Document:

<PAGE>   1

                                                                    EXHIBIT 4.05

                             INTERCREDITOR AGREEMENT

                  INTERCREDITOR AGREEMENT (as amended, modified or supplemented
from time to time, this "Agreement"), dated as of March 30, 2001, among (w)
Harrah's Entertainment, Inc., a Delaware corporation ("HET"), Harrah's Operating
Company, Inc., a Delaware corporation ("HOC"), and any other successor or
substitute entity which becomes a party hereto as a Minimum Payment Guarantor
after the date hereof (with HET, HOC and each other such Minimum Payment
Guarantor being herein each called a "Minimum Payment Guarantor" and,
collectively, the "Minimum Payment Guarantors"), (x) HET, HOC and Harrah's New
Orleans Management Company ("HNOMC"), as lenders under the Revolving Credit
Agreement hereinafter referred to, together with any successor and other lenders
and letter of credit issuers under the Revolving Credit Agreement hereinafter
referred to (HET, HOC, HNOMC and any other such lenders or letter of credit
issuers, if any, are hereinafter called the "Revolver Creditors"), (y) Wells
Fargo Bank Minnesota, National Association, as trustee (together with any
successor trustee, in such capacity, the "Senior Note Trustee"), for the holders
from time to time of the Senior Notes as hereinafter defined (such holders of
the Senior Notes are hereinafter called the "Senior Note Holders," and together
with the Senior Note Trustee, the "Senior Note Creditors" and, together with the
Minimum Payment Guarantors and the Revolver Creditors, are hereinafter called
the "Secured Creditors") and (z) The Bank of New York, as Collateral Agent (as
hereinafter defined). Capitalized terms used herein and defined in Section 12
hereof shall have the meaning so provided therein.

                                   WITNESSETH:

                  WHEREAS, HET and HOC have jointly and severally provided the
initial Minimum Payment Guaranty, and HET and HOC (and/or one or more other
Minimum Payment Guarantors) may hereafter provide one or more substitute or
replacement Minimum Payment Guaranties and HET, HOC and the Company (as
hereinafter defined) have entered into that certain Amended and Restated HET/JCC
Agreement dated as of March 30, 2001 (as amended, supplemented or modified, the
"HET/JCC Agreement");

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

<PAGE>   2

agreements, whether or not with the same agent, trustee, representative, lenders
or holders; provided that, with respect to any agreement providing for the
refinancing or replacement of indebtedness under the Revolving Credit Agreement,
such agreement shall only be treated as, or as part of, the Revolving Credit
Agreement hereunder if (i) either (A) all obligations under the Revolving Credit
Agreement being refinanced or replaced (if then outstanding) shall be paid in
full at the time of such refinancing or replacement, and all commitments and
letters of credit issued pursuant to the refinanced or replaced Revolving Credit
Agreement shall have been terminated in accordance with their terms or (B) the
Required Revolver Creditors shall have consented in writing to the refinancing
or replacement indebtedness being treated as indebtedness pursuant to the
Revolving Credit Agreement, (ii) the refinancing or replacement indebtedness
shall be permitted to be incurred under the Revolving Credit Agreement being
refinanced or replaced (if such Revolving Credit Agreement is to remain
outstanding) and the other Revolving Credit Documents then in effect, and under
the Senior Note Documents referred to below (if any Senior Notes remain
outstanding) and (iii) a notice to the effect that the refinancing or
replacement indebtedness shall be treated as issued under the Revolving Credit
Agreement shall be delivered by the Company to the Collateral Agent);

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

                  WHEREAS, it is a condition precedent to the above-described
extensions of credit to the Company that (i) each of the Credit Parties shall
have executed and delivered each of the Shared Security Documents (as
hereinafter defined) to which it is a party and (ii) HET and HOC, as initial
Minimum Payment Guarantors, HET, HOC and HNOMC, as initial Revolver Creditors,
the Senior Note Trustee, on behalf of the Senior Note Holders, and the
Collateral Agent shall have executed and delivered this Agreement; and

                  WHEREAS, the Minimum Payment Guarantors, the Revolver
Creditors, the Senior Note Trustee and the Collateral Agent desire to enter into
this Agreement to satisfy the conditions described in the preceding paragraph.

                  NOW, THEREFORE, it is agreed:

                  1. Appointment. The Secured Creditors, by their acceptance of
the benefits of the Pledge Agreement, the Security Agreement, each Mortgage, and
any other security agreements or security documents which may from time to time
be executed and delivered by JCC Holding, the Company and/or any of their
respective Subsidiaries to secure the obligations of the Credit Parties

                                      -2-
<PAGE>   3

to the Secured Creditors (collectively, but excluding any security agreement
which is for the sole purpose of creating the security interests described in
Section 11(h) hereof, the "Shared Security Documents") as required by the
Minimum Payment Guaranty Documents, the Revolving Credit Documents or the Senior
Note Documents, hereby designate The Bank of New York, as Collateral Agent, to
act as specified herein and in each of the Shared Security Documents. Each
Secured Creditor hereby irrevocably authorizes, and each holder of any Revolver
Note or Senior Note by the acceptance of such Revolver Note or Senior Note shall
be deemed irrevocably to authorize, the Collateral Agent to take such action on
behalf of such Secured Creditor pursuant to this Agreement, the Shared Security
Documents and any other documents and agreements referred to therein as the
Collateral Agent is required to do in accordance with and subject to the
provisions of this Agreement and the Shared Security Documents and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically required of the Collateral Agent by the terms hereof and thereof
and such other powers as are reasonably incidental thereto. The Collateral Agent
may perform any of its duties hereunder or thereunder by or through its
authorized agents or employees.

                  2. Nature of Duties. (a) The Collateral Agent shall have no
duties or responsibilities except those expressly set forth herein and in the
Shared Security Documents. Neither the Collateral Agent nor any of its officers,
directors, employees or agents shall be liable for taking any action or
refraining from taking or omitting to take any action hereunder or in connection
with this Agreement or the Shared Security Documents, unless caused by its or
their gross negligence or willful misconduct. The duties of the Collateral Agent
shall be mechanical and administrative in nature only; the Collateral Agent
shall not have by reason of the Shared Security Documents, any Minimum Payment
Guaranty Document, any Revolving Credit Document or any Senior Note Document a
fiduciary relationship in respect of any Secured Creditor; and nothing in the
Shared Security Documents, any Minimum Payment Guaranty Document, any Revolving
Credit Document or any Senior Note Document, express or implied, is intended to
or shall be so construed as to impose upon the Collateral Agent any obligations
in respect of the Shared Security Documents except as expressly set forth herein
or therein.

                  (b) The Collateral Agent shall receive direction from the
Required Secured Creditors as a condition precedent to giving any consent or
approval, or commencing any enforcement action, under any Shared Security
Document, the Casino Lease or the Casino Operating Contract and upon receipt
thereof shall act in accordance with such direction, provided that the
Collateral Agent shall have no liability for failing to give any such consent or
approval, or failing to commence or take any such enforcement action, absent
such direction.

                  3. Lack of Reliance on the Collateral Agent. Independently and
without reliance upon the Collateral Agent, each Secured Creditor, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Credit
Parties in connection with the making and the continuance of the Obligations and
the taking or not taking of any action in connection therewith, and (ii) its own
appraisal of the creditworthiness of the Credit Parties, and the Collateral
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Secured Creditor with any credit or other information with
respect thereto, whether coming into its possession before the extension of any
Obligations or the purchase of any Revolver Notes or Senior Notes, or at any

                                      -3-
<PAGE>   4

time or times thereafter. The Collateral Agent shall not be responsible or
liable to any Secured Creditor for any recitals, statements, information,
covenants, agreements, representations or warranties herein, in any of the
Shared Security Documents or in any document, certificate or other writing
delivered in connection herewith or therewith or for the execution,
effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of any of the Shared Security Documents
or any of the Collateral or the financial condition of any Credit Party or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of any of the Shared Security
Documents, or the financial condition of any Credit Party, or the existence or
possible existence of any Default or Event of Default.

                  4. Certain Rights of the Collateral Agent; Pari Passu in
Priority of Liens; Non-Shared Collateral; Protective Advances; Etc. (a) Except
as provided in Section 4(e) hereof, no Secured Creditor, acting alone or with
other Secured Creditors not constituting the Required Secured Creditors, shall
have the right to take any action with respect to (or against) any Collateral,
or cause the Collateral Agent to take any action with respect to (or against)
any Collateral, with only the Required Secured Creditors having the right to
direct the Collateral Agent by written instruction in accordance with Section
4(f) hereof to take any such action. Except for actions required to be taken by
the Collateral Agent in accordance with this Agreement or the Shared Security
Documents, if the Required Secured Creditors shall fail to instruct the
Collateral Agent with respect to any act or action (including failure to act and
refrain from acting) in connection with this Agreement or the Shared Security
Documents, the Collateral Agent shall be entitled to refrain from such act or
taking such action, unless and until it shall have received written instructions
from the Required Secured Creditors and, to the extent requested, and in
addition to any agreement of indemnity herein contained appropriate
indemnification in respect of actions to be taken or not taken (as the case may
be), and the Collateral Agent shall not incur liability to any Secured Creditor
or any other Person by reason of so refraining. Without limiting the foregoing,
no Secured Creditor shall have any right of action whatsoever against the
Collateral Agent as a result of the Collateral Agent acting or refraining from
acting (x) hereunder or under any Shared Security Document in accordance with
the instructions of the Required Secured Creditors or (y) under any Shared
Security Document as provided for therein. As used herein, (1) the term
"Required Secured Creditors" shall mean, at any time, those Secured Creditors
which (in aggregate) at such time would constitute the Required Minimum Payment
Guarantor Secured Creditors (but only if a Minimum Payment Guaranty is then in
effect or if there are unpaid Minimum Payment Obligations which are then due and
payable in an aggregate amount equal to or in excess of $1,000,000), the
Required Revolver Creditors (but only if commitments to lend are then in effect
pursuant to the Revolving Credit Agreement or there are unpaid Revolving Credit
Agreement Obligations then outstanding in an aggregate amount equal to or in
excess of $1,000,000) and the Required Senior Noteholders (so long as any Senior
Note Obligations are then outstanding). Notwithstanding anything to the contrary
contained in the immediately preceding sentence, (1) if at any time the
principal of any Revolving Credit Agreement Obligations has been accelerated, or
the maturity date with respect to any such Revolving Credit Agreement
Obligations has occurred, and as a result thereof a payment Event of Default
exists under the Revolving Credit Agreement, which payment Event of Default has
continued in existence for at least 90 consecutive days after the date of such
acceleration or maturity, and the Required Secured Creditors at such time
(determined without regard to this

                                      -4-

<PAGE>   5

clause (1)) have not directed the Collateral Agent to commence enforcement
proceedings pursuant to the Shared Security Documents, then so long as such
payment Event of Default is continuing the Required Revolver Creditors shall
constitute the Required Secured Creditors for (and only for) purposes of causing
the Collateral Agent to commence enforcement proceedings pursuant to the Shared
Security Documents, (2) if at any time any Minimum Payment Obligations in an
aggregate amount in excess of $1,000,000 have not been paid when due (and remain
unpaid) or have been accelerated, and as a result thereof a payment Event of
Default exists under the Minimum Payment Guaranty Documents, which payment Event
of Default has continued in existence for at least 90 consecutive days after the
date of the initial occurrence thereof, and the Required Secured Creditors at
such time (determined without regard to this clause (2)) have not directed the
Collateral Agent to commence enforcement proceedings pursuant to the Shared
Security Documents, then so long as such payment Event of Default is continuing
the Secured Creditors holding at least a majority of the outstanding Minimum
Payment Obligations subject to such payment Event of Default shall constitute
the Required Secured Creditors for (and only for) purposes of causing the
Collateral Agent to commence enforcement proceedings pursuant to the Security
Documents and (3) if at any time the principal of any Senior Note Obligations
has been accelerated or has become due and payable, in whole or in part,
pursuant to the Senior Note Documents (whether upon stated maturity, required
redemption or offer to purchase, or otherwise), and as a result thereof a
payment Event of Default exists under the Senior Note Indenture, which payment
Event of Default has continued in existence for at least 90 consecutive days
after the date of such acceleration, maturity (in whole or in part) or
declaration, and the Required Secured Creditors at such time (determined without
regard to this clause (3)) have not directed the Collateral Agent to commence
enforcement proceedings pursuant to the Shared Security Documents, then so long
as such payment Event of Default is continuing the Required Senior Noteholders
shall constitute the Required Secured Creditors for (and only for) purposes of
causing the Collateral Agent to commence enforcement proceedings pursuant to the
Security Documents; provided that in any such event specified in preceding
clauses (1) through (3) the Secured Creditors who would constitute the Required
Secured Creditors in the absence of this sentence shall have the right (but not
the obligation) to direct the manner and method of enforcement so long as such
directions do not materially delay or impair the taking of enforcement action.

                  (b) Notwithstanding anything to the contrary contained in this
Agreement, the Collateral Agent is authorized, but not obligated (and shall have
no liability for its failure), (i) to take any action reasonably required to
perfect or continue the perfection of the liens on the Collateral created by the
Shared Security Documents for the benefit of the Secured Creditors and (ii) when
instructions from the Required Secured Creditors have not yet been received, to
take or omit to take any action which the Collateral Agent, in good faith,
believes to be reasonably required or appropriate to promote and/or protect the
interests of the Secured Creditors in the Collateral; provided that once
instructions have been received, the Collateral Agent shall act or refrain from
acting in accordance with such instructions and the Collateral Agent shall not
take any further action which would be contrary thereto.

                  (c) Notwithstanding anything to the contrary contained in this
Agreement, the Collateral Agent shall not be required to take or refrain from
taking, and shall have no liability to any Secured Creditor for taking or
refraining from taking, any action that exposes or, in the good

                                      -5-
<PAGE>   6

faith judgment of the Collateral Agent, may expose, the Collateral Agent or its
officers, directors, agents or employees to personal liability (including,
without limitation, taking title to any Collateral) unless the Collateral Agent
shall be adequately indemnified as provided herein or that is, or in the good
faith judgment of the Collateral Agent may be, contrary to this Agreement, the
Casino Lease, the Casino Operating Contract, the Shared Security Documents or
applicable law.

                  (d) The Minimum Payment Guarantors' liens, the Revolver
Creditors' liens and the Senior Note Creditors' liens in all Collateral shall be
subject to the priorities for distributions in accordance with the terms of
Section 11 hereof. The foregoing shall be effective at all times during the term
of this Agreement, notwithstanding: (i) the initiation of any bankruptcy,
moratorium, reorganization or other insolvency proceeding with respect to any
Credit Party; (ii) the priorities which would otherwise result from the order of
creation, attachment or perfection of any such lien; (iii) the taking of
possession of any of the Collateral by the Collateral Agent, any Minimum Payment
Guarantor, any Revolver Creditor or any Senior Note Creditor; (iv) the filing of
any financing statement or the recording of any mortgage or other instrument in
any recording office; (v) the order in which any of the Minimum Payment
Obligations, the Revolving Credit Agreement Obligations or the Senior Note
Obligations is created; (vi) whether any such lien is now perfected, hereafter
ceases to be perfected, is avoidable by any bankruptcy trustee or otherwise is
set aside, invalidated or lapses; or (vii) any other matter whatsoever; and
shall continue in full force and effect unless and until this Agreement shall
have terminated in accordance with Section 17 hereof.

                  (e) Any Secured Creditor, but only with (and to the extent of)
the prior written consent of the Required Secured Creditors (which consent shall
expressly acknowledge that the respective advances constitute Protective
Advances for purposes of this Agreement), may make advances for the protection
of the Secured Creditors' interest in and lien on the Collateral ("Protective
Advances") solely for (i) the payment of taxes and insurance required to be paid
with respect to the Collateral, (ii) the payment of expenses to maintain the
Collateral, and (iii) to the extent permitted by the Casino Lease, any payments
required to cure any default under the Casino Lease; provided that no portion of
the proceeds of Protective Advances shall be used to make any payments to HET,
HOC or the manager of the Casino (or any of their Affiliates). Protective
Advances by any Secured Creditor pursuant to this Section 4(e) may be made
directly or by payment of such funds to the Collateral Agent to be applied by
the Collateral Agent for such purposes as directed in writing by the advancing
Secured Creditor. Any Protective Advances made pursuant to this Section 4(e),
including any interest payable with respect thereto, shall form part of the
Obligations of the applicable Credit Party to such Secured Creditor, which shall
be fully secured pursuant to the Shared Security Documents, and shall be
entitled to the benefits of the Shared Security Documents and this Agreement,
even if the other Obligations of the respective Secured Creditor are repaid or
if the respective Secured Creditor ceases to be a creditor with respect to such
other Obligations.

                  (f) For purposes of this Agreement, each of the Minimum
Payment Guarantors (as a group), the Revolver Creditors (as a group) and the
Senior Note Creditors (as a group) shall appoint a Person as such Secured
Creditors' authorized representative ("Authorized Representative") for the
purpose of giving or delivering any notices or instructions hereunder or with
respect to any Shared Security Document. Any instructions given by the Required
Secured

                                      -6-

<PAGE>   7

Creditors to the Collateral Agent pursuant to this Agreement or under any Shared
Security Document shall be in writing and signed by the Authorized
Representative(s) of the various Secured Creditors comprising the Required
Secured Creditors with respect to such instructions and such instructions shall
certify to and for the benefit of the Collateral Agent that the Secured
Creditors issuing or delivering such instructions constitute the Required
Secured Creditors for purposes of this Section 4 and the instructions being
delivered. The Collateral Agent shall be entitled to conclusively and absolutely
rely on such instructions and certification as to the identity of the Required
Secured Creditors with respect to such instructions, and the Collateral Agent
shall not be required to take any action or make any inquiry, and shall not be
liable to any Secured Creditor for failing or refusing to act, pursuant to any
instructions which are not given or delivered by the Authorized
Representative(s) of the various Secured Creditors comprising the Required
Secured Creditors with respect to such instructions. The parties hereto
acknowledge that the Authorized Representative of each of the Secured Creditors
shall be (x) HET (or a successor designated by HET), in the case of the Minimum
Payment Guarantors, (y) HET (or a successor designated by HET), in the case of
the Revolver Creditors and (z) the Senior Note Trustee, in the case of the
Senior Note Creditors.

                  5. Reliance; Interpretation. The Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, radiogram, order or other document or writing
purportedly signed, sent or made by the proper Person or entity, and, with
respect to all legal matters pertaining to this Agreement or the Shared Security
Documents and its duties hereunder and thereunder, upon advice of counsel
selected by it. If, in its good faith judgment, the Collateral Agent reasonably
believes that any instructions given or delivered pursuant to this Agreement or
with respect to any Shared Security Document require judicial interpretation or
are invalid or otherwise contrary to the provisions of this Agreement, the
Casino Lease, the Casino Operating Contract, the Shared Security Documents or
applicable law, the Collateral Agent shall have the right to petition a court of
competent jurisdiction to determine the validity of, or otherwise interpret, any
such instructions. In such event, the Collateral Agent shall not be required to
carry out such instructions unless directed to do so, or it is determined that
it may do so, by such court.

                  6. Reimbursement and Indemnification. (a) To the extent the
Collateral Agent is not reimbursed and indemnified by the Company or any of the
other Credit Parties under the respective Shared Security Documents to which
they are a party, the Collateral Agent shall be entitled to reimbursement from
the proceeds of Collateral, but the Collateral Agent shall have no claim against
any Secured Creditor (other than against Minimum Payment Guarantors as, and to
the extent, provided in Sections 6(c) and (d) hereof) for reimbursement or
indemnification.

                  (b) Notwithstanding any provision of this Agreement or any
Shared Security Document to the contrary, the Collateral Agent shall have the
right to forbear from taking any action or exercising any remedy under any
Shared Security Document or applicable law, including, without limitation, the
foreclosure upon or the taking of title to any Collateral, if, in the good faith
judgment of the Collateral Agent, the Collateral Agent or its officers,
directors, agents or employees are not adequately indemnified by a Person
acceptable to the Collateral Agent from any liability or claim (including,
without limitation, any environmental liability or claim) by any

                                      -7-
<PAGE>   8

person or governmental authority which would result from the taking or
refraining from taking of any such action or the exercise or refraining from
exercising of any such remedy; provided that the Collateral Agent acknowledges
that the indemnity provided in Sections 6(c) and (d) hereof shall be adequate,
for purposes of this Section 6(b), for so long as such indemnity remains in
effect and the initial Minimum Payment Guarantors (or successor Minimum Payment
Guarantor or Minimum Payment Guarantors reasonably acceptable to the Collateral
Agent) remain obligated hereunder.

                  (c) The Minimum Payment Guarantors hereby jointly, severally
and in solido indemnify, save and hold harmless and agree to defend the
Collateral Agent, its officers, directors, shareholders, employees, agents and
representatives (the "Indemnified Parties") from and against any and all suits,
causes of action, proceedings, claims, controversies, damages, liabilities,
losses, demands, costs and expenses (including reasonable attorneys' fees and
court costs) of any kind which may at any time be brought by any Person against,
or incurred by, any Indemnified Party (collectively, "Liabilities"), arising
from or relating to (i) this Agreement, any of the Shared Security Documents or
any agreement or instrument to which the Collateral Agent is a party which is
executed in connection herewith or therewith, (ii) any Collateral, and/or (iii)
any act or omission of the Collateral Agent or any other Indemnified Party in
connection with the taking of any action (or the refraining from taking any
action) in accordance with and as provided in this Agreement or the Shared
Security Documents, excluding, with respect to any of the foregoing, (x) any and
all Liabilities caused by or resulting from the gross negligence or willful
misconduct of any Indemnified Party and (y) any and all Liabilities to the
extent such Liabilities are fully paid, satisfied or reimbursed by the Company
or any other Person. The applicable Indemnified Party shall notify the Minimum
Payment Guarantors in writing of any Liability subject to indemnification under
this Section 6(c) then due and payable, which notice shall specify the amount of
any such Liability and shall include reasonable documentation evidencing the
payment or satisfaction of such Liability by such Indemnified Party or otherwise
evidencing the obligation of such Indemnified Party to pay such Liability. The
Minimum Payment Guarantors shall, within forty-five (45) days of receipt of such
notice, pay or cause to be paid in full all amounts specified in such notice.
The indemnity provided in this Section 6(c) shall be fully transferable to any
successor collateral agent retained or engaged under Section 9 hereof upon the
resignation of the Collateral Agent (but not upon the removal of the Collateral
Agent by the Required Secured Creditors pursuant to Section 9(a) hereof).

                  (d) Notwithstanding anything to the contrary contained in any
of the Shared Security Documents or any limitation on the Collateral Agent's
fees contained therein, to the extent the fees (which, for purposes of this
Section 6(d), shall include, without limitation, all reasonable fees incurred by
the Collateral Agent in the performance of its obligations under this Agreement
and/or the Shared Security Documents, to be reimbursed at the Collateral Agent's
customary hourly rates) and expenses (including, without limitation, reasonable
attorneys' fees and disbursements and out-of-pocket expenses) of the Collateral
Agent as provided for and in connection with this Agreement are not timely paid
by the Company or any other Person, the Minimum Payment Guarantors agree to
reimburse and make whole the Collateral Agent for any such unpaid fees or other
expenses within forty-five (45) days following written demand thereof from the
Collateral Agent.

                                      -8-
<PAGE>   9

                  (e) To the extent any amounts are paid by any Minimum Payment
Guarantor to the Collateral Agent pursuant to the provisions of preceding
Sections 6(c) and/or (d), the respective Minimum Payment Guarantor shall be
subrogated to the rights of the Collateral Agent to receive such amounts from
the Company and/or from proceeds of distributions which would otherwise have
been made to the Collateral Agent pursuant to Section 11(a)(i) hereof.

                  7. The Collateral Agent in its Individual Capacity. The
Collateral Agent may accept deposits from, lend money to, and generally engage
in any kind of banking, trust or other business with the Company or any
Affiliate or Subsidiary of the Company as if it were not performing the duties
specified herein or in the Shared Security Documents, and may accept fees and
other consideration from the Company and/or any of its Affiliates and/or
Subsidiaries for services in connection with the Revolving Credit Agreement, the
other Revolving Credit Documents and otherwise without having to account for the
same to the Secured Creditors; provided that the Collateral Agent shall use
reasonable good faith efforts so that it at no time becomes a Revolver Creditor
or a Senior Note Creditor; provided further, that the foregoing proviso shall in
no event operate to prevent the Collateral Agent from acquiring all or any
portion of the equity interests in any other Person which itself is a Revolver
Creditor or a Senior Note Creditor (and as a result of which the Collateral
Agent could become a Revolver Creditor or a Senior Note Creditor).

                  8. Holders. The Collateral Agent may deem and treat the payee
of any Revolver Note or the registered owner of any Senior Note as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Collateral Agent. Any request, authority or consent of any Person
or entity who, at the time of making such request or giving such authority or
consent, is the holder of any Revolver Note or the registered owner of any
Senior Note shall be final and conclusive and binding on any subsequent holder,
transferee, assignee or endorsee, as the case may be, of such Revolver Note or
Senior Note or any Revolver Note or Senior Note issued in exchange therefor.

                  9. Resignation by the Collateral Agent. (a) The Collateral
Agent may resign from the performance of all of its functions and duties under
this Agreement and the Shared Security Documents at any time by giving thirty
(30) Business Days' prior written notice to the Company, the Minimum Payment
Guarantors, HET and the Senior Note Trustee and may be removed at any time, with
or without cause, by the Required Secured Creditors by written notice delivered
to the Company, the Minimum Payment Guarantors, HET and the Senior Note Trustee,
provided that such resignation or removal shall not take effect until a
successor Collateral Agent shall have been appointed and such appointment shall
have become effective in accordance with this Section 9.

                  (b) Upon receiving notice of any such resignation or removal,
a successor Collateral Agent shall be appointed by the Required Secured
Creditors; provided, however, that such successor Collateral Agent shall be (A)
a bank or trust company having a combined capital and surplus of at least
$100,000,000 subject to supervision or examination by a federal or state banking
authority; (B) authorized under the laws of the jurisdiction of its
incorporation or organization to assume the functions of the Collateral Agent;
and (C) qualified to act in such capacity pursuant to applicable Gaming
Regulations, if required. If the appointment of such successor

                                      -9-
<PAGE>   10

shall not have become effective (as hereafter provided) within such thirty (30)
Business Day period after the Collateral Agent shall have given such notice,
then the Required Secured Creditors or the resigning Collateral Agent may
petition a court of competent jurisdiction for the appointment of a successor
Collateral Agent. Such court shall, after such notice as it may deem proper,
appoint a successor Collateral Agent meeting the qualifications specified in
this Section 9(b). The Secured Creditors hereby consent to such petition and
appointment so long as such criteria are met.

                  (c) The resignation or removal of a Collateral Agent shall
become effective only upon the execution and delivery of such documents or
instruments as are necessary to transfer the rights and obligations of the
Collateral Agent under this Agreement and the Shared Security Documents and the
recording or filing of such documents, instruments or financing statements as
may be necessary to maintain the priority and perfection of any security
interests and liens granted by any Shared Security Document. Copies of each such
document or instrument shall be delivered to each of the Company, the Minimum
Payment Guarantors, HET and the Senior Note Trustee. The appointment of a
successor Collateral Agent pursuant to this Section 9 shall become effective
upon the acceptance of such appointment (and execution by such successor of the
documents, instruments and/or financing statements referred to above) and such
successor Collateral Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent.

                  (d) After any resignation or removal hereunder of the
Collateral Agent, the indemnification provisions of this Agreement shall
continue to inure to its benefit as to any actions taken or omitted to be taken
by it in connection with its agency hereunder while it was Collateral Agent.

                  10. Fees and Expenses of Collateral Agent. (a) In addition to
the indemnification provisions contained in the various Shared Security
Documents, the Company (by its execution and delivery hereof) hereby agrees that
it shall pay to The Bank of New York, as the initial Collateral Agent, such fees
as have been separately agreed to in writing with The Bank of New York for
acting as Collateral Agent hereunder and under the Shared Security Documents. In
the event a successor Collateral Agent is at any time appointed pursuant to
Section 9 of this Agreement, the Company hereby agrees to pay such successor
Collateral Agent such reasonable fees for acting as such as would customarily be
charged by such Collateral Agent for acting in such capacity in similar
situations.

                  (b) In addition, the Company, by its execution and delivery
hereof, agrees to pay all reasonable out-of-pocket costs and expenses of the
Collateral Agent in connection with this Agreement and/or the Shared Security
Documents and/or any actions taken by the Collateral Agent hereunder or
thereunder, and agrees to pay all costs and expenses of the Collateral Agent in
connection with the enforcement of, or its taking or refraining from taking any
act with respect to, this Agreement or any of the Shared Security Documents
and/or any of the documents and instruments referred to herein or therein
(including, without limitation, reasonable fees and disbursements of counsel for
the Collateral Agent).

                                      -10-
<PAGE>   11

                  11. Application of Proceeds. (a) All moneys received by the
Collateral Agent upon any sale or other disposition of any Collateral pursuant
to the enforcement of any of the Shared Security Documents or the exercise of
any of the remedial provisions thereof, together with all other moneys received
by the Collateral Agent hereunder or under the Shared Security Documents as a
result of any such enforcement or the exercise of any such remedial provisions
or as a result of any distribution of any Collateral upon the bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding involving the readjustment of the obligations and
indebtedness of any Credit Party, or the application of any Collateral to the
payment thereof or any distribution of the Collateral upon the liquidation or
dissolution of any Credit Party, or the winding up of the assets or business of
any Credit Party, or under the Mortgage Policies (if any) or otherwise payable
under any Shared Security Documents, shall be applied as follows:

                 (i) first, to the payment of all amounts owing to the
         Collateral Agent of the type described in clauses (v), (vi) and (vii)
         of the definition of "Obligations" and, thereafter, to all amounts
         owing to any Minimum Payment Guarantor of the type described in clause
         (v) of the definition of "Obligations";

                (ii) second, to the extent proceeds remain after the application
         pursuant to the preceding clause (i), an amount equal to the
         outstanding First Priority Secured Obligations shall be paid to the
         Secured Creditors as provided in Section 11(e) hereof, with each
         Secured Creditor receiving an amount equal to its outstanding First
         Priority Secured Obligations or, if the proceeds are insufficient to
         pay in full all such First Priority Secured Obligations, such Secured
         Creditor's Pro Rata Share of the amount remaining to be distributed;

               (iii) third, to the extent proceeds remain after the application
         pursuant to the preceding clauses (i) and (ii), an amount equal to the
         outstanding Second Priority Secured Obligations shall be paid to the
         Secured Creditors as provided in Section 11(e) hereof, with each
         Secured Creditor receiving an amount equal to its outstanding Second
         Priority Secured Obligations or, if the proceeds are insufficient to
         pay in full all such Second Priority Secured Obligations, such Secured
         Creditor's Pro Rata Share of the amount remaining to be distributed;

                (iv) fourth, to the extent proceeds remain after the application
         pursuant to the preceding clauses (i) through (iii), inclusive, an
         amount equal to the outstanding Third Priority Secured Obligations
         shall be paid to the Secured Creditors as provided in Section 11(e)
         hereof, with each Secured Creditor receiving an amount equal to its
         outstanding Third Priority Secured Obligations or, if the proceeds are
         insufficient to pay in full all such Third Priority Secured
         Obligations, such Secured Creditor's Pro Rata Share of the amount
         remaining to be distributed;

                 (v) fifth, to the extent proceeds remain after the application
         pursuant to the preceding clauses (i) through (iv), inclusive, an
         amount equal to the outstanding Fourth Priority Secured Obligations
         shall be paid to the Secured Creditors as provided in Section 11(e)
         hereof, with each Secured Creditor receiving an amount equal to its
         outstanding

                                      -11-

<PAGE>   12

         Fourth Priority Secured Obligations or, if the proceeds are
         insufficient to pay in full all such Fourth Priority Secured
         Obligations, such Secured Creditor's Pro Rata Share of the amount
         remaining to be distributed;

                (vi) sixth, to the extent proceeds remain after the application
         pursuant to the preceding clauses (i) through (v), inclusive, an amount
         equal to the outstanding Fifth Priority Secured Obligations shall be
         paid to the Secured Creditors as provided in Section 11(e) hereof, with
         each Secured Creditor receiving an amount equal to its outstanding
         Fifth Priority Secured Obligations or, if the proceeds are insufficient
         to pay in full all such Fifth Priority Secured Obligations, such
         Secured Creditor's Pro Rata Share of the amount remaining to be
         distributed; and

               (vii) seventh, to the extent proceeds remain after the
         application pursuant to the preceding clauses (i) through (vi),
         inclusive, and following the termination of this Agreement pursuant to
         Section 17 hereof, to the respective Credit Party under its respective
         Shared Security Document, or to whomever may be lawfully entitled to
         receive such surplus.

                  (b) For purposes of this Agreement (i) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's First
Priority Secured Obligations, Second Priority Secured Obligations, Third
Priority Secured Obligations, Fourth Priority Secured Obligations or Fifth
Priority Secured Obligations, as the case may be, and the denominator of which
is the then outstanding amount of all First Priority Secured Obligations, Second
Priority Secured Obligations, Third Priority Secured Obligations, Fourth
Priority Secured Obligations or Fifth Priority Secured Obligations, as the case
may be, (ii) "First Priority Secured Obligations" shall mean all principal of,
interest on, and other amounts owing to the Secured Creditors with respect to
the Protective Advances, if any, made by them in accordance with the
requirements of Section 4(e) of this Agreement, (iii) "Second Priority Secured
Obligations" shall mean, with respect to the Minimum Payment Obligations, all
obligations pursuant to the Minimum Payment Guaranty Documents in respect of
amounts advanced pursuant to one or more Minimum Payment Guaranties, and any
indemnities, fees and expenses, enforcement costs (including reasonable
attorneys' fees) and interest on such obligations in accordance with the terms
of the relevant Minimum Payment Guaranty Documents, (iv) "Third Priority Secured
Obligations" shall mean all principal of, and interest on, all loans under the
Revolving Credit Agreement and the aggregate amount of all unpaid reimbursement
obligations (together with all interest accrued thereon) with respect to letters
of credit issued (or assumed) pursuant to the Revolving Credit Agreement, the
aggregate undrawn amounts of all letters of credit issued pursuant to the
Revolving Credit Agreement and all regularly accruing fees owing by the Company
under the Revolving Credit Agreement as same relate to the foregoing extensions
of credit or commitments in respect thereof, and all indemnities, fees and
expenses, enforcement costs (including reasonable attorneys' fees) and interest
on or relating to the foregoing obligations, extensions of credit or commitments
in respect thereof, (v) "Fourth Priority Secured Obligations" shall mean all
principal of, and accrued and unpaid interest on, the Senior Notes and (vi)
"Fifth Priority Secured Obligations" shall mean all Obligations other than First
Priority Secured Obligations, Second Priority Secured Obligations, Third
Priority Secured

                                      -12-
<PAGE>   13

Obligations and Fourth Priority Secured Obligations. Notwithstanding anything to
the contrary contained elsewhere in this Agreement, to the extent that, after
the date of this Agreement, the relevant Secured Creditors amend or modify the
Minimum Payment Guaranty Documents or Revolving Credit Documents in a manner
which has the effect of increasing the outstanding principal amount (for this
purpose, treating the face amount of outstanding letters of credit and
unreimbursed drawings with respect to letters of credit as principal) of Second
Priority Secured Obligations or Third Priority Secured Obligations above the
principal amounts thereof as then in effect (excluding any waivers or amendments
to the Revolving Credit Documents which (x) make available Third Priority
Secured Obligations which would otherwise not be available to the extent that
the principal amount thereof is not increased above $35 million, (y) defer or
capitalize accrued and unpaid interest or (z) in the case of Revolving Credit
Agreement Obligations incurred pursuant to any refinancing, increases to the
principal amount thereof to the extent (i) accrued and unpaid interest and/or
other amounts owing with respect to the refinanced indebtedness is refinanced
and/or (ii) of the fees and expenses incurred in connection with the refinancing
indebtedness), any such increased principal amounts (but only to the extent of
such increase) shall constitute Fifth Priority Secured Obligations rather than
obligations with the higher priority indicated above in this Section 11(b).

                  (c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 11 only) (i) first, to their First Priority Secured Obligations, (ii)
second, to their Second Priority Secured Obligations, (iii) third, to their
Third Priority Secured Obligations, (iv) fourth, to their Fourth Priority
Secured Obligations and (v) fifth, to their Fifth Priority Secured Obligations.

                  (d) Each of the Secured Creditors agrees and acknowledges that
if the Revolver Creditors are to receive a distribution on account of undrawn
amounts with respect to letters of credit issued pursuant to the Revolving
Credit Agreement (which shall only occur after all outstanding loans and all
unpaid reimbursement obligations with respect to drawn letters of credit have
been paid in full), such amounts shall be paid to HET and held by it, for the
equal and ratable benefit of the Revolver Creditors holding Third Priority
Secured Obligations, as cash security for the repayment of all Third Priority
Secured Obligations owing to the Revolver Creditors as such. If any amounts are
held as cash security pursuant to the immediately preceding sentence, then upon
the termination of all outstanding letters of credit issued pursuant to the
Revolving Credit Agreement, and after the application of all such cash security
to the repayment of all Third Priority Secured Obligations after giving effect
to the termination of all such letters of credit, if there remains any excess
cash, such excess cash shall be returned by HET to the Collateral Agent for
distribution in accordance with Section 11(a) hereof.

                  (e) All payments required to be made hereunder shall be made
(w) if to the Collateral Agent, directly to the Collateral Agent, (x) if to the
Minimum Payment Guarantors, directly to the respective Minimum Payment
Guarantors (including, if to HET, directly to HET), (y) if to the Revolver
Creditors, directly to the respective Revolver Creditors and (z) if to the
Senior Note Creditors, to the Senior Note Trustee for the account of (and for
distribution to) the Senior Note Creditors. All amounts so distributed shall be
applied in accordance with the requirements of this Section 11.

                                      -13-
<PAGE>   14

                  (f) For purposes of applying payments received in accordance
with this Section 11, the Collateral Agent shall be entitled to rely upon the
Authorized Representative of the respective Secured Creditors, on behalf
thereof, for a determination (which such Authorized Representative shall provide
to the Collateral Agent in writing upon the request of the Collateral Agent,
prior to the distribution of any monies by the Collateral Agent) of the
outstanding Second Priority Secured Obligations, Third Priority Secured
Obligations, Fourth Priority Secured Obligations and Fifth Priority Secured
Obligations owed to the Minimum Payment Guarantors, the Revolver Creditors or
the Senior Note Creditors, as the case may be. For purposes of applying payments
received in accordance with this Section 11, the Collateral Agent shall be
entitled to rely upon the Authorized Representatives for each class of
Obligations at such time to be taken into account for purposes of determining
the Required Secured Creditors for a determination of the First Priority Secured
Obligations then outstanding. Unless it has actual knowledge (including by way
of written notice from a Minimum Payment Guarantor, a Revolver Creditor or a
Senior Note Creditor through an Authorized Representative thereof) to the
contrary, the Minimum Payment Guarantors, the Revolver Creditors, the Senior
Note Trustee and each Authorized Representative, in furnishing information
pursuant to the preceding sentence, and the Collateral Agent, in acting
hereunder, shall be entitled to assume that no First Priority Secured
Obligations and no Fifth Priority Secured Obligations are outstanding. Unless it
has actual knowledge to the contrary, the Collateral Agent, in acting hereunder,
shall be entitled to assume that no First Priority Secured Obligations are in
existence.

                  (g) It is understood and agreed that the Company shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral thereunder and the aggregate amount of the sums referred to in
clauses (i) through (vi), inclusive, of Section 11(a) of this Agreement.

                  (h) The Secured Creditors and the Collateral Agent acknowledge
that the Minimum Payment Guarantors have been granted a security interest in the
House Bank to secure the Minimum Payment Obligations maintained at the Casino
and that no Secured Creditor (other than the Minimum Payment Guarantors) shall
have a lien or other security interest in the House Bank. Upon the occurrence
and during the continuance of an Event of Default under the Minimum Payment
Obligations and provided that there are then no operations at the Casino, the
Minimum Payment Guarantors agree to fully enforce and realize upon the security
interest in the House Bank (and apply all proceeds thereof to the Minimum
Payment Obligations) prior to applying the proceeds of any other Collateral to
the Minimum Payment Obligations as set forth in this Section 11.

                  12. Definitions. The following terms shall have the meanings
herein specified unless the context otherwise requires. Such definitions shall
be equally applicable to the singular and plural forms of the terms defined.

                  "Affiliate" shall mean, with respect to any Person, any other
Person (i) directly or indirectly controlling, (including, but not limited to,
all directors, officers and partners of such Person), controlled by, or under
direct or indirect common control with, such Person or (ii) that directly or
indirectly owns more than 30% of any class of the voting securities or capital
stock of or equity interests in such Person. A Person shall be deemed to control
another Person if such

                                      -14-
<PAGE>   15

Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.

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

                  "Authorized Representative" shall have the meaning provided in
Section 4(f) of this Agreement.

                  "Canal Development" shall mean JCC Canal Development, L.L.C.,
a Louisiana limited liability company.

                  "Casino" shall mean the Company's casino located at the site
of the former Rivergate Convention Center in New Orleans, Louisiana.

                  "Casino Lease" shall mean the Amended and Restated Lease
Agreement among Rivergate Development Corporation as landlord, the Company, as
tenant, and the City of New Orleans, as intervenor, dated as of March 30, 2001,
as amended, modified or supplemented from time to time in accordance with the
terms thereof.

                  "Casino Operating Contract" means the Amended and Renegotiated
Casino Operating Contract among Harrah's Jazz Company, a Louisiana general
partnership, the Company, and the State of Louisiana, by and through the LGCB,
dated October 30, 1998, as amended by that certain First Amendment to Amended
and Renegotiated Casino Operating Contract dated October 19, 1999 and further
amended by the Second Amendment to Amended and Renegotiated Casino Operating
Contract dated March 30, 2001, as amended, modified or supplemented from time to
time in accordance with the terms thereof.

                  "Class" shall have the meaning provided in Section 16 hereof.

                  "Collateral" shall mean all "Collateral" (or similar defined
term) under, and as defined in, the Shared Security Documents.

                  "Collateral Agent" shall mean (x) with respect to this
Agreement, The Bank of New York acting in its capacity as collateral agent
hereunder and (y) with respect to the Shared Security Documents, The Bank of New
York for the benefit of the Secured Creditors in its capacity as (i) "Collateral
Agent" under, and as defined in, the Security Agreement, (ii) "Pledgee" under,
and as defined in, the Pledge Agreement or (iii) "Mortgagee" under, and as
defined in, the Mortgages, in each case, to include any successor collateral
agent hereunder and under the Shared Security Documents.

                  "Company" shall mean Jazz Casino Company, L.L.C., a Louisiana
limited liability company.

                  "Credit Party" shall mean and include JCC Holding, the Company
and each Subsidiary of JCC Holding or the Company that is party to any Shared
Security Document.

                                      -15-
<PAGE>   16

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

                  "Event of Default" shall mean any Event of Default under, and
as defined in, any Minimum Payment Guaranty Document, the Revolving Credit
Agreement or the Senior Note Indenture, any payment default under any Shared
Security Document and shall in any event, include, without limitation, any
payment default on any of the Obligations after the expiration of any applicable
grace period.

                  "Fifth Priority Secured Obligations" shall have the meaning
provided in Section 11(b) hereof.

                  "First Priority Secured Obligations" shall have the meaning
provided in Section 11(b) hereof.

                  "Fourth Priority Secured Obligations" shall have the meaning
provided in Section 11(b) hereof.

                  "Fulton Development" shall mean JCC Fulton Development,
L.L.C., a Louisiana limited liability company.

                  "Gaming Regulations" shall mean the laws, rules, regulations
and orders applicable to the gaming business of the Company or any of its
Subsidiaries, or any other Credit Party, as in effect from time to time,
including the Louisiana Economic Development and Gaming Corporation Act (La.
R.S. Section 27:201, et seq.) and the policies, interpretations and
administration thereof by the governmental authorities charged with their
administration and enforcement, including the LGCB.

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

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

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

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

                  "JCC Development" shall mean JCC Development Company, L.L.C.,
a Louisiana limited liability company.

                  "JCC Holding" shall mean JCC Holding Company, a Delaware
corporation.

                  "LGCB" mean the Louisiana Gaming Control Board and its
successors and assigns.

                                      -16-

<PAGE>   17

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

                  "Minimum Payment Guaranty" shall mean the initial Minimum
Payment Guaranty issued on or before the Plan Effective Date by HET and HOC, and
any substitute or successor Minimum Payment Guaranty (as defined in Section 25.1
of the Casino Operating Contract) from time to time issued by HET, HOC or any
other Minimum Payment Guarantor, in each case so long as (x) the respective
Minimum Payment Guaranty is issued without causing a breach, violation or
default under any of the provisions of the Revolving Credit Agreement, or the
relevant provisions of any other Secured Debt Agreement and (y) each party
thereto as a Minimum Payment Guarantor becomes a party to this Agreement in
accordance with the provisions of Section 21 hereof.

                  "Minimum Payment Guaranty Documents" shall mean each Minimum
Payment Guaranty, the HET/JCC Agreement and any successor or replacement
agreement to the HET/JCC Agreement entered into with one or more Minimum Payment
Guarantors, in each case so long as the provisions of such successor agreements
do not violate the relevant provisions of the Revolving Credit Agreement or the
relevant provisions of any Secured Debt Agreement.

                  "Minimum Payment Obligations" shall have the meaning provided
in clause (ii) of the definition of "Obligations."

                  "Mortgage" shall mean, collectively, (i) the Act of Mortgage
and Collateral Assignment dated as of the date hereof by the Company, as
mortgagor, in favor of the Collateral Agent, as mortgagee for the benefit of the
Secured Creditors, (ii) the Act of Mortgage and Collateral Assignment dated as
of the date hereof by JCC Development, as mortgagor, in favor of the Collateral
Agent, as mortgagee for the benefit of the Secured Creditors, (iii) the Act of
Mortgage and Collateral Assignment dated as of the date hereof by Fulton
Development, as mortgagor, in favor of the Collateral Agent, as mortgagee for
the benefit of the Secured Creditors, (iv) the Act of Mortgage and Collateral
Assignment dated as of the date hereof by Canal Development, as mortgagor, in
favor of the Collateral Agent, as mortgagee for the benefit of the Secured
Creditors and (v) any mortgage, deed of trust, assignment of leases or rents or
similar document executed and delivered at any time after the date of this
Agreement by JCC Holding or any of its Subsidiaries to secure any of the
Obligations.

                  "Mortgage Policies" shall mean any and all mortgagee title
insurance policies in favor of the Collateral Agent or the Secured Creditors
with respect to any property at any time mortgaged pursuant to any Mortgage.

                  "Mortgage Release Provisions" shall mean the respective
provisions designated below of the Mortgages described in clauses (ii) through
(iv), inclusive, of the definition of Mortgage contained herein, as follows:

                  (i) Section 34 of the Mortgage described in clause (ii) of the
         definition of Mortgage contained herein;

                                      -17-
<PAGE>   18

                  (ii) Section 32 of the Mortgage described in clause (iii) of
         the definition of Mortgage contained herein; and

                  (iii) Section 32 of the Mortgage described in clause (iv) of
         the definition of Mortgage contained herein.

                  "Obligations" shall mean all of the Company's obligations with
respect to:

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

                (ii) the full and prompt payment when due (whether at the date
         of maturity, by acceleration or otherwise) of all obligations and
         indebtedness (including, without limitation, indemnities, fees and
         expenses, enforcement costs (including reasonable attorneys' fees) and
         interest on such obligations and indebtedness) of the Company and any
         other Credit Party to the Minimum Payment Guarantors now existing or
         hereafter incurred under, arising out of, or in connection with any
         Minimum Payment Guaranty Document (including, without limitation, all
         such obligations and indebtedness under the Minimum Payment Guaranty)
         to which it is a party (in each case, to the extent such obligations
         and indebtedness relate to the Minimum Payment Guaranty) and the due
         performance and compliance by the Company and each such Credit Party
         with all of the terms, conditions and agreements contained in each such
         Minimum Payment Guaranty Document (all such principal, interest,
         obligations and liabilities described in this clause (ii) being herein
         collectively called the "Minimum Payment Obligations");

               (iii) the full and prompt payment when due (whether at the stated
         maturity, by acceleration or otherwise) of (x) the principal of and
         interest on the notes issued by, and loans made to, the Company under
         the Revolving Credit Agreement and all reimbursement obligations and
         unpaid drawings (together with interest thereon) with respect to the
         letters of credit issued (or assumed) under the Revolving Credit
         Agreement and (y) all other obligations and indebtedness (including,
         without limitation, indemnities, fees and expenses, enforcement costs
         (including reasonable attorneys' fees) and interest on such obligations
         and indebtedness), of each Credit Party to the Revolver Creditors,
         whether now existing or hereafter incurred under, arising out of or in
         connection with the Revolving Credit Agreement and the other Revolving
         Credit Documents and the due performance and compliance by each Credit
         Party with all of the terms, conditions and agreements contained in the
         Revolving Credit Agreement and the other Revolving Credit Documents

                                      -18-
<PAGE>   19

         (all such principal, interest, obligations and liabilities described in
         this clause (iii) being herein collectively called the "Revolving
         Credit Agreement Obligations");

                (iv) the full and prompt payment when due (whether at the stated
         maturity, by acceleration or otherwise) of (x) the principal of, and
         premium, if any, and interest on the Senior Notes and (y) all other
         obligations and indebtedness (including, without limitation,
         indemnities, fees and expenses, enforcement costs (including reasonable
         attorneys' fees) and interest on such obligations and indebtedness) of
         each Credit Party to the Senior Note Creditors, whether now existing or
         hereafter incurred under, arising out of or in connection with the
         Senior Notes, the other Senior Note Documents and the Shared Security
         Documents and the due performance and compliance by each Credit Party
         with all of the terms, conditions and agreements contained in the
         Senior Notes, the other Senior Note Documents and the Shared Security
         Documents (all such obligations and liabilities described in this
         clause (iv) being herein collectively called the "Senior Note
         Obligations");

                (v) any and all amounts owing to the Collateral Agent pursuant
         to, or as referenced in, this Agreement or any Shared Security
         Document, and any and all amounts (but without any interest thereon)
         owing to any Minimum Payment Guarantor pursuant to the subrogation
         provisions contained in Section 6(e) hereof; provided that with respect
         to the amounts described above as owing to any Minimum Payment
         Guarantor pursuant to the subrogation provisions contained in Section
         6(e) hereof, the respective amount paid by the Minimum Payment
         Guarantor to the Collateral Agent shall have been actually due and
         owing to the Collateral Agent at the time of the respective payment by
         such Minimum Payment Guarantor;

                (vi) any and all sums advanced by the Collateral Agent in
         order to preserve the Collateral or preserve its security interest in
         the Collateral; and

                (vii) in the event of any proceeding for the collection or
         enforcement of any indebtedness, obligations, or liabilities of the
         Company referred to in clauses (i), (ii), (iii) and (iv), after an
         Event of Default shall have occurred and be continuing, the reasonable
         expenses of re-taking, holding, preparing for sale or lease, selling or
         otherwise disposing of or realizing on the Collateral, or of any
         exercise by the Collateral Agent of its rights hereunder or under the
         Shared Security Documents, together with reasonable attorneys' fees and
         court costs.

                  "Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.

                  "Plan Effective Date" shall mean the "Effective Date" as
defined in the Plan of Reorganization (as defined in the Revolving Credit
Agreement as originally in effect).

                  "Pledge Agreement" shall mean the Pledge Agreement, dated as
of March 30, 2001, among JCC Holding and various of its Subsidiaries, as
Pledgors, and the Collateral Agent,

                                      -19-
<PAGE>   20

as Pledgee for the benefit of the Secured Creditors, as amended, modified or
supplemented from time to time.

                  "Pro Rata Share" shall have the meaning provided in Section
11(b) hereof.

                  "Protective Advance Obligations" shall have the meaning
provided in clause (i) of the definition of "Obligations."

                  "Protective Advances" shall have the meaning provided in
Section 4(e) hereof.

                  "Qualified Person" shall mean, with respect to any Revolver
Creditor party to the Revolving Credit Agreement on the date hereof or that
becomes a Revolver Creditor pursuant to the relevant provisions of the Revolving
Credit Agreement, a commercial bank, financial institutions or other "accredited
investor" (as defined in Regulation D of the Securities Act), which shall not
have been found unsuitable under, and, to the extent necessary, shall have
qualified or be presumed suitable under, the Gaming Regulations applicable to
lenders and the Casino Operating Contract.

                  "Required Creditors" shall mean the requisite percentage of
Secured Creditors which are needed to take actions with respect to a given Class
of Obligations, i.e., whether the Required Minimum Payment Guarantor Secured
Creditors, the Required Revolver Creditors or the Required Senior Noteholders.

                  "Required Minimum Payment Guarantor Secured Creditors" shall
mean, at any time, the Minimum Payment Guarantor or Minimum Payment Guarantors
which are designated as such pursuant to any then outstanding Minimum Payment
Guaranty or, if no such Minimum Payment Guaranty is then outstanding, are owed
amounts which are then due and payable (and have not yet been paid) pursuant to
the respective Minimum Payment Guaranty Documents (or if, pursuant to the terms
of the Minimum Payment Guaranty Documents, less than 100% of such Minimum
Payment Guarantors are required to take actions hereunder, such lesser
percentage as may be specified in the respective Minimum Payment Guaranty
Documents).

                  "Required Revolver Creditors" shall have the meaning assigned
that term in the Revolving Credit Agreement.

                  "Required Secured Creditors" shall have the meaning provided
in Section 4 hereof.

                  "Required Senior Noteholders" shall mean the "Required
Holders" under, and as defined in, the Senior Note Indenture.

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

                  "Revolver Note" shall mean each promissory note issued from
time to time pursuant to the Revolving Credit Agreement.

                                      -20-
<PAGE>   21

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

                  "Revolving Credit Agreement Obligations" shall have the
meaning provided in clause (iii) of the definition of "Obligations".

                  "Revolving Credit Documents" shall mean the Revolving Credit
Agreement and each instrument or document executed and delivered pursuant to or
in connection therewith, including without limitation all "Credit Documents"
under, and as defined in, the Revolving Credit Agreement as in effect on the
date hereof.

                  "Second Priority Secured Obligations" shall have the meaning
provided in Section 11(b) hereof.

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

                  "Secured Debt Agreements" shall mean and include the Shared
Security Documents, the Minimum Payment Guaranty Documents, the Revolving Credit
Documents and the Senior Note Documents.

                  "Security Agreement" shall mean the Security Agreement, dated
as of March 30, 2001, among JCC Holding and various of its Subsidiaries as
assignors, and the Collateral Agent, as secured party for the benefit of the
Secured Creditors as amended, modified or supplemented from time to time.

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

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

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

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

                  "Senior Note Obligations" shall have the meaning provided in
clause (iv) of the definition of "Obligations."

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

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

                  "Shared Security Documents" shall have the meaning provided in
Section 1 hereof.

                                      -21-

<PAGE>   22

                  "Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.

                  "Third Priority Secured Obligations" shall have the meaning
provided in Section 11(b) hereof.

                  13. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications hereunder shall be in writing
and shall be delivered or mailed by first class mail, postage prepaid, addressed
as follows:

                  (a)    if to the Company, at:

                                  One Canal Place
                                  365 Canal Street - Suite 900
                                  New Orleans, Louisiana 70130
                                  Telephone:  (504) 533-6017
                                  Telecopy:  (504) 533-6185
                                  Attention:  President

                  (b)    if to the Revolver Creditors, at each of the following:

                                  One Harrah's Court
                                  Las Vegas, NV 89119-4312
                                  Telephone: 702-407-6406
                                  Telecopy: 702-407-6405
                                  Attention:  Chuck Atwood

                                  One Harrah's Court
                                  Las Vegas, NV 89119-4312
                                  Telephone: 702-407-6393
                                  Telecopy: 702-407-6418
                                  Attention:  Steve Brammell

                                  1023 Cherry Road
                                  Memphis, TN 38117
                                  Telephone: 901-537-3439
                                  Telecopy: 901-537-3443
                                  Attention:  Tom Evans

                  (c)    if to the Collateral Agent, at:

                                      -22-
<PAGE>   23

                               The Bank of New York
                               10161 Centurion Parkway
                               Jacksonville, FL  32256
                               Telephone:  (800) 705-0384
                               Telecopy:  (904) 645-1979
                               Attention:  Cynthia Moore

                  (d)    if to the Senior Note Trustee, at:

                               Wells Fargo Bank Minnesota, National Association,
                               6th and Marquette
                               MAC-N9303-120
                               Minneapolis, Minnesota 55479
                               Telephone:  (612) 667-9764
                               Telecopy:  (612) 667-9825
                               Attention: Corporate Trust Department

                  (e)    if to any Senior Note Holder, to the Senior Note
                         Trustee at its address set forth above;

                  (f)    if to any Minimum Payment Guarantor at:

                               Harrah's Entertainment, Inc.
                               One Harrah's Court
                               Las Vegas, NV 89119
                               Telephone:  (702) 407-6393
                               Telecopy:  (702) 579-2671
                               Attention:  General Counsel

or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder;

                  (g) in addition to any other notices required or permitted to
be given pursuant to this Agreement, the Collateral Agent shall promptly provide
to each Authorized Representative (in accordance with the foregoing provisions
of this Section 13) copies of any notices received by the Collateral Agent under
or with respect to any of the Shared Secured Documents, the Casino Operating
Contract or the Casino Lease.

                  (h) In addition to any other notices required or permitted to
be given pursuant to this Agreement, the Collateral Agent shall, promptly after
its taking any enforcement action pursuant to this Agreement or any of the
Shared Security Documents, give the LGCB (at the address provided in the
following sentence) written notice of the enforcement action so taken; provided
that any failure or delay in giving any such notice shall not affect or impair
the validity of any such enforcement action and shall give rise to no liability
on the part of the Collateral Agent or any Secured Creditor. All notices to the
LGCB pursuant to this sentence shall be mailed (or sent by reputable courier) to
the LGCB at the following address (or such other address as the

                                      -23-
<PAGE>   24

LGCB furnishes to the Collateral Agent from time to time for its receipt of
notices pursuant to this Section):

                             Louisiana Gaming Control Board
                             9100 Bluebonnet Centre Blvd.
                             Suite 500
                             Baton Rouge, LA  70809
                             Attention:  Chairman

                  14. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

                  15. Miscellaneous. This Agreement shall be binding upon the
parties hereto (including the Credit Parties) and shall inure to the benefit of
and be enforceable by the successors and assigns of the parties hereto. Any
Person that becomes a Secured Creditor after the date hereof by its provision of
any Minimum Payment Guaranty or its acceptance of any Revolver Note, any Senior
Note or the benefits of any Shared Security Document, as the case may be, shall
be bound by the terms hereof. The headings in this Agreement are for purposes of
reference only and shall not limit or define the meaning hereof. This Agreement
may be executed in any number of counterparts, each of which shall be an
original, but all of which shall constitute one instrument. In the event that
any provision of this Agreement shall prove to be invalid or unenforceable, such
provision shall be deemed to be severable from the other provisions of this
Agreement which shall remain binding on all parties hereto.

                  16. Amendment or Waiver of this Agreement and the Shared
Security Documents Payment; Notice of Acceleration. (a) None of the terms and
conditions of this Agreement may be changed, waived, modified or varied in any
manner whatsoever unless in writing duly signed by the Required Revolver
Creditors, the Required Minimum Payment Guarantor Secured Creditors, the Senior
Note Trustee (with the consent of the Required Senior Noteholders) and the
Collateral Agent; provided, however, that if any such change, waiver,
modification or variance adversely affects any Credit Party, the written consent
of such Credit Party shall also be required.

                  (b) None of the terms and conditions of any Shared Security
Document may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the applicable Credit Party thereto and the
Collateral Agent with the written consent of the Required Secured Creditors
(and, to the extent such change, waiver, modification or variance results in the
release of all or substantially all of the Collateral pursuant to all the Shared
Security Documents, with the consent of each Senior Note Holder); provided,
however, that (1) any change, waiver, modification or variance affecting the
rights and benefits of a single Class of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall also require the written consent of
the Required Creditors of such affected Class and (2) any change, waiver,
modification or variance to (a) any of the Mortgage Release Provisions contained
in the Mortgages described in clauses (ii) through (iv), inclusive, of the
definition of Mortgage contained herein, (b) any provision contained in any
Mortgage described in clauses (i) through (iv),

                                      -24-
<PAGE>   25

inclusive, of the definition of Mortgage contained herein, stating a maximum
amount secured thereby to the extent that the maximum amount is decreased or (c)
any granting clause in any Mortgage (or otherwise effect any release or partial
release, other than in accordance with the Mortgagee Release Provisions)
described in clause (i) through (iv), inclusive, of the definition of Mortgage
contained herein, that releases or decreases the amount of Collateral subject to
the respective Mortgage (unless, in the case of a partial release, the
respective mortgagor certifies that the Collateral so released is not necessary
to the continued use of or conduct of business, if any, on the respective
property subject to such Mortgage) shall in any event as described in
sub-clauses (a), (b) and (c) of this clause (2) require the written consent of
both (x) the Required Revolving Creditors and (y) the Required Senior
Noteholders. For the purpose of this Agreement, the term "Class" shall mean each
class of Secured Creditors, i.e., whether (w) any Secured Creditors which have
made Protective Advances, with respect to such Protective Advances, (x) the
Minimum Payment Guarantors as holders of the Minimum Payment Obligations, (y)
the Revolver Creditors as holders of the Revolving Credit Agreement Obligations
or (z) the Senior Note Holders as holders of the Senior Note Obligations.
Notwithstanding anything to the contrary contained above, additional Credit
Parties may be added as parties to the various Shared Security Documents in
accordance with the terms thereof (and without requiring any consent as
otherwise contemplated by this Section 16(b)) and, to the extent provided in
Section 17 hereof, Collateral and/or various Credit Parties may from time to
time be released pursuant to the Shared Security Documents in accordance with
the provisions of said Section 17 (and without the requirement of any additional
vote pursuant to this Section 16).

                  (c) Each of the Minimum Payment Guarantors, the Revolver
Creditors and the Senior Note Trustee agrees to deliver to the Collateral Agent
and to the others:

                 (i) in the case of the Revolver Creditors, prompt written
         notice of the acceleration of the Revolving Credit Agreement
         Obligations (such notice to be provided in the same manner and
         substantially contemporaneously with any notice provided to the
         Company), although the failure to deliver any such notice shall not
         affect the validity of such acceleration;

                (ii) in the case of the Senior Note Trustee, prompt written
         notice of the acceleration of the Senior Note Obligations (such notice
         to be provided in the same manner and substantially contemporaneously
         with any notice provided to the Company), although the failure to
         deliver any such notice shall not affect the validity of such
         acceleration; and

               (iii) in the case of the Minimum Payment Guarantors, prompt
         written notice of any non-renewal of any then outstanding Minimum
         Payment Guaranty or any acceleration of any Minimum Payment Obligations
         (such notice to be provided in the same manner and substantially
         contemporaneously with any notice provided to the Company), although
         the failure to deliver any such notice shall not affect the validity of
         any such non-renewal or acceleration.

                  17. Termination; Release. (a) This Agreement shall terminate
on the first date upon which (i) no Protective Advances are outstanding (and if
any Protective Advances have

                                      -25-

<PAGE>   26

theretofore been made, all amounts owing in respect of Protective Advance
Obligations shall have been indefeasibly been paid in full), (ii) all
theretofore outstanding Minimum Payment Guaranties have expired in accordance
with their terms and all Minimum Payment Obligations which are then due and
payable have been indefeasibly paid in full, (iii) all commitments under, and
letters of credit issued pursuant to, the Revolving Credit Agreement have
terminated, and no Revolver Note issued thereunder remains outstanding and all
Revolving Credit Agreement Obligations have been indefeasibly paid in full and
(iv) no Senior Notes remain outstanding and all Senior Note Obligations have
been indefeasibly paid in full.

                  (b) In the event that any property subject to any Mortgage
(excluding the Mortgage described in clause (i) of the definition thereof
contained herein) is sold or disposed of in a transaction whereby a release of
the Mortgage on such property is permitted pursuant to Section 10(c) of the
Senior Note Indenture, and so long as the respective release does not give rise
to a violation of any of the provisions of the Secured Debt Agreements then in
effect, and so long as the respective Credit Party certifies to the Collateral
Agent that such release is permitted pursuant to Section 10.5(c) of the Senior
Note Indenture and does not give rise to a violation of the terms of any of the
Secured Debt Agreements, the Collateral Agent, at the request and expense of the
respective Credit Party, shall release the respective Mortgage pursuant to
documentation in form and substance reasonably satisfactory to the Collateral
Agent.

                  (c) In addition to releases pursuant to preceding clause (b),
in the event that any part of the Collateral (excluding property subject to any
of the Mortgages described in clauses (i) through (iv) of the definition thereof
contained herein, which can be released only pursuant to the provisions thereof)
is sold or otherwise disposed of in connection with a sale or other disposition
permitted by the relevant provisions of the Minimum Payment Guaranty Documents,
the Revolving Credit Agreement and the Senior Note Indenture or is otherwise
released at the direction of the Required Minimum Payment Secured Creditors, the
Required Revolver Creditors and, unless the release is permitted pursuant to the
terms of the Senior Note Indenture, the Senior Note Trustee acting at the
direction of the Required Senior Noteholders (and all the Revolver Creditors and
all Senior Note Holders in the case of a release of all or substantially all of
the Collateral under all the Shared Security Documents) and so long as the
respective Credit Party under the respective Shared Security Document certifies
to the Collateral Agent that such sale or other disposition or clause is
permitted by the Minimum Payment Guaranty Documents, the Revolving Credit
Agreement and the Senior Note Indenture and the proceeds of such sale or other
disposition or from such release shall be applied in the manner, if any,
required by the Minimum Payment Guaranty Documents, the Revolving Credit
Agreement and the Senior Note Indenture, the Collateral Agent, at the request
and expense of the respective Credit Party will duly assign, transfer and
deliver to the respective Credit Party (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold or otherwise disposed of or released and as may be in the
possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement or the Shared Security Documents.

                  (d) At any time that any Credit Party (other than JCC Holding
or the Company) is released from all of its obligations pursuant to all Secured
Debt Documents (as defined in the various Shared Security Documents) then in
effect, and so long as the occurrence of such release has been certified to the
Collateral Agent by the Minimum Payment Guarantors (with

                                      -26-
<PAGE>   27

respect to the Minimum Payment Guaranty Documents), HET (with respect to the
Revolving Credit Documents), the Senior Note Trustee (with respect to the Senior
Note Obligations) and the Company (with respect to all Obligations), and so long
as the Company certifies that the respective Credit Party has been released from
all of its Obligations (including any guaranties thereof), the respective Credit
Party shall be released by the Collateral Agent as a party to any Shared
Security Documents to which it is a party at such time, in accordance with the
provisions thereof.

                  (e) At any time that the respective Credit Party desires that
Collateral (or any Credit Party) be released as provided in the foregoing
Sections 17(a), (b), (c) or (d), it shall deliver to the Collateral Agent a
certificate signed by a principal executive officer of such Credit Party stating
that the release of the respective Collateral (or Credit Party) is permitted
pursuant to Sections 17(a), (b), (c) or (d). If requested by the Collateral
Agent (although the Collateral Agent shall have no obligation to make any such
request), the respective Credit Party shall furnish appropriate legal opinions
(from counsel acceptable to the Collateral Agent) to the effect set forth in the
immediately preceding sentence. The Collateral Agent shall have no liability
whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this Section 17.

                  18. Inconsistent Provisions. If any provision of this
Agreement shall be inconsistent with, or contrary to, any provision in any
Shared Security Document, including, without limitation, any provision of any
Shared Security Document limiting the amount payable to the Collateral Agent,
the provision in this Agreement shall be controlling, and shall supersede such
inconsistent provision to the extent necessary to give full effect to all
provisions contained in this Agreement.

                  19. Legends. (a) The Company and the Senior Note Creditors
hereby agree that (i) the Senior Note Indenture shall contain an appropriate
provision therein to the effect that such Senior Note Indenture, and the Senior
Notes issued thereunder, are subject to the terms of this Agreement, and (ii)
each Senior Note issued pursuant to the Senior Note Indenture shall contain the
following legend (which shall be printed thereon in bold face):

                  THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN
THE INTERCREDITOR AGREEMENT (AS DEFINED IN THE INDENTURE), WHICH INTERCREDITOR
AGREEMENT, AMONG OTHER THINGS, ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE
SECURITY FOR THIS NOTE AND THE SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER
SECURED CREDITORS (AS DEFINED IN THE INTERCREDITOR AGREEMENT). A COPY OF SUCH
INTERCREDITOR AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THIS NOTE UPON
REQUEST TO THE COMPANY.

                  (b) The Company and the Revolver Creditors hereby agree that
(i) the Revolving Credit Agreement shall contain an appropriate provision
therein to the effect that the Revolving Credit Agreement, and the Revolver
Notes issued thereunder, are subject to the terms of this Agreement and (ii)
each Revolver Note issued pursuant to the Revolving Credit Agreement shall
contain the following legend (which shall be printed thereon in bold face):

                                      -27-
<PAGE>   28

                  THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN
THE INTERCREDITOR AGREEMENT (AS DEFINED IN THE AGREEMENT), WHICH INTERCREDITOR
AGREEMENT, AMONG OTHER THINGS, ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE
SECURITY FOR THIS NOTE AND THE SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER
SECURED CREDITORS (AS DEFINED IN THE INTERCREDITOR AGREEMENT). A COPY OF SUCH
INTERCREDITOR AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THIS NOTE UPON
REQUEST TO THE COMPANY.

                  20. Co-Collateral Agents; Separate Collateral Agents. (a) If
at any time or times it shall be necessary or prudent in order to conform to any
law of any jurisdiction in which any of the Collateral shall be located, or the
Collateral Agent shall be advised by counsel, satisfactory to it and to the
Required Minimum Payment Guarantor Secured Creditors, the Required Revolver
Creditors and the Senior Note Trustee, that it is necessary or prudent or in the
interest of the Collateral Agent or the Secured Creditors, then the Collateral
Agent shall be entitled to appoint one or more sub-collateral agents or
co-collateral agents, and in such case the Collateral Agent, the Company and
each of the other Credit Parties having an interest in the Collateral located in
the State in which such separate or sub-collateral agent or co-collateral agent
is to act shall execute and deliver all instruments and agreements necessary or
proper to constitute another bank or trust company, or one or more individuals
approved by the Collateral Agent, either to act as co-collateral agent or
co-collateral agents jointly with the Collateral Agent originally named herein
or any successor or successors, or to act as a separate or sub-collateral agent
or agents of the Collateral Agent and the Secured Creditors in respect of any or
all of the Collateral. If the Company and each of the other Credit Parties
having an interest in the Collateral located in the State in which such separate
or sub-collateral agent or co-collateral agent is to act shall not have joined
in the execution of such instruments or agreements within ten (10) days after
the receipt of a written request from the Collateral Agent so to do, or if a
Default or an Event of Default shall be continuing, the Collateral Agent may act
under the foregoing provisions of this Section 20 without the concurrence of the
Company and the other Credit Parties, and the Company and each of the other
Credit Parties hereby irrevocably appoint the Collateral Agent as their agent
and attorney-in-fact to act for them under the foregoing provisions of this
Section 20 in either of such contingencies. Any co-collateral agent or separate
or sub-collateral agent appointed to act with respect to the Casino shall be a
Qualified Person.

                  (b) Every separate or sub-collateral agent (and all references
herein to a "separate collateral agent" shall be deemed to refer also to a
"sub-collateral agent" or a "collateral sub-agent") and every co-collateral
agent, other than any collateral agent which may be appointed as successor to
any Collateral Agent, shall, to the extent permitted by applicable law, be
appointed and act and be such, subject to the following provisions and
conditions, namely:

                 (i) all rights, remedies, powers, duties and obligations
         conferred upon, reserved to or imposed upon the Collateral Agent in
         respect of the custody, control and management of monies, papers or
         securities shall be exercised solely by the Collateral Agent hereunder;

                (ii) all rights, remedies, powers, duties and obligations
         conferred upon, reserved to or imposed upon the Collateral Agent
         hereunder shall be conferred, reserved or imposed

                                      -28-
<PAGE>   29

         and exercised or performed by the Collateral Agent and such separate
         collateral agent or separate collateral agents or co-collateral agent
         or co-collateral agents, jointly or severally, as shall be provided in
         the instrument appointing such separate collateral agent or separate
         collateral agents or co-collateral agent or co-collateral agents,
         except to the extent that, under any law of any jurisdiction in which
         any particular act or acts are to be performed, the Collateral Agent
         shall be incompetent or unqualified to perform such act or acts, in
         which event such rights, remedies, powers, duties and obligations shall
         be exercised and performed by such separate collateral agent or
         separate collateral agents or co-collateral agent or co-collateral
         agents;

               (iii) no power given hereby to, or which it is provided hereby
         may be exercised by, any such separate collateral agent or separate
         collateral agents or co-collateral agent or co-collateral agents shall
         be exercised hereunder by such separate collateral agent or separate
         collateral agents or co-collateral agent or co-collateral agents except
         (subject to applicable law) jointly with, or with the consent or at the
         direction in writing of, the Collateral Agent;

                (iv) all provisions of this Agreement relating to the Collateral
         Agent or to releases of Collateral shall apply to any such separate
         collateral agent or separate collateral agents or co-collateral agent
         or co-collateral agents;

                 (v) no collateral agent constituted under this Section 20 shall
         be personally liable by reason of any act or omission of any other
         separate or co-collateral agent or the Collateral Agent hereunder; and

                (vi) the Collateral Agent at any time by an instrument in
         writing, executed by it, may accept the resignation of any such
         separate collateral agent or co-collateral agent and the Collateral
         Agent or the Required Secured Creditors may individually or jointly
         remove any such separate collateral agent or co-collateral agent, and
         in that case, by an instrument in writing executed by the Collateral
         Agent or the Required Secured Creditors, as the case may be, and the
         Collateral Agent or the Required Secured Creditors, as the case may be,
         may appoint a successor to such separate collateral agent or
         co-collateral agent, as the case may be, anything herein contained to
         the contrary notwithstanding. If the Company and each of the other
         Credit Parties shall not have joined in the execution of any such
         instrument within 10 days after the receipt of a written request from
         the Collateral Agent so to do, or if a Default or an Event of Default
         shall be continuing, the Collateral Agent shall have the power to
         accept the resignation of or remove any such separate collateral agent
         or co-collateral agent and to appoint a successor to such separate
         collateral agent or co-collateral agent, as the case may be, and to
         execute any such instrument without the concurrence of the Company or
         such other Credit Party, and the Company and each of the other Credit
         Parties hereby irrevocably appoint the Collateral Agent their agent and
         attorney-in-fact to act for them in such connection in either of such
         contingencies. If the Collateral Agent shall have appointed a separate
         collateral agent or separate collateral agents or co-collateral agent
         or co-collateral agents as above provided, the Collateral Agent may at
         any time, by an instrument in writing, accept the resignation of or
         remove any such separate collateral agent or co-collateral agent, the
         successor to any such

                                      -29-
<PAGE>   30

         separate collateral agent or co-collateral agent to be appointed by the
         Required Secured Creditors, or by the Collateral Agent alone, as
         hereinabove provided in this Section 20.

                  (c) Notwithstanding any other provision of this Section 20,
the Collateral Agent shall not appoint any separate collateral agent or
co-collateral agent without the consent of the Minimum Payment Guarantors, HET
and the Senior Note Trustee.

                  21. Special Provisions regarding Minimum Payment Guarantors.
As contemplated by Section 15 hereof, this Agreement shall be binding upon the
successors and assigns of HET and HOC, as the Minimum Payment Guarantors
originally party hereto. In addition to the provisions of the immediately
preceding sentence, if any other Person at any time furnishes any substitute or
replacement Minimum Payment Guaranty (unless such Minimum Payment Guaranty is
being provided on an unsecured basis), then each such person or entity which so
furnishes a successor or replacement Minimum Payment Guaranty (or becomes a
Minimum Payment Guarantor, either individually or jointly and severally with any
other Person) shall be required (and JCC Holding and the Company shall cause
each such Person) to become a party to this Agreement (concurrently with its
providing any such Minimum Payment Guaranty or becoming a Minimum Payment
Guarantor), by executing and delivering to the Collateral Agent an instrument in
writing, in substantially the form of Annex A hereto, pursuant to which it
becomes a party hereto as a Minimum Payment Guarantor. Any Person furnishing a
Minimum Payment Guaranty (or becoming a Minimum Payment Guarantor) which does
not so become a party hereto shall not be entitled to the benefits (and shall
not be secured by) any of the Shared Security Documents.

                  22. Rights under Casino Lease. The parties hereto acknowledge
that, for purposes of the Casino Lease, the Collateral Agent shall be the "First
Leasehold Mortgagee" under and as defined in the Casino Lease and the exercise
of any and all rights granted the Collateral Agent as the First Leasehold
Mortgagee under the Casino Lease shall be subject to and in accordance with the
terms and conditions of this Agreement, including, without limitation, the
provisions of Sections 4 and 11 hereof.

                  23. Additional Collateral. Each Secured Creditor hereby agrees
for the benefit of the other Secured Creditors that, except as otherwise
specifically provided in Section 11(h) hereof and in the immediately succeeding
sentence, to the extent any additional or substitute collateral for any of the
Obligations is delivered by JCC Holding or any of its Subsidiaries to or for the
benefit of any Secured Creditor, such collateral shall be subject to the
provisions of this Agreement and the interest of such Secured Creditor therein
shall be immediately transferred to the Collateral Agent. The foregoing
provisions shall not apply to any cash payments received by any Authorized
Representative or Secured Creditor in advance (but not more than ten (10)
Business Days in advance) of the date such cash is to be applied to the payment
of any Obligations or to any cash or cash equivalents required to be delivered
at any time as collateral for one or more outstanding letters of credit pursuant
to the Revolving Credit Agreement.

                  24. No Third Party Beneficiaries. This Agreement is entered
into solely for the benefit of the parties hereto and their respective
successors and assigns and for the benefit of the Secured Creditors from time to
time and their respective successors and assigns and, except for the Secured
Creditors and their successors and assigns, there shall be no third party
beneficiaries

                                      -30-
<PAGE>   31

hereof, nor shall any Person other than the parties hereto and their respective
successors and assigns, and the Secured Creditors and their respective
successors and assigns, be entitled to enforce the provisions hereof or have any
claims against any party hereto (or any Secured Creditor) or their successors
and assigns arising from, or under, this Agreement; provided that this Agreement
shall create no rights or claims in favor of any Credit Party.

                                      * * *

                                      -31-
<PAGE>   32

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

                                       THE BANK OF NEW YORK,
                                         as Collateral Agent

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

                                       WELLS FARGO BANK MINNESOTA,
                                          National Association,
                                          as Senior Note Trustee

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

                                       HARRAH'S ENTERTAINMENT, INC.,
                                           as a Minimum Payment Guarantor and
                                           as a Revolver Creditor

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

                                       HARRAH'S OPERATING COMPANY, INC.,
                                           as a Minimum Payment Guarantor and as
                                           a Revolver Creditor

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

<PAGE>   33

                                      HARRAH'S NEW ORLEANS MANAGEMENT
                                          COMPANY, as a Revolver Creditor

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

Acknowledged and Agreed to
as of the date first above
written:

JCC HOLDING COMPANY

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

JAZZ CASINO COMPANY, L.L.C.

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

JCC CANAL DEVELOPMENT, L.L.C.

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

JCC FULTON DEVELOPMENT, L.L.C.

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

JCC DEVELOPMENT COMPANY, L.L.C.

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

<PAGE>   34

                                              ANNEX A TO INTERCREDITOR AGREEMENT

                       FORM OF JOINDER AGREEMENT TO BECOME
                      PARTY TO THE INTERCREDITOR AGREEMENT

[Name and Address of
Collateral Agent]

         Re: Intercreditor Agreement dated as of March 30, 2001, as amended

         Reference is hereby made to that certain Intercreditor Agreement dated
as of March 30, 2001, among the various Secured Creditors described therein and
you, as Collateral Agent (the "Intercreditor Agreement"). Unless otherwise
defined herein, capitalized terms used herein and defined in the Intercreditor
Agreement are used herein as therein defined.

         The undersigned hereby notifies you that it has provided, or will be
providing, a Minimum Payment Guaranty to the State of Louisiana by and through
the LGCB in accordance with the provisions of Section 25.1 of the Casino
Operating Contract. As a result of the execution and delivery of this Agreement
by the undersigned, the undersigned hereby agrees to become a party to the
Intercreditor Agreement as a Minimum Payment Guarantor thereunder, in each case
in accordance with the terms and provisions of the Intercreditor Agreement. The
undersigned agrees to comply with its obligations (including without limitation
those set forth in Section 6(c) and (d) thereof) as a party to the Intercreditor
Agreement as a Minimum Payment Guarantor thereunder.

         IN WITNESS WHEREOF, this Agreement is executed and delivered as of this
____ day of ____, ____.

   [Address of Minimum Payment Guarantor] [Name of Minimum Payment Guarantor]

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

Accepted and Agreed as of this ___ day of ____, ____:

[Name of Collateral Agent], as Collateral Agent

By
  -----------------------------------------
  Name:
  Title:<PAGE>   1
                                                                    EXHIBIT 4.06

================================================================================

                           REVOLVING CREDIT AGREEMENT

                                      AMONG

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

                              JCC HOLDING COMPANY,
                         JCC CANAL DEVELOPMENT, L.L.C.,
                       JCC FULTON DEVELOPMENT, L.L.C. AND
                 JCC DEVELOPMENT COMPANY, L.L.C., as Guarantors,

                                       AND

                          HARRAH'S ENTERTAINMENT, INC.,
                      HARRAH'S OPERATING COMPANY, INC., and
               HARRAH'S NEW ORLEANS MANAGEMENT COMPANY, as Lenders

                           Dated as of March 30, 2001

================================================================================

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----

<S>                                                                         <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE.........................1

   SECTION 1.1      DEFINITIONS...............................................1
   SECTION 1.2      RULES OF CONSTRUCTION....................................26

ARTICLE II. TERMS OF CREDIT..................................................26

   SECTION 2.1      THE REVOLVING LOANS......................................26
   SECTION 2.2      MINIMUM AMOUNT OF EACH REVOLVING LOAN....................27
   SECTION 2.3      NOTICE OF BORROWING......................................27
   SECTION 2.4      DISBURSEMENT OF FUNDS....................................27
   SECTION 2.5      NOTE.....................................................27
   SECTION 2.6      CONTINUATIONS AND CONVERSIONS INTO REVOLVING LOANS OF
                      ANOTHER TYPE...........................................28
   SECTION 2.7      INTEREST.................................................29
   SECTION 2.8      INTEREST PERIODS.........................................29
   SECTION 2.9      INCREASED COSTS, ILLEGALITY, ETC.........................30
   SECTION 2.10     COMPENSATION.............................................32
   SECTION 2.11     LETTERS OF CREDIT........................................32
   SECTION 2.12     MINIMUM STATED AMOUNT....................................34
   SECTION 2.13     LETTER OF CREDIT OBLIGATION REQUESTS.....................34
   SECTION 2.14     AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS.............34
   SECTION 2.15     INCREASED COSTS..........................................35

ARTICLE III. FEES; REDUCTIONS OF REVOLVING LOAN COMMITMENT AND PAYMENTS......36

   SECTION 3.1      FEES.....................................................36
   SECTION 3.2      REDUCTIONS OF THE TOTAL UNUTILIZED REVOLVING LOAN
                      COMMITMENT.............................................37
   SECTION 3.3      MANDATORY TERMINATION OF REVOLVING LOAN COMMITMENT.......37
   SECTION 3.4      VOLUNTARY AND MANDATORY PREPAYMENTS......................37
   SECTION 3.5      MANDATORY REPAYMENTS.....................................37
   SECTION 3.6      METHOD AND PLACE OF PAYMENT..............................38
   SECTION 3.7      NET PAYMENTS.............................................38

ARTICLE IV. SECURITY.........................................................39

   SECTION 4.1      SECURITY INTEREST........................................39
   SECTION 4.2      RECORDING; OPINIONS OF COUNSEL...........................39
   SECTION 4.3      DISPOSITION OF CERTAIN COLLATERAL........................40
   SECTION 4.4      NET CASH PROCEEDS ACCOUNT................................41
   SECTION 4.5      CERTAIN RELEASES OF COLLATERAL...........................42
   SECTION 4.6      LIEN PRIORITIES..........................................42
   SECTION 4.7      PAYMENT OF EXPENSES......................................43
   SECTION 4.8      SUITS TO PROTECT THE COLLATERAL..........................43
   SECTION 4.9      LENDER'S DUTIES..........................................43
   SECTION 4.10     SECURITY DOCUMENTS.......................................44

ARTICLE V. COVENANTS.........................................................44

   SECTION 5.1      PAYMENT OF REVOLVING OBLIGATIONS AND PIK PAYMENTS........44
   SECTION 5.2      INFORMATION COVENANTS; COMPLIANCE CERTIFICATE; NOTICE OF
                      DEFAULT................................................44
   SECTION 5.3      END OF FISCAL YEARS; FISCAL QUARTERS.....................48
   SECTION 5.4      MAINTENANCE OF OPERATING ACCOUNT.........................48
   SECTION 5.5      LIMITATION ON RESTRICTED PAYMENTS........................49
   SECTION 5.6      EXISTENCE................................................50
</TABLE>

                                       i
<PAGE>   3

<TABLE>
<S>                                                                         <C>
   SECTION 5.7      PAYMENT OF TAXES AND OTHER CLAIMS........................50
   SECTION 5.8      MAINTENANCE OF INSURANCE.................................51
   SECTION 5.9      REPORTS..................................................51
   SECTION 5.10     WAIVER OF STAY, EXTENSION OR USURY LAWS..................51
   SECTION 5.11     TRANSACTIONS WITH AFFILIATES.............................51
   SECTION 5.12     LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS......52
   SECTION 5.13     LIMITATION ON LIENS......................................53
   SECTION 5.14     CONSOLIDATION, MERGER, PURCHASE OR SALE OF ASSETS, ETC...56
   SECTION 5.15     LIMITATION ON PAYMENTS OF CERTAIN INDEBTEDNESS,
                      MODIFICATIONS OF CERTAIN INDEBTEDNESS, MODIFICATIONS OF
                      CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN
                      OTHER AGREEMENTS, ETC..................................57
   SECTION 5.16     [INTENTIONALLY OMITTED.].................................57
   SECTION 5.17     COMPLIANCE WITH ENVIRONMENTAL LAWS.......................57
   SECTION 5.18     CAPITAL EXPENDITURES.....................................58
   SECTION 5.19     ADVANCES, INVESTMENTS AND LOANS..........................59
   SECTION 5.20     LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.......59
   SECTION 5.21     BUSINESS.................................................60
   SECTION 5.22     ADDITIONAL SECURITY AND FURTHER ASSURANCES...............60
   SECTION 5.23     USE OF PROCEEDS..........................................61
   SECTION 5.24     MINIMUM EBITDA...........................................61
   SECTION 5.25     NOTICES..................................................61
   SECTION 5.26     LIMITATION ON ISSUANCE OF EQUITY INTERESTS...............61
   SECTION 5.27     LIMITATION ON CREATION OF SUBSIDIARIES...................62
   SECTION 5.28     CASINO MANAGER...........................................62
   SECTION 5.29     SEPARATENESS FROM UNRESTRICTED SUBSIDIARIES..............62
   SECTION 5.30     REPLACEMENT FACILITY.....................................63
   SECTION 5.31     LIMITATION ON CERTAIN OUTSTANDING OBLIGATIONS............64
   SECTION 5.32     MINIMUM PROJECTED EBITDAM ...............................64
   SECTION 5.33     POST-CLOSING ITEMS.......................................64

ARTICLE VI. EVENTS OF DEFAULT AND REMEDIES...................................65

   SECTION 6.1      EVENTS OF DEFAULT........................................65
   SECTION 6.2      ACCELERATION AND ENFORCEMENT.............................70

ARTICLE VII. GUARANTY........................................................70

   SECTION 7.1      GUARANTY.................................................70
   SECTION 7.2      PARENT GUARANTY..........................................72
   SECTION 7.3      [INTENTIONALLY OMITTED]..................................73
   SECTION 7.4      FUTURE SUBSIDIARY GUARANTORS.............................73
   SECTION 7.5      RELEASE OF GUARANTORS....................................74
   SECTION 7.6      WHEN THE GUARANTOR MAY MERGE, ETC........................75
   SECTION 7.7      CERTAIN BANKRUPTCY EVENTS................................76

ARTICLE VIII. MISCELLANEOUS..................................................76

   SECTION 8.1      PAYMENT OF EXPENSES, ETC.................................76
   SECTION 8.2      [INTENTIONALLY OMITTED]..................................77
   SECTION 8.3      NOTICES..................................................77
   SECTION 8.4      BENEFIT OF AGREEMENT.....................................78
   SECTION 8.5      NO WAIVER; REMEDIES CUMULATIVE...........................78
   SECTION 8.6      CALCULATIONS; COMPUTATIONS...............................78
   SECTION 8.7      GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
                      OF JURY TRIAL..........................................78
   SECTION 8.8      COUNTERPARTS.............................................80
   SECTION 8.9      EFFECTIVENESS............................................80
   SECTION 8.10     HEADINGS DESCRIPTIVE.....................................80
</TABLE>

                                       ii
<PAGE>   4

<TABLE>
<S>                                                                         <C>
   SECTION 8.11     AMENDMENT OR WAIVER; ETC. ...............................80
   SECTION 8.12     SURVIVAL.................................................80
   SECTION 8.13     DOMICILE OF LOANS........................................80
   SECTION 8.14     APPLICATION OF GAMING REGULATIONS........................81
   SECTION 8.15     NO THIRD PARTY BENEFICIARIES.............................81
   SECTION 8.16     LENDER PARTIES...........................................81
</TABLE>

EXHIBITS

Exhibit A-1       Form of Notice of Borrowing
Exhibit A-2       Form of Promissory Note
Exhibit A-3       Form of Letter of Credit Obligation Request
Exhibit B         Conditions; Representations, Warranties and Agreements
Exhibit C-1       Form of Adams & Reese Opinion
Exhibit C-2       Form of William H. Patrick Opinion
Exhibit C-3       Form of Pilsbury Winthrop, LLP Opinion
Exhibit D         Form of Officer's Certificate
Exhibit E         Form of Pledge Agreement (Exhibit 4.07 to 10K/A)
Exhibit F         Form of Security Agreement (Exhibit 4.05 to 10K/A)
Exhibit G-1       Form of Borrower Mortgage (Exhibit 10.12 to 10K/A)
Exhibit G-2       Form of JCC Development Mortgage (Exhibit 10.15 to 10K/A)
Exhibit G-3       Form of Canal Development Mortgage (Exhibit 10.13 to 10K/A)
Exhibit G-4       Form of Fulton Development Mortgage (Exhibit 10.14 to 10K/A)
Exhibit H         Form of Intercreditor Agreement (Exhibit 4.05 to 10K/A)
Exhibit I         Form of Consent Letter
Exhibit J         Form of Subordination Terms (Exhibit 4.04 to 10K/A)
Exhibit K         Form of Letter of Credit Guaranty for Existing Letters of
                    Credit
Exhibit L         Form of Registration Rights Agreement (Common Stock)
                    (Exhibit 4.03 to 10K/A)
Exhibit M         Form of Registration Rights Agreement (Senior Notes)
                    (Exhibit 4.02 to 10K/A)
Exhibit N         Litigation

                                       iii
<PAGE>   5

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----

EXHIBITS
--------
<S>               <C>
Exhibit A-1       Form of Notice of Borrowing
Exhibit A-2       Form of Note
Exhibit A-3       Form of Letter of Credit Obligation Request
Exhibit B         Conditions; Representations, Warranties and Agreements
Exhibit C-1       Form of Adams & Reese Opinion
Exhibit C-2       Form of William H. Patrick Opinion
Exhibit C-3       Form of Pilsbury Winthrop, LLP Opinion
Exhibit D         Form of Officer's Certificate
Exhibit E         Form of Pledge Agreement
Exhibit F         Form of Security Agreement
Exhibit G-1       Form of Borrower Mortgage
Exhibit G-2       Form of JCC Development Mortgage
Exhibit G-3       Form of Canal Development Mortgage
Exhibit G-4       Form of Fulton Development Mortgage
Exhibit H         Form of Intercreditor Agreement
Exhibit I         Form of Consent Letter
Exhibit J         Form of Subordination Terms
Exhibit K         Form of Letter of Credit Guaranty for Existing Letters of
                    Credit
Exhibit L         Form of Registration Rights Agreement (Common Stock)
Exhibit M         Form of Registration Rights Agreement (Senior Notes)
Exhibit N         Litigation
</TABLE>

<PAGE>   6

         REVOLVING CREDIT AGREEMENT, dated as of March 30, 2001, among Jazz
Casino Company, L.L.C., a Louisiana limited liability company, as borrower, JCC
Holding Company, a Delaware corporation, JCC Canal Development, L.L.C., a
Louisiana limited liability company, JCC Fulton Development, L.L.C., a Louisiana
limited liability company, and JCC Development Company, L.L.C., a Louisiana
limited liability company, as guarantors, and Harrah's Entertainment, Inc., a
Delaware corporation, Harrah's Operating Company, Inc., a Delaware corporation,
and Harrah's New Orleans Management Company, a Nevada corporation, as lenders.

    Each party hereto agrees as follows for the benefit of each other party:

                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

         Section 1.1 Definitions.

                  "ADDITIONAL MORTGAGE" shall have the meaning provided in
Section 5.22(a).

                  "ADDITIONAL MORTGAGED PROPERTY" shall have the meaning
provided in Section 5.22(a).

                  "ADDITIONAL SECURITY DOCUMENTS" shall have the meaning
provided in Section 5.22(b).

                  "AFFILIATE" means (i) any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person, (ii) any spouse, immediate family member, or other relative who has
the same principal residence of any Person described in clause (i) above, and
(iii) any trust in which any Person described in clause (i) or (ii) above has a
beneficial interest. For purposes of this definition, the term "control" means
(a) the power to direct the management and policies of a Person, directly or
through one or more intermediaries, whether through the ownership of voting
securities, by contract, or otherwise, or (b) the beneficial ownership of 30% or
more of the voting Equity Interest of a Person (on a fully diluted basis).
Notwithstanding the foregoing, no holder of Equity Interests of JCC Holding
received pursuant to the Plan of Reorganization (other than HET and its
Subsidiaries and Affiliates) shall constitute an Affiliate of the Borrower or
JCC Holding or any of their Subsidiaries, in each case unless the respective
holder acquires control of JCC Holding or the Borrower as a result of its
beneficial ownership of 30% or more of the voting Equity Interests of JCC
Holding or the Borrower, as the case may be. Unless the context (or a specific
reference) otherwise requires, all references herein to an "Affiliate" or
"Affiliates" shall be references to an "Affiliate" or "Affiliates" of the
Borrower or any Guarantor.

                  "AGREEMENT" shall mean this Revolving Credit Agreement, as
modified, supplemented, amended, restated (including any amendment and
restatement thereof), extended, renewed, refinanced or replaced from time to
time.

<PAGE>   7

                  "APPLICABLE MARGIN" at any time shall mean a percentage per
annum equal to (i) in the case of Revolving Loans maintained as Eurodollar
Loans, 3.00%, and (ii) in the case of Revolving Loans maintained as Base Rate
Loans, 2.00%.

                  "ASSET SALE" means the conveyance, sale, transfer, assignment
or other disposition of, directly or indirectly, any property, business or
assets of the Borrower or any of its Subsidiaries (other than the Equity
Interests or other interests of an Unrestricted Subsidiary), including, without
limitation, any sale or other transfer or issuance of any Equity Interest of any
Subsidiary of the Borrower or any sale and leaseback transaction, whether by the
Borrower or a Subsidiary of the Borrower or the issuance, sale or transfer of
Equity Interests by a Subsidiary of the Borrower.

                  "AUTHORIZED REPRESENTATIVE" means, (i) with respect to any
Person that is a corporation, or any Person that has two or more Officers, any
Officer thereof, and (ii) with respect to any Person that is a limited liability
company and that has fewer than two Officers, an Officer or the manager of such
liability company, and (iii) with respect to any Person that is a partnership
and that has fewer than two Officers, an Officer of a general partner of such
partnership.

                  "BANK OF AMERICA" means Bank of America National Trust and
Savings Association, its successors and assigns.

                  "BANKRUPTCY CODE" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.

                  "BANKRUPTCY COURT" shall mean the United States Bankruptcy
Court for the Eastern District of Louisiana having jurisdiction over the
bankruptcy case of the Borrower.

                  "BANKRUPTCY LAW" means the Bankruptcy Code or any similar
Federal, state or foreign law relating to bankruptcy, insolvency or the relief
of debtors.

                  "BASE RATE" means, as of any date of determination, the rate
per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the
higher of (a) the Reference Rate in effect on such date (calculated on the basis
of a year of 365 or 366 days and the actual number of days elapsed) and (b) the
Federal Funds Rate in effect on such date (calculated on the basis of a year of
360 days and the actual number of days elapsed) plus 1/2 of 1% (50 basis
points).

                  "BASE RATE LOAN" shall mean each Revolving Loan designated as
such under the terms of this Agreement at the time of the incurrence thereof or
conversion thereto.

                  "BOARD OF DIRECTORS" means, with respect to any Person, the
Board of Directors of such Person or any committee of the Board of Directors of
such Person authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.

                                       2
<PAGE>   8

                  "BORROWER" shall mean Jazz Casino Company, L.L.C., a Louisiana
limited liability company, and its successors.

                  "BORROWER MORTGAGE" shall have the meaning provided in Section
16 of Part I of Exhibit B.

                  "BORROWER MORTGAGED PROPERTY" shall have the meaning provided
in Section 16 of Part I of Exhibit B.

                  "BORROWING" shall mean the borrowing by the Borrower of one
Type of Revolving Loan on a given date (or resulting from a conversion of one
Type of Revolving Loan to another Type or from a continuation of an Interest
Period to another Interest Period on such date).

                  "BTCO PAYMENT OFFICE" means the office of Bankers Trust
Company located at 130 Liberty Street, New York, New York 10006, or such other
office as may be designated from time to time in writing by Bankers Trust
Company to the Borrower as the BTCo Payment Office for purposes of this
Agreement.

                  "BUSINESS DAY" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City a legal holiday or a day on which banking institutions
are authorized or required by law or other government action to close and (ii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the Designated Eurodollar Market.

                  "CANAL DEVELOPMENT" means JCC Canal Development, L.L.C.,
(f/k/a CP Development, L.L.C.), a Louisiana limited liability company, and its
successors, and which, on the Effective Date, is a direct Wholly-Owned
Subsidiary of JCC Holding.

                  "CANAL DEVELOPMENT MORTGAGE" shall have the meaning provided
in Section 16 of Part I of Exhibit B.

                  "CANAL DEVELOPMENT MORTGAGED PROPERTY" shall have the meaning
provided in Section 16 of Part I of Exhibit B.

                  "CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
generally accepted accounting principles) and the amount of Capitalized Lease
Obligations incurred by such Person.

                  "CAPITALIZED LEASE OBLIGATIONS" of any Person means all rental
obligations that are or will be required to be capitalized for financial
reporting purposes in

                                       3
<PAGE>   9
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations, as determined
in accordance with GAAP.

                  "CASH" means such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.

                  "CASH EQUIVALENT" means (i) securities issued or directly and
fully guaranteed, or secured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) and in each case maturing
within one year after the date of acquisition, (ii) time deposits and
certificates of deposit of any commercial bank having, or which is the principal
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof, the District of Columbia or any foreign jurisdiction
having capital and surplus in excess of $250,000,000 and maturing within one
year after the date of acquisition, (iii) commercial paper issued by others
rated at least A-2 or the equivalent thereof by Standard & Poor's Corporation
and at least P-2 or the equivalent thereof by Moody's Investors Service, Inc.
and maturing within one year after the date of acquisition, (iv) repurchase
obligations with a term of not more than 90 days collateralized by securities
issued or directly and fully guaranteed, or secured by the United States of
America or any agency or instrumentality thereof (provided that the full faith
and credit of the United States of America is pledged in support thereof)
entered into with any bank or other person meeting the qualifications specified
in clause (ii) above, and (v) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (i) through (iv).

                  "CASINO" means the casino located at the site of the former
Rivergate Convention Center in New Orleans, Louisiana, together with all support
facilities and improvements appurtenant and related thereto (including, without
limitation, the Poydras Street Support Facility and the Poydras Tunnel Area and
shell construction of the Second Floor), but excluding tenant improvements and
non-gaming development of the Second Floor.

                  "CASINO LEASE" shall mean the Amended and Restated Lease
Agreement among the RDC, as landlord, the Borrower, as tenant, and the City, as
intervenor, dated as of October 29, 1998, as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof.

                  "CASINO OPERATING CONTRACT" means the Amended and Renegotiated
Casino Operating Contract among Harrah's Jazz Company, the Borrower and the
State of Louisiana by and through the Louisiana Gaming Control Board, dated
October 30, 1998, as amended by that certain First Amendment to Amended and
Renegotiated Casino Operating Contract dated October 19, 1999 and further
amended by the Second Amendment to Amended and Renegotiated Casino Operating
Contract dated March 30, 2001, as it may be amended or supplemented from time to
time.

                  "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 et seq.

                                       4
<PAGE>   10

                  "CHANGE OF CONTROL" shall mean (i) JCC Holding shall at any
time cease to own 100% of the Equity Interests of the Borrower, (ii) the Board
of Directors of JCC Holding shall not consist of a majority of Continuing
Directors or (iii) the acquisition by any Person or "group" (within the meaning
of sections 13(d) and 14(d) under the Exchange Act, as in effect on the Initial
Borrowing Date) (other than HET or its Subsidiaries) of beneficial ownership of
50% or more of the voting or economic interest in the Equity Interests of JCC
Holding.

                  "CITY" means the City of New Orleans, Louisiana.

                  "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder. Section references to the Code are to the Code, as in effect
at the date of this Agreement, and to any subsequent provision of the Code,
amendatory thereof, supplemental thereto or substituted therefor.

                  "COLLATERAL" shall mean all Property (whether real or
personal) of the Borrower and the Guarantors with respect to which any security
interests have been granted (or purported to be granted) pursuant to any
Security Document, including, without limitation, all Pledge Agreement
Collateral, all Security Agreement Collateral, all Mortgaged Properties and all
Cash and Cash Equivalents delivered as collateral pursuant to any Security
Document.

                  "COLLATERAL AGENT" shall mean The Bank of New York, or any
successor Collateral Agent, acting as collateral agent for the Secured Creditors
pursuant to the Security Documents and any sub agents or sub trustees appointed
pursuant to the Intercreditor Agreement and permitted under applicable Gaming
Regulations.

                  "CONFIRMATION ORDER" shall mean the order of the Bankruptcy
Court confirming the Plan of Reorganization pursuant to Sections 1128 and 1129
of the Bankruptcy Code entered on March 19, 2001.

                  "CONSOLIDATED CASH INTEREST EXPENSE" shall mean, for any
period, the total consolidated interest expense of Borrower and its Consolidated
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion of Capitalized
Lease Obligations of the Borrower and its Consolidated Subsidiaries representing
the interest factor for such period, but excluding, however, (without
duplication) (x) all amortization of deferred financing costs and amortization
of any premium or discount and other non-cash items that are part of such
consolidated interest expense and (y) any interest payment made through the
issuance of additional notes or securities (including Senior Notes), in lieu of
Cash, in each case in accordance with the terms of the respective documentation
relating thereto. For periods prior to the Effective Date, Consolidated Cash
Interest Expense shall include all interest expense required to be paid in cash
in accordance with the documentation relating thereto, regardless of any
write-downs, write-offs or other treatment thereof pursuant to the Plan of
Reorganization.

                  "CONSOLIDATED EBIT" shall mean, for any period, the
Consolidated Net Income for such period plus (without duplication) (i) the
amount of consolidated interest expense (to the extent same was deducted in
determining Consolidated Net Income for such period), and

                                       5
<PAGE>   11
(ii) provision for taxes based on income (to the extent deducted in determining
Consolidated Net Income for such period, but excluding gaming and similar taxes)
and without giving effect to any extraordinary gains or losses or gains or
losses from sales of assets.

                  "CONSOLIDATED EBITDA" shall mean, for any period, Consolidated
EBIT, adjusted by (i) adding thereto the amount of all amortization of
intangibles and depreciation expenses that were deducted in arriving at
Consolidated EBIT for such period and (ii) subtracting therefrom the amount of
payments made to, or on behalf of, JCC Holding as contemplated by Section 5.5(v)
for such period to the extent such amounts have not already been deducted in
arriving at Consolidated EBITDA for such period.

                  "CONSOLIDATED INTEREST COVERAGE RATIO" for any period shall
mean the ratio of Consolidated EBITDA to Consolidated Cash Interest Expense for
such period.

                  "CONSOLIDATED NET INCOME" shall mean, for any period, the net
income of the Borrower and its Consolidated Subsidiaries for such period
determined in accordance with GAAP; provided that (without duplication of
exclusions) (i) the net income (to the extent positive) of any Person that is
not a Subsidiary of the Borrower or that is accounted for by the equity method
of accounting shall be included only to the extent of the amount of dividends or
distributions paid in Cash to the Borrower or a Wholly-Owned Subsidiary thereof,
(ii) to the extent Consolidated Net Income reflects amounts attributable to
minority interests in Subsidiaries that are not Wholly-Owned Subsidiaries of the
Borrower, Consolidated Net Income shall be reduced by the amounts attributable
to such minority interests, (iii) the net income of any Subsidiary (other than
the Borrower) shall be excluded to the extent that the declaration or payment of
dividends and distributions by that Subsidiary of net income is not at the date
of determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders and
(iv) the net income of any Person acquired in a pooling of interests transaction
for any period prior to the date of such acquisition shall be excluded.

                  "CONSOLIDATED SUBSIDIARIES" means, for any Person, all
Subsidiaries of such Person (whether now existing or hereafter created or
acquired) the financial statements of which are or are required to be
consolidated for financial statement reporting purposes with the financial
statements of such Person in accordance with GAAP.

                  "CONTINGENT OBLIGATION" shall mean, as to any Person, any
obligation, contingent or otherwise, of such Person directly or indirectly
guaranteeing (including, without limitation, as a result of such Person being a
general partner of the other Person, unless the underlying obligation is
expressly made non-recourse as to such general partner) any Indebtedness or
other obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of

                                       6
<PAGE>   12
such Indebtedness or other obligation of the payment thereof or to protect the
obligee against loss in respect thereof (in whole or in part), provided that the
term Contingent Obligation shall not include endorsements for collection or
deposit in the ordinary course of business.

                  "CONTINUING DIRECTORS" means the directors of JCC Holding on
the Effective Date and each other director nominated (i) in accordance with the
terms of Sections 3.2(b)(i) through (v) of the Second Amended and Restated
Certificate of Incorporation of JCC Holding, as in effect on the date hereof,
(ii) by a majority of the then Continuing Directors, or (iii) by HET at such
times as HET and its Subsidiaries beneficially own 90% or more of the Equity
Interests in JCC Holding.

                  "CREDIT DOCUMENTS" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, the
Note, the Intercreditor Agreement, each Security Document and the Manager
Subordination Agreement.

                  "CREDIT EVENT" shall mean the making of any Revolving Loan or
the incurrence of a Letter of Credit Obligation.

                  "CREDIT PARTY" shall mean JCC Holding, the Borrower and each
Subsidiary Guarantor.

                  "CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.

                  "DEBT AGREEMENT" shall have the meaning provided in Section 6
of Part I of Exhibit B.

                  "DEFAULT" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.

                  "DESIGNATED EURODOLLAR MARKET" shall mean, with respect to any
Eurodollar Loan, (a) the London Eurodollar market, or (b) if prime banks in the
London Eurodollar market are at the relevant time not accepting deposits of
Dollars or if the Lender determines that the London Eurodollar market does not
represent at the relevant time the effective pricing to the Lender for deposits
of Dollars in the London Eurodollar market, the Cayman Islands Eurodollar market
or (c) if prime banks in the Cayman Islands Eurodollar market are at the
relevant time not accepting deposits of Dollars or if the Lender determines that
the Cayman Islands Eurodollar market does not represent at the relevant time the
effective pricing to the Lender for deposits of Dollars in the Cayman Islands
Eurodollar market, such other Eurodollar market as may from time to time be
selected by the Lender with the approval of Borrower.

                  "DIP INDEBTEDNESS" shall mean, at the time of determination,
all principal, interest and other amounts then outstanding in respect of the
debtor-in-possession loans made by HET and its Affiliates to JCC Holding and its
Subsidiaries pursuant to orders of the Bankruptcy Court entered at any time on
or before the Effective Date.

                                       7
<PAGE>   13

                  "DISCLOSURE STATEMENT" means the Debtors' Joint Disclosure
Statement as of February 8, 2001 pursuant to Section 1125 of the Bankruptcy Code
relating to the Plan of Reorganization, as approved by the Bankruptcy Court.

                  "DISQUALIFIED EQUITY INTEREST" means (a) except as provided in
(b), with respect to any Person, any Equity Interests of such Person that, by
its terms or by the terms of any security into which it is convertible,
exercisable or exchangeable, (x) is, or upon the happening of an event or the
passage of time could be, required to be redeemed (other than as may be required
by Gaming Regulations) or repurchased (including at the option of the holder
thereof) by such Person or any of its Subsidiaries, in whole or in part at any
time on or prior to the first anniversary of the Revolving Loan Maturity Date or
(y) would require any Distribution thereon or with respect thereto in
contravention of the requirements of this Agreement, and (b) with respect to any
Subsidiary of such Person (including any Subsidiary of the Borrower), and Equity
Interest other than Equity Interest with no preference, privileges, or
redemption or repayment provisions.

                  "DISTRIBUTION" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to any
holder or holders of its Equity Interests or authorized or made any other
distribution, payment or delivery of property (other than common stock of such
Person) or Cash to any holder or holders of its Equity Interests as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock or any partnership
interests or any other Equity Interests outstanding on or after the Effective
Date (or any options or warrants issued by such Person with respect to its
capital stock or any partnership interests or any other Equity Interests), or
set aside any funds for any of the foregoing purposes, or shall have permitted
any of its Subsidiaries to purchase or otherwise acquire for a consideration any
shares of any class of the capital stock or any partnership interests or any
other Equity Interests of such Person outstanding on or after the Effective Date
(or any options or warrants issued by such Person with respect to its capital
stock or any other Equity Interests). Without limiting the foregoing,
"Distributions" with respect to any Person shall also include all payments made
or required to be made by such Person with respect to any stock appreciation
rights, plans, equity incentive or achievement plans or any similar plans or
setting aside of any funds for the foregoing purposes.

                  "DOCUMENTS" shall mean the Credit Documents, the Leases, the
Casino Operating Contract, the Management Agreement, the New Common Stock
Documents, the Senior Note Documents and the Minimum Payment Guaranty Documents.

                  "DOLLARS" and the sign "$" shall each mean freely transferable
lawful money of the United States.

                  "EFFECTIVE DATE" shall have the meaning provided in Section
8.9.

                  "ENVIRONMENTAL CLAIMS" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),

                                       8
<PAGE>   14

including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.

                  "ENVIRONMENTAL LAW" means any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, guideline,
written policy and rule of common law now or hereafter in effect and in each
case as amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment, to
the extent binding on the Borrower or any of its subsidiaries, relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C.
Section 9601 ET SEQ.; the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C. Section 6901 ET SEQ.; the Federal
Water Pollution Control Act, 33 U.S.C. Section 1251 ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.; the Clean Air Act, 42
U.S.C. Section 7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section 3803
ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 ET SEQ.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 ET SEQ., the Hazardous Material Transportation Act, 49 U.S.C.
Section 1801 ET SEQ. and the Occupational Safety and Health Act, 29 U.S.C.
Section 651 ET SEQ. (to the extent it regulates occupational exposure to
Hazardous Materials); and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.

                  "EQUITY INTERESTS" of any Person shall mean all equity
interests therein, including without limitation any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any common
stock, preferred stock, any limited or general partnership interest and any
limited liability company membership interest.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.

                  "ERISA AFFILIATE" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Borrower or any Subsidiary of the
Borrower would be deemed to be a "single employer" within the meaning of Section
414(b), (c), (m) or (o) of the Code.

                  "EURODOLLAR LOAN" shall mean each Revolving Loan designated as
such under the terms of this Agreement at the time of the incurrence thereof or
conversion thereto.

                                       9
<PAGE>   15

                  "EURODOLLAR QUOTED RATE" means, with respect to any Eurodollar
Loan, the average of the interest rates per annum (rounded upward, if necessary,
to the next 1/16 of 1%) at which deposits in Dollars are offered by Bank of
America to prime banks in the Designated Eurodollar Market at or about 11:00
a.m. local time in the Designated Eurodollar Market, two Business Days before
the first day of the applicable Interest Period in an aggregate amount
approximately equal to the amount of the applicable Borrowing with respect to
such Eurodollar Loan and for a period of time comparable to the number of days
in the applicable Interest Period. The determination of the Eurodollar Quoted
Rate by the Lender shall be conclusive in the absence of manifest error.

                  "EURODOLLAR RATE" means, with respect to any Eurodollar Loan,
an interest rate per annum (rounded upward, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:

<TABLE>
<CAPTION>
    Eurodollar        =        Eurodollar Quoted Rate
                           --------------------------------
<S>                        <C>
       Rate                   1.00 - Eurodollar Reserve
                                     Percentage
</TABLE>

                  "EURODOLLAR RESERVE PERCENTAGE" means, with respect to any
Eurodollar Loan, the maximum reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/100th of 1%) in effect on the date the Eurodollar Quoted
Rate for that Eurodollar Loan is determined under regulations issued from time
to time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to eurocurrency funding (currently referred to as
"eurocurrency liabilities") having a term comparable to the Interest Period for
such Eurodollar Loan. The determination by the Lender of any applicable
Eurodollar Reserve Percentage shall be conclusive in the absence of manifest
error.

                  "EVENT OF DEFAULT" shall have the meaning specified in Section
6.1.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.

                  "EXISTING LETTERS OF CREDIT" shall have the meaning specified
in Section 2.11(d).

                  "FEDERAL FUNDS RATE" means, as of any date of determination,
the rate set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such date opposite the caption "Federal Funds
(Effective)". If for any relevant date such rate is not yet published in
H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
government securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such date under the caption "Federal Funds Effective Rate." If
on any relevant date the appropriate rate for such date is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such date
will be the

                                       10
<PAGE>   16

arithmetic mean of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that date by each of three
leading brokers of Federal funds transactions in New York City selected by the
Lender. For purposes of this Agreement, any change in the Base Rate due to a
change in the Federal Funds Rate shall be effective as of the opening of
business on the effective date of such change.

                  "FEES" means each of the fees described in Section 3.1.

                  "FINANCIAL FORECAST" shall mean the Financial Forecast
provided to the Lender on the Effective Date.

                  "FULTON DEVELOPMENT" means JCC Fulton Development, L.L.C.
(f/k/a FP Development, L.L.C.), a Louisiana limited liability company, and its
successors, and which, on the Effective Date, is a direct Wholly-Owned
Subsidiary of JCC Holding.

                  "FULTON DEVELOPMENT MORTGAGE" shall have the meaning provided
in Section 16 of Part I of Exhibit B.

                  "FULTON DEVELOPMENT MORTGAGED PROPERTY" shall have the meaning
provided in Section 16 of Part I of Exhibit B.

                  "GAAP" means United States generally accepted accounting
principles as in effect on the date of this Indenture.

                  "GAMING AUTHORITY" means any Governmental Authority with the
power to regulate gaming in any Gaming Jurisdiction, and the corresponding
Governmental Authorities with responsibility to interpret and enforce the laws
and regulations applicable to gaming in any Gaming Jurisdiction.

                  "GAMING JURISDICTION" shall mean any jurisdiction in which the
Borrower is licensed to conduct gaming activities.

                  "GAMING PATRON INDEBTEDNESS" shall have the meaning provided
such term in the Pledge Agreement.

                  "GAMING REGULATIONS" shall mean the laws, rules, regulations
and orders applicable to the gaming business of the Borrower or any of its
Subsidiaries, or any other Credit Party, as in effect from time to time,
including the Louisiana Economic Development and Gaming Corporation Act (La.
R.S. ` 27:201, et seq.) and the policies, interpretations and administration
thereof by the Gaming Authorities, including the LGCB.

                  "GOVERNMENTAL AUTHORITY" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any nature
whatsoever of the United States or foreign government, any state, province or
any city or other political subdivision and whether now or hereafter in
existence, or any officer or official thereof, and any maritime authority.

                                       11
<PAGE>   17

                  "GROUND LEASE" means the Amended and Restated Lease Agreement
for the site of the Casino between the RDC and the City, dated as of March 15,
1994, as amended on October 29, 1998, by that certain First Amendment to Amended
and Restated Lease Agreement dated October 29, 1998.

                  "GUARANTORS" means collectively the Parent Guarantor and the
Subsidiary Guarantors.

                  "GUARANTY" shall have the meaning provided in Section 7.1.

                  "HARRAH'S MANAGEMENT COMPANY" means Harrah's New Orleans
Management Company, a Nevada corporation, and its successors.

                  "HAZARDOUS MATERIALS" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority under Environmental Laws.

                  "HET" means Harrah's Entertainment, Inc., a Delaware
corporation, and its successors.

                  "HET/JCC AGREEMENT" means the Amended and Restated HET/JCC
Agreement, dated as of March 30, 2001, among HET, HOC and the Borrower (and any
substitute or successor agreement), and any other documents entered into in
connection with (and to the extent relating directly to) such agreement, as
amended, modified, renewed, extended or replaced from time to time, pursuant to
which HET and HOC shall provide the Minimum Payment Guaranty for certain periods
and subject to certain terms and conditions set forth therein.

                  "HOC" means Harrah's Operating Company, Inc., a Delaware
corporation, and its successors.

                  "HOLDING COMPANY COSTS" shall have the meaning provided in
Section 5.5(v).

                  "INDEBTEDNESS" of any Person means, without duplication, (a)
all liabilities and obligations, contingent or otherwise, of such Person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services
(including, without limitation, accrued Management Fees and other amounts owing
pursuant to the Management Agreement), except such as would constitute trade
payables to trade creditors in the ordinary course of business, (iv) evidenced
by bankers' acceptances or similar instruments issued or accepted by banks, (v)
for the payment of money relating to a Capitalized Lease Obligation, or (vi)
evidenced by

                                       12
<PAGE>   18
a letter of credit or a reimbursement obligation of such Person with respect to
any letter of credit; (b) all obligations of such Person under Interest Rate
Protection Agreements and foreign currency hedges; (c) all liabilities of others
of the kind described in the preceding clause (a) or (b) that such Person has
guaranteed or that is otherwise its legal liability; (d) all Contingent
Obligations of such Person; (e) all obligations to purchase, redeem or acquire
any Equity Interest; and (f) all obligations secured by a Lien to which the
property or assets (including, without limitation, leasehold interests and any
other tangible or intangible property rights) of such Person are subject,
whether or not the obligations secured thereby shall have been assumed by or
shall otherwise be such Person's legal liability, provided, that the amount of
such obligations shall be limited to the lesser of the fair market value of the
assets or property to which such Lien attaches and the amount of the obligation
so secured. In addition, "Indebtedness" of any Person shall include Indebtedness
described in the foregoing clauses (a)(i), (ii) and (iii) that would not appear
as a liability on the balance sheet of such Person if (1) such Indebtedness is
the obligation of a partnership or joint venture that is not a Subsidiary of
such Person (a "Joint Venture"), (2) such Person or a Subsidiary of such Person
is a general partner of the Joint Venture (a "General Partner"), and (3) there
is recourse, by contract or operation of law, with respect to payment of such
obligation to property or assets of such Person or a Subsidiary of such Person;
then such Indebtedness shall be included in an amount not to exceed (x) the
greater of (A) the net assets of the General Partner, and (B) the amount of such
obligations to the extent that there is recourse, by contract or operation of
law, to the property or assets of such Person or a Subsidiary of such Person
(other than the General Partner) or (y) if less than the amounts determined
pursuant to clause (x) above, the actual amount of such Indebtedness that is
recourse to such Person, if the Indebtedness is evidenced by a writing and is
for a determinable amount.

                  "INDENTURE OBLIGATIONS" shall have the meaning provided in the
Senior Note Indenture.

                  "INITIAL BORROWING DATE" means the date occurring on or after
the Effective Date on which the initial Borrowing of Revolving Loans occurs
hereunder.

                  "INSURANCE AND CONDEMNATION PROCEEDS" means the Borrower's and
the Guarantors' interest in and to all proceeds which now or hereafter may be
paid as a result of any condemnation proceedings or under any insurance policies
now or hereafter obtained by or on behalf of the Borrower or any of the
Guarantors in connection with the conversion of the Property subject to the
Security Documents into Cash, Cash Equivalents or liquidated claims, together
with the interest payable thereon and the right to collect and receive the same,
including, but without limiting the generality of the foregoing, proceeds of
casualty insurance, title insurance, business interruption insurance and any
other insurance now or hereafter maintained with respect to such Property.

                  "INTELLECTUAL PROPERTY SECURITY DOCUMENTS" means the
Assignment of Security Interests in United States Trademarks and Patents and the
Assignment of Security Interest in United States Copyrights, each substantially
in the form annexed to the Security Agreement and executed in favor of the
Collateral Agent.

                  "INTERCREDITOR AGREEMENT" shall have the meaning provided in
Section 17 of Part I of Exhibit B.

                                       13
<PAGE>   19

                  "INTEREST DETERMINATION DATE" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.

                  "INTEREST PERIOD" shall have the meaning provided in Section
2.8.

                  "INTEREST RATE PROTECTION AGREEMENT" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement, interest rate floor agreement or other similar
agreement or arrangement, in each case which are non-speculative in nature and
are designed to protect any Person against fluctuations in interest rates.

                  "INVESTMENT" by any Person in any other Person means (without
duplication): (a) the acquisition by such Person (whether for Cash, property,
services, securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other Person or any agreement to make any such
acquisition; (b) the making or lending by such Person of any deposit with, or
advance, loan or other extension of credit to or on behalf of, such other Person
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such other Person) or any commitment to make any such advance, loan or extension
(but excluding accounts receivable arising in the ordinary course of business);
(c) other than (i) any guarantees of the Senior Notes by the Guarantors, (ii)
any guarantees of the Revolving Obligations by the Guarantors, (iii) any
guarantees of Interest Rate Protection Agreements by the Guarantors, the
entering into by such Person of any guarantee of, or other credit support or
contingent obligation with respect to, Indebtedness or other liability of such
other Person; (d) the making of any capital contribution by such Person to such
other Person; (e) the making of any capital contribution to any other Person; or
(f) the purchase or sale of currency or other commodities at a future date in
the nature of futures contracts.

                  "ISSUING BANK" shall mean (i) Bankers Trust Company with
respect to the Existing Letters of Credit and (ii) any bank which has been
approved by Lender and which agrees, in such bank's sole discretion, to become
an Issuing Bank for the purpose of issuing Letters of Credit after the Effective
Date pursuant to Section 2.11.

                  "JCC DEVELOPMENT" means JCC Development Company, L.L.C., a
Louisiana limited liability company, and its successors, and which, on the
Effective Date, is a direct Wholly-Owned Subsidiary of JCC Holding.

                  "JCC DEVELOPMENT MORTGAGE" shall have the meaning provided in
Section 16 of Part I of Exhibit B.

                  "JCC DEVELOPMENT MORTGAGED PROPERTY" shall have the meaning
provided in Section 16 of Part I of Exhibit B.

                  "JCC HOLDING" shall mean JCC Holding Company, a Delaware
corporation, and its successors.

                                       14
<PAGE>   20

                  "JCC HOLDING'S KNOWLEDGE" means the knowledge of any
Authorized Officer of JCC Holding and its Subsidiaries.

                  "L/C SUPPORTABLE INDEBTEDNESS" shall mean (i) obligations of
the Borrower or its Subsidiaries incurred in the ordinary course of business
with respect to insurance obligations and workers' compensation, surety bonds
and other similar statutory obligations and (ii) such other obligations of the
Borrower or any of its Subsidiaries (other than Indebtedness for borrowed money)
as are reasonably acceptable to the respective Issuing Bank and otherwise
permitted to exist pursuant to the terms of this Agreement.

                  "LEASEHOLDS" of any Person means all the right, title and
interest of such Person as lessee or licensee in, to and under any lease.

                  "LEASES" shall mean the Ground Lease and the Casino Lease.

                  "LENDER" means, collectively, HET, HOC and Harrah's Management
Company and their successors or assigns and as further described in Section
8.16.

                  "LETTER OF CREDIT" shall have the meaning provided in Section
2.11.

                  "LETTER OF CREDIT OBLIGATIONS" means all outstanding
obligations (including all Existing Letters of Credit) incurred by Borrower or
Lender (at the request of Borrower), whether direct or indirect, contingent or
otherwise, due or not due, in connection with the issuance of Letters of Credit
(including all Existing Letters of Credit) by an Issuing Bank pursuant to
Section 2.11, including, without limitation, any guarantee or risk participation
issued by Lender covering Letters of Credit (including all Existing Letters of
Credit) issued for the account of Borrower and any reimbursement obligations of
Lender with respect to any Letters of Credit issued for the account of Lender.
The aggregate amount of such Letter of Credit Obligations outstanding as of any
date of determination shall equal the maximum amount that may be payable as of
such date or at any time thereafter by Lender or Borrower (without duplication)
with respect to all Letters of Credit (including all Existing Letters of Credit)
that have been issued on or prior to such date.

                  "LETTER OF CREDIT OBLIGATION REQUEST" shall have the meaning
provided in Section 2.13.

                  "LGCB" means, collectively, the Louisiana Gaming Control
Board, and its successors and assigns.

                  "LIEN" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).

                                       15
<PAGE>   21

                  "MANAGEMENT AGREEMENT" means the Third Amended and Restated
Management Agreement between the Borrower and Harrah's Management Company
relating to the management of the Casino dated as of March 30, 2001, as it may
be amended or supplemented from time to time.

                  "MANAGEMENT FEES" means the "MANAGEMENT FEE" and the "SERVICE
FEE," as defined by the Management Agreement, together with any amounts
reimbursable to Harrah's Management Company under the terms of the Management
Agreement, but excluding the Termination Fee.

                  "MANAGER SUBORDINATION AGREEMENT" shall mean that certain
Manager Subordination Agreement dated as of the Effective Date between Harrah's
Management Company and the Trustee, as it may be amended or supplemented from
time to time.

                  "MARGIN STOCK" shall have the meaning provided in
Regulation U.

                  "MINIMUM PAYMENT GUARANTOR" shall mean HET and HOC, as joint
and several obligors, or any successor or substitute guarantor providing a
Minimum Payment Guaranty in accordance with the requirements of the Casino
Operating Contract.

                  "MINIMUM PAYMENT GUARANTY" means the Minimum Payment Guaranty
(as defined in the Casino Operating Contract) that the Casino Operating Contract
obligates the Borrower to cause to be provided to the State of Louisiana by and
through the Regulating Authority, as the same may be amended, supplemented or
modified from time to time, including any replacement or renewal thereof.

                  "MINIMUM PAYMENT GUARANTY DOCUMENTS" means each Minimum
Payment Guaranty and all agreements or documents (including, without limitation,
the HET/JCC Agreement) executed and delivered in connection therewith or any
successor documents entered into with a successor Minimum Payment Guarantor
other than HET and HOC.

                  "MINIMUM PAYMENT GUARANTY FEES" shall mean the fees paid by
the Borrower pursuant to Section 2 of the HET/JCC Agreement or pursuant to the
terms of any successor Minimum Payment Guaranty Documents.

                  "MINIMUM PAYMENT GUARANTY LIEN" shall mean the Lien, in each
case created under the Security Documents, securing the Borrower's obligations
pursuant to the HET/JCC Agreement or pursuant to any successor Minimum Payment
Guaranty Documents.

                  "MINIMUM PAYMENT GUARANTY OBLIGATIONS" shall have the meaning
specified in the Intercreditor Agreement.

                  "MORTGAGE" shall have the meaning provided in Section 16 of
Part I of Exhibit B.

                  "MORTGAGED PROPERTY" shall mean and be a collective reference
to the Company Mortgaged Properties, the JCC Development Mortgaged Properties,
the Canal

                                       16
<PAGE>   22
Development Mortgaged Properties and the Fulton Development Mortgaged
Properties, as well as any Additional Mortgaged Properties.

                  "NET CASH PROCEEDS" means the aggregate amount of Cash or Cash
Equivalents received by the Borrower in the case of an Asset Sale, less the sum,
of (a) all fees, commissions and other expenses incurred in connection with such
Asset Sale, (b) the amount (estimated reasonably and in good faith by the
Borrower) of income, franchise, sales and other applicable taxes required to be
paid by the Borrower or any of its Subsidiaries in connection with such Asset
Sale and (c) the aggregate amount of Cash or Cash Equivalents so received which
is used to retire (in whole or in part) existing Indebtedness (other than
Revolving Obligations) of the Borrower or its Subsidiaries (owed to a Person
other than an Affiliate) which was secured by the assets that were the subject
of such Asset Sale (and if such assets constitute Collateral, which Indebtedness
(other than Revolving Obligations) had a higher lien priority than Revolving
Obligations) and which was required to be repaid (which repayment, in the case
of a revolving credit arrangement or multiple advance arrangement, reduces the
commitment thereunder) in connection with such Asset Sale.

                  "NET CASH PROCEEDS ACCOUNT" means the separate custodial
account established and maintained by the Borrower in the name of the Collateral
Agent for the benefit of the Secured Creditors pursuant to the terms of the
Security Agreement into which the Net Cash Proceeds from Asset Sales and
Insurance and Condemnation Proceeds are to be deposited.

                  "NEW COMMON STOCK" shall mean the common stock of JCC Holding,
$.01 par value per share.

                  "NEW COMMON STOCK DOCUMENTS" shall mean the agreements,
instruments and other documents executed and delivered in connection with the
issuance of the New Common Stock.

                  "NOTE" shall have the meaning provided in Section 2.5.

                  "NOTICE OF BORROWING" shall have the meaning provided in
Section 2.3.

                  "NOTICE OFFICE" shall mean the office of HET located at 1
Harrah's Court, Las Vegas, NV 89119, or such other office as HET may hereafter
designate in writing as such to the other parties hereto.

                  "OFFICER" means, with respect to any Person, the Chairman of
the Board, the President, any Vice President, the Chief Financial Officer, the
Treasurer, the Controller, or the Secretary or Assistant Secretary of such
Person.

                  "OFFICER'S CERTIFICATE" means, with respect to the Borrower or
any Guarantor, a certificate signed by any Authorized Representative of such
entity and otherwise complying with the applicable provisions in this Agreement
requiring an Officer's Certificate.

                  "OPERATING ACCOUNTS" shall have the meaning provided in
Section 5.4.

                                       17
<PAGE>   23

                  "PARENT GUARANTOR" means JCC Holding.

                  "PARENT GUARANTY" shall have the meaning provided in Section
7.2(a).

                  "PAYMENT OFFICE" shall mean the office of HET located at 1
Harrah's Court, Las Vegas, NV 89119, or such other office as HET may hereafter
designate in writing as such to the other parties hereto.

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.

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

                  "PERMITTED ENCUMBRANCE" shall mean, with respect to any
Mortgaged Property, the "Permitted Encumbrances" with respect thereto, as
defined in the respective Mortgage.

                  "PERMITTED INDEBTEDNESS" shall have the meaning specified in
Section 5.12.

                  "PERMITTED LIENS" shall have the meaning specified in Section
5.13.

                  "PERMITTED PAYMENT GUARANTY AMENDMENT" shall mean any waiver,
amendment or modification of any provision of the Minimum Payment Guaranty
Documents or such Minimum Payment Guaranty Documents delivered by a substitute
or successor Minimum Payment Guarantor, which (i) are not adverse in any respect
to the interests of the Borrower (including without limitation, so long as the
nature and amount of obligations guaranteed thereunder are not adversely changed
or increased and so long as the financial terms thereof are not made worse from
the perspective of the Borrower) and (ii) do not cause a Default or Event of
Default pursuant to Section 6.1(q).

                  "PERMITTED SENIOR NOTE AMENDMENT" shall mean any waiver,
amendment or consent to the Senior Note Indenture which is entered into (i) to
cure any ambiguity, defect or inconsistency therein so long as any such
amendment or consent is not adverse to the interests of the Lender in any
respect, (ii) to evidence or provide for a replacement trustee thereunder or
(iii) to modify any covenant, obligation or event of default thereunder so long
as the respective waiver, amendment or consent does not impose any obligations
or restrictions on the Borrower greater than those set forth in this Agreement
as in effect at the time of such amendment or consent before giving effect
thereto. In no event will a Permitted Amendment increase the rate of interest,
fees or other amounts payable in connection with the Senior Notes or under the
Senior Note Indenture, or alter the provisions with respect to the deferral of
any payments thereunder (except to the extent the respective amendment further
extends such deferral).

                                       18
<PAGE>   24

                  "PERMITTED TAX PAYMENT" means (for any taxable year of the
Borrower in which it joins in filing a consolidated federal income tax return
with JCC Holding) a payment (including any estimated tax payment based on any
estimated tax liability for such year) by the Borrower to JCC Holding in an
amount not in excess of the lesser of (i) the separate return federal income tax
liability (if any) of the affiliated group (within the meaning of Section 1504
of the Code) of which the Borrower would be the parent (the "JCC Group") if it
were not a member of another affiliated group for that or any other taxable
year, and (ii) the product of (a) the actual tax liability (if any) of the
affiliated group of which the Borrower is actually a member (the "Guarantor
Group") for such year and (b) a fraction, (A) the numerator of which is an
amount equal to the federal taxable income of the Borrower and its Subsidiaries,
computed on a hypothetical consolidated federal income tax basis as if the
Borrower and each of its Subsidiaries filed a separate consolidated federal
income tax return, with the Borrower as common parent of such affiliated group
and where the Subsidiaries were not members of another affiliated group for that
or any other taxable year and (B) the denominator of which is the sum of the
amount calculated in (A) above, plus the positive separate federal taxable
income of each member of the Guarantor Group other than the Borrower and its
Subsidiaries; provided, that such payment can be made by the Borrower no earlier
than two Business Days prior to the date on which the Guarantor Group is
required to make federal income tax payments for such year to the Internal
Revenue Service. In the event that JCC Holding and any member of the JCC Group
join in filing any combined or consolidated (or similar) state or local income
or franchise tax returns, then Permitted Tax Payment shall include payments with
respect to such state or local income or franchise taxes determined in a manner
as similar as possible to that provided in the preceding sentence for federal
income taxes.

                  "PERMITTED TERMINATION" shall mean a termination of HET or its
Affiliate as manager of the Casino pursuant to (i) Section 17.03 of the
Management Agreement, (ii) Section 17.02(d) of the Management Agreement or (iii)
Section 17.02(a) of the Management Agreement as a result of an Event of Default
(as defined therein) by the Manager (as defined therein).

                  "PERSON" means any individual, limited liability company,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof.

                  "PLAN" shall mean any multiemployer or single-employer plan,
as defined in Section 4001 of ERISA, which is maintained or contributed to by
(or to which there is an obligation to contribute of), the Borrower or a
Subsidiary of the Borrower or an ERISA Affiliate, and each such plan for the
five year period immediately following the latest date on which the Borrower, a
Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed or had
an obligation to contribute to such plan.

                  "PLAN OF REORGANIZATION" means the Joint Plan of
Reorganization under Chapter 11 of the Bankruptcy Code, dated February 8, 2001,
filed with the United States Bankruptcy Court for the Eastern District of
Louisiana by JCC Holding Company, Jazz Casino Company, L.L.C., JCC Canal
Development, L.L.C., JCC Fulton Development, L.L.C. and JCC Development Company,
L.L.C. (including all exhibits and schedules annexed thereto).

                                       19
<PAGE>   25

                  "PLEDGE AGREEMENT" shall have the meaning provided in Section
14 of Part I of Exhibit B.

                  "PLEDGE AGREEMENT COLLATERAL" shall mean all Collateral under,
and as defined in, the Pledge Agreement.

                  "PLEDGED SECURITIES" shall mean "COLLATERAL" as defined in the
Pledge Agreement.

                  "POYDRAS STREET SUPPORT FACILITY" shall mean the support
facilities and improvements appurtenant to the Casino constructed on the Poydras
Street Support Facility Premises.

                  "POYDRAS STREET SUPPORT FACILITY PREMISES" shall have the
meaning provided in the Casino Lease.

                  "POYDRAS TUNNEL AREA" shall have the meaning provided in the
Casino Lease.

                  "PROJECT" shall mean the lease, renovation, construction,
equipping and operation of the Casino, and all related facilities at the
Borrower Mortgaged Property, including, without limitation, the Poydras Street
Support Facility Premises, the Servitude Areas, the Pedestrian Bridge Areas, the
Poydras Tunnel Area, the Tunnel and, as defined in the Casino Lease, the
Encroachment Areas, Pedestrian Bridge Areas and the Lafayette Subsurface Area,
but excluding the Second Floor (other than the shell construction thereof).

                  "PROJECT DEFAULT" shall have the meaning provided in Section
6.1(n).

                  "PROPERTY" means any right or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible, intangible, contingent, indirect or direct.

                  "QUALIFIED EQUITY INTEREST" means, as to any Person, any
Equity Interest of such Person that is not a Disqualified Equity Interest.

                  "QUALIFIED SUBORDINATED INDEBTEDNESS" means Subordinated
Indebtedness of JCC Holding which is subordinated in right of payment in all
respects to the Revolving Obligations (and JCC Holding's Guaranty thereof) and
has no scheduled installment of principal due by redemption, sinking fund or
otherwise, on or prior to the first anniversary of the Revolving Loan Maturity
Date and has a stated maturity on or after the first anniversary of the
Revolving Loan Maturity Date.

                  "QUARTERLY PAYMENT DATE" shall mean each March 31, June 30,
September 30, and December 31 occurring after the Effective Date.

                  "RDC" means Rivergate Development Corporation, a Louisiana
public benefit corporation.

                                       20
<PAGE>   26

                  "REAL PROPERTY" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures, including
Leaseholds.

                  "REFERENCE RATE" means the rate of interest publicly announced
from time to time by Bank of America as its "reference rate." Bank of America's
reference rate is a rate set by Bank of America based upon various factors
including Bank of America's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate. Any change
in the Reference Rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of such
change.

                  "REGISTRATION RIGHTS AGREEMENTS" shall have the meaning
provided in Section 19 of Part I of Exhibit B.

                  "REGULATING AUTHORITY" means the Louisiana Gaming Control
Board (or any successor thereto).

                  "REGULATION D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.

                  "REGULATION T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.

                  "REGULATION U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.

                  "REGULATION X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.

                  "RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migration into the environment.

                  "REPORTABLE EVENT" shall mean an event described in Section
4043(b) of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by the PBGC.

                  "RESERVE FUND" means the Capital Replacement Fund as defined
in the Management Agreement, as in effect on the date hereof.

                  "RESTRICTED PAYMENT" shall mean (a) any authorization,
declaration or payment of any Distributions with respect to JCC Holding or any
of its Subsidiaries or any other payment to any of their Affiliates (excluding
the Borrower), (b) the making (or the giving of any notice in respect thereof)
by JCC Holding or any of its Subsidiaries of any voluntary or mandatory

                                       21
<PAGE>   27
payment, purchase, acquisition or redemption, whether by the making of any
payments of the principal, interest or otherwise, in respect of any loan,
advance or extension of credit made to JCC Holding or any of its Subsidiaries
by, or in respect of any guarantee or Contingent Obligation made for the benefit
of JCC Holding or any of its Subsidiaries by, or in respect of any other
obligation of JCC Holding or any of its Subsidiaries owed to, HET, HOC or any
Affiliate of HET or HOC (excluding the Borrower and its Wholly-Owned
Subsidiaries), whether pursuant to any Document or otherwise, (c) any purchase,
prepayment, redemption, or other acquisition or retirement for value of, or any
defeasance of any Subordinated Indebtedness, directly or indirectly, by JCC
Holding or any of its Subsidiaries prior to the scheduled maturity, any
scheduled repayment of principal, or scheduled sinking fund payment, as the case
may be, of such Subordinated Indebtedness (including any payment in respect of
any amendment of the terms of such Subordinated Indebtedness, which amendment is
sought in connection with any such acquisition of such Subordinated Indebtedness
or seeks to shorten any such due date), (d) the making (or the giving of any
notice in respect thereof) by JCC Holding or any of its Subsidiaries of any
payment whatsoever in respect of, or pursuant to, any of the Minimum Payment
Guaranty Documents and (e) the payment of any Management Fees, Termination Fee
or any other fees or expenses (including the reimbursement thereof by JCC
Holding or any of its Subsidiaries) pursuant to the Management Agreement or any
other agreement with an Affiliate of JCC Holding or its Subsidiaries.
Notwithstanding anything to the contrary contained above, (i) payments made in
respect of the Revolving Obligations in accordance with the terms of the Credit
Documents shall not constitute Restricted Payments, even if the respective
Revolving Obligations are held by HET, HOC, Harrah's Management Company or an
Affiliate thereof and (ii ) payments made in respect of the Indenture
Obligations in accordance with the terms of the Senior Note Documents shall not
constitute Restricted Payments, even if the respective Indenture Obligations are
held by HET, HOC or an Affiliate thereof and (iii) payments by any Unrestricted
Subsidiary with respect to loans incurred by such Unrestricted Subsidiary
pursuant to and in accordance with Section 5.12(x) will not constitute
Restricted Payments even if the respective obligations are held by HET, HOC
Harrah's Management Company or one or more Affiliates thereof.

                   "RETURNS" shall have the meaning provided in Section 9 of
Part II of Exhibit B.

                  "REVOLVING LOAN" shall have the meaning provided in Section
2.1.

                  "REVOLVING LOAN COMMITMENT" shall mean Thirty-Five Million
Dollars ($35,000,000) as the same may be reduced from time to time pursuant to
Sections 3.2, 3.3 and/or 6.

                  "REVOLVING LOAN MATURITY DATE" shall mean the earlier of (i)
the date which is one year after the date on which the Management Agreement is
terminated or (ii) March 30, 2006; provided that such date in clause (ii) hereof
may be extended at the option of Borrower to March 30, 2007 if HET receives at
least thirty (30) days (but no more than ninety (90) days) written notice (prior
to March 30, 2006) from Borrower of its election to extend such date.

                  "REVOLVING OBLIGATIONS" shall mean all amounts owing to the
Lender, any Issuing Bank and the Collateral Agent pursuant to the terms of this
Agreement or any other Credit Document.

                                       22
<PAGE>   28

                  "SEC" means the Securities and Exchange Commission or any
successor thereto.

                  "SECOND FLOOR" shall mean the non-gaming areas of the second
floor of the Casino which are subject to the Second Floor Sublease.

                  "SECOND FLOOR SUBLEASE" means the Second Floor Non-Gaming
Sublease, dated as of October 29, 1998, between the Borrower as sublessor and
JCC Development as sublessee relating to JCC Development's sublease of the
second floor of the Casino, attached as Exhibit O to the Casino Lease.

                  "SECONDARY SECURITIES" has the meaning set forth in the Senior
Note Indenture.

                  "SECURED CREDITORS" means, collectively, the Minimum Payment
Guarantor, the Lender and the Trustee.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.

                  "SECURITY AGREEMENT" has the meaning provided in Section 13 of
Part I of Exhibit B.

                  "SECURITY AGREEMENT COLLATERAL" shall mean all "Collateral" as
defined in the Security Agreement.

                  "SECURITY DOCUMENTS" shall mean the Pledge Agreement, the
Security Agreement, the Intellectual Property Security Documents, each Mortgage,
and, after the execution and delivery thereof, each Additional Mortgage and each
Additional Security Document.

                  "SECURITY INTERESTS" means the Liens on the Collateral created
by the Security Documents in favor of the Collateral Agent for the benefit of
the Secured Creditors.

                  "SENIOR NOTE DOCUMENTS" shall mean the Senior Note Indenture,
the Senior Notes and all other documents executed and delivered in connection
therewith.

                  "SENIOR NOTE INDENTURE" shall mean the Indenture dated as of
the date hereof among Borrower, the "Guarantors" named therein and Wells Fargo
Bank Minnesota, National Association, as Trustee, as amended, modified or
supplemented from time to time in accordance with the terms thereof or hereof.

                  "SENIOR NOTES" shall mean the "Securities" as defined in the
Senior Note Indenture.

                  "SERVITUDE AREAS" shall mean the Employee Bus and Parking
Facility Servitude Area, the Employee and Bus Parking Facility Access Servitude
Area, and the Observation Tower Servitude Area (each as defined in the Casino
Lease).

                                       23
<PAGE>   29

                  "SIGNIFICANT SUBSIDIARY" of a Person means a Subsidiary of
such Person which, together with its Consolidated Subsidiaries, has assets or
revenues equal to or greater than 10% of the assets or revenues, respectively,
of such Person and its Subsidiaries on a consolidated basis.

                  "SPECIFIED REAL ESTATE" shall mean the Canal Development
Mortgaged Property and the Fulton Development Mortgaged Property.

                  "SUBORDINATED INDEBTEDNESS" means any Indebtedness of JCC
Holding, the Borrower or any Subsidiary that is subordinated in right of payment
to the Revolving Obligations (or JCC Holding's or any Subsidiary Guarantor's
Guaranty thereof).

                  "SUBSIDIARY" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture, limited liability company or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.

                  "SUBSIDIARY GUARANTOR" shall mean and include each of JCC
Development, Canal Development, Fulton Development and each Subsidiary of JCC
Holding, which, after the Effective Date, is required to be a Subsidiary
Guarantor pursuant to Section 7.4 hereof.

                  "SUBSIDIARY GUARANTY" means all guarantees at any time from
any Subsidiary of JCC Holding pursuant to Section 7.

                  "TAXES" shall have the meaning provided in Section 3.7.

                  "TERMINATION EVENT," when used with respect to the Leases or
the Casino Operating Contract, shall mean (a) any material provision of any
Lease or the Casino Operating Contract, as the case may be, at any time for any
reason ceases to be valid and binding on any of the parties thereto or is
declared to be null and void or any of the parties thereto shall deny in writing
that it has any further liability or obligation thereunder, or (b) the
termination of any Lease or the Casino Operating Contract, provided that the
term "Termination Event" does not include the scheduled expiration in the
ordinary course of any Lease or the Casino Operating Contract in accordance with
its terms.

                  "TERMINATION FEE" shall have the meaning provided in the
Management Agreement as in effect on the Effective Date.

                  "TEST PERIOD" shall mean for any determination made hereunder,
the four consecutive fiscal quarters of the Borrower then last ended (taken as
one accounting period).

                                       24
<PAGE>   30

                  "TOTAL UNUTILIZED REVOLVING LOAN COMMITMENT" shall mean, at
any time, an amount equal to the remainder of (x) the then Revolving Loan
Commitment less (y) the sum of the aggregate principal amount of Revolving Loans
outstanding plus the then aggregate amount of outstanding Letter of Credit
Obligations.

                  "TRANSACTION" means the reorganization effected pursuant to
the Plan of Reorganization and the financing therefor and resulting therefrom.

                  "TRUSTEE" means the party named as such in the Senior Note
Indenture until a successor replaces it in accordance with the provisions of the
Senior Note Indenture and thereafter means such successor.

                  "TUNNEL" shall mean the support facilities and improvements
appurtenant to the Casino constructed on and/or in the Poydras Tunnel Area.

                  "TYPE" shall mean the type of Revolving Loan determined with
regard to the interest option applicable thereto, i.e., whether a Base Rate Loan
or a Eurodollar Loan.

                  "UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.

                  "UNFUNDED CURRENT LIABILITY" of any Plan means the amount, if
any, by which the actuarial present value of the accumulated benefits under the
Plan as of the close of its most recent plan year, determined in accordance with
Statement of Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan, exceeds the fair market value of the assets allocable thereto,
determined in accordance with Section 412 of the Code.

                  "UNITED STATES" and "U.S." shall each mean the United States
of America.

                  "UNPAID DRAWINGS" shall have the meaning provided in Section
2.14.

                  "UNRESTRICTED SUBSIDIARIES GUARANTY" means the Guaranty of
each of the Unrestricted Subsidiaries.

                  "UNRESTRICTED SUBSIDIARY" means Canal Development, Fulton
Development or JCC Development and each Subsidiary thereof and any other special
purpose Subsidiary of JCC Holding (so long as the same is not a Subsidiary of
the Borrower) created or acquired after the Effective Date; provided, that no
Person shall constitute an Unrestricted Subsidiary if (a) the Borrower or any of
its Subsidiaries owns any Equity Interest (whether directly or indirectly) in
any such Person or (b) any Indebtedness or other obligation of the respective
Person or any Subsidiary or direct or indirect holding company thereof (other
than JCC Holding) is recourse in any respect (whether by operation of law or
pursuant to any Contingent Obligation) to JCC Holding, the Borrower or any
Subsidiary of the Borrower.

                  "WHOLLY-OWNED SUBSIDIARY" with respect to a Subsidiary of any
Person means (i) any corporation 100% of whose capital stock is at the time
owned by such Person

                                       25
<PAGE>   31
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.

         Section 1.2 Rules of Construction. Unless the context otherwise
requires:

                         (i) a term has the meaning assigned to it;

                         (ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;

                         (iii) "or" is not exclusive;

                         (iv) words in the singular include the plural, and
words in the plural include the singular;

                         (v) provisions apply to successive events and
transactions;

                         (vi) "herein," "hereof" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision; and

                         (vii) references to Sections or Articles means
reference to such Section or Article in this Agreement, unless stated otherwise.

                                  ARTICLE II.

                                 TERMS OF CREDIT

         Section 2.1 The Revolving Loans. Provided that on the Initial Borrowing
Date and on the date of each Credit Event thereafter, and after giving effect
thereto, (i) no Default or Event of Default exists, (ii) all representations and
warranties set forth in Exhibit B to this Agreement and in the other Credit
Documents are true and correct in all material respects (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material respects
only as of such specified date), (iii) the Borrower has delivered a Notice of
Borrowing which meets the requirements of Section 2.3 and (iv) the proposed
Credit Event will be prior to the first anniversary of the date on which
Harrah's Management Company received notice of termination of the Management
Agreement under the terms of the Management Agreement, then, subject to and upon
the other terms and conditions set forth herein, the Lender agrees to make, from
time to time on and after the Initial Borrowing Date and prior to the Revolving
Loan Maturity Date, a revolving loan or revolving loans (each a "Revolving Loan"
and, collectively, the "Revolving Loans") to the Borrower, which Revolving Loans
(a) shall, at the option of the Borrower (subject to Section 2.9), be incurred
and maintained as and/or converted into Base Rate Loans or Eurodollar Loans,
provided that, except as otherwise specifically provided in Section 2.9, all
Revolving Loans comprising the same Borrowing shall at all times be of the same
Type, (b) may be repaid and reborrowed in accordance with the provisions hereof
and (c) shall not exceed at any time outstanding that aggregate

                                       26
<PAGE>   32
principal amount which, when added to the aggregate amount of all Letter of
Credit Obligations (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, equals the Revolving Loan
Commitment at such time. The Lender shall have no obligation to make a Revolving
Loan hereunder to the extent such Revolving Loan is to be made after the first
anniversary of the date on which Harrah's Management Company received notice of
termination of the Management Agreement under the terms of the Management
Agreement or if any other condition set forth above is not satisfied.

         Section 2.2 Minimum Amount of Each Revolving Loan. The aggregate
principal amount of each Borrowing of Revolving Loans shall be not less than
$500,000 and, if greater, shall be in an integral multiple of $500,000. More
than one Borrowing may occur on the same date, but at no time shall there be
outstanding more than five (5) Borrowings of Eurodollar Loans.

         Section 2.3 Notice of Borrowing. Whenever the Borrower desires to incur
Revolving Loans hereunder, the Borrower shall give Lender at least one Business
Day's prior written notice of each Base Rate Loan and at least three Business
Days' prior written notice of each Eurodollar Loan to be incurred hereunder,
provided that any such notice shall be deemed to have been given on a certain
day only if given before 11:00 A.M. (New York time) on such day. Each such
written notice (each a "Notice of Borrowing"), except as otherwise expressly
provided in Section 2.9, shall be irrevocable and shall be given by the Borrower
in the form of Exhibit A-1, appropriately completed to specify the aggregate
principal amount of the Revolving Loans to be made pursuant to such Borrowing,
the date of such Borrowing (which shall be a Business Day), whether the
Revolving Loans being made pursuant to such Borrowing are to be initially
maintained as Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the
initial Interest Period to be applicable thereto.

         Section 2.4 Disbursement of Funds. Not later than 12:00 Noon (New York
time) on the date specified in each Notice of Borrowing, the Lender will make
available such Borrowing requested to be made on such date. All such amounts
shall be made available in Dollars and in immediately available funds and
directed to the Borrower's Operating Account specified in the Notice of
Borrowing.

         Section 2.5 Note.

                     (a) The Borrower's obligation to pay the principal of, and
         interest on, the Revolving Loans shall be evidenced by this Agreement
         and a promissory note duly executed and delivered by the Borrower
         substantially in the form of Exhibit A-2, with blanks appropriately
         completed in conformity herewith (the "Note").

                     (b) In addition to the terms set forth above in this
         Section 2.5, the Note shall also contain the following legend (which
         shall be printed thereon in bold face):

                  THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN
                  THE INTERCREDITOR

                                       27
<PAGE>   33
                  AGREEMENT (AS DEFINED IN THE AGREEMENT), WHICH INTERCREDITOR
                  AGREEMENT, AMONG OTHER THINGS, ESTABLISHES CERTAIN RIGHTS WITH
                  RESPECT TO THE SECURITY FOR THIS NOTE AND THE SHARING OF
                  PROCEEDS THEREOF WITH CERTAIN OTHER SECURED CREDITORS (AS
                  DEFINED IN THE INTERCREDITOR AGREEMENT). COPIES OF SUCH
                  INTERCREDITOR AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF
                  THIS NOTE UPON REQUEST TO THE BORROWER.

                     (c) The Lender will note on its internal records the amount
         of each Revolving Loan made by it and each payment in respect thereof
         and will prior to any transfer of the Note endorse on the reverse side
         thereof the outstanding principal amount of Revolving Loans evidenced
         thereby. Failure to make any such notation or any error in any such
         notation or endorsement shall not affect the Borrower's obligations in
         respect of such Revolving Loans.

         Section 2.6 Continuations and Conversions Into Revolving Loans of
Another Type. The Borrower shall have the option to continue any Eurodollar Loan
from one Interest Period to another by providing a Notice of Borrowing to the
Lender prior to 11:00 A.M. (New York time) at least three Business Days prior to
the date of the proposed continuation, provided that (i) except as otherwise
provided in Section 2.9(b), Eurodollar Loans may be continued only on the last
day of an Interest Period applicable to the Eurodollar Loans being continued,
(ii) the Borrower's selection of an Interest Period complies with Section 2.8
and (iii) no continuation pursuant to this Section 2.6 shall result in a greater
number of Borrowings of Eurodollar Loans than is permitted under Section 2.2.
The Borrower shall have the option to convert, on any Business Day, all or a
portion equal to at least $500,000 (and, if greater, in an integral multiple of
$500,000), of the outstanding principal amount of Revolving Loans made pursuant
to one or more Borrowings of one or more Types of Revolving Loans into a
Borrowing of another Type of Revolving Loan, provided that (i) except as
otherwise provided in Section 2.9(b), Eurodollar Loans may be converted into
Base Rate Loans only on the last day of an Interest Period applicable to the
Revolving Loans being converted and no such partial conversion of Eurodollar
Loans shall reduce the outstanding principal amount of such Eurodollar Loans
made pursuant to a single Borrowing to less than $500,000, (ii) Base Rate Loans
may only be converted into Eurodollar Loans if the Borrower's selection of an
Interest Period complies with Section 2.8 and (iii) no conversion pursuant to
this Section 2.6 shall result in a greater number of Borrowings of Eurodollar
Loans than is permitted under Section 2.2. Each such conversion shall be
effected by the Borrower giving the Lender a Notice of Borrowing prior to 11:00
A.M. (New York time) at least three Business Days prior to the date of the
proposed conversion. Each such Notice of Borrowing given pursuant to this
Section 2.6, except as otherwise expressly provided in Section 2.9, shall be
irrevocable and shall be appropriately completed to specify the Revolving Loans
to be so converted or continued, the Borrowing(s) pursuant to which such
Revolving Loans were made and, if to be converted into or continued as
Eurodollar Loans, the Interest Period to be applicable thereto.

                                       28
<PAGE>   34
         Section 2.7 Interest.

                     (a) The Borrower agrees to pay interest in respect of the
         unpaid principal amount of each Base Rate Loan from the date of
         incurring such Base Rate Loan (as a Borrowing or as a conversion from a
         Eurodollar Loan) until the earlier of (i) the maturity (whether by
         acceleration or otherwise) of such Base Rate Loan and (ii) the
         conversion of such Base Rate Loan to a Eurodollar Loan pursuant to
         Section 2.6, at a rate per annum which shall be equal to the sum of the
         Applicable Margin plus the Base Rate in effect from time to time.

                     (b) The Borrower agrees to pay interest in respect of the
         unpaid principal amount of each Eurodollar Loan from the date of
         incurring such Eurodollar Loan (as a Borrowing or as a conversion from
         a Base Rate Loan) until the earlier of (i) the maturity (whether by
         acceleration or otherwise) of such Eurodollar Loan and (ii) the
         conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
         Sections 2.6, 2.8 or 2.9, as applicable, at a rate per annum which
         shall, during each Interest Period applicable thereto, be equal to the
         sum of the Applicable Margin plus the Eurodollar Rate for such Interest
         Period.

                     (c) Overdue principal and, to the extent permitted by law,
         overdue interest in respect of each Revolving Loan and any other
         overdue amount payable hereunder shall, in each case (notwithstanding
         any provision of any Mortgage that would result in a different rate of
         interest being applicable to any such amount), bear interest at a rate
         per annum equal to the greater of (x) 2% per annum in excess of the
         rate otherwise applicable to Base Rate Loans and (y) the rate which is
         2% in excess of the rate then borne by such Revolving Loans, in each
         case with such interest to be payable on demand.

                     (d) Subject to the following sentence, accrued (and
         theretofore unpaid) interest on the Revolving Loans shall be payable
         (i) in respect of each Base Rate Loan, quarterly in arrears on each
         Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on the
         last day of each Interest Period applicable thereto and, in the case of
         an Interest Period in excess of three months, on each date occurring at
         three month intervals after the first day of such Interest Period and
         (iii) on any repayment or prepayment (on the amount repaid or prepaid),
         at maturity (whether by acceleration or otherwise) and, after such
         maturity, on demand.

                     (e) Upon each Interest Determination Date, the Lender shall
         determine the Eurodollar Rate for each Interest Period applicable to
         Eurodollar Loans and shall promptly notify the Borrower thereof. Each
         such determination shall, absent manifest error, be final and
         conclusive and binding on all parties hereto.

         Section 2.8 Interest Periods. At the time the Borrower gives any Notice
of Borrowing in respect of the making of, or conversion into, or continuation of
any Eurodollar Loan or on the third Business Day prior to the expiration of an
Interest Period applicable to such Eurodollar Loan (in the case of any
subsequent Interest Period), the Borrower shall have the right to elect, by
giving the Lender notice thereof, the interest period (each an "Interest
Period") applicable to such

                                       29
<PAGE>   35
Eurodollar Loan, which Interest Period shall, at the option of the Borrower, be
a one, two, three or six-month period, provided that:

                         (i) all Eurodollar Loans comprising a Borrowing shall
         at all times have the same Interest Period;

                         (ii) the initial Interest Period for any Eurodollar
         Loan shall commence on the date of Borrowing of such Eurodollar Loan
         (including the date of any conversion thereto from a Revolving Loan of
         a different Type) and each Interest Period occurring thereafter in
         respect of such Eurodollar Loan shall commence on the day on which the
         next preceding Interest Period applicable thereto expires;

                         (iii) if any Interest Period relating to a Eurodollar
         Loan begins on a day for which there is no numerically corresponding
         day in the calendar month at the end of such Interest Period, such
         Interest Period shall end on the last Business Day of such calendar
         month;

                         (iv) if any Interest Period would otherwise expire on a
         day which is not a Business Day, such Interest Period shall expire on
         the next succeeding Business Day; provided, however, that if any
         Interest Period for a Eurodollar Loan would otherwise expire on a day
         which is not a Business Day but is a day of the month after which no
         further Business Day occurs in such month, such Interest Period shall
         expire on the next preceding Business Day;

                         (v) no Interest Period may be selected at any time when
         a Default or an Event of Default is then in existence; and

                         (vi) no Interest Period in respect of any Borrowing of
         Revolving Loans shall be selected which extends beyond the Revolving
         Loan Maturity Date for such Revolving Loans.

                  If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above or pursuant to Section 2.6, the Borrower shall be deemed
to have elected to convert such Eurodollar Loans into Base Rate Loans effective
as of the expiration date of such current Interest Period.

         Section 2.9 Increased Costs, Illegality, etc.

                     (a) The Borrower acknowledges that Lender's source of funds
         to be provided to the Borrower under the terms of this Agreement may
         originate from one or more lenders to Lender (each, a "Funding Bank").
         In the event that the Lender shall have received notice from any
         Funding Bank which results in:

                         (i) the inability of the Lender to obtain loans from a
         Funding Bank with Eurodollar Rate pricing; or

                                       30
<PAGE>   36

                         (ii) the Lender incurring increased costs for making
         Eurodollar Loans hereunder with funds obtained from a Funding Bank; or

                         (iii) any loans from a Funding Bank (proceeds of which
         are used or to be used to fund Eurodollar Rate Loans hereunder) being
         deemed to be (x) unlawful by any law or governmental rule, regulation
         or order, (y) impossible by compliance by such Funding Bank in good
         faith with any governmental request (whether or not having force of
         law) or (z) impracticable as a result of a contingency occurring after
         the date of this Agreement which materially and adversely affects the
         interbank Eurodollar market;

then, and in any such event, the Lender shall promptly give notice (by telephone
confirmed in writing) to the Borrower of such determination. Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Lender notifies the Borrower that the circumstances
giving rise to such notice by the Lender no longer exist, and any Notice of
Borrowing given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower agrees to pay
to the Lender, upon written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as the Lender in its sole discretion shall determine based on the
manner in which the applicable Funding Bank imposes costs on the Lender under
clause (ii) above) as shall be required to compensate the Lender for such
increased costs (a written notice certifying as to the additional amounts owed
to the Lender, showing the basis for the calculation thereof, submitted to the
Borrower by the Lender in good faith shall, absent manifest error, be final and
conclusive and binding on all the parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in Section
2.9(b) as promptly as possible and, in any event, within the time period
required by law. The Lender agrees that if it gives notice to the Borrower of
any of the events described in clause (i) or (iii) above, it shall promptly
notify the Borrower if such event ceases to exist. If any such event described
in clause (iii) above ceases to exist, the obligations of the Lender to make
Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans on the
terms and conditions contained herein shall be reinstated.

                     (b) At any time that any Eurodollar Loan is affected by the
         circumstances described in Section 2.9(a)(ii), the Borrower may, and in
         the case of a Eurodollar Loan affected by the circumstances described
         in Section 2.9(a)(iii) the Borrower shall, either (x) if the affected
         Eurodollar Loan is then being made initially or pursuant to a
         conversion, cancel the respective Borrowing by giving the Lender
         telephonic notice (confirmed in writing) on the same date that the
         Borrower was notified by the Lender pursuant to Section 2.9(a)(ii) or
         (iii) or (y) if the affected Eurodollar Loan is then outstanding, upon
         at least three Business Days' written notice to the Lender, require the
         Lender to convert such Eurodollar Loan into a Base Rate Loan.

                     (c) At any time, that the introduction of or any change in
         any applicable law or governmental rule, regulation, order, guideline,
         directive or request (whether or not having the force of law and
         including, without limitation, those announced or published prior to
         the Effective Date) concerning capital adequacy, or any change in
         interpretation or administration thereof by any governmental authority,
         central bank or comparable

                                       31
<PAGE>   37
         agency, will have the effect of increasing the amount of capital
         required or expected to be maintained by any Funding Bank or any
         corporation controlling such Funding Bank, then the Borrower agrees to
         pay to the Lender, upon its written demand therefor, such additional
         amounts as shall be required by the Lender to compensate such Funding
         Bank or such other corporation for any additional amounts imposed on
         Lender in connection with funds borrowed by Lender from such Funding
         Bank which are used by Lender to provide the credit facilities
         hereunder.

         Section 2.10 Compensation. The Borrower agrees to compensate the
Lender, upon its written request (which request shall certify the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by the Lender to fund its Eurodollar Loans but excluding any loss of
anticipated profit) which are imposed on the Lender from any Funding Bank as the
result of: (i) for any reason (other than a default by the Lender) a Borrowing
of, or conversion from or into, Eurodollar Loans does not occur on a date
specified therefor in a Notice of Borrowing (whether or not withdrawn by the
Borrower or deemed withdrawn pursuant to Section 2.9(a)); (ii) any repayment
(including any repayment made pursuant to Sections 3.4 or 3.5 or a result of an
acceleration of the Revolving Loans pursuant to Section 6 or conversion of any
of its Eurodollar Loans) occurring on a date which is not the last day of an
Interest Period with respect thereto; (iii) any prepayment of any Eurodollar
Loans not being made on any date specified in a notice of prepayment given by
the Borrower; (iv) any other default by the Borrower to repay Revolving Loans
when required by the terms of this Agreement or the Note held by the Lender; or
(v) any election made pursuant to Section 2.9(b).

         Section 2.11 Letters of Credit.

                      (a) Provided that on the date of each issuance of any
         Letter of Credit (excluding the Existing Letters of Credit) and after
         giving effect thereto, (i) no Default or Event of Default exists, (ii)
         all representations and warranties set forth in Exhibit B to this
         Agreement and in the other Credit Documents are true and correct in all
         material respects (it being understood and agreed that any
         representation or warranty which by its terms is made as of a specified
         date shall be required to be true and correct in all material respects
         only as of such specified date), (iii) the Borrower has delivered a
         Letter of Credit Obligation Request which meets the requirements of
         Section 2.13 and (iv) the proposed Letter of Credit Obligation will be
         incurred prior to the first anniversary of the date on which Harrah's
         Management Company received notice of termination of the Management
         Agreement under the terms of the Management Agreement, then, subject to
         and upon the other terms and conditions set forth herein, the Borrower
         may request that Lender incur Letter of Credit Obligations and the
         Lender agrees to incur Letter of Credit Obligations by causing an
         Issuing Bank to issue, at any time and from time to time on and after
         the Initial Borrowing Date and prior to the Revolving Loan Maturity
         Date, for the account of the Borrower (or, at Lender's option, for the
         account of the Lender) and for the benefit of any holder (or any
         trustee, agent or other similar representative for any such holders) of
         L/C Supportable Indebtedness of the Borrower or any of its
         Subsidiaries, an irrevocable standby letter of credit, in a form
         customarily used by such Issuing Bank or in such other

                                       32
<PAGE>   38
         form as has been approved by such Issuing Bank (each such standby
         letter of credit and each Existing Letter of Credit as defined below,
         each, a "Letter of Credit" and collectively, the "Letters of Credit")
         in support of such L/C Supportable Indebtedness.

                      (b) The Lender shall have no obligation to incur any
         Letter of Credit Obligation or cause any Issuing Bank to issue any
         Letter of Credit of the types described above if at the time of such
         issuance: any order, judgment or decree of any governmental authority
         or arbitrator shall purport by its terms to enjoin or restrain the
         Lender from incurring any Letter of Credit Obligation or such Issuing
         Bank from issuing such Letter of Credit or any requirement of law
         applicable to the Lender or such Issuing Bank or any request or
         directive (whether or not having the force of law) from any
         governmental authority with jurisdiction over the Lender or such
         Issuing Bank shall prohibit, or request that the Lender or such Issuing
         Bank refrain from, incurring Letter of Credit Obligations or issuing
         letters of credit, as applicable, generally or such Letter of Credit in
         particular or shall impose upon the Lender or such Issuing Bank with
         respect to such Letter of Credit Obligation or Letter of Credit, as
         applicable, any restriction or reserve or capital requirement (for
         which Lender or such Issuing Bank is not otherwise compensated) not in
         effect on the date hereof, or any unreimbursed loss, cost or expense
         which was not applicable, in effect or known to the Lender or such
         Issuing Bank as of the date hereof and which the Lender or such Issuing
         Bank in good faith deems material to it;

                      (c) Notwithstanding the foregoing, (i) the Lender shall
         not incur any Letter of Credit Obligations the amount of which, when
         added to all other outstanding Letter of Credit Obligations at such
         time would exceed either (x) $10,000,000 or (y) when added to the
         aggregate principal amount of all Revolving Loans made and then
         outstanding, an amount equal to the Revolving Loan Commitment at such
         time, (ii) each Letter of Credit shall be denominated in Dollars and
         (iii) each Letter of Credit shall by its terms terminate on or before
         the earlier of (x) the date which occurs 12 months after the date of
         the issuance thereof (although any such Letter of Credit may be
         extendible for successive periods of up to 12 months, but not beyond
         the Revolving Loan Maturity Date, on terms acceptable to the Issuing
         Bank thereof) and (y) the Revolving Loan Maturity Date.

                      (d) Notwithstanding the foregoing, the parties hereto
         acknowledge the existence of the following letters of credit
         outstanding as of the Effective Date (each such letter of credit, as
         the same may be amended, modified, supplemented or extended from time
         to time, an "Existing Letter of Credit" and collectively, the "Existing
         Letters of Credit") for which the Lender shall, upon the Effective Date
         incur Letter of Credit Obligations in support thereof: (i) the Letter
         of Credit issued by Bankers Trust Company in favor of Entergy New
         Orleans, Inc. in the face amount of $400,000, (ii) the Letter of Credit
         issued by Bankers Trust Company in favor of Windsor Court Hotel in the
         face amount of $150,000, (iii) the Letter of Credit issued by Bankers
         Trust Company in favor of Peter A. Mayer Advertising in the face amount
         of $1,000,000 and (iv) the Letter of Credit issued by Bankers Trust
         Company in favor of Doubletree Hotel in the face amount of $200,000.
         Nothing in this Agreement shall impose any obligation on Bankers Trust
         Company to extend the maturity of any Existing Letter of Credit or to
         issue any other

                                       33
<PAGE>   39
         Letters of Credit. On the Effective Date, the Lender will execute a
         guarantee in favor of Bankers Trust Company in the form of Exhibit K
         hereto which guarantee shall guarantee, without limitation, (i) the
         repayment when due of all unpaid drawings with respect to the Existing
         Letters of Credit, (ii) fees for each Existing Letter of Credit as
         provided in Section 3.1(c) and (iii) such administrative charges and
         indemnity obligations typically imposed by Bankers Trust Company in
         connection with the issuance and administration of letters of credit
         generally.

         Section 2.12 Minimum Stated Amount. The face amount of each Letter of
Credit shall be not less than $50,000 or such lesser amount as is acceptable to
the Issuing Bank.

         Section 2.13 Letter of Credit Obligation Requests.

                      (a) Whenever the Borrower desires that a Letter of Credit
         Obligation (excluding Letter of Credit Obligations in respect to the
         Existing Letters of Credit) be incurred, the Borrower shall give the
         Lender at least five Business Days' (or such shorter period as is
         acceptable to the Lender and the Issuing Bank) written notice thereof.
         Each notice shall be in the form of Exhibit A-3 (each a "Letter of
         Credit Obligation Request").

                      (b) The making of each Letter of Credit Obligation Request
         shall be deemed to be a representation and warranty by the Borrower
         that such Letter of Credit Obligation may be incurred in accordance
         with, and will not violate the requirements of, Section 2.11(c). Unless
         (i) an Issuing Bank has not been selected, (ii) the Lender has received
         notice from Borrower or otherwise knows that one or more of the
         conditions specified in Section 2.11 are not then satisfied or (iii)
         that the incurrence of the requested Letter of Credit Obligation would
         violate Section 2.11(c), then the Lender shall incur such Letter of
         Credit Obligation and cause the Issuing Bank to issue the requested
         Letter of Credit for the account of the Borrower (or, at Lender's
         option, for the account of the Lender) in accordance with such Issuing
         Bank's usual and customary practices.

         Section 2.14 Agreement to Repay Letter of Credit Drawings.

                      (a) The Borrower hereby agrees to reimburse the Issuing
         Bank (in the case of all Existing Letters of Credit and all Letters of
         Credit issued for the Borrower's account) or the Lender (in the case of
         a Letter of Credit Obligation (excluding Letter of Credit Obligations
         relating to Existing Letters of Credit, except to the extent of any
         payments thereof by the Lender pursuant to any guarantee by it in favor
         of Bankers Trust Company) incurred by Lender), by making payment to the
         Issuing Bank or the Lender, as the case may be, in immediately
         available funds at the office designated by the Issuing Bank or the
         Payment Office, as the case may be, for any payment or disbursement
         made by the Issuing Bank or the Lender, as the case may be, under any
         Letter of Credit issued by the Issuing Bank or Letter of Credit
         Obligation incurred by the Lender (each such amount, so paid by the
         Issuing Bank or the Lender until reimbursed, an "Unpaid Drawing"),
         immediately after, and in any event on the date of, the date of such
         payment or disbursement, with interest on the amount so paid or
         disbursed by the Issuing Bank or the Lender, to the extent not
         reimbursed prior to 12:00 Noon (New York time) on the date of

                                       34
<PAGE>   40
         such payment or disbursement, from and including the date paid or
         disbursed to but excluding the date the Issuing Bank or the Lender was
         reimbursed by the Borrower therefor at a rate per annum which shall be
         the Base Rate in effect from time to time plus the Applicable Margin
         for Revolving Loans maintained as Base Rate Loans, provided, however,
         to the extent such amounts are not reimbursed prior to 12:00 Noon (New
         York time) on the third Business Day following such payment or
         disbursement, interest shall thereafter accrue on the amounts so paid
         or disbursed by the Issuing Bank or the Lender (and until reimbursed by
         the Borrower) at a rate per annum which shall be the Base Rate in
         effect from time to time plus the Applicable Margin for Revolving Loans
         maintained as Base Rate Loans plus 2%, in each such case, with interest
         to be payable by the Borrower on demand. The Lender shall give the
         Borrower prompt notice of each Unpaid Drawing under any Letter of
         Credit Obligation, provided that the failure to give any such notice
         shall in no way affect, impair or diminish the Borrower's obligations
         hereunder.

                      (b) The obligations of the Borrower under this Section
         2.14 to reimburse the Issuing Bank or the Lender with respect to Unpaid
         Drawings (including interest thereon) shall be absolute and
         unconditional under any and all circumstances and irrespective of any
         setoff, counterclaim or defense to payment which the Borrower may have
         or have had against the Lender or any Issuing Bank, or any
         nonapplication or misapplication by the beneficiary of the proceeds of
         any drawing under a Letter of Credit, the Issuing Bank's only
         obligation to the Borrower being to confirm that any documents required
         to be delivered under such Letter of Credit appear to have been
         delivered and that they appear to comply on their face with the
         requirements of such Letter of Credit; provided, however, that the
         foregoing shall not absolve the respective Issuing Bank for any damages
         to the Borrower actually caused by the willful misconduct or gross
         negligence of the respective Issuing Bank (as determined by a final
         non-appealable order of a court of competent jurisdiction).

         Section 2.15 Increased Costs. If at any time the introduction of or any
change in any applicable law, rule, regulation, order, guideline or request or
in the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by any
Issuing Bank or the Lender with any request or directive by any such authority
(whether or not having the force of law), or any change in generally acceptable
accounting principles, shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by any Issuing Bank or Letter of Credit Obligations incurred by
the Lender, or (ii) impose on any Issuing Bank or the Lender any other
conditions relating, directly or indirectly, to this Agreement or any Letter of
Credit or Letter of Credit Obligation; and the result of any of the foregoing is
to increase the cost to any Issuing Bank or the Lender of issuing or maintaining
any Letter of Credit or Letter of Credit Obligation, or reduce the amount of any
sum received or receivable by any Issuing Bank or the Lender or reduce the rate
of return on its capital with respect to Letters of Credit or Letter of Credit
Obligations (except for changes in the rate of tax on, or determined by
reference to, the net income or profits of such Issuing Bank or the Lender
pursuant to the laws of the jurisdiction in which it is organized or in which
its principal office or applicable lending office is located or any subdivision
thereof or therein), then, upon demand to the Borrower by the Lender, the
Borrower agrees to pay (and shall pay) to the Lender (for the benefit of the
Lender or the Issuing

                                       35
<PAGE>   41
Bank, as applicable) such additional amount or amounts as will compensate such
Person for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital. The Lender, upon determining
that any additional amounts will be payable pursuant to this Section 2.15, will
give prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by the Lender, setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate the applicable Persons. The certificate required to be
delivered pursuant to this Section 2.15 shall, if delivered in good faith and
absent manifest error, be final and conclusive and binding on the Borrower.

                                  ARTICLE III.

           FEES; REDUCTIONS OF REVOLVING LOAN COMMITMENT AND PAYMENTS

         Section 3.1 Fees.

                     (a) The Borrower agrees to pay, upon each payment under,
         issuance of, or amendment to, any Letter of Credit, such amount as
         shall at the time of such event be the administrative charge which the
         respective Issuing Bank is generally imposing in connection with such
         occurrence with respect to letters of credit.

                     (b) The Borrower agrees to pay to the Lender an unused line
         fee for the period from the Effective Date to but excluding the
         Revolving Loan Maturity Date (or such earlier date as the Revolving
         Loan Commitment shall have been terminated), computed at a rate for
         each day equal to one-quarter of one percent (0.25%) on the daily
         average Total Unutilized Revolving Loan Commitment. Accrued unused line
         fees shall be due and payable quarterly in arrears on each Quarterly
         Payment Date and on the Revolving Loan Maturity Date or such earlier
         date upon which the Revolving Loan Commitment is terminated.

                     (c) The Borrower agrees to pay to the Lender (or, in the
         case of the Existing Letters of Credit, Bankers Trust Company) letter
         of credit fees in respect of each Letter of Credit (including the
         Existing Letters of Credit) issued hereunder (or as contemplated
         herein) for the period from and including the date of issuance of the
         respective Letter of Credit (or, in the case of the Existing Letters of
         Credit, from the Effective Date) to and including the termination of
         such Letter of Credit, computed at a rate per annum equal to the
         Applicable Margin for Revolving Loans maintained as Eurodollar Loans on
         the average daily stated amount (i.e., the maximum amount available to
         be drawn thereunder) of such Letter of Credit. Accrued letter of credit
         fees shall be due and payable quarterly in arrears on each Quarterly
         Payment Date and upon the first day on or after the termination of the
         Revolving Loan Commitment upon which no Letter of Credit remains
         outstanding.

                     (d) The Borrower agrees to pay to the Lender on the Initial
         Borrowing Date and each anniversary of the Initial Borrowing Date, a
         non-refundable administration fee in an amount equal to $25,000.

                                       36
<PAGE>   42

         Section 3.2 Reductions of the Total Unutilized Revolving Loan
Commitment. Upon at least two Business Days' prior notice to the Lender at its
Notice Office, the Borrower shall have the right, at any time or from time to
time, without premium or penalty, to terminate the Total Unutilized Revolving
Loan Commitment, in whole or in part, in integral multiples of $500,000 in the
case of partial reductions to the Total Unutilized Revolving Loan Commitment,
provided that the reduction to the Total Unutilized Revolving Loan Commitment
shall in no case be in an amount which would cause the Revolving Loan Commitment
to be reduced by an amount which exceeds the Total Unutilized Revolving Loan
Commitment as in effect immediately before giving effect to such reduction.

         Section 3.3 Mandatory Termination of Revolving Loan Commitment. The
Revolving Loan Commitment shall terminate in its entirety on the first to occur
of (i) the Revolving Loan Maturity Date and (ii) termination of the Revolving
Loan Commitment pursuant to Section 6.

         Section 3.4 Voluntary and Mandatory Prepayments. The Borrower shall
have the right to prepay the Revolving Loans, without premium or penalty, in
whole or in part at any time and from time to time on the following terms and
conditions: (i) the Borrower shall give the Lender prior to 12:00 Noon (New York
time) at its Notice Office (x) at least one Business Day's prior written notice
(or telephonic notice promptly confirmed in writing) of the Borrower's intent to
prepay Base Rate Loans and (y) at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of the Borrower's
intent to prepay Eurodollar Loans, the amount of such prepayment and the Types
of Loans to be prepaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which made; (ii) each prepayment shall be in
an aggregate principal amount of at least $500,000, provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than $500,000, then such Borrowing may not be continued as a Borrowing of
Eurodollar Loans and any election of an Interest Period with respect thereto
given by the Borrower shall have no force or effect. At any time when Minimum
Payment Guaranty Loans (as defined in the HET/JCC Agreement) and/or Revolving
Loans are outstanding, the Borrower shall immediately apply any and all balances
of Cash and Cash Equivalents it holds (net of amounts required to be deposited
into the Net Cash Proceeds Account pursuant to Section 4.4 hereof) that are in
excess of the amount equal to the sum of (i) $2,875,000 plus (ii) the amount
required to be retained by JCC pursuant to applicable Gaming Regulations at such
time plus (iii) the cash portions of the House Bank (as defined in the
Management Agreement), first, to prepay any and all Minimum Payment Guaranty
Loans until such Minimum Payment Guaranty Loans are paid in full, and second, to
prepay any and all outstanding Revolving Loans until such Revolving Loans are
paid in full.

         Section 3.5 Mandatory Repayments. On any day on which the sum of the
aggregate outstanding principal amount of the Revolving Loans and the amount of
Letter of Credit Obligations exceeds the Revolving Loan Commitment as then in
effect, the Borrower agrees to prepay principal of Revolving Loans in an amount
equal to such excess. If, after giving effect to the prepayment of all
outstanding Revolving Loans, the aggregate amount of the Letter of Credit
Obligations exceeds the Revolving Loan Commitment as then in effect, the
Borrower agrees to pay to the Lender at the Payment Office on such date an
amount of cash or Cash Equivalents equal to the amount of such excess (up to a
maximum amount equal to the Letter of Credit

                                       37
<PAGE>   43
Obligations at such time), such cash or Cash Equivalents to be held as security
for all obligations of the Borrower hereunder in a cash collateral account to be
established by the Lender. In addition to the foregoing, all Revolving
Obligations shall be due and payable on the Revolving Loan Maturity Date or such
earlier date pursuant to this Agreement upon which the Revolving Obligations are
declared or deemed to be due and payable.

         Section 3.6 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any other
Credit Document shall be made to the Lender for the account of the Lender not
later than 12:00 Noon (New York time) on the date when due and shall be made in
Dollars in immediately available funds at the Payment Office of the Lender;
provided that all payments with respect to Existing Letters of Credit shall be
made directly to Bankers Trust Company not later than 12:00 noon (New York time)
on the date when due and shall be made in Dollars in immediately available funds
at the BTCo Payment Office. Whenever any payment to be made hereunder or under
the Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.

         Section 3.7 Net Payments.

                     (a) All payments made by the Borrower hereunder, under the
         Note and any other Credit Document will be made without setoff,
         counterclaim or other defense. All such payments will be made free and
         clear of, and without deduction or withholding for, any present or
         future taxes, levies, imposts, duties, fees, assessments or other
         charges of whatever nature now or hereafter imposed by any jurisdiction
         or by any political subdivision or taxing authority thereof or therein
         with respect to such payments (but excluding, except as provided in the
         second succeeding sentence, any tax imposed on or measured by the net
         income or profits of the Lender or any franchise tax based on the net
         income of the Lender pursuant to the laws of the jurisdiction in which
         it is organized or the jurisdiction in which the principal office of
         the Lender is located or any subdivision thereof or therein) and all
         interest, penalties or similar liabilities with respect thereto (all
         such non-excluded taxes, levies, imports, duties, fees, assessments or
         other charges being referred to collectively as "Taxes"). If any Taxes
         are so levied or imposed, the Borrower agrees to pay the full amount of
         such Taxes, and such additional amounts as may be necessary so that
         every payment of all amounts due under this Agreement or under the
         Note, after withholding or deduction for or on account of any Taxes,
         will not be less than the amount provided for herein or in the Note. If
         any amounts are payable in respect of Taxes pursuant to the two
         preceding sentences, the Borrower agrees to reimburse the Lender, upon
         the written request of the Lender, for taxes imposed on or measured by
         the net income or profits of the Lender or any franchise tax based on
         the net income of the Lender pursuant to the laws of the jurisdiction
         in which the principal office of the Lender is located or under the
         laws of any political subdivision or taxing authority of any such
         jurisdiction in which the principal office of the Lender is located and
         for any withholding of income or similar taxes imposed by the United
         States of America as the Lender shall determine are payable by, or
         withheld from, the Lender in respect of such amounts so paid to or on
         behalf of the Lender pursuant to the preceding two sentences and in
         respect of

                                       38
<PAGE>   44
         any amounts paid to or on behalf of the Lender pursuant to this
         sentence. The Borrower will furnish to the Lender within 45 days after
         the date the payment of any Taxes is due pursuant to applicable law
         certified copies of tax receipts evidencing such payment by the
         Borrower. The Borrower agrees to indemnify and hold harmless the
         Lender, and reimburse the Lender upon its written request, for the
         amount of any Taxes so levied or imposed and paid by the Lender.

                     (b) If the Borrower pays any additional amount under this
         Section 3.7 to the Lender and the Lender determines that it has
         received or realized in connection therewith any refund or any
         reduction of, or credit against, its liabilities for Taxes in or with
         respect to the taxable year in which the additional amount is paid, the
         Lender shall pay to the Borrower an amount that the Lender shall, in
         its sole discretion, determine is equal to the net benefit, after tax,
         which was obtained by the Lender in such taxable year as a consequence
         of such refund, reduction or credit.

                                  ARTICLE IV.

                                    SECURITY

         Section 4.1 Security Interest.

                     (a) In order to secure the prompt and complete payment and
         performance in full of the Revolving Obligations, the Borrower, the
         Guarantors and, as applicable, the other Secured Creditors and the
         Collateral Agent for the benefit of the Secured Creditors have entered
         into the Security Documents. The Lender hereby agrees to all of the
         terms and provisions of the Intercreditor Agreement, the Manager
         Subordination Agreement and the Security Documents, as the
         Intercreditor Agreement, the Manager Subordination Agreement and the
         Security Documents may be amended from time to time pursuant to the
         provisions thereof and hereof.

                     (b) The Collateral is to be held by the Collateral Agent
         for the benefit of the Secured Creditors, subject to the terms of the
         Intercreditor Agreement the Security Documents and Section 4.6.

         Section 4.2 Recording; Opinions of Counsel.

                     (a) The Borrower represents that it has caused to be
         executed and delivered, filed and recorded and covenants that it will
         promptly cause to be executed and delivered, filed and recorded, all
         instruments and documents, and has done and will do or will cause to be
         done all such acts and other things, at the Borrower's expense, as are
         necessary to effect and maintain valid and perfected security interests
         in the Collateral. The Borrower shall, as promptly as practicable,
         cause to be executed and delivered, filed and recorded all instruments
         and do all acts and other things as may be required by law to perfect,
         maintain and protect the security interests under the Security
         Documents and herein.

                                       39
<PAGE>   45

                     (b) The Borrower shall furnish to the Lender and the
         Collateral Agent, concurrently with the execution and delivery of this
         Agreement, and the Security Documents and promptly after the execution
         and delivery of any amendment thereto or any other instrument of
         further assurance, an opinion(s) of counsel to the Borrower stating
         that, in the opinion of such counsel, subject to customary exclusions
         and exceptions reasonably acceptable to the Lender, either (i) this
         Agreement, the Security Documents, any such amendment and all other
         instruments of further assurance have been properly recorded,
         registered and filed and all such other action has been taken to the
         extent necessary to make effective valid security interests and to
         perfect the security interests intended to be created by this Agreement
         and the Security Documents, and reciting the details of such action, or
         (ii) no such action is necessary to effect and maintain in full force
         and effect the validity and perfection of the security interests under
         the Security Documents and hereunder.

         Section 4.3 Disposition of Certain Collateral.

                     (a) The Borrower may, without requesting the release or
         consent of the Lender or the Collateral Agent, but otherwise subject to
         the requirements of this Agreement, and in each case in the ordinary
         course of its business:

                         (i) sell, assign, transfer, license or otherwise
         dispose of, free from the security interests under the Security
         Documents and hereunder, any machinery, equipment, or other personal
         Property constituting Collateral that has become worn out, obsolete, or
         unserviceable or is being upgraded, upon replacing the same with or
         substituting for the same, machinery, equipment or other Property
         constituting Collateral not necessarily of the same character but being
         of at least equal fair value and at least equal utility to the Borrower
         as the Property so disposed of, which Property shall without further
         action become Collateral subject to the security interests under the
         Security Documents and hereunder;

                         (ii) (a) consistent with industry practices, sell,
         assign, transfer, license or otherwise dispose of, free from the
         security interests under the Security Documents and hereunder,
         inventory held for resale that is at any time part of the Collateral,
         (b) in the ordinary course of the Borrower's business and consistent
         with industry practices, collect, liquidate, sell, factor or otherwise
         dispose of, free from the security interests under the Security
         Documents and hereunder, accounts receivable or notes receivable that
         are part of the Collateral or (c) make ordinary course of business Cash
         payments (including scheduled repayments of Indebtedness permitted to
         be incurred hereby) from Cash that is at any time part of the
         Collateral;

                         (iii) sell, assign, transfer, license or otherwise
         dispose of, free from the security interests under the Security
         Documents and hereunder, any personal property the use of which is no
         longer necessary or desirable in the proper conduct of the business of
         the Borrower and its Subsidiaries and the maintenance of its earnings
         and is not material to the conduct of the business of the Borrower and
         its Subsidiaries;

                                       40
<PAGE>   46
                         (iv) subject to the provisions of the Security
         Documents pertaining to disposal of Real Property, sell, assign,
         transfer, license or otherwise dispose of, free from the security
         interests under the Security Documents and hereunder, any assets or
         property in accordance with Section 5.14; provided that the Collateral
         Agent shall have a valid and perfected security interest in all net
         proceeds that are not Net Cash Proceeds from such disposition (except
         those fees, commissions and other expenses and taxes deducted in the
         definition of "Net Cash Proceeds") and in any assets or property
         acquired with the proceeds from such disposition in the same priority
         as such assets or property so disposed of; and

                         (v) sell, assign, transfer, license, release or
         otherwise dispose of, free from the security interests under the
         Security Documents, the Intercreditor Agreement and hereunder, any
         Collateral as permitted by and pursuant to the express terms of any of
         the Security Documents.

                     (b) Notwithstanding the provisions of subsection (a) above,
         the Borrower shall not dispose of or transfer (by lease, assignment,
         license, sale or otherwise) or pledge, mortgage or otherwise encumber
         Collateral pursuant to the provisions of Section 4.3(a)(ii) or (iii)
         with a fair value of 10% or more of the aggregate fair value of all
         Collateral then existing in any transaction or any series of related
         transactions.

                     (c) In the event that the Borrower has sold, exchanged, or
         otherwise disposed of or proposes to sell, exchange or otherwise
         dispose of any portion of the Collateral which under the provisions of
         this Section 4.3 may be sold, exchanged or otherwise disposed of by the
         Borrower without consent of the Lender or the Collateral Agent, and the
         Borrower requests the Lender or the Collateral Agent to furnish a
         written disclaimer, release or quitclaim of any interest in such
         property under the Security Documents, the Lender shall execute such an
         instrument (or instruct the Collateral Agent to do so), prepared by the
         Borrower, upon delivery to the Lender of an Officer's Certificate by
         the Borrower reciting the sale, exchange or other disposition made or
         proposed to be made and describing in reasonable detail the property
         affected thereby, and certifying that such property is property which
         by the provisions of this Section 4.3 may be sold, exchanged or
         otherwise disposed of or dealt with by the Borrower without any release
         or consent of the Lender. Each of the Lender and the Collateral Agent
         shall be authorized to conclusively rely on such certification.

                     (d) Any disposition of Collateral made in compliance with
         the provisions of this Section 4.3 shall be deemed not to impair the
         security interests under the Security Documents and hereunder in
         contravention of the provisions of this Indenture.

         Section 4.4 Net Cash Proceeds Account. All Cash or Cash Equivalents
received by the Borrower or its Subsidiaries as Net Cash Proceeds from any Asset
Sale or as Insurance and Condemnation Proceeds shall be deposited in the Net
Cash Proceeds Account, in which account

                                       41
<PAGE>   47
there shall be, subject to the lien priority provisions set forth in the
Intercreditor Agreement, the Security Documents and Section 4.6, a perfected
security interest in favor of the Collateral Agent for the benefit of the
Secured Creditors. As long as no Default or Event of Default exists, the funds
from time to time on deposit in the Net Cash Proceeds Account may, subject to
the requirement of the immediately succeeding sentence, be disbursed from such
account for general corporate purposes and to replace, restore, repair or
rebuild the respective Collateral. Notwithstanding anything to the contrary
contained in the immediately preceding sentence, if the aggregate amount of
Insurance and Condemnation Proceeds (for this purpose, excluding proceeds from
business interruption insurance) with respect to any single event or series of
related events equals or exceeds $1,000,000, then all Insurance and Condemnation
Proceeds received from the respective event or series of related events
(including proceeds from business interruption insurance) may only be withdrawn
from the Net Cash Proceeds Account so long as no Default or Event of Default
then exists, (i) in the case of proceeds from business interruption insurance,
for general corporate purposes, and (ii) in the case of all other such Insurance
and Condemnation Proceeds, (A) within 180 days after the date of the receipt of
such proceeds, to commence replacement, restoration, repair or reconstruction of
any Collateral that has been damaged, destroyed, or subject to the respective
casualty or condemnation event (provided, that such replacement, restoration,
repair or reconstruction is completed within 365 days of such commencement)
and/or (B) to the extent not used for the purposes described in the preceding
clause (A), subject to the terms of the Intercreditor Agreement, to redeem
Senior Notes in accordance with Section 3.1 of the Senior Note Indenture. Any
release of proceeds as contemplated by the immediately preceding sentence shall
be effected pursuant to the delivery of an Officers' Certificate by the Borrower
to the Lender at the time of each release of such funds, with each such
Officers' Certificate to certify the amount of funds to be withdrawn and the use
to be made of the proceeds of such drawing.

         Section 4.5 Certain Releases of Collateral. Subject to applicable law,
the release of any Collateral from Liens created by the Security Documents or
the release of, in whole or in part, the Liens created by the Security
Documents, will not be deemed to impair the Security Documents in contravention
of the provisions of this Agreement if and to the extent the Collateral or Liens
are released pursuant to, and in accordance with, the Intercreditor Agreement
and the applicable Security Documents and are in compliance with, the terms
hereof (including, without limitation, the applicable provisions of Section
5.14).

         Section 4.6 Lien Priorities.

                     (a) Priorities. As more fully provided in (and subject to
         the express provisions of) the various Security Documents and the
         Intercreditor Agreement, it is acknowledged and agreed that all
         proceeds applied in accordance with the various Security Document are
         required to be applied, as between the various "Obligations" (as used
         in this Section 4.6, the term "Obligations" shall have the meaning
         provided in the Intercreditor Agreement): (i) first, to certain
         Obligations owing to the Collateral Agent, (ii) second, to all
         reimbursement obligations pursuant to the Minimum Payment Guaranty
         Documents in respect of amounts actually paid pursuant to one or more
         Minimum Payment Guaranties, and any interest thereon or other amounts
         secured thereby in accordance with, the terms of the relevant Minimum
         Payment Guaranty Documents, (iii)

                                       42
<PAGE>   48

         third, to all unpaid Revolving Obligations (as defined in the
         Intercreditor Agreement); and (iv) fourth, to all unpaid Indenture
         Obligations, as (and on the basis) provided in the Security Documents
         and the Intercreditor Agreement.

                     (b) Acknowledgment of Prior Security Interest. It is
         acknowledged and agreed that the security interests granted pursuant to
         various of the Security Documents shall also secure the Minimum Payment
         Obligations (as defined in the Intercreditor Agreement) owed to HET and
         HOC as Minimum Payment Guarantors and the Minimum Payment Obligations
         owing to any other Minimum Payment Guarantor which becomes a party to
         the Intercreditor Agreement in accordance with the terms and provisions
         thereof, with the Minimum Payment Obligations so secured to be entitled
         to the Lien priorities in terms of distributions pursuant to the
         Security Documents described in preceding Section 4.6(a).

         Section 4.7 Payment of Expenses. On demand of the Lender, the Borrower
forthwith shall pay or satisfactorily provide for all reasonable expenditures
incurred by the Lender and/or the Collateral Agent under this Article IV,
including the reasonable fees and expenses of counsel.

         Section 4.8 Suits to Protect the Collateral. Subject to Section 4.1 of
this Agreement, the Intercreditor Agreement and to the provisions of the
Security Documents, the Lender shall have power to institute and to maintain
such suits and proceedings as it may deem expedient to prevent any impairment of
the Collateral by any acts which may be unlawful or in violation of the Security
Documents or this Agreement, including the power to institute and maintain suits
or proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid or if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interests in contravention of this
Agreement or be prejudicial to the interests of the Lender. The Lender shall
give notice to the Borrower promptly following the institution of any such suit
or proceeding.

         Section 4.9 Lender's Duties. The powers and duties conferred upon the
Lender and the Collateral Agent by this Article IV are solely to protect the
security interests and shall not impose any duty upon the Lender or the
Collateral Agent to exercise any such powers and duties, except as expressly
provided in this Agreement. Neither the Lender nor the Collateral Agent shall be
under any duty to the Borrower or any Guarantor whatsoever to make or give any
presentment, demand for performance, notice of nonperformance, protest, notice
of protest, notice of dishonor, or other notice or demand in connection with any
Collateral, or to take any steps necessary to preserve any rights against prior
parties except as expressly provided in this Agreement. Neither the Lender nor
the Collateral Agent shall be liable to the Borrower or any Guarantor for
failure to collect or realize upon any or all of the Collateral, or for any
delay in so doing, nor shall the Lender or the Collateral Agent be under any
duty to the Borrower or any Guarantor to take any action whatsoever with regard
thereto. Neither the Lender nor the Collateral Agent shall have any duty to the
Borrower or any Guarantor to comply with any recording, filing, or other legal
requirements necessary to establish or maintain the validity, priority or
enforceability of the security interests in, or the Lender's or the Collateral
Agent's rights in or to, any of the Collateral.

                                       43
<PAGE>   49

         Section 4.10 Security Documents. Notwithstanding any provision of this
Agreement, or the Security Documents, or any other documents contemplated
hereunder to the contrary:

                      (a) This Agreement and the Security Documents shall grant
         no Liens, or any other security or other interests or right in or to
         (i) the Casino Operating Contract, (ii) the House Bank (as defined in
         the Management Agreement), and (iii) the Louisiana Gaming Gross Revenue
         Share Payments (including the State's Interest in Daily Collections),
         as such terms are defined in the Casino Operating Contract;

                      (b) The Casino Operating Contract and the Louisiana Gaming
         Gross Revenue Share Payments (including the State's Interest in Daily
         Collections), are not part of the Collateral and are not included
         within the definition of Collateral; and

                                   ARTICLE V.

                                    COVENANTS

         Section 5.1 Payment of Revolving Obligations and PIK Payments.

                     (a) The Borrower shall duly and punctually pay the
         principal of, interest on and other obligations with respect to, the
         Revolving Obligations at the places, on the dates and in the manner
         provided in this Agreement.

                     (b) The Borrower agrees to make all interest payments owing
         with respect to the Senior Notes by issuing "Secondary Securities" (as
         defined in the Senior Note Indenture), rather than making such payments
         in cash, to the maximum extent permitted under the terms of the Senior
         Note Indenture.

         Section 5.2 Information Covenants; Compliance Certificate; Notice of
Default. JCC Holding and/or the Borrower will furnish to the Lender the
following information:

                     (a) Monthly Reports. Within 30 days after the end of each
         fiscal month of JCC Holding (other than the last such month of any
         fiscal quarter of JCC Holding), copies of such monthly financial
         statements, if any, which JCC Holding or any of its Subsidiaries is
         required to file with any Gaming Authority and which are publicly
         available after such filing. To the extent not provided or available
         pursuant to the preceding sentence, within 30 days after the end of
         each fiscal month of JCC Holding (other than the last such month of any
         fiscal quarter of JCC Holding), the consolidated balance sheet of JCC
         Holding and its Consolidated Subsidiaries as at the end of such fiscal
         month, and the related consolidated statements of income and retained
         earnings and statement of cash flows for such fiscal month and for the
         elapsed portion of the fiscal year ended with the last day of such
         fiscal month, all of which shall be certified by a financial officer of
         JCC Holding, subject to normal year-end audit adjustments. If JCC
         Holding has any Subsidiaries which are Unrestricted Subsidiaries
         hereunder, then the monthly financial information required by this
         clause (a) shall include a reasonably detailed presentation, either on
         the face of the financial statements or the footnotes thereto, of the
         financial

                                       44
<PAGE>   50
         condition and results of operations of Unrestricted Subsidiaries
         separate from the financial condition and results of operations of JCC
         Holding and its Subsidiaries which are not Unrestricted Subsidiaries.

                     (b) Quarterly Financial Statements. Within 45 days after
         the close of each of the first three quarterly accounting periods in
         each fiscal year of JCC Holding and within 90 days after the close of
         the fourth quarterly accounting period in each fiscal year of JCC
         Holding, the consolidated balance sheet of JCC Holding and its
         Consolidated Subsidiaries as at the end of such quarterly accounting
         period and the related consolidated statements of income and retained
         earnings and statement of cash flows, in each case for such quarterly
         accounting period and for the elapsed portion of the fiscal year ended
         with the last day of such quarterly accounting period, in each case
         setting forth comparative figures for the corresponding periods in the
         prior fiscal year, all of which shall be certified by a financial
         officer of the Borrower, subject to normal year-end audit adjustments.
         To the extent JCC Holding is filing quarterly reports on Form 10-Q with
         the SEC, delivery of such reports to the Lender shall be deemed to
         satisfy the foregoing requirements of this subsection. If JCC Holding
         has any Subsidiaries which are Unrestricted Subsidiaries hereunder,
         then the quarterly financial information required by this clause (b)
         shall include a reasonably detailed presentation, either on the face of
         the financial statements or the footnotes thereto, and in the
         management's discussion an analysis of operational and financial
         developments, of the financial condition and results of operations of
         Unrestricted Subsidiaries separate from the financial condition and
         results of operations of JCC Holding and its Subsidiaries which are not
         Unrestricted Subsidiaries.

                     (c) Annual Financial Statements. Within 120 days after the
         close of each fiscal year of JCC Holding, (i) the consolidated balance
         sheet of JCC Holding and its Consolidated Subsidiaries as at the end of
         such fiscal year and the related consolidated statements of income and
         retained earnings and statement of cash flows for such fiscal year
         setting forth comparative figures for the preceding fiscal year and
         certified by Deloitte & Touche or such other independent certified
         public accountants of recognized national standing reasonably
         acceptable to the Trustee, and (ii) management's discussions and
         analysis of the important operational and financial developments during
         such fiscal year. To the extent JCC Holding is filing Annual Reports on
         Form 10-K with the SEC, delivery of such reports to the Lender shall be
         deemed to satisfy the foregoing requirements of this subsection. If JCC
         Holding has any Subsidiaries which are Unrestricted Subsidiaries
         hereunder, then the annual financial information required by this
         clause (c) shall include a reasonably detailed presentation, either on
         the face of the financial statements or the footnotes thereto, and in
         the management's discussion and analysis of operational and financial
         developments, of the financial condition and results of operations of
         Unrestricted Subsidiaries separate from the financial condition and
         results of operations of JCC Holding and its Subsidiaries which are not
         Unrestricted Subsidiaries.

                     (d) Other Reports, Notices and Filings. Promptly, copies of
         all financial information, proxy materials, notices and other
         information and reports, if any, which JCC Holding or any of its
         Subsidiaries shall file with the SEC.

                                       45
<PAGE>   51

                     (e) Management Letters. At any time that Harrah's
         Management Company or any of its Affiliates is not the manager of the
         Casino, promptly after the receipt thereof by JCC Holding or any of its
         Subsidiaries, a copy of any "management letter" received by JCC Holding
         or such Subsidiary from its certified public accountants and the
         management's responses thereto.

                     (f) Management Agreement. At any time that Harrah's
         Management Company or any of its Affiliates is not the manager of the
         Casino, no later than 30 days following the approval thereof by the
         Board of Directors of JCC Holding, the annual plan prepared pursuant to
         Article 8 of the Management Agreement, any revisions to the annual plan
         referred to in the Management Agreement as may be agreed to by JCC
         Holding or the Borrower and/or Harrah's Management Company, any
         submissions to arbitration in connection with such annual plan and the
         results of any such arbitration.

                     (g) Budgets. At any time that Harrah's Management Company
         or any of its Affiliates is not the manager of the Casino, no later
         than 30 days following the approval thereof by the Board of Directors
         of JCC Holding, a budget (including budgeted statements of income and
         sources and uses of cash and balance sheets) prepared by JCC Holding
         for (x) each of the twelve months of such fiscal year prepared in
         detail and (y) for the year immediately following such fiscal year, in
         each case prepared in summary form and consolidated for JCC Holding and
         its Subsidiaries, and accompanied by the statement of a financial
         officer of JCC Holding to the effect that, to the best of such
         officer's knowledge, the budget is a reasonable estimate for the period
         covered thereby.

                     (h) Other Reports, Notices and Filings. Promptly, copies of
         all financial information, notices and other information and reports,
         if any, which JCC Holding or any of its Subsidiaries (y) delivers to
         holders of Senior Notes or any other issue of its Indebtedness if the
         aggregate principal amount thereof exceeds (or upon the utilization of
         any unused commitment may exceed) $5,000,000, pursuant to the terms of
         the documentation governing any such Indebtedness (or any trustee,
         agent or other representative therefor) or (z) deliver pursuant to any
         of the Minimum Payment Guaranty Documents (including, without
         limitation, any notice to the effect that the Minimum Payment Guaranty
         shall not be renewed or extended).

                     (i) Litigation. Promptly, and in any event within three
         Business Days after JCC Holding or the Borrower obtains knowledge
         thereof, notice of any litigation or governmental investigation or
         proceeding (including any investigation by any Gaming Authority)
         pending (x) against JCC Holding or any of its Subsidiaries or
         Affiliates of any thereof (other than the initial suitability
         investigations by the LGCB of directors and officers of the Borrower
         and JCC Holding, but including notice of any adverse finding in any
         such investigation), which could materially and adversely affect the
         business, operations, property, assets, liabilities, condition
         (financial or otherwise) or prospects of the Borrower or JCC Holding
         and its Subsidiaries taken as a whole, (B) with respect to any material
         Indebtedness of JCC Holding and its Subsidiaries taken as a whole or
         (C) with respect to any Document or the Transaction.

                                       46
<PAGE>   52

                     (j) Environmental Matters. Promptly upon, and in any event
         within ten Business Days after, an Authorized Representative of JCC
         Holding or any of its Subsidiaries obtains knowledge thereof, notice of
         one or more of the following environmental matters, unless such
         environmental matters could not, individually or when aggregated with
         all other such environmental matters, be reasonably expected to
         materially and adversely affect the business, operations, property,
         assets, liabilities, condition (financial or otherwise) or prospects of
         the Borrower and its Subsidiaries taken as a whole:

                         (i) any pending or threatened Environmental Claim
         against JCC Holding or any of its Subsidiaries or any Real Property
         owned or operated by the Borrower or any of its Subsidiaries;

                         (ii) any condition or occurrence on or arising from any
         Real Property owned or operated by JCC Holding or any of its
         Subsidiaries that (a) results in noncompliance by JCC Holding or any of
         its Subsidiaries with any applicable Environmental Law or (b) could
         reasonably be expected to form the basis of an Environmental Claim
         against JCC Holding or any of its Subsidiaries or any such Real
         Property;

                         (iii) any condition or occurrence on any Real Property
         owned or operated by JCC Holding or any of its Subsidiaries that could
         reasonably be expected to cause such Real Property to be subject to any
         restrictions on the ownership, occupancy, use or transferability by JCC
         Holding or any of its Subsidiaries of such Real Property under any
         Environmental Law; and

                         (iv) the taking of any removal or remedial action in
         response to the actual or alleged presence of any Hazardous Material on
         any Real Property owned or operated by JCC Holding or any of its
         Subsidiaries as required by any Environmental Law or any governmental
         or other administrative agency. All such notices shall describe in
         reasonable detail the nature of the claim, investigation, condition,
         occurrence or removal or remedial action and JCC Holdings' or such
         Subsidiary's response thereto. In addition, JCC Holding will provide
         the Lender with copies of all material communications with any
         government or governmental agency relating to Environmental Laws, all
         communications with any Person (other than its attorneys) relating to
         any Environmental Claim of which notice is required to be given
         pursuant to this Section 5.2(j), and such detailed reports of any such
         Environmental Claim as may reasonably be requested by the Lender;
         provided that in any event JCC Holding shall deliver to the Lender all
         notices received by it or any of its Subsidiaries from any
         government or governmental agency under, or pursuant to, CERCLA.

                     (k) Compliance Certificate; Notice of Default. JCC Holding
         and/or the Borrower will furnish to the Lender the following
         information:

                         (i) within 120 days after the end of its fiscal year,
         an Officers' Certificate stating that a review of its activities and
         the activities of its Subsidiaries during

                                       47
<PAGE>   53
         the preceding fiscal year has been made under the supervision of the
         signing Officers with a view to determining whether the Borrower has
         kept, observed, performed and fulfilled its obligations under this
         Agreement, the Security Documents, the Senior Note Indenture and
         further stating, as to each such Officer signing such certificate,
         whether or not the signer knows of any failure by the Borrower, any
         Guarantor or any Subsidiary of the Borrower or any Guarantor to comply
         with any conditions or covenants in this Agreement and, if such signer
         does know of such a failure to comply, the certificate shall describe
         such failure with particularity. The Officers' Certificate shall also
         notify the Lender should the relevant fiscal year end on any date other
         than the current fiscal year end date;

                         (ii) so long as not contrary to the then current
         recommendation of the American Institute of Certified Public
         Accountants, within 120 days after the end of its fiscal year, a
         written report of a firm of independent certified public accountants
         with an established national reputation stating that in conducting
         their audit for such fiscal year, nothing has come to their attention
         that caused them to believe that the Borrower or any Subsidiary of the
         Borrower was not in compliance with the provisions set forth in
         Sections 5.1, 5.5, 5.14, 5.24 , 5.31 and 5.32 of this Agreement;

                         (iii) at the time of the delivery of the financial
         statements provided for in Section 5.2(b) and (c), a certificate of an
         Authorized Officer of JCC Holding to the effect that, to the best of
         such officer's knowledge, no Default or Event of Default has occurred
         and is continuing or, if any Default or Event of Default has occurred
         and is continuing, specifying the nature and extent thereof, which
         certificate shall set forth in reasonable detail the calculation of (A)
         Consolidated EBITDA for the Test Period ended on the last day of the
         period covered by the respective financial statements and (B) "Adjusted
         EBITDAM" pursuant to Section 5.32 for the applicable "Performance
         Period" under Section 5.32; and

                         (iv) so long as this Agreement has not been terminated,
         immediately upon becoming aware of any Default or Event of Default
         under this Agreement, or an event of default under the Senior Note
         Indenture, an Officer's Certificate specifying such Default or Event of
         Default under this Agreement or event of default under the Senior Note
         Indenture, as applicable, and what action the Borrower is taking or
         proposes to take with respect thereto. The Lender shall not be deemed
         to have knowledge of a Default or an Event of Default unless one of the
         Lender's officers receives notice of the Default or Event of Default
         giving rise thereto from the Borrower.

         Section 5.3 End of Fiscal Years; Fiscal Quarters. JCC Holding shall
cause (i) its, and each of its Subsidiaries', fiscal years to end on December
31, except that for purposes of the Casino Operating Contract and the Minimum
Payment Guaranty Documents, the fiscal year of the Borrower shall be deemed to
end on March 31, and (ii) its, and each of its Subsidiaries', fiscal quarters to
end on the last day of each March, June, September and December.

         Section 5.4 Maintenance of Operating Account. The Borrower shall
establish one or more operating accounts, including the Bank Account (as defined
in the Management Agreement) into which the Minimum Balance (as defined in the
Management Agreement) is to be deposited,

                                       48
<PAGE>   54
for all funds to be used for operations and working capital (the "Operating
Accounts"). The proceeds of all Revolving Loans shall be deposited into one or
more of the Operating Accounts.

         Section 5.5 Limitation on Restricted Payments. JCC Holding will not,
and will not permit any of its Subsidiaries to, authorize, declare, pay or make
any Restricted Payments, except:

                         (i) any Subsidiary of the Borrower may make Restricted
         Payments to the Borrower or any Wholly-Owned Subsidiary of the
         Borrower;

                         (ii) any Unrestricted Subsidiary may make Restricted
         Payments to JCC Holding or any other Unrestricted Subsidiary;

                         (iii) the Borrower may pay the Management Fees and
         Minimum Payment Guaranty Fees, in each case to the extent permitted by
         Section 5.11(iii) and (iv);

                         (iv) the Borrower may make Distributions to JCC Holding
         in an amount equal to all Permitted Tax Payments to the extent all such
         Distributions pursuant to this clause (iv) are promptly (and in any
         event within two Business Days) used by JCC Holding to make payments in
         respect of the tax obligations of the type described in the definition
         of Permitted Tax Payments; provided further that any refund actually
         received by JCC Holding shall be promptly (in any event within two
         Business Days) returned to the Borrower (and if not so returned, shall
         reduce the amount of payments otherwise permitted to be made in the
         future by the Borrower pursuant to this clause (iv));

                         (v) the Borrower may make to, or on behalf of, JCC
         Holding payments (all of which payments, if made to JCC Holding, shall
         be used by it promptly, and in any event within ten Business Days, to
         pay the amounts in respect of which such payments were advanced to it
         pursuant to this Section 5.05(v)) to cover administrative, overhead, or
         holding company operating expenses incurred in the ordinary course of
         business, including, without limitation, JCC Holding's reasonable
         professional fees and expenses in connection with complying with its
         reporting obligations and obligations to prepare and distribute
         business records, financial statements, or other documents to any
         lender or other Persons having business dealings with JCC Holding or as
         may be required by law, JCC Holding's costs and related expenses in
         connection with computation of federal, state, local or foreign taxes
         and other governmental charges, including franchise taxes, other than
         Permitted Tax Payments, indemnification agreements, insurance premiums,
         surety bonds and insurance brokers' fees, JCC Holding's expenses for
         directors', officers' and employees' compensation and benefits, rent,
         office furnishings, fixtures, equipment and office supplies and JCC
         Holding's reasonable expenses, including professional fees and expenses
         in connection with its obligations under the Registration Rights
         Agreements ("Holding Company Costs"); provided, that, at such time as
         any Unrestricted Subsidiary (i) is no longer a Subsidiary Guarantor or
         (ii) has Cash or Cash Equivalents through loans, Investments or
         otherwise (other than from JCC Holding or its Subsidiaries) in excess
         of $1,000,000, such Unrestricted Subsidiary shall pay its allocable
         fair share (as determined in good-faith by the Board of Directors of
         JCC Holding) of Holding Company Costs;

                                       49
<PAGE>   55

                         (vi) JCC Holding and any of its Subsidiaries may make
         payments on any loans or advances made pursuant to Sections 5.19(iv),
         (v) and, subject to compliance with the applicable subordination
         provisions, (vi);

                         (vii) JCC Holding may purchase or redeem outstanding
         shares of the New Common Stock if no Default or Event of Default then
         exists or would result therefrom to the extent necessary in the good
         faith judgment of the Board of Directors of JCC Holding to prevent the
         filing of a disciplinary action by the State of Louisiana or the LGCB
         or to prevent the loss or secure the reinstatement of the Casino
         Operating Contract; provided that the aggregate amount spent in
         connection with purchases pursuant to this clause (vii) shall in no
         event exceed $5,000,000 and shall be made only from the proceeds of
         Qualified Subordinated Indebtedness permitted to be incurred pursuant
         to Section 5.12(ix);

                         (viii) JCC Development may pay rents to the Borrower
         pursuant to the Second Floor Sublease; and

                         (ix) at any time after any payment is made by any
         Minimum Payment Guarantor pursuant to the terms of a Minimum Payment
         Guaranty, such payment may be reimbursed to the respective Minimum
         Payment Guarantor by the Borrower and the Borrower may pay interest
         thereon in accordance with the terms of the relevant Minimum Payment
         Guaranty Documents.

         Section 5.6 Existence. The Borrower and the Guarantors shall do or
cause to be done all things necessary to preserve and keep in full force and
effect their existence, rights (charter and statutory) and franchises in
accordance with the respective organizational documents of each of them;
provided, however, that neither the Borrower nor any Guarantor shall be required
to preserve any right or franchise if (a) the Board of Directors or members, as
applicable, shall determine reasonably and in good faith that the preservation
thereof is no longer desirable in the conduct of the business of the Borrower or
Subsidiary and (b) the loss thereof is not disadvantageous in any material
respect to the Lender.

         Section 5.7 Payment of Taxes and Other Claims. The Borrower and each of
the Guarantors shall, and shall cause each of its Subsidiaries to, pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon the Borrower, any Guarantor or any of their Subsidiaries
or upon any of their material properties and assets and (ii) all material lawful
claims, whether for labor, materials, supplies, services or anything else, which
have become due and payable and which by law have or may become a Lien upon the
property and assets of the Borrower, any Guarantor or any of their Subsidiaries;
provided, however, that neither the Borrower nor any Guarantor shall be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP.

                                       50
<PAGE>   56

         Section 5.8 Maintenance of Insurance. On the Effective Date, and at all
times thereafter, JCC Holding and its Subsidiaries shall have in effect
customary comprehensive general liability, property and casualty and business
interruption insurance, shall have payment or performance or similar bonds in
place for the Casino, in each case on terms and in an amount reasonably believed
by JCC Holding to be sufficient (taking into account, among other factors, the
creditworthiness of the insurer) to avoid a material adverse change in the
financial condition or results of operation of JCC Holding and its Subsidiaries,
taken as a whole.

         Section 5.9 Reports. Whether or not the Borrower or any Guarantor is
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Borrower and JCC Holding shall file (which filing may be on a
consolidated basis) with the SEC (to the extent permitted under the Exchange
Act) on or prior to the date they are or would have been required to file such
with the SEC (the "Required Filing Date"), annual and quarterly consolidated
financial statements substantially equivalent to financial statements that would
have been included in reports filed with the SEC if the Borrower or JCC Holding,
as applicable, were subject to the requirements of Section 13 or 15(d) of the
Exchange Act, including, with respect to annual information only, a report
thereon by such reporting entity's certified independent public accountants as
such would be required in such reports to the SEC and, in each case, together
with a management's discussion and analysis of financial condition and results
of operations which would be so required. The Borrower and JCC Holding shall
also include in such reports, in the case of quarterly reports, the Borrower's
Consolidated EBITDA with respect to the most recently ended fiscal quarter and,
in the case of annual reports, audited Consolidated EBITDA for the most recently
ended fiscal year. The Borrower and JCC Holding shall also file all other
reports and information that they are or would have been required with the SEC
prior to the Required Filing Date. The Borrower and JCC Holding will also
provide copies of such annual and quarterly reports to the Lender within 30 days
after the Required Filing Date; provided, that the Borrower and JCC Holding
shall not be in default of the provisions of this Section 5.9 for any failure to
file reports with the SEC solely by refusal by the SEC to accept the same for
filing, it being understood that in such event, such reports shall be delivered
to the Lender as described herein as if they had been filed with the SEC.

         Section 5.10 Waiver of Stay, Extension or Usury Laws. The Borrower and
each Guarantor covenant (to the extent that they may lawfully do so) that they
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law wherever enacted which would prohibit or forgive the Borrower or any
Guarantor from paying all or any portion of the principal of, interest on or
other obligations with respect to, the Revolving Obligations as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Agreement; and (to the extent
that they may lawfully do so) the Borrower and each Guarantor hereby expressly
waive all benefit or advantage of any such law insofar as such law applies to
the Revolving Obligations, and covenant that they shall not hinder, delay or
impede the execution of any power herein granted to the Lender, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

         Section 5.11 Transactions with Affiliates. JCC Holding will not, and
will not permit any of its Subsidiaries (other than Unrestricted Subsidiaries)
to, enter into any transaction or series of

                                       51
<PAGE>   57
related transactions with any Affiliate of JCC Holding or any of its
Subsidiaries, other than in the ordinary course of business and on terms and
conditions substantially as favorable to JCC Holding or such Subsidiary as would
reasonably be obtained by JCC Holding or such Subsidiary at that time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that:

                         (i) Restricted Payments may be paid to the extent
         provided in Section 5.5;

                         (ii) loans and advances may be made to the extent
         expressly permitted by Sections 5.12(i), (ix), and (xi) and Investments
         may be made as permitted by Sections 5.19(iv), (v) and (vi), and
         repayments may be made with respect thereto (in each case subject to
         compliance with any applicable subordination provision);

                         (iii) the Borrower may enter into the Management
         Agreement and may pay the Management Fees pursuant thereto as and when
         due and payable in accordance with the terms of the Management
         Agreement, provided that no payment may be made by JCC Holding, the
         Borrower or any of their Subsidiaries of the Termination Fee unless and
         until all Senior Notes, together with all interest and other Indenture
         Obligations (as well as any refinancing of any of the foregoing unless
         it is specifically otherwise agreed in the relevant refinancing
         documentation) have been paid in full; provided further, that the
         Termination Fee may be paid directly to Harrah's Management Company by
         a successor manager permitted to act as such without causing any
         Default or Event of Default so long as neither JCC Holding nor any of
         its Subsidiaries incurs any obligation to reimburse such successor
         manager for all or any portion of the Termination Fee so paid; provided
         further, that all Termination Fees shall be subject to the terms of the
         Manager Subordination Agreement;

                         (iv) the Borrower may enter into the Minimum Payment
         Guaranty Documents and may pay the Minimum Payment Guaranty Fees and
         other costs and expenses pursuant thereto, provided that, the Minimum
         Payment Guaranty Fees payable in connection with any extension,
         successor or substitute for the Minimum Payment Guaranty shall be
         calculated on a basis, and be payable at rates, which are not less
         favorable to the Borrower than the Minimum Payment Guaranty Fees
         payable by it with respect to the Minimum Payment Guaranty as in effect
         on the Effective Date; and

                         (v) the Borrower and the Guarantors may enter into the
         Credit Documents and the Senior Note Documents.

         Section 5.12 Limitation on Incurrence of Additional Indebtedness. JCC
Holding will not, and will not permit any of its Subsidiaries to, contract,
create, incur, assume or suffer to exist any Indebtedness, provided that the
provisions of this Section 5.12 shall not prevent the creation, incurrence,
assumption or existence of the following (Indebtedness described below is herein
referred to as "Permitted Indebtedness"):

                         (i) Indebtedness incurred pursuant to the Senior Note
         Indenture in an aggregate principal amount not to exceed (x)
         $124,520,000 (plus the

                                       52
<PAGE>   58
         aggregate principal amount of Secondary Securities issued as interest
         in lieu of Cash interest, in each case in accordance with the terms of
         the Senior Note Indenture to the extent the same may be deemed to be
         principal), less (y) the aggregate principal amount of all repayments
         of principal of Senior Notes effected after the Effective Date;

                         (ii) [Intentionally Omitted]

                         (iii) accrued expenses and trade accounts payable
         incurred in the ordinary course;

                         (iv) Indebtedness under Interest Rate Protection
         Agreements relating to Indebtedness otherwise permitted under this
         Section 5.12; provided that Lender has approved of the terms and
         conditions of such Interest Rate Protection Agreements;

                         (v) Indebtedness subject to Liens permitted under
         Section 5.13(vi) or evidenced by Capitalized Lease Obligations,
         provided, that in no event shall the aggregate principal amount of such
         Indebtedness and Capitalized Lease Obligations exceed $10,000,000
         (which amount shall increase by $5,000,000 on each of the first three
         anniversaries of the Effective Date but on a prospective basis only) at
         any time outstanding;

                         (vi) [Intentionally Omitted]

                         (vii) Indebtedness incurred from time to time pursuant
         to the Credit Documents;

                         (viii) Indebtedness of the Borrower representing
         reimbursement obligations under the Minimum Payment Guaranty Documents,
         subject to compliance with the provisions of Section 5.31;

                         (ix) JCC Holding may incur Qualified Subordinated
         Indebtedness not to exceed an aggregate amount of $5,000,000 for the
         sole purpose of Required Regulatory Redemptions (as defined in the
         Senior Note Indenture);

                         (x) Unrestricted Subsidiaries may incur Indebtedness;
         provided such Indebtedness is expressly non-recourse to JCC Holding,
         the Company and their respective Subsidiaries which are not
         Unrestricted Subsidiaries;

                         (xi) JCC Holding and its Subsidiaries may incur
         Indebtedness to the extent expressly permitted under Sections 5.19(iv),
         (v) and (vi); and

                         (xii) the Company may incur Indebtedness in an amount
         not to exceed $150,000 in connection with charges under credit cards
         obtained from third-party financial institutions for use by employees
         of the Borrower.

         Section 5.13 Limitation on Liens. JCC Holding will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon or with respect to any

                                       53
<PAGE>   59
property or assets (real or personal, tangible or intangible) of JCC Holding or
any of its Subsidiaries, whether now owned or hereafter acquired, or sell any
such property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable with recourse to JCC Holding or any of its Subsidiaries), or assign
any right to receive income or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any similar recording or
notice statute; provided that the provisions of this Section 5.13 shall not
prevent the creation, incurrence, assumption or existence of the following
(Liens described below are herein referred to as "Permitted Liens"):

                         (i) inchoate Liens for taxes, assessments or
         governmental charges, compensation or levies not yet due and payable or
         Liens for taxes, assessments or governmental charges or levies being
         contested in good faith and by appropriate proceedings for which
         adequate reserves have been established in accordance with generally
         accepted accounting principles;

                         (ii) [Intentionally Omitted];

                         (iii) Permitted Encumbrances;

                         (iv) Liens created pursuant to the Security Documents;

                         (v) leases or subleases granted by the Borrower or the
         Unrestricted Subsidiaries to other Persons in the ordinary course of
         business not materially interfering with the conduct of the business of
         the Borrower or the Unrestricted Subsidiaries, respectively, or
         materially detracting from the value of the assets of the Borrower or
         the Unrestricted Subsidiaries, respectively;

                         (vi) Liens on equipment or machinery subject to
         Capitalized Lease Obligations to the extent permitted by Section
         5.12(v), provided that (x) the amount of such Capitalized Lease
         Obligations outstanding at any one time, together with the aggregate
         principal amount of all Indebtedness outstanding at such time and
         secured by Liens permitted by clause (viii) of this Section 5.13, shall
         not exceed that aggregate amount permitted by Section 5.12(v), (y) such
         Liens only serve to secure the payment of Indebtedness arising under
         such Capitalized Lease Obligation and (z) the Lien encumbering the
         equipment or machinery giving rise to the Capitalized Lease Obligation
         does not encumber any other asset;

                         (vii) Liens (other than any lien imposed by ERISA)
         incurred or deposits made in the ordinary course of business in
         connection with workers' compensation, unemployment insurance and other
         types of social security in the ordinary course of business;

                         (viii) Liens placed upon equipment or machinery used in
         the ordinary course of business of the Borrower or any Unrestricted
         Subsidiary at the time of acquisition thereof by the Borrower or such
         Unrestricted Subsidiary or within 90 days thereafter to secure
         Indebtedness incurred to pay all or a portion of the purchase price

                                       54
<PAGE>   60
         thereof, provided that (x) the aggregate outstanding principal amount
         of all Indebtedness secured by Liens permitted by this clause (viii) at
         any time, together with the amount of all Capitalized Lease Obligations
         outstanding at such time, shall not exceed that aggregate amount
         permitted by Section 5.12(v) and (y) in all events, the Lien
         encumbering the equipment or machinery so acquired does not encumber
         any other asset of JCC Holding or any of its Subsidiaries;

                         (ix) easements, rights-of-way, restrictions,
         encroachments and other similar charges or encumbrances, and minor
         title deficiencies, in each case not securing Indebtedness and not
         materially interfering with the conduct of the business of JCC Holding,
         the Borrower or the Unrestricted Subsidiaries;

                         (x) Liens arising from precautionary UCC financing
         statement filings regarding operating leases entered into by the
         Borrower or the Unrestricted Subsidiaries in the ordinary course of
         business;

                         (xi) Liens arising out of judgments or awards in
         respect of which JCC Holding, the Borrower or the Unrestricted
         Subsidiaries shall in good faith be prosecuting an appeal or
         proceedings for review in respect of which there shall have been
         secured a subsisting stay of execution pending such appeal or
         proceedings, provided that the aggregate amount of all such judgments
         or awards (and any Cash and the fair market value of any property
         subject to such Liens) does not exceed $5,000,000 at any time
         outstanding;

                         (xii) lessor's privileges under leases to which the
         Borrower or the Unrestricted Subsidiaries is a party;

                         (xiii) restrictions pursuant to legends on stock
         required by Gaming Regulations and the Casino Operating Contract to the
         extent such restrictions constitute a Lien;

                         (xiv) restrictions pursuant to the Management
         Agreement, the Casino Lease and the Casino Operating Contract on the
         granting of any security interest in the House Bank and Minimum Balance
         (each as defined in the Management Agreement) and the Reserve Fund;

                         (xv) Liens securing Indebtedness of the Unrestricted
         Subsidiaries, in each case so long as such Indebtedness is incurred
         pursuant to, and permitted under, Section 5.12(x) and so long as such
         Liens encumber only the assets of the Unrestricted Subsidiaries;

                         (xvi) the ownership rights of the State of Louisiana in
         the Louisiana Gross Revenue Share Payments, including the State of
         Louisiana's Interest in Daily Collections, each to the extent granted
         to the State of Louisiana under (and as each such term is defined in)
         the Casino Operating Contract as originally in effect and as modified
         from time to time in compliance with Section 5.15;

                                       55
<PAGE>   61

                         (xvii) the Minimum Payment Guaranty Lien shall be
         permitted; and

                         (xviii) Liens in respect of property or assets of the
         Borrower or the Unrestricted Subsidiaries imposed by law, which were
         incurred in the ordinary course of business and do not secure
         Indebtedness for borrowed money, such as carriers', warehousemen's,
         materialmen's and mechanics' liens and other similar Liens arising in
         the ordinary course of business, and (x) which do not in the aggregate
         materially detract from the value of the respective Subsidiary's
         property or assets or materially impair the use thereof in the
         operation of the business of the Borrower or the Unrestricted
         Subsidiary, respectively, or (y) which are being contested in good
         faith by appropriate proceedings, which proceedings have the effect of
         preventing the forfeiture or sale of the property or assets subject to
         any such Lien;

         Section 5.14 Consolidation, Merger, Purchase or Sale of Assets, Etc.
JCC Holding will not, and will not permit any of its Subsidiaries (other than
Unrestricted Subsidiaries) to, wind up, liquidate or dissolve its affairs or
enter into any transaction of merger or consolidation, or convey, sell, lease or
otherwise dispose of (or agree to do any of the foregoing at any future time)
all or substantially all of its property or assets, or enter into any
sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials, equipment and
intangible assets in the ordinary course of business) of any Person, except
that:

                         (i) Capital Expenditures by the Borrower shall be
         permitted in accordance with the provisions of Section 5.18;

                         (ii) Investments may be made to the extent permitted by
         Section 5.19;

                         (iii) the Borrower may lease (as lessor) portions of
         the Casino for retail, restaurant and other ancillary uses so long as
         all such leases (i) do not in the aggregate detract from the gaming
         operations of the Casino in any material respect, (ii) are permitted by
         the Casino Operating Contract, the Casino Lease, the Gaming Regulations
         and applicable zoning and conditional uses and (iii) are subordinate
         and subject to the Borrower Mortgage;

                         (iv) the Borrower may lease (as lessee) real or
         personal property so long as any such lease does not create a
         Capitalized Lease Obligation (other than as permitted under Section
         5.12);

                         (v) HET, or any of its Subsidiaries, so long as HET or
         its respective Subsidiary owns 90% of more of the common stock of JCC
         Holding, may merge with or into JCC Holding so long as (i) no Default
         or Event of Default exists at the time of such merger or immediately
         thereafter giving effect thereto and (ii) the surviving corporation
         enters into such agreements, in form and substance reasonably
         satisfactory to the Lender affirming that it assumes all obligations of
         JCC Holding under the Guaranty

                                       56
<PAGE>   62
         and the relevant Security Documents, and takes all action necessary or
         desirable to maintain the perfection and priority of all security
         interests created under such Security Documents; and

                         (vi) the Borrower may make dispositions pursuant to
         Section 4.3(a)(i), (ii) and (iii) hereof.

To the extent any Collateral is sold as permitted by this Section 5.14 and by
the other Credit Documents, such Collateral (unless sold to JCC Holding or a
Subsidiary of JCC Holding) shall be sold free and clear of the Liens created by
the Security Documents, and the Collateral Agent shall be authorized to take any
actions (and shall take such actions) as it deems appropriate in order to effect
the release of the respective Collateral from the Liens created by the
respective Security Documents.

         Section 5.15 Limitation on Payments of Certain Indebtedness,
Modifications of Certain Indebtedness, Modifications of Certificate of
Incorporation, By-laws and Certain Other Agreements, Etc. JCC Holding will not,
and will not permit any of its Subsidiaries to, (i) make (or give any notice in
respect of) any voluntary or optional payment or prepayment on or redemption or
acquisition for value of, any Indebtedness (excluding Indebtedness owing under
the Minimum Payment Guaranty Documents, Indebtedness consisting of Revolving
Obligations and Indebtedness in connection with any "Required Regulatory
Redemption" (as defined in the Senior Note Indenture)), (ii) amend or modify, or
permit the amendment or modification of, any provision of the Minimum Payment
Guaranty Documents at any time when neither the Lender nor any of its Affiliates
are the Minimum Payment Guarantor, other than Permitted Payment Guaranty
Amendments, (iii) amend or modify, or permit the amendment or modification of,
any provision of the Senior Note Documents other than Permitted Senior Note
Amendments, or (iv) amend, modify or change its certificate of incorporation,
by-laws, other applicable organizational documents, the Casino Lease, the Casino
Operating Contract or the Management Agreement except such amendments,
modifications or changes which are not adverse to the interests of the Borrower
or do not impose material restrictions on the Borrower.

         Section 5.16 [Intentionally Omitted.]

         Section 5.17 Compliance with Environmental Laws.

                      (a) The Borrower and each of the Guarantors will comply,
         in all material respects with all Environmental Laws applicable to the
         ownership or use of its Real Property now or hereafter owned or
         operated by the Borrower or any of the Guarantors, will within a
         reasonable time-period pay or cause to be paid all costs and expenses
         incurred in connection with such compliance and will keep or cause to
         be kept all such Real Property free and clear of any Liens imposed
         pursuant to such Environmental Laws, except as could not reasonably be
         expected to have a material adverse effect, singly or in the aggregate,
         on the properties, business, results of operations, financial
         condition, business affairs or prospects of the Borrower (a "Material
         Adverse Effect"). Except as could not reasonably be expected to have a
         Material Adverse Effect, neither the Borrower nor any Guarantor will
         generate, use, treat, store, release or dispose of, or permit the

                                       57
<PAGE>   63

         generation, use, treatment, storage, release or disposal of Hazardous
         Materials on any Real Property now or hereafter owned or operated by
         the Borrower or any Guarantor, or transport or permit the
         transportation of Hazardous Materials to or from any such Real Property
         except for Hazardous Materials used or stored at any such Real
         Properties in material compliance with all applicable Environmental
         Laws and reasonably required in connection with the operation, use and
         maintenance of any such Real Property.

                      (b) At the written request of the Lender, which request
         shall specify in reasonable detail the basis therefor, at any time and
         from time to time, the Borrower will provide, at its expense, an
         environmental site assessment report concerning any Real Property now
         or hereafter owned or operated by the Borrower or any Guarantor,
         prepared by an environmental consulting firm approved by the Lender,
         indicating the presence or absence of Hazardous Materials and the
         potential cost of any removal or remedial action in connection with any
         Hazardous Materials on such Real Property; provided that such request
         may be made only if (i) there has occurred and is continuing an Event
         of Default, (ii) the Lender reasonably believes that the Borrower or
         any such Guarantor or any such Real Property is not in material
         compliance with any Environmental Law, or (iii) circumstances exist
         that reasonably could be expected to form the basis of a material
         Environmental Claim against the Borrower or any such Guarantor or any
         such Real Property. If the Borrower fails to provide the same within 90
         days after such request was made, the Lender may order the same, and
         the Borrower and any such Guarantor shall grant and hereby grants to
         the Lender and its agents access to such Real Property and specifically
         grants the Lender an irrevocable non-exclusive license, subject to the
         rights of tenants, to undertake such an assessment, all at the
         Borrower's expense.

         Section 5.18 Capital Expenditures. JCC Holding will not, and will not
permit any of its Subsidiaries (other than Unrestricted Subsidiaries) to, make
Capital Expenditures, except:

                      (a) the Borrower may make Capital Expenditures with funds
         deposited in the Reserve Fund in accordance with the requirements of
         the Management Agreement;

                      (b) the Borrower may make Capital Expenditures in excess
         of the funds deposited in the Reserve Fund in an amount not to exceed
         $10,000,000; provided, that (except as provided in the immediately
         succeeding proviso) such funds shall be used solely to make
         improvements to the Casino as permitted by the LGCB for the exclusive
         purpose of adding food service facilities in the Casino; provided
         further that (x) up to, but not more than, $250,000 of the $10,000,000
         of Capital Expenditures permitted by this clause (b) may be allocated
         to Capital Expenditures related to limousine services and (y) up to,
         but not more than, $2,000,000 of the $10,000,000 of Capital
         Expenditures permitted by this clause (b) may be allocated to Capital
         Expenditures (other than in connection with food services facilities
         and limousine services) in connection with the Casino; and

                      (c) the Company may make Capital Expenditures with
         Insurance and Condemnation Proceeds to replace or restore the Casino on
         account of loss, physical destruction, condemnation or damage to the
         Casino in accordance with Section 4.4.

                                       58
<PAGE>   64

         Section 5.19 Advances, Investments and Loans. JCC Holding will not, and
will not permit any of its Subsidiaries to, directly or indirectly, make any
Investment, except that the following shall be permitted:

                         (i) JCC Holding and its Subsidiaries may acquire and
         hold Cash and Cash Equivalents it being understood and agreed that the
         provisions of this clause (i) do not authorize JCC Holding or any of
         its Subsidiaries to transfer Cash or Cash Equivalents to any other such
         Person;

                         (ii) JCC Holding and its Subsidiaries may acquire and
         hold accounts receivable owing to any of them, if created or acquired
         in the ordinary course of business and payable or dischargeable in
         accordance with customary terms; and

                         (iii) JCC Holding and its Subsidiaries may enter into
         Interest Rate Protection Agreements to the extent permitted in Section
         5.12(iv);

                         (iv) JCC Holding may make Investments in the Borrower
         (so long as all such Investments in the Borrower are common equity
         investments) and the Unrestricted Subsidiaries from the net cash
         proceeds of issuances of Qualified Equity Interests of JCC Holding;

                         (v) The Borrower may make loans to any Unrestricted
         Subsidiary (other than an Unrestricted Subsidiary which has been
         released from its Subsidiary Guaranty pursuant to Section 7.5, which
         has transferred assets pursuant to the provisions of Section 7.5(b), or
         which is a Subsidiary of any Unrestricted Subsidiary described in this
         parenthetical), to (i) pay property and franchise taxes, if any, and
         (ii) to pay pre-development and/or development costs; provided that (x)
         no amounts shall be loaned pursuant to the foregoing provisions of this
         clause (v) more than three Business Days before the date of the use of
         such amounts by the respective Unrestricted Subsidiary to make the
         payments in respect of which the loans are being made and (y) the
         aggregate amount of loans made for the purposes described in this
         clause (v) shall not exceed, in the aggregate, $1,500,000 in any fiscal
         year (with the amount so loaned in each case to be determined without
         regard to any write-downs or write-offs in respect of the amounts so
         loaned); provided that any amounts up to $1,000,000 not spent in the
         fiscal year ended closest to December 31, 2001 may be carried over to
         fiscal year ended December 31, 2002; and

                         (vi) Any Unrestricted Subsidiary may make Investments
         in JCC Holding or any other Unrestricted Subsidiary; provided that any
         loans or advances to JCC Holding shall be subordinated pursuant to an
         agreement substantially in the form attached hereto as Exhibit J.

         Section 5.20 Limitation on Certain Restrictions on Subsidiaries. JCC
Holding will not, and will not permit any of its Subsidiaries (other than
Unrestricted Subsidiaries) to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of any such Subsidiary to (a) pay dividends or make any other

                                       59
<PAGE>   65

distributions on its capital stock or any other interest or participation in its
profits owned by JCC Holding or any Subsidiary of JCC Holding, or pay any
Indebtedness owed to the Borrower or a Subsidiary of the Borrower, (b) make
loans or advances to the Borrower or any of the Borrower's Subsidiaries or (c)
transfer any of its properties or assets to the Borrower, except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) the Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or a
Subsidiary of the Borrower and (iv) customary provisions restricting assignment
of any licensing agreement entered into by the Borrower or a Subsidiary of the
Borrower in the ordinary course of business.

         Section 5.21 Business.

                      (a) JCC Holding will engage in no business other than its
         ownership of the Equity Interests in the Borrower and the Unrestricted
         Subsidiaries (except activities associated therewith and with its
         rights and obligations otherwise permitted pursuant to this Agreement
         and not prohibited by the Casino Operating Contract, the Casino Lease,
         the Gaming Regulations or applicable zoning and conditional uses).

                      (b) The Borrower will not, and will not permit any of its
         Subsidiaries to, engage (directly or indirectly) in any business other
         than the operation of the Casino and the sublease and development of
         the Second Floor and the businesses ancillary thereto

                      (c) JCC Development will not, and will not permit any of
         its Subsidiaries to, engage (directly or indirectly) in any business
         other than the leasing (and subleasing) and development of the Second
         Floor and the businesses ancillary thereto.

         Section 5.22 Additional Security and Further Assurances.

                      (a) JCC Holding will, and will cause each of its
         Subsidiaries to, grant to the Collateral Agent security interests,
         pledge agreements, mortgages and amendments or supplements thereto
         (collectively, an "Additional Mortgage") in such Real Property or other
         assets (including, without limitation, leasehold interests) of JCC
         Holding or any of its Subsidiaries as are not covered by the Security
         Documents, to the extent acquired after the Initial Borrowing Date (but
         in any event excluding the Specified Real Estate after the release
         thereof from the Mortgages in accordance with the terms thereof), and
         as may be requested from time to time by the Lender (each such Real
         Property, an "Additional Mortgaged Property"). All such Additional
         Mortgages shall be granted pursuant to documentation substantially in
         the form of the applicable Security Document executed on the Initial
         Borrowing Date or in such other form as is reasonably satisfactory to
         the Collateral Agent and shall constitute valid and enforceable
         perfected Liens that are, except to the extent subject to then existing
         Liens permitted by Section 5.13 at the time of such perfection,
         superior to and prior to the rights of all third Persons and subject to
         no other Liens. The Additional Mortgages or instruments related thereto
         shall have been duly recorded or filed in such manner and in such
         places as are required by law to establish, perfect, preserve and
         protect the Liens in favor of the Collateral Agent required to be
         granted pursuant to the Additional Mortgages and all taxes, fees and
         other charges

                                       60
<PAGE>   66
         payable in connection therewith shall have been paid in full. All
         Additional Mortgages shall be Shared Security Documents as defined in
         the Intercreditor Agreement.

                      (b) JCC Holding will, and will cause each of its
         Subsidiaries to, at the expense of the Borrower, make, execute,
         endorse, acknowledge, file and/or deliver to the Collateral Agent from
         time to time such vouchers, invoices, schedules, confirmatory
         assignments, conveyances, financing statements, transfer endorsements,
         powers of attorney, certificates (including estoppel certificates from
         the RDC in respect of the Casino Lease), real property surveys, reports
         and other assurances or instruments (collectively, the "Additional
         Security Documents") and take such further steps relating to the
         Collateral covered by any of the Security Documents as the Lender or
         the Collateral Agent may reasonably require pursuant to this Section
         5.23. Furthermore, JCC Holding shall cause to be delivered to the
         Collateral Agent such opinions of counsel, title insurance and other
         related documents as may be reasonably requested by the Lender or the
         Collateral Agent to assure itself that this Section 5.23 has been
         complied with. All Additional Security Documents shall be Shared
         Security Documents as defined in the Intercreditor Agreement.

                      (c) JCC Holding agrees that each action required by
         Section 5.22(a) or (b) shall be completed as soon as possible, but in
         no event later than 30 days after such action is requested to be taken
         by the Lender or the Collateral Agent.

         Section 5.23 Use of Proceeds. The proceeds of Revolving Loans made on
the Initial Borrowing Date shall be used by Borrower to repay the DIP
Indebtedness, replace or guaranty any outstanding letters of credit issued for
the account of Borrower, pay certain claims under the Plan of Reorganization and
pay for certain costs associated with the consummation of the Plan of
Reorganization. Proceeds of additional Revolving Loans made on and after the
Initial Borrowing Date shall be used for Borrower's working capital requirements
and to satisfy other operating expenses (including, without limitation,
Borrower's obligations under the HET/JCC Agreement, state and local taxes and
interest on the Senior Notes).

         Section 5.24 Minimum EBITDA. The Borrower will not permit Consolidated
EBITDA for any Test Period ended after March 31, 2003 to be less than $1.00.

         Section 5.25 Notices. The Borrower shall at all times (i) maintain the
registration of the Collateral Agent as the Registered Leasehold Mortgagee under
(and as defined in) the Casino Operating Contract, (ii) provide the RDC with the
notice address for the Collateral Agent under (and as defined) the Casino Lease
and (iii) cause a copy or will deliver a copy of any notice provided by the LGCB
or the RDC to the Collateral Agent to be delivered at the same time to the
Trustee.

         Section 5.26 Limitation on Issuance of Equity Interests. (a) JCC
Holding shall not issue any Equity Interest, except Qualified Equity Interest,
and (b) JCC Holding will not permit the Borrower to issue any Equity Interests
(including by way of sales of treasury stock) or any options or warrants to
purchase, or securities convertible into, Equity Interests, except for

                                       61
<PAGE>   67
issuances to JCC Holding where the respective Equity Interests have been
pledged, and delivered to the Collateral Agent for pledge, pursuant to the
Pledge Agreement.

         Section 5.27 Limitation on Creation of Subsidiaries. The Borrower will
not establish, create or acquire any Subsidiaries, except that the Borrower may
form one or more Wholly-Owned Subsidiaries to operate certain ancillary and
support functions in connection with the Casino.

         Section 5.28 Casino Manager. Neither JCC Holding nor the Borrower will
permit any Person, other than Harrah's Management Company, to act as the
"manager" or in a similar capacity with respect to the Casino, provided that,
(A) any other Wholly-Owned Subsidiary of HET may be substituted for Harrah's
Management Company as the casino manager and (B) the "manager" of the Casino may
be replaced pursuant to a Permitted Termination; provided, further, that, in the
event of any replacement of a manager, (i) all necessary regulatory and other
approvals (including, without limitation, all approvals required of any relevant
Gaming Authorities) shall have been obtained in connection with such
substitution, (ii) after giving effect to the substitution, there shall be no
conflict with any applicable law, rule, regulation or contract applicable to JCC
Holding or its Subsidiaries, the Casino or the new manager, and (iii) any
successor manager shall have assumed all obligations pursuant to all relevant
contracts (including, without limitation, the Management Agreement and the
Manager Subordination Agreement) pursuant to documentation in form and substance
reasonably satisfactory to the Lender.

         Section 5.29 Separateness from Unrestricted Subsidiaries. JCC Holding,
the Borrower and each of their Subsidiaries which is not an Unrestricted
Subsidiary shall conduct its business and operations in accordance with the
following provisions:

                      (a) maintain books and records and bank accounts separate
         from those of Unrestricted Subsidiaries;

                      (b) maintain its bank accounts and all its other assets
         separate from those of the Unrestricted Subsidiaries.

                      (c) hold itself out to creditors and the public as a legal
         entity separate and distinct from the Unrestricted Subsidiaries;

                      (d) provide appropriate disclosure in the footnotes to the
         financial statements of JCC Holding regarding Unrestricted
         Subsidiaries;

                      (e) except as expressly permitted by this Agreement,
         allocate and charge fairly and reasonably any common employee or
         overhead shared with any of the Unrestricted Subsidiaries;

                      (f) except as expressly permitted by this Agreement,
         transact all business with Unrestricted Subsidiaries on an arm's length
         basis and enter into transactions with Unrestricted Subsidiaries only
         on a commercially reasonable basis;

                                       62
<PAGE>   68

                      (g) conduct business in its own name and use separate
         stationery, invoices and checks;

                      (h) not commingle its assets or funds with those of any
         Unrestricted Subsidiary;

                      (i) not assume, guarantee (directly or indirectly) or pay
         the Indebtedness of any Unrestricted Subsidiary;

                      (j) except as expressly permitted by this Agreement, pay
         its own liabilities and expenses only out of its own funds, and not pay
         any liabilities and expenses of any of the Unrestricted Subsidiaries;

                      (k) except as expressly permitted by this Agreement, pay
         salaries of its own employees from its own funds, and not pay salaries
         of the employees of any Unrestricted Subsidiary;

                      (l) not hold out its credit as being available to satisfy
         the obligations of any Unrestricted Subsidiary;

                      (m) not pledge its assets for the benefits of any
         Unrestricted Subsidiary; and

                      (n) correct any known misunderstanding regarding its
         identity as being separate from the Unrestricted Subsidiary.

                  Furthermore, each of JCC Holding and the Borrower will, and
will cause each of its Subsidiaries (including Unrestricted Subsidiaries) to,
satisfy customarily corporate or limited liability company formalities, as the
case may be, including the holding of regular board of directors', shareholders'
and/or members' meetings, as appropriate, or action by directors, shareholders
or members without a meeting and the maintenance of company offices and records.
Additionally, neither JCC Holding nor any of its Subsidiaries shall take any
action, or conduct its affairs in a manner, which is likely to result in the
separate legal existence of any Unrestricted Subsidiary being ignored, or in the
assets and liabilities of JCC Holding or any of its Subsidiaries being
substantively consolidated with those of any Unrestricted Subsidiary in a
bankruptcy, reorganization or other insolvency proceeding.

         Section 5.30 Replacement Facility. At such time when the Consolidated
Interest Coverage Ratio for the Test Period last ended equals or exceeds
1.8:1.0, JCC Holding and the Borrower shall use their commercially reasonable
efforts (but in any event no earlier than the six-month anniversary of the
Effective Date) to identify and obtain a working capital loan facility with a
lender or lenders other than HET and its Affiliates to replace and refinance the
Revolving Obligations and this Agreement, subject to the restrictions set forth
in Section 5.15(b) of the Indenture. JCC Holding and Borrower agree to report to
Lender from time to time (no less frequently than semi-annually) as to the
status of their compliance with the foregoing provisions. Notwithstanding the
foregoing, failure of JCC Holding or the Borrower to comply with the provisions
of this Section 5.30 shall not constitute an Event of Default under Section 6.

                                       63
<PAGE>   69

         Section 5.31 Limitation on Certain Outstanding Obligations. [JCC
Holding and the Borrower will not permit the sum of the items described in the
following clauses (a) through (d) to exceed $20,000,000 at any time outstanding:

                      (a) the aggregate amount of all unpaid reimbursement and
         other payment obligations pursuant to the Minimum Payment Guaranty
         Documents (but excluding contingent obligations in respect to amounts
         not yet drawn or made available pursuant to the Minimum Payment
         Guaranty) which have been waived, deferred or not paid when due
         pursuant to the terms of the Minimum Payment Guaranty Documents as in
         effect on the Effective Date and, without duplication, the amount of
         all outstanding loans and advances made or deemed made pursuant to the
         Minimum Payment Guaranty Documents and all accrued and unpaid interest
         thereon;

                      (b) the aggregate amount of unpaid obligations under the
         Management Agreement (or any replacement agreement or agreements),
         which have been waived, deferred or not paid when due pursuant to the
         terms of the Management Agreement (without giving effect to any waiver
         or modification thereto);

                      (c) the aggregate amount of interest and fees accrued or
         accruing pursuant to the Credit Documents which have been waived,
         deferred or otherwise not paid on a timely basis pursuant to the terms
         of the Credit Documents as in effect on the Effective Date; and

                      (d) any other amounts (excluding trade payables in the
         ordinary course which do not remain unpaid more than 90 days after the
         respective trade payable came into existence, and principal and unpaid
         drawings under the Credit Documents) owing to HET or any of its
         Subsidiaries by JCC Holding, the Borrower or any of their Subsidiaries
         (excluding Unrestricted Subsidiaries which have been released from
         their, or are not party to, any Guaranty).

         Section 5.32 Minimum Projected EBITDAM. The Borrower will not permit
"Adjusted EBITDAM" for each "Performance Period" to be less than seventy-five
percent (75%) of "Projected Adjusted EBITDAM" for such "Performance Period" (as
such terms are defined in the Management Agreement), as calculated in accordance
with Section 17.03 of the Management Agreement.(a)

         Section 5.33 Post-Closing Items.

                      (a) The Borrower shall deliver to the Lender and the
         Collateral Agent no later than 90 days after the Effective Date a true
         and correct current survey of each Mortgaged Property (and, where
         applicable, the underlying property subject to a leasehold which is
         subject to a Mortgage) along with a certification of such survey from
         the surveyor, which surveyor shall be a qualified M.A.I. surveyor
         reasonably satisfactory to the Trustee, as to the accuracy and
         completeness of such survey, which survey and surveyor's certification
         shall be in compliance with industry standards in all material
         respects.

                                       64
<PAGE>   70

                      (b) The Borrower shall deliver to the Lender and the
         Collateral Agent no later than 90 days after the Effective Date an
         Officer's Certificate of the Borrower certifying, for each Mortgaged
         Property, and following the Borrower's review of the survey described
         above, (A)(i) that the description of title in the relevant Mortgage
         for such Mortgaged Property accurately and completely describes the
         Mortgaged Property, or (ii) each and every difference, omission,
         inadequacy, or other misdescription in the description of the title in
         the relevant Mortgage for such Mortgaged Property that has been
         disclosed by the survey for such Mortgaged Property (the
         "Misdescriptions") and (B)(i) that there exist no easements, rights of
         way or encumbrances with respect to such Mortgaged Property (including
         as shown in the survey described above) other than Permitted
         Encumbrances or (ii) if any easements, rights of way or encumbrances,
         other than Permitted Encumbrances are disclosed in the survey described
         above (each a "Non-Permitted Encumbrance"), each such Non-Permitted
         Encumbrance (and specifically listing each such Non-Permitted
         Encumbrance) and certifying the removal thereof (together with the
         relevant supporting documentation with respect thereto).

                      (c) In the case of any Misdescription, as described in the
         preceding subsection (b)(A)(ii) of this Section 5.33, each of the
         Lender and the Collateral Agent is authorized to execute and deliver
         amendments to any of the Mortgages to correct any such Misdescription
         and to record and file any such amendments to the Mortgages as may be
         necessary to give effect thereto; provided, that any such amendment
         shall be executed, delivered, recorded and filed so as to give effect
         to such amendment no later than 30 days following the delivery of the
         survey to the Lender and the Collateral Agent by the Borrower as
         provided in subsection (a) of this Section 5.33.

                                  ARTICLE VI.

                         EVENTS OF DEFAULT AND REMEDIES

         Section 6.1 Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be caused voluntarily or involuntarily or
effected, without limitation, by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

                     (a) the failure by the Borrower to pay any installment of
         interest on the Revolving Loans as and when due and payable or the
         failure by the Borrower to pay any Unpaid Drawings or Fees as and when
         due and payable, and the continuance of any such failure for 10 days;

                     (b) the failure by the Borrower to pay all or any part of
         the principal on the Revolving Loans when and as the same become due
         and payable at maturity, by acceleration or otherwise or the failure by
         the Borrower to cash collateralize outstanding Letter of Credit
         Obligations at the time required by this Agreement;

                                       65
<PAGE>   71

                     (c) the failure of Borrower to satisfy the "Projected
         Adjusted EBITDAM" requirement for any "Performance Period" as set forth
         in Section 5.32; provided that such failure shall not constitute a
         Default or Event of Default hereunder until the ninetieth (90th) day
         after such Performance Period, but only to the extent that the Borrower
         has not delivered a written notice to Harrah's Management Company,
         within such 90 day period, electing to terminate the Management
         Agreement in accordance with Section 17.03 of the Management Agreement;

                     (d) the failure of JCC Holding or any Subsidiary of JCC
         Holding to comply with (i) any provision of any of Sections 5.5, 5.12
         (other than 5.12(viii)), 5.13, 5.14, 5.15, 5.18, 5.19, 5.24, 5.26 and
         5.28 at any time, (ii) any provision of Section 5.12(viii) or Section
         5.31 which failure continues for five days and (iii) any other covenant
         or agreement contained in the Credit Documents (excluding Section 5.30)
         and the continuance of such failure under this clause (iii) for a
         period of 30 days after written notice is given to the Borrower by the
         Lender;

                     (e) the filing by the Parent Guarantor, the Borrower, any
         Subsidiary of the Borrower, or any Significant Subsidiary of the Parent
         Guarantor (in each case, a "Debtor") of a petition commencing a
         voluntary case under Section 301 of title 11 of the United States Code,
         or the commencement by a Debtor of a case or proceeding under any other
         Bankruptcy Law seeking the adjustment, restructuring, or discharge of
         the debts of such Debtor, or the liquidation of such Debtor, including
         without limitation the making by a Debtor of an assignment for the
         benefit of creditors; or the taking of any corporate action by a Debtor
         in furtherance of or to facilitate, conditionally or otherwise, any of
         the foregoing;

                     (f) the filing against a Debtor of a petition commencing an
         involuntary case under Section 303 of title 11 of the United States
         Code, with respect to which case (i) such Debtor consents or fails to
         timely object to the entry of, or fails to seek the stay and dismissal
         of, an order of relief, (ii) an order for relief is entered and is
         pending and unstayed on the 60th day after the filing of the petition
         commencing such case, or if stayed, such stay is subsequently lifted so
         that such order for relief is given full force and effect, or (iii) no
         order for relief is entered, but the court in which such petition was
         filed has not entered an order dismissing such petition by the 60th day
         after the filing thereof; or the commencement under any other
         Bankruptcy Law of a case or proceeding against a Debtor seeking the
         adjustment, restructuring, or discharge of the debts of such Debtor, or
         the liquidation of such Debtor, which case or proceeding is pending
         without having been dismissed on the 60th day after the commencement
         thereof;

                     (g) the entry by a court of competent jurisdiction or by
         the Regulating Authority of a judgment, decree or order appointing a
         receiver, liquidator, trustee, custodian or assignee of a Debtor or of
         the property of a Debtor, or directing the winding up or liquidation of
         the affairs or property of a Debtor, and (i) such Debtor consents or
         fails to timely object to the entry of, or fails to seek the stay and
         dismissal of, such judgment, decree, or order, or (ii) such judgment,
         decree or order is in full force and effect

                                       66
<PAGE>   72
         and is not stayed on the 60th day after the entry thereof, or, if
         stayed, such stay is thereafter lifted so that such judgment, decree or
         order is given full force and effect;

                     (h) (i) JCC Holding, the Borrower, or any of their
         Subsidiaries (other than Unrestricted Subsidiaries of JCC Holding)
         shall (x) default in any payment of any Indebtedness (other than the
         Revolving Obligations) beyond the period of grace, if any, provided in
         the instrument or agreement under which such Indebtedness was created
         or (y) default in the observance or performance of any agreement or
         condition relating to any Indebtedness (other than the Revolving
         Obligations) or contained in any instrument or agreement evidencing,
         securing or relating thereto, or any other event shall occur or
         condition exist, the effect of which default or other event or
         condition is to cause, or to permit the holder or holders of such
         Indebtedness (or a trustee or agent on behalf of such holder or
         holders) to cause (determined without regard to whether any notice is
         required), any such Indebtedness to become due prior to its stated
         maturity; provided that in the case of the Indenture Obligations only,
         such default as described above in this clause (y) shall have continued
         for 30 days or more without being cured or waived, or (ii) any
         Indebtedness (other than the Revolving Obligations) of JCC Holding or
         any of its Subsidiaries shall be declared to be due and payable, or
         required to be prepaid other than by a regularly scheduled required
         prepayment, prior to the stated maturity thereof, provided that it
         shall not be a Default or an Event of Default under this Section 6.1(h)
         unless the aggregate principal amount of all Indebtedness as described
         in preceding clauses (i) and (ii) is at least $5,000,000; or

                     (i) final unsatisfied judgments not covered by insurance
         aggregating in excess of $15,000,000, at any one time rendered against
         JCC Holding, the Borrower, any Subsidiary of the Borrower, or any other
         Significant Subsidiary of JCC Holding and not stayed, bonded or
         discharged for any period of 60 consecutive days;

                     (j) the loss of the legal right of the Borrower to operate
         slot machines at the Casino for gaming activities and such loss
         continuing for more than 90 days;

                     (k) a failure to comply with the provisions of the Security
         Documents and the continuance of such failure to comply for a period of
         30 days after written notice is given to the Borrower by the Lender,
         provided that if such failure to comply materially and adversely
         affects (1) the Collateral, (2) the priority or perfection of the
         security interests purported to be created with respect to any material
         portion of the Collateral or (3) the rights and remedies of the
         Collateral Agent, the Lender or the respective Secured Creditors in
         respect of any material portion of the Collateral, then the failure to
         comply need only continue after the applicable cure period specified in
         the applicable Security Document;

                     (l) any Security Document fails to become or ceases to be
         in full force and effect (other than in accordance with its terms or
         the terms hereof) or ceases (once effective) to create in favor of the
         Collateral Agent, with respect to any material amount of Collateral, a
         valid and perfected Lien on the Collateral (except to the extent a
         valid and perfected Lien on the Collateral is not required at such time
         under the terms of the

                                       67
<PAGE>   73
         Security Documents) to be covered thereby (unless a prior or exclusive
         Lien is specifically permitted by this Agreement);

                     (m) any representation, warranty or statement made by or on
         behalf of any Credit Party herein, in any other Credit Document, Notice
         of Borrowing, Letter of Credit Obligation Request or in any other
         certificate delivered pursuant hereto or thereto shall prove to be
         untrue in any material respect on the date as of which made or deemed
         made;

                     (n) there shall occur and be continuing (i) a Termination
         Event under any Lease or the Casino Operating Contract, or (ii) a
         default or an event of default by the Borrower or any of its
         Subsidiaries as described and defined in any of the Leases or the
         Casino Operating Contract, or (iii) any event or condition which could,
         either immediately or with the giving of notice or lapse of time or
         both, enable any party to any Lease or the Casino Operating Contract
         other than the Borrower or any of its Subsidiaries to terminate or
         suspend its obligations under such Lease or the Casino Operating
         Contract, or (iv) a breach by the Borrower or any of its Subsidiaries
         of any term, covenant or agreement contained in any Lease or the Casino
         Operating Contract, or if, in the case of this clause (iv), in the
         determination of the Lender, such breach could reasonably be expected
         to have a material adverse effect on either the business, operations,
         property, assets, liabilities, condition (financial or otherwise) or
         prospects of the Borrower and its Subsidiaries taken as a whole, and if
         such Termination Event or other event or condition described in the
         preceding clause (i), (ii), (iii) or (iv) (each, a "Project Default")
         remains uncured for 30 days after the occurrence thereof; provided that
         (I) except as provided in the following clause (II), if (A) such
         Project Default cannot be cured within such 30-day period, (B) such
         Project Default is susceptible of cure by the Borrower, (C) the
         Borrower is proceeding with diligence and in good faith to cure such
         Project Default, (D) the existence of such Project Default does not
         impair the Liens on the Collateral or any leasehold interest in
         Collateral and (E) the Lender shall have received a certificate of the
         Borrower stating what action the Borrower is taking to cure such
         Project Default, then, the time within which such Project Default may
         be cured shall be extended to such date, not to exceed a total of 120
         days after the occurrence of such Project Default, as shall be
         necessary for the Borrower diligently to cure such Project Default and,
         (II) notwithstanding anything to the contrary contained above, there
         shall be no grace period, and it shall be an immediate Event of
         Default, if any of the Leases or Casino Operating Contracts are the
         subject of a Termination Event of the type described in clause (b) of
         the definition thereof; or

                     (o) a Change of Control shall occur; or

                     (p) any Gaming Authority having jurisdiction over the
         Casino shall determine that JCC Holding, any of its Subsidiaries or
         Affiliates or Harrah's Management Company (or the then manager of the
         Casino), as the case may be, to the extent that any of the foregoing
         Persons are required to be found suitable under the Gaming Regulations,
         does not qualify, or that a required suitability finding or license
         (including, without limitation, the Casino Operating Contract) of any
         of them with respect to the Casino

                                       68
<PAGE>   74
         should be revoked, not renewed or suspended for more than 10 days, or
         any such Gaming Authority shall have appointed a conservator,
         supervisor or trustee to oversee any of the operations of the Borrower
         (except, with respect to the foregoing, if (i) any such failure to be
         found suitable timely shall have been appealed by JCC Holding, any of
         its Subsidiaries or Affiliates or Harrah's Management Company (or the
         then manager of the Casino), as the case may be, and any such
         determination is stayed or otherwise does not prevent continued gaming
         operations at the Casino, (ii) such failure to be found suitable is
         cured within any applicable cure periods, and does not prevent
         continued gaming operations at the Casino or (iii) in the case of
         unsuitability of Harrah's Management Company, a successor manager shall
         have been obtained in accordance with the requirements of Section 5.28
         without interruption of gaming operations); provided that no Event of
         Default shall exist under this Section 6.1(p) to the extent Harrah's
         Management Company is in violation of the provisions of this Section
         6.1(p) as a result of a breach by it of the terms of the Management
         Agreement which breach continues after giving effect to any applicable
         cure period thereunder; or

                     (q) unless no Minimum Payment Guaranty is required by the
         Casino Operating Contract, at any time (i) the Minimum Payment Guaranty
         shall expire in accordance with its terms, unless a substitute or
         successor guarantor assumes all obligations of the Minimum Payment
         Guarantor in accordance with the requirements of the Casino Operating
         Contract and without causing and Event of Default under the following
         clause (iii), or (ii) any other event shall occur with respect to the
         Minimum Payment Guaranty which occurrence permits (or requires) the
         termination of the Casino Operating Contract or (iii) any Person other
         than HET or HOC becomes a substitute or successor guarantor providing a
         Minimum Payment Guaranty, unless such substitute or successor guarantor
         meets all requirements contained in the Casino Operating Contract and
         executes documentation in favor of the Lender and the Collateral Agent
         which is substantially the same as the documentation (including,
         without limitation the Intercreditor Agreement) entered into by the
         Minimum Payment Guarantor on or prior to the Initial Borrowing Date;

                     (r) any Guaranty or any provision thereof shall cease to be
         a legal, valid and binding obligation enforceable against the obligor
         thereof, or any Guarantor shall default in its due performance of any
         term, covenant or agreement on its part to be performed or observed
         pursuant to its Guaranty, or any default or event of default under, and
         as defined in, a Guaranty shall be in existence;

                     (s) (i) the Manager Subordination Agreement or any
         provision thereof shall cease to be a legal, valid and binding
         obligation enforceable against any party thereto who has agreed to
         subordinate any obligations pursuant thereto, or any such party shall
         default in the due performance of any term, covenant or agreement on
         its part to be performed or observed pursuant to the Manager
         Subordination Agreement; provided that no Event of Default shall exist
         under this Section 6.1(s) to the extent Harrah's Management Company,
         HET or any of its Affiliates are the "Manager" under the Management
         Agreement and such Person is the defaulting party under this Section
         6.1(s)(i), or (ii) at any time there shall be any manager of the Casino
         which has not

                                       69
<PAGE>   75
         executed and delivered to the Lender a counterpart to the Manager
         Subordination Agreement or an assumption of the obligations of Harrah's
         Management Company thereunder in accordance with the requirements of
         Section 5.28; or

                     (t) the Management Agreement (or any successive management
         agreement entered into with a new manager of the Casino appointed in
         accordance with the provisions of 5.28) or any material provision
         thereof shall cease to be in full force and effect or an Event of
         Default (as defined in the Management Agreement) or any substantially
         similar event, however defined, in any amended or replacement
         Management Agreement, shall have occurred.

         Section 6.2 Acceleration and Enforcement. If any Event of Default shall
be continuing, the Lender may by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of the Lender or the
holder of the Note to enforce its claims against any Credit Party (provided
that, if an Event of Default specified in Sections 6.1(e), (f) or (g) shall
occur with respect to the Borrower, the result which would occur upon the giving
of written notice by the Lender to the Borrower as specified in clauses (i) and
(ii) below shall occur automatically without the giving of any such notice): (i)
declare the Revolving Loan Commitment terminated, whereupon the Revolving Loan
Commitment shall forthwith terminate immediately; (ii) declare the principal of
and any accrued interest in respect of all Revolving Loans and the Note and all
other Revolving Obligations owing hereunder and thereunder to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Credit Party; (iii) terminate any Letter of Credit, which may be terminated, in
accordance with its terms; (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Sections 6.1(e), (f) or (g) with respect to the Borrower,
it will pay) to the Lender at the Payment Office such additional amount of cash,
to be held as security by the Lender, as is equal to the outstanding amount of
all Letter of Credit Obligations then outstanding; (v) request the Required
Secured Creditors under and as defined in the Intercreditor Agreement to direct
the Collateral Agent to enforce all of the Liens and security interests created
pursuant to the respective Security Documents subject to the terms of the
Intercreditor Agreement to the extent applicable to such Security Document; and
(vi) apply any cash collateral in the possession of the Lender to the
outstanding Revolving Obligations.

                                  ARTICLE VII.

                                    GUARANTY

         Section 7.1 Guaranty.

                     (a) In consideration of good and valuable consideration,
         the receipt and sufficiency of which is hereby acknowledged, and
         subject to subsection (d) below, each of the Guarantors hereby
         irrevocably and unconditionally guarantees (the "Guaranty") to Lender
         and its successors and assigns, irrespective of the validity and
         enforceability of any Credit Document or the obligations of the
         Borrower under this Agreement or the Note, that: (w) all the Revolving
         Obligations will be paid in full when due, whether at maturity,

                                       70
<PAGE>   76
         by acceleration or otherwise; (x) all other obligations of the Borrower
         under the Credit Documents will be promptly paid in full or performed,
         all in accordance with the terms of the Credit Documents; and (y) in
         case of any extension of time of payment or renewal of any Revolving
         Obligations or any of such other obligations, they will be paid in full
         when due or performed in accordance with the terms of the extension or
         renewal, whether at maturity, by acceleration or otherwise. Failing
         payment when due of any amount so guaranteed for whatever reason, each
         Guarantor shall be obligated to pay the same before failure so to pay
         becomes an Event of Default.

                     (b) Each Guarantor hereby agrees that its obligations with
         regard to this Guaranty shall be unconditional, irrespective of the
         validity, regularity or enforceability of any Credit Document, the
         absence of any action to enforce the same, any delays in obtaining or
         realizing upon or failures to obtain or realize upon collateral, the
         recovery of any judgment against the Borrower, any action to enforce
         the same or any other circumstances that might otherwise constitute a
         legal or equitable discharge or defense of a Guarantor. Each Guarantor
         hereby waives diligence, presentment, demand of payment, filing of
         claims with a court in the event of insolvency or bankruptcy of the
         Borrower, any right to require a proceeding first against the Borrower
         or right to require the prior disposition of the assets of the Borrower
         to meet its obligations, protest, notice and all demands whatsoever and
         covenants that this Guaranty will not be discharged except by complete
         performance of the obligations contained in the Credit Documents.

                     (c) If Lender is required by any court or otherwise to
         return to either the Borrower or any Guarantor, or any Custodian, or
         similar official acting in relation to the Borrower or such Guarantor,
         any amount paid by the Borrower or such Guarantor to the Lender, this
         Guaranty, to the extent theretofore discharged, shall be reinstated in
         full force and effect. Each Guarantor agrees that it will not be
         entitled to any right of subrogation in relation to the Lender in
         respect of any obligations guaranteed hereby until all Revolving
         Obligations shall have been paid in full and the Revolving Loan
         Commitment shall have been terminated. Each Guarantor further agrees
         that, as between such Guarantor, on the one hand, and the Lender, on
         the other hand, (i) the maturity of the obligations guaranteed hereby
         may be accelerated as provided in Section 6.2 for the purposes of this
         Guaranty, notwithstanding any stay, injunction or other prohibition
         preventing such acceleration as to the Borrower of the obligations
         guaranteed hereby, and (ii) in the event of any declaration of
         acceleration of those obligations as provided in Section 6.2, those
         obligations (whether or not due and payable) will forthwith become due
         and payable by each of the Guarantors for the purpose of this Guaranty.

                     (d) It is the intention of each Guarantor and the Borrower
         that the obligations of each Guarantor hereunder shall be, but not in
         excess of, the maximum amount permitted by applicable law. Accordingly,
         if the obligations in respect of the Guaranty would be annulled,
         avoided or subordinated to the creditors of the Guarantor by a court of
         competent jurisdiction in a proceeding actually pending before such
         court as a result of a determination both that such Guaranty was made
         without fair consideration and, immediately after giving effect
         thereto, or at the time that any demand is made thereupon, such
         Guarantor was insolvent or unable to pay its debts as they mature or
         left

                                       71
<PAGE>   77
         with an unreasonably small capital, then the obligations of such
         Guarantor under such Guaranty shall be reduced by such an amount, if
         any, that would result in the avoidance of such annulment, avoidance or
         subordination; provided, however, that any reduction pursuant to this
         paragraph shall be made in the smallest amount as is necessary to reach
         such result. For purposes of this paragraph, "fair consideration,"
         "insolvency," "unable to pay its debts as they mature," "unreasonably
         small capital" and the effective times of reductions, if any, required
         by this paragraph shall be determined in accordance with applicable
         law.

                     (e) Each Guarantor shall be subrogated to all rights of the
         Lender against the Borrower under the Credit Documents in respect of
         any amounts paid by such Guarantor pursuant to the provisions of such
         Guaranty or this Agreement; provided, however, that the Guarantor shall
         not be entitled to enforce or to receive any payments arising out of,
         or based upon, such right of subrogation until all the Revolving
         Obligations shall have been paid in full.

         Section 7.2 Parent Guaranty.

                     (a) In consideration of good and valuable consideration,
         the receipt and sufficiency of which are hereby acknowledged, and
         subject to subsection (d) below, the Parent Guarantor hereby
         irrevocably and unconditionally guarantees (the "Parent Guaranty" and,
         together with the Guaranty of the Parent Guarantor, the "Parent
         Guaranties") to the Lender and its successors and assigns, irrespective
         of the validity and enforceability of the Subsidiary Guaranty or the
         obligations of any of the Subsidiaries under the Subsidiary Guaranty,
         that all obligations of each of the Subsidiaries to the Lender under
         the Subsidiary Guaranty will be promptly paid in full or performed, all
         in accordance with the terms of the Subsidiary Guaranty.

                     (b) The Parent Guarantor hereby agrees that its obligations
         with regard to this Parent Guaranty shall be unconditional,
         irrespective of the validity, regularity or enforceability of the
         Subsidiary Guaranty or this Agreement, the absence of any action to
         enforce the same, any delays in obtaining or realizing upon or failures
         to obtain or realize upon collateral, the recovery of any judgment
         against any Subsidiary, any action to enforce the same or any other
         circumstances that might otherwise constitute a legal or equitable
         discharge or defense of any Subsidiary under the Subsidiary Guaranty.
         The Parent Guarantor hereby waives diligence, presentment, demand of
         payment, filing of claims with a court in the event of insolvency or
         bankruptcy of any Subsidiary, any right to require a proceeding first
         against any Subsidiary or right to require the prior disposition of the
         assets of any Subsidiary to meet its obligations, protest, notice and
         all demands whatsoever and covenants that this Parent Guaranty will not
         be discharged except by complete performance of the obligations of the
         Subsidiaries under the Subsidiary Guaranty.

                     (c) If the Lender is required by any court or otherwise to
         return to any Subsidiary, or any Custodian or similar official acting
         in relation to such Subsidiary, any amount paid by such Subsidiary to
         the Lender, this Parent Guaranty, to the extent

                                       72
<PAGE>   78
         theretofore discharged, shall be reinstated in full force and effect.
         The Parent Guarantor agrees that it will not be entitled to any right
         of subrogation in relation to the Lender in respect of any obligations
         guaranteed hereby until all the Revolving Obligations shall have been
         paid in full and the Revolving Loan Commitment shall have been
         terminated. The Parent Guarantor further agrees that, as between such
         Subsidiary, on the one hand, and the Lender, on the other hand, (i) the
         maturity of the obligations guaranteed hereby may be accelerated as
         provided in Section 6.2 for the purposes of this Parent Guaranty,
         notwithstanding any stay, injunction or other prohibition preventing
         such acceleration as to any Subsidiary of the obligations guaranteed
         hereby, and (ii) in the event of any declaration of acceleration of
         those obligations as provided in Section 6.2, those obligations
         (whether or not due and payable) will forthwith become due and payable
         by the Parent Guarantor for the purpose of this Parent Guaranty.

                     (d) It is the intention of the Parent Guarantor and the
         Subsidiaries that the obligations of the Parent Guarantor hereunder
         shall be, but not in excess of, the maximum amount permitted by
         applicable law. Accordingly, if the obligations in respect of the
         Parent Guaranty would be annulled, avoided or subordinated to the
         creditors of the Parent Guarantor by a court of competent jurisdiction
         in a proceeding actually pending before such court as a result of a
         determination both that the Parent Guaranty was made without fair
         consideration and, immediately after giving effect thereto, or at the
         time that any demand is made thereupon, the Parent Guarantor was
         insolvent or unable to pay its debts as they mature or left with an
         unreasonably small capital, then the obligations of the Parent
         Guarantor under the Parent Guaranty shall be reduced by such an amount,
         if any, that would result in the avoidance of such annulment, avoidance
         or subordination; provided, however, that any reduction pursuant to
         this paragraph shall be made in the smallest amount as is necessary to
         reach such result. For purposes of this paragraph, "fair
         consideration," "insolvency," "unable to pay its debts as they mature,"
         "unreasonably small capital" and the effective times of reductions, if
         any, required by this paragraph shall be determined in accordance with
         applicable law.

                     (e) The Parent Guarantor shall be subrogated to all rights
         of the Lender against the Subsidiaries under the Subsidiary Guaranty in
         respect of any amounts paid by the Parent Guarantor pursuant to the
         provisions of the Parent Guaranty; provided, however, that the Parent
         Guarantor shall not be entitled to enforce or to receive any payments
         arising out of, or based upon, such right of subrogation until all the
         Revolving Obligations shall have been paid in full and the Revolving
         Loan Commitment shall have been terminated.

         Section 7.3 [Intentionally Omitted].

         Section 7.4 Future Subsidiary Guarantors. The Borrower shall cause each
person that is or becomes a Subsidiary of the Borrower after the Effective Date
to execute a supplement to this Agreement for the purpose of adding such
Subsidiary as a Guarantor hereunder.

                                       73
<PAGE>   79

         Section 7.5 Release of Guarantors.

                     (a) In the event of a sale or other disposition (to a
         Person other than JCC Holding and its Subsidiaries, and in a
         transaction permitted by this Agreement) of all of the Equity Interests
         of any Subsidiary Guarantor, owned by JCC Holding or its Subsidiaries,
         by way of merger, consolidation or otherwise, then such Guarantor shall
         be released and relieved of any obligations under its Guaranty and all
         security interests in the Equity Interests of such released Guarantor
         shall be released from the security interests created pursuant to the
         Security Documents.

                     (b) In the event any Unrestricted Subsidiary incurs
         Indebtedness for borrowed money (from any Person other than JCC Holding
         or its Subsidiaries) in excess of $2,500,000 for purposes of developing
         real property owned or leased by it, as long as (i) no Default or Event
         of Default exists at the time of such incurrence or immediately after
         giving effect thereto, (ii) such Unrestricted Subsidiary is being
         released from all other direct and indirect guarantees by it of
         Indebtedness of JCC Holding and its Subsidiaries (other than
         Unrestricted Subsidiaries), and (iii) such Unrestricted Subsidiary
         repays in full in Cash any and all Indebtedness to JCC Holding and its
         Subsidiaries (including, without limitation, all amounts theretofore
         loaned to such Unrestricted Subsidiary pursuant to Section 5.19(v),
         determined without regard to any write-downs, write-offs or
         forgivenesses thereof), then such Guarantor shall be released and
         relieved of any obligations under its Guaranty.

                     (c) In the event of the sale or other disposition (in a
         transaction permitted by this Agreement) by any Unrestricted Subsidiary
         of its assets to a Person (other than (x) HET and any Affiliate
         thereof, except to the extent such person constitutes an Affiliate of
         HET solely because of HET's direct or indirect equity interests in JCC
         Holding or (y) JCC Holding or any Wholly-Owned Subsidiary thereof), all
         security interests created pursuant to the Security Documents shall be
         released with respect to such assets, so long as (i) no Default or
         Event of Default exists at the time of such sale or other disposition
         or immediately after giving effect thereto and (ii) such Unrestricted
         Subsidiary repays in full in Cash any and all Obligations to JCC
         Holding and its Subsidiaries (including, without limitation, all
         amounts theretofore loaned to such Unrestricted Subsidiary pursuant to
         Section 5.19(v), determined without regard to any write-downs,
         write-offs or forgivenesses thereof). In connection with any release of
         assets pursuant to the provisions of this clause (c), it is understood
         that the respective Unrestricted Subsidiary shall remain a party to its
         Guaranty unless and until otherwise released in accordance with the
         provisions of preceding clauses (a) and/or (b), and its Equity
         Interests, and the assets which continue to be owned by such
         Unrestricted Subsidiary, shall continue to be subject to the applicable
         provisions of the various Security Documents to which it is a party.

                     (d) Notwithstanding anything to the contrary contained
         above, the releases provided in preceding clauses (a), (b) and (c)
         shall only occur upon the delivery by the Borrower to the Lender of an
         Officer's Certificate in form and substance reasonably satisfactory to
         the Lender, certifying the relevant facts described above and
         certifying in

                                       74
<PAGE>   80

         reasonable detail the releases which shall occur in accordance with the
         provisions of Section 7.5(a), (b) or (c), as the case may be. As
         described in preceding clauses (a), (b) and (c), (i) in cases where
         preceding clause (a) or (b) is applicable, the Guaranty of the
         respective Unrestricted Subsidiary shall be released, (ii) in cases
         where preceding clause (a) or (b) is applicable, the respective
         released Unrestricted Subsidiary shall also be released from the
         Security Documents to which it is a party (and the assets of the
         respective Unrestricted Subsidiary shall likewise be released
         therefrom), (iii) in cases where preceding clause (a) is applicable,
         the Equity Interests in the respective released Unrestricted Subsidiary
         shall be released from the security interests created pursuant to the
         Security Documents and (iv) in cases where preceding clause (c) is
         applicable, only the assets being sold or disposed of to the respective
         Person described in preceding clause (c) shall be released from the
         security interests created pursuant to the Security Documents. Each
         Officer's Certificate delivered pursuant to this clause (d) shall
         contain a certification of all relevant facts permitting (and the
         satisfaction of all conditions to) the releases described in the
         respective clause of this Section 7.5. Following its receipt of the
         documentation described above in this clause (d), the Lender shall
         execute any documents reasonably required in order to effect the
         releases contemplated above in this Section 7.5.

         Section 7.6 When the Guarantor May Merge, Etc. No Guarantor shall
consolidate with or merge with or into any other Person unless:

                     (a) either the Borrower or a Guarantor shall be the
         continuing Person, or the Person (if other than the Borrower or a
         Guarantor) formed by such consolidation or into which the Guarantor is
         merged or to which the assets of the Guarantor are transferred shall be
         a corporation organized and validly existing under the laws of the
         United States or any State thereof or the District of Columbia and
         shall expressly assume, by a supplement to this Agreement, executed and
         delivered to the Lender, in form satisfactory to the Lender, all the
         obligations of such Guarantor under the Guaranty and/or Parent
         Guaranty, as applicable, and this Agreement;

                     (b) such transaction complies with the relevant
         requirements of Section 5.14 and immediately after giving effect to
         such transaction, no Event of Default, and no event or condition which,
         after notice or lapse of time or both, would become an Event of
         Default, shall have occurred and be continuing; and

                     (c) the Guarantor has delivered to the Lender an Officer's
         Certificate and an opinion of counsel to Guarantor, each stating that
         such consolidation, merger, sale, conveyance or lease and such
         supplemental indenture comply with this Section and that all conditions
         precedent herein provided for relating to such transaction have been
         complied with.

                  Upon any consolidation or merger, the successor corporation
formed by such consolidation or into which the Guarantor is merged or to which
such transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Guarantor under this Agreement with the same
effect as if such successor corporation had been named as a Guarantor herein.

                                       75
<PAGE>   81

         Section 7.7 Certain Bankruptcy Events. Each Guarantor hereby covenants
and agrees that in the event of the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower, such Guarantor shall not file (or
join in any filing of), or otherwise seek to participate in the filing of, any
motion or request seeking to stay or to prohibit (even temporarily) execution on
the Guaranty or the Parent Guaranty and hereby waives and agrees not to take the
benefit of any such stay of execution, whether under Section 362 or 105 of the
United States Bankruptcy Code or otherwise.

                                  ARTICLE VIII.

                                  MISCELLANEOUS

         Section 8.1 Payment of Expenses, etc. The Borrower shall: (i) whether
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Lender (including, without limitation,
the reasonable fees and disbursements of Latham & Watkins and local counsel and
all appraisal fees, trustee's fees, documentary and recording taxes, title
insurance and recording, filing and other expenses) in connection with the
preparation, execution and delivery of this Agreement, the other Credit
Documents and all other documents, agreements and instruments referred to
herein, therein and in connection with the Transaction and any amendment, waiver
or consent relating hereto or thereto, and of the Lender (and of Bankers Trust
Company to the extent relating to Existing Letters of Credit) in connection with
the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein (including, without
limitation, the reasonable fees and disbursements of counsel (including
allocated costs of in-house counsel) for the Lender and Bankers Trust Company in
the case of the Existing Letters of Credit); (ii) pay and hold the Lender (and
Bankers Trust Company with respect to Existing Letters of Credit) harmless from
and against any and all present and future stamp, excise and other similar taxes
with respect to the foregoing matters and save the Lender (and Bankers Trust
Company with respect to Existing Letters of Credit) harmless from and against
any and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to the Lender or Bankers Trust Company)
to pay such taxes; and (iii) indemnify the Lender (and Bankers Trust Company
with respect to Existing Letters of Credit) and its officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all liabilities, obligations (including removal or remedial
actions), losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses and disbursements (including reasonable attorneys' (including allocated
costs of in-house counsel) and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not the Lender or Bankers Trust Company is a party
thereto) related to the entering into and/or performance of this Agreement or
any other Credit Document or the use of any Letter of Credit or the proceeds of
any Revolving Loans or the consummation of any transactions contemplated herein
(or in any other Credit Document or the exercise of any of their rights or
remedies provided herein or in the other Credit Documents), or (b) the actual or
alleged presence of Hazardous Materials in the air, surface water or groundwater
or on the surface or subsurface of any Real Property owned, leased or at any
time operated by any Credit Party or any of their Subsidiaries, the Release,
generation, storage,

                                       76
<PAGE>   82
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned or operated by any Credit Party or any of their
Subsidiaries, the non-compliance of any Real Property with foreign, federal,
state and local laws, regulations, and ordinances (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim relating
in any way to any Credit Party or any of their Subsidiaries, their operations,
or any Real Property owned, leased or at any time operated by any Credit Party
or any of their Subsidiaries, including, in each case, without limitation, the
reasonable fees and disbursements of counsel and other consultants incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Lender (or Bankers Trust Company with respect to Existing Letters
of Credit) set forth in the preceding sentence may be unenforceable because it
is violative of any law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.

         Section 8.2 [Intentionally Omitted]

         Section 8.3 Notices.

                     (a) Except as otherwise expressly provided herein, all
         notices and other communications provided for hereunder shall be in
         writing (including telegraphic, telex, telecopier or cable
         communication) and mailed, telegraphed, telexed, telecopied, cabled or
         delivered: if to any Credit Party at the address specified opposite its
         signature below or in the other relevant Credit Documents; if to the
         Lender, at its Notice Office; or, as to any Credit Party or the Lender,
         at such other address as shall be designated by such party in a written
         notice to the other parties hereto. All such notices and communications
         shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent
         by overnight courier, be effective when deposited in the mails,
         delivered to the telegraph company, cable company or overnight courier,
         as the case may be, or sent by telex or telecopier, except that notices
         and communications to the Lender and the Borrower shall not be
         effective until received by the Lender or the Borrower, as the case may
         be.

                     (b) In addition to any other notices required or permitted
         to be given pursuant to this Agreement, the Lender shall, promptly
         after its delivery of any written notice to the Borrower (x) which
         specifically states that an Event of Default pursuant to this Agreement
         is in existence or (y) pursuant to Section 6.2, send to the LGCB (at
         the address provided in the following sentence) a copy of such written
         notice; provided that any failure or delay in giving any such notice
         shall not affect or impair the validity of said notice or any action
         taken pursuant thereto (or otherwise pursuant to this Agreement or any
         other Credit Document) and shall give rise to no liability (monetary or
         otherwise) on the part of the Lender to any Credit Party, the LGCB or
         any other Person. All notices to the LGCB pursuant to this sentence
         shall be mailed (or sent by reputable courier) to the LGCB at the
         following address (or such other address as the LGCB furnishes to the
         Lender from time to time for its receipt of notices pursuant to this
         Section):

                                       77
<PAGE>   83

                           Louisiana Gaming Control Board
                           9100 Bluebonnet Centre Blvd.
                           Suite 500
                           Baton Rouge, LA 70809
                           Attention: Chairman

         Section 8.4 Benefit of Agreement. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, the Borrower may not assign or
transfer any of its rights, obligations or interest hereunder without the prior
written consent of the Lender; provided, further however, that neither the
Lender nor the Borrower may assign, transfer or alter any of their respective
rights, obligations or interests in connection with the Existing Letters of
Credit without the prior written consent of Bankers Trust Company.

         Section 8.5 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Lender or any holder of the Note in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower or any other Credit Party and the Lender or the holder of
the Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the Lender
or the holder of the Note would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle such Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Lender or the holder of any Note to any other or further action in
any circumstances without notice or demand.

         Section 8.6 Calculations; Computations.

                     (a) The financial statements to be furnished to the Lender
         pursuant hereto shall be made and prepared in accordance with generally
         accepted accounting principles in the United States consistently
         applied throughout the periods involved (except as set forth in the
         notes thereto or as otherwise disclosed in writing by the Borrower to
         the Lender).

                     (b) All computations of interest hereunder, unless
         otherwise indicated, shall be made on the basis of a year of 360 days
         for the actual number of days (including the first day but excluding
         the last day) occurring in the period for which such interest is
         payable.

         Section 8.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL.

                     (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
         RIGHTS AND OBLIGATIONS OF THE PARTIES

                                       78
<PAGE>   84
         HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN THE
         MORTGAGES OR CERTAIN OTHER SECURITY DOCUMENTS, BE CONSTRUED IN
         ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
         ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
         OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
         NEVADA OR OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
         NEVADA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH CREDIT
         PARTY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
         PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
         AFORESAID COURTS. EACH CREDIT PARTY HEREBY IRREVOCABLY DESIGNATES,
         APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE
         HEREOF AT 6100 NEIL ROAD, SUITE 500, RENO, NEVADA 89511 AS ITS
         DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR
         AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND
         ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED
         IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
         APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
         CREDIT PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN
         NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
         SATISFACTORY TO THE LENDER UNDER THIS AGREEMENT. EACH CREDIT PARTY
         FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
         THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
         MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
         PREPAID, TO SUCH CREDIT PARTY, AS THE CASE MAY BE, AT ITS ADDRESS SET
         FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30
         DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
         LENDER UNDER THIS AGREEMENT OR THE HOLDER OF THE NOTE TO SERVE PROCESS
         IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS
         OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
         JURISDICTION.

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

                                       79
<PAGE>   85

                     (c) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT
         TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
         OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
         TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

         Section 8.8 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Lender.

         Section 8.9 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which JCC Holding, the Borrower, the other Credit
Parties and the Lender shall have signed a counterpart hereof (whether the same
or different counterpart) and shall have delivered the same to the Lender.

         Section 8.10 Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.

         Section 8.11 Amendment or Waiver; etc. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be amended, modified,
changed, waived, discharged or terminated unless such amendment, modification,
change, waiver, discharge or termination is in writing signed by (i) the
respective Credit Parties party thereto and the Lender (or the Required Secured
Creditors in the case of an amendment, modification change, waiver, discharge or
termination with respect to a Security Document) and (ii) Bankers Trust Company
if (x) any terms or provisions of Sections 2.11(d), 2.14, 2.15, 3.1(c), 3.6 or
3.7 relating to Existing Letters of Credit is amended, modified, changed,
waived, discharged or terminated or (y) any other amendment, modification,
change, waiver, discharge or termination is entered into which otherwise affects
Bankers Trust Company's rights, obligations or responsibilities hereunder or
with respect to any Existing Letters of Credit or (z) any of the provisions of
Section 8.1, Section 8.4, this Section 8.11 or Section 8.15 are amended,
modified, changed, waived, discharged or terminated (in each case, as such
Sections affect Bankers Trust Company). Furthermore, this Agreement shall not be
terminated or replaced (including as contemplated by Section 5.30) unless (x)
all Existing Letters of Credit are terminated and surrendered to Bankers Trust
Company for cancellation and (y) all amounts owing to Bankers Trust Company
hereunder with respect to the Existing Letters of Credit are repaid in full.

         Section 8.12 Survival. All indemnities set forth herein including,
without limitation, in Sections 2.9, 2.10, 2.15, 3.7 and 8.1, shall survive the
execution, delivery and termination of this Agreement and the Note, and the
making and repayment of the Revolving Loans.

         Section 8.13 Domicile of Loans. Lender may transfer and carry its
Revolving Loans at, to or for the account of any office, Subsidiary or Affiliate
of Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Revolving Loans pursuant to this

                                       80
<PAGE>   86
Section 8.13 would, at the time of such transfer, result in increased costs
under Section 2.9, 2.10, 2.15 or 3.7 from those being charged by the Lender (or
in the case of Section 3.7, otherwise being incurred by the Borrower) prior to
such transfer, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower shall be obligated to pay any other increased costs
of the type described above resulting from changes after the date of the
respective transfer).

         Section 8.14 Application of Gaming Regulations. JCC Holding, the
Borrower and Lender acknowledge that (i) the consummation of the transactions
contemplated by the Credit Documents is subject to the Gaming Regulations (and
JCC Holding and the Borrower represent and warrant that all requisite approvals
thereunder have been duly obtained except approvals which are not required to be
obtained or in effect as of the date the representation contained in this
Section 8.14 is being made or deemed made), (ii) the exercise of remedies under
the Security Documents with respect to the Collateral will be subject to the
Gaming Regulations and (iii) the LGCB may rely upon these acknowledgments.

         Section 8.15 No Third Party Beneficiaries. This Agreement is entered
into solely for the benefit of the parties hereto and their respective
successors and assigns and there shall be no third party beneficiaries hereof
(other than Bankers Trust Company with respect to Existing Letters of Credit),
nor shall any Person other than the parties hereto (and Bankers Trust Company
with respect to Existing Letters of Credit) and their respective successors and
assigns be entitled to enforce the provisions hereof or have any claims against
any party hereto or their successors of assigns arising from, or under, this
Agreement.

         Section 8.16 Lender Parties. Each reference in this Agreement and the
other Credit Documents to the term "Lender" shall be a reference to each of HET,
HOC and Harrah's Management Company, collectively (each a "Lender Party" and
together the "Lender Parties") and the Credit Parties agree and acknowledge that
the obligations, rights, and remedies of the Lender under the Credit Documents
may be exercised by one or more of such Lender Parties on behalf of all Lender
Parties, as such Lender Parties shall determine.

                            (SIGNATURE PAGES FOLLOW)

                                       81
<PAGE>   87

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.

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

                                  By:
                                           ------------------------------------
                                           Name:       L. Camille Fowler
                                           Title:      Vice President-Finance,
                                                       Secretary and Treasurer

                                           Address:
                                                   ----------------------------

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

                                           ------------------------------------
                                           Fax:
                                               --------------------------------

                                  JCC HOLDING COMPANY,
                                  a Delaware corporation

                                  By:
                                           ------------------------------------
                                           Name:       L. Camille Fowler
                                           Title:      Vice President-Finance,
                                                       Secretary and Treasurer

                                           Address:
                                                   ----------------------------

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

                                           ------------------------------------
                                           Fax:
                                               --------------------------------

                                  JCC CANAL DEVELOPMENT, L.L.C.,
                                  a Louisiana limited liability company

                                  By:
                                           ------------------------------------
                                           Name:       L. Camille Fowler
                                           Title:      Vice President-Finance,
                                                       Secretary and Treasurer

                                           Address:
                                                   ----------------------------

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

                                           ------------------------------------
                                           Fax:
                                               --------------------------------

                 [SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]

<PAGE>   88

                                  JCC FULTON DEVELOPMENT, L.L.C.,
                                  a Louisiana limited liability company

                                  By:
                                           ------------------------------------
                                           Name:       L. Camille Fowler
                                           Title:      Vice President-Finance,
                                                       Secretary and Treasurer

                                           Address:
                                                   ----------------------------

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

                                           ------------------------------------
                                           Fax:
                                               --------------------------------

                                  JCC DEVELOPMENT COMPANY, L.L.C.,
                                  a Louisiana limited liability company

                                  By:
                                           ------------------------------------
                                           Name:       L. Camille Fowler
                                           Title:      Vice President-Finance,
                                                       Secretary and Treasurer

                                           Address:
                                                   ----------------------------

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

                                           ------------------------------------
                                           Fax:
                                               --------------------------------

                                  HARRAH'S ENTERTAINMENT, INC.

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

                                  HARRAH'S OPERATING COMPANY, INC.

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

                 [SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]

<PAGE>   89

                                  HARRAH'S NEW ORLEANS MANAGEMENT COMPANY

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

                 [SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]

<PAGE>   90

                                   EXHIBIT A-1

                          TO REVOLVING CREDIT AGREEMENT

                           FORM OF NOTICE OF BORROWING
                                                              _________ __, 200_
Harrah's Entertainment, Inc.,
Harrah's Operating Company, Inc,
and Harrah's New Orleans Management Company,
as Lenders party to the Revolving Credit Agreement
referred to below
1 Harrah's Court
Las Vegas, NV  89119
Attention:
           -------------------------

Ladies and Gentlemen:

         The undersigned, Jazz Casino Company, L.L.C. ("Borrower"), refers to
the Revolving Credit Agreement dated as of March __, 2001 among the Borrower,
the other Credit Parties named therein and the Lender (as from time to time
amended, restated, supplemented or otherwise modified, the "Revolving Credit
Agreement"; capitalized terms used herein shall have the meanings given such
terms in the Revolving Credit Agreement), and hereby gives you notice,
irrevocably, pursuant to Section 2.3 of the Revolving Credit Agreement that
Borrower hereby requests that the Lender [advance Revolving Loans to the
Borrower] [convert ____ Loans into _____ Loans] [continue Eurodollar Loans as
Eurodollars] and in connection with such request sets forth below the
information relating to such requested Borrowing as required by the Revolving
Credit Agreement:

         (i)      The date of the requested Borrowing is _______________.

         (ii)     The aggregate amount of the requested Borrowing is
                  $_____________.

         (iii)    [The Borrowing is to initially be maintained as a
                  Eurodollar/Base Rate Loan].

                  [On date ] convert $[________]of the aggregate outstanding
                  principal amount of the Revolving Loans bearing interest at
                  the [________] Rate, into a(n) [________] Loan]

                  [On [ date ] continue $[________]of the aggregate outstanding
                  principal amount of the Revolving Loans bearing interest at
                  the Eurodollar Rate as a Eurodollar Loan].

                  [The duration of the Interest Period for the requested
                  Borrowing is _________.]

         Borrower hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the requested Borrowing:

                                 Exhibit A-1 - 1
<PAGE>   91

         (A) all representations and warranties contained in the Revolving
Credit Agreement and in the other Credit Documents are true and correct in all
material respects both before and after giving effect to the requested Borrowing
and to the application of the proceeds therefrom, as though made on and as of
such date; and

         (B) no Default or Event of Default has occurred and is continuing, or
could reasonably be expected to result from the requested Borrowing or from the
application of the proceeds therefrom, which has not been waived pursuant to the
terms of the Revolving Credit Agreement.

                                         JAZZ CASINO COMPANY, L.L.C.

                                         By:
                                             ----------------------------------
                                         Name:
                                               --------------------------------
                                                  Its:
                                                      -------------------------

                                 Exhibit A-1 - 2
<PAGE>   92
                                   EXHIBIT A-2
                                       to
                           REVOLVING CREDIT AGREEMENT

                             FORM OF PROMISSORY NOTE

THIS PROMISSORY NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE
INTERCREDITOR AGREEMENT (AS DEFINED IN THE REVOLVING CREDIT AGREEMENT), WHICH
INTERCREDITOR AGREEMENT, AMONG OTHER THINGS, ESTABLISHES CERTAIN RIGHTS WITH
RESPECT TO THE SECURITY FOR THIS NOTE AND THE SHARING OF PROCEEDS THEREOF WITH
CERTAIN OTHER SECURED CREDITORS (AS DEFINED IN THE INTERCREDITOR AGREEMENT).
COPIES OF SUCH INTERCREDITOR AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THIS
PROMISSORY NOTE UPON REQUEST TO THE BORROWER.

$35,000,000
                                                                  March __, 2001

                  FOR VALUE RECEIVED, the undersigned, JAZZ CASINO COMPANY,
L.L.C., a Louisiana limited liability company ("Borrower"), HEREBY PROMISES TO
PAY to the order of HARRAH'S ENTERTAINMENT, INC., HARRAH'S OPERATING COMPANY,
INC. and HARRAH'S NEW ORLEANS MANAGEMENT COMPANY (collectively, the "Lender") at
the Lender's address at 1 Harrah's Court, Las Vegas, Nevada 89119, or at such
other place as the Lender may designate from time to time in writing, in lawful
money of the United States of America and in immediately available funds, the
amount of THIRTY-FIVE MILLION DOLLARS AND NO CENTS ($35,000,000) or, if less,
the aggregate unpaid amount of all Revolving Loans made to the undersigned under
the "Revolving Credit Agreement" (as hereinafter defined). All capitalized terms
used but not otherwise defined herein have the meanings given to them in the
Revolving Credit Agreement.

                  This Promissory Note (this "Note") is issued pursuant to that
certain Revolving Credit Agreement dated as of March __, 2001 by and among
Borrower, the other Persons named therein as Credit Parties and the Lender (as
from time to time amended, restated, supplemented or otherwise modified, the
"Revolving Credit Agreement"), and is entitled to the benefit and security of
the Revolving Credit Agreement and all of the other Credit Documents referred to
therein. Reference is hereby made to the Revolving Credit Agreement for a
statement of all of the terms and conditions under which the Revolving Loans
evidenced hereby are made and are to be repaid. The date and amount of each
Revolving Loan made by Lender to Borrower, the rates of interest applicable
thereto and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books; provided that the failure of the Lender to
make any such recordation shall not affect the obligations of Borrower to make a
payment when due of any amount owing under the Revolving Credit Agreement or
this Note in respect of the Revolving Loans made by the Lender to Borrower.

                                 Exhibit A-2 - 1
<PAGE>   93

                  The principal amount of the indebtedness evidenced hereby
shall be payable in the amounts and on the dates specified in the Revolving
Credit Agreement, the terms of which are hereby incorporated herein by
reference. Interest thereon shall be paid until such principal amount is paid in
full at such interest rates and at such times, and pursuant to such
calculations, as are specified in the Revolving Credit Agreement.

                  If any payment on this Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.

                  Upon and after the occurrence of any Event of Default, this
Note may, as provided in the Revolving Credit Agreement, and without demand,
notice or legal process of any kind, be declared, and immediately shall become,
due and payable.

                  Time is of the essence of this Note. Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by Borrower.

                  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE.

                                       JAZZ CASINO COMPANY, L.L.C.

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

                                 Exhibit A-2 - 2
<PAGE>   94
                                   EXHIBIT A-3

                          TO REVOLVING CREDIT AGREEMENT

                   FORM OF LETTER OF CREDIT OBLIGATION REQUEST
                                                              _________ __, 200_
Harrah's Entertainment, Inc.,
Harrah's Operating Company, Inc,
and Harrah's New Orleans Management Company,
as Lenders party to the Revolving Credit Agreement
referred to below
1 Harrah's Court
Las Vegas, NV  89119
Attention:
           -------------------------

Ladies and Gentlemen:

         The undersigned, Jazz Casino Company, L.L.C. ("Borrower"), refers to
the Revolving Credit Agreement dated as of March __, 2001 among the Borrower,
the other Credit Parties named therein and the Lender (as from time to time
amended, restated, supplemented or otherwise modified, the "Revolving Credit
Agreement"; capitalized terms used herein shall have the meanings given such
terms in the Revolving Credit Agreement), and hereby gives you notice,
irrevocably, pursuant to Section 2.13 of the Revolving Credit Agreement that
Borrower hereby requests that the Lender incur Letter of Credit Obligations and
cause a Letter of Credit to be issued by the Issuing Bank. In connection with
such request, the Borrower sets forth the following information:

         (i)      The date of issuance for the requested Letter of Credit is
                  ____________.

         (ii)     The aggregate stated amount for requested the Letter of Credit
                  is $_____________.

         (iii)    The beneficiary of the requested Letter of Credit will be
                  _______________.

         (iv)     The requested Letter of credit will be in support of
                  ___________________.

         (v)      The requested Letter of Credit will have an expiration date of
                  _______________.

Borrower hereby certifies that the following statements are true on the date
hereof, and will be true on the date that the requested Letter of Credit is
issued:

         (A) all representations and warranties contained in the Revolving
Credit Agreement and in the other Credit Documents are true and correct in all
material respects both before and after giving effect to the issuance of the
requested Letter of Credit; and

                                 Exhibit A-3 - 1
<PAGE>   95

         (B) no Default or Event of Default has occurred and is continuing, or
could reasonably be expected to result from the issuance of the requested Letter
of Credit which has not been waived pursuant to the terms of the Revolving
Credit Agreement.

                                       JAZZ CASINO COMPANY, L.L.C.

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

                                 Exhibit A-3 - 2
<PAGE>   96
                                    EXHIBIT B

             CONDITIONS, REPRESENTATIONS, WARRANTIES AND AGREEMENTS

I.       Conditions. The obligation of the Lender to make Revolving Loans and to
         incur Letter of Credit Obligations on the Initial Borrowing Date and
         the date of any subsequent Credit Event is subject to the satisfaction
         of the following conditions:

         1.       Execution of Credit Documents. The Credit Documents shall be
                  executed by all the parties thereto and delivered to the
                  Lender.

         2.       Fees, etc. On the Initial Borrowing Date, the Borrower shall
                  have paid to the Lender all costs, fees and expenses
                  (including, without limitation, legal fees and expenses of
                  counsel to the Lender only, title premiums, survey charges and
                  recording taxes and fees) payable to the Lender then due.

         3.       Officer's Certificate. On the Initial Borrowing Date, the
                  Lender shall have received a certificate dated the Initial
                  Borrowing Date signed on behalf of the Borrower by an
                  Authorized Representative of the Borrower stating that all of
                  the conditions in Sections 6, 7, 9, 10, 11, 12, 13, 20, 21, 22
                  and 23 of this Section I of Exhibit B have been satisfied on
                  such date.

         4.       Opinions of Counsel. On the Initial Borrowing Date, the Lender
                  shall have received (i) from Adams and Reese LLP, Louisiana
                  counsel to the Borrower, an opinion addressed to the Lender
                  and dated the Initial Borrowing Date in the form of Exhibit
                  C-1, (ii) from William H. Patrick, Esq., special counsel to
                  the Borrower for Louisiana gaming matters, an opinion
                  addressed to the Lender and dated the Initial Borrowing Date
                  in the form of Exhibit C-2 and (iii) from Pilsbury Winthrop,
                  LLP, New York counsel to the Borrower, an opinion addressed to
                  the Lender and dated the Initial Borrowing Date in the form of
                  Exhibit C-3.

         5.       Corporate Documents; Proceedings; etc. On the Initial
                  Borrowing Date, the Lender shall have received a certificate,
                  dated the Initial Borrowing Date, signed by an Authorized
                  Representative of each of the Credit Parties, and attested to
                  by another Authorized Representative of each such Credit
                  Party, in the form of Exhibit D with appropriate insertions,
                  together with copies of such Credit Party's certificate of
                  incorporation and by-laws (or other relevant organizational
                  documents), as the case may be, and the resolutions or other
                  appropriate authorizing documents of such Credit Party
                  referred to in such certificate.

         6.       Debt Agreements. On the Initial Borrowing Date, there shall
                  have been delivered to the Lender true and correct copies,
                  certified as true and complete by an Authorized Representative
                  of JCC Holding, of all agreements evidencing or relating to
                  Indebtedness of JCC Holding or any of its Subsidiaries which
                  is to remain outstanding after the Effective Date
                  (collectively, the "Debt Agreements").

                                  Exhibit B - 1
<PAGE>   97

         7.       Leases. On the Initial Borrowing Date, there shall have been
                  delivered to the Lender, true and correct copies, certified as
                  true and complete by an Authorized Representative of the
                  Borrower, of the Leases. Furthermore, (i) the Collateral Agent
                  shall have been registered as the Registered Leasehold
                  Mortgagee under (and as defined in) the Casino Operating
                  Contract and (ii) the notice address for the Collateral Agent
                  as Leasehold Mortgagee under (and as defined in) the Casino
                  Lease shall have been delivered to the RDC.

         8.       Confirmation of Plan of Reorganization. On or prior to the
                  Initial Borrowing Date, (i) there shall have been delivered to
                  the Lender true and correct copies of the Plan of
                  Reorganization and the Disclosure Statement, (ii) a
                  Confirmation Order shall have been entered, (iii) the order
                  referenced in preceding clause (ii) shall not have been stayed
                  and shall have become final and non-appealable and (iv) all
                  conditions precedent to the effective date of the Plan of
                  Reorganization shall have been satisfied (and not waived
                  without the consent of the Lender).

         9.       Senior Note Documents. On or prior to the Initial Borrowing
                  Date, (i) the Credit Parties and the Trustee shall have
                  entered into the Senior Note Documents and (ii) there shall
                  have been delivered to the Lender true and correct copies of
                  the Senior Note Documents.

         10.      [Intentionally Omitted].

         11.      [Intentionally Omitted].

         12.      Issuance of New Common Stock. On or prior to the Initial
                  Borrowing Date, (i) JCC Holding shall have issued all shares
                  of New Common Stock in accordance with and pursuant to the
                  Plan of Reorganization and (ii) there shall have been
                  delivered to the Lender true and correct copies of the New
                  Common Stock Documents.

         13.      [Intentionally Omitted].

         14.      Pledge Agreement. On the Initial Borrowing Date, JCC Holding,
                  the Borrower and each Subsidiary Guarantor shall have duly
                  authorized, executed and delivered a Pledge Agreement in the
                  form of Exhibit E (as modified, supplemented or amended from
                  time to time, the "Pledge Agreement") and shall have delivered
                  to the Collateral Agent, as Pledgee, all the Pledged
                  Securities, if any, referred to therein then owned by JCC
                  Holding, the Borrower and each Subsidiary Guarantor (to the
                  extent required to be delivered on the Initial Borrowing Date
                  pursuant to the terms thereof), (x) endorsed in blank in the
                  case of promissory notes constituting Pledged Securities and
                  (y) together with executed and undated stock powers, in the
                  case of capital stock constituting Pledged Securities.

         15.      Security Agreement. On the Initial Borrowing Date, JCC
                  Holding, the Borrower and each Subsidiary Guarantor shall have
                  duly authorized, executed and delivered

                                  Exhibit B - 2
<PAGE>   98
                  a Security Agreement in the form of Exhibit F (as modified,
                  supplemented or amended from time to time, the "Security
                  Agreement") covering all of JCC Holdings', the Borrower's and
                  each Subsidiary Guarantor's present and future Security
                  Agreement Collateral, together with:

                  (a)      proper Financing Statements (Form UCC-1) fully
                           executed for filing under the UCC or other
                           appropriate filing offices of each jurisdiction as
                           may be necessary or desirable to perfect the security
                           interests purported to be created by the Security
                           Agreement;

                  (b)      unless otherwise previously provided, certified
                           copies of Requests for Information or Copies (Form
                           UCC-11), or equivalent reports, listing all effective
                           financing statements that name JCC Holding, the
                           Borrower or any Subsidiary Guarantor as debtor and
                           that are filed in the jurisdictions referred to in
                           clause (a) above, together with copies of such other
                           financing statements (none of which shall cover the
                           Collateral except to the extent evidencing Permitted
                           Liens or in respect of which the Collateral Agent
                           shall have received termination or assignment
                           statements (Form UCC-3) or such other termination
                           statements as shall be required by local law) fully
                           executed for filing;

                  (c)      evidence of the completion of all other recordings
                           and filings of, or with respect to, the Security
                           Agreement as may be necessary or desirable to perfect
                           the security interests intended to be created by the
                           Security Agreement; and

                  (d)      evidence that JCC Holding, the Borrower and the
                           Subsidiary Guarantors have obtained all necessary
                           consents to permit them to assign to the Collateral
                           Agent pursuant to the Security Agreement all of the
                           their right, title and interest in and to all
                           material Permits required to be obtained by the
                           Initial Borrowing Date in connection with the
                           ownership, lease, construction, equipping and
                           operation of the Project or any facilities or
                           services ancillary thereto and the other transactions
                           contemplated by the Credit Documents and the other
                           Documents and otherwise referred to herein or
                           therein, construction documents, architectural and
                           engineering documents, maintenance, management
                           (including the Management Agreement), leasing and
                           service documents and franchise contracts relating to
                           the Project (other than (x) the Casino Operating
                           Contract and (y) to the extent a security interest
                           therein cannot be so granted under applicable law,
                           any other Permit).

         16.      Mortgage; Surveys; etc. On the Initial Borrowing Date, the
                  Collateral Agent shall have received a copy certified by the
                  Recorder of Mortgages for Orleans Parish, Louisiana of fully
                  executed mortgages in the form of Exhibits G-1 through G-4,
                  inclusive (as modified, supplemented or amended from time to
                  time, each a "Mortgage" and, collectively, the "Mortgages"),
                  which Mortgages shall cover

                                  Exhibit B - 3
<PAGE>   99

                  (i) in the case of the Mortgage executed and delivered in the
                  form of Exhibit G-1 (as modified, supplemented or amended from
                  time to time, the "Borrower Mortgage"), the Casino Lease and
                  the Borrower's fee simple estate or leasehold estate or other
                  interest, as the case may be, in such other Real Property
                  owned or leased by the Borrower (each, a "Borrower Mortgaged
                  Property" and, collectively, the "Borrower Mortgaged
                  Properties"), (ii) in the case of the Mortgage executed and
                  delivered in the form of Exhibit G-2 (as modified,
                  supplemented or amended from time to time, the "JCC
                  Development Mortgage"), JCC Development's interest as
                  sublessee in the Second Floor Sublease and JCC Development's
                  fee simple estate or leasehold estate or other interest, as
                  the case may be, in such other Real Property owned or leased
                  by JCC Development (each a "JCC Development Mortgaged
                  Property" and, collectively, the "JCC Development Mortgaged
                  Properties"), (iii) in the case of the Mortgage executed and
                  delivered in the form of Exhibit G-3 (as modified,
                  supplemented or amended from time to time, the "Canal
                  Development Mortgage"), Canal Development's fee simple estate
                  or leasehold estate or other interest, as the case may be, in
                  such Real Property owned or leased by Canal Development (each
                  a "Canal Development Mortgaged Property" and, collectively,
                  the "Canal Development Mortgaged Properties"), and (iv) in the
                  case of the Mortgage executed and delivered in the form of
                  Exhibit G-4 (as modified, supplemented or amended from time to
                  time, the "Fulton Development Mortgage"), Fulton Development's
                  fee simple estate or leasehold estate or other interest, as
                  the case may be, in such Real Property owned or leased by
                  Fulton Development (each a "Fulton Development Mortgaged
                  Property" and, collectively, the "Fulton Development Mortgaged
                  Properties"), and each of which Mortgages shall have been
                  recorded in Orleans Parish, Louisiana to effectively create a
                  valid and enforceable mortgage lien;

         17.      Intercreditor Agreement. On the Initial Borrowing Date, the
                  Lender, the Collateral Agent, and the Minimum Payment
                  Guarantor shall have duly authorized, executed and delivered
                  an Intercreditor Agreement in the form of Exhibit H (as
                  modified, supplemented or amended from time to time, the
                  "Intercreditor Agreement"), and the Intercreditor Agreement
                  shall be in full force and effect.

         18.      Consent Letter. On the Initial Borrowing Date, the Lender
                  shall have received a letter from CT Corporation System,
                  presently located at 6100 Neil Road, Suite 500, Reno, Nevada
                  89511, substantially in the form of Exhibit I, indicating its
                  consent to its appointment by each Credit Party as its agent
                  to receive service of process as specified in Section 8.7 of
                  this Agreement.

         19.      Registration Rights Agreements. On the Effective Date, the
                  Borrower and each Person listed in Exhibit A to the
                  Registration Rights Agreements shall have duly authorized,
                  executed and delivered the Registration Rights Agreements in
                  the form of Exhibits L and M (as modified, supplemented or
                  amended from time to time), and the Registration Rights
                  Agreements shall remain in full force and effect.

                                  Exhibit B - 4
<PAGE>   100

         20.      Adverse Change; Approvals; Permits; etc.

                  (a)      On the Initial Borrowing Date, nothing shall have
                           occurred which is reasonably likely to have a
                           material adverse effect (i) on the rights or remedies
                           of the Lender, or on the ability of any Credit Party
                           to perform their respective obligations to the Lender
                           or (ii) on the business, property, assets,
                           liabilities, condition (financial or otherwise) or
                           prospects of any Credit Party from that set forth in
                           the Financial Forecast.

                  (b)      On or prior to the Initial Borrowing Date, all
                           necessary governmental (domestic and foreign) and
                           third party approvals (including, without limitation,
                           all approvals of the Bankruptcy Court having
                           jurisdiction over the Credit Parties' bankruptcy
                           case) and Permits (including, without limitation, the
                           Casino Operating Contract) (other than approvals and
                           Permits as are immaterial to the construction or
                           operation of the Project) required to be obtained by
                           such date in connection with the ownership, lease,
                           construction and operation of the Project or any
                           facilities or services ancillary thereto and the
                           other transactions contemplated by the Credit
                           Documents and the other Documents and otherwise
                           referred to herein or therein shall have been
                           obtained and remain in full force and effect, and no
                           action shall have been taken by any competent
                           authority which restrains, prevents or imposes
                           materially adverse conditions upon the completion of
                           the Project or the consummation of the transactions
                           contemplated by this Indenture and the other
                           Documents. Additionally, there shall not exist any
                           judgment, order, injunction or other restraint issued
                           or filed or a hearing seeking injunctive relief or
                           other restraint pending or notified (i) challenging
                           the legality, validity or enforceability of any such
                           Permit or the legality or validity of the process
                           pursuant to which such Permit was issued or (ii)
                           prohibiting or imposing materially adverse conditions
                           upon the completion of the Project or the
                           consummation of the transactions contemplated by this
                           Indenture and the other Documents.

                  (c)      On or prior to the Initial Borrowing Date, there
                           shall have been delivered to the Lender evidence that
                           holders of the Senior Notes are qualified under the
                           Louisiana Gaming Regulations as financial sources or
                           qualifiers, or are exempt or waived from, or are
                           presumed qualified under, the provisions thereof, and
                           the Lender shall be satisfied that no other Louisiana
                           gaming license, authorization, qualification, waiver
                           or exemption of the holders of the Senior Notes is
                           required on or prior to the Initial Borrowing Date by
                           reason of the Senior Note Indenture or the Security
                           Documents. The Lender shall be satisfied with any
                           conditions or requirements imposed by Louisiana or
                           other relevant Gaming Authorities upon the holders of
                           the Senior Notes, the Indenture, the Security
                           Documents or the Collateral.

                  (d)      On or prior to the Initial Borrowing Date, the
                           Borrower, Harrah's Management Company and the Lender
                           shall have received any

                                  Exhibit B - 5
<PAGE>   101
                           qualifications required on or prior to the Initial
                           Borrowing Date under applicable Gaming Regulations in
                           connection with this Agreement, the Security
                           Documents and the Transaction, and the Borrower,
                           Harrah's Management Company and the Lender shall have
                           received all other approvals, authorizations or
                           consents of, or notices to or registrations with any
                           governmental body and required releases and consents
                           from any other appropriate Persons in connection with
                           this Agreement, the Security Documents and the
                           Transaction and required on or prior to the Initial
                           Borrowing Date.

                  (e)      On the Initial Borrowing Date, there shall have been
                           delivered to the Lender true and correct copies,
                           certified as true and complete by an Authorized
                           Representative of the Borrower, of all such approvals
                           and Permits referred to in this Section 20 and
                           required to be obtained by the Initial Borrowing
                           Date.

         21.      Litigation. On the Initial Borrowing Date, no litigation by
                  any entity (private or governmental) shall be pending or
                  threatened (except that litigation which is identified in the
                  attached Exhibit N) (i) with respect to the Credit Documents,
                  the other Documents or with respect to the Transaction or (ii)
                  which could have a material adverse effect on the business,
                  property, assets, nature of assets, liabilities, condition
                  (financial or otherwise) or prospects of the Borrower.

         22.      Minimum Payment Guaranty; etc.

                  (a)      On the Initial Borrowing Date, HET and HOC shall have
                           duly authorized, executed and delivered the initial
                           Minimum Payment Guaranty in favor of the LGCB as
                           required by Section 25.1 of the Casino Operating
                           Contract and, in connection therewith, HET, HOC and
                           the Borrower shall have entered into the HET/JCC
                           Agreement.

                  (b)      On the Initial Borrowing Date, there shall have been
                           delivered to the Lender true and correct copies,
                           certified as true and complete by an Authorized
                           Representative of Borrower, of all of the Minimum
                           Payment Guaranty Documents.

         23.      No Default; Representations and Warranties. The making of
                  Revolving Loans on the Initial Borrowing Date shall be deemed
                  to constitute a representation and warranty by the Borrower to
                  the Lender that all of the conditions specified in this
                  Exhibit B exist (and have been satisfied) as of that time.
                  Each Credit Event shall be deemed to constitute a
                  representation and warranty by the Borrower to the Lender
                  that, and after giving effect thereto, (i) there shall exist
                  no Default or Event of Default, (ii) all representations and
                  warranties as set forth below and in the other Credit
                  Documents shall be true and correct in all material respects
                  (it being understood and agreed that any representation or
                  warranty which by its terms is made as of a specified date
                  shall be required to be true and correct in all material

                                  Exhibit B - 6
<PAGE>   102
                  respects only as of such specified date), (iii) Borrower has
                  delivered a Notice of Borrowing or Letter of Credit Obligation
                  Request (except with respect to Existing Letters of Credit),
                  as applicable, which meets the requirements of Sections 2.3 or
                  2.13, as applicable and (iv) such Credit Event will not occur
                  after the first anniversary of the date on which Harrah's
                  Management Company received notice of termination of the
                  Management Agreement under the terms of the Management
                  Agreement.

II.      Representations, Warranties and Agreements. In order to induce the
         Lender to enter into this Agreement and to make Revolving Loans and
         incur Letter of Credit Obligations, each of JCC Holding, the Borrower
         and the Guarantors makes the following representations, warranties and
         agreements, all of which shall survive the execution of the Agreement,
         with the occurrence of each Credit Event being deemed to constitute a
         representation and warranty that the matters specified in this Exhibit
         B are true and correct in all material respects on the date of such
         Credit Event (it being understood and agreed that any representation or
         warranty which by its terms is made as of a specified date shall be
         required to be true and correct in all material respects only as of
         such specified date).

         1.       Status. Each of JCC Holding and its Subsidiaries (i) is a duly
                  organized and validly existing corporation or limited
                  liability company, as the case may be, in good standing under
                  the laws of the jurisdiction of its organization, (ii) has the
                  requisite power and authority to own its property and assets
                  and to transact the business in which it is engaged and
                  presently proposes to engage and (iii) is duly qualified and
                  is authorized to do business and is in good standing in each
                  jurisdiction where the conduct of its business requires such
                  qualifications except for failures to be so qualified which,
                  individually or in the aggregate, could not reasonably be
                  expected to have a material adverse effect on the business,
                  operations, property, assets, liabilities, condition
                  (financial or otherwise) or prospects of the Borrower and its
                  Subsidiaries taken as a whole.

         2.       Power and Authority. Each of JCC Holding and its Subsidiaries
                  has the corporate or limited liability company, as the case
                  may be, power and authority to execute, deliver and perform
                  the terms and provisions of each of the Documents to which it
                  is party and has taken all necessary action to authorize the
                  execution, delivery and performance by it of each of such
                  Documents. Each of JCC Holding and its Subsidiaries has duly
                  executed and delivered each of the Documents to which it is
                  party, and each of such Documents constitutes the legal, valid
                  and binding obligation of such Person enforceable in
                  accordance with its terms, except to the extent that the
                  enforceability thereof may be limited by applicable
                  bankruptcy, insolvency, reorganization, moratorium or other
                  similar laws generally affecting creditors' rights and by
                  equitable principles (regardless of whether enforcement is
                  sought in equity or at law).

         3.       No Violation. Neither the execution, delivery or performance
                  by JCC Holding or any of its Subsidiaries of the Documents to
                  which it is a party, nor compliance by it with the terms and
                  provisions thereof, (i) will contravene any provision of any

                                  Exhibit B - 7
<PAGE>   103

                  applicable law, statute, rule or regulation or any applicable
                  order, writ, injunction or decree of any court or governmental
                  instrumentality, (ii) will conflict with or result in any
                  breach of any of the terms, covenants, conditions or
                  provisions of, or constitute a default under, or result in the
                  creation or imposition of (or the obligation to create or
                  impose) any Lien (except pursuant to the Security Documents)
                  upon any of the properties or assets of JCC Holding or any of
                  its Subsidiaries pursuant to the terms of any indenture,
                  mortgage, deed of trust, credit agreement or loan agreement,
                  or any other material agreement, contract or instrument to
                  which JCC Holding or any of its Subsidiaries is a party or by
                  which it or any of its property or assets is bound or to which
                  it may be subject or (iii) will violate any provision of the
                  certificate of incorporation or by-laws, or other
                  organizational documents, of JCC Holding or any of its
                  Subsidiaries.

         4.       Governmental Approvals. No order, consent, approval, license,
                  authorization or validation of, or filing, recording or
                  registration with (except as have been obtained or made on or
                  prior to the Effective Date and excluding any such items which
                  are not required to be obtained or in effect as of the Initial
                  Borrowing Date), or exemption by, any governmental or public
                  body or authority (including, without limitation, any Gaming
                  Authority), or any subdivision thereof, is required to
                  authorize, or is required in connection with, (i) the
                  execution, delivery and performance of any Document, (ii) the
                  consummation of the Transaction or (iii) the legality,
                  validity, binding effect or enforceability of any such
                  Document, except where the failure to so obtain would not (x)
                  have a material adverse effect on the business, operations,
                  property, assets, liabilities, condition (financial or
                  otherwise) or prospects of the Borrower or JCC Holding and its
                  Subsidiaries taken as a whole or (y) adversely affect the
                  Lender, the Trustee, the Collateral Agent or their rights
                  under, or the legality, validity, binding effect or
                  enforceability of, any Credit Document.

         5.       [Intentionally Omitted].

         6.       Litigation. There are no actions, suits or proceedings pending
                  or, to the best knowledge of JCC Holding and the Borrower,
                  threatened (i) with respect to any Document or (ii) that could
                  reasonably be expected to materially and adversely affect the
                  business, operations, property, assets, liabilities, condition
                  (financial or otherwise) or prospects of the Borrower or JCC
                  Holding and its Subsidiaries taken as a whole.

         7.       True and Complete Disclosure. All factual information (taken
                  as a whole) furnished by or on behalf of JCC Holding or the
                  Borrower in writing to the Lender for purposes of or in
                  connection with this Agreement, the other Documents or any
                  transaction contemplated herein or therein is, and all other
                  such factual information (taken as a whole) hereafter
                  furnished by or on behalf of JCC Holding or the Borrower in
                  writing to the Lender, will be, true and accurate in all
                  material respects on the date as of which such information is
                  dated or certified and not incomplete by omitting to state any
                  fact necessary to make such information (taken

                                  Exhibit B - 8
<PAGE>   104
                  as a whole) not misleading in any material respect at such
                  time in light of the circumstances under which such
                  information was provided.

         8.       Use of Proceeds; Margin Regulations. No part of the proceeds
                  of any Revolving Loans (or Indebtedness refinanced therewith)
                  were used to purchase or carry any Margin Stock or to extend
                  credit for the purpose of purchasing or carrying any Margin
                  Stock. Neither the making (or deemed making) of any Revolving
                  Loans nor the use of the proceeds thereof will violate or be
                  inconsistent with the provisions of Regulation T, Regulation U
                  or Regulation X.

         9.       Tax Returns and Payments. Each of JCC Holding and its
                  Subsidiaries has timely filed or caused to be timely filed, on
                  the due dates thereof or within applicable extension or grace
                  periods, with the appropriate taxing authority, all material
                  U.S. federal, state, city and other returns, statements, forms
                  and reports for taxes (the "Returns") required to be filed by
                  or with respect to the income, properties or operations of JCC
                  Holding and its Subsidiaries. The Returns accurately reflect
                  in all material respects all liability for taxes of JCC
                  Holding and its Subsidiaries for the periods covered thereby.
                  Each of JCC Holding and its Subsidiaries has paid all material
                  taxes payable by it other than taxes which are not delinquent,
                  and other than those contested in good faith and for which
                  adequate reserves have been established in accordance with
                  generally accepted accounting principles. There is no material
                  action, suit, proceeding, investigation, audit, or claim now
                  pending or, to the best knowledge of JCC Holding and the
                  Borrower, threatened by any taxing authority regarding any
                  taxes relating to JCC Holding and its Subsidiaries. As of the
                  Initial Borrowing Date, neither JCC Holding nor any of its
                  Subsidiaries has entered into an agreement or waiver or been
                  requested to enter into an agreement or waiver extending any
                  statute of limitations relating to the payment or collection
                  of taxes of JCC Holding or such Subsidiary. Neither JCC
                  Holding nor any of its Subsidiaries has provided, with respect
                  to itself or property held by it, any consent under Section
                  341 of the Code.

         10.      Compliance with ERISA. To the best of JCC Holdings' Knowledge,
                  each Plan is in substantial compliance with ERISA and the
                  Code; no Reportable Event has occurred with respect to a Plan;
                  no Plan is insolvent or in reorganization; no Plan has an
                  Unfunded Current Liability; no Plan has an accumulated or
                  waived funding deficiency, has permitted decreases in its
                  funding standard account or has applied for an extension of
                  any amortization period within the meaning of Section 412 of
                  the Code; all contributions required to be made with respect
                  to a Plan have been timely made; neither JCC Holding nor any
                  of its Subsidiaries nor any ERISA Affiliate has incurred any
                  material liability to or on account of a Plan pursuant to
                  Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
                  4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
                  4975 of the Code or expects to incur any liability (including
                  any indirect, contingent, or secondary liability) under any of
                  the foregoing Sections with respect to any Plan; no
                  proceedings have been instituted to terminate or appoint a
                  trustee to administer any Plan; no condition exists which
                  presents a material risk to JCC Holding or any of its
                  Subsidiaries or any ERISA

                                  Exhibit B - 9
<PAGE>   105
                  Affiliate of incurring a liability to or on account of a Plan
                  pursuant to the foregoing provisions of ERISA and the Code; no
                  lien imposed under the Code or ERISA on the assets of JCC
                  Holding or any of its Subsidiaries or any ERISA Affiliate
                  exists or is likely to arise on account of any Plan; and JCC
                  Holding and its Subsidiaries may cease contributions to or
                  terminate any employee benefit plan maintained by any of them
                  without incurring any material liability. The representations
                  and warranties in this Section 10 shall only apply insofar as
                  the matters referred to in this Section 10 present a risk of
                  material liability to JCC Holding or any of its Subsidiaries
                  or ERISA Affiliates. With respect to a multi-employer plan as
                  defined in Section 4001(a)(3) of ERISA, it is understood and
                  agreed that the representations and warranties of this Section
                  10 are based solely on nonreceipt by JCC Holding or its
                  Subsidiaries or ERISA Affiliates of written notice from the
                  PBGC or a Plan Administrator referring to material violations
                  or material liabilities affecting JCC Holding or its
                  Subsidiaries or ERISA Affiliates in respect of the matters
                  referred to in such representations and warranties.

         11.      The Security Documents.

                  (a)      The provisions of the Security Agreement are
                           effective to create in favor of the Collateral Agent
                           for the benefit of the Secured Creditors (subject to
                           the provisions of the Intercreditor Agreement) a
                           legal, valid and enforceable security interest in all
                           right, title and interest of the Credit Parties in
                           the Security Agreement Collateral described therein,
                           and the Security Agreement, upon the filing of Form
                           UCC-1 financing statements or the appropriate
                           equivalent (which filings have been made), creates a
                           fully perfected (except as otherwise expressly
                           provided in Section 3.2(d) of the Pledge Agreement
                           with respect to Gaming Patron Indebtedness) lien on,
                           and security interest in, all right, title and
                           interest in all of the Security Agreement Collateral
                           described therein, subject to no other Liens other
                           than Permitted Liens. The recordation of the
                           Assignment of Security Interest in U.S. Patents and
                           Trademarks in the form attached to the Security
                           Agreement in the United States Patent and Trademark
                           Office together with filings on Form UCC-1 made
                           pursuant to the Security Agreement will be effective,
                           under applicable law, to perfect the security
                           interest granted to the Collateral Agent in the
                           trademarks and patents covered by the Security
                           Agreement and the recordation of the Assignment of
                           Security Interest in U.S. Copyrights in the form
                           attached to the Security Agreement with the United
                           States Copyright Office together with filings on Form
                           UCC-1 made pursuant to the Security Agreement will be
                           effective under federal law to perfect the security
                           interest granted to the Collateral Agent in the
                           copyrights covered by the Security Agreement. Each
                           Credit Party has good and valid title to all Security
                           Agreement Collateral described therein, free and
                           clear of all Liens except those described above in
                           this clause (a).

                                 Exhibit B - 10
<PAGE>   106

                  (b)      The security interests created in favor of the
                           Collateral Agent, as Pledgee, for the benefit of the
                           Secured Creditors (subject to the provisions of the
                           Intercreditor Agreement) under the Pledge Agreement
                           constitute first priority perfected (except as
                           otherwise expressly provided in Section 3.2(d) of the
                           Pledge Agreement with respect to Gaming Patron
                           Indebtedness) security interests in the Pledge
                           Agreement Collateral, subject to no security
                           interests of any other Person. No filings or
                           recordings are required in order to perfect (or
                           maintain the perfection or priority of) the security
                           interests created in the Pledged Securities and the
                           proceeds thereof under the Pledge Agreement.

                  (c)      Upon the establishment of any Pledged Account in
                           accordance with the Security Agreement, and until the
                           termination of such Security Agreement in accordance
                           with its respective terms, the security interests
                           created in favor of the Collateral Agent for the
                           benefit of the Secured Creditors (subject to the
                           provisions of the Intercreditor Agreement) under such
                           Security Agreement will constitute perfected security
                           interests in the Collateral (as defined in such
                           Security Agreement), subject to no security interests
                           of any other Person (other than Permitted Liens). No
                           filings or recordings are required (other than those
                           that have been made) in order to perfect (or maintain
                           the perfection or priority of) the security interests
                           created in such Collateral.

                  (d)      The Mortgages create, as security for the obligations
                           purported to be secured thereby, valid and
                           enforceable perfected security interests in and
                           mortgage liens on all of the Mortgaged Properties in
                           favor of the Collateral Agent for the benefit of the
                           Secured Creditors (subject to the provisions of the
                           Intercreditor Agreement), superior to and prior to
                           the rights of all third Persons (except that the
                           security interest and mortgage lien created in the
                           Mortgaged Properties may be subject to the Permitted
                           Encumbrances related thereto) and subject to no other
                           Liens (other than Permitted Liens). Each of JCC
                           Holding and its Subsidiaries has good and
                           merchantable title to all fee-owned Mortgaged
                           Properties and valid leasehold title to all leasehold
                           Mortgaged Properties, in each case free and clear of
                           all leases, occupancy interests and all Liens except
                           those described in the first sentence of this
                           subsection (d).

         12.      Representations and Warranties in Documents. On the date of
                  each Credit Event, all representations and warranties set
                  forth in the Documents were true and correct in all material
                  respects at the time as of which such representations and
                  warranties were made (or deemed made).

         13.      Properties. Each of JCC Holding and its Subsidiaries has good
                  and valid title to all material properties owned by it (except
                  as sold or otherwise disposed of in the ordinary course of
                  business), free and clear of all Liens, other than Permitted
                  Liens. On the Effective Date, the Mortgages set forth a true
                  and complete

                                 Exhibit B - 11
<PAGE>   107

                  description of all Real Property owned or leased by JCC
                  Holding and its Subsidiaries and sets forth the direct owner
                  or lessee thereof.

         14.      Capitalization.

                  (a)      On the Initial Borrowing Date, the authorized capital
                           stock of JCC Holding shall consist of 40,000,000
                           shares of common stock, $.01 par value per share, of
                           which 12,386,200 shares are issued and outstanding.
                           All such outstanding shares of common stock have been
                           duly and validly issued, are fully paid and
                           non-assessable and are free of preemptive rights. As
                           of the Initial Borrowing Date, JCC Holding does not
                           have outstanding any securities convertible into or
                           exchangeable for its capital stock or outstanding any
                           rights to subscribe for or to purchase, or any
                           options for the purchase of, or any agreements
                           providing for the issuance (contingent or otherwise)
                           of, or any calls, commitments or claims of any
                           character relating to, its capital stock.

                  (b)      100% of the Equity Interests in each of the Borrower,
                           JCC Development, Canal Development and Fulton
                           Development are owned by JCC Holding, and all such
                           Equity Interests are fully paid and nonassessable and
                           are free of preemptive rights. As of the Initial
                           Borrowing Date, none of the Borrower, JCC
                           Development, Canal Development or Fulton Development
                           has outstanding any securities convertible into or
                           exchangeable for its Equity Interests or outstanding
                           any rights to subscribe for or to purchase, or any
                           options for the purchase of, or any agreements
                           providing for the issuance (contingent or otherwise)
                           of, or any calls, commitments or claims of any
                           character relating to, its Equity Interests.

         15.      Subsidiaries. As of the Initial Borrowing Date, JCC Holding
                  has no Subsidiaries other than the Borrower, JCC Development,
                  Canal Development and Fulton Development, each of which is a
                  direct Wholly-Owned Subsidiary of JCC Holding.

         16.      Compliance with Statutes, etc.

                  (a)      Each of JCC Holding and its Subsidiaries is in
                           compliance with all applicable statutes, laws,
                           ordinances, codes, rules, regulations and orders of,
                           and all applicable restrictions imposed by and all
                           applicable Permits issued by, all governmental
                           bodies, domestic or foreign, in respect of the
                           conduct of its business, the ownership of its
                           property and the construction and operation of the
                           Casino (including applicable statutes, regulations,
                           orders and restrictions relating to environmental
                           standards and controls) to the extent required as of
                           the Initial Borrowing Date and the date of each
                           Credit Event, except such instances of noncompliance
                           as could not, individually or in the aggregate,
                           reasonably be expected to have a material adverse
                           effect on the business, operations, property, assets,
                           liabilities,

                                 Exhibit B - 12
<PAGE>   108
                           condition (financial or otherwise) or prospects of
                           the Borrower or JCC Holding and its Subsidiaries
                           taken as a whole.

                  (b)      All necessary governmental (domestic and foreign) and
                           third party approvals and Permits (including, without
                           limitation, the Casino Operating Contract) (other
                           than any approvals and Permits as are immaterial to
                           the operation of the Casino) required to be obtained
                           by the date upon which this representation is being
                           made or deemed made in connection with the ownership,
                           lease, construction and operation of the Casino or
                           any facilities or services ancillary thereto and the
                           other transactions contemplated by the Credit
                           Documents and the other Documents and otherwise
                           referred to herein or therein have been obtained and
                           remain in full force and effect, and all applicable
                           waiting periods shall have expired without any action
                           being taken by any competent authority which
                           restrains, prevents or imposes materially adverse
                           conditions upon the operation of the Casino or the
                           consummation of the transactions contemplated by this
                           Indenture and the other Documents. Additionally,
                           there does not exist any judgment, order, injunction
                           or other restraint issued or filed or a hearing
                           seeking injunctive relief or other restraint pending
                           or notified (i) challenging the legality, validity or
                           enforceability of any such Permit or the legality or
                           validity of the process pursuant to which such Permit
                           was issued or (ii) prohibiting or imposing materially
                           adverse conditions upon the operation of the Casino
                           or the consummation of the transactions contemplated
                           by this Indenture and the other Documents.

         17.      Investment Company Act. Neither JCC Holding nor any of its
                  Subsidiaries is an "investment company" or a company
                  "controlled" by an "investment company," within the meaning of
                  the Investment Company Act of 1940, as amended.

         18.      Public Utility Holding Company Act. Neither JCC Holding nor
                  any of its Subsidiaries is a "holding company," or a
                  "subsidiary company" of a "holding company," or an "affiliate"
                  of a "holding company" or of a "subsidiary company" of a
                  "holding company" within the meaning of the Public Utility
                  Holding Company Act of 1935, as amended.

         19.      Environmental Matters.

                  (a)      Each of JCC Holding and its Subsidiaries is in
                           compliance with all applicable Environmental Laws and
                           the requirements of any Permits issued under such
                           Environmental Laws. There are no pending or, to the
                           best knowledge of JCC Holding and the Borrower after
                           due inquiry, past or threatened Environmental Claims
                           against JCC Holding or any of its Subsidiaries on any
                           Real Property owned or operated by JCC Holding or any
                           of its Subsidiaries that individually or in the
                           aggregate could reasonably be expected to materially
                           and adversely affect the business, operations,
                           property, assets, liabilities, condition (financial
                           or otherwise) or prospects

                                 Exhibit B - 13
<PAGE>   109
                           of the Borrower or JCC Holding and its Subsidiaries
                           taken as a whole. There are no facts, circumstances,
                           conditions or occurrences with respect to the
                           business or operations of JCC Holding or any of its
                           Subsidiaries or any Real Property owned or operated
                           by JCC Holding or any of its Subsidiaries or, to the
                           best knowledge of JCC Holding and the Borrower after
                           due inquiry, on any property adjoining or in the
                           vicinity of any such Real Property that, to the best
                           knowledge of JCC Holding and the Borrower after due
                           inquiry, could reasonably be expected (i) to form the
                           basis of an Environmental Claim against JCC Holding
                           or any of its Subsidiaries or any such Real Property
                           that individually or in the aggregate could
                           reasonably be expected to materially and adversely
                           affect the business, operations, property, assets,
                           liabilities, condition (financial or otherwise) or
                           prospects of the Borrower or JCC Holding and its
                           Subsidiaries taken as a whole, or (ii) to cause any
                           such Real Property to be subject to any restrictions
                           on the ownership, occupancy, use or transferability
                           of such Real Property by JCC Holding or any of its
                           Subsidiaries under any applicable Environmental Law.

                  (b)      Hazardous Materials have not at any time been
                           generated, used, treated or stored on, or transported
                           to or from, any Real Property owned or operated by
                           JCC Holding or any of its Subsidiaries where such
                           generation, use, treatment or storage has violated or
                           could reasonably be expected to violate any
                           Environmental Law. Hazardous Materials have not at
                           any time been Released on or from any Real Property
                           owned or operated by JCC Holding or any of its
                           Subsidiaries where such Release has violated or could
                           reasonably be expected to violate any applicable
                           Environmental Law. There are no underground storage
                           tanks located on any Real Property owned or operated
                           by JCC Holding or any of its Subsidiaries that are
                           not in compliance with all Environmental Laws.

         20.      Labor Relations. To the best of JCC Holdings' Knowledge,
                  neither JCC Holding nor any of its Subsidiaries is engaged in
                  any unfair labor practice that could reasonably be expected to
                  have a material adverse effect on the Borrower or JCC Holding
                  and its Subsidiaries taken as a whole. To the best of JCC
                  Holdings' Knowledge, there is (i) no unfair labor practice
                  complaint pending against JCC Holding or any of its
                  Subsidiaries or threatened against any of them, before the
                  National Labor Relations Board, and no material grievance or
                  arbitration proceeding arising out of or under any collective
                  bargaining agreement is so pending against JCC Holding or any
                  of its Subsidiaries or threatened against any of them, (ii) no
                  strike, labor dispute, slowdown or stoppage pending against
                  JCC Holding or any of its Subsidiaries or threatened against
                  JCC Holding or any of its Subsidiaries and (iii) no union
                  representation proceeding pending with respect to the
                  employees of JCC Holding or any of its Subsidiaries except
                  (with respect to any matter specified in clause (i), (ii) or
                  (iii) above, either individually or in the aggregate) such as
                  could not reasonably be expected to have a material adverse
                  effect on the business, operations, property, assets,
                  liabilities, condition (financial

                                 Exhibit B - 14
<PAGE>   110
                  or otherwise) or prospects of the Borrower or JCC Holding and
                  its Subsidiaries taken as a whole.

         21.      Patents, Licenses, Franchises and Formulas. To the best of JCC
                  Holdings' Knowledge, each of JCC Holding and its Subsidiaries
                  owns all patents, trademarks, permits, service marks, trade
                  names, copyrights, licenses, franchises and formulas, or has
                  rights with respect to the foregoing, and has obtained
                  assignments of all leases and other rights of whatever nature,
                  reasonably necessary for the present conduct of its business,
                  without any known conflict with the rights of others which, or
                  the failure to obtain which, as the case may be, would result
                  in a material adverse effect on the business, operations,
                  property, assets, liabilities, condition (financial or
                  otherwise) or prospects of the Borrower or JCC Holding and its
                  Subsidiaries taken as a whole.

         22.      Indebtedness. As of the Initial Borrowing Date, except for the
                  Credit Documents, the Senior Note Documents and the Minimum
                  Payment Guaranty Documents, JCC Holding and its Subsidiaries
                  have no other outstanding Indebtedness.

         23.      Special Purpose Corporation. As of the Initial Borrowing Date,
                  JCC Holding engages in no business activities and has no
                  significant assets (other than the Equity Interests in the
                  Borrower, JCC Development, Canal Development, Fulton
                  Development and any other Subsidiary of JCC Holding created or
                  established after the Effective Date in accordance with the
                  requirements of this Agreement) or liabilities (other than the
                  liabilities expressly permitted by this Agreement).

                                 Exhibit B - 15
<PAGE>   111
                            EXHIBIT C-3 TO INDENTURE
                                        &
                    EXHIBIT C-1 TO REVOLVING CREDIT AGREEMENT

                         [ADAMS & REESE LLP LETTERHEAD]

                                 March 30, 2001

Wells Fargo Bank Minnesota,
National Association
    as Trustee under the Indenture
    referred to below
6th and Marquette
MAC-N9303-120
Minneapolis, Minnesota 55479

Harrah's Entertainment, Inc. and
Harrah's Operating Company, Inc.,
    as Minimum Payment Guarantors  and Revolver
    Creditors and
Harrah's New Orleans Management Company,
    as Revolver Creditor, pursuant to
    the HET/JCC Agreement and Revolving
    Credit Agreement referred to below
One Harrah's Court
Las Vegas, Nevada 89119

         and

The Bank of New York,
  as Collateral Agent
10161 Centurion Parkway
Jacksonville, Florida  32256

                  Re:  Jazz Casino Company, L.L.C.
                       ---------------------------
                       Our File No. 5394-13

Ladies and Gentlemen:

         We have acted as general counsel to Jazz Casino Company, L.L.C., a
Louisiana limited liability company (the "Company"); JCC Holding Company, a
Delaware corporation ("JCC Holding"); JCC Canal Development, L.L.C., a Louisiana
limited liability company ("Canal

<PAGE>   112

March 30, 2001
Page 2

Development"); JCC Fulton Development, L.L.C., a Louisiana limited liability
company ("Fulton Development"); and JCC Development Company, L.L.C., a Louisiana
limited liability company ("JCC Development") in connection with the execution
and delivery of, and certain of the transactions contemplated by:

               o  the Indenture dated as of March 30, 2001 (the "Indenture"),
                  among the Company, as issuer, JCC Holding, Canal Development,
                  Fulton Development, and JCC Development, as guarantors, and
                  Wells Fargo Bank Minnesota, National Association, as trustee
                  (the "Trustee"); and

               o  the Revolving Credit Agreement (the " Revolving Credit
                  Agreement") dated as of March 30, 2001, among the Company, as
                  borrower, JCC Holding, Canal Development, Fulton Development
                  and JCC Development, as guarantors, and Harrah's
                  Entertainment, Inc., ("HET") a Delaware Corporation, Harrah's
                  Operating Company, Inc., ("HOC") a Delaware corporation, and
                  Harrah's New Orleans Management Company, ("HNOMC") a Nevada
                  corporation, as lenders.

         The Company, JCC Development, Canal Development and Fulton Development
are hereinafter sometimes collectively referred to as the "Louisiana Companies",
and each as a "Louisiana Company". The Louisiana Companies and JCC Holding are
hereinafter sometimes collectively referred to as the "Credit Parties", and each
as a "Credit Party."

         This opinion is being delivered to you pursuant to Section I(4) of
Exhibit B to each of the Indenture and the Revolving Credit Agreement.

         Capitalized terms used herein but not defined herein have the meanings
assigned to them in the Indenture as executed on the date hereof.

         The documents we have examined in rendering this opinion and upon which
we have relied are the following, all executed by the parties thereto and dated
as of the date hereof, unless otherwise indicated:

         1.       the Indenture;

         2.       the Securities (including the Series A Notes and Series B
                  Notes);

         3.       [Intentionally Left Blank];

         4.       the Revolving Credit Agreement;

         5.       the Company's Note in the form of Exhibit A-2 of the Revolving
                  Credit Agreement (the "Revolving Note");

         6.       the Management Agreement;

<PAGE>   113

March 30, 2001
Page 3

         7.       the Intercreditor Agreement;

         8.       the HET/JCC Agreement;

         9.       the Casino Lease;

         10.      the Registration Rights Agreement (Senior Notes) and
                  Registration Rights Agreement (Common Stock) (collectively the
                  "Registration Rights Agreements");

         11.      the Mortgages;

         12.      the Pledge Agreement;

         13.      the Security Agreement;

         14.      the Louisiana UCC-1 financing statements executed by JCC
                  Holding, the Company, JCC Development, Canal Development and
                  Fulton Development, respectively, as debtors, in favor of the
                  Collateral Agent, as secured party, with respect to the
                  Security Agreement and the Pledge Agreement (the "Financing
                  Statements"); and

         15.      the Louisiana UCC-1 fixture financing statements executed by
                  the Company, JCC Development, Canal Development and Fulton
                  Development, respectively, as debtors, in favor of the
                  Collateral Agent, as secured party, with respect to the
                  Security Agreement (the "Fixture Statements").

         16.      as to each Credit Party, a Secretary's Certificate dated as of
                  the date hereof, and executed and delivered concurrently
                  herewith pursuant to Section I(5) of Exhibit B of each of the
                  Indenture and Revolving Credit Agreement;

         17.      as to the Company, Officer's Certificates dated as of the date
                  hereof, and executed and delivered concurrently herewith
                  pursuant to Section I(3) of Exhibit B of each of the Indenture
                  and the Revolving Credit Agreement;

         18.      certified copies of the records of the proceeding and actions
                  of the Board of Directors of each of the Credit Parties with
                  respect to the transactions contemplated by the Documents;

         19.      as to each Credit Party, a Certificate of Existence and Good
                  Standing issued by the Secretary of State and/or Office of the
                  Comptroller of Public Account (or equivalent offices) of the
                  jurisdiction of its organization;

<PAGE>   114

March 30, 2001
Page 4

         20.      as to each Credit Party, a copy of which is attached hereto as
                  Exhibit A, a certificate identifying among other items
                  (together, the "Management Certificates"):

                  (i)      all judicial and governmental judgments, orders,
                           injunctions, decrees, and arbitration awards
                           outstanding against the Credit Party and all judicial
                           and governmental actions, suits, and proceedings, and
                           all arbitrations and mediations, pending or
                           threatened against the Credit Party or any of its
                           properties; and

                  (ii)     any governmental programs to which the Credit Party
                           is subject and identifying whether the Credit Party
                           is engaged in or operates in a regulated industry;

         21.      Such other documents and matters as we have deemed necessary
                  and appropriate to render the opinions set forth in this
                  letter, subject to the limitations, assumptions and
                  qualifications noted below.

The documents and instruments referred to in items 1 through 15 (inclusive)
above are hereinafter sometimes collectively referred to as the "Documents". The
Documents referred to in items 11 through 15 above are hereinafter sometimes
collectively referred to as the "Louisiana Documents".

         As to any facts material to our opinion, we have relied upon factual
representations made in or pursuant to the Documents, the Disclosure Statement
and the Plan of Reorganization and the documents referred to therein by the
various parties thereto and upon a certificate or certificates or other written
or oral advice of an official, officer or authorized representative of the
particular governmental authority, corporation, company, firm or other person or
entity concerned. Our opinions with respect to the Documents should not be
construed to extend to other agreements or documents which are incorporated by
reference into, or the defined terms of which are used in, or which are
otherwise referred to in, the Documents.

         In addition, we have made or caused to be made, and relied upon,
searches, with respect to the Credit Parties of the records of the offices
identified for the matters listed on Exhibit B attached hereto and incorporated
herein by reference. The date of the report for each office and the date the
report is current through are given for each office. (These reports are
collectively referred to in this opinion as the "Reports," copies of which are
attached hereto as Exhibit C.)

         Insofar as this opinion relates to the absence of actions, judgments,
liens, and security interests, we have relied solely upon and assumed the
accuracy of the Reports. To obtain such reports, we have searched only under the
name of each Credit Party as shown on its respective organizational documents as
certified, including, without limitation, articles/certificate of

<PAGE>   115

March 30, 2001
Page 5

incorporation or organization (as applicable). Information in the Reports does
not include any filings filed, recorded or terminated after the dates indicated
on each of the Reports, and accordingly, we express no opinion relating to the
existence or absence of any filings filed or recorded after the dates. In
addition, we have not obtained searches in states, counties or courts, other
than those listed on Exhibit B.

         As used in this opinion, the phrase "to our knowledge" means the
current actual knowledge of the particular attorneys of this firm who have had
active involvement with the Documents, and is intended to indicate that during
the course of our representation of the Credit Parties no information has come
to our attention that would give us actual knowledge contrary to the existence
or non-existence of facts. We have, however, not undertaken any independent
investigation to determine the existence or non-existence of such facts, other
than our review of the Documents referenced herein and our consultation with the
officers of the Credit Parties providing certificates to us. No inference as to
our knowledge of the existence or non-existence of facts, other than the facts
to which we have obtained actual knowledge, should be drawn from our
representation of the Louisiana Companies. Although we are general counsel to
the Credit Parties, there may exist matters of a legal and/or factual nature
pertaining to the Credit Parties which are not addressed by this opinion and
with respect to which we have not been consulted.

         In reaching the opinions set forth below, we have assumed, without any
independent investigation or inquiry on our part, the following:

                  (a)      each of the Documents has been duly authorized,
                           executed and delivered by each of the signatories
                           thereto (other than the Credit Parties), is within
                           the corporate, partnership, company, governmental,
                           banking, custodial or trust powers, as applicable, of
                           each of the signatories thereto (other than the
                           Credit Parties), and the circumstances under which
                           they were negotiated and entered into do not violate,
                           and constitute the legal, valid and binding
                           obligations of each of the signatories thereto (other
                           than the Credit Parties) under the laws of all
                           jurisdictions applicable thereto;

                  (b)      each person executing any such instrument, document
                           or agreement on behalf of any such party (other than
                           the Credit Parties) is duly authorized to do so;

                  (c)      each natural person executing any of the Documents is
                           legally competent to do so;

                  (d)      each of the signatories to the Documents (other than
                           the Credit Parties) is a duly organized and validly
                           existing legal entity under the laws of the
                           jurisdiction of its formation, and has complied with
                           all legal requirements

<PAGE>   116
March 30, 2001
Page 6

                           pertaining to its status as such status relates to
                           the performance of its obligations under the
                           Documents and its rights to enforce the Documents;

                  (e)      there are no oral or written modifications or
                           amendments to the Documents and there has been no
                           waiver of any provisions of the Documents by actions
                           or conduct of the parties thereto or otherwise;

                  (f)      the parties to the Documents, and their successors
                           and assigns will (i) act in good faith and in a
                           commercially reasonable manner in the exercise of any
                           rights or enforcement of any remedies under the
                           Documents; (ii) not engage in any conduct in the
                           exercise of such rights or enforcement of such
                           remedies that would constitute other than fair
                           dealing; and (iii) comply with all requirements of
                           applicable procedural and substantive law in
                           exercising any rights or enforcing any remedies under
                           the Documents;

                  (g)      the exercise of any rights or enforcement of any
                           remedies under the Documents would not be
                           unconscionable or result in a breach of the peace;

                  (h)      [Intentionally Left Blank]

                  (i)      the depository bank or savings and loan association
                           at which any Louisiana deposit account is maintained
                           by a Credit Party has not contractually prohibited or
                           otherwise limited the pledge, assignment, collateral
                           assignment or granting of any type of security
                           interest in such deposit account, in accordance with
                           La. R.S. 6:312(E), and the assumptions in paragraphs
                           (a), (b), (c), and (d) above are correct with respect
                           to the Consent executed in the form of Security
                           Agreement Annex D by such depositary institution;

                  (j)      each of the Security Agreement and the Pledge
                           Agreement constitutes the legal, valid and binding
                           obligations of all of the signatories thereto,
                           enforceable against each of such signatories in
                           accordance with its terms, under the laws of the
                           State of New York;

                  (k)      all of Secured Obligations (as defined in the
                           Mortgages), the Obligations (as defined in the
                           Security Agreement) and the Obligations (as defined
                           in the Pledge Agreement) are, except to the extent
                           that the laws of the State of Louisiana are
                           applicable to the portion of such Secured Obligations
                           arising under the Mortgages in accordance with their
                           respective terms, the legal, valid and binding
                           obligations of each of the Credit Parties,
<PAGE>   117

March 30, 2001
Page 7

                           enforceable against each the Credit Parties in
                           accordance with their respective terms under the laws
                           of all jurisdictions applicable thereto;

                  (l)      any New York court and any federal court in New York,
                           applying New York principles of choice of law in a
                           properly presented case, would uphold the choice of
                           New York law to govern the Indenture, the Notes, the
                           Intercreditor Agreement, the HET/JCC Agreement, the
                           Security Agreement and the Pledge Agreement;

                  (m)      the Company Mortgaged Property, the JCC Development
                           Mortgaged Property, the Canal Development Mortgaged
                           Property and the Fulton Development Mortgaged
                           Property (collectively the "Mortgaged Property"),
                           exist, are located in Orleans Parish, Louisiana, and
                           each respective Credit Party has good title to its
                           respective portion thereof (including without
                           limitation pursuant to the Plan of Reorganization);

                  (n)      the Assigned Leases and the Rents (as each term is
                           defined in the Mortgages) exist or will exist and
                           each respective Credit Party has or will have good
                           title thereto (including without limitation pursuant
                           to the Plan of Reorganization);

                  (o)      the Security Agreement Collateral and the Pledge
                           Agreement Collateral (as each term is defined below)
                           exist or will exist, each Credit Party has or will
                           have good title to its respective portion thereof
                           (including without limitation pursuant to the Plan of
                           Reorganization), and each Credit Party has received
                           value for the Liens granted by such Credit Party
                           therein;

                  (p)      the descriptions of the Mortgaged Property in the
                           Mortgages and the Fixture Statements are accurate and
                           complete;

                  (q)      the descriptions of the Security Agreement Collateral
                           in the Security Agreement (including without
                           limitation any deposit account numbers listed in
                           Annex E thereto), in the Financing Statements and the
                           Fixture Statements are accurate and complete;

                  (r)      the descriptions of the Pledge Agreement Collateral
                           in the Pledge Agreement and in the Financing
                           Statements are accurate and complete;

                  (s)      the respective address and federal taxpayer
                           identification number of each Credit Party and the
                           Collateral Agent and the name of the Collateral Agent
                           as set forth in the Louisiana Documents are correct,
                           the respective names and federal taxpayer
                           identification number of the actual record owners of
<PAGE>   118
March 30, 2001
Page 8

                           the real property described in the Company's and JCC
                           Development's Fixture Statements are accurately set
                           forth therein, and JCC Development, Canal Development
                           and Fulton Development are not required under
                           applicable law to have taxpayer identification
                           numbers different from the number of their sole
                           member, JCC Holding;

                  (t)      the chief executive office of each Louisiana Company
                           is, and will remain, located in New Orleans,
                           Louisiana, and the chief executive office of JCC
                           Holding is, and will remain, located in New Orleans,
                           Louisiana;

                  (u)      where Collateral is described in the Security
                           Agreement or the Pledge Agreement by reference to
                           defined terms under the Uniform Commercial Code from
                           time to time in effect in the State of New York (the
                           "New York Code"), such terms under the New York Code
                           are identical in all respects to such terms as used
                           and defined in Chapter 9 of the Louisiana Commercial
                           Laws - Secured Transactions (LA. R.S. 10:9-101 et
                           seq.) ("LAUCC");

                  (v)      the execution, delivery and performance of the
                           Documents, the issuance of the Notes and the grants
                           of Liens pursuant to the Louisiana Documents (i) do
                           not constitute a breach of any of the terms or
                           provisions of, or a default under, any agreement to
                           which any signatory to any Document is a party, or by
                           which any signatory or its respective properties is
                           bound, and (ii) do not violate any laws, regulations
                           or court orders of any federal or other governmental
                           authority outside the State of Louisiana applicable
                           to any signatory or its respective properties;

                  (w)      except as expressly set forth in paragraph 4 below,
                           each of the Credit Parties either has validly
                           obtained or, prior to the date on which the same are
                           required under applicable law, shall have validly
                           obtained all agreements, approvals, certificates,
                           consents, waivers, exemptions, variances, franchises,
                           orders, permits, authorizations, rights and licenses
                           of and from any and all Persons in any and all
                           jurisdictions, including but not limited to the State
                           of Louisiana or the City of New Orleans and their
                           respective instrumentalities, required under
                           applicable law (including without limitation under
                           all Gaming Regulations, and from the Bankruptcy
                           Court) in order for each Credit Party to comply with,
                           and to consummate the transactions contemplated by,
                           the Documents to which each Credit Party is a party
                           and otherwise to operate their respective businesses;

                  (x)      any authorizations, approvals or other actions by, or
                           notices to or filings with (i) the Bankruptcy Court
                           or any other non-Louisiana court and (ii)
<PAGE>   119

March 30, 2001
Page 9

                           any Gaming Authority necessary for the execution,
                           delivery, effectiveness and performance of the
                           Documents and the grant of the Liens thereunder by
                           the parties thereto have been obtained or made and
                           are in full force and effect;

                  (y)      all the shares of JCC Holding have been issued for
                           lawful and sufficient consideration in compliance
                           with the Plan of Reorganization;

                  (z)      all of the membership units of the Louisiana
                           Companies have been issued for lawful and sufficient
                           consideration;

                  (aa)     [Intentionally Left Blank]

                  (bb)     there are no documents or agreements (other than the
                           Plan of Reorganization) among any of the parties to
                           the Documents which alter the provisions of the
                           Documents and which would have an effect on the
                           opinions expressed in this Opinion Letter; and

                  (cc)     All documents submitted to us as originals are
                           authentic, all documents submitted to us as certified
                           or photostatic copies conform to the original
                           documents, all signatures on all documents submitted
                           to us for examination are genuine, and all public
                           records reviewed are accurate and complete.

                  (dd)     With your permission, we assume that none of the
                           Credit Parties have any litigation outstanding
                           against them, except as disclosed in the Reports.

         Based on our review of the foregoing, and subject to the assumptions
and qualifications set forth herein, it is our opinion that, as of the date of
this letter:

                  1. Based solely on the certificates in Paragraph (19) above:

                           (a) The Company is a limited liability company,
validly existing and in good standing under the laws of the State of Louisiana;

                           (b) JCC Holding is a corporation, validly existing
and in good standing under the laws of the State of Delaware;

                           (c) Canal Development is a limited liability company,
validly existing and in good standing under the laws of the State of Louisiana;

<PAGE>   120
March 30, 2001
Page 10

                     (d) Fulton Development is a limited liability company,
validly existing and in good standing under the laws of the State of Louisiana;
and

                     (e) JCC Development is a limited liability company, validly
existing and in good standing under the laws of the State of Louisiana.

                  2. Each Credit Party:

                     (a) has all requisite corporate or limited liability
company (as applicable) power and authority to own its property and assets and
to execute, deliver, and perform all of its agreements under each of the
Documents to which it is a party;

                     (b) has taken all corporate or limited liability company
(as applicable) action necessary to authorize the execution and delivery of, and
performance by each Credit Party of its agreements in, the Documents to which
such Credit Party is a party;

                     (c) has duly authorized by all necessary corporate or
limited liability company (as applicable) action the Documents to which such
Credit Party is a party; and

                     (d) has duly executed and delivered the Documents to which
such Credit Party is a party.

                  3. (a) (i) Each of the Mortgages to which a Louisiana Company
is a party is a valid and binding agreement of such Louisiana Company,
enforceable against such Louisiana Company in accordance with its terms.

                         (ii) The foregoing enforceability opinion, and the
opinions expressed in paragraphs 4, 5, and 11 below, are made without regard to
the choice of New York law provisions in such documents (as to which we express
no opinion) and instead assume that the Mortgages will be governed solely by the
internal laws of the State of Louisiana applicable to agreements made to be
performed in the State of Louisiana, an assumption we have made with your
permission.

                     (b) Although the Security Agreement and the Pledge
Agreement contain choice of law provisions which state each shall be construed
in accordance with and governed by the law of the State of New York, in the
event that the law of the State of Louisiana were applied to govern the Security
Agreement and the Pledge Agreement, the Security Agreement and the Pledge
Agreement would be the valid and binding agreement of each Credit Party,
enforceable against such Credit Party in accordance with its terms.

                  4. (a) The execution and delivery of the Documents, the
issuance of the Notes and the grants of Liens pursuant to the Louisiana
Documents by the Credit Parties do not

<PAGE>   121
March 30, 2001
Page 11

violate applicable provisions of Louisiana statutory law or regulation
thereunder customarily applied to transactions of the type contemplated in the
Documents (provided that no opinion is expressed herein with respect to Gaming
Regulations), or, to our knowledge, based solely on the Management Certificates,
violate any order of any Louisiana state court to which any Credit Party is
subject.

                     (b) The execution and delivery of the Documents, the
issuance of the Notes and the grants of Liens pursuant to the Louisiana
Documents by the Credit Parties does not require any authorization, approval or
other action by, or notice to or filing with, any Louisiana governmental
authority, except for (i) the filings and reinscriptions and continuations set
forth in paragraphs 5, 6, 7 and 8 hereof, (ii) approvals and filings under the
Gaming Regulations, as to which we express no opinion, and (iii) consents and
authorizations from the City and the RDC pertaining to the granting of,
encumbering of and foreclosing on leases or other contracts with such entities,
as to which we express no opinion.

                  5. (a) The Mortgages create in favor of the Collateral Agent,
as security for the Secured Indebtedness as defined in the Mortgages:

                         (i) valid mortgage liens on that portion of the
Mortgaged Property specifically described therein that constitutes corporeal
immovable property under Louisiana law (the "Immovable Property") or that
consist of a Louisiana Company's rights as tenant in a lease or sublease of a
described immovable together with its rights in the buildings and other
constructions on such immovable and the predial servitudes, if any, which
benefit the Immovable Property encumbered by the Canal Development Mortgage and
the Fulton Development Mortgage (collectively the "Louisiana Mortgaged
Property"),

                         (ii) valid pledge liens on each Louisiana Company's
right to receive proceeds attributable to the insurance loss of such described
Immovable Property, and

                         (iii) valid collateral assignments of the right, title
and interest of each Louisiana Company as landlord in the presently existing and
anticipated future leases or subleases of each described Immovable Property and
the rents therefrom (collectively, clauses (i), (ii) and (iii) being the
"Louisiana Mortgage Liens").

                     (b) Upon recordation of each Mortgage in the mortgage
records of the Recorder of Mortgages of Orleans Parish, Louisiana, the Louisiana
Mortgage Liens will be perfected.

                     (c) The effect of recordation of each Mortgage will cease
unless the Mortgage is reinscribed by the filing of a signed, written notice of
reinscription that meets the requirements of Louisiana Civil Code Article 3333
within ten (10) years after the date of that

<PAGE>   122
March 30, 2001
Page 12

Mortgage. Each reinscription that is filed before the effect of recordation
ceases will continue the effect of recordation for ten (10) years from the day
the notice of reinscription is filed.

                  6. (a) The Financing Statements and Fixture Statements are in
proper form for filing under the LAUCC.

                     (b) The effectiveness of each Financing Statement and each
Fixture Statement will lapse five years after the date it is filed unless a
properly completed UCC-3 continuation statement is filed within six (6) months
prior to the expiration of the original filing with the same filing office with
whom the respective Financing Statement or Fixture Statement was originally
filed.

                     (c) Upon the timely filing of such continuation statement,
the effectiveness of the original Financing Statement or original Fixture
Statement will be continued for five years after the last date to which the
filing was effective whereupon it will lapse unless another continuation
statement is filed within six (6) months prior to such lapse. Succeeding
continuation statements may be filed in the same manner to continue the
effectiveness of the original Financing Statement or original Fixture Statement.

                  7. (a) (i) Although the Security Agreement contains a choice
of law provision which states that it shall be construed in accordance with and
be governed by the law of the State of New York, in the event that the law of
the State of Louisiana were applied to govern the Security Agreement, the
Security Agreement creates a valid security interest in favor of the Collateral
Agent upon all right and title and interests of the Credit Parties in those
items and types of Collateral described therein (i) in which a Security Interest
may be created under the LAUCC and (ii) in which such Credit Parties currently
have rights (the "Security Agreement Collateral"), all as security for the
Obligations as defined in the Security Agreement.

                         (ii) Upon the proper filing of each Financing Statement
and Fixture Statement in the uniform commercial code records of either the
Recorder of Mortgages of Orleans Parish, Louisiana or the Clerk of Court of any
other Parish in the State of Louisiana and the payment of all required filing
fees, the security interest created by the Security Agreement in those items and
types of the Security Agreement Collateral in which a security interest may be
perfected under the LAUCC by the filing of uniform commercial code financing
statements in the State of Louisiana will be perfected (except as to motor
vehicles and farm products).

                     (b) To the extent, if any, that the Security Agreement
accurately lists all of the information required by Security Agreement Annex E
for a "deposit account"(within the meaning of LAUCC Section 9-105) maintained by
a Credit Party with a bank or savings and loan association within the State of
Louisiana, and for which deposit account a Consent in the form of Security
Agreement Annex D has been duly authorized, executed and delivered by such
<PAGE>   123

March 30, 2001
Page 13

depositary institution, the Collateral Agent and such Credit Party, the Security
Agreement will create a valid security interest in favor of the Collateral Agent
upon all right, title and interest of such Credit Party in such specifically
described deposit account.

                           You should be aware that a security interest in a
Louisiana deposit account is perfected only by giving notice of the security
interest to the depositary of the account, and the filing of a financial
statement is not effective to perfect a security interest in a Louisiana deposit
account. However, we caution you that the foregoing opinion is made without
regard to the choice of New York law provision in the Security Agreement and
instead assumes that the Security Agreement were governed solely by the internal
laws of the State of Louisiana applicable to agreements made to be performed in
this state. The opinion in this subparagraph (b) is limited by the qualification
that we express no opinion as to whether a security interest will be held to be
created or perfected in a Louisiana deposit account pursuant to the Security
Agreement which by its terms is governed by the laws of the Sate of New York,
which we understand does not authorize the creation or perfection of a security
interest in a deposit account under the New York Code.

                  8. (a) Under Chapter 8 of the Louisiana Commercial Laws -
Investment Securities (La.R.S. 10:8-101 et seq.) ("Chapter 8"), JCC Holding's
interests in the Louisiana Companies, each of which is a Louisiana limited
liability company, is a "certificated security" within the meaning of Chapter 8.

                     (b) (i) Although the Pledge Agreement contains a choice of
law provision which states that it shall be construed in accordance with and be
governed by the law of the State of New York, in the event that the law of the
State of Louisiana were applied to govern the Pledge Agreement, the Pledge
Agreement:

                         (w) creates a valid security interest in favor of the
Collateral Agent upon the limited liability company interests of JCC Holding in
the Louisiana Companies;

                         (x) creates valid security interests in favor of the
Collateral Agent upon all right, title and interest of the Credit Parties in
those items and types of the Collateral described therein (i) in which a
security interest may be created under LAUCC and (ii) in which such Credit
Parties currently have rights or may obtain rights in the future;

                         (collectively as described in clauses (w) and (x), the
"Pledge Agreement Collateral"), all as security for the Obligations as defined
therein.

                         (ii) The Collateral Agent's taking of physical
possession of the "certificated securities" representing all right, title and
interest in each of the Louisiana Companies shall be effective to perfect in
favor of the Collateral Agent the security interest

<PAGE>   124

March 30, 2001
Page 14

granted by the Pledge Agreement in the limited liability company interests of
JCC Holding in the Louisiana Companies.

         However, during the time that the security certificates representing
JCC Holding's limited liability company interests in the Louisiana Companies are
located in a jurisdiction, perfection of a security interest, the effect of
perfection or non-perfection, and the priority of a security interest in the
certificated security represented thereby are governed by the local law of that
jurisdiction.

         It is our understanding that said Louisiana Companies certificated
securities are being delivered to the Collateral Agent in the State of New York
pursuant to the Pledge Agreement.

         You should be aware that under the LAUCC, a security interest of a
secured party who has control over certificated securities has priority over a
security interest of a secured party who does not have control, and the filing
of the Financing Statements as provided in subparagraph (b) above will not grant
control to the Collateral Agent with respect to such certificated securities.
Instead, under Chapter 8, "control" of a certificated security is obtained by
taking delivery, provided that the security certificate has been endorsed to the
secured party or in blank. However, as stated above, we refer you to the laws of
the state of New York with respect to perfection and priority by control of the
Collateral Agent's security interest in the Louisiana Companies certificated
securities.

                  9. Each of the Indenture, the Securities, the Revolving Credit
Agreement, the Revolving Note, the Intercreditor Agreement, the HET/JCC
Agreement, the Pledge Agreement and the Security Agreement provides that it is
to be governed by the laws of the State of New York. We are of the opinion that
a Louisiana court or a federal court in Louisiana, applying Louisiana principles
of choice of law in a properly presented case, would uphold the aforesaid
choice-of-law provisions, except (i) to the extent that the chosen (New York)
law contravenes the public policy of the state whose law would otherwise be
applicable under Louisiana's choice of law principles (generally, as to
contractual issues other than capacity and form, the law of the state whose
policies would be most seriously impaired if its law were not applied to that
issue), (ii) insofar as federal laws may apply with respect to certain issues,
(iii) that the laws of the State of Louisiana will be applied as to matters
involving the perfection and the effect of perfection or non-perfection of the
security interest in Collateral located (within the meaning of the LAUCC) in the
State of Louisiana, and the remedies available with respect to Collateral
located in the State of Louisiana and also insofar as federal laws or the laws
of another jurisdiction may apply as to collateral located in states other than
the State of New York with respect to procedural and substantive matters
relating to the creation, perfection and enforcement of the security interest,
and (iv) as to the second sentence of Pledge Agreement Section 26(a).

                  10. Each of the Securities and the Revolving Note provides
that it is to be governed by the laws of the State of New York. We are of the
opinion that the respective

<PAGE>   125
March 30, 2001
Page 15

interest provisions of the Notes do not violate any usury law of the State of
Louisiana. We point out that under the usury laws of the State of Louisiana it
would be unlawful for any obligee under the Notes or the other Documents
(assuming the usury laws of the State of Louisiana applied to the Notes or the
other Documents) to increase prospectively the fixed simple interest rate
provided thereunder, following a default under any of said obligations to a rate
greater than (a) twenty-one percent (21%) per annum or (b) three (3) percentage
points over the original rate fixed in any such obligation prior to default,
whichever is greater, absent a written agreement by the Credit Parties under
such obligation entered into following such default. However, Louisiana does not
impose its default rate restrictions on commercial or business loans which are
contractually subject to the laws of another state notwithstanding the fact that
the obligor may have facilities in Louisiana or that the loan proceeds or a
portion thereof may be utilized in Louisiana.

                  11. The Mortgages provide, pursuant to the terms thereof and
applicable law, remedies to the Collateral Agent substantially equivalent to
those customarily available to the holders of mortgages affecting immovable
property located in the state of Louisiana in transactions involving substantial
amounts of credit, including (without limitation) the customary provisions
permitted by the law of the State of Louisiana relating to foreclosure, but
subject to the qualification in paragraph O below.

                  12. The Trustee to the Indenture which is either a United
States national banking association or a bank organized under the laws of any
state of the United States or the District of Columbia, as specified in La. R.S.
12:302(K), is not required to qualify to transact business in the State of
Louisiana or to pay any tax or fee required to be paid by foreign corporations
or business associations under Louisiana law solely as the result of their
execution and delivery of any of the Documents.

                  13. Except for usual and customary filing and recording fees
and except for the City of New Orleans documentary transactions tax, no mortgage
tax, stamp tax or recording tax or similar charge will be required to be paid
under the laws of the State of Louisiana in connection with the recording of
each of the Mortgages.

                  14. The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

                  15. The Company is not a "holding company," or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

<PAGE>   126

March 30, 2001
Page 16

         The opinions set forth above are subject in all respect to the
following qualifications and limitations and comments:

                  A. The enforceability of the Louisiana Documents is subject to
the effect of bankruptcy, insolvency, reorganization, moratorium and similar
laws now or hereafter in effect relating to or affecting creditors' rights and
remedies generally or affecting the collection of debtors' obligations generally
(including but not limited to the Louisiana Deficiency Judgment Act, LSA-R.S.
13:4016 et seq.); fraudulent conveyance or fraudulent transfer laws; and
concepts of materiality, reasonableness, good faith and fair dealing and general
principles of equity, and the discretion of the court before which any
proceeding may be brought, which may limit the availability of certain remedies
including (without limitation) rights of specific performance, injunctive relief
or self-help.

                  B. The enforceability of the Louisiana Documents is subject to
the further qualification that certain of the remedial, waiver, "self-help",
extrajudicial and other provisions of the Louisiana Documents, including the
confession of judgment prior to the maturity of any obligation in the Documents
for any purpose other than Louisiana executory process foreclosure procedure,
the right to executory process foreclosure proceedings, and the right to
appointment of a receiver prior to the judicially approved seizure of any
property, are or may be limited or unenforceable in whole or in part under
applicable law, although the inclusion of such provisions does not affect the
validity of such Louisiana Documents as a whole, and such limitations do not in
our opinion, subject to the other exceptions and limitations set forth herein,
make the remedies provided therein (taken as a whole) or pursuant to applicable
law inadequate for the realization of the benefits intended to be afforded
thereby, excluding the economic consequences of any procedural delay that may
result therefrom (and excluding consequences arising from Gaming Regulations),
provided such enforcement is conducted in accordance with the applicable
procedures established by the law of the State of Louisiana.

                  C. We express no opinion with respect to any of the following
matters:

                  1. Title or status of title to, or the existence, description
or condition of, any of the Collateral. We have made no examination of title. In
particular, we express no opinion with respect to the filing, recording or
indexing of the leases and other documents referred to in the Louisiana
Documents, or whether the properties described in the Louisiana Documents are
the properties and interests (or all the properties and interests) intended by
any of the parties to be encumbered thereby. We express no opinion as to the
creation or perfection of a Lien by the Mortgages on any unrecorded interest in
immovable property. We have assumed that the Ground Lease, the Casino Lease, the
Second Floor Sublease and the other leases and subleases described in the
Mortgages are valid, enforceable and existing contracts (except as specifically
set forth in opinion paragraphs 1 and 2), and that all special requirements or
restrictions contained therein or in the Master Plan (as defined in the JCC
Development Mortgage) or in applicable local law regarding the assigning or
mortgaging of such leases or subleases have been

<PAGE>   127

March 30, 2001
Page 17

satisfied. We have assumed that an extract of lease pertaining to the Ground
Lease, the Casino Lease and each other lease or sublease included within the
Mortgaged Property has been properly recorded in the records of Orleans Parish,
that the recordation information for each such extract of lease is correctly
described in the applicable Mortgage, and that said extract of lease and said
lease itself each contains an accurate and complete description of the immovable
properties described therein. We note that the Mortgages purport to include in
the property encumbered thereby not only the specific property interest
described therein but also the respective Louisiana Company's interest in
undescribed adjacent land and other immovable property not defined in the
Mortgages, and we express no opinion herein as to the effectiveness of the
Mortgages as to any immovable property interest purported to be included in the
encumbered property relating to such undescribed real property interest
(including without limitation any mortgage lien on any undescribed lease or
sublease) except as expressly stated in clause (i) of paragraph 5(a) above as to
predial servitudes, if any, benefiting Canal Development's and Fulton
Development's Immovable Property;

                  2. the priority or ranking of any Lien created pursuant to any
of the Documents, including without limitation with respect to the Company
Mortgage and any liens arising under the Private Works Act;

                  3. the irrevocability of any power of attorney granted by the
Credit Parties under any of the Louisiana Documents;

                  4. any severability clause contained in any of the Documents;

                  5. any Environmental Laws;

                  6. any agreement by the Credit Parties to submit to the
jurisdiction of any court sitting in any particular jurisdiction;

                  7. any waiver by the Credit Parties of any right to a trial by
jury, to claim any forum as inconvenient, or to judicial service of process;

                  8. any non-judicial, self-help remedy granted by any of the
Documents, including without limitation any right of entry and possession
without prior judicial proceedings, or the right to the appointment of a
receiver;

                  9. any right to enforce any of the Louisiana Documents by
executory process;

                  10. the availability or enforceability of rights and remedies
which may be provided under any laws of the State of New York, including but not
limited to, the New York Code;

<PAGE>   128

March 30, 2001
Page 18

                  11. any securities laws or Blue Sky laws of any jurisdiction;

                  12. the creation or perfection of any Lien purported to be
created by the Security Agreement or the Pledge Agreement in or on any of, or
any Proceeds of, any of the following (capitalized terms used in this paragraph
C(12) having the same meanings as are set forth in the Security Agreement or the
Pledge Agreement unless otherwise noted): (a) Cash Collateral Accounts or any
deposits therein, Pledged Accounts or any deposits therein (except to the
limited extent expressly provided in paragraph 7(b) above), Collateral Accounts
or any deposits therein, any other bank accounts or any deposits or credit
balances therein, checks, Gaming Patron Indebtedness, trade secrets, Marks or
the goodwill or rights associated therewith, patents, Copyrights, Documents,
Securities (except as to the Canal Development or Fulton Development membership
certificated securities), Security Entitlements, Financial Assets or Investment
Property (except as to the Canal Development and Fulton Development membership
certificated securities), (b) Permits, (c) Contracts or the Contract Rights, to
the extent any thereof does not constitute a "general intangible" or an
"account" under the LAUCC, (d) Receivables, to the extent any thereof does not
constitute an "account" under the LAUCC, (e) Receivables or General Intangibles
as to which the payor or obligor is the United States or any State thereof or
any foreign government or any agency or instrumentality of any of the foregoing,
(f) computer programs, intellectual property rights and other proprietary
information to the extent that any thereof does not constitute a "general
intangible" under the LAUCC, (g) motor vehicles or other property subject to the
Louisiana Certificate of Title Law; farm products, crops, timber, minerals or
accounts resulting from the sale of timber or minerals; consumer goods; mobile
goods; rights to receive deposits or trust payments; tax refunds; causes of
action, litigious rights or claims under warranties; rights to payment under
letters of credit and similar arrangements; rights under insurance, bond, surety
or similar contracts or arrangements; condemnation proceeds; uncertificated
securities, or certificated securities other than the Canal Development and
Fulton Development membership certificates; policies of insurance; money; real
estate or other immovable property or interests therein; leases of real estate
or the rents arising thereunder; Collateral that is subject to any statute of
the United States to the extent such statute governs the rights of parties to
and third Persons affected by transactions in particular types of property;
Goods that are covered by a document of title or that are in the possession of a
bailee; or any partnership agreement, any interest in any partnership or any
partnership agreement or any rights, claims, Liens, remedies or privileges under
any partnership agreement, (h) any Collateral with respect to which any Lien
therein is prohibited either as a matter of law or of contract, (i) any
Fixtures, to the extent any thereof are not a Louisiana Company's goods (but
excluding ordinary building materials or other similar things) which, after the
filing of the Fixture Statements, become Component Parts and Fixtures on and as
part of the Immovable Property specifically described in that Louisiana
Company's Fixture Statement, (j) Collateral that is not either equipment,
inventory, account, chattel paper or general intangibles (including without
limitation the Company and JCC Development limited liability company interests),
as each one of such terms is defined in the LAUCC, or the Canal Development and
Fulton Development

<PAGE>   129
March 30, 2001
Page 19

certificated securities, or to the limited extent expressly provided in
paragraph 7(b) Louisiana deposit accounts, or (k) Proceeds which are not
identifiable;

                  13. the right of any Person, other than the Collateral Agent
or other secured party named as such in any of the Louisiana Documents, to
enforce any right or avail itself of any remedy set forth in any of the
Louisiana Documents, and in the case of the Pledge Agreement and the Security
Agreement, with respect to the status of any Persons as a Secured Creditor for
whom the Collateral Agent is not acting as representative within the meaning of
Section 9-105(m) of the LAUCC;

                  14. any provision of any of the Louisiana Documents that
extends, or would have the effect of extending, any statutory period of
limitation or prescriptive period applicable under Louisiana law to any
obligation, liability, right or remedy therein set forth;

                  15. the enforceability of any provision of any of the
Louisiana Documents regarding the recovery by the Collateral Agent or any other
secured party of attorneys' fees to the extent such fees exceed amounts deemed
reasonable in the discretion of any Louisiana court or any federal court in
Louisiana applying Louisiana law;

                  16. whether any keeper fees of the Collateral Agent or of any
other secured party would be enforced as a portion of the obligations or
indebtedness or be secured by any Lien granted by any of the Louisiana
Documents;

                  17. any of the Collateral that consists of any gaming license
or gaming permit;

                  18. any Gaming Regulations, including without limitation The
Louisiana Economic Development and Gaming Corporation Act (La. R.S. 27:201 et
seq.), or the effect thereof on any Lien or on the validity or enforceability of
any Document;

                  19. any zoning, land use or historic district laws, rules or
regulations, use restrictions, restrictive covenants, building code requirements
or health or safety laws or regulations applicable to any of the Mortgaged
Property;

                  20. any provisions of any of the Louisiana Documents that
purports to waive the right of the Credit Parties to raise any defense with
respect to any part thereof;

                  21. the ability of the Collateral Agent or any other secured
party named as such in any of the Louisiana Documents to collect any deficiency
remaining on any indebtedness or other obligation secured thereby following a
foreclosure of, or other realization on, any Lien granted by any of the
Louisiana Documents;

                  22. the negotiability of the Notes;

<PAGE>   130
March 30, 2001
Page 20

                  23. any provision of any of the Louisiana Documents that
waives or releases any legal rights of any Person prior to the accrual or
existence of such rights, defenses or counterclaims, or any set off or
compensation, or any statutory requirements for notice, judicial hearings or
bonds;

                  24. any provision of any of the Louisiana Documents that
purports to create a constructive trust as to any funds received by any Person;

                  25. any provision of any of the Documents that provides for
the continuation of any Lien created thereby notwithstanding defenses to or
discharge of the obligations or indebtedness secured thereby;

                  26. the validity or enforceability of any documents or other
writings incorporated by reference in any of the Documents unless specifically
addressed in this opinion;

                  27. the enforceability of any of the Louisiana Documents
except in good faith and in a commercially reasonable manner;

                  28. the validity or enforceability of the Liens created by the
Louisiana Documents with respect to contracts for or the proceeds of sales of
immovable property, options to buy, sell or lease immovable property or rights
to buy or sell or encumber immovable property, or rights to possession or
occupancy of immovable property which do not constitute leaseholds;

                  29. the validity or enforceability of the Liens created by the
Mortgages with respect to any proceeds of the Mortgaged Property or to any
Incorporeal Rights (as defined in the Mortgages) or the remedies purportedly
available with respect thereto, except as expressly stated in clauses (a)(ii)
and (a)(iii) of paragraph 5 above as to proceeds attributable to casualty
insurance loss of the Immovable Property to the extent permitted by La. R.S.
9:5386 and leases and rents (and proceeds thereof) to the extent permitted by
La. R.S. 9:4401;

                  30. any provision for liquidated damages contained in any of
the Louisiana Documents;

                  31. the creation or perfection of any Liens purported to be
created by the Mortgages on (a) the Franchise Agreement or the Franchise Area
(as each term is defined in the Company Mortgage), (b) any buildings or other
Improvements (as defined in the Mortgages) located on lands not specifically
described in the Mortgages, (c) any personal (movable) property, (d) any Rights
and Privileges (as defined in the Mortgages), including without limitation those
servitudes arising pursuant to Section 4.18 of the Ground Lease, except as
expressly stated in clause (a)(i) of paragraph 5 above as to predial servitudes,
if any, benefiting

<PAGE>   131
March 30, 2001
Page 21

Canal Development's or Fulton Development's Immovable Property, or (e) any
after-acquired property;

                  32. the validity or enforceability of Section 9 of the JCC
Development Mortgage or Sections 8 of the other Mortgages, or Sections 26(h),
(i) or (j) of the Company Mortgage and the JCC Development Mortgage and Sections
25(h), (i) and (j) of the Canal Development Mortgage and the Fulton Development
Mortgage;

                  33. the validity or enforceability of any Lien purported to be
created by the Mortgages on security deposits or escrow payments;

                  34. the effectiveness of any provisions in the Mortgage
purporting to deem materials delivered to the Immovable Property to be a part of
the Immovable Property prior to becoming component parts or the validity or
enforceability of any Lien thereon under the Mortgages prior to such materials
becoming component parts;

                  35. any provision of any of the Louisiana Documents that
provides for the restoration of any indebtedness or obligation previously paid
following the bankruptcy of any Person, or the restoration or continuation of
any rights or documents held by a Person after judicial proceedings to which
such Person is a party are abandoned or discontinued or determined adversely;

                  36. the validity or enforceability of any Leases or any
Contracts (as defined in the Security Agreement);

                  37. the creation or perfection of any Lien on any policy of
insurance, letter of credit, guaranty, claim, security interest or other
security held by any Credit Party to secure payment or performance by any other
Person;

                  38. any right of the Collateral Agent or other secured party
to the appointment of a receiver or keeper for, or to operate, or to own after
foreclosure or other realization on any Lien thereon, any Collateral that
constitutes a gaming facility or gaming equipment other than in compliance with
the Gaming Regulations;

                  39. provisions in the Documents assigning or granting the
right to modify, terminate or exercise rights under leases or other contracts or
create new contracts or withdraw monies on deposit or otherwise manage or
operate the Collateral prior to the Collateral Agent or other secured party
acquiring ownership of such Collateral, or obtaining judicial appointment of a
keeper and judicial and Gaming Authority authorizations for such actions;

                  40. the effectiveness or enforceability of the purported
subrogation of the Collateral Agent to the rights of taxing authorities by
reason of the payment of taxes;

<PAGE>   132
March 30, 2001
Page 22

                  41. provisions in the Documents pertaining to the
admissibility of evidence or evidentiary standards or the conclusiveness of
decisions or the reasonableness of actions;

                  42. waivers of provisions of the Louisiana Code of Civil
Procedure or of the right of redemption or of the duty of a secured party with
respect to Collateral in its possession;

                  43. any provisions of the Mortgages that purport to or would
have the effect of granting the Collateral Agent the power to retain subordinate
leases affecting the Mortgaged Property after a foreclosure and judicial sale;

                  44. any requirement in any Document that such Document's terms
may be amended or waived only by an agreement in writing signed by all parties
thereto, or provisions authorizing the delay or failure to exercise a right
without waiving such right;

                  45. provisions of any of the Louisiana Documents purporting to
make all remedies cumulative;

                  46. any provision of any of the Louisiana Documents which
purports to make the foreclosure or other sale of any encumbered property a
perpetual bar to claims by the Credit Parties;

                  47. provisions of any of the Documents providing for
indemnification of or contribution to a party with respect to a liability where
such indemnification or contribution is not permitted by law or is contrary to
public policy;

                  48. any provision of any of the Louisiana Documents that
excludes or limits the liability of any Person for damage caused by things which
such Person has in their custody as defined by Louisiana jurisprudence;

                  49. any provision of any of the Louisiana Documents that
excludes or limits the liability of any Person (a) for such Person's intentional
or gross fault that causes damage to any other Person or (b) for causing
physical injury to any other Person; or

                  50. any provision which purports to continue the liability of
any Person who is a surety for the Company's Secured Indebtedness or Obligations
notwithstanding (a) any defense to the Company's Secured Indebtedness or
Obligations that the Company could assert, except lack of capacity or discharge
and bankruptcy of the Company, or (b) a modification or amendment of the
Company's Secured Indebtedness or Obligations or the Documents or an impairment
of real security held for the Company's Secured Indebtedness or Obligations, in
any material manner and without such Person's consent if the Person is
prejudiced by such action.

<PAGE>   133
March 30, 2001
Page 23

         D. The rights of the Collateral Agent under the Mortgages against any
insurer responsible for paying proceeds attributable to the casualty insurance
loss of any Mortgaged Property will be subject to any dealings by the insurer
with the applicable Louisiana Company, or its successor in interest, until the
insurer receives written notice from or on behalf of the Collateral Agent or the
applicable Louisiana Company of the collateral assignment to the Collateral
Agent of the right to receive such insurance proceeds.

         E. The rights of the Collateral Agent in proceeds of Assigned Leases
and Rents will be limited as set forth in La. R.S. 9:4401(F).

         F. Unless and until the debtors or payors of each one of the
Receivables (as defined in the Security Agreement) have received written notice
of the security interest granted therein to the Collateral Agent, such security
interest will remain subject to any dealings by such debtors or payors with the
pertinent Credit Party or other assignee, if any, of such Receivables.

         G. Unless and until the debtors and lessees under each one of the
Assigned Leases have received written notice of the assignment thereof, the
rights of the Collateral Agent in such Assigned Leases and Rents will be subject
to any dealings by such debtors and lessees with the pertinent Credit Party or
any other assignee, if any, of such Assigned Leases and Rents.

         H. The Lien created by the Security Agreement on Contracts and Contract
Rights (each as defined in the Security Agreement) will be subject to the
respective rights of the parties to each Contract and will not be enforceable
against any payor or obligor thereunder unless and until such payor or obligor
has received written notice thereof from the Collateral Agent.

         I. Although the term "general intangibles", as defined in the Security
Agreement, by itself may be sufficient to include in the Collateral all of the
property intended to be covered thereby, (1) a dispute could arise as to whether
a particular item of property is included or not included within such term, and
(2) the degree of specificity required for the description of particular items
of general intangibles has not been established under the LAUCC. Accordingly,
our opinion as to the effectiveness of the Security Agreement or any Financing
Statement (or Fixture Statement) to create and perfect a security interest in
all "general intangibles" of any Credit Party merely described as such without
further description is limited as aforesaid. (This paragraph does not apply with
respect to the security interest in JCC Holding's limited liability company
interests in the Company and in JCC Development.) Furthermore, we express no
opinion as to the effectiveness of the Security Agreement or any Financing
Statement (or Fixture Statement) to create and perfect a security interest in
"all personal property" or "any property or assets of any type or description"
of any Credit Party merely described as such without further description.

         J. We call your attention to, and our opinion is limited by, the fact
that (1) the continuation of perfection of security interest in proceeds is
limited to the extent set forth in the

<PAGE>   134

March 30, 2001
Page 24

LAUCC; (2) buyers and purchasers of the Security Agreement Collateral and the
Pledge Agreement Collateral, whether or not in the ordinary course of business,
in certain circumstances described in LAUCC Sections 9-307, 9-308 and 9-309, may
acquire such Collateral free of the Collateral Agent's perfected security
interest; (3) a perfected security interest may become unperfected (a) if
Collateral located in Louisiana is removed from this state to another state, or
a Credit Party's chief executive office is moved to another state, and in each
instance appropriate steps are not taken in that other state, or (b) a Financing
Statement or Fixture Statement becomes seriously misleading due to changes in
the name, identity, taxpayer identification number or corporate structure of a
Credit Party; and (4) a perfected security interest in goods may be lost if the
goods (a) are installed in or affixed to, or become a part of a product or mass
with, goods which are not items of Collateral or (b) become a fixture (other
than a Louisiana Company's goods, but excluding ordinary building materials or
other similar things) that become a fixture on the Immovable Property
specifically described in that Louisiana Company's Fixture Statement).

         K. You are aware that the Louisiana Mortgaged Property includes
interests in leases or subleases, and that the exercise of remedies under the
Mortgages is subject to the terms of said leases or subleases (and, in the case
of the JCC Development Mortgage, also the Master Plan as defined therein). We
have assumed that the requirements contained in such leases, or in the case of
subleases, contained either in such sublease or in the leases from which the
sublease is derived (and, in the case of the JCC Development Mortgage, also in
the Master Plan as defined therein), for the mortgaging of such leases or
subleases have been met or waived. The opinions expressed herein are subject to
the effect, if any, of any such requirements pertaining to the mortgaging or
assigning thereof. The Louisiana Documents will not prevent the grantor or
grantee of any such leases, subleases or other contracts constituting a part of
the Collateral from modifying or terminating such leases or contracts (although
such actions may constitute an enforceable breach of other agreements in favor
of the Secured Creditors or an enforceable default under the Documents). The
termination of the Casino Lease will terminate the Lien of the Mortgage granted
by the Company on the Casino Lease and the Casino building.

         L. We express no opinion as to whether the Collateral Agent or any Bank
or their assignees will be admitted as members of the Louisiana Companies or be
entitled to assume such limited liability company interests.

         M. We do not express any opinion with respect to (1) the enforceability
of any of the Documents except as set forth in paragraph 5 above, or (2) the
perfection of any Lien except as set forth in paragraphs 7, 8, 9 and 10 above.

         N. For purposes of the opinions in paragraphs 14 and 15 above, we have
relied solely upon a certificate of an executive officer of the Company with
respect to certain factual matters.

         O. You are aware that the Louisiana Companies and the Documents are
subject to the Gaming Regulations and federal statutes, regulations and orders
regulating gaming. The

<PAGE>   135
March 30, 2001
Page 25

enforceability of the remedies provided under the Louisiana Documents are
subject to orders of federal and Louisiana governmental authorities pursuant
thereto. In particular, the acquisition or operation of the encumbered
properties and property interests by the Collateral Agent, any of the Trustee,
any of the Secured Creditors or any other Person will require approvals by and
filings with governmental authorities under the Gaming Regulations, which
requirements may limit the number of potential bidders, delay or reduce the
realization on such property and otherwise limit the practical value of
realizing on such property.

         P. We have assumed that the Bankruptcy Court's Confirmation Order
confirming the Plan of Reorganization has been entered and is not stayed, the
time to appeal or to seek review by petition for certiorari therefrom has
expired without an appeal or application for review having been filed, and such
Confirmation Order now constitutes a final, non-appealable judgment in full
force and effect, and that the Plan Effective Date occurred under the Plan of
Reorganization on March 19, 2001. We further assume that the execution, delivery
and performance of the Documents has been approved by the Bankruptcy Court in
connection with the Plan of Reorganization, and we express no opinion as to the
enforceability of any provision of the Louisiana Documents to the extent that
such provision conflicts with the terms of the Plan of Reorganization.

         Q. Without limiting the exceptions stated in paragraph 14, we express
no opinion as to whether a court applying Louisiana law would give effect to the
choice of New York law as governing (x) the Mortgages or any portions thereof,
or (y) the validity and enforceability of the Documents in which such choice of
law is stipulated as to the following provisions:

                  (1)      any requirement in any Document that such Document's
                           terms may be amended or waived only by an agreement
                           in writing signed by all parties thereto, or
                           provisions authorizing the delay or failure to
                           exercise a right without waiving such right;

                  (2)      provisions pertaining to the admissibility of
                           evidence or evidentiary standards or the
                           conclusiveness of determinations or the
                           reasonableness of actions;

                  (3)      any agreement to submit to the jurisdiction of any
                           court sitting in any particular jurisdiction;

                  (4)      any waiver of any right to a trial by jury or to
                           claim any forum as inconvenient or to judicial
                           service of process;

                  (5)      provisions which purport to create a constructive
                           trust as to any funds received by any Person;

<PAGE>   136

March 30, 2001
Page 26

                  (6)      provisions which purport to establish the obligation
                           of the Credit Parties for a deficiency in
                           circumstances not permitted by the Louisiana
                           Deficiency Judgment Act;

                  (7)      provisions which purport to waive the duty of a
                           secured party with respect to Collateral in its
                           possession;

                  (8)      the creation of security interests under the Pledge
                           Agreement or the Security Agreement in Collateral not
                           subject to the LAUCC, or the perfection of security
                           interests or other matters provided for in LAUCC
                           Section 9-103, or the remedies provided in the
                           Documents;

                  (9)      any provision for liquidated damages contained in any
                           of the Documents;

                  (10)     any waiver or extension of any statute of limitations
                           or liberative prescriptive period;

                  (11)     provisions of Indenture Section 11.17(b) or HET/JCC
                           Agreement Section 20(b);

                  (12)     provisions of Security Agreement Section 7.3;

                  (13)     provisions of the Pledge Agreement and the Security
                           Agreement regarding any incorporeal (intangible)
                           Collateral to which the application of such provision
                           is found to be ambiguous, or the second sentence of
                           Pledge Agreement Section 26(a);

                  (14)     provisions which purport to restore or continue any
                           rights or documents held by a Person after judicial
                           proceedings to which such Person is a party are
                           abandoned or discontinued or determined adversely;

                  (15)     irrevocable power of attorney grants or appointments;

                  (16)     provisions which exclude or limit any liability of
                           any Person for such Person's intentional or gross
                           fault that causes damage to any other Person or for
                           causing physical injury to any other Person;

                  (17)     indemnities against a Person's intentional, gross
                           fault, negligence or otherwise where such
                           indemnification is not permitted by law or is
                           contrary to public policy; or

<PAGE>   137
March 30, 2001
Page 27

                  (18)     provisions which purport to continue the liability of
                           a Credit Party notwithstanding (a) any defense to the
                           Company's Secured Indebtedness or Obligations that
                           the Company could assert, except lack of capacity or
                           discharge and bankruptcy of the Company, or (b) a
                           modification or amendment of the Company's Secured
                           Indebtedness or Obligations or the Documents or an
                           impairment of real security held for the Company's
                           Secured Indebtedness or Obligations, in any material
                           manner and without such Credit Party's consent if the
                           Credit Party is prejudiced by such action.

          R. With regard to the opinion expressed in paragraph 12 above, in the
event that any bank acquires possession or ownership of encumbered property in
Louisiana, whether by the exercise of provisional remedies available under the
Documents and applicable law, foreclosure, dation en paiement (deed in lieu of
foreclosure) or otherwise, various filings or other acts may by required in
Louisiana in connection with the use, operation or ownership of such property,
and the foregoing opinion does not extend to any such filings or acts. In
particular, you should be aware that the banks' exemption from Louisiana taxes
shall not include ad valorem taxes assessed against any immovable property that
the banks may own in this state. Additionally, the opinion expressed above is
rendered without regard to any other activities or transactions which any of the
banks are engaged in or is a party to, and assumes that each bank is not subject
to the jurisdiction of any court or governmental authority of the State of
Louisiana for any reason other than the execution, delivery and performance of
the Documents. We express no opinion as to whether any bank which is not an
entity of the type described in La. R.S. 12:302(K) (as stated in opinion
paragraph 12 above) is or is not required to qualify to transact business or pay
any tax or fee in connection with this transaction.

         S. (1) The Louisiana Documents state in multiple provisions that the
Louisiana Documents and the liens, rights and covenants thereunder are subject
to the terms and conditions of the Intercreditor Agreement, which further is
purported to be incorporated into the Mortgages by reference. The opinions
expressed herein are subject to the effect, if any, of such terms and conditions
of the Intercreditor Agreement on the Louisiana Documents. We express no opinion
as to the validity or enforceability of the Intercreditor Agreement (except as
stated in paragraph 4 as to its due authorization), and the opinions expressed
above pertaining to the Louisiana Documents should not be construed as extending
thereto. Furthermore, we express no opinion as to the enforceability of, or the
effect on the Louisiana Documents' validity and enforceability and the opinions
expressed herein arising from, (x) the purported incorporation by reference of
the Intercreditor Agreement (which elects New York law) into the Mortgages or
(y) any provisions in the Louisiana Documents which conflict or are inconsistent
with the provisions of the Intercreditor Agreement.

            (2) We express no opinion as to the validity or enforceability of
the Mortgages under the laws of the State of New York. Furthermore, we express
no opinion as to

<PAGE>   138
March 30, 2001
Page 28

the enforceability of, or the effect on the Mortgages' validity and
enforceability and the opinions expressed herein arising from, the purported
choice of New York law in the Mortgages.

         T. No opinion is to be implied herein or inferred herefrom as to (1)
the financial ability of the Credit Parties to meet their respective obligations
under the Documents, (2) the truthfulness or accuracy of any financial
statements, reports, plans or documents or other facts furnished to you by the
Credit Parties in connection with the Documents, (3) the truthfulness or
accuracy of any statements of fact made by the Credit Parties in the Documents
or any other documents described herein, except to the extent that such matters
are expressly addressed herein, or (4) whether any of the obligations, covenants
or agreements contained in the Documents in fact have been or will be fulfilled,
completed or performed. We have assumed that no facts exist that would make
available the defenses of error, fraud or other vice of consent.

         U. With your permission, we express no opinion regarding the
applicability or effect of the bankruptcy and insolvency laws of the United
States and State of Louisiana pertaining to fraudulent conveyances.

         V. We express no opinions as to the laws of any jurisdiction other that
the laws of the State of Louisiana, and the General Corporation Law of the State
of Delaware as to opinion paragraphs 1 and 2, above, and the federal laws of the
United States pertinent to opinion paragraphs 14 and 15, and we express no
opinion with respect to the laws of the United States of America except with
respect to opinion paragraphs 14 and 15 or of any other State or jurisdiction
(or, in the case of the State of Delaware, any laws other than the Delaware
General Corporation Law) or any matters of municipal law.

         The opinions expressed herein are expressed as of the date hereof and
are not intended to have any prospective effect. No opinion is expressed herein
as to the effect of any future acts of the parties or changes in existing laws.
We assume no obligation to advise you or any other Person of any changes
concerning the above matters or opinions, whether or not deemed material, which
may hereafter come or be brought to our attention, including but not limited to,
changes which could result from pending or future legislation, law or
jurisprudence or changes in the facts presently in effect.

         The foregoing expresses our legal opinion as to the matters set forth
above and is based upon our professional knowledge and judgment at this time; it
is not, however, to be construed as a guaranty, nor is it a warranty that a
court considering such matters would not rule in a manner contrary to the
opinions set forth above. This legal opinion is prepared and rendered in
accordance with the standard of care applicable to opinion letters issued by law
firms and/or lawyers located in the state of Louisiana.

         The opinions expressed in this letter are given solely for the benefit
of Trustee under the Indenture, HET and HOC under the Minimum Payment Guaranty
and Revolving Credit

<PAGE>   139

March 30, 2001
Page 29

Agreement, HNOMC under the Revolving Credit Agreement, the Collateral Agent, and
their respective counsel. This opinion letter may be relied upon by Trustee,
HET, HOC, and HNOMC and their respective counsel only in connection with the
transactions contemplated by the Documents. This opinion letter may not be
relied upon in whole or in part, for any other purposes or by any other Person
without our prior written consent.

                                            Very truly yours,

                                            ADAMS AND REESE

<PAGE>   140
                    EXHIBIT C-2 TO REVOLVING CREDIT AGREEMENT
                                        &
                            EXHIBIT C-5 TO INDENTURE

           [HELLER, DRAPER, HAYDEN, PATRICK & HORN, L.L.C. LETTERHEAD]

                                 March 29, 2001

Wells Fargo Bank Minnesota,
National Association as Trustee
under the Indenture referred to below
6th and Marquette
MAC-N9303-120
Minneapolis, Minnesota 55479

and

Harrah's Entertainment, Inc.
and Harrah's Operating Company, Inc.,
Harrah's New Orleans Management Company,
as Revolver Creditors, pursuant to
  Revolving Credit Agreement referred to below
One Harrah's Court
Las Vegas, Nevada 89119

and

The Bank of New York,
  as Collateral Agent
10161 Centurion Parkway
Jacksonville, Florida 32256

                  Re:   Borrower: Jazz Casino Company, L.L.C.

Ladies and Gentlemen:

         I have been asked to render this opinion on behalf of Jazz Casino
Company, L.L.C., a Louisiana limited liability company (the "Borrower"), with
respect to certain matters of Louisiana casino gaming law in connection with the
Indenture, among Jazz

<PAGE>   141

Casino Company, L.L.C., the issuer, JCC Holding Company, JCC Canal Development,
L.L.C., JCC Fulton Development L.L.C., and JCC Development Company, L.L.C., the
guarantors, and Wells Fargo Bank Minnesota, National Association, the trustee
(the "Trustee"), dated as of March 30, 2001 (the "Indenture"), and the Revolving
Credit Agreement, among Jazz Casino Company, L.L.C., as borrower, JCC Holding
Company, JCC Canal Development, L.L.C., JCC Fulton Development L.L.C., and JCC
Development Company, L.L.C., as guarantors, Harrah's Entertainment, Inc.,
Harrah's Operating Company, Inc., and Harrah's New Orleans Management Company,
as Lenders, dated as of March 30, 2001 (the "Revolving Credit Agreement").

         Unless the context requires otherwise, capitalized terms used herein
but not defined herein have the meaning assigned to them in the Indenture.

         The laws, rules and regulations, including emergency regulations, of
the State of Louisiana pertaining to licensed casino gaming activities, as set
forth in the Louisiana Economic Development and Gaming Corporation Act (the
"Act") and the regulations, emergency regulations, resolutions and orders
adopted thereunder by the Louisiana Gaming Control Board or its successors (the
"LGCB") as in effect on the date hereof are collectively referred to herein as
"Gaming Regulations." The LGCB, together with any other governmental authority
charged with the administration and the enforcement of the Gaming Regulations,
shall hereinafter be referred to as the "Gaming Authorities."

         For purposes of this opinion, I have reviewed (a) the Amended and
Renegotiated Casino Operating Contract dated as of October 30, 1998 among
Harrah's Jazz Company, a Louisiana general partnership, the Borrower and the
LGCB, the Second Amendment to Amended and Renegotiated Casino Operating Contract
and the Third Amendment to Amended and Renegotiated Casino Operating Contract
(collectively, the "Casino Operating Contract"); (b) the petition and first
amended and supplemental petition to the LGCB identified on Schedule A attached
hereto (the "LGCB Order"); and (d) the Indenture, the Revolving Credit Agreement
and certain related security documents described on Schedule C attached hereto
(hereinafter "Secured Documents").

         I have also examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and, except as stated
herein, I have conducted such other investigations of fact and law as I have
deemed necessary or advisable for purposes of this opinion.

         Based upon the foregoing, and subject to the assumptions,
qualifications, restrictions and limitations set forth in this letter and the
Remedy Qualification (as defined below), I am of the following opinions:

         0.1. All authorizations, consents or approvals of or by the Gaming
Authorities required as of the date of this letter under the Gaming Regulations
have been obtained and are in full force and effect for: (a) the due execution
and delivery by the Borrower of the Secured Documents executed as of the date of
this letter to which the Borrower is a party; (b) the grant by the Borrower of
any lien or security interest in Collateral of the Borrower created pursuant to
the Secured Documents executed as of the date of this letter; (c) the perfection
of the Collateral Agent's rights under any lien or security interest in
Collateral of the

<PAGE>   142

Borrower created pursuant to any Secured Documents executed as of the date of
this letter; and (d) the issuance of New Common Stock pursuant to the Plan of
Reorganization, subject to the right of the LGCB to call forward any holder of
New Common Stock for a finding of suitability in accordance with the Gaming
Regulations, and with regard to Preston Smart, directly or indirectly through
trusts and investment companies, limited by the LGCB Order until he is found
suitable by the LGCB; provided, however, I express no opinion as to any
proceedings, authorizations, consents, approvals, notices, filings or other
actions required to be taken, obtained or made with the Gaming Authorities in
connection with the operation or exercise of any or all of the restrictions,
rights or remedies contemplated, authorized, created or provided for under any
of the Secured Documents (the "Remedy Qualification").

         0.2 The Gaming Regulations do not prevent any Security Document
executed as of the date of this letter that creates a valid and enforceable
security interest or lien in the Collateral of the Borrower from creating a
security interest or lien in favor of the Collateral Agent in the Collateral of
Borrower that is the subject of such Security Deposit, as security for the
payment of the obligations secured thereby.

         0.3 Trustee and The Bank of New York are required by reason of the
transactions referred to in the Secured Documents to be found suitable under the
Gaming Regulations; provided, however, Trustee and The Bank of New York are
presumed to be suitable at this time pursuant to the LGCB Order and/or the
Casino Operating Contract; and further provided, however, (a) the LGCB may
withdraw the presumption of suitability at any time and Trustee and The Bank of
New York are subject to being called forward for a finding of suitability in the
discretion of the LGCB; (b) the LGCB may require, in its discretion, a finding
of suitability in connection with the granting of any necessary approvals for
the exercise of remedies provided for in the Secured Documents; (c) successors
to, or transferees of, Trustee or The Bank of New York may be required to be
found suitable and are subject to being called forward for a finding of
suitability in the discretion of the LGCB; and (d) Trustee and The Bank of New
York, and any successors to, or transferees of, Trustee or The Bank of New York,
are required to comply with the Gaming Regulations and the Casino Operating
Contract in connection with the exercise of any rights or remedies under the
Secured Documents.

         0.4. The execution and delivery by the Borrower of the Secured
Documents executed as of the date of the letter to which it is a party will not
violate any Gaming Regulations.

         The foregoing opinions are limited by, subject to, and based on, the
following limitations, assumptions, restrictions and qualifications, all of
which have been made with your permission:

         A. This opinion assumes, consistent with the Gaming Regulations and the
Casino Operating Contract, that none of the Secured Documents creates a lien or
any

<PAGE>   143

other security interest in or to (i) the Casino Operating Contract, (ii) the
House Bank (as defined in the Third Amended and Restated Management Agreement as
in effect on the date of this letter), or (iii) the Louisiana Gaming Gross Share
Payments (including the LGCB's interest in Daily Collections), as such terms are
defined in the Casino Operating Contract, as in effect on the date of this
letter.

         B. The foregoing opinions relate only to suitability determinations,
authorizations, consents and approvals that are required as of the date of this
letter under the Gaming Regulations as applicable to the Borrower with respect
to the Secured Documents in effect as of the date of this letter, and without
considering or giving effect to any other additional security and/or mortgage
with respect to the Secured Documents or any of the other credit documents. The
exercise of remedies under the Secured Documents, may require licenses, permits,
suitability determinations, consents, approvals, authorizations, orders or
notices under the Gaming Regulations, the Secured Documents and the Casino
Operating Contract. I express no opinion as to the applicability of any such
requirements and assume that all have been or will be satisfied. In addition,
the Gaming Regulations require that persons and entities other than the Borrower
obtain licenses, permits, or suitability determinations or other consents,
approvals, authorizations or orders under the Gaming Regulations. I express no
opinion as to any such requirements and assume that all have been or will be
satisfied. Furthermore, I advise you that the presumptions of suitability set
forth in the LGCB Order, the Casino Operating Contract and the Gaming
Regulations are subject to withdrawal by the LGCB. I express no opinion as to
the validity or enforceability of the Secured Documents except as specifically
set forth in this letter with respect to Gaming Regulations only and then
subject to the Remedy Qualification and the other limitations, assumptions,
restrictions and qualifications set forth in this letter;

         C. There are uncertainties with respect to the Gaming Regulations and
their application to the Casino Operating Contract. This letter expresses no
opinion as to the validity or enforceability of the Casino Operating Contract or
the effect on your rights under the Secured Documents, including any liens on
Collateral, or New Common Stock in the event the Casino Operating Contract is
found to be invalid or unenforceable in whole or in part, without limiting the
opinion given in paragraphs 0.1 and 0.2. With your permission, I have not
addressed those matters herein, and, for purposes of this opinion, I have
assumed that the Casino Operating Contract constitutes the legal, valid and
binding obligations of the parties thereto, including the LGCB, enforceable in
accordance with its terms. The Louisiana Constitution and the Gaming Regulations
contain provisions which may materially impair or terminate Borrower's ability
to conduct casino gaming activities pursuant to the Casino Operating Contract,
including, but not limited to, provisions (i) requiring or permitting referendum
elections or elections on propositions relating to allowing or prohibiting one
or more forms of gaming, gambling or wagering authorized by Legislative Act;
(ii) authorizing the legislature at any time to repeal statutes authorizing
gaming, gambling or wagering; (iii) authorizing the Governor, the legislature
and the LGCB to set aside the Casino Operating Contract or order the Casino
Operating Contract to be renegotiated under certain circumstances; (iv) that
neither the state of Louisiana nor any political subdivision thereof shall be
liable in damages for revocation,

<PAGE>   144

modification or order for renegotiation of the Casino Operating Contract; and
(v) that the Casino Operating Contract is a pure, absolute, revocable privilege
and not a right, property or otherwise, under the constitutions of the United
States or the state of Louisiana, and that no holder thereof acquired any vested
right therein or thereunder. I also have not addressed the consequences on the
Borrower's rights to the Casino Operating Contract, or the approvals contained
in the LGCB Order and opined to in this letter, in the event that Act 1 of the
First Extraordinary Session of 2001 is found to be invalid, unenforceable,
unconstitutional or otherwise infirm under the laws of the state of Louisiana or
the United States of America. Further, I have not addressed the consequences in
the event that the LGCB Order is appealed and reversed, revised, amended,
remanded, vacated or modified by a reviewing court in the state of Louisiana, or
otherwise held to be invalid or infirm in whole or in part. With your
permission, I have not addressed those matters herein or rendered any advice or
opinion with respect thereto.

         D. For purposes of the opinions expressed in this letter, with your
permission, I have assumed and have not independently verified: (i) the
authenticity of all documents submitted to me as originals, the conformity with
the originals of all documents submitted to me as copies or forms, the
genuineness of all signatures, and the legal capacity of all natural persons;
(ii) the due organization, valid existence and good standing of all non-natural
persons in their respective jurisdictions of organization and the registration
or other qualification to do business and good standing of all such persons in
all other relevant jurisdictions, including the State of Louisiana; (iii) that
the Borrower has the requisite power and authority to conduct its business as
now conducted and as proposed to be conducted; (iv) that all statutes, judicial
and administrative decisions and orders, and rules and regulations, including
emergency regulations and resolutions, of governmental agencies, including the
Gaming Authorities, are generally available (i.e., in terms of access and
distribution following publication or other release) to lawyers practicing in
the State of Louisiana; (v) the constitutionality and validity of all relevant
statutes, rules and regulations, including but not limited to the Gaming
Regulations; (vi) that all statements and representations made in the Petition
and at any hearing on the Petition are true and correct, accurate and complete;
and (vii) that the LGCB Order in the form and substance attached hereto will
become final and nonappealable, and not subject to modification, amendment,
revocation, rehearing or rescission.

         E. I am qualified to practice law in the State of Louisiana and I do
not purport to express any opinion herein concerning any law other that the
Gaming Regulations. I assume no responsibility with respect to the application
of any other such law to the opinions contained herein.

         The opinions expressed in this letter (i) are expressly limited to the
matters stated herein in writing and no opinion may be inferred beyond the
matters expressly stated herein in writing; (ii) are given only as of this date
based on the laws in effect as of this date and I do not undertake to report to
you or any third parties changes in facts or laws, including, but not limited
to, Gaming Regulations, statutes or jurisprudence, regulations, emergency
regulations, rules, regulations, or resolutions, or any political corporation
and

<PAGE>   145

agency actions; and (iii) are issued only to the addressees hereof and may not
be used, circulated or quoted, in whole or in part, or relied upon by any person
or entity for any purpose without my prior written consent.

                                            Yours sincerely,

                                            /s/ William H. Patrick, III
                                            ---------------------------

<PAGE>   146

        SCHEDULE A TO MARCH 30, 2001 LETTER FROM WILLIAM H. PATRICK, III,
  TO WELLS FARGO BANK OF MINNESOTA, NATIONAL ASSOCIATION AS TRUSTEE UNDER THE
 INDENTURE; HARRAH'S ENTERTAINMENT, INC., HARRAH'S OPERATING COMPANY, INC., AND
 HARRAH'S NEW ORLEANS MANAGEMENT COMPANY, AS REVOLVER CREDITORS, PURSUANT TO
 THE REVOLVING CREDIT AGREEMENT; AND THE BANK OF NEW YORK, AS COLLATERAL AGENT

1.       Petition of Jazz Casino Company, L.L.C. and JCC Holding Company filed
         on February 28, 2001 with the Louisiana Gaming Control Board in the
         matter entitled "In the Matter of the Petition of Jazz Casino Company,
         L.L.C. and JCC Holding Company, Seeking Declaratory Rulings With
         Respect to the Plan of Reorganization and Related Transactions"; and

2.       First Amended and Supplemental Petition of Jazz Casino Company, L.L.C.
         and JCC Holding Company filed on March 22, 2001 with the Louisiana
         Gaming Control Board in the matter entitled "In the Matter of the
         Petition of Jazz Casino Company, L.L.C. and JCC Holding Company,
         Seeking Declaratory Rulings With Respect to the Plan of Reorganization
         and Related Transactions".

                                       END

<PAGE>   147

        SCHEDULE B TO MARCH 30, 2001 LETTER FROM WILLIAM H. PATRICK, III,
   TO WELLS FARGO BANK OF MINNESOTA, NATIONAL ASSOCIATION AS TRUSTEE UNDER THE
  INDENTURE; HARRAH'S ENTERTAINMENT, INC., HARRAH'S OPERATING COMPANY, IN., AND
  HARRAH'S NEW ORLEANS MANAGEMENT COMPANY, AS REVOLVER CREDITORS, PURSUANT TO
  THE REVOLVING CREDIT AGREEMENT; AND THE BANK OF NEW YORK, AS COLLATERAL AGENT

1.       "Order on Petition, as Amended, of Jazz Casino Company, L.L.C. and JCC
         Holding Company Seeking Declaratory Rulings With Respect to the Plan of
         Reorganization and Related Transactions" adopted by the Louisiana
         Gaming Control Board on March 29, 2001.

                                       END
<PAGE>   148

                    EXHIBIT C-3 TO REVOLVING CREDIT AGREEMENT
                                        &
                            EXHIBIT C-4 TO INDENTURE

                         [PILLSBURY WINTHROP LETTERHEAD]

                                 March 30, 2001

Wells Fargo Bank Minnesota, National Association
as Trustee for the benefit of the Holders from
time to time under the Senior Note Indenture
referred to below

and

Harrah's Entertainment, Inc.
and Harrah's Operating Company, Inc. as
Minimum Payment Guarantors pursuant
to the HET/JCC Operating Agreement referred to
in the Senior Note Indenture and as lenders
under the Revolving Credit Agreement
referred to below

and

The Bank of New York, as Collateral Agent
10161 Centurion Parkway
Jacksonville, Florida 32256

Ladies and Gentlemen:

         We have acted as special New York (the "State") counsel to (i) JCC
Holding Company, a Delaware corporation ("JCC Holding") and (ii) Jazz Casino
Company, L.L.C., a Louisiana limited liability company ("JCC") for purposes of
providing this opinion in connection with (x) the Indenture, dated as of March
30, 2001 (the "Senior Note Indenture"), among JCC, as issuer, JCC Holding, JCC
Canal Development, L.L.C., a Louisiana limited liability company ("Canal
Development"), JCC Fulton Development, L.L.C., a Louisiana limited liability
company ("Fulton Development"), JCC Development Company, L.L.C., a Louisiana
limited liability company ("JCC Development"), as guarantors, and Wells Fargo
Bank Minnesota, National Association, as Trustee and (y) the Revolving Credit
Agreement, dated as of March 30, 2001 (the

<PAGE>   149
March 30, 2001
Page 2

"Revolving Credit Agreement"), among JCC, as borrower, JCC Holding, Canal
Development, Fulton Development and JCC Development, as guarantors, and Harrah's
Entertainment, Inc., Harrah's Operating Company, Inc. and Harrah's New Orleans
Management Company, as lenders.

         As used herein, "Governmental Approval" means any authorization,
consent, approval, license or exemption (or the like) of or from any
governmental unit, "Governmental Registration" means any registration or filing
(or the like) with, or report or notice (or the like) to, any governmental unit,
"Subsidiary Guarantors" means Canal Development, Fulton Development and JCC
Development, "Documents" means the Senior Note Indenture, the Revolving Credit
Agreement, the Pledge Agreement, dated as of March 30, 2001 (the "Pledge
Agreement"), among JCC Holding, JCC and the Subsidiary Guarantors, as pledgors,
and The Bank of New York, not in its individual capacity, but solely as
Collateral Agent, and the Security Agreement, dated as of March 30, 2001 (the
"Security Agreement"), among JCC Holding, JCC and the Subsidiary Guarantors, as
assignors, and The Bank of New York, not in its individual capacity, but solely
as Collateral Agent, "Securities" means the Senior Notes due 2008 of JCC in the
form included in Exhibit A to the Senior Note Indenture, "Security Interest"
means the security interests created by the Pledge Agreement and the Security
Agreement, "LLC Membership Certificates" means the certificates evidencing units
of membership interests in Canal Development, Fulton Development and JCC
Development, "Collateral" shall mean all the "Collateral" as defined in the
Pledge Agreement and/or the Security Agreement, as the case may be, "Pledged
Securities" means any "Security" (as defined in the Pledge Agreement) that is
included in the Collateral under the Pledge Agreement, including, without
limitation, the LLC Membership Certificates, "Stock" has the meaning assigned to
such term in the Pledge Agreement, "Uniform Commercial Code" means the Uniform
Commercial Code as in effect in the State on the date hereof, "Revolver Note"
means the "Note" as defined in the Revolving Credit Agreement, and the terms
"Revolving Loan Commitment" and "Revolving Loan" have the meanings assigned to
such terms in the Revolving Credit Agreement. Other capitalized terms used
herein but not defined herein have the meanings assigned to them in the Senior
Note Indenture.

         This opinion is delivered to you pursuant to Section 4.2(b) of the
Senior Note Indenture and Section 4.2(b) of the Revolving Credit Agreement at
the request of JCC.

         On the basis of the assumptions and subject to the qualifications and
limitations set forth below, we are of the opinion that:

                  1. Each Document constitutes a valid and legally binding
agreement of JCC Holding, JCC and/or each Subsidiary Guarantor to the extent
such Person is a party thereto, each Security will, upon being duly issued for
value and executed and authenticated in accordance with the terms and conditions
of the Senior Note Indenture, constitute a valid and legally binding obligation
of JCC, and the Revolver Note delivered on the date hereof will, upon
disbursement of a Revolving Loan evidenced by the

<PAGE>   150
March 30, 2001
Page 3

Revolver Note, constitute a valid and legally binding obligation of JCC, in each
case enforceable against JCC Holding, JCC, and/or the Subsidiary Guarantors, as
the case may be, in accordance with its terms.

                  2. Under the law of the State, no Governmental Approvals are
required to have been obtained, and no Governmental Registrations are required
to have been made, by JCC for the valid execution, delivery and issuance by JCC
of the Securities and the Revolver Note issued on the date hereof, for JCC's
incurrence of Indebtedness in the aggregate amount of $124,500,000 and the
repayment of such Indebtedness, with interest, in accordance with the terms of
the Senior Note Indenture and the Securities, for JCC's incurrence of
Indebtedness in the amount of the Revolving Loan Commitment and the repayment of
such Indebtedness, with interest, in accordance with the terms of the Revolving
Credit Agreement and the Revolver Note, for the grant by JCC of the Security
Interest or, subject to paragraph 3(b) below, the maintenance of the Security
Interest in accordance with the terms of the Security Agreement, for the
performance by JCC of its other obligations under the Documents or for the
performance by JCC Holding and the Subsidiary Guarantors of their respective
obligations under the Documents (other than in connection or in compliance with
the blue-sky law of the State, as to which we express no opinion).

                  3. (a) The provisions of (i) the Security Agreement are
effective to create in favor of the Collateral Agent for the benefit of the
Secured Creditors a valid security interest in the Collateral to secure the
Obligations (as defined in the Security Agreement) and (ii) the Pledge Agreement
are effective to create in favor of the Collateral Agent for the benefit of the
Secured Creditors a valid security interest in the Collateral to secure the
Obligations (as defined in the Pledge Agreement).

                     (b) The law (including the conflict of law rules) of the
jurisdiction in which a debtor's place of business, or, if it has more than one
place of business, its chief executive office, is located governs the perfection
by filing of the Security Interest in the Security Agreement Collateral
consisting of (in each case as defined in the Uniform Commercial Code) accounts
(other than accounts described in Section 9-103(5) of the Uniform Commercial
Code), general intangibles and investment property and, in the case of such
accounts and general intangibles, the effect of such perfection or
non-perfection.

                     (c) (i) The delivery to the Collateral Agent in the State
of the certificates (and related stock powers executed in blank) delivering to
it representing Pledged Securities constituting Stock or the LLC Membership
Certificates is effective to perfect the Security Interest in the Pledged
Securities evidenced by such certificates on the date of such delivery.

                         (ii) Upon the delivery of the certificates representing
the Pledged Securities referred to in clause (i) to the Collateral Agent as
specified in such clause, the Security Interest in such Pledged Securities,
insofar as it secures the principal

<PAGE>   151
March 30, 2001
Page 4

amount of the Securities issued on the date hereof and the principal amount of
the Revolving Loans outstanding on the date hereof, will not be subject to any
present or future prior Liens.

                           (d) The delivery to the Collateral Agent in the State
of any Collateral constituting instruments (as such term is defined in Section
9-105(1)(i) of the Uniform Commercial Code) is effective to perfect the Security
Interest in such instruments on the date of such delivery.

         Our opinion is subject to the following qualifications and limitations:

                  (a) Our opinion is subject to the effect of (i) applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and other similar
laws affecting creditors' rights generally, (ii) general equitable principles,
(iii) requirements of reasonableness, good faith and fair dealing, and (iv)
additionally in the case of (A) indemnities, a requirement that facts, known to
the indemnitee but not the indemnitor, in existence at the time the indemnity
becomes effective that would entitle the indemnitee to indemnification be
disclosed to the indemnitor, (B) waivers, Section 9-501(3) of the Uniform
Commercial Code and (C) indemnities, waivers and exculpatory provisions, public
policy. Our opinion with respect to the Senior Note Indenture and the Revolving
Credit Agreement is subject to the further qualification that JCC Holding and
the Subsidiary Guarantors may be exonerated as to a guaranteed party if that
guaranteed party fails to inform JCC Holding or the Subsidiary Guarantors of
material, adverse information, known to it and not to JCC Holding or the
Subsidiary Guarantors, concerning JCC or any collateral.

                  (b) Certain remedial provisions of the Documents we are
opining on may be unenforceable in whole or in part, but the inclusion of such
provisions does not affect the validity of the balance of such Documents, and
the practical realization of the benefits created by such Documents taken as a
whole will not be materially impaired by the unenforceability of those
particular provisions. In addition, certain remedial provisions of such
Documents may be subject to procedural requirements not set forth therein.

                  (c) The Security Interest will not be enforceable (i) with
respect to, or attach to, any Collateral until value has been given and JCC
Holding, JCC or any Subsidiary Guarantor, as the case may be, has rights in such
Collateral and (ii) against the competing interests of those third parties
(other than JCC Holding, JCC or any Subsidiary Guarantor) who would, in
accordance with the provisions of the Uniform Commercial Code, take free of, or
have priority over, the Security Interest, notwithstanding its perfection.

                  (d) Our opinion is limited to the law of the State as in
effect on the date hereof and to the Documents insofar as such Documents purport
to be governed by the law of the State.

<PAGE>   152
March 30, 2001
Page 5

                  (e) This opinion is solely for your benefit and the benefit of
your assignees and participants in connection with the above transactions. This
opinion may not be relied upon by you for any other purpose or furnished to
(unless otherwise required to be so furnished by applicable law or judicial
process), quoted to or relied upon by any other Person for any purpose without
our prior written consent.

                  (f) We express no opinion with respect to:

                           (i) JCC Holding's, JCC's, or any Subsidiary
         Guarantor's rights in, title to or legal or beneficial ownership of any
         of the Collateral, or any Collateral acquired after the date hereof;

                           (ii) the perfection of the Security Interest in any
         dividends or other distributions on Pledged Securities that are not the
         subject of our opinion expressed in paragraph 3(c)(i) above;

                           (iii) except to the extent specified in paragraph
         3(c)(ii), the priority of the Security Interest;

                           (iv) any Collateral that (A) is not governed by
         Article 8 or 9 of the Uniform Commercial Code (and not, in the case of
         Article 9, excluded therefrom by Section 9-104 or Section 9-313(2)),
         (B) is subject to Section 9-401(10)(a) or (b) of the Uniform Commercial
         Code or (C) is a trademark;

                           (v) Section 11.8 of the Senior Note Indenture,
         Sections 8.7(a) and (b) of the Revolving Credit Agreement and Sections
         26(a) and (b) of the Pledge Agreement, insofar as such Sections relate
         to federal courts (except as to the personal jurisdiction thereof);

                           (vi) Section 8.7(c) of the Revolving Credit Agreement
         and Section 26(c) of the Pledge Agreement, insofar as such Sections are
         sought to be enforced in a federal court;

                           (vii) In the case of the Pledge Agreement, Section
         7(b) through (f), Section 26(a), insofar as it purports to except
         Sections 7(b) through (f) from the first sentence of such Section, and
         Section 27;

                           (viii) In the case of the Security Agreement, Section
         6.3(b) through (f), Section 10.7, insofar as it purports to except
         Section 6.3(b) through 9(f) from such Section, and Section 10.12;

                           (ix) In the case of the Senior Note Indenture,
         Section 11.15;

                           (x) In the case of the Securities, Section 14
         thereof;

<PAGE>   153

March 30, 2001
Page 6

                           (xi) In the case of the Revolving Credit Agreement,
         Section 8.14; or

                           (xii) In the case of the Pledge Agreement and the
         Security Agreement, with respect to the status of any Person as a
         Secured Creditor for whom the Collateral Agent is not acting as
         representative within the meaning of Section 9-1059(1)(m) of the
         Uniform Commercial Code.

         In rendering our opinion:

                  (i) We have examined originals, or copies of originals
certified, conformed or otherwise identified to our satisfaction, of such
agreement, documents and records as we have considered relevant and necessary as
a basis for this opinion.

                  (ii) We have assumed the accuracy and completeness of all, and
the authenticity of all original, certificates, agreements, documents, records
and other materials submitted to us the conformity with the originals of any
copies submitted to us, the genuineness of all signatures and the legal capacity
of all natural persons.

                  (iii) We have assumed that (A) JCC Holding, JCC and each
Subsidiary Guarantor (1) are duly incorporated or organized, validly existing
and in good standing under the law of the State of Delaware and Louisiana, as
the case may be, and (2) have corporate power, and have taken all necessary
action (including any necessary stockholder or member action) to authorize them,
(aa) to execute and deliver, and to perform their respective obligations under,
and have duly executed and delivered, the Documents to which they are a party
and (bb) in the case of JCC, to execute, deliver and issue, and to perform it
obligations under, and have duly executed, delivered and issued for value, the
Securities and the Revolver Note; and (B) the execution and delivery of, and the
performance of their obligations under, the Documents by JCC Holding, JCC and
the Subsidiary Guarantors, and the execution, delivery and issuance of, and
performance of its obligations under, the Securities and the Revolver Note by
JCC, do not and will not (1) require any Governmental Approval or any
Governmental Registration of (2) violate or conflict with, result in a breach
of, constitute a default under, or result in the creation of any Lien (other
than, the Security Interest) upon any property of JCC Holding, JCC, any
Subsidiary Guarantor, or any of their respective Affiliates under, (aa) the
certificate of incorporation or the by-laws of JCC Holding and the certificate
of formation or operating agreement of JCC or any Subsidiary Guarantor, as the
case may be, (bb) any agreement or instrument to which JCC Holding, JCC, any
Subsidiary Guarantor, or any of their respective Affiliates is a party or by
which JCC Holding, JCC, any Subsidiary Guarantor, or any of its Affiliates or
any of

<PAGE>   154
March 30, 2001
Page 7

their respective properties may be bound, (cc) any Governmental Approval
or Governmental Registration that may be applicable to JCC Holding, JCC, any
Subsidiary Guarantor or any of its Affiliates or any of their respective
properties, (dd) any order, decision, judgment or decree that may be applicable
to JCC Holding, JCC, any Subsidiary Guarantor, or any of their respective
Affiliates or any of their respective properties or (ee) any law except that the
foregoing assumption does not apply to, (w) in the case of the Governmental
Approvals and Governmental Registrations referred to in subclause (B)(1), the
Governmental Approvals and Governmental Registrations that are the subject of
our opinion expressed in paragraph 2 above and (x) in the case of the law
referred to in subclause (b)(2)(ee), the law of the State (except as to any
Governmental Approvals and Governmental Registrations required thereunder that
are not the subject of our opinion expressed in paragraph 2 above).

                  (iv) We have assumed that the Documents constitute (subject to
the same qualifications as are contained in subparagraph (a) of the immediately
preceding paragraph) the valid and legally binding agreements of the parties
thereto under all applicable law (other than, in the case of JCC Holding, JCC
and the Subsidiary Guarantors the law of the State (except as to any
Governmental Approvals and Governmental Registrations required thereunder that
are not the subject of our opinion expressed in paragraph 2 above)).

                  (v) We have assumed, for purposes of paragraph 3(c), that (A)
the Secured Creditors and the Collateral Agent (on behalf of the Secured
Creditors) takes the Pledged Securities in good faith and without notice of any
adverse claim, (B) the Collateral Agent maintains continuous possession of the
Pledged Securities that are the subject of our opinion expressed in paragraph
3(c) above in the State and complies with the provisions of, and holds such
Pledged Securities for the benefit of the Secured Creditors in the manner
provided for in, the Pledge Agreement and (C) such Pledged Securities are
"certificated securities" within the meaning of Section 8-102(a)(4) of the
Uniform Commercial Code.

                  (vi) We have assumed, for purposes of paragraph 3(d), that (A)
the Secured Creditors and the Collateral Agent (on behalf of the Secured
Creditors) would take any instrument referred to in such paragraph for value, in
good faith and without notice that it is overdue or has been dishonored or of
any defense against or claim to it on the part of any person, and (B) the
Collateral Agent would maintain continuation possession of such instrument in
the State and would comply with the provisions of, and hold such instrument for
the benefit of the Secured Creditors in the manner provided for in, the Pledge
Agreement.

                  (vii) We have assumed, for the purposes of paragraph 2 above,
that the only activities of JCC Holding, JCC and the Subsidiary Guarantors in
the State consist of the negotiation, execution and delivery of, and the
performance of its obligations under, the Documents.

                  (viii) We have assumed that the Documents, the Securities, the
Revolver Note and Pledged Securities that are the subject of our opinion
expressed herein, as executed and delivered, were in the forms submitted to us.

<PAGE>   155
March 30, 2001
Page 8

                  (ix) We have assumed, for so much of paragraph 1 as relates to
Section 11.8 of the Indenture, Section 8.7(a) of the Revolving Credit Agreement,
Section 26(a) of the Pledge Agreement, Section 10.7 of the Security Agreement or
the last paragraph of the Revolver Note, that the choice of law of the State as
the governing law of such Documents, the Securities and the Revolver Note would
not result in a violation of an important public policy of another state having
greater contacts with the transactions contemplated by such Documents, the
Securities and the Revolver Note than the State.

                                            Very truly yours,

                                            PILLSBURY WINTHROP LLP

<PAGE>   156
                          JAZZ CASINO COMPANY, L.L.C.

               Officer's Certificate - Revolving Credit Agreement

     I, the undersigned, being the Secretary of JAZZ CASINO COMPANY, L.L.C., a
Louisiana limited liability company (the "Company"), hereby certify that:

     1.   This Certificate is furnished pursuant to Section 3 of Article I of
Exhibit B of the Revolving Credit Agreement dated as of March __, 2001 (the
"Agreement"), among Jazz Casino Company, L.L.C., as borrower, JCC Holding
Company, JCC Canal Development, L.L.C., JCC Fulton Development, L.L.C., JCC
Development Company, L.L.C., as guarantors, Harrah's Entertainment, Inc.,
Harrah's Operating Company, Inc., and Harrah's New Orleans Management Company,
as lenders. Unless otherwise defined here, capitalized terms used in this
Certificate shall have the meanings set forth in the Agreement.

     2.   The undersigned certifies that the conditions in Section 6, 7, 9, 10,
11, 12, 13, 20, 21, 22 and 23 of Article I of Exhibit B of the Agreement have
been satisfied as of the date hereof.

     IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of March
2001.

                                        -------------------------------
                                        Name:  L. Camille Fowler
                                        Title: Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}]]