Document:

Exhibit 4.5B

                                 DIAMOND JO, LLC
                     THE OLD EVANGELINE DOWNS CAPITAL CORP.

                $233,000,000 8 3/4% SENIOR SECURED NOTES DUE 2012

                  JOINDER TO THE REGISTRATION RIGHTS AGREEMENT

                                                                   June 16, 2004

JEFFERIES & COMPANY, INC.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, California 90025

Ladies and Gentlemen:

            Reference  is  made  to  the  Registration   Rights  Agreement  (the
"REGISTRATION  RIGHTS AGREEMENT") dated April 16, 2004, by and among Diamond Jo,
LLC, a Delaware limited  liability  company (the "COMPANY"),  The Old Evangeline
Downs Capital Corp., a Delaware  corporation  ("CAPITAL" and,  together with the
Company,  the  "ISSUERS"),  and the  Guarantors  listed on the  signature  pages
thereto  under the  heading  "Guarantors,"  on the one  hand,  and  Jefferies  &
Company,  Inc. (the "INITIAL PURCHASER"),  on the other hand.  Capitalized terms
used herein but not defined herein shall have the respective  meanings  assigned
to such terms in the Registration Rights Agreement.

            This letter  agreement is being executed and delivered  concurrently
with the consummation of the Reorganization Transactions.

            1. Joinder.  Peninsula  Gaming,  LLC, a Delaware  limited  liability
company  (the  "PARENT  ISSUER"),  hereby  agrees  to be  bound  by  the  terms,
conditions and other  provisions of the  Registration  Rights Agreement with all
attendant rights, duties and obligations stated therein, with the same force and
effect as if originally named as an "Issuer" therein and as if the Parent Issuer
had executed the Registration Rights Agreement on the date thereof.

            2. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED,
AND THE RIGHTS OF THE PARTIES SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION,  SECTIONS 5 1401 AND 5 1402
OF THE NEW YORK  GENERAL  OBLIGATIONS  LAW AND  RULE  327(b)  OF NEW YORK  CIVIL
PRACTICE  LAWS AND RULES.  EACH  ISSUER AND EACH  GUARANTOR  HEREBY  IRREVOCABLY
SUBMITS TO THE  JURISDICTION  OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH
OF  MANHATTAN  IN THE  CITY OF NEW  YORK  IN  RESPECT  OF ANY  SUIT,  ACTION  OR
PROCEEDING ARISING OUT OF OR RELATING

<PAGE>

TO THIS  AGREEMENT,  AND  IRREVOCABLY  ACCEPTS  FOR ITSELF AND IN RESPECT OF ITS
PROPERTY,  GENERALLY AND UNCONDITIONALLY,  JURISDICTION OF THE AFORESAID COURTS.
EACH ISSUER AND EACH GUARANTOR  IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER  APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH
ISSUER AND EACH  GUARANTOR  IRREVOCABLY  CONSENTS,  TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER  APPLICABLE LAW, TO THE SERVICE OF PROCESS 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 ISSUER OR SUCH
GUARANTOR,  AS THE CASE MAY BE, AT ITS ADDRESS SET FORTH HEREIN, SUCH SERVICE TO
BECOME  EFFECTIVE 30 DAYS AFTER SUCH  MAILING.  NOTHING  HEREIN SHALL AFFECT THE
RIGHT OF ANY  PARTY TO THIS  AGREEMENT  TO SERVE  PROCESS  IN ANY  OTHER  MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL  PROCEEDINGS OR OTHERWISE  PROCEED AGAINST
ANY OTHER PARTY TO THIS AGREEMENT IN ANY OTHER JURISDICTION.

            3. Counterparts. This letter agreement may be executed in any number
of  counterparts  and by the parties  hereto in separate  counterparts,  each of
which when so executed  shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

            4.  Amendments.  No  amendment  or waiver of any  provision  of this
letter agreement, nor any consent or approval to any departure therefrom,  shall
in any event be effective  unless the same shall be in writing and signed by the
parties hereto.

            5.  Headings.   The  headings  in  this  letter  agreement  are  for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning hereof.

                            [signature pages follow]

<PAGE>

            If the foregoing is in accordance  with your  understanding  of this
letter agreement,  kindly sign and return to us a counterpart thereof, whereupon
this  instrument  will  become  a  binding  agreement  among  the  Issuers,  the
Guarantors,  the  Parent  Issuer  party  hereto  and the  Initial  Purchaser  in
accordance with its terms.

                                            Very truly yours,

                                            PENINSULA GAMING, LLC

                                            By:/s/M. BRENT STEVENS
                                               ------------------------------
                                               Name:  M. Brent Stevens
                                               Title: Chief Executive Officer

<PAGE>

ACCEPTED AND AGREED TO:

JEFFERIES & Company, Inc.

By: /s/STEVE CROXTON
   ----------------------
   Name: Steve Croxton
   Title:  Managing DirectorEXHIBIT 4.6A

                          PLEDGE AND SECURITY AGREEMENT

                           DATED AS OF APRIL 16, 2004

                                      AMONG

                                DIAMOND JO, LLC,

                     THE OLD EVANGELINE DOWNS CAPITAL CORP.,

                              OED ACQUISITION, LLC,

                          PENINSULA GAMING CORPORATION,

                                       AND

                        THE OLD EVANGELINE DOWNS, L.L.C.,

                                       AND

                   U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE,
                                AS SECURED PARTY.

<PAGE>

                                TABLE OF CONTENTS

1.   DEFINITIONS...............................................................2
              1.1   GENERAL DEFINITIONS........................................2
              1.2   DEFINITIONS; INTERPRETATION................................9
2.   GRANT OF SECURITY.........................................................9
              2.1   GRANT OF SECURITY..........................................9
              2.2   CERTAIN LIMITED EXCLUSIONS................................10
              2.3   INTERCREDITOR AGREEMENT...................................11
3.   SECURITY FOR OBLIGATIONS.................................................11
              3.1   SECURITY FOR OBLIGATIONS..................................11
              3.2   OBLIGATIONS REMAIN........................................11
4.   REPRESENTATIONS AND WARRANTIES AND COVENANTS.............................12
              4.1   GENERALLY.................................................12
              4.2   EQUIPMENT AND INVENTORY...................................15
              4.3   RECEIVABLES CONTRACTS.....................................16
              4.4   INVESTMENT RELATED PROPERTY...............................19
              4.5   INTELLECTUAL PROPERTY.....................................20
              4.6   COMMERCIAL TORT CLAIMS....................................21
              4.7   JUDGMENTS.................................................21
5.   FURTHER ASSURANCES; ADDITIONAL DEBTORS...................................21
              5.1   FURTHER ASSURANCES........................................21
              5.2   ADDITIONAL DEBTORS........................................23
6.   ATTORNEY-IN-FACT.........................................................23
              6.1   POWER OF ATTORNEY.........................................23
              6.2   NO DUTY ON THE PART OF SECURED PARTY......................24
7.   REMEDIES.................................................................24
              7.1   GENERALLY.................................................24
              7.2   LOUISIANA REMEDIES........................................26
              7.3   APPLICATION OF PROCEEDS...................................27
              7.4   INVESTMENT RELATED PROPERTY...............................27
              7.5   INTELLECTUAL PROPERTY.....................................27
              7.6   CASH PROCEEDS.............................................29
              7.7   REGULATORY MATTERS........................................29
8.   CONTINUING SECURITY INTEREST; TRANSFER OF NOTES..........................29
9.   STANDARD OF CARE; SECURED PARTY MAY PERFORM..............................30
10.  INDEMNITY................................................................30
11.  MISCELLANEOUS............................................................30
              11.1     NOTICES................................................30
              11.2     EXPENSES...............................................30
              11.3     SUBROGATION............................................31
              11.4     DEBTOR WAIVERS.........................................31
              11.5     AMENDMENTS AND WAIVERS.................................32
              11.6     SUCCESSORS AND ASSIGNS.................................32
              11.7     INDEPENDENCE OF COVENANTS..............................32
              11.8     SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
                       AGREEMENTS.............................................32

                                       i
<PAGE>

              11.9     NO WAIVER; REMEDIES CUMULATIVE.........................32
              11.10    SEVERABILITY...........................................33
              11.11    HEADINGS...............................................33
              11.12    APPLICABLE LAW.........................................33
              11.13    SUBMISSION TO JURISDICTION.............................33
              11.14    COUNTERPARTS...........................................33
              11.15    GAMING LAWS............................................33
              11.16    EFFECTIVENESS..........................................34
              11.17    ENTIRE AGREEMENT.......................................34
              11.18    THE MORTGAGES..........................................34
              11.19    INDENTURE CONTROLS.....................................35
              11.20    TRUST INDENTURE ACT CONTROLS...........................35

SCHEDULE I --     DILIGENCE CERTIFICATE

Exhibit A     Supplement to Security Agreement
Exhibit B     Control Agreement (Securities Accounts)
Exhibit C     Control Agreement (Deposit Accounts)

                                       ii
<PAGE>

     This  PLEDGE  AND  SECURITY  AGREEMENT,  dated as of April 16,  2004  (this
"AGREEMENT"),  among  Diamond  Jo,  LLC, a Delaware  limited  liability  company
("DJL"),  The  Old  Evangeline  Downs  Capital  Corp.,  a  Delaware  corporation
("CAPITAL"  and,  together with DJL, the  "ISSUERS"),  OED  Acquisition,  LLC, a
Delaware limited  liability company ("OEDA"),  Peninsula Gaming  Corporation,  a
Delaware corporation ("PG CORP."), The Old Evangeline Downs, L.L.C., a Louisiana
limited liability company ("OED"),  and each additional Guarantor (as defined in
the Indenture  referred to below) and Issuer (as defined in the Indenture)  from
time to time party hereto pursuant to Section 5.2 (the Issuers,  OEDA, PG Corp.,
OED  and  each  such  additional  Guarantor  and  Issuer,  each a  "DEBTOR"  and
collectively,  the "DEBTORS"),  and U.S. Bank National  Association,  as Trustee
(together with any successor Trustee pursuant to the terms of the Indenture, the
"SECURED PARTY"),  acting in the capacity of collateral agent for the benefit of
itself and the Holders.

                                R E C I T A L S:

     WHEREAS, the Debtors and the Secured Party, have entered into an Indenture,
dated as of April 16, 2004 (as  amended,  restated,  supplemented  or  otherwise
modified  from time to time,  the  "INDENTURE"),  pursuant  to which the Issuers
incurred   indebtedness  for  certain  notes  (such  notes,  together  with  all
additional  notes and all other notes  issued  thereunder  in exchange  for such
notes and additional  notes,  the "NOTES") and the other Debtors have guaranteed
the payment of the Notes and the other Obligations thereunder;

     WHEREAS,  each Issuer desires to secure the Notes and its other Obligations
under the Indenture and each other Debtor desires to secure its guarantee  under
the  Indenture by granting to the Secured  Party,  for the benefit of itself and
the Holders, security interests in the Collateral as set forth herein;

     WHEREAS,  certain of the Debtors,  Wells Fargo  Foothill,  Inc. and certain
other financial  institutions  have entered into those certain Loan and Security
Agreements  dated as of February 23, 2001,  June 24, 2003 and September 22, 2003
(in each  case,  as  amended,  restated,  supplemented,  replaced  or  otherwise
modified from time to time, collectively, the "CREDIT AGREEMENT");

     WHEREAS,  the Secured Party,  the Credit Facility Secured Party and Debtors
have entered into that certain  Intercreditor  Agreement,  dated as of April 16,
2004 (as amended,  restated,  supplemented,  replaced or otherwise modified from
time to time,  the  "INTERCREDITOR  AGREEMENT"),  which  agreement,  among other
things, sets forth, as between the Secured Party and the Credit Facility Secured
Party,  the relative  priority of their  respective  Liens in the Collateral and
their rights with respect thereto;

     WHEREAS,  each Debtor  (other than  Company) is a Subsidiary of the Company
and will benefit from the proceeds of the Notes; and

     WHEREAS, to induce the Initial Purchaser to purchase the Notes, each Holder
to hold the Notes to be held by it and U.S. Bank National  Association to act in
its  capacity  as the  Secured  Party,  each  Debtor  desires to pledge,  grant,
transfer,  and assign to the Secured  Party,  for its benefit and the benefit of
the  Holders,  a security  interest  in the  Collateral  to secure  the  Secured
Obligations of such Debtor, as provided herein.

     NOW,  THEREFORE,  in  consideration  of the  premises  and the  agreements,
provisions  and covenants  herein  contained,  each Debtor and the Secured Party
agree as follows:

                                       1
<PAGE>

1.   DEFINITIONS

     1.1 GENERAL DEFINITIONS.  In this Agreement, the following terms shall have
the following meanings:

          "ACCOUNT  DEBTOR"  shall  mean  each  Person  who  is  obligated  on a
Receivables Contract or any Supporting Obligation related thereto.

          "ACCOUNTS"  shall mean all  "accounts"  as defined in Article 9 of the
UCC.

          "AGREEMENT" shall have the meaning set forth in the preamble.

          "BANKRUPTCY  CODE"  shall  mean  Title 11 of the  United  States  Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.

          "CASH PROCEEDS" shall mean all proceeds of any Collateral  received by
any Debtor consisting of cash, checks and other near-cash items.

          "CHATTEL PAPER" shall mean all "chattel paper" as defined in Article 9
of the  UCC,  including,  without  limitation,  "electronic  chattel  paper"  or
"tangible  chattel  paper",  as each term is defined in Revised Article 9 of the
UCC.

          "COLLATERAL" shall have the meaning set forth in Section 2.1 hereof.

          "COLLATERAL RECORDS" shall mean books,  records,  ledger cards, files,
correspondence,  customer lists, blueprints, technical specifications,  manuals,
computer software,  computer printouts, tapes, disks and related data processing
software  and similar  items that at any time  evidence  or contain  information
relating to any of the  Collateral or are otherwise  necessary or helpful in the
collection thereof or realization thereupon.

          "COLLATERAL  SUPPORT"  shall  mean all  property  (real  or  personal)
assigned,  hypothecated  or otherwise  securing any Collateral and shall include
any security  agreement or other agreement  granting a lien or security interest
in such real or personal property.

          "COMMERCIAL  TORT CLAIMS" shall mean all  "commercial  tort claims" as
defined in the UCC, including,  without  limitation,  all commercial tort claims
listed  and  described  with  specification  on  Schedule  E  of  the  Diligence
Certificate (as such schedule may be amended or supplemented from time to time).

          "COMMODITIES  ACCOUNTS"  (i) shall mean all  "commodity  accounts"  as
defined in Article 9 of the UCC and (ii) shall include, without limitation,  all
of the  accounts  listed on Schedule A of the  Diligence  Certificate  under the
heading "Commodities  Accounts" (as such schedule may be amended or supplemented
from time to time).

          "COMPANY"  shall  mean (i) until  Peninsula  Gaming,  LLC,  a Delaware
limited  liability  company  ("PGLLC"),  shall become a party hereto pursuant to
Section 5.2, DJL and (ii) thereafter, PGLLC.

          "CONTROLLED  FOREIGN   CORPORATION"  shall  mean  "controlled  foreign
corporation" as defined in the Tax Code.

                                       2
<PAGE>

          "COPYRIGHT  LICENSES" shall mean any and all agreements  providing for
the granting of any right in or to  Copyrights  (whether such Debtor is licensee
or licensor thereunder) including,  without limitation,  each agreement referred
to in Schedule B of the Diligence  Certificate  (as such schedule may be amended
or supplemented from time to time).

          "COPYRIGHTS"   shall  mean  all  United  States,   state  and  foreign
copyrights,  including but not limited to copyrights in software and  databases,
and all Mask Works (as defined under 17 U.S.C.  901 of the U.S.  Copyright Act),
whether  registered  or  unregistered,  and,  with respect to any and all of the
foregoing:  (i) all registrations and applications  therefor including,  without
limitation,  the  applications  referred  to  in  Schedule  B of  the  Diligence
Certificate (as such schedule may be amended or supplemented from time to time),
(ii) all extensions and renewals thereof, (iii) all rights corresponding thereto
throughout  the  world,  (iv) all  rights to sue for past,  present  and  future
infringements  thereof, (v) all licenses,  claims,  damages and proceeds of suit
arising  therefrom,  and (vi) all payments and rights to payments arising out of
the sale, lease, license, assignment, or other disposition thereof.

          "CREDIT  FACILITY  SECURED  PARTY"  shall  mean,  as the  context  may
require,  all or any of the Senior Lien Creditor  Representatives (as defined in
the Intercreditor Agreement).

          "DEPOSIT ACCOUNTS" shall mean all (i) "deposit accounts" as defined in
Article  9 of the UCC and (ii)  shall  include,  without  limitation,  all other
accounts  listed on Schedule A under the  heading  "Deposit  Accounts"  (as such
schedule may be amended or supplemented from time to time).

          "DILIGENCE  CERTIFICATE"  shall  mean the  Pre-Closing  UCC  Diligence
Certificate dated as of the date of this Agreement and executed by each Debtor.

          "DOCUMENTS"  shall mean all "documents" as defined in Article 9 of the
UCC.

          "EQUIPMENT"  shall mean:  (i) all  "equipment"  as defined in the UCC,
(ii)  all  machinery,   manufacturing  equipment,   data  processing  equipment,
computers, office equipment,  furnishings,  furniture,  appliances, fixtures and
tools (in each case,  regardless of whether characterized as equipment under the
UCC), (iii) slot machines,  electronic  gaming devices and related equipment and
(iv) all accessions or additions thereto,  all parts thereof,  whether or not at
any time of determination incorporated or installed therein or attached thereto,
and all replacements  therefor,  wherever  located,  now or hereafter  existing,
including any fixtures.

          "GAMING AUTHORITY" shall mean any agency,  authority,  board,  bureau,
commission,  department,  office or  instrumentality of any nature whatsoever of
the United States of America or foreign government,  any state,  province or any
city or other political  subdivision,  whether now or hereafter existing, or any
officer or official thereof,  including without limitation, the Louisiana Gaming
Control  Board and any other  agency  with  authority  to  regulate  any  gaming
operation  (or  proposed  gaming  operation)  owned,  managed or operated by the
Company or any of its Subsidiaries.

          "GAMING  LAWS"  shall  mean the  gaming  laws of any  jurisdiction  or
jurisdictions  to  which  the  Company,  any of its  Subsidiaries  or any of the
Guarantors is, or may at any time after the date hereof, be subject.

          "GAMING LICENSE" shall mean every license,  franchise, permit or other
authorization  required  to own,  lease,  operate or  otherwise  conduct  gaming
activities  of  the  Company  or  any of  its  Subsidiaries,  including  without
limitation,  all such  licenses  granted  under the  Louisiana  Video Draw Poker
Devices Control Act or the Louisiana  Pari-Mutuel Live Racing Facility  Economic
Redevelopment

                                       3
<PAGE>

and Gaming  Control Act (Slots at the Track) and  regulated  under the Louisiana
Gaming Control Law, the regulations  promulgated  pursuant to each such law, and
other applicable federal, state, foreign or local laws.

          "GENERAL  INTANGIBLES"  (i) shall mean all  "general  intangibles"  as
defined in Article 9 of the UCC and (ii) shall include, without limitation,  all
interest rate or currency protection or hedging  arrangements,  all tax refunds,
all licenses,  permits,  concessions and  authorizations,  and all  Intellectual
Property  (in  each  case,   regardless  of  whether  characterized  as  general
intangibles under the UCC) and exclude all Gaming Licenses held by a Debtor.

          "GOODS"  (i) shall mean all "goods" as defined in Article 9 of the UCC
and (ii) shall include, without limitation, all Inventory and Equipment (in each
case, regardless of whether characterized as goods under the UCC).

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

          "INDEMNITEE" shall mean the Secured Party, and its and its Affiliates'
officers,  directors,  employees and agents, and including, if the Secured Party
or its agent is a  partnership,  its  partners,  and if the Secured Party or its
agent is a trust, its trustee.

          "INDENTURE" shall have the meaning set forth in the preamble.

          "INDENTURE  DOCUMENTS"  shall  mean  the  Indenture,  the  Notes,  the
Security  Documents  and the  Registration  Rights  Agreement,  and  such  other
agreements,  instruments and certificates  executed and delivered (or issued) by
the Debtors pursuant to the Indenture or any of the foregoing,  as any or all of
the same may be amended, restated,  supplemented or otherwise modified from time
to time.

          "INSTRUMENTS"  shall mean all "instruments" as defined in Article 9 of
the UCC.

          "INSURANCE" shall mean: (i) all insurance policies covering any or all
of the  Collateral  (regardless  of whether the Secured  Party is the loss payee
thereof) and (ii) any key man life insurance policies.

          "INTELLECTUAL PROPERTY" shall mean, collectively,  the Copyrights, the
Copyright  Licenses,  the Patents,  the Patent  Licenses,  the  Trademarks,  the
Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses.

          "INVENTORY"  shall mean: (i) all "inventory" as defined in the UCC and
(ii) all goods  held for sale or lease or to be  furnished  under  contracts  of
service or so leased or furnished, all raw materials,  work in process, finished
goods,  and materials used or consumed in the  manufacture,  packing,  shipping,
advertising,  selling,  leasing,  furnishing or production of such  inventory or
otherwise  used or consumed  in any  Debtor's  business;  all goods in which any
Debtor  has an  interest  in mass or a joint or other  interest  or right of any
kind;  and all goods which are  returned to or  repossessed  by any Debtor,  all
computer programs embedded in any goods and all accessions  thereto and products
thereof (in each case,  regardless of whether  characterized  as inventory under
the UCC).

                                       4
<PAGE>

          "INVESTMENT   RELATED   PROPERTY"  shall  mean:  (i)  all  "investment
property"  (as such term is defined  in  Article 9 of the UCC);  (ii) all of the
following  (regardless  of whether  classified as investment  property under the
UCC):  all  Pledged  Equity  Interests,  Pledged  Debt,  the  Deposit  Accounts,
Securities Accounts, Commodities Accounts and certificates of deposit.

          "LEGAL  REQUIREMENTS"  means  all  applicable  restrictive  covenants,
applicable zoning and subdivision  ordinances and building codes, all applicable
health and  environmental  laws and  regulations,  all  applicable  Racing Laws,
Gaming  Laws  and  applicable  regulations,   and  all  other  applicable  laws,
ordinances,  rules, regulations,  judicial decisions,  administrative orders and
other  requirements of any Governmental  Authority having  jurisdiction over any
Debtor,  the Collateral and/or any Affiliate of such Debtor, in effect either at
the time of execution of this Agreement or at any time during the term hereof.

          "LETTER  OF  CREDIT  RIGHT"  shall  mean  "letter-of-credit  right" as
defined in the UCC.

          "MATERIAL  COLLATERAL  CONTRACT"  shall  mean  any  contract  or other
arrangement  to which any  Debtor is a party for which  breach,  nonperformance,
cancellation or failure to renew could reasonably be expected to have a Material
Adverse Effect.

          "MONEY" shall mean "money" as defined in the UCC.

          "PATENT LICENSES" shall mean all agreements providing for the granting
of any right in or to Patents  (whether  such  Debtor is  licensee  or  licensor
thereunder)  including,  without  limitation,  each  agreement  referred  to  in
Schedule B of the  Diligence  Certificate  (as such  schedule  may be amended or
supplemented from time to time).

          "PATENTS"  shall  mean all  United  States  and  foreign  patents  and
certificates of invention, or similar industrial property rights, including, but
not  limited  to  each  patent  referred  to  in  Schedule  B of  the  Diligence
Certificate (as such schedule may be amended or supplemented from time to time),
and with respect to any and all of the foregoing, (i) all applications therefore
including, without limitation, the patent applications referred to in Schedule B
of the Diligence  Certificate  (as such schedule may be amended or  supplemented
from   time   to   time),   (ii)   all   reissues,   divisions,   continuations,
continuations-in-part,  extensions,  renewals, and reexaminations  thereof, (ii)
all rights  corresponding  thereto throughout the world, (ii) all inventions and
improvements  described  therein,  (iv) all rights to sue for past,  present and
future infringements thereof, (v) all licenses, claims, damages, and proceeds of
suit arising therefrom, and (vi) all payments and rights to payments arising out
of the sale, lease, license, assignment, or other disposition thereof.

          "PAYMENT INTANGIBLE" shall have the meaning specified in the UCC.

          "PLEDGED  DEBT"  shall  mean  all  Indebtedness  owed to such  Debtor,
including,  without limitation,  all Indebtedness described on Schedule A of the
Diligence  Certificate under the heading "Pledged Debt and Instruments" (as such
schedule  may be  amended  or  supplemented  from time to  time),  issued by the
obligors named therein,  the instruments  evidencing such Indebtedness,  and all
interest,  cash,  instruments  and other  property or proceeds from time to time
received,  receivable or otherwise  distributed in respect of or in exchange for
any or all of such Indebtedness.

          "PLEDGED EQUITY  INTERESTS" shall mean all Pledged Stock,  Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests.

                                       5
<PAGE>

          "PLEDGED  LLC  INTERESTS"  shall  mean all  interests  in any  limited
liability company including,  without limitation,  all limited liability company
interests  listed on Schedule A of the Diligence  Certificate  (as such schedule
may be amended or supplemented from time to time) and the certificates,  if any,
representing  such limited  liability company interests and any interest of such
Debtor on the books and  records  of such  limited  liability  company or on the
books and records of any securities intermediary pertaining to such interest and
all dividends,  distributions,  cash, warrants,  rights,  options,  instruments,
securities and other property or proceeds from time to time received, receivable
or  otherwise  distributed  in respect of or in exchange  for any or all of such
limited liability company interests.

          "PLEDGED  PARTNERSHIP  INTERESTS"  shall  mean  all  interests  in any
general partnership, limited partnership, limited liability partnership or other
partnership including,  without limitation,  all partnership interests listed on
Schedule A of the  Diligence  Certificate  (as such  schedule  may be amended or
supplemented from time to time) and the certificates,  if any, representing such
partnership  interests  and any interest of such Debtor on the books and records
of such  partnership or on the books and records of any securities  intermediary
pertaining to such interest and all dividends,  distributions,  cash,  warrants,
rights,  options,  instruments,  securities  and other property or proceeds from
time to time received,  receivable or otherwise  distributed in respect of or in
exchange for any or all of such partnership interests.

          "PLEDGED  TRUST  INTERESTS"  shall  mean all  interests  in a Delaware
business trust or other trust including, without limitation, all trust interests
listed on  Schedule A of the  Diligence  Certificate  (as such  schedule  may be
amended  or  supplemented  from  time to  time)  and the  certificates,  if any,
representing  such trust  interests and any interest of such Debtor on the books
and  records  of such  trust  or on the  books  and  records  of any  securities
intermediary pertaining to such interest and all dividends, distributions, cash,
warrants,  rights,  options,  instruments,  securities  and  other  property  or
proceeds  from time to time  received,  receivable or otherwise  distributed  in
respect of or in exchange for any or all of such trust interests.

          "PLEDGED  STOCK" shall mean all shares of capital  stock owned by such
Debtor, including,  without limitation, all shares of capital stock described on
Schedule A of the  Diligence  Certificate  (as such  schedule  may be amended or
supplemented from time to time), and the certificates, if any, representing such
shares and any interest of such Debtor in the entries on the books of the issuer
of such shares or on the books of any securities intermediary pertaining to such
shares,  and all dividends,  distributions,  cash,  warrants,  rights,  options,
instruments,  securities  and  other  property  or  proceeds  from  time to time
received,  receivable or otherwise  distributed in respect of or in exchange for
any or all of such shares.

          "PROCEEDS"  shall mean:  (i) all "proceeds" as defined in Article 9 of
the UCC,  (ii)  payments or  distributions  made with respect to any  Investment
Related Property and (iii) whatever is receivable or received when Collateral or
proceeds are sold,  exchanged,  collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.

          "RACING  AUTHORITY"  means  any  agency,  authority,   board,  bureau,
commission,  department,  office or  instrumentality of any nature whatsoever of
the United States of America or foreign government,  any state,  province or any
city or other political  subdivision,  whether now or hereafter existing, or any
officer or official thereof,  including without limitation,  the Louisiana State
Racing   Commission  and  any  other  agency  with  authority  to  regulate  any
pari-mutuel  wagering operation (or proposed  pari-mutuel  wagering  operation),
including  operations  at live horse racing and  off-track  betting  facilities,
owned, managed or operated by the Company or any of its Subsidiaries.

                                       6
<PAGE>

          "RACING LAW" means the  pari-mutuel  wagering  laws,  including  those
governing  operations at live horse racing and off-track betting facilities,  of
any jurisdiction or jurisdictions to which the Company,  any of its Subsidiaries
or any of the  Guarantors  is,  or may at any time  after  the date  hereof,  be
subject.

          "RACING  LICENSE"  means  any  license,  permit,  franchise  or  other
authorization  required to own,  lease,  or operate or otherwise  conduct racing
activities,  including  pari-mutuel wagering activities,  of the Company and its
Subsidiaries, including, without limitation, all such licenses granted under the
Louisiana  horse racing and  off-track  betting  statutes  and  regulated by the
regulations promulgated pursuant to such statutes, and other Legal Requirements,
including all applicable liquor and tobacco permits.

          "RECEIVABLES  CONTRACTS"  shall mean all (i)  Accounts,  (ii)  Chattel
Paper,  (iii) Payment  Intangibles,  (iv)  Instruments and (v) to the extent not
otherwise  covered above, all other rights to payment,  whether or not earned by
performance,  for goods or other property sold,  leased,  licensed,  assigned or
otherwise disposed of, or services rendered or to be rendered, regardless of how
classified under the UCC;  together with all of such Debtors' rights, if any, in
any  goods or other  property  giving  rise to such  right  to  payment  and all
Collateral   Support  and  Supporting   Obligations   related  thereto  and  all
Receivables Records;  provided,  however,  that Receivables  Contracts shall not
include any Investment Related Property.

          "RECEIVABLES  RECORDS"  shall  mean  (i) all  original  copies  of all
documents,  instruments or other writings or electronic records or other Records
evidencing the Receivables Contracts, (ii) all books, correspondence,  credit or
other  files,  Records,  ledger  sheets or  cards,  invoices,  and other  papers
relating to Receivables  Contracts,  including,  without limitation,  all tapes,
cards, computer tapes, computer discs, computer runs, record keeping systems and
other papers and documents relating to the Receivables Contracts, whether in the
possession  or under the control of Debtor or any computer  bureau or agent from
time to time acting for Debtor or  otherwise,  (iii) all evidences of the filing
of UCC  financing  statements  and the  registration  of  other  instruments  in
connection  therewith,  and  amendments,   supplements  or  other  modifications
thereto,  notices to other  creditors  or  secured  parties,  and  certificates,
acknowledgments,  or other writings,  including, without limitation, lien search
reports,   from  filing  or  other  registration   officers,   (iv)  all  credit
information, reports and memoranda relating thereto and (v) all other written or
non-written  forms of  information  related in any way to the  foregoing  or any
Receivable.

          "RECORD" shall have the meaning specified in Article 9 of the UCC.

          "SECURED  OBLIGATIONS" shall have the meaning set forth in Section 3.1
hereof.

          "SECURED PARTY" has the meaning set forth in the preamble.

          "SECURITIES"  shall mean any  stock,  shares,  partnership  interests,
voting trust  certificates,  certificates  of interest or  participation  in any
profit-sharing agreement or arrangement,  options,  warrants, bonds, debentures,
notes, or other evidences of  indebtedness,  secured or unsecured,  convertible,
subordinated  or  otherwise,  or in general any  instruments  commonly  known as
"securities"  or any  certificates  of  interest,  shares or  participations  in
temporary or interim  certificates  for the purchase or  acquisition  of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

          "SECURITIES  ACCOUNTS"  (i) shall mean all  "securities  accounts"  as
defined in Article 8 of the UCC and (ii) shall include, without limitation,  all
of the accounts listed on Schedule A under the heading "Securities Accounts" (as
such schedule may be amended or supplemented from time to time).

                                       7
<PAGE>

          "SOFTWARE  EMBEDDED IN GOODS"  means,  with respect to any Goods,  any
computer  program embedded in Goods and any supporting  information  provided in
connection  with a  transaction  relating  to the  program if (i) the program is
associated  with the Goods in such a manner that it  customarily  is  considered
part of the Goods or (ii) by becoming the owner of the Goods a person acquires a
right to use the program in connection with the Goods.

          "SUPPLEMENT TO SECURITY  AGREEMENT"  shall mean any supplement to this
agreement in substantially the form of Exhibit A.

          "SUPPORTING  OBLIGATION"  shall mean all  "supporting  obligations" as
defined in the UCC.

          "TAX CODE" shall mean the United States Internal Revenue Code of 1986,
as amended from time to time.

          "TRADEMARK  LICENSES" shall mean any and all agreements  providing for
the granting of any right in or to  Trademarks  (whether such Debtor is licensee
or licensor thereunder) including,  without limitation,  each agreement referred
to in Schedule B of the Diligence  Certificate  (as such schedule may be amended
or supplemented from time to time).

          "TRADEMARKS"   shall  mean  all  United  States,   state  and  foreign
trademarks,  trade  names,  corporate  names,  company  names,  business  names,
fictitious business names,  Internet domain names, service marks,  certification
marks,  collective marks, logos, other source or business  identifiers,  designs
and general intangibles of a like nature, all registrations and applications for
any of the  foregoing  including,  but  not  limited  to the  registrations  and
applications  referred to in Schedule B of the  Diligence  Certificate  (as such
schedule may be amended or  supplemented  from time to time),  all extensions or
renewals of any of the foregoing,  all of the goodwill of the business connected
with the use of and  symbolized  by the  foregoing,  the  right to sue for past,
present and future  infringement  or dilution of any of the foregoing or for any
injury to  goodwill,  and all  proceeds  of the  foregoing,  including,  without
limitation, licenses, royalties, income, payments, claims, damages, and proceeds
of suit.

          "TRADE SECRET  LICENSES"  shall mean any and all agreements  providing
for the  granting of any right in or to Trade  Secrets  (whether  such Debtor is
licensee or licensor thereunder) including,  without limitation,  each agreement
referred to in Schedule B of the Diligence  Certificate (as such schedule may be
amended or supplemented from time to time).

          "TRADE   SECRETS"   shall  mean  all  trade   secrets  and  all  other
confidential  or proprietary  information and know-how now or hereafter owned by
or used in, the business of such Debtor (all of the foregoing being collectively
called a "Trade Secret"), whether or not such Trade Secret has been reduced to a
writing or other  tangible form,  including all documents and things  embodying,
incorporating,  or referring in any way to such Trade  Secret,  the right to sue
for past, present and future  infringement of any Trade Secret, and all proceeds
of the foregoing,  including, without limitation,  licenses,  royalties, income,
payments, claims, damages, and proceeds of suit.

          "UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, if by reason of mandatory provisions of
law,  the  perfection  or the  effect of  perfection  or  non-perfection  of the
security  interests in any  Collateral or the priority of security  interests in
any  Collateral  is governed by the  Uniform  Commercial  Code as in effect in a
jurisdiction  other than New York, "UCC" shall mean the Uniform  Commercial Code
as in effect in such other  jurisdiction  for purposes of the provisions  hereof
relating  to such  perfection  or  effect of  perfection  or  non-perfection  or
priority.

                                       8
<PAGE>

     1.2  DEFINITIONS;   INTERPRETATION.   All  capitalized  terms  used  herein
(including  the preamble and recitals  hereto) and not otherwise  defined herein
shall have the meanings  ascribed  thereto in the  Indenture  or, if not defined
therein, in the UCC. References to "Sections,"  "Exhibits" and "Schedules" shall
be to Sections,  Exhibits and  Schedules,  as the case may be, of this Agreement
unless otherwise specifically  provided.  Section headings in this Agreement are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
Any of the terms defined herein may, unless the context otherwise  requires,  be
used in the singular or the plural,  depending on the reference.  The use herein
of the word "include" or "including", when following any general statement, term
or matter, shall not be construed to limit such statement, term or matter to the
specific  items or  matters  set  forth  immediately  following  such word or to
similar items or matters,  whether or not nonlimiting language (such as "without
limitation"  or "but not  limited  to" or words of similar  import) is used with
reference  thereto,  but rather  shall be deemed to refer to all other  items or
matters that fall within the broadest possible scope of such general  statement,
term or matter.  If any conflict or inconsistency  exists between this Agreement
and the  Indenture,  the  Indenture  shall  govern.  All  references  herein  to
provisions  of  the  UCC  shall  include  all  successor  provisions  under  any
subsequent version or amendment to any Article of the UCC.

2.   GRANT OF SECURITY

     2.1 GRANT OF  SECURITY.  Subject to  applicable  Gaming  Laws,  each Debtor
hereby grants to the Secured Party a security  interest and  continuing  lien on
all of such Debtor's right,  title and interest in, to and under all property of
such Debtor  including,  but not limited to the following,  in each case whether
now owned or existing or  hereafter  acquired  or arising and  wherever  located
(such Debtor's "COLLATERAL"):

            (i)   Accounts;

            (ii)  Chattel  Paper,  together  with  all  returned,   rejected  or
                  repossessed goods, the sale or lease of which shall have given
                  or shall  give rise to chattel  paper,  and all  property  and
                  goods both now owned and  hereafter  acquired  by the  Debtors
                  which  are  sold,  leased,  secured,  or  the  subject  of  or
                  otherwise  covered by, the Debtors'  Chattel  Paper,  together
                  with all  reversionary  rights embodied  therein and all other
                  rights incident to such property and goods;

            (iii) Documents;

            (iv)  Goods  (including  Documents  Representing  Goods and Software
                  Embedded in Goods);

            (v)   Instruments;

            (vi)  Insurance;

            (vii) Intellectual Property;

            (viii) Investment Related Property;

            (ix)  judgments;

                                       9
<PAGE>

            (x)   Letter of Credit Rights;

            (xi)  Money;

            (xii) Receivables Contracts and Receivable Records;

            (xiii) Commercial Tort Claims;

            (xiv) to the  extent  not  otherwise  included  above,  all  General
                  Intangibles,  Material Collateral Contracts and other personal
                  property of any kind;

            (xv)  to the extent not otherwise  included  above,  all  Collateral
                  Records,   Collateral   Support  and  Supporting   Obligations
                  relating to any of the foregoing; and

            (xvi) to the extent not  otherwise  included  above,  all  Proceeds,
                  products,  accessions,  rents and  profits of or in respect of
                  any of the foregoing.

     2.2 CERTAIN LIMITED EXCLUSIONS.  (a) Notwithstanding anything herein to the
contrary,  in no event  shall the  Collateral  include,  and no Debtor  shall be
deemed to have granted a security interest in, any of such Debtor's right, title
or interest  in: (i) any  Intellectual  Property  if the grant of such  security
interest  shall  constitute  or  result  in  the  abandonment,  invalidation  or
rendering unenforceable any right, title or interest of any Debtor therein or if
such a grant, under the terms of such Intellectual Property license, contract or
agreement  results in a breach or  termination of the terms of, or constitutes a
default under or termination of any such Intellectual Property license, contract
or  agreement  (other than to the extent that the terms under such  Intellectual
Property  license,  contract or  agreement  that  restricts  such grant would be
rendered  ineffective  pursuant  to  Section  9-406  or 9-408 of the UCC (or any
successor  provision or  provisions) of any relevant  jurisdiction  or any other
applicable law (including  the Bankruptcy  Code) or principles of equity);  (ii)
any license, contract,  agreement,  lease, Permit or other assets or property to
which  such  Debtor  is a party or any of its  rights or  interests  thereunder,
including, without limitation, with respect to any Pledged Partnership Interests
or any Pledged LLC Interests, to the extent, but only to the extent, that such a
grant, under the terms of such license,  contract,  agreement,  lease, Permit or
other  assets  or  property  (including,  without  limitation,  any  partnership
agreements or any limited liability company agreements),  or otherwise,  results
in a breach or  termination  of the terms of, or  constitutes a default under or
termination of any such license,  contract,  agreement,  lease,  Permit or other
assets or  property,  without  the  consent of third  parties  that has not been
obtained (including  applicable Gaming Authorities,  Racing Authorities,  liquor
agencies and authorities and other Governmental  Authorities) (other than to the
extent  that any such term would be  rendered  ineffective  pursuant  to Section
9-406 or 9-408 of the UCC (or any  successor  provision  or  provisions)  of any
relevant  jurisdiction  or any other  applicable  law  (including the Bankruptcy
Code) or  principles  of equity);  provided,  that each Debtor agrees to use all
commercially reasonable efforts (which shall not require the payment of cash to,
or the reimbursement of fees and expenses of, the consenting party or the making
of any material concessions under any such license, contract,  agreement, lease,
Permit  or  other  assets  or  property  (including,   without  limitation,  any
partnership  agreements,  any limited liability company agreements or any of the
parcels of the Warner  Land that are subject to the  mortgage  granted by OED to
the seller of such land)) to obtain all requisite  consent to enable such Debtor
to provide a security interest in such asset and, in any event, immediately upon
the  ineffectiveness,  lapse or  termination  of any such  provision of any such
license,  contract,  agreement,  lease, Permit or other assets or property,  the
Collateral  shall  include,  and such Debtor  shall be deemed to have  granted a
security interest in, all such rights and interests in, under or with respect to
such license, contract,  agreement, lease, Permit or other assets or property as
if such provision

                                       10
<PAGE>

had never been in effect;  (iii) in any of the outstanding  capital stock of any
Controlled  Foreign  Corporation in excess of 65% of the total  combined  voting
power of all classes of capital  stock of such  Controlled  Foreign  Corporation
entitled to vote; provided,  however,  that if the Company is able to receive an
opinion of counsel  nationally  recognized in tax matters to the effect that the
pledge of such excess will not result in an income  inclusion  under section 951
et. seq. of the Code, the Collateral  shall include,  and the applicable  Debtor
shall be deemed to have granted a security interest in, such greater  percentage
of  capital  stock of such  Controlled  Foreign  Corporation;  (iv)  any  assets
securing FF&E Financing, Purchase Money Obligations or Capital Lease Obligations
permitted  to be  incurred  under  the  Indenture  to  the  extent  acquired  or
refinanced with the proceeds of such FF&E Financing,  Purchase Money Obligations
and Capital Lease  Obligations;  (v) any Gaming License or Racing License;  (vi)
the  lease  for  the  Company's  off-track  betting  operations  at New  Iberia,
Louisiana  or any other  leases of  off-track  betting  parlors  operated by the
Company in any other location in the future;  (vii) FF&E to the extent  securing
FF&E Financing  permitted under the Indenture;  (viii) any motor vehicles;  (ix)
any cash (other than cash deposited in deposit  accounts);  or (x) OEDA's rights
under or in respect of the Management  Services  Agreement and proceeds  thereof
(including fees paid to OEDA pursuant thereto).

     2.3  INTERCREDITOR  AGREEMENT.   Notwithstanding  anything  herein  to  the
contrary,  the relative  rights and remedies of the Secured Party  hereunder and
the Credit Facility  Secured Party shall be subject to and governed by the terms
of the  Intercreditor  Agreement at any time the  Intercreditor  Agreement is in
effect,  and in the event of any inconsistency  between the terms hereof and the
Intercreditor  Agreement,  the Intercreditor Agreement shall control at any time
the Intercreditor Agreement is in effect.

3.   SECURITY FOR OBLIGATIONS

     3.1 SECURITY FOR OBLIGATIONS. This Agreement secures, and the Collateral is
collateral  security for, the prompt and complete payment or performance in full
when due,  whether at stated  maturity,  by  required  prepayment,  declaration,
acceleration,  demand or otherwise  (including the payment of amounts that would
become due but for the operation of the automatic  stay under Section  362(a) of
the Bankruptcy Code, 11 U.S.C. ss.362(a) (and any successor provision thereof)),
of all  obligations  and  liabilities  of every  nature  of each  Debtor  now or
hereafter existing under the Indenture Documents to which such Debtor is a party
(all such obligations and liabilities being the "SECURED OBLIGATIONS").

     3.2 OBLIGATIONS REMAIN. Notwithstanding anything herein to the contrary,

          (a) each Debtor shall remain liable under any partnership agreement or
limited liability company agreement relating to any Pledged Partnership Interest
or Pledged LLC Interest  and/or any other  contracts and agreements  included in
the  Collateral,  to the extent set forth therein,  to perform all of its duties
and obligations  thereunder to the same extent as if this Agreement had not been
executed;

          (b) the exercise by the Secured  Party of any of its rights  hereunder
shall not  release any Debtor  from any of its duties or  obligations  under the
contracts and agreements  included in the  Collateral  until title or all rights
thereto has been  transferred from such Debtor in accordance with such contracts
or agreements; and

          (c) the Secured Party shall not have any obligation or liability under
any partnership agreement or limited liability company agreement relating to any
Pledged  Partnership  Interests or Pledged LLC Interests or any other  contracts
and  agreements  included in the  Collateral by reason of this  Agreement or any
other Security  Document,  nor shall the Secured Party be obligated to assume or
perform any of the obligations or duties of any Debtor thereunder or to take any
action to collect or

                                       11
<PAGE>

enforce any claim for payment assigned  hereunder by reason of this Agreement or
any other Security Document.

4.   REPRESENTATIONS AND WARRANTIES AND COVENANTS

     4.1 GENERALLY.

          (a) Representations and Warranties.  Each Debtor hereby represents and
warrants, on the Issue Date, that:

            (i)   it  owns  the  Collateral  purported  to  be  owned  by  it or
                  otherwise  has the rights it  purports to have in each item of
                  Collateral  and, as to all Collateral  whether now existing or
                  hereafter  acquired,  will continue to own or have such rights
                  in each item of the Collateral, in each case free and clear of
                  any and all Liens, rights or claims of all other Persons other
                  than Permitted Liens,  including,  without  limitation,  liens
                  arising as a result of such Debtor becoming bound (as a result
                  of merger or otherwise)  as debtor under a security  agreement
                  entered into by another Person;

            (ii)  it has indicated in Section I of the Diligence Certificate (as
                  such  schedule  may be  amended or  supplemented  from time to
                  time): (w) the taxpayer  identification  number of such Debtor
                  and the organization  identification number of such Debtor, if
                  any, provided by the Secretary of State of such Debtor's state
                  of organization,  (x) the type of organization of such Debtor,
                  (y) the  jurisdiction  of  organization of such Debtor and (z)
                  the jurisdiction  where the chief executive office or its sole
                  place of  business,  as the case may be,  is, and for the five
                  (5)-year period preceding the date hereof has been, located.

            (iii) the full legal name of such  Debtor is as set forth in Section
                  I of the Diligence Certificate and it has not done in the last
                  five (5) years, and does not do, business under any other name
                  (including any trade-name or fictitious  business name) except
                  for  those  names  set  forth in  Section  I of the  Diligence
                  Certificate  (as such schedule may be amended or  supplemented
                  from time to time);

            (iv)  the names of all  companies  with which such Debtor has merged
                  or consolidated in the last five (5) years,  together with the
                  dates  of such  mergers  or  consolidations  are set  forth in
                  Section I of the Diligence Certificate;

            (v)   the  location(s)  at which such Debtor has kept or  maintained
                  Equipment  or  Inventory  in the last five (5)  years  that is
                  Collateral  under this Agreement is set forth in Section II of
                  the Diligence Certificate;

            (vi)  such  Debtor  has not  within  the last five (5) years  become
                  bound  (whether as a result of merger or  otherwise) as debtor
                  under a security  agreement  entered  into by another  Person,
                  which has not  heretofore  or  concurrently  with the delivery
                  hereof been terminated;

                                       12
<PAGE>

            (vii) the  security   interests   granted  by  each  Debtor  in  the
                  Collateral   of  such  Debtor  to  Secured   Party   hereunder
                  constitute   valid  security   interests  in  such  Collateral
                  securing  the  payment  of the  Secured  Obligations  of  such
                  Debtor,  and upon the filing of all UCC  financing  statements
                  naming  such  Debtor  as  "debtor"  and the  Secured  Party as
                  "secured  party" and describing  such Collateral in the filing
                  offices set forth  opposite such Debtor's name in Section I of
                  the Diligence  Certificate  (as such section may be amended or
                  supplemented from time to time) and, to the extent not subject
                  to Article 9 of the UCC, upon the  recordation of the security
                  interest   granted   hereunder  in  Patents,   Trademarks  and
                  Copyrights in the applicable  patent,  trademark and copyright
                  registries  (including  the United States Patent and Trademark
                  Office  and  the  United  States  Copyright  Office),  and the
                  registration of all unregistered  Copyrights and other filings
                  delivered by such Debtor,  the security  interests  granted to
                  the  Secured  Party  hereunder   constitute   perfected  Liens
                  (subject in the case of priority  only to Permitted  Liens) on
                  all such Collateral (other than Collateral  constituting goods
                  covered by certificates  of title,  Money,  deposit  accounts,
                  Letter of Credit Rights and insurance policies);

            (viii)all actions,  consents and  approvals,  including all filings,
                  notices,   registrations  and  recordings  necessary  for  the
                  exercise  by the Secured  Party of the voting or other  rights
                  provided for in this  Agreement or the exercise of remedies in
                  respect of the Collateral have been made or obtained except to
                  the extent any actions, consents or approvals are required (A)
                  in the case of any  action,  to be  performed  by the  Secured
                  Party or (B) under applicable  Gaming Laws, the  Intercreditor
                  Agreement or any Intellectual  Property  license,  contract or
                  agreement;

            (ix)  other than the UCC financing  statements filed in favor of the
                  Secured Party, no effective UCC financing  statement,  fixture
                  filing  or  other  instrument  similar  in  effect  under  any
                  applicable  law covering all or any part of the  Collateral is
                  on file in any filing or recording  office  except for (x) UCC
                  financing  statements for which proper termination  statements
                  have been  delivered  to the Secured  Party for filing and (y)
                  UCC financing  statements  filed in connection  with Permitted
                  Liens;

            (x)   no  authorization,  approval or other action by, and no notice
                  to or filing with, any Governmental  Authority is required for
                  either  (i) the  pledge  or grant by any  Debtor  of the Liens
                  purported  to  be  created  in  favor  of  the  Secured  Party
                  hereunder or (ii) the exercise by Secured  Party of any rights
                  or remedies in respect of any Collateral (whether specifically
                  granted or created  hereunder  or created or  provided  for by
                  applicable  law),  except (A) for the filings  contemplated by
                  clause (vii) above, (B) as may be required, in connection with
                  the disposition of any Investment  Related  Property,  by laws
                  generally  affecting the offering and sale of Securities,  (C)
                  to the extent any  authorizations,  consents or approvals  are
                  required  under  applicable  Gaming  Laws,  the  Intercreditor
                  Agreement or any Intellectual  Property  license,  contract or
                  agreement and (D) to the extent any actions are required to be
                  performed by the Secured Party;

                                       13
<PAGE>

            (xi)  all written information supplied by any Debtor with respect to
                  any of the  Collateral  (in each  case  taken as a whole  with
                  respect to any particular Collateral) is accurate and complete
                  in all material respects; and

            (xii) none of the  Collateral  constitutes,  or is the  Proceeds of,
                  "farm products" (as defined in the UCC).

          (b) Covenants and Agreements.  Each Debtor hereby covenants and agrees
that until the Secured Obligations have been paid in full:

            (i)   except for the security interest created by this Agreement, it
                  shall  not  create  or  suffer  to exist any Lien upon or with
                  respect to any of the Collateral, except Permitted Liens;

            (ii)  it shall not produce,  use or permit any Collateral to be used
                  unlawfully or in violation of any provision of this  Agreement
                  or any  applicable  statute,  regulation  or  ordinance or any
                  policy of insurance covering the Collateral;

            (iii) it  shall  (A)  not  change  such  Debtor's  name,   identity,
                  corporate structure, sole place of business or chief executive
                  office,  as the case may be, or  jurisdiction  of organization
                  unless  it  shall  have  (1)  notified  the  Secured  Party in
                  writing,  by executing  and  delivering to the Secured Party a
                  completed  Supplement to Security Agreement,  substantially in
                  the form of  Exhibit  A  attached  hereto,  together  with all
                  Supplements  to Schedules  thereto,  at least thirty (30) days
                  prior to any such change,  identifying such new proposed name,
                  identity, corporate structure, sole place of business or chief
                  executive  office,  as the case  may be,  or  jurisdiction  of
                  organization   and  providing   such  other   information   in
                  connection  therewith  as the  Secured  Party  may  reasonably
                  request or (2) taken all actions  necessary  or  advisable  to
                  maintain the continuous validity and perfection of the Secured
                  Party's  security  interest in the  Collateral  intended to be
                  granted and agreed to hereby and (B) notify the Secured  Party
                  of any tradename established by such Debtor within thirty (30)
                  days following such establishment;

            (iv)  upon  such  Debtor or any  officer  of such  Debtor  obtaining
                  knowledge  of any event not  generally  known to the public at
                  large,  it shall promptly  notify the Secured Party in writing
                  of any such event that could  reasonably be expected to have a
                  material  adverse  effect  on (A) the  value of a  significant
                  portion of the  Collateral,  (B) the  ability of any Debtor or
                  the  Secured  Party  to  dispose  of  the  Collateral  or  any
                  significant  portion  thereof  pursuant to  applicable  law or
                  agreements  that could  reasonably  be expected to affect such
                  ability or (C) the rights and remedies of the Secured Party in
                  relation to the Collateral or any significant portion thereof,
                  including,  without limitation,  the levy of any legal process
                  against the Collateral or any significant portion thereof;

            (v)   it shall use commercially  reasonable efforts (which shall not
                  require the payment of cash to, or the  reimbursement  of fees
                  and expenses of, such

                                       14
<PAGE>

                  landlord or the making of any material  concessions  under any
                  such lease) to deliver to the Secured Party landlord consents,
                  to the extent it occupies and has business  activities  on any
                  premises as a lessee  under a lease,  executed by the landlord
                  in respect of such lease the effect of which would subordinate
                  the claims of such  landlord to the Liens  created  under this
                  Agreement and enable the Secured Party to access such premises
                  without delay for the purpose of enforcing such Liens; and

            (vi)  it shall, on request of the Secured Party, cause other Persons
                  (including  without  limitation  those  in  possession  of any
                  Collateral)  to execute  and  deliver in favor of the  Secured
                  Party   acknowledgments,   consents  and  control   agreements
                  necessary,   or  desirable  and  commercially   reasonable  in
                  furtherance  of the  purposes of this  Agreement.  All matters
                  shall be in form and  substance  reasonably  acceptable to the
                  Secured Party and shall be at such Debtor's cost.

     4.2 EQUIPMENT AND INVENTORY.

          (a)  Representations  and  Warranties.   Each  Debtor  represents  and
warrants, on the Issue Date, that:

            (i)   all of the Equipment and Inventory  included in the Collateral
                  is kept only at the  locations  specified in Schedule C of the
                  Diligence Certificate; and

            (ii)  any Goods now or hereafter  produced by any Debtor included in
                  the  Collateral  have been and will be produced in  compliance
                  with the  requirements  of the Fair Labor  Standards  Act,  as
                  amended.

          (b) Covenants and Agreements. Each Debtor covenants and agrees that:

            (i)   it shall not deliver any Document evidencing any Equipment and
                  Inventory to any Person other than the issuer of such Document
                  to claim the Goods evidenced  therefor or the Secured Party or
                  the  Credit  Facility  Secured  Party or any  other  holder or
                  representative of a holder of a Permitted Lien; and

            (ii)  if any  Equipment or Inventory is in  possession or control of
                  any  third  party  (other  than the  Credit  Facility  Secured
                  Party),  it shall join with the Secured Party in notifying the
                  third party of the Secured Party's  security  interest and use
                  its commercially  reasonable  efforts (which shall not require
                  the  payment  of cash  to,  or the  reimbursement  of fees and
                  expenses  of, such third  party or the making of any  material
                  concessions  under any contract or agreement  relating to such
                  Equipment or  Inventory) in obtaining an  acknowledgment  from
                  the third party that it is holding the Equipment and Inventory
                  for the  benefit  of the  Secured  Party and other  holders of
                  Permitted Liens.

                                       15
<PAGE>

     4.3 RECEIVABLES  CONTRACTS.  Covenants and  Agreements:  Each Debtor hereby
covenants and agrees that until the Secured  Obligations have been paid in full,
it shall keep and maintain at its own cost and expense satisfactory and complete
records of the Receivables Contracts.

     4.4 INVESTMENT RELATED PROPERTY.

          (a) Representations and Warranties.  Each Debtor hereby represents and
warrants, on the Issue Date, that:

            (i)   Schedule A of the Diligence  Certificate (as such schedule may
                  be amended or  supplemented  from time to time) sets forth all
                  of  the  Pledged  Stock,   Pledged  LLC   Interests,   Pledged
                  Partnership Interests and Pledged Trust Interests owned by any
                  Debtor  and  such  Pledged  Equity  Interests  constitute  the
                  percentage  of  issued  and   outstanding   shares  of  stock,
                  percentage of membership interests,  percentage of partnership
                  interests  or  percentage   of  beneficial   interest  of  the
                  respective issuers thereof indicated on such Schedule;

            (ii)  it is the record and  beneficial  owner of the Pledged  Equity
                  Interests free of all Liens, rights or claims of other Persons
                  other than Permitted Liens;

            (iii) without  limiting  the  generality  of Section  4.1(a)(v),  no
                  consent of any Person  including  any other general or limited
                  partner,  any other member of a limited liability company, any
                  other  shareholder or any other trust beneficiary is necessary
                  in connection  with the creation or perfection of the security
                  interest of the Secured Party in any Pledged Equity  Interests
                  or the  exercise by the  Secured  Party of the voting or other
                  rights  provided  for in this  Agreement  or the  exercise  of
                  remedies in respect thereof;

            (iv)  none of the Pledged  LLC  Interests  nor  Pledged  Partnership
                  Interests are or represent  interests in issuers that are: (a)
                  registered as investment companies, (b) are dealt in or traded
                  on  securities  exchanges  or  markets or (c) have opted to be
                  treated as securities under the UCC of any jurisdiction;

            (v)   Schedule A of the Diligence  Certificate (as such schedule may
                  be amended or supplemented from time to time) sets forth under
                  the heading  "Pledged  Debt" all of the Pledged  Debt owned by
                  any  Debtor  and  all of  such  Pledged  Debt  has  been  duly
                  authorized,  authenticated or issued, and delivered and is the
                  legal, valid and binding obligation of the issuers thereof and
                  is not in  default  and  constitutes  all  of the  issued  and
                  outstanding   inter-company   Indebtedness   evidenced  by  an
                  instrument or certificated  security of the respective issuers
                  thereof owing to such Debtor;

            (vi)  Schedule A of the Diligence  Certificate  sets forth under the
                  headings   "Securities   Accounts,"  "Deposit  Accounts,"  and
                  "Commodities  Accounts,"  respectively,  all of the Securities
                  Accounts,  Deposit Accounts and Commodities  Accounts in which
                  the each Debtor has an

                                       16
<PAGE>

                  interest.  Each Debtor is the sole entitlement  holder of each
                  such  Securities  Account,  Deposit  Account  and  Commodities
                  Account,  and such  Debtor  has not  consented  to, and is not
                  otherwise aware of, any Person having "control" (as defined in
                  the UCC) over, or any other  interest in, any such  Securities
                  Account,   Deposit  Account  or  Commodity  Account,   or  any
                  securities or other property credited thereto; and

            (vii) The Secured Party has valid and enforceable control agreements
                  with all Persons with whom each Debtor has Deposit Accounts or
                  with all securities intermediaries  maintaining any Securities
                  Accounts  of,  or on  behalf  of,  such  Debtor.  As to  other
                  Collateral in which  perfection of a security  interest may be
                  obtained  by  control,  all  actions  have been taken so as to
                  ensure that the Secured Party has control of such  Collateral,
                  other than as  permitted  hereby in the absence of an Event of
                  Default.

          (b) Covenants and Agreements.  Each Debtor hereby covenants and agrees
that until the Secured Obligations have been paid in full:

            (i)   in the  event it  acquires  rights in any  Investment  Related
                  Property  after  the  date  hereof,  it shall  deliver  to the
                  Secured Party a completed  Supplement  to Security  Agreement,
                  substantially  in the  form  of  Exhibit  A  attached  hereto,
                  together with all Supplements to Schedules thereto, reflecting
                  such new Investment  Related Property and all other Investment
                  Related  Property.   Notwithstanding  the  foregoing,   it  is
                  understood  and  agreed  that  the  security  interest  of the
                  Secured Party shall attach to all Investment  Related Property
                  immediately  upon any Debtor's  acquisition  of rights therein
                  and shall not be  affected  by the  failure  of any  Debtor to
                  deliver  a   supplement   to  Schedule  A  of  the   Diligence
                  Certificate as required hereby;

            (ii)  except as  provided  in the next  sentence,  in the event such
                  Debtor receives any dividends,  interest or  distributions  on
                  any Investment  Related  Property,  or any securities or other
                  property  upon  the  merger,  consolidation,   liquidation  or
                  dissolution of any issuer of any Investment  Related Property,
                  then  (a)  such  dividends,   interest  or  distributions  and
                  securities  or  other   property  shall  be  included  in  the
                  definition of Collateral  without  further action and (b) such
                  Debtor shall immediately take all steps, if any, necessary, or
                  advisable and  commercially  reasonable to ensure the validity
                  and  perfection  of the  Secured  Party  over such  Investment
                  Related  Property  (including,  without  limitation,  delivery
                  thereof to the Secured Party);

            (iii) it  shall  comply  with  all  of  its  obligations  under  any
                  partnership or limited  liability company agreement or limited
                  liability  company agreement  relating to Pledged  Partnership
                  Interests or Pledged LLC  Interests  and shall  enforce all of
                  its rights with  respect to any  Investment  Related  Property
                  related to Persons that are not Guarantors;

            (iv)  each Debtor  consents  to the grant by each other  Debtor of a
                  security  interest in all Investment  Related  Property to the
                  Secured Party and,

                                       17
<PAGE>

                  without  limiting the  foregoing,  consents to the transfer of
                  any Pledged Partnership  Interest and any Pledged LLC Interest
                  to the  Secured  Party or its  nominee  following  an Event of
                  Default and to the  substitution  of the Secured  Party or its
                  nominee as a partner in any  partnership or as a member in any
                  limited  liability  company  with all the  rights  and  powers
                  related thereto;

            (v)   with respect to any Investment Related Property  consisting of
                  Securities Accounts or Securities Entitlements, it shall cause
                  the  securities   intermediary   maintaining  such  Securities
                  Account or Securities  Entitlement  to enter into an agreement
                  substantially  in the form of  Exhibit  B hereto  pursuant  to
                  which the securities  intermediary  shall agree to comply with
                  the  Secured  Party's  "entitlement  orders"  without  further
                  consent by such Debtor. With respect to any Investment Related
                  Property  that is a  "Deposit  Account",  it shall  cause  the
                  depositary institution  maintaining such account to enter into
                  an  agreement  substantially  in the form of Exhibit C hereto,
                  pursuant  to which  the  Secured  Party  shall  have both sole
                  dominion and control over such Deposit  Account and  "control"
                  (within  the  meaning of  Section  9-104 of the UCC) over such
                  Deposit  Account.  Such Debtor  shall have  entered  into such
                  control  agreement  or  agreements  with  respect  to: (i) any
                  Securities  Accounts,   Securities   Entitlements  or  Deposit
                  Accounts that exist on the Issue Date and (ii) any  Securities
                  Accounts, Securities Entitlements or Deposit Accounts that are
                  created or acquired  after the Issue  Date,  as of or prior to
                  the deposit or transfer of any such Securities Entitlements or
                  funds, whether  constituting moneys or investments,  into such
                  Securities Accounts or Deposit Accounts; and

            (vi)  with respect to any  Investment  Related  Property in which it
                  currently  has  rights,   it  shall  have  complied  with  the
                  provisions  of this  Section on or before the Closing Date and
                  with  respect to any  Investment  Related  Property  hereafter
                  acquired by such Debtor it shall comply with the provisions of
                  this Section  immediately  upon acquiring  rights therein,  in
                  each case in form and  substance  satisfactory  to the Secured
                  Party. With respect to any Investment Related Property that is
                  represented by a certificate or that is an "instrument" (other
                  than any Investment  Related Property credited to a Securities
                  Account) it shall cause such  certificate  or instrument to be
                  delivered  to the  Secured  Party,  indorsed  in  blank  by an
                  "effective  indorsement"  (as defined in Section  8-107 of the
                  UCC),  regardless  of whether such  certificate  constitutes a
                  "certificated  security" for purposes of the UCC. With respect
                  to any Investment  Related Property that is an "uncertificated
                  security"   for   purposes   of  the  UCC   (other   than  any
                  "uncertificated securities" credited to a Securities Account),
                  it shall cause the issuer of such  uncertificated  security to
                  register the Secured Party as the registered  owner thereof on
                  the books and records of the issuer.

                                       18
<PAGE>

          (c) Voting and Distributions.

            (i)   So long as no Event of  Default  shall  have  occurred  and be
                  continuing, and subject to applicable Gaming Laws, each Debtor
                  shall be entitled to exercise or refrain from  exercising  any
                  and all voting and other consensual  rights  pertaining to the
                  Investment  Related  Property  or any  part  thereof  for  any
                  purpose not  inconsistent  with the terms of this Agreement or
                  the Indenture.

            (ii)  Upon the occurrence and during the continuation of an Event of
                  Default subject to Section 7.7:

                  (A)   all rights of each Debtor to  exercise  or refrain  from
                        exercising the voting and other consensual  rights which
                        it would  otherwise  be entitled  to  exercise  pursuant
                        hereto shall cease and all such rights  shall  thereupon
                        become vested in the Secured  Party who shall  thereupon
                        have the sole right to  exercise  such  voting and other
                        consensual rights; and

                  (B)   in order to permit the  Secured  Party to  exercise  the
                        voting  and  other  consensual  rights  which  it may be
                        entitled to exercise  pursuant hereto and to receive all
                        dividends  and  other  distributions  which  it  may  be
                        entitled to receive  hereunder:  (1) each  Debtor  shall
                        promptly  execute  and  deliver (or cause to be executed
                        and   delivered)  to  the  Secured  Party  all  proxies,
                        dividend  payment  orders and other  instruments  as the
                        Secured Party may from time to time  reasonably  request
                        and (2) each Debtor  acknowledges that the Secured Party
                        may utilize  the power of attorney  set forth in Section
                        6.

      4.5 INTELLECTUAL PROPERTY.

          (a) Representations and Warranties.  Except as disclosed in Schedule B
of the Diligence  Certificate  (as such schedule may be amended or  supplemented
from time to time),  each Debtor hereby  represents  and warrants,  on the Issue
Date, that:

            (i)   Schedule B of the Diligence  Certificate (as such schedule may
                  be  amended  or  supplemented  from time to time) sets forth a
                  true and  complete  list of (i) all active  United  States and
                  foreign   registrations   of  and  applications  for  Patents,
                  Trademarks,  and Copyrights  owned by each Debtor and (ii) all
                  Patent  Licenses,  Trademark  Licenses and Copyright  Licenses
                  material to the business of such Debtor;

            (ii)  it is the sole and exclusive owner of the entire right, title,
                  and  interest in and to all  Intellectual  Property  listed as
                  "owned"  by  such  Debtor  on  Schedule  B  of  the  Diligence
                  Certificate  (as such schedule may be amended or  supplemented
                  from time to time), and owns or has the valid right to use all
                  other  Intellectual  Property  used in or necessary to conduct
                  its   business,   free  and  clear  of  all   Liens,   claims,
                  encumbrances and licenses,  except for Permitted Liens and the
                  licenses set forth on

                                       19
<PAGE>

                  Schedule  B of  the  Diligence  Certificate  (as  each  may be
                  amended or supplemented from time to time);

            (iii) to each Debtor's knowledge, all Intellectual Property is valid
                  and enforceable;  no holding,  decision,  or judgment has been
                  rendered  in any  action  or  proceeding  before  any court or
                  administrative  authority  challenging  the  validity of, such
                  Debtor's right to register,  or such Debtor's rights to own or
                  use,  any   Intellectual   Property  and  no  such  action  or
                  proceeding  is  pending  or,  to the  best  of  such  Debtor's
                  knowledge, threatened;

            (iv)  all registrations and applications for Copyrights, Patents and
                  Trademarks  are standing in the name of each Debtor,  and none
                  of  the  Trademarks,   Patents,  Copyrights  or  Trade  Secret
                  Collateral has been licensed by any Debtor to any affiliate or
                  third  party,  except  as  disclosed  on  Schedule  B  of  the
                  Diligence  Certificate (as each may be amended or supplemented
                  from time to time); and

            (v)   there  is  no  effective  UCC  financing  statement  or  other
                  document or instrument now executed, or on file or recorded in
                  any public  office that has not been  released or  terminated,
                  granting a security  interest in or otherwise  encumbering any
                  part of the Intellectual Property,  other than in favor of the
                  Secured Party.

          (b) Covenants and Agreements.  Each Debtor hereby covenants and agrees
that until the Secured Obligations have been paid in full:

            (i)   it shall  promptly (but in no event more than thirty (30) days
                  after any  Debtor  obtains  knowledge  thereof)  report to the
                  Secured  Party (i) the filing of any  application  to register
                  any  Intellectual  Property  with the United States Patent and
                  Trademark  Office,  the United States Copyright Office, or any
                  state  registry  or  foreign   counterpart  of  the  foregoing
                  (whether such  application  is filed by such Debtor or through
                  any agent,  employee,  licensee, or designee thereof) and (ii)
                  the  registration  of any  Intellectual  Property  by any such
                  office,  in  each  case by  executing  and  delivering  to the
                  Secured Party a completed  Supplement  to Security  Agreement,
                  substantially  in  the  form of  Exhibit  A attached   hereto,
                  together with all Supplements to Schedules thereto;

            (ii)  it shall,  promptly upon the reasonable request of the Secured
                  Party,  execute and deliver to the Secured  Party any document
                  required to acknowledge, confirm, register, record, or perfect
                  the Secured Party's  interest in any part of the  Intellectual
                  Property, whether now owned or hereafter acquired;

            (iii) it shall hereafter use commercially  reasonable efforts (which
                  shall not require the payment of cash to, or the reimbursement
                  of fees and expenses of, the counterparty to any such contract
                  or the  making  of any  material  concessions  under  any such
                  contract) so as not to permit the inclusion in any contract to
                  which it hereafter becomes a party of any

                                       20
<PAGE>

                  provision that could or might in any way materially  impair or
                  prevent  the  creation  of a  security  interest  in,  or  the
                  assignment  of,  such  Debtor's  rights and  interests  in any
                  property  included within the definitions of any  Intellectual
                  Property acquired under such contracts;

      4.6 COMMERCIAL TORT CLAIMS.

          (a) Representations and Warranties.  Each Debtor hereby represents and
warrants,  on the Issue Date,  that Schedule E of the Diligence  Certificate (as
such schedule may be amended or  supplemented  from time to time) sets forth all
Commercial Tort Claims of each Debtor.

          (b) Covenants and Agreements.  Each Debtor hereby covenants and agrees
that until the Secured  Obligations  have been paid in full, with respect to any
Commercial Tort Claim hereafter  arising it shall deliver to the Secured Party a
completed Supplement to Security Agreement, substantially in the form of Exhibit
A  attached  hereto,   together  with  all  Supplements  to  Schedules  thereto,
identifying such new Commercial Tort Claims.

      4.7 JUDGMENTS.

          (a) Representations and Warranties.  Each Debtor hereby represents and
warrants,  on the Issue Date,  that Schedule E of the Diligence  Certificate (as
such schedule may be amended or  supplemented  from time to time) sets forth all
judgments in favor of each Debtor.

          (b) Covenants and Agreements.  Each Debtor hereby covenants and agrees
that until the Secured  Obligations  have been paid in full, with respect to any
judgment  hereafter arising in its favor it shall deliver to the Secured Party a
completed Supplement to Security Agreement, substantially in the form of Exhibit
A  attached  hereto,   together  with  all  Supplements  to  Schedules  thereto,
identifying  such new judgments  unless such Debtor was  incorporated  or formed
under the laws of  Louisiana,  in which case,  such Debtor shall  deliver to the
Secured Party a completed  security  agreement  having terms consistent with the
terms hereof,  together with all Supplements to Schedules  thereto,  identifying
such new judgments,  which new security agreement shall be governed by Louisiana
law.

5.    FURTHER ASSURANCES; ADDITIONAL DEBTORS

      5.1 FURTHER ASSURANCES.

          (a) Each  Debtor  agrees  that  from time to time  until  the  Secured
Obligations have been paid in full, at the expense of such Debtor, that it shall
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary, or desirable and commercially reasonable,
in order to create and/or  maintain the validity,  perfection or priority of and
protect any security  interest  granted or purported to be granted  hereby or to
enable the  Secured  Party to  exercise  and  enforce  its  rights and  remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, each Debtor shall:

            (i)   execute and file such financing or continuation statements, or
                  amendments  thereto,   and  execute  and  deliver  such  other
                  agreements,  instruments,  endorsements, powers of attorney or
                  notices, as may be necessary or desirable, in order to perfect
                  and preserve the security interests granted or purported to be
                  granted hereby;

                                       21
<PAGE>

            (ii)  take all  actions  necessary  to  ensure  the  recordation  of
                  appropriate  evidence  of  the  Liens  and  security  interest
                  granted  hereunder  in  the  Intellectual  Property  with  any
                  intellectual  property  registry  in which  said  Intellectual
                  Property  is  registered  or  in  which  an  application   for
                  registration is pending  including,  without  limitation,  the
                  United States Patent and Trademark  Office,  the United States
                  Copyright  Office,  the various  Secretaries of State, and the
                  foreign counterparts on any of the foregoing;

            (iii) at any  reasonable  time,  upon request by the Secured  Party,
                  exhibit  the  Collateral  to  and  allow   inspection  of  the
                  Collateral by the Secured Party, or persons  designated by the
                  Secured Party; and

            (iv)  at the Secured Party's  reasonable  request and subject to the
                  Intercreditor  Agreement,  appear in and  defend any action or
                  proceeding  that  may  affect  the  Secured  Party's  security
                  interest in all or any part of the Collateral.

          (b) Each Debtor hereby authorizes the Secured Party to file, until the
Secured  Obligations  have been paid in full,  a Record or  Records,  including,
without  limitation,  UCC financing or continuation  statements,  and amendments
thereto,  in all  jurisdictions and with all filing offices as the Secured Party
may determine, in its sole discretion, are necessary or advisable to perfect the
security  interest  granted to the  Secured  Party  herein.  Such UCC  financing
statements may describe the Collateral in the same manner as described herein or
may contain an  indication or  description  of collateral  that  describes  such
property in any other  manner as the Secured  Party may  determine,  in its sole
discretion,  is necessary,  advisable or prudent to ensure the perfection of the
security  interest  in the  Collateral  granted  to the  Secured  Party  herein,
including,  without  limitation,  describing  such property as "all assets other
than the excluded  assets" or other  substantially  similar  descriptions.  Each
Debtor  shall  furnish to the  Secured  Party from time to time  statements  and
schedules  further  identifying  and  describing  the  Collateral and such other
reports in connection  with the  Collateral as the Secured Party may  reasonably
request, all in reasonable detail.

          (c) Each Debtor  hereby  authorizes  the Secured  Party to modify this
Agreement  after  obtaining  such  Debtor's  approval  of or  signature  to such
modification  by  amending  Schedule  B of the  Diligence  Certificate  (as such
schedule may be amended or supplemented  from time to time) to include reference
to any right,  title or interest in any  existing  Intellectual  Property or any
Intellectual  Property  acquired or developed by any Debtor after the  execution
hereof or to  delete  any  reference  to any  right,  title or  interest  in any
Intellectual  Property  in which any  Debtor no longer  has or claims any right,
title or interest

          (d) Unless (i) the  Secured  Party  shall have  failed to comply  with
Section 9-513(c) of the UCC with respect to any Debtor, (ii) otherwise permitted
under Section  4.1(b)(iii)(b)  to ensure the continued  effectiveness of any UCC
financing  statement  relating to such Debtor or (iii) otherwise  required under
Section  5.1(a) to  ensure  the  continued  effectiveness  of any UCC  financing
statement  relating  to such  Debtor or perfect  the  security  interest  of the
Secured Party hereunder in any Collateral of such Debtor, such Debtor agrees not
to file any  termination  statements,  amendments,  corrections  or  supplements
relative to the UCC financing statements filed in connection with this Agreement
without the prior written consent of the Secured Party.

                                       22
<PAGE>

      5.2 ADDITIONAL  DEBTORS.  From time to time subsequent to the date hereof,
additional  Guarantors  and/or  Issuers (as defined in the Indenture) may become
additional  Debtors  pursuant  to the terms of the  Indenture,  by  executing  a
Supplement to Security  Agreement,  substantially in the form attached hereto as
Exhibit A. Upon delivery of any such counterpart agreement to the Secured Party,
notice of which is hereby waived by Debtors, (a) each additional Debtor shall be
a Debtor and shall be as fully a party  hereto as if  additional  Debtor were an
original  signatory hereto and (b) the supplemental  schedules  thereto shall be
incorporated  into and become a part of and supplement the respective  schedules
to this  Agreement;  and each  reference to such  Schedules  shall mean and be a
reference  to such  Schedules as  supplemented  pursuant to each  Supplement  to
Security  Agreement.  Each Debtor expressly agrees that its obligations  arising
hereunder  shall not be affected or diminished by the addition or release of any
other Debtor  hereunder,  nor by any election of Secured  Party not to cause any
Subsidiary  of the  Company  to  become an  additional  Debtor  hereunder.  This
Agreement  shall be fully  effective as to any Debtor that is or becomes a party
hereto  regardless  of whether  any other  Person  becomes or fails to become or
ceases to be a Debtor hereunder.

6.    ATTORNEY-IN-FACT

      6.1 POWER OF ATTORNEY. Each Debtor hereby irrevocably appoints the Secured
Party  (such  appointment  being  coupled  with an  interest)  as such  Debtor's
attorney-in-fact,  with full authority in the place and stead of such Debtor and
in the  name  of  such  Debtor,  the  Secured  Party,  from  time to time in its
discretion  to take any action and to execute  any  instrument  that it may deem
reasonably  necessary or advisable to accomplish  the purposes of this Agreement
and the Intercreditor Agreement, including, without limitation, the following:

          (a) upon the  occurrence  and during the  continuance  of any Event of
Default, to obtain and adjust insurance required to be maintained by such Debtor
pursuant to the Indenture;

          (b) upon the  occurrence  and during the  continuance  of any Event of
Default, to ask for, demand,  collect, sue for, recover,  compound,  receive and
give  acquittance  and  receipts  for  moneys  due and to become due under or in
respect of any of the Collateral;

          (c) upon the  occurrence  and during the  continuance  of any Event of
Default,  to  receive,  endorse  and  collect  any drafts or other  instruments,
documents and chattel  paper in connection  with clause (b) above subject in all
respects  to the rights of any lender  under the Credit  Agreement  to  receive,
endorse and collect the same;

          (d) upon the  occurrence  and during the  continuance  of any Event of
Default,  to file any claims or take any  action or  institute  any  proceedings
necessary or desirable for the  collection of any of the Collateral or otherwise
to  enforce  the  rights  of  the  Secured  Party  with  respect  to  any of the
Collateral;

          (e) to prepare  and file any UCC  financing  statements  against  such
Debtor as debtor;

          (f) to prepare,  sign, and file for  recordation  in any  intellectual
property  registry,  appropriate  evidence  of the  lien and  security  interest
granted  herein  in the  Intellectual  Property  in the name of such  Debtor  as
assignor;

          (g) to take or cause to be taken all actions  necessary  to perform or
comply or cause  performance  or  compliance  with the terms of this  Agreement,
including, without limitation,  access to pay or discharge taxes or Liens (other
than  Permitted  Liens)  levied  or  placed  upon  or  threatened   against  the

                                       23
<PAGE>

Collateral,  the  legality or validity  thereof  and the  amounts  necessary  to
discharge  the  same,  any such  payments  made by the  Secured  Party to become
obligations  of such Debtor to the Secured  Party,  due and payable  immediately
without demand;

          (h) upon the  occurrence  and during the  continuance  of any Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise  deal with any of the  Collateral as fully and completely as though
the Secured Party were the absolute  owner thereof for all purposes,  and to do,
at the Secured  Party's  option and such Debtor's  expense,  at any time or from
time to time,  all acts and  things  that the  Secured  Party  deems  reasonably
necessary to protect,  preserve or realize upon the  Collateral  and the Secured
Party's  security  interest  therein  in  order to  effect  the  intent  of this
Agreement, all as fully and effectively as such Debtor might do; and

          (i) upon the  occurrence  and during the  continuance  of any Event of
Default, to enforce all Supporting Obligations with respect to any Collateral.

      6.2 NO DUTY ON THE PART OF  SECURED  PARTY.  The powers  conferred  on the
Secured Party hereunder are solely to protect the interests of the Secured Party
in the  Collateral  and shall not  impose  any duty  upon the  Secured  Party to
exercise  any such  powers.  The  Secured  Party shall be  accountable  only for
amounts  that it actually  receives as a result of the  exercise of such powers,
and neither it nor any of its officers, directors,  employees or agents shall be
responsible  to any Debtor for any act or failure to act  hereunder,  except for
their own gross negligence or willful misconduct.

7.    REMEDIES

      7.1 GENERALLY.

          (a) If any Event of Default shall have occurred and be continuing, the
Secured  Party may  exercise  in respect of the  Collateral,  in addition to all
other  rights and remedies  provided for herein or otherwise  available to it at
law or in  equity,  all the rights and  remedies  of a secured  party on default
under the UCC  (whether or not the UCC applies to the  affected  Collateral)  to
collect,  enforce or satisfy any  Secured  Obligations  then  owing,  whether by
acceleration or otherwise,  and also may pursue any of the following separately,
successively or simultaneously:

            (i)   require any Debtor to, and each Debtor  hereby  agrees that it
                  shall at its expense and promptly  upon request of the Secured
                  Party  forthwith,  assemble all or part of the  Collateral  as
                  directed by the  Secured  Party and make it  available  to the
                  Secured Party at a place to be designated by the Secured Party
                  that is reasonably convenient to both parties;

            (ii)  enter onto the property  where any  Collateral  is located and
                  take possession thereof with or without judicial process;

            (iii) prior to the  disposition of the Collateral,  store,  process,
                  repair or recondition the Collateral or otherwise  prepare the
                  Collateral  for  disposition  in any  manner to the extent the
                  Secured Party deems appropriate;

            (iv)  without  notice  except as  specified  below or under the UCC,
                  sell, assign,  lease, license (on an exclusive or nonexclusive
                  basis) or  otherwise  dispose  of the  Collateral  or any part
                  thereof in one or more parcels at

                                       24
<PAGE>

                  public or private sale, at any of the Secured  Party's offices
                  or elsewhere,  for cash, on credit or for future delivery,  at
                  such time or times and at such  price or prices  and upon such
                  other  terms  as  the  Secured  Party  may  deem  commercially
                  reasonable; and

          (b)  The  Secured  Party  may  be a  purchaser  of  any  or all of the
Collateral at any public or, to the extent permitted under the UCC, private sale
in  accordance  with the UCC and the  Secured  Party,  as Secured  Party for and
representative of the Holders, shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral  sold at any such sale made in  accordance  with the UCC,  to use and
apply any of the  Secured  Obligations  of such Debtor as a credit on account of
the purchase price for any Collateral payable by the Secured Party at such sale.
To the extent provided under the UCC or other  applicable law, each purchaser at
any such sale shall hold the  property  sold  absolutely  free from any claim or
right  on the  part of any  Debtor  and  Debtor  hereby  waives  (to the  extent
permitted by  applicable  law) all rights of  redemption  stay and/or  appraisal
which it now has or may at any time in the future  have under any rule of law or
statute  now  existing  or  hereafter  enacted  until  payment  in  full  of the
Obligations.  Each Debtor  agrees  that,  to the extent  notice of sale shall be
required  by law,  at least ten (10) days  notice to such Debtor of the time and
place of any public or private sale shall  constitute  reasonable  notification.
The  Secured  Party  shall  not be  obligated  to make  any  sale of  Collateral
regardless  of notice of sale having been given.  The Secured  Party may adjourn
any public or  private  sale from time to time by  announcement  at the time and
place fixed  therefor and by notice to the Company,  and such sale may,  without
further notice, be made at the time and place to which it was so adjourned. Each
Debtor hereby  waives any claims  against the Secured Party arising by reason of
the fact  that the price at which  any  Collateral  may have been sold at such a
private sale was less than the price which might have been  obtained at a public
sale,  even if the Secured Party  accepts the first offer  received and does not
offer such  Collateral to more than one offeree.  If the proceeds of any sale or
other  disposition of the Collateral of any Debtor are  insufficient  to pay all
the Secured  Obligations  of such  Debtor,  such Debtor  shall be liable for the
deficiency  and the  fees of any  attorneys  employed  by the  Secured  Party to
collect such deficiency.  Each Debtor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the Secured
Party,  that the Secured Party has no adequate  remedy at law in respect of such
breach and, as a  consequence,  that each and every  covenant  contained in this
Section shall be specifically  enforceable  against such Debtor, and such Debtor
hereby  waives  and  agrees  not to assert  any  defenses  against an action for
specific  performance of such covenants except for a defense that no default has
occurred giving rise to the Secured  Obligations  becoming due and payable prior
to their stated  maturities.  Nothing in this Section shall in any way alter the
rights of the Secured Party hereunder.

          (c) The Secured Party may sell the Collateral following the occurrence
and during the  continuance of an Event of Default without giving any warranties
as to the Collateral.  The Secured Party may specifically disclaim or modify, in
its sole  discretion,  any warranties of title or the like as to any Collateral.
This  procedure  will not be  considered  to  adversely  affect  the  commercial
reasonableness  of any sale of any of the  Collateral.  The  Secured  Party  may
comply with any applicable  state or federal law requirements in connection with
a  disposition  of the  Collateral  and  compliance  will not be  considered  to
adversely  affect the commercial  reasonableness  of any sale of the Collateral.
Leasing and  licensing of  Collateral  by the Secured Party to third Persons are
types of sales permitted hereunder.

          (d) If the Secured Party sells any of the  Collateral of any Debtor on
credit,  the Secured  Obligations  of such  Debtor  will be  credited  only with
payments  actually  made by the  purchaser and received by the Secured Party and
applied to the  indebtedness of the purchaser.  In the event the purchaser fails
to pay for the Collateral, the Secured Party may resell the Collateral.

                                       25
<PAGE>

          (e) The Secured  Party shall have no  obligation to marshal any of the
Collateral.

          (f) All amounts and proceeds  (including checks and other instruments)
received  by any Debtor in respect of amounts  due to such  Debtor in respect of
the  Collateral or any portion  thereof  following the occurrence and during the
continuance of an Event of Default shall be received in trust for the benefit of
the Secured Party hereunder, shall be segregated from other funds of such Debtor
and shall be  forthwith  paid over or  delivered  (subject to the  Intercreditor
Agreement to the extent then in effect) to the Secured Party in the same form as
so received (with any necessary  endorsement)  to be held as cash Collateral and
applied as provided  by Section  7.6  following  the  occurrence  and during the
continuance of an Event of Default. Upon demand from the Secured Party following
the occurrence and during the continuance of an Event of Default,  Debtors shall
not  adjust,  settle or  compromise  the amount or payment of any such amount or
release wholly or partly any obligor with respect thereto or allow any credit or
discount thereon.

      7.2 LOUISIANA REMEDIES. The Secured Party, instead of exercising the power
of sale herein  conferred upon it, may,  following the occurrence and during the
continuance of an Event of Default,  proceed by a suit or suits to foreclose the
security  interest  and sell  the  Collateral  or any  portion  thereof  under a
judgment  of a court or  courts  of  competent  jurisdiction.  For  purposes  of
Louisiana  executory process  procedures,  each Debtor  acknowledges its Secured
Obligations  and does hereby confess  judgment in favor of the Secured Party for
the full amount of such Secured  Obligations.  Each Debtor  agrees that upon the
occurrence of an Event of Default the Secured Party may cause the  Collateral to
be seized and sold under executory or ordinary  process,  at the Secured Party's
sole option,  without appraisement,  appraisement being hereby expressly waived,
as an entirety or in parcels as the Secured Party may determine,  to the highest
bidder for cash, and otherwise exercise the rights, powers and remedies afforded
herein and under applicable Louisiana law. Any and all declarations of fact made
by authentic  act before a Notary  Public in the presence of two  witnesses by a
person  declaring  that such  facts lie within his  knowledge  shall  constitute
authentic  evidence of such facts for the  purpose of  executory  process.  Each
Debtor  hereby  waives  in  favor  of the  Secured  Party:  (a) the  benefit  of
appraisement  as provided in Louisiana  Code of Civil  Procedure  Articles 2332,
2336,  2723 and 2724, and all other laws conferring the same; (b) the demand and
three days delay accorded by Louisiana Code of Civil Procedure Articles 2639 and
2721; (c) the notice of seizure  required by Louisiana  Code of Civil  Procedure
Articles 2293 and 2721;  (d) the three days delay  provided by Louisiana Code of
Civil  Procedure  Articles  2331 and  2722;  and (e) the  benefit  of the  other
provisions of Louisiana Code of Civil  Procedure  Articles 2331,  2722 and 2723,
not  specifically  mentioned  above.  In the  event the  Collateral  or any part
thereof is seized as an incident to an action for the recognition or enforcement
of this Agreement by executory process, ordinary process, sequestration, writ of
fieri  facias,  or  otherwise,  each Debtor and the Secured Party agree that the
court  issuing any such order shall,  if  petitioned  for by the Secured  Party,
direct the  applicable  sheriff to  appoint as a keeper of the  Collateral,  the
Secured  Party or any agent  designated by the Secured Party or any person named
by the Secured Party at the time such seizure is effected.  This  designation is
pursuant to Louisiana  Revised  Statutes  9:5136-9:5140.2  and the Secured Party
shall be entitled to all the rights and benefits afforded thereunder as the same
may be amended. It is hereby agreed that the keeper shall be entitled to receive
as  compensation,   in  excess  of  its  costs  and  expenses  incurred  in  the
administration or preservation of the Collateral, an amount equal to $250.00 per
day  payable  monthly  on the first day of each month and shall be  included  as
Secured  Obligations  secured by this Agreement.  The designation of keeper made
herein  shall  not be  deemed  to  require  the  Secured  Party to  provoke  the
appointment  of such a keeper.  In  addition to the normal  recourse  provisions
noted above,  the Secured  Party will have to comply with the  provisions of the
Louisiana Administrative Code Title 42 Section 2501 et. seq. relating to holders
of gaming licenses.  These provisions provide for emergency situations,  such as
foreclosures by security interest holders.  Louisiana  Administrative Code Title
42  Section  2501 et.  seq.  delineates  the  process  for  obtaining  emergency
permission to take over and defines how to proceed with the Louisiana

                                       26
<PAGE>

Gaming Control Board. Additionally,  in accordance with Louisiana Administrative
Code Title 42  Section  2501 et.  seq.,  any  transfer  of  interest,  including
security  interest,  is subject to prior approval by the Louisiana  State Racing
Commission and the Louisiana Gaming Control Board.

      7.3  APPLICATION OF PROCEEDS.  Except as expressly  provided  elsewhere in
this  Agreement,  all Proceeds  received by the Secured  Party in respect of any
sale,  any  collection  from, or other  realization  upon all or any part of the
Collateral  of any Debtor  shall be  applied  in full or in part by the  Secured
Party against the Secured  Obligations of such Debtor in the order  specified in
Section 6.10 of the Indenture.

      7.4 INVESTMENT RELATED PROPERTY. Each Debtor recognizes that, by reason of
certain  prohibitions  contained  in the  Securities  Act and  applicable  state
securities laws, the Secured Party may be compelled, with respect to any sale of
all or any part of the  Investment  Related  Property  conducted  without  prior
registration  or  qualification  of such Investment  Related  Property under the
Securities Act and/or such state  securities  laws, to limit purchasers to those
who will agree,  among other things, to acquire the Investment  Related Property
for their own account, for investment and not with a view to the distribution or
resale thereof.  Each Debtor  acknowledges  that any such private sale may be at
prices and on terms less favorable than those  obtainable  through a public sale
without  such  restrictions  (including  a public  offering  made  pursuant to a
registration  statement  under the  Securities  Act) and,  notwithstanding  such
circumstances,  each Debtor agrees that any such private sale shall be deemed to
have been made in a  commercially  reasonable  manner and that the Secured Party
shall have no  obligation  to engage in public sales and no  obligation to delay
the sale of any Investment  Related Property for the period of time necessary to
permit the issuer  thereof to register  it for a form of public  sale  requiring
registration under the Securities Act or under applicable state securities laws,
even if such issuer  would,  or should,  agree to so register it. If the Secured
Party  determines  to  exercise  its right to sell any or all of the  Investment
Related Property,  upon written request,  each Debtor shall and shall cause each
issuer of any Pledged  Stock to be sold  hereunder,  each  partnership  and each
limited  liability company from time to time to furnish to the Secured Party all
such  information  as the  Secured  Party  may  reasonably  request  in order to
determine  the  number  and  nature of  interest,  shares  or other  instruments
included in the  Investment  Related  Property  which may be sold by the Secured
Party  in  exempt  transactions  under  the  Securities  Act and the  rules  and
regulations of the Securities and Exchange  Commission  thereunder,  as the same
are from time to time in effect.  Notwithstanding  any other  provision  of this
Agreement to the contrary,  with respect to any deposit accounts that constitute
part of the  Collateral,  the  Secured  Party may only  exercise  remedies  with
respect to such  deposit  accounts at the earliest of (i) the date that an Event
of Default shall be continuing  for 180  consecutive  days after the delivery of
written notice to the Company of such Event of Default under the Indenture, (ii)
the date on which a declaration of acceleration  has been made under Section 6.2
of the Indenture or an Event of Default under Section  6.1(a)(xii)  or (xiii) of
the  Indenture has  occurred,  and (iii) any other date to the extent  permitted
under the Intercreditor  Agreement at any time the Intercreditor Agreement is in
effect.

      7.5 INTELLECTUAL PROPERTY.

          (a) Anything  contained herein to the contrary  notwithstanding,  upon
the occurrence and during the continuation of an Event of Default:

            (i)   the   Secured   Party  shall  have  the  right  (but  not  the
                  obligation) to bring suit or otherwise  commence any action or
                  proceeding  in the name of any Debtor,  the  Secured  Party or
                  otherwise, in the Secured Party's sole discretion,  to enforce
                  any Intellectual  Property,  in which event such Debtor shall,
                  at  the  request  of  the  Secured  Party,   do  any  and  all
                  reasonable,  lawful  acts and  execute  any and all  documents
                  reasonably

                                       27
<PAGE>

                  required by the Secured Party in aid of such  enforcement  and
                  such  Debtor  shall  promptly,  upon  demand,   reimburse  and
                  indemnify  the Secured  Party as provided in Section 10 hereof
                  in  connection  with the  exercise  of its  rights  under this
                  Section, and, to the extent that the Secured Party shall elect
                  not to bring  suit to enforce  any  Intellectual  Property  as
                  provided  in  this  Section,  each  Debtor  agrees  to use all
                  reasonable measures,  whether by action,  suit,  proceeding or
                  otherwise,  to prevent the commercially  material infringement
                  of any of the material Intellectual Property by others and for
                  that purpose agrees to diligently maintain any action, suit or
                  proceeding  against  any  Person  so  infringing  as  shall be
                  reasonably necessary to prevent such infringement;

            (ii)  upon  reasonable  written demand from the Secured Party,  each
                  Debtor shall grant,  assign,  convey or otherwise  transfer to
                  the  Secured  Party  all of such  Debtor's  right,  title  and
                  interest in and to the Intellectual Property and shall execute
                  and  deliver  to  the  Secured  Party  such  documents  as are
                  necessary or  appropriate to carry out the intent and purposes
                  of this Agreement;

            (iii) each Debtor  agrees that such an assignment  and/or  recording
                  shall be  applied to reduce the  Secured  Obligations  of such
                  Debtor  outstanding  only to the extent that the Secured Party
                  receives  cash  proceeds  in  respect of the sale of, or other
                  realization upon, the Intellectual Property of such Debtor;

            (iv)  within five (5) Business  Days after  written  notice from the
                  Secured Party, each Debtor shall make available to the Secured
                  Party, to the extent within such Debtor's power and authority,
                  such  personnel  in such  Debtor's  employ on the date of such
                  Event  of  Default  as  the  Secured   Party  may   reasonably
                  designate,  by name,  title or job  responsibility,  to permit
                  such Debtor to continue,  directly or indirectly,  to produce,
                  advertise and sell the products and services sold or delivered
                  by such Debtor under or in  connection  with the  Intellectual
                  Property,  such persons to be available to perform their prior
                  functions on the Secured  Party's behalf and to be compensated
                  by the Secured Party at such  Debtor's  expense on a per diem,
                  pro-rata  basis   consistent   with  the  salary  and  benefit
                  structure  applicable  to each as of the date of such Event of
                  Default; and

            (v)   the Secured  Party shall have the right to notify,  or require
                  each Debtor to notify,  any  obligors  with respect to amounts
                  due  or to  become  due  to  such  Debtor  in  respect  of the
                  Intellectual  Property,  of  the  existence  of  the  security
                  interest  created  herein,  to direct  such  obligors  to make
                  payment of all such  amounts  directly to the  Secured  Party,
                  and, upon such notification and at the expense of such Debtor,
                  to  enforce  collection  of any such  amounts  and to  adjust,
                  settle or  compromise  the amount or payment  thereof,  in the
                  same manner and to the same  extent as such Debtor  might have
                  done.

                                       28
<PAGE>

          (b) If (i) an Event of Default  shall have  occurred and, by reason of
cure,  waiver,  modification,  amendment or otherwise,  no longer be continuing,
(ii) no other Event of Default shall have occurred and be  continuing,  (iii) an
assignment  or other  transfer  to the Secured  Party of any  rights,  title and
interests in and to the  Intellectual  Property shall have been  previously made
and shall have become absolute and effective,  and (iv) the Secured  Obligations
shall not have become  immediately due and payable,  upon the written request of
any Debtor, the Secured Party shall promptly execute and deliver to such Debtor,
at such Debtor's sole cost and expense,  such  assignments  or other transfer as
may be necessary to reassign to such Debtor any such rights, title and interests
as may have been  assigned to the  Secured  Party as  aforesaid,  subject to any
disposition  thereof  that may have been made by the  Secured  Party;  provided,
after giving effect to such reassignment,  the Secured Party's security interest
granted pursuant hereto, as well as all other rights and remedies of the Secured
Party  granted  hereunder,  shall  continue to be in full force and effect;  and
provided  further,  the rights,  title and interests so reassigned shall be free
and clear of any Liens granted by or on behalf of the Secured Party.

          (c) Solely for the purpose of enabling  the Secured  Party to exercise
rights and remedies under this Section 7 following the occurrence and during the
continuance  of an Event of Default,  each Debtor  hereby  grants to the Secured
Party,  to the  extent it has the right to do so, an  irrevocable,  nonexclusive
license  (exercisable  without payment of royalty or other  compensation to such
Debtor),  subject,  in the case of Trademarks,  to sufficient  rights to quality
control and inspection in favor of such Debtor to avoid the risk of invalidation
of  said  Trademarks,   to  use,  operate  under,  license,  or  sublicense  any
Intellectual  Property  now owned or  hereafter  acquired  by such  Debtor,  and
wherever the same may be located.

      7.6 CASH  PROCEEDS.  Cash Proceeds  shall,  following the  occurrence  and
during the  continuance of an Event of Default,  be held by such Debtor in trust
for the Secured Party,  segregated  from other funds of such Debtor,  and shall,
forthwith upon receipt by such Debtor,  unless  otherwise  provided  pursuant to
Section 4.4, be turned over to the Secured  Party in the exact form  received by
such Debtor (duly  indorsed by such Debtor to the Secured  Party,  if required).
Any Cash  Proceeds  received  by the  Secured  Party  (whether  from a Debtor or
otherwise),  following the occurrence and during the  continuance of an Event of
Default, shall be applied by the Secured Party in accordance with Section 7.3.

      7.7 REGULATORY MATTERS. The Secured Party acknowledges and agrees that the
approval of the applicable Gaming Authorities of this Agreement shall not act or
be construed as the approval,  either express or implied,  for the Secured Party
to take any  actions or steps  provided  for in this  Agreement  for which prior
approval of such Gaming  Authority is required,  without  first  obtaining  such
prior and separate approval to the extent then required by applicable law.

8.    CONTINUING SECURITY INTEREST; TRANSFER OF NOTES

          This  Agreement  shall  create a continuing  security  interest in the
Collateral  and shall  remain in full force and effect until the payment in full
of all Secured  Obligations,  be binding upon each Debtor,  its  successors  and
assigns (except to the extent otherwise  provided in the Indenture),  and inure,
together  with the rights and remedies of the Secured  Party  hereunder,  to the
benefit  of the  Secured  Party and its  successors,  transferees  and  assigns.
Without  limiting the generality of the  foregoing,  but subject to the terms of
the Indenture,  any Holder may assign or otherwise  transfer any Note held by it
to any other Person to the extent permitted under the Indenture,  and such other
Person shall  thereupon  become vested with all the benefits in respect  thereof
granted to the Holders. Upon the payment in full of all Secured Obligations, the
security interest granted hereby shall terminate hereunder and all rights to the
Collateral granted hereunder shall revert to Debtors.  Upon any such termination
the Secured Party shall, at Debtors'

                                       29
<PAGE>

expense,  execute  and  deliver  to Debtors  such  documents  as  Debtors  shall
reasonably request to evidence such termination.

9.    STANDARD OF CARE; SECURED PARTY MAY PERFORM

          The powers  conferred  on the Secured  Party  hereunder  are solely to
protect its interest in the  Collateral and shall not impose any duty upon it to
exercise any such  powers.  Except for the  exercise of  reasonable  care in the
custody  of any  Collateral  in its  possession  and the  accounting  for moneys
actually  received by it  hereunder,  the Secured Party shall have no duty as to
any  Collateral  or as to the taking of any necessary  steps to preserve  rights
against prior  parties or any other rights  pertaining  to any  Collateral.  The
Secured Party shall be deemed to have exercised  reasonable  care in the custody
and  preservation of Collateral in its possession if such Collateral is accorded
treatment  substantially  equal to that which the Secured  Party accords its own
property.  Neither  the  Secured  Party  nor  any  of its  directors,  officers,
employees  or agents  shall be liable for failure to demand,  collect or realize
upon all or any part of the  Collateral or for any delay in doing so or shall be
under any  obligation to sell or otherwise  dispose of any  Collateral  upon the
request of any Debtor or otherwise. If any Debtor fails to perform any agreement
contained herein, the Secured Party may itself perform, or cause performance of,
such  agreement,  and the expenses of the Secured  Party  incurred in connection
therewith shall be payable by each Debtor under Section 11.2 hereof.

10.   INDEMNITY

          (a) Each Debtor agrees to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless each Indemnitee, from and against any
and all claims, losses and liabilities in any way relating to, growing out of or
resulting  from  this  Agreement  and  the  transactions   contemplated   hereby
(including  without  limitation  enforcement of this  Agreement),  except to the
extent such claims,  losses or liabilities  result from such Indemnitee's  gross
negligence or willful  misconduct as finally and  unappeallably  determined by a
court  of  competent  jurisdiction,  and to pay to the  Secured  Party  promptly
following  written  demand  the  amount  of any and  all  reasonable  costs  and
reasonable  expenses,  including the reasonable fees and expenses of its counsel
and of any experts and agents in accordance with the terms and conditions of the
Indenture.

          (b) The  obligations  of each Debtor in this Section 10 shall  survive
the  termination  of this  Agreement and the  discharge of such  Debtor's  other
obligations under this Agreement and the Indenture.

11.   MISCELLANEOUS

      11.1 NOTICES. Unless otherwise specifically provided herein, any notice or
other communication  herein required or permitted to be given to a Debtor or the
Secured Party,  shall be sent to such Person's  address and in the manner as set
forth in the Indenture.

      11.2 EXPENSES. Debtors agree to pay promptly all the actual and reasonable
costs and expenses of preparation  of the Indenture  Documents and any consents,
amendments,  waivers or other modifications thereto; all the costs of furnishing
all  opinions by counsel for the  Debtors;  the  reasonable  fees,  expenses and
disbursements  of  counsel to Secured  Party (in each case  including  allocated
costs of internal  counsel) in  connection  with the  negotiation,  preparation,
execution  and  administration  of the  Indenture  Documents  and any  consents,
amendments,  waivers or other  modifications  thereto and any other documents or
matters  requested by Debtors;  all the actual costs and reasonable  expenses of
creating and perfecting  Liens in favor of Secured Party, for the benefit of the
Holders, including filing and

                                       30
<PAGE>

recording fees,  expenses and taxes,  stamp or documentary  taxes,  search fees,
title insurance  premiums and reasonable  fees,  expenses and  disbursements  of
counsel to Secured  Party and of counsel  providing  any  opinions  that Secured
Party may  reasonably  request in respect of the Collateral or the Liens created
pursuant to the Indenture  Documents;  all the actual costs and reasonable fees,
expenses  and  disbursements  of  any  auditors,  accountants,   consultants  or
appraisers;  all  the  actual  costs  and  reasonable  expenses  (including  the
reasonable  fees,  expenses and  disbursements  of any appraisers,  consultants,
advisors  and agents  employed or retained by Secured  Party and its counsel) in
connection with the custody or preservation of any of the Collateral;  and after
the  occurrence  of an Event of  Default,  all  costs  and  expenses,  including
reasonable  attorneys'  fees (including  allocated  costs of internal  counsel),
keeper's  fees and costs of  settlement,  incurred by Secured Party in enforcing
any Secured  Obligations  of or in  collecting  any payments due from any Debtor
hereunder  or under  the  other  Indenture  Documents  by  reason of an Event of
Default  (including in connection  with the sale of,  collection  from, or other
realization upon any of the Collateral) or in connection with any refinancing or
restructuring of the credit  arrangements  provided hereunder in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy cases or proceedings.

      11.3  SUBROGATION.  Each Debtor further agrees to waive any and all rights
of subrogation it may have against any other Debtor upon the sale or disposition
of all or any portion of the  Collateral by Secured Party  pursuant to the terms
of this Agreement until all of the Secured  Obligations  have been paid in full,
and following the payment in full of all Secured Obligations,  the Secured Party
agrees that, at such Debtor's reasonable request, the Secured Party will execute
and deliver to such  Debtor  appropriate  documents  necessary  to evidence  the
transfer by subrogation to such Debtor of an interest in the Secured Obligations
resulting from such payment by such Debtor.

      11.4 DEBTOR  WAIVERS.  Each  Debtor  hereby  waives to the fullest  extent
permitted by applicable law, for the benefit of Secured Party:  (i) any right to
require  Secured Party, as a condition of payment or performance by such Debtor,
to (A) proceed against any other Debtor or any other Person, (B) proceed against
or exhaust any other  security  held from any other Debtor or any other  Person,
(C) proceed  against or have  resort to any  balance of any  deposit  account or
credit on the books of Secured  Party  attributable  to any other  Debtor or any
other  Person,  or (D)  pursue any other  remedy in the power of  Secured  Party
whatsoever,  (ii) any  defense  arising  by  reason of the  incapacity,  lack of
authority or any  disability  or other  defense of any other  Debtor  including,
without limitation,  any defense based on or arising out of the lack of validity
or the  unenforceability  of any of the Indenture  Documents or any agreement or
instrument  relating  thereto or by reason of the  cessation of the liability of
any other Debtor from any cause other than  indefeasible  payment in full of the
Secured  Obligations;  (iii) any  defense  based upon any statute or rule of law
which  provides that the obligation of a surety must be neither larger in amount
nor in other  respects  more  burdensome  than that of the  principal;  (iv) any
defense based upon Secured Party's errors or omissions in the  administration of
the Indenture Documents,  except as a result of the gross negligence,  bad faith
or willful misconduct of the Secured Party, (v) (A) any principles or provisions
of law, statutory or otherwise, which are or might be in conflict with the terms
of  this  Agreement  and any  legal  or  equitable  discharge  of such  Debtor's
obligations  hereunder,  (B) the benefit of any statute of limitations affecting
such Debtor's liability  hereunder or the enforcement  hereof, (C) any rights to
set-offs, recoupments and counterclaims,  and (D) promptness,  diligence and any
requirement  that Secured  Party  protect,  secure,  perfect or insure any other
security  interest  or lien  or any  property  subject  thereto;  (vi)  notices,
demands,  presentments,  protests, notices of dishonor and notices of any action
or inaction,  notices of default under the Indenture  Documents or any agreement
or instrument related thereto, notices of any renewal, extension or modification
of the Indenture  Documents or any  agreement  related  thereto,  notices of any
extension  of credit to any  other  Debtor  and  notices  of any of the  matters
referred to in this paragraph and any right to consent to any thereof, and (vii)
any defenses or benefits that

                                       31
<PAGE>

may be derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms of this Agreement.

      11.5 AMENDMENTS AND WAIVERS

          (a) Secured  Party's  Consent.  Subject to Section 11.5(b) and 11.5(c)
and the terms of the  Indenture,  no  amendment,  modification,  termination  or
waiver of any  provision of this  Agreement,  or consent to any departure by any
Debtor  therefrom,   shall  in  any  event  be  effective  without  the  written
concurrence  of the  Secured  Party and,  in the case of any such  amendment  or
modification,  by each of the  Debtors;  provided,  that this  Agreement  may be
modified  by  the  execution  of a  Supplement  to  Security  Agreement  by  (i)
additional  Guarantors  and  Issuers  (as  defined in the  Indenture)  to become
parties hereto as Debtors in accordance with Section 5.2 this Agreement and (ii)
existing Debtors pursuant to Section 4.1(b)(iii),  4.4(b)(i),  4.5(b)(i), 4.6(b)
or 4.7(b),  and each other Debtor hereby waives any  requirement of notice of or
consent to any such  amendment.  Any such waiver or consent  shall be  effective
only in the  specific  instance  and for the  specific  purpose for which it was
given.

          (b) Other Consents. No amendment, modification,  termination or waiver
of any  provision of this  Agreement,  or consent to any departure by any Debtor
therefrom,  shall amend, modify,  terminate or waive any provision herein as the
same applies to Secured Party without the consent of the Secured Party except as
provided in accordance with the Indenture.

          (c)  Waiver.  Any waiver or  consent  shall be  effective  only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on any Debtor in any case shall  entitle any Debtor to any other or
further notice or demand in similar or other circumstances.

      11.6  SUCCESSORS  AND ASSIGNS.  This  Agreement  shall be binding upon the
parties hereto and their respective successors and assigns including all persons
who  become  bound as  debtor to this  Agreement.  No  Debtor  shall,  except as
permitted under the Indenture,  assign any right, duty or obligation  hereunder.
This Agreement is for the benefit of the Secured Party and for such other Person
or Persons as may from time to time  become or be  Holders,  and this  Agreement
shall be transferrable  with the same force and effect and to the same extent as
the Secured  Obligations may be  transferrable,  and the Collateral shall secure
any and all of the then existing and thereafter  arising Secured  Obligations in
favor of such a transferee that has effectuated such transfer in accordance with
the terms of the Indenture, with retroactive rank.

      11.7  INDEPENDENCE  OF COVENANTS.  All covenants  hereunder shall be given
independent  effect so that if a particular action or condition is not permitted
by any of such  covenants,  the fact that it would be  permitted by an exception
to, or would otherwise be within the limitations of, another  covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.

      11.8  SURVIVAL  OF   REPRESENTATIONS,   WARRANTIES  AND  AGREEMENTS.   All
representations,  warranties  and  agreements  made  herein  shall  survive  the
execution and delivery hereof. Notwithstanding anything herein or implied by law
to the contrary, the agreements of each Debtor set forth in Sections 10 and 11.2
shall survive the payment of the Secured Obligations and the termination hereof.

      11.9 NO WAIVER;  REMEDIES  CUMULATIVE.  No failure or delay on the part of
the Secured Party in the exercise of any power, right or privilege  hereunder or
under any other Indenture  Document shall impair such power,  right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial  exercise of any such power,  right or privilege  preclude
other or further exercise thereof or of any other power, right or privilege. All
rights, powers and remedies existing

                                       32
<PAGE>

under this Agreement and the other Indenture  Documents are cumulative,  and not
exclusive of, any rights or remedies  otherwise  available.  Any  forbearance or
failure to exercise,  and any delay in  exercising,  any right,  power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof,  nor shall it preclude the further exercise of any such right,
power or remedy.  Without limiting the generality of the foregoing,  each Debtor
waives any right  such  Debtor may have to  require  the  Secured  Party and the
Holders to pursue any third Person for any of the Secured Obligations.

      11.10 SEVERABILITY. In case any provision in or obligation hereunder shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and  enforceability  of the  remaining  provisions  or  obligations,  or of such
provision  or  obligation  in any  other  jurisdiction,  shall not in any way be
affected or impaired thereby.

      11.11   HEADINGS.   Section   headings  herein  are  included  herein  for
convenience  of  reference  only and shall not  constitute a part hereof for any
other purpose or be given any substantive effect.

      11.12 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES  HEREUNDER  SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL  OBLIGATIONS  LAW), EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY  INTEREST  HEREUNDER,
OR REMEDIES HEREUNDER,  IN RESPECT OF ANY PARTICULAR  COLLATERAL ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

      11.13 SUBMISSION TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY DEBTOR ARISING OUT OF OR RELATING HERETO OR ANY OTHER INDENTURE DOCUMENT, OR
ANY OF THE  OBLIGATIONS,  MAY BE  BROUGHT  IN ANY  STATE  OR  FEDERAL  COURT  OF
COMPETENT  JURISDICTION IN THE STATE,  COUNTY AND CITY OF NEW YORK. BY EXECUTING
AND DELIVERING  THIS AGREEMENT,  EACH DEBTOR,  FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, IRREVOCABLY SUBMITS TO AND ACCEPTS GENERALLY AND UNCONDITIONALLY
THE NONEXCLUSIVE  JURISDICTION  AND VENUE OF SUCH COURTS;  WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS;  AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED  MAIL,  RETURN  RECEIPT
REQUESTED,  TO THE APPLICABLE  DEBTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION  11.1;  AGREES THAT SERVICE AS PROVIDED  ABOVE IS  SUFFICIENT  TO CONFER
PERSONAL  JURISDICTION  OVER THE APPLICABLE DEBTOR IN ANY SUCH PROCEEDING IN ANY
SUCH COURT,  AND OTHERWISE  CONSTITUTES  EFFECTIVE AND BINDING  SERVICE IN EVERY
RESPECT;  AND AGREES  SECURED  PARTY  RETAINS THE RIGHT TO SERVE  PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS  AGAINST ANY DEBTOR IN THE
COURTS OF ANY OTHER JURISDICTION HAVING JURISDICTION OVER SUCH DEBTOR.

      11.14  COUNTERPARTS.  This  Agreement  may be  executed  in any  number of
counterparts,  each of which when so executed and  delivered  shall be deemed an
original,  but all such  counterparts  together shall constitute but one and the
same instrument.

      11.15 GAMING LAWS. The Secured Party acknowledges,  understands and agrees
that the Gaming  Laws may  impose  certain  licensing  or  transaction  approval
requirements prior to the exercise of

                                       33
<PAGE>

the rights and remedies  granted to it under this  Agreement with respect to the
Collateral subject to the Gaming Laws.

          (a) If any consent  under the Gaming  Laws is  required in  connection
with the taking of any of the actions which may be taken by the Secured Party in
the  exercise  of its  rights  hereunder,  then  each  Debtor  agrees to use its
commercially  reasonable  best  efforts to secure such  consent and to cooperate
with the Secured Party in obtaining any such consent.  Upon the  occurrence  and
during the  continuation  of any Event of Default,  each Debtor  shall  promptly
execute   and/or  cause  the  execution  of  all   applications,   certificates,
instruments,  and other  documents  and  papers  that the  Secured  Party may be
required  to file in order to obtain any  necessary  approvals  under the Gaming
Laws, and if such Debtor fails or refuses to execute such documents, the Secured
Party or the court with  jurisdiction  may execute  such  documents on behalf of
such Debtor.

          (b)  Notwithstanding  any other  provision  of this  Agreement  to the
contrary other than as set forth in Section 7.6, nothing in this Agreement shall
(i) effect any transfer of any ownership interest in a Debtor or (ii) effect any
transfer, sale, purchase, lease or hypothecation of, or any borrowing or loaning
of money against,  or any  establishment  of any voting trust agreement or other
similar  agreement with respect to any certificate of suitability or any owner's
license heretofore issued to any person,  including any Debtor, under any of the
Gaming Laws.

          (c) Debtors and Secured  Party each  acknowledge  that,  to the extent
required under applicable law, the consummation of the transactions contemplated
hereby and the exercise of remedies hereunder are subject to the Louisiana horse
racing and off-track betting statutes, La. R.S. 4:141 et seq. and 4:211 et seq.,
the Video Draw Poker Devices Control Law, La. R.S. 27:301 et seq., the Louisiana
Pari-Mutuel Live Racing Facility  Economic  Redevelopment and Gaming Control Act
(Slots at the Track), La. R.S. 27:351 et seq., the Louisiana Gaming Control Law,
La. R.S. 27:1 et seq. and the regulations  promulgated pursuant to such laws and
statutes,  all as amended  from time to time.  Debtors  and  Secured  Party each
further acknowledge that the Racing Licenses and the Gaming Licenses held by the
Company are not part of the  Collateral of this  Agreement  and that,  under the
above described legislation and rules promulgated thereunder,  Secured Party may
be precluded  from or otherwise  limited in taking  possession of or selling the
Collateral of this Agreement under the Defaults and Remedies  provisions of this
Agreement.  Debtors and Secured Party each also  acknowledge that due to various
legal restrictions,  including,  without  limitation,  licensing of operators of
pari-mutuel wagering facilities and prior approval of the sale or disposition of
assets of a licensed pari-mutuel wagering operation,  the sale of Collateral may
be denied by Racing  Authorities or Gaming Authorities or delayed pending Racing
Authority or Gaming Authority action or approval.

      11.16  EFFECTIVENESS.  Agreement shall become effective upon the execution
of a counterpart hereof by each of the parties hereto and receipt by the Secured
Party of written or telephonic  notification of such execution and authorization
of delivery thereof.

      11.17 ENTIRE AGREEMENT.  This Agreement, the other Indenture Documents and
the  Intercreditor  Agreement  embody the  entire  agreement  and  understanding
between the Debtors and the Secured Party and supersede all prior agreements and
understandings  between such parties  relating to the subject  matter hereof and
thereof.  Accordingly,  the Indenture Documents and the Intercreditor  Agreement
may not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties.  There are no unwritten oral  agreements  between the
parties.

      11.18 THE MORTGAGES.  In the event that any of the Collateral hereunder is
also subject to a valid and enforceable Lien under the terms of any Mortgage and
the terms of such Mortgage are

                                       34
<PAGE>

inconsistent  with the  terms  of this  Agreement,  then  with  respect  to such
Collateral,  the  terms of such  Mortgage  shall be  controlling  in the case of
fixtures  and leases,  letting and  licenses of, and  contracts  and  agreements
relating to real property or leases of real property and vessels registered with
the U.S. Coast Guard,  and the terms of this  Agreement  shall be controlling in
the case of all other Collateral.

      11.19 INDENTURE CONTROLS. All terms, covenants, conditions, provisions and
requirements  of the Indenture are  incorporated by reference in this Agreement.
In the event of any conflict or  inconsistency  between the  provisions  of this
Agreement  and  those  of the  Indenture,  including,  without  limitation,  any
conflicts  or  inconsistencies  in  any  definitions  herein  or  therein,   the
provisions or definitions of the Indenture shall govern.

      11.20 TRUST  INDENTURE  ACT CONTROLS.  If any provision of this  Agreement
limits,  qualifies or conflicts with the duties  imposed by the Trust  Indenture
Act of 1939 as in effect on the date of this Agreement, the imposed duties shall
control.

                                       35
<PAGE>

          IN WITNESS WHEREOF, each Debtor and the Secured Party have caused this
Agreement  to be duly  executed  and  delivered  by  their  respective  officers
thereunto duly authorized as of the date first written above.

                                       DEBTORS:
                                       DIAMOND JO, LLC

                                       By: /s/M. BRENT STEVENS
                                          ----------------------------
                                           Name:  M. Brent Stevens
                                           Title: Chief Executive Officer

                                       THE OLD EVANGELINE DOWNS CAPITAL CORP.

                                       By: /s/M. BRENT STEVENS
                                          ----------------------------
                                           Name:  M. Brent Stevens
                                           Title: Chief Executive Officer

                                       OED ACQUISITION, LLC

                                       By: /s/M. BRENT STEVENS
                                          ----------------------------
                                           Name:  M. Brent Stevens
                                           Title: Chief Executive Officer

                                       PENINSULA GAMING CORPORATION

                                       By: /s/M. BRENT STEVENS
                                          ----------------------------
                                           Name:  M. Brent Stevens
                                           Title: Chief Executive Officer

                                       THE OLD EVANGELINE DOWNS, L.L.C.

                                       By: /s/M. BRENT STEVENS
                                          ----------------------------
                                           Name:  M. Brent Stevens
                                           Title: Chief Executive Officer

<PAGE>

                                       SECURED PARTY:
                                       U.S. BANK NATIONAL ASSOCIATION, as
                                            Trustee, as Secured Party

                                       By: /s/FRANK P. LESLIE, II
                                          -------------------------------
                                            Name:  Frank P. Leslie, II
                                            Title: Vice President

<PAGE>

                                                                       EXHIBIT A
                                                TO PLEDGE AND SECURITY AGREEMENT

                    FORM OF SUPPLEMENT TO SECURITY AGREEMENT

      This  SUPPLEMENT TO SECURITY  AGREEMENT,  dated  [________  __, 20__],  is
delivered by the  undersigned  in favor of U.S.  Bank National  Association,  as
Trustee  (together  with any  successor  Trustee  pursuant  to the  terms of the
Indenture,  the "SECURED PARTY"), acting in the capacity of collateral agent for
the  benefit  of itself and the  Holders,  pursuant  to the Pledge and  Security
Agreement,  dated as of April 16, 2004 (as it may be from time to time  amended,
restated, modified or supplemented, the "SECURITY AGREEMENT"), among Diamond Jo,
LLC, a Delaware  limited  liability  company  ("DJL"),  The Old Evangeline Downs
Capital Corp., a Delaware  corporation  ("CAPITAL"  and,  together with DJL, the
"ISSUERS"), OED Acquisition, LLC, a Delaware limited liability company ("OEDA"),
Peninsula  Gaming  Corporation,  a Delaware  corporation  ("PG CORP."),  The Old
Evangeline Downs,  L.L.C., a Louisiana  limited  liability company ("OED"),  and
each additional  Guarantor (as defined in the Indenture referred to therein) and
Issuer (as defined in the Indenture) from time to time party thereto pursuant to
Section 5.2 thereof,  and the Secured Party.  Capitalized  terms used herein not
otherwise  defined  herein  shall  have the  meanings  ascribed  thereto  in the
Security Agreement.

      The undersigned [hereby confirms,  as of the date first written above, the
grant to the Secured Party set forth in the Security  Agreement](1) [does hereby
grant to the  Secured  Party a security  interest  in, all of the  undersigned's
right,  title  and  interest  in and to all  Collateral  to secure  the  Secured
Obligations of the undersigned,  in each case whether now or hereafter  existing
or in which the  undersigned  now has or  hereafter  acquires  an  interest  and
wherever the same may be located](2).  The undersigned hereby further agrees, as
of the date first written  above,  to [continue to] be bound by all of the terms
and provisions of the Security Agreement,  as supplemented by this Supplement to
Security Agreement.  The undersigned hereby makes all of the representations and
warranties  set forth in the  Security  Agreement,  and  hereby  represents  and
warrants that the attached  supplements  to Schedules  accurately and completely
set  forth  all  [additional]  information  required  pursuant  to the  Security
Agreement and hereby agrees that such  Supplements to Schedules shall constitute
part of the schedules to the Security Agreement.

      IN WITNESS WHEREOF, the undersigned has caused this Supplement to Security
Agreement to be duly executed and delivered by its duly authorized officer.

                                         [NAME OF DEBTOR]

                                         By:_____________________________
                                             Name:
                                             Title:

ACCEPTED AND AGREED TO BY:
U.S. BANK NATIONAL ASSOCIATION,
     as Trustee, as Secured Party

By:_____________________________
     Name:
     Title:

-----------
(1) Use bracketed language for existing Debtor.
(2) Use bracketed language for new Debtor.

                                      A-1
<PAGE>

                                                                       EXHIBIT B
                                                TO PLEDGE AND SECURITY AGREEMENT

                 FORM OF CONTROL AGREEMENT (SECURITIES ACCOUNTS)

                      [ATTACH SECURITIES CONTROL AGREEMENT]

                                      B-1
<PAGE>

                                                                       EXHIBIT C
                                                TO PLEDGE AND SECURITY AGREEMENT

                  FORM OF CONTROL AGREEMENT (DEPOSIT ACCOUNTS)

                   [ATTACH DEPOSIT ACCOUNT CONTROL AGREEMENT]

                                      C-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]