTICES

         18.01 Procedure. All notices or other communications provided for in
this Agreement shall be in writing and shall be personally served, sent by
Federal Express or comparable express courier, or sent by postage prepaid
certified mail to the following addresses until such time as written notice, as
provided hereby, of a change of address with a new address to be used thereafter
is delivered to the other party:

                  Owner:        Jazz Casino Company, L.L.C.
                                One Canal Place, Suite 900
                                New Orleans, Louisiana 70130
                                Attn: President

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<PAGE>   60

                  Manager:      Harrah's New Orleans Management Company
                                One Harrah's Court
                                Las Vegas, NV  89193-8905
                                Attn: General Manager

Notices hereunder shall be deemed given upon receipt.

         18.02 Landlord and LGCB Notice. All notices relating to an Event of
Default, arbitration or the exercise of any right or claim of termination of
this Agreement shall be given to Landlord at the address set forth in the
Authorized Lease and to the LGCB at the address set forth in the Casino
Operating Contract.

                                   ARTICLE 19
                   RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS

         19.01 Relationship. Manager and Owner shall not, by virtue of this
Agreement, be construed as joint venturers or partners of each other and neither
shall have the power to bind or obligate the other except as set forth in this
Agreement. Manager is the agent of Owner. Manager and certain of its Affiliates
have agreed to make revolving credit loans to Owner pursuant to a credit
facility entered into concurrently with execution of this Agreement. This
Agreement creates an agency coupled with an interest and such agency is
irrevocable except as expressly set forth in this Agreement.

         19.02 Contractual Authority. Manager is authorized, subject to the
fiscal limitations of this Agreement, to make, enter into and perform in the
name of, for the account of, on behalf of and at the expense of Owner any
contracts and agreements deemed necessary or advisable by Manager, in its
commercially reasonable judgment, to carry out and place in effect the terms and
conditions of this Agreement. In hiring, purchasing or contracting for goods and
services, Manager shall administer and comply with the Open Access Program and
any open access plans adopted pursuant thereto with respect to the operation of
the Casino and shall give preference and priority to Louisiana residents, except
where not reasonably possible to do so without added expense, substantial
inconvenience, or sacrifice in operational efficiency. Contracts between Manager
and Manager's Affiliates for furnishing of goods and services to the Casino
shall not exceed the price for which goods and services of comparable quality
may be secured from other vendors. Contracts and agreements entered into
pursuant to this Article 19.02 shall include an express statement that such
contract or agreement is being entered into by Manager "as agent for Jazz Casino
Company, L.L.C." or words to that effect.

         19.03 Further Actions. Owner agrees to execute all contracts,
agreements and documents and to take all actions necessary to comply with the
provisions of this Agreement and the intent hereof.

                                       55
<PAGE>   61

                                   ARTICLE 20
                         APPLICABLE LAW AND ARBITRATION

         20.01 Scope. The interpretation, validity and performance of this
Agreement shall be governed by the internal laws of the State of Nevada, except
as to mandatory provisions of the Gaming Act as to which the internal laws of
the State of Louisiana will apply, without regard to principles of conflicts of
law. If any court or appropriate judicial authority shall hold or declare that
the law of another jurisdiction is applicable, this Agreement shall remain
enforceable under the law of that jurisdiction. If any of the terms and
provisions hereof shall be held invalid or unenforceable for any reason, such
invalidity or unenforceability shall in no event affect any of the other terms
or provisions hereof, and all such other terms and provisions shall be valid and
enforceable to the fullest extent permitted by law; provided, however, if, in
any event any material part of Owner's obligations under this Agreement shall be
declared invalid or unenforceable, Manager shall have the option to terminate
this Agreement.

         20.02 Arbitration

         (a) Matters Subject to Arbitration. In case of a dispute with respect
to any of the following matters, either party may submit such matter to
arbitration which shall be conducted by the Arbitrating Accountants:

                  (i)      computation of the Management Fee or System Fees;

                  (ii)     results of any audit by the Accountants;

                  (iii)    adjustment of any amounts required to be adjusted to
                           reflect changes in the CPI;

                  (iv)     disputes concerning approval of the Annual Plan, or
                           any revisions thereto, including any items in the
                           Budget;

                  (v)      equitable allocation of any award for partial
                           condemnation under Article 16.02;

                  (vi)     disputes as to the amount of any unliquidated
                           Monetary Default; and/or

                  (vii)    any disputes between Owner and Manager under the
                           definition of EBITDAM Adjustments as to what
                           constitutes expenses over which Manager does not
                           exercise control.

The decision of the Arbitrating Accountants shall be binding on the parties.

         (b) Arbitrating Accountants. The "Arbitrating Accountants" shall be one
of three firms of certified public accountants of recognized standing in the
casino industry selected by the Manager or by the parties pursuant to this
Article 20.02(b). Until otherwise agreed by the parties,

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<PAGE>   62

the Arbitrating Accountants shall be KPMG Peat Marwick, Deloitte & Touche LLP or
Arthur Andersen & Co. The party desiring to submit any matter to arbitration
shall do so by written notice to the other party, which notice shall set forth
the items to be arbitrated and such party's choice of one of the three
designated firms. The party receiving such notice shall, within fifteen (15)
days after receipt of such notice, either approve such choice or designate one
of the remaining two firms by written notice back to the first party, and the
first party shall, within fifteen (15) days after receipt of such notice, either
approve such choice or disapprove the same. If both parties shall have approved
one of the three firms designated above, then such firm shall be the Arbitrating
Accountants for the purpose of arbitrating the dispute; otherwise the third
firm, which was not designated by either party shall be the Arbitrating
Accountants for such purpose. The Arbitrating Accountants shall be required to
render a decision in accordance with the procedures described in Article
20.02(c) within thirty (30) days after being notified of their selection. The
fees and expenses of the Arbitrating Accountants with respect to an arbitration
will be paid by the non-prevailing party.

         (c) Arbitration Procedures. In all arbitration proceedings submitted to
the Arbitrating Accountants, the Arbitrating Accountants shall be required to
agree upon and approve the substantive position advocated by Owner or Manager
with respect to each disputed item. Any decision rendered by the Arbitrating
Accountants that does not adopt the substantive position advocated by Owner or
Manager shall be beyond the scope of authority granted to the Arbitrating
Accountants and consequently may be overturned by either party. All proceedings
by the Arbitrating Accountants shall be conducted in accordance with the Uniform
Arbitration Act, except to the extent the provisions of such Act are modified by
this Agreement or the mutual agreement of the parties. Unless otherwise agreed,
all arbitration proceedings shall be conducted at the Casino. In resolving any
dispute as to any Budget, the arbitrators shall adopt the substantive position
that will most likely: (i) assure the continued operation of the Casino in
accordance with Casino Operational Standards and Legal Requirements; or (ii) if
no Casino Operational Standard is applicable, assure the continued operation of
the Casino as a viable and competitive economic enterprise.

                                   ARTICLE 21
                             SUCCESSORS AND ASSIGNS

         21.01 Assignment by Manager

         (a) Assignment to Affiliates. Owner's consent shall not be required for
Manager to assign any of its obligations, rights or interests as Manager
hereunder to any Manager's Affiliate that is controlled by Manager's ultimate
parent, or pursuant to a transfer of all or substantially all of the gaming
business of Manager and Manager's Affiliates, or pursuant to a corporate
reorganization of Manager and Manager's Affiliates or in connection with the
transfer of publicly-held stock in Manager or any of Manager's Affiliates whose
stock is publicly traded.

         (b) Assignment for Financing Purposes. At all times, without obtaining
any consent from Owner, Manager may assign, pledge, encumber and/or hypothecate
all of Manager's rights, fees (earned and unearned), interest in insurance,
condemnation awards, indemnities and other

                                       57
<PAGE>   63

proceeds (but not Manager's obligations, except as provided in Article 21.01(a))
as security for any loan, and, in any such case, the assignee shall hold and be
entitled to enforce such rights and receive such fees and/or payments, and Owner
agrees to look solely to Manager and not to any such assignee in regard to any
claim which it may have under this Agreement. Notwithstanding the foregoing,
Owner shall have no obligation to assure the payment to any such assignee of any
amounts received by Manager from the Casino and Owner shall retain all rights
under this Agreement upon an Event of Default by Manager.

         (c) Consent Requirements. Except as otherwise provided in Articles
21.01(a) or (b), or in connection with any sale, sublease, assignment, transfer
or other disposition of the Casino by Owner, in which case Manager may assign or
otherwise transfer its interest in this Agreement to the purchaser, sublessee,
transferee or other successor of Owner's interest therein, however designated,
or its selected manager, Manager shall not in any manner, voluntarily or
involuntarily, directly or indirectly, partition (or seek the partition of),
sell, assign or transfer any of its legal or beneficial interest in Manager or
this Agreement or delegate the performance of any of Manager's material
obligations hereunder without the prior written consent of Owner (which consent
may be withheld for any reason); provided that Manager may assign its rights and
obligations hereunder to an Affiliate of Manager which is wholly-owned directly
or indirectly by HET, and upon any such assignment, Manager may only be relieved
of its obligations hereunder with the consent of Owner.

         21.02 Termination Rights Upon Certain Assignments or Transfers by Owner

         (a) Change of Control of Owner. If any entity (including any Controlled
Affiliates of such entity and any entity of which such entity is a Controlled
Affiliate) which (i) controls or operates, or, as of the Commencement Date, is
licensed or qualified to control or operate in any of the states of Illinois,
Indiana, Louisiana, Mississippi, Missouri, Nevada or New Jersey, a casino or
casino hotel facility, or (ii) has been, within the five (5) years prior to the
Commencement Date, involved in litigation with HET which HET has disclosed in an
Annual Report on or prior to the date the Plan is consummated, or which HET
would be required to disclose in its next Annual Report following the
Commencement Date, acquires twenty percent (20%) or more of the outstanding
shares of JCC Holding and the Board of Directors of JCC Holding shall not
consist of a majority of Continuing Directors, Manager shall be entitled to
terminate this Agreement upon ninety (90) days' written notice to Owner, but
shall not be entitled to receive a Termination Fee pursuant to Article 17.02.

         (b) Sale of Casino. If Owner shall sell, assign or transfer any of its
direct or indirect legal or beneficial interest in the Casino, to any person
other than a Qualified Purchaser approved by Manager pursuant to Article
21.02(d) who assumes and agrees to perform all obligations of Owner under this
Agreement, Manager shall be entitled to terminate this Agreement upon the
closing of such sale, assignment or transfer, but shall not be entitled to
receive a Termination Fee pursuant to Article 17.02.

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<PAGE>   64

         (c) Definitions. As used herein, a "Qualified Purchaser" shall mean a
Suitable Lender or any person or entity that is duly licensed or otherwise
authorized to own and operate the Casino and that:

                  (i)      does not control or operate, or, as of the date of
                           this Agreement, is not licensed or qualified to
                           control or operate in any of the states of Illinois,
                           Indiana, Louisiana, Mississippi, Missouri, Nevada or
                           New Jersey, a casino or casino hotel facility; and

                  (ii)     has not been, within the five (5) years prior to the
                           Commencement Date, involved in litigation with HET
                           which HET has disclosed in an Annual Report on or
                           prior to the Commencement Date, or which HET would be
                           required to disclose in its next Annual Report
                           following the date the Plan is consummated; and

                  (iii)    would not, if Affiliated with Manager, in the
                           reasonable judgment of Manager or any licensing
                           authority, impair or cause the denial, suspension or
                           revocation of any gaming registration, permit,
                           license, right or entitlement or alcoholic beverage
                           registration, permit, license, right or entitlement
                           held or applied for by Manager or any Affiliate of
                           Manager.

Any party other than a Qualified Purchaser is referred to herein as a
"Non-Qualified Purchaser."

         (d) Approval. Any request for approval of a transferee as a Qualified
Purchaser shall be submitted to Manager in writing no less than thirty (30) days
prior to the anticipated date of transfer. Owner shall provide all documentation
that Manager may reasonably request to establish the identity, qualification,
reputation and creditworthiness of the transferee. Creditworthiness shall be
supported by audited financial statements for the three (3) years preceding any
request by Owner for approval of a transferee. Manager shall advise Owner of its
approval or rejection of a proposed transferee (as a Qualified Purchaser) within
thirty (30) days after Manager receives all information which it reasonably
requests to support its determination. Owner shall be prospectively released
from liability under this Agreement following a transfer to any transferee
approved by Manager pursuant to this Article 21.02(d).

         21.03 Manager's Termination Right. Any transfer of any direct or
indirect legal or beneficial ownership in Owner or JCC Holding, or any
indebtedness of or other loan interest in Owner or JCC Holding, to a
Non-Qualified Person, that has not been cured within forty-five (45) days
following written notice to Owner by Manager of such transfer, or such shorter
period as may be required by any governmental entity with authority over the
Casino, shall entitle Manager, at its option, to terminate this Agreement and,
inter alia, collect the Termination Fee.

         21.04 Binding Effect. The terms, provisions, covenants, undertakings,
agreements, obligations and conditions of this Agreement shall be binding upon
and shall inure to the benefit of the permitted successors in interest and the
permitted assigns of the parties hereto with the same

                                       59
<PAGE>   65

effect as if mentioned in each instance where the party hereto is named or
referred to, except that no assignment, transfer, sale, pledge, encumbrance,
mortgage, lease or sublease by or through Owner in violation of the provisions
of this Agreement shall vest any rights in the assignee, transferee, purchaser,
secured party, mortgagee, pledgee, lessee, sublessee or occupant.

                                   ARTICLE 22
                             RECORDING OF MEMORANDUM

         22.01 Amended Memorandum of Agreement. Owner and Manager shall execute,
acknowledge and deliver an amended memorandum of this Agreement in the public
records for the Parish of Orleans in the form attached hereto as Exhibit A.

                                   ARTICLE 23
                                  FORCE MAJEURE

         23.01 Operation of Casino. If (i) there shall occur any Excusable
Temporary Cessation of Operations (as defined in the Casino Operating Contract),
(ii) Owner shall not otherwise have appropriate legal or contractual authority
to operate the Casino, or (iii) the Casino shall not be in a condition suitable
for gaming operations, Manager may close and cease operation of all or part of
the Casino, reopening and commencing operation when Manager deems that such may
be done without jeopardy to the Casino, its guests and employees, provided that
the Term has not theretofore expired. Manager shall have no obligation to reopen
the Casino if there shall be less than ninety (90) days remaining unexpired in
the Term at the time of such event.

         23.02 Extension of Time. It is further understood and agreed that, with
respect to any obligation to be performed by a party during the Term (except for
defaults in the nature of failure to make any required payment or maintain
required insurance), and subject to the absolute time limitations provided
below, such party shall not be in default for failure so to do when and only for
so long as such performance is prevented by any Force Majeure. The time within
which such obligation shall be performed may be extended only for a period
equivalent to the delay caused by such Force Majeure, and, in no event, more
than sixty (60) days, except in the case of construction delays due to the above
causes in which case the extension shall continue until the termination of the
Authorized Lease.

                                   ARTICLE 24
                                   TERMINATION

         24.01 Surviving Obligations. In the event of any termination or
expiration of this Agreement, Owner shall remain liable to pay all fees and
other amounts due from Owner to Manager for periods through the termination
date, to maintain insurance for the benefit of and indemnify (subject to the
provisions of Articles 14.01(c) and 14.02) Manager with respect to all
occurrences before termination, and to reimburse Manager for all expenses
incurred by Manager before or in connection with such termination or expiration.

                                       60
<PAGE>   66

         24.02 Termination; Expiration. In connection with the expiration and/or
termination of this Agreement:

         (a) Manager's Obligations. Manager shall:

                  (i)      deliver possession of the Casino to Owner or Owner's
                           designated agents or employees subject to rights of
                           all parties in possession, in "as is" condition,
                           without recourse or any warranty whatsoever;

                  (ii)     deliver to Owner correct and complete originals or
                           copies of all written Operating Agreements with
                           respect to the Casino which have not theretofore been
                           delivered to Owner;

                  (iii)    deliver to Owner correct and complete originals or
                           copies of all agreements for or with respect to the
                           operation of the Casino (which have not theretofore
                           been furnished to Owner) that have terms extending
                           after such expiration or termination;

                  (iv)     advise all Casino purveyors by mail of the expiration
                           or termination of this Agreement;

                  (v)      permit Owner to have an observer at the Casino to
                           coordinate the turnover of Casino operations for a
                           period of seven (7) days prior to expiration or
                           termination, provided that such observer shall not
                           participate in the operation or management of the
                           Casino, give any direction to or contact any Casino
                           employee or otherwise interfere with Manager's
                           operation of the Casino, as determined by Manager's
                           general manager in his sole discretion. If such
                           observer shall be deemed by Manager's general manager
                           to interfere with Casino operations, then such
                           observer may be required to leave the Casino
                           immediately upon notice from the general manager;

                  (vi)     deliver to Owner the financial records of Casino
                           operations, excluding Confidential and Proprietary
                           Information, but including, without limitation, the
                           records pertaining to:

                           (A)      accounts payable outstanding and unpaid at
                                    termination or expiration, provided that
                                    Manager shall, to the extent funds are made
                                    available therefor by Owner and amounts due
                                    are then known, pay all accounts payable
                                    through and including the date of expiration
                                    or termination;

                           (B)      accounts receivable outstanding and
                                    uncollected at termination or expiration,
                                    all of which Owner agrees

                                       61
<PAGE>   67

                                    shall be accounted for by Owner when
                                    collected by Owner or Manager as Gross
                                    Revenues under this Agreement; and

                           (C)      Casino Employees who remain at the Casino
                                    following termination or expiration of this
                                    Agreement (to the extent the information in
                                    the file is not deemed confidential by
                                    Manager); and

                  (vii)    after deducting therefrom any amounts due and payable
                           under this Agreement and not theretofore paid
                           (subject to the priorities set forth in Article
                           9.01(b)), Manager shall disburse the balance, if any,
                           remaining in the Bank Account(s) after termination or
                           expiration of this Agreement to Owner.

         (b) Owner's Obligations. Owner shall be solely responsible for and
shall pay all costs of:

                  (i)      canceling any Operating Agreements which Owner does
                           not wish to continue after such termination or
                           expiration; or

                  (ii)     assuming and continuing performance under any such
                           Operating Agreements which Owner desires to retain in
                           effect.

         (c) Employee Severance Payments. Except as otherwise set forth in
Article 7.03(a)(iii), Owner shall, without limiting Owner's obligation as
employer, be solely responsible and shall pay for all severance or other
termination benefits due any employee of Owner or Key Casino Personnel whose
services are terminated.

         (d) Change of Brand Identification. As of the date of termination or
expiration, Owner shall:

                  (i)      cooperate in the removal of all signage identifying
                           the casino as a Harrah's Casino or containing any
                           System Marks and, in the case of any such signage
                           supplied pursuant to an advertising contract (as in
                           the case of billboard advertisements) pay all costs
                           necessary to repaint or otherwise re-identify the
                           Casino and remove any System Marks from such
                           advertisement;

                  (ii)     cease use of the System Marks, Harrah's Services,
                           Proprietary Systems and Confidential and Proprietary
                           Information, and destroy any personal property
                           bearing such System Mark unless otherwise authorized
                           in writing by Manager;

                  (iii)    cause the telephone number, if it relates to the
                           System Marks, and initiate requests to change all
                           telephone advertisements for the

                                       62
<PAGE>   68

                           Casino to be changed to different telephone numbers
                           so as to preclude the identification of the Casino as
                           a Harrah's Casino;

                  (iv)     cause any proprietary personal property licensed for
                           use by Manager but not by Owner to be returned to
                           Manager, including any such personal property
                           required to be at the Casino pursuant to any Casino
                           Operational Standard; and

                  (v)      Comply with Article 12.02(b).

         (e) Owner's Indemnity. Without limiting the foregoing, Owner shall
indemnify, defend and hold Manager free and harmless from and against all loss,
cost, claim or damage relating to the Casino or its operation or ownership after
termination or expiration of this Agreement unless the sole cause of the loss,
cost, claim or damage was the breach of this Agreement by Manager or an event
excluded from indemnification pursuant to Article 14.01(c).

         (f) Enforceability of Covenants. The foregoing shall be covenants
running with the Casino, shall survive termination or expiration of this
Agreement, and shall be specifically enforceable by Manager and Owner.

                                   ARTICLE 25
                               GENERAL PROVISIONS

         25.01 Authorization. Owner represents that it has full power and
authority to execute this Agreement and to be bound by and perform the terms
hereof. Manager represents it has full power and authority to execute this
Agreement and to be bound by and perform the terms hereof. On request, each
party shall furnish the other evidence of such authority.

         25.02 Interest. Unless otherwise provided for herein, any other amounts
payable to Manager or Owner not paid when due shall bear interest at the lesser
of: (a) the highest legal limit, or (b) two percent (2%) over the prime rate of
interest charged by Citibank, N.A. at its offices in New York, New York, to
borrowers on ninety (90) day unsecured commercial loans, as the same may be
changed from time to time (the "Interest Rate").

         25.03 Formalities. Any change to or modification of this Agreement must
be in writing signed by both parties hereto. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original. The
captions for each Article are intended for convenience only.

         25.04 Documents. Throughout the Term, Owner shall furnish Manager
copies of all paid property tax and insurance statements, all financing
documents (including notes and mortgages) relating to the Casino and such other
documents pertaining to the Casino as Manager shall request.

                                       63
<PAGE>   69

         25.05 Personal Service Contract. This Agreement shall be construed as a
personal service contract which may not be assigned by Owner or Owner's
representatives in any bankruptcy, receivership, insolvency or similar
proceedings.

         25.06 Exhibits. All Exhibits referred to in and attached to this
Agreement are, by such reference, intended to be incorporated within and made a
part of this Agreement.

                                   ARTICLE 26
                              RESTRICTIVE COVENANTS

         26.01 Other Use of Site or Building. Owner shall not permit any use to
be made of the Site or Building other than that of the Casino provided for
herein or as permitted by the Second Floor Non-Gaming Sublease. In the event
that the use of the Building and Site as a Casino becomes prohibited by law,
this Agreement shall terminate as of the date that such prohibition becomes
effective. Notwithstanding the foregoing, if such prohibition shall be removed
for any reason prior to termination of the Authorized Lease, then Manager shall
have the option, at its election and its sole discretion, to reinstate this
Agreement by giving written notice to Owner specifying a date of reinstatement
that is no more than one hundred twenty (120) days following the date of such
notice and, in addition, Owner shall pay, as incurred, all costs incurred by
Manager to reinstate operations at the Casino.

         26.02 Diversion of Business. Manager shall not knowingly and willfully
divert gaming business from the Casino to other Harrah's Casinos; provided,
however, that this restriction shall not limit Manager from advertising other
casinos in the Harrah's System by written, verbal, audio-visual or other
advertising or promotional techniques with the intent of promoting business
either at individual properties or at all properties in the Harrah's System,
regardless of the actual effect of such activity, and provided further, that
Owner's sole remedy for any alleged breach of this provision shall be to seek to
enjoin the practice objected to upon proof of violation of this provision.

         26.03 Competition. Owner and Manager and their respective Affiliates
may engage and possess an interest in any other business venture of any nature,
kind or description, including, without limiting the generality of the
foregoing, any business venture engaged in the same type of business as the
Casino, even if such other business is competitive with that of the Casino, and
the development, ownership, financing and management of casino and other gaming
operations of any kind whatsoever; provided, however, that neither Manager nor
Owner nor any Affiliate of Manager or Owner that is controlled by Manager's
ultimate parent or Owner's ultimate parent, as the case may be, may be
associated with the development, ownership, financing or management of casino
and other gaming operations in Orleans, Plaquemines, St. Charles, St. Tammany,
Jefferson, or St. Bernard Parishes, Louisiana, except for the Casino. Further,
Owner and Manager agree that except as otherwise agreed in writing by Owner and
Manager:

         (a) neither Owner nor Manager nor any Affiliate of Manager or Owner
shall have the right in and to such other business venture or the income or
profits derived therefrom by any other party;

                                       64
<PAGE>   70

         (b) neither Owner nor Manager, nor any of the owners of Owner or
Affiliates of Manager, nor any of relatives or Affiliates of any of the
foregoing, need disclose, to any other, any business venture in which they may
have an interest or any other business opportunity presented to them even if
such opportunity is of a character which, if presented, could be taken and each
shall have the right to take for its own account or to recommend to others any
such particular investment opportunity or business venture; and

         (c) as a natural part of the consideration for the execution of this
Agreement by Manager, Owner hereby waives, relinquishes and renounces any right
or claim of participation in any other business venture of Manager or its
Affiliates.

                                   ARTICLE 27
                 CONFLICTS BETWEEN AGREEMENTS, JURISDICTION AND
                            THIRD PARTY BENEFICIARIES

         27.01 Conflicts Between Agreements. Notwithstanding anything to the
contrary contained in this Agreement, as to any conflict between the terms and
provisions of the Authorized Lease and the obligations and responsibilities of
Owner or Manager under this Agreement, to the extent legally permissible, the
terms and provisions of the Authorized Lease shall control. Any consent or
approval of the Management Agreement by Landlord or the City of New Orleans
shall not be construed as a waiver of the provisions of the Authorized Lease,
nor shall such consent or approval require any additional actions or impose any
additional duties or obligations on Landlord or the City of New Orleans.

         27.02 Jurisdiction. The parties hereto consent and agree to the
jurisdiction of the State of Louisiana and the courts thereof and the United
States District Court for the Southern District of New York, for the purpose of
any suit, action or other proceeding arising out of or relating to this
Agreement, and hereby agree not to assert by way of motion, as a defense or
otherwise, that such action is improper, or that the subject matter thereof may
not be enforced in or by such courts.

         27.03 Third Party Beneficiaries. As to the provisions of Articles 7.07,
7.08, 7.09, 7.12, 8.01, and 10.01, Landlord, the City of New Orleans and the
LGCB are intended third party beneficiaries to this Agreement to the extent that
their interests under the Authorized Lease and the Casino Operating Contract,
respectively, are affected as are any of their respective successors in interest
to the Authorized Lease and the Casino Operating Contract, respectively.
Manager's obligations to Landlord, the City of New Orleans, and the LGCB
hereunder shall survive the termination of this Agreement.

                            [Signature page follows]

                                       65
<PAGE>   71

         IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement effective as of the day and year first above written.

WITNESSES:                                 OWNER:

                                           JAZZ CASINO COMPANY, L.L.C., a
                                           Louisiana limited liability company

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

                                           MANAGER:

                                           HARRAH'S NEW ORLEANS
                                           MANAGEMENT COMPANY, a Nevada
                                           corporation

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

                                      S-1
<PAGE>   72

                                   EXHIBIT "A"

                   FORM OF MEMORANDUM OF MANAGEMENT AGREEMENT

<PAGE>   73

Prepared by and when recorded mail to:
Latham & Watkins
5800 Sears Tower
Chicago, Illinois 60606
Attn:  George A. Rice, Esq.

            -----(SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY)-----

                                  MEMORANDUM OF
                 THIRD AMENDED AND RESTATED MANAGEMENT AGREEMENT

                  THIS MEMORANDUM OF THIRD AMENDED AND RESTATED MANAGEMENT
AGREEMENT (this "Memorandum"), dated as of this 30th day of March, 2001, is made
by and between JAZZ CASINO COMPANY, L.L.C., a Louisiana limited liability
company ("Owner"), and HARRAH'S NEW ORLEANS MANAGEMENT COMPANY, a Nevada
corporation ("Manager").

                                    RECITALS

                  A. On January 4, 2001, Owner filed a voluntary petition for
relief under Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Eastern District of Louisiana, Case No.
01-10086.

                  B. Owner has submitted, and the United States Bankruptcy Court
for the Eastern District of Louisiana has confirmed, a Plan of Reorganization,
as modified (the "Plan").

                  C. Owner and Manager have previously entered into that certain
Second Amended and Restated Management Agreement between Owner and Manager dated
as of October 28, 1998 (the "Prior Management Agreement").

                  D. Pursuant to that certain Third Amended and Restated
Management Agreement (the "New Casino Management Agreement") and in accordance
with the Plan, Owner and Manager have amended and restated the Prior Management
Agreement in its entirety.

                  E. Owner and Manager desire to have a memorandum of the New
Casino Management Agreement recorded in the Parish of Orleans, State of
Louisiana.

                             MEMORANDUM OF AGREEMENT

                  NOW, THEREFORE, in consideration of the mutual promises and
covenants contained in the New Casino Management Agreement, the parties hereto
hereby agree as follows:

                                      A-1
<PAGE>   74

                  1. Prior Memo Superseded. This Memorandum supersedes in its
entirety that certain Second Memorandum of Amended and Restated Management
Agreement dated as of October 28, 1998, by and between Owner and Manager, and
recorded in the records of the Parish of Orleans, State of Louisiana as
Instrument No. 488187, at 98-50510 (the "Prior Memorandum"), such Prior
Memorandum being of no further force or effect.

                  2. Non-Disturbance. Other than as set forth in the Manager
Subordination Agreements referred to and as defined in Article 4.03 of the New
Casino Management Agreement, upon any foreclosure of the Mortgages, Manager's
rights under the New Casino Management Agreement in relation to the holders of
the Mortgages shall not be disturbed or affected by any such foreclosure.

                  3. Provisions From Management Agreement. Owner and Manager
acknowledge and agree that the New Casino Management Agreement provides and
contains, in part, the following provisions:

                                   "ARTICLE 3
                                TERM AND RENEWALS

                  3.01 Initial Term. The initial term ("Initial Term") of this
Agreement shall be deemed to have begun on the Commencement Date, and shall
continue for a period of twenty (20) years after the Commencement Date.

                  3.02 Extension Term. Manager shall have the option to extend
the term of this Agreement for four (4) consecutive extension terms of ten (10)
years each ("Extension Term") and the term of this Agreement shall be so
extended, provided Manager is not in default under this Agreement at the time
any such Extension Term is to commence. Manager shall be deemed to have
exercised its option to extend the term of this Agreement for each Extension
Term unless it shall have delivered to Owner written notice to the contrary at
least one hundred eighty (180) days prior to the date on which the respective
Extension Term is to commence.

                  3.03 Early Termination; Termination of Authorized Lease. This
Agreement may be terminated prior to the expiration of the Initial Term or any
then current Extension Term as provided in Articles 15, 16 and 17."

                                   "ARTICLE 4
                               COVENANTS OF OWNER

                  4.03 Manager Subordination Agreements; Mortgages. Owner and
Manager acknowledge that (i) Wells Fargo Bank Minnesota, National Association,
as Trustee, and Manager have entered into that certain Manager Subordination
Agreement (Lenders) of even date herewith, and (ii) Landlord, the City of New
Orleans and Manager have entered into that certain Manager Subordination
Agreement (Landlord) of even date herewith (collectively, the "Manager
Subordination Agreements"). Any party (other than the holder of the Mortgages)
holding a mortgage, deed of trust, security agreement, assignment of rents,
revenues or profits, lease

                                      A-2
<PAGE>   75

(including any sale leaseback or like arrangement), or other form of security
interest in or affecting the Casino shall, as a condition to the effectiveness
of such interest and/or qualification thereof as an Authorized Mortgage, enter
into a Subordination, Non-Disturbance and Attornment Agreement, in such form as
may be negotiated between Manager and the holder of the Authorized Mortgage.
Upon any foreclosure upon any of the Mortgages, Manager's rights hereunder in
relation to the holder of the Mortgages shall not be disturbed or affected by
any such foreclosure other than as set forth in the Manager Subordination
Agreements referred to in this Article 4.03."

                                   "ARTICLE 21
                             SUCCESSORS AND ASSIGNS

                  21.01 Assignment by Manager

                  (a) Assignment to Affiliates. Owner's consent shall not be
required for Manager to assign any of its obligations, rights or interests as
Manager hereunder to any Manager's Affiliate that is controlled by Manager's
ultimate parent, or pursuant to a transfer of all or substantially all of the
gaming business of Manager and Manager's Affiliates, or pursuant to a corporate
reorganization of Manager and Manager's Affiliates or in connection with the
transfer of publicly-held stock in Manager or any of Manager's Affiliates whose
stock is publicly traded.

                  (b) Assignment for Financing Purposes. At all times, without
obtaining any consent from Owner, Manager may assign, pledge, encumber and/or
hypothecate all of Manager's rights, fees (earned and unearned), interest in
insurance, condemnation awards, indemnities and other proceeds (but not
Manager's obligations, except as provided in Article 21.01(a)) as security for
any loan, and, in any such case, the assignee shall hold and be entitled to
enforce such rights and receive such fees and/or payments, and Owner agrees to
look solely to Manager and not to any such assignee in regard to any claim which
it may have under this Agreement. Notwithstanding the foregoing, Owner shall
have no obligation to assure the payment to any such assignee of any amounts
received by Manager from the Casino and Owner shall retain all rights under this
Agreement upon an Event of Default by Manager.

                  (c) Consent Requirements. Except as otherwise provided in
Articles 21.01(a) or (b), or in connection with any sale, sublease, assignment,
transfer or other disposition of the Casino by Owner, in which case Manager may
assign or otherwise transfer its interest in this Agreement to the purchaser,
sublessee, transferee or other successor of Owner's interest therein, however
designated, or its selected manager, Manager shall not in any manner,
voluntarily or involuntarily, directly or indirectly, partition (or seek the
partition of), sell, assign or transfer any of its legal or beneficial interest
in Manager or this Agreement or delegate the performance of any of Manager's
material obligations hereunder without the prior written consent of Owner (which
consent may be withheld for any reason); provided that Manager may assign its
rights and obligations hereunder to an Affiliate of Manager which is
wholly-owned directly or indirectly by HET, and upon any such assignment,
Manager may only be relieved of its obligations hereunder with the consent of
Owner.

                  21.02 Termination Rights Upon Certain Assignments or Transfers
by Owner

                                      A-3
<PAGE>   76

                  (a) Change of Control of Owner. If any entity (including any
Controlled Affiliates of such entity and any entity of which such entity is a
Controlled Affiliate) which (i) controls or operates, or, as of the date the
Plan is consummated, is licensed or qualified to control or operate in any of
the states of Illinois, Indiana, Louisiana, Mississippi, Missouri, Nevada or New
Jersey, a casino or casino hotel facility, or (ii) has been, within the five (5)
years prior to the date the Plan is consummated, involved in litigation with HET
which HET has disclosed in an Annual Report on or prior to the date the Plan is
consummated, or which HET would be required to disclose in its next Annual
Report following the date the Plan is consummated, acquires twenty percent (20%)
or more of the outstanding shares of JCC Holding and the Board of Directors of
JCC Holding shall not consist of a majority of Continuing Directors, Manager
shall be entitled to terminate this Agreement upon ninety (90) days' written
notice to Owner, but shall not be entitled to receive a Termination Fee pursuant
to Article 17.02.

                  (b) Sale of Casino. If Owner shall sell, assign or transfer
any of its direct or indirect legal or beneficial interest in the Casino, to any
person other than a Qualified Purchaser approved by Manager pursuant to Article
21.02(d) who assumes and agrees to perform all obligations of Owner under this
Agreement, Manager shall be entitled to terminate this Agreement upon the
closing of such sale, assignment or transfer, but shall not be entitled to
receive a Termination Fee pursuant to Article 17.02.

                  (c) Definitions. As used herein, a "Qualified Purchaser" shall
mean a Suitable Lender or any person or entity that is duly licensed or
otherwise authorized to own and operate the Casino and that:

                      (i)      does not control or operate, or, as of the date
                               of this Agreement, is not licensed or qualified
                               to control or operate in any of the states of
                               Illinois, Indiana, Louisiana, Mississippi,
                               Missouri, Nevada or New Jersey, a casino or
                               casino hotel facility; and

                      (ii)     has not been, within the five (5) years prior to
                               the Commencement Date, involved in litigation
                               with HET which HET has disclosed in an Annual
                               Report on or prior to the Commencement Date, or
                               which HET would be required to disclose in its
                               next Annual Report following the date the Plan is
                               consummated; and

                      (iii)    would not, if Affiliated with Manager, in the
                               reasonable judgment of Manager or any licensing
                               authority, impair or cause the denial, suspension
                               or revocation of any gaming registration, permit,
                               license, right or entitlement or alcoholic
                               beverage registration, permit, license, right or
                               entitlement held or applied for by Manager or any
                               Affiliate of Manager.

Any party other than a Qualified Purchaser is referred to herein as a
"Non-Qualified Purchaser."

                                      A-4
<PAGE>   77

                  (d) Approval. Any request for approval of a transferee as a
Qualified Purchaser shall be submitted to Manager in writing no less than thirty
(30) days prior to the anticipated date of transfer. Owner shall provide all
documentation that Manager may reasonably request to establish the identity,
qualification, reputation and creditworthiness of the transferee.
Creditworthiness shall be supported by audited financial statements for the
three (3) years preceding any request by Owner for approval of a transferee.
Manager shall advise Owner of its approval or rejection of a proposed transferee
(as a Qualified Purchaser) within thirty (30) days after Manager receives all
information which it reasonably requests to support its determination. Owner
shall be prospectively released from liability under this Agreement following a
transfer to any transferee approved by Manager pursuant to this Article
21.02(d).

                  21.03 Manager's Termination Right. Any transfer of any direct
or indirect legal or beneficial ownership in Owner or JCC Holding, or any
indebtedness of or other loan interest in Owner or JCC Holding, to a
Non-Qualified Person, that has not been cured within forty-five (45) days
following written notice to Owner by Manager of such transfer, or such shorter
period as may be required by any governmental entity with authority over the
Casino, shall entitle Manager, at its option, to terminate this Agreement and,
inter alia, collect the Termination Fee."

                  4. Definitions From Management Agreement. The New Casino
Management Agreement contains, among other definitions, the following
definitions of terms used in the foregoing Articles 3.01, 3.02, 3.03, 4.03,
21.01, 21.02 and 21.03 and in the following definitions:

                  "Affiliate - as to any person the affiliates of whom are
relevant for purposes of any provisions of this Agreement, (i) any corporation,
partnership, limited liability company, joint venture, trust or individual
controlled by, under common control with, or which controls, directly or
indirectly, such person, (ii) a trust of which the person, or a direct or
indirect shareholder of such person, is a trustee, or which has as its principal
beneficiaries such person, or any direct or indirect shareholder of such person,
or members of the immediate family of such direct or indirect shareholder or
other person, and (iii) any members of such person's immediate family, or the
member of the immediate family of any direct or indirect shareholder of such
person. For purposes hereof, shares or other ownership interests held by a trust
shall be deemed to be owned pro-rata by the beneficiaries of such trust, and
members of the immediate family of any person shall include all collateral
relatives of such person having a common linear ancestor with such person, and
the spouse or any former spouse of such person or any such collateral relatives.

                  Agreement - this Third Amended and Restated Management
Agreement by and between Owner and Manager, as the same may be amended,
supplemented or otherwise modified from time to time.

                  Annual Report - any Annual Report filed by any person or
entity on Form 10-K with the United States Securities and Exchange Commission or
any successor thereof.

                  Authorized GDA - that certain Amended and Restated General
Development Agreement by and among Owner, Landlord and the City of New Orleans,
as intervenor, dated as of October 28, 1998.

                                      A-5
<PAGE>   78

                  Authorized Lease - that certain Amended and Restated Lease
Agreement by and among Owner, Landlord and the City of New Orleans, as
intervenor, dated as of October 28, 1998, and as amended of even date herewith.

                  Authorized Mortgage - (i) the Mortgage, and (ii) any other
mortgage(s), deed(s) of trust, security agreements, or other forms of agreements
securing payment of indebtedness, the proceeds of which are used solely to
construct, improve, restore, or repair the Casino, or to refinance any
indebtedness in connection with any Authorized Mortgage, with a lien or
equivalent security interest against the Casino, provided that the holder of any
Authorized Mortgage referred to in this clause (ii) has executed and delivered
to Manager and has agreed in writing to be bound by a Subordination,
Non-Disturbance and Attornment Agreement or such other similar document, in
either case in such form as may be negotiated between Manager and the holder of
an Authorized Mortgage.

                  Building - all buildings, structures and improvements now
located or hereafter constructed on the Site and all fixtures, Furnishings and
Equipment attached to, forming a part of, or necessary for the operation of such
buildings, structures and improvements as a casino and parking garages, or any
non-gaming development on the second floor of the building on the Site, and all:

                  (i)      restaurants, bars and other public areas, if any,

                  (ii)     commercial space, including concessions and shops;

                  (iii)    storage, parking and service areas;

                  (iv)     permanently affixed signage; and

                  (v)      other buildings, facilities and appurtenances, as may
                           now or hereafter, pursuant to this Agreement or with
                           Manager's advance written approval, replace, be
                           attached to and form a part of the Building.

                  Casino - a collective term for the Site, the Building, the
Furnishings and Equipment, the Operating Equipment and the Operating Supplies.
The non-gaming development on the second floor of the building on the Casino
premises subleased pursuant to the Second Floor Non-Gaming Sublease shall not be
included in this definition of the Casino unless converted into Gaming Space in
accordance with the provisions of the Second Floor Non-Gaming Sublease.

                  Casino Operating Contract - that certain Amended and
Renegotiated Casino Operating Contract among Owner, Harrah's Jazz Company and
the State of Louisiana by and through the LGCB authorizing and regulating
activities at the Casino, entered into as of October 28, 1998, and as amended of
even date herewith.

                  Controlled Affiliate - has the meaning provided in that
certain Amended and Restated Certificate of Incorporation of JCC Holding as in
effect as of the date hereof.

                                      A-6
<PAGE>   79

                  Continuing Directors - the directors of JCC Holding on the
effective date of the Plan under each other director, if such other director's
nomination for election to the Board of Directors of JCC Holding is recommended
by (i) a majority of the then Continuing Directors, (ii) any directors nominated
or appointed by HET or its affiliates, or (iii) any directors nominated or
appointed by the Creditor's Committee (as defined in the Articles of
Incorporation of JCC Holding as presently in effect).

                  Extension Term - as defined in Article 3.02.

                  Event of Default - as defined in Article 17.01.

                  Furnishings and Equipment - all furniture, furnishings and
equipment (except Operating Equipment) required for the operation of the Casino
in accordance with the Casino Operational Standards, including, without
limitation:

                  (i)      cashier, money sorting and money counting equipment,
                           surveillance and communication equipment, and
                           security equipment;

                  (ii)     slot machines, video games of chance, table games,
                           keno equipment and other gaming equipment;

                  (iii)    office furnishings and equipment;

                  (iv)     specialized equipment necessary for the operation of
                           any portion of the Casino for non-gaming or accessory
                           purposes, including equipment for kitchens,
                           laundries, dry cleaning, cocktail lounges,
                           restaurants, public rooms, commercial and parking
                           spaces, and recreational facilities; and

                  (v)      all other furnishings and equipment hereafter located
                           and installed in or about the Casino which are used
                           in the operation of the Casino in accordance with the
                           Casino Operational Standards .

                  Gaming Space - that area of the Casino in which gaming
activity takes place, not including support, storage, entertainment, service and
other such areas.

                  HET - Harrah's Entertainment, Inc., a Delaware corporation.

                  HOCI - Harrah's Operating Company, Inc., a Delaware
corporation.

                  Initial Term - as defined in Article 3.01.

                  JCC Holding - JCC Holding Company, a Delaware corporation and
the parent of Owner.

                  Landlord - as defined in the Authorized Lease.

                                      A-7
<PAGE>   80

                  LGCB - the Louisiana Gaming Control Board or any successor
entity.

                  Manager's Affiliate - Manager's ultimate parent entity
(currently HET) and any of its Affiliates.

                  Mortgage - that certain Mortgage of even date herewith in
favor of HET and HOCI (or any successor or substitute therefor providing a
Minimum Payment Guaranty under and as defined in the Casino Operating Contract)
and the lenders providing financing to Owner pursuant to the Plan.

                  Non-Qualified Person - any person or entity that would, if
associated with Owner, JCC Holding, Manager or any Affiliate of Manager, in the
reasonable judgment of Manager or any licensing authority, impair or cause the
denial, suspension or revocation of any gaming registration, permit, license,
right or entitlement or any alcoholic beverage registration, permit, license,
right or entitlement held or applied for by Owner, Manager, JCC Holding or any
Affiliate of Manager.

                  Non-Qualified Purchaser - as defined in Article 21.02(c).

                  Operating Equipment - all equipment required for the operation
of a casino, including accessory gaming table equipment, chinaware, glassware,
linens, silverware, utensils, uniforms, and all other similar items.

                  Operating Supplies - food and beverages (alcoholic and
non-alcoholic) and other consumable items used in the operation of a casino,
such as playing cards, tokens, chips, plaques, dice, fuel, soap, cleaning
materials, matches, paper goods, stationery and all other similar items.

                  Plan - the Plan of Reorganization under Chapter 11 of the
United States Bankruptcy Code of Owner, confirmed by the Bankruptcy Court on
March 19, 2001 for that certain case captioned In re JCC Holding Company, Case
No. 01-10086.

                  Plans and Specifications - as defined in the Authorized GDA.

                  Qualified Purchaser - as defined in Article 21.02(c).

                  Second Floor Non-Gaming Sublease - the Second Floor Non-Gaming
Sublease entered into by and between Owner and JCC Development Company, L.L.C.,
a Louisiana limited liability company, dated as of October 28, 1998, as amended
of even date herewith.

                  Site - the Casino Site, the tunnel under Poydras Street, and
the parcels of land on which parking garages are situated connected to the
Casino Site by said tunnel under Poydras Street and all other parcel(s) of land,
together with all easements and rights appurtenant thereto, owned by the Owner
in New Orleans, Louisiana.

                  Suitable Lender - has the meaning provided in the Casino
Operating Contract.

                                      A-8
<PAGE>   81

                  Termination Fee - as defined in Article 17.02(b).

                  5. Recording Authorized. The parties hereto authorize and
direct the Recorder of Mortgages for the Parish of Orleans, State of Louisiana,
to record this Memorandum in the records of the Parish of Orleans, State of
Louisiana.

                            [Signature page follows]

                                      A-9
<PAGE>   82

                  IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Memorandum effective as of the day and year first above written.

WITNESSES:

                                           OWNER:

                                           JAZZ CASINO COMPANY,  L.L.C., a
                                           Louisiana limited liability company

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

                                           MANAGER:

                                           HARRAH'S NEW ORLEANS MANAGEMENT
                                           COMPANY, a Nevada corporation

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

                                      S-1
<PAGE>   83

                                 ACKNOWLEDGMENT

STATE OF LOUISIANA

PARISH OF ORLEANS

                  BEFORE ME, the undersigned authority, on this day personally
appeared ____________________, known to me to be the person whose name is
subscribed to the foregoing instrument, and known to me to be the
_____________________ of JAZZ CASINO COMPANY, L.L.C., a Louisiana limited
liability company, and acknowledged to me that he executed said instrument for
the purposes and consideration therein expressed, in the capacity therein stated
and as the act of said corporation.

Given under my hand and seal of office this 30th day of March, 2001.

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

                      ------------------------------------
                                  NOTARY PUBLIC
                          My Commission Expires:
                                                -------

<PAGE>   84

                                 ACKNOWLEDGMENT

STATE OF LOUISIANA

PARISH OF ORLEANS

                  BEFORE ME, the undersigned authority, on this day personally
appeared ____________________, known to me to be the person whose name is
subscribed to the foregoing instrument, and known to me to be the
_____________________ of HARRAH'S NEW ORLEANS MANAGEMENT COMPANY, a Nevada
corporation, and acknowledged to me that he executed said instrument for the
purposes and consideration therein expressed, in the capacity therein stated and
as the act of said corporation.

Given under my hand and seal of office this 30th day of March, 2001.

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

                      ------------------------------------
                                  NOTARY PUBLIC
                          My Commission Expires:
                                                -------

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