EXHIBIT
10.6







AMENDED
AND RESTATED INTERCOMPANY SUBORDINATION AGREEMENT




THIS
AMENDED AND RESTATED INTERCOMPANY SUBORDINATION AGREEMENT (this “Agreement”) dated as
of October 29, 2009, is made and entered into by and among PENINSULA GAMING,
LLC, a Delaware limited liability company (“Peninsula Gaming”),
THE OLD EVANGELINE DOWNS, L.L.C., a Louisiana limited liability company (“OED”), DIAMOND JO
WORTH, LLC, a Delaware limited liability company (“DJW”), DIAMOND JO,
LLC, a Delaware limited liability company (“DJO”), BELLE OF
ORLEANS, L.L.C., a Louisiana limited liability company (“Amelia Belle”;
together with Peninsula Gaming, OED, DJW and DJO, hereinafter collectively
referred to as the “Borrowers” and each
individually, a “Borrower”), PENINSULA
GAMING CORP. a Delaware corporation (“OED Capital”;
together with the Borrowers hereinafter collectively referred to as the “Debtors” and each
individually, a “Debtor”; and
together, in their respective capacity as a creditor to a Debtor, each ofPeninsula Gaming, OED,
DJW, DJO, Amelia Belle and OED Capital, hereinafter collectively referred to as
the “Subordinated
Lenders” and each individually, a “Subordinated
Lender”), and WELLS FARGO FOOTHILL, INC., a California corporation, as
agent for the Lenders (as defined in the Senior Loan Agreement defined below)
(the “Agent”).




W I T N E S S E T
H:




WHEREAS,
the parties hereto executed and delivered that certain Intercompany
Subordination Agreement dated as of June 16, 2004 (as amended, restated,
supplemented or otherwise modified prior to the date hereof, the “Existing Intercompany
Subordination Agreement”) and desire to amend and restate the Existing
Intercompany Subordination Agreement as provided herein; and




WHEREAS,
the parties hereto intend that (a) the provisions of the Existing Intercompany
Subordination Agreement be hereby superseded and replaced by the provisions
hereof, and (b) by entering into and performing their respective obligations
hereunder, this transaction shall not constitute a novation; and




WHEREAS,
the Debtors are indebted and may from time to time in the future become indebted
to a Subordinated Lender in respect of advances, loans and other extensions of
credit or other financial accommodations made from time to time by the
Subordinated Lenders to the Debtors (such indebtedness, together with all other
indebtedness and obligations of the Debtors, or any of them, to each
Subordinated Lender, however evidenced and whether now existing or hereafter
arising, is referred to herein as the “Subordinated Debt”;
provided that
“Subordinated Debt” shall not include payments to OED Acquisition, LLC, a
Delaware limited liability company (“OEDA”), Peninsula
Gaming Partners, LLC, a Delaware limited liability company (“PGP”) and DJO, as
applicable, as set forth in that certain Amended and Restated Management Fees
Subordination Agreement, dated as of the date hereof, among OEDA, PGP, DJO, OED,
DJW and the Agent);and




WHEREAS,
the Borrowers, the Agent and the Lenders are parties to that certain Amended and
Restated Loan and Security Agreement dated as of even date herewith
(collectively, as amended, restated, supplemented or otherwise modified from
time to time, the “Senior Loan
Agreement”), whereby the Borrowers may be indebted to the Lender Group
(as







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Senior Debt




WHEREAS,
as an inducement to the Lender Group to enter into the Loan Agreement and to
extend the credit therein, OED Capital has entered into a Guaranty dated as of
the date hereof in favor of the Agent, for the benefit of the Lender Group,
whereby OED Capital has guaranteed the Secured Obligations (as defined in the
Guaranty to which such Person is a party);




WHEREAS,
as security for the payment of all liabilities and obligations due under the
Senior Debt, the Debtors, pursuant to the Loan Documents (as defined in the
Senior Loan Agreement), have granted to the Agent, for the benefit of the Lender
Group, a first priority lien on and unconditional security interest in and to
certain personal and real property assets of the Debtors as set forth in the
Loan Documents (collectively, said interests in and assets of the Debtors are
referred to herein as the “Collateral;” and,
collectively said liens and security interests of the Agent are referred to
herein as the “Senior
Lien”); and




WHEREAS,
as part of the consideration for the Lender Group’s extension of credit to the
Borrowers, each Subordinated Lenders has agreed, among other things, subject to
the terms and provisions of this Agreement, (i) to subordinate the Subordinated
Debt to the Senior Debt, (ii) to subordinate any lien which each Subordinated
Lender has or may have in the future in the assets or property of any Debtor or
any Subsidiary or Affiliate of the Debtors (the “Subordinated Lien”)
to the Senior Lien, and (iii) to forebear from exercising any creditor’s remedy
or taking any action against the Debtors upon any of their obligations to each
Subordinated Lender.




NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
that each capitalized term used herein and not defined herein shall have the
meaning ascribed thereto in the Senior Loan Agreement, and further agree that
the Existing Intercompany Subordination Agreement is amended and restated in its
entirety pursuant to the terms hereof, and further agree as
follows:




1.           Priority of Liens;
Subordinated Debt.  Notwithstanding anything contained in this
Agreement to the contrary including, without limitation, the date, time, manner
or order of perfection or attachment of the security interests and liens on the
Collateral granted by the Debtors to the Agent or any Subordinated Lender, and
notwithstanding the usual application of the priority provisions of the Uniform
Commercial Code as in effect in any jurisdiction or any other applicable law or
judicial decision of any jurisdiction, or whether such Subordinated Lender holds
possession of all or any part of the Collateral, or if the Agent or such
Subordinated







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Commitments




2.           Subordination of
Subordinated Debt.




(a)           Each
Subordinated Lender hereby subordinates any and all claims now or hereafter
owing to it by the Debtors, or any of them, under all or any portion of the
Subordinated Debt to any and all Senior Debt (including, without limitation,
interest, fees, costs or other payments on the Senior Debt paid or accrued after
the commencement of an Insolvency Proceeding and whether or not such claims are
deemed allowed or recoverable in any Insolvency Proceeding, and payment of or
for adequate protection pursuant to any Insolvency Proceeding), and agrees that
all Senior Debt shall be paid in full in cash to the satisfaction of the Lender
Group and the Commitments shall be terminated before any payment may be made on
the Subordinated Debt, whether of principal or interest or other indebtedness or
other obligations.




(b)           Each
Subordinated Lender agrees not to accept, and waives any and all rights to, any
payment of any kind or form of the Subordinated Debt (from the Debtors or
otherwise) nor make any transfer to third parties not party to this Agreement or
take any other action, in any case, designed to secure indirectly from the
Debtors any payment on account of the Subordinated Debt without the express,
prior written consent of the Agent, and each Subordinated Lender agrees to pay
over to the Agent any funds that may be received by it from the Debtors (i) as a
prepayment at any time or (ii) as a payment on account of the Subordinated Debt
at any time until the Senior Debt has been paid in full in cash to the
satisfaction of the Lender Group and the Commitments have been
terminated.  In case any funds shall be paid or delivered to a
Subordinated Lender under the circumstances described in clause (i) or (ii) of
the preceding sentence before the Senior Debt shall have been paid in full in
cash to the satisfaction of the Lender Group and the Commitments have been
terminated, such funds shall be held in trust by such Subordinated Lender for
and immediately paid and delivered to the Agent (in the form received endorsed
over to the Agent).  Each Subordinated Lender further agrees not to
sell, assign, transfer or endorse any Subordinated Debt to any other Person
except subject to the terms and conditions of this Agreement.




(c)           Each
Subordinated Lender agrees that the priority of the Senior Debt set forth above
shall continue during any insolvency, receivership, bankruptcy,
dissolution,







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Insolvency
Proceeding Section 2






(d)           Subject
to the provisions of this Agreement, the Agent shall have the sole right to
control all aspects of liquidation of the Collateral and disposition of the
proceeds thereof, including all proceedings pertaining thereto under any
Insolvency Proceeding and the approval of any plan of reorganization of the
Debtors, or any of them, thereunder.




3.           Forbearance from Exercise of
Certain Remedies.  Until the Senior Debt has been paid in full
in cash and the Commitments have been terminated, no Subordinated Lender shall
(a) take any action or exercise any remedy against the Debtors, or any of them,
to enforce all or any portion of the Subordinated Debt; (b) take any action or
exercise any remedy against any guarantor of or pledgor securing the Senior Debt
in order to collect any of the Subordinated Debt; (c) commence, or join with any
other creditor of the Debtors, or any of them, in commencing any Insolvency
Proceeding against the Debtors, or any of them; or (d) take any action or
exercise any remedy against any property or assets of any guarantor of or
pledgor securing the Senior Debt.  The parties hereto understand and
agree that the Agent shall have the right, but shall have no obligation, to cure
any default under the Subordinated Debt without the prior written consent of
each Subordinated Lender.  Notwithstanding anything contained in this
Agreement to the contrary, in no event shall any Subordinated Lender be entitled
to receive and retain any securities, equity or otherwise, or other
consideration provided for in (i) a plan of reorganization or otherwise in
connection with any bankruptcy or Insolvency Proceeding or (ii) any other
judicial or nonjudicial proceeding for the liquidation, dissolution or winding
up of the Debtors, or any of them, or the assets or properties of the Debtors,
or any of them, in any case unless and until the Senior Debt is paid in full in
cash to the satisfaction of the Lender Group and the Commitments are
terminated.







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4.           Agent’s Authority to
Act.  For so long as any of the Senior Debt shall remain
unpaid, the Agent shall have the right to act as attorney-in-fact for each
Subordinated Lender and other holders of the Subordinated Debt for the purposes
specified herein and each Subordinated Lender hereby irrevocably appoints the
Agent as such Subordinated Lender’s true and lawful attorney, with full power of
substitution, in the name of such Subordinated Lender or in the name of holders
of the Subordinated Debt, for the use and benefit of the holders of the Senior
Debt without notice to the holders of Subordinated Debt or any of their
representatives, successors or assigns, to perform the following acts, at the
option of the holders of the Senior Debt, at any meeting of creditors of the
Debtors or in connection with any Insolvency Proceeding:




(a)           if
a proper claim or proof of debt in respect of the Subordinated Debt has not been
filed in the form required in any such Insolvency Proceeding at least ten (10)
Business Days prior to the expiration of the time for filing such claims, to
file an appropriate claim for and on behalf of the holders of Subordinated
Debt;




(b)           to
collect any assets of the Debtors distributed, divided or applied by way of
dividend or payment, or any securities issued, on account of the Subordinated
Debt and to apply the same, or the proceeds of any realization upon the same
that the Agent in its discretion elects to effect, to the Senior Debt until all
of the Senior Debt (including, without limitation, all interest and other
payments accruing or paid on the Senior Debt after the commencement of any
Insolvency Proceeding at the rate specified in the Senior Debt) has been paid in
full in cash to the satisfaction of the Lender Group, rendering any surplus to
the holders of Subordinated Debt if and to the extent permitted by law;
and




(c)           generally
to take any action in connection with any such Insolvency Proceeding either in
its own name or in the name of each Subordinated Lender (including without
limitation voting on any plan of reorganization) that the holders of
Subordinated Debt would be authorized to take, but for this Agreement, in the
event that the Agent believes such action is necessary to protect its interests
in the Senior Debt and under this Agreement and after first giving each
Subordinated Lender five (5) days’ written notice of its intent to take such
action (to the extent such notice is practicable), provided that the
Agent agrees to permit such Subordinated Lender to take action on such
Subordinated Lender’s own behalf in connection with any such Insolvency
Proceeding as may be necessary to reasonably protect such Subordinated Lender’s
interests, as long as such action is not contrary to or in conflict with the
actions and interests of the Agent and such Subordinated Lender’s interests are
always in second position to the Senior Debt and the Senior Lien.




In no
event shall the holder or holders of the Senior Debt be liable to any
Subordinated Lender or any other holders of the Subordinated Debt for any
failure to prove the Subordinated Debt, to exercise any right with respect
thereto or to collect any sums payable thereon.  A distribution made
under this Agreement to holders of Senior Debt that otherwise would have been
made to holder or holders of Subordinated Debt is not, as between the Debtors,
or any of them, its other creditors and holder or holders of Subordinated Debt,
a payment by the Debtors on the Senior Debt, it being understood that the
provisions of this Agreement are solely for the purpose of defining the relative
rights of the holders of Subordinated Debt, on the one hand, and the holders of
Senior Debt on the other hand.  Each Subordinated Lender represents
that the Subordinated Lenders
are the sole holders of the Subordinated Debt and, except upon satisfaction of
the conditions set forth in Section 16 hereof,
shall not assign, participate, pledge, encumber or transfer any of the
Subordinated Debt or any interest therein until the Senior Debt is repaid in
full in cash and the Commitments are terminated.  The
power-of-attorney granted hereby is coupled with an interest and shall be
irrevocable.







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5.           Duration and
Termination.  This Agreement shall constitute a continuing
agreement of subordination and shall remain in effect until indefeasible payment
in full in cash to the satisfaction of the Lender Group of the Senior Debt and
termination of the Commitments.  The holder or holders of Senior Debt
may, without notice to any Subordinated Lender or the other holders of the
Subordinated Debt, extend or continue credit and make other financial
accommodations to or for the account of the Borrowers in reliance upon this
Agreement.  The obligations of each Subordinated Lender and the other
holders of Subordinated Debt under this Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time any payment in
respect of any Senior Debt is rescinded or must otherwise be restored or
returned by a holder of Senior Debt by reason of any Insolvency Proceeding or as
a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Debtors or any substantial part of any
Debtor’s property, or otherwise, all as though such payment had not been
made.




6.           Subordinated Lender’s
Waivers.  All of the Senior Debt shall be deemed to have been
made or incurred in reliance upon this Agreement.  Each Subordinated
Lender expressly waives all notice of the acceptance by the Agent of the
subordination and other provisions of this Agreement and all other notices not
specifically required pursuant to the terms of this Agreement whatsoever, and
each Subordinated Lender expressly consents to reliance by the Agent upon the
subordination and other agreements as herein provided.  Each
Subordinated Lender agrees that the Agent has not made warranties or
representations with respect to the due execution, legality, validity,
completeness or enforceability of the Senior Loan Agreement and other Loan
Documents or the collectibility of the obligations thereunder, that Agent shall
be entitled to manage and supervise its loans in accordance with applicable law
and its usual practices, modified from time to time as it deems appropriate
under the circumstances, and that the Agent shall not have any liability to such
Subordinated Lender for, and such Subordinated Lender waives any claim (except
with respect to willful misconduct) that such Subordinated Lender may now or
hereafter have against Agent arising out of (i) any and all actions that the
Agent takes or omits to take (including, without limitation, actions with
respect to the creation, perfection or continuation of liens or security
interests in the Senior Debt or the Senior Lien, actions with respect to the
occurrence of an Event of Default, actions with respect to the foreclosure upon,
sale, release, or depreciation of, or failure to realize upon, the Collateral
and actions with respect to the collection of any claim for all or any part of
the Senior Debt from any account debtor, guarantor or any other party) with
respect to the documents regarding the Senior Debt or any other agreement
related thereto or to the collection of the Senior Debt or the valuation, use,
protection or release of the Collateral and/or other security for the Senior
Debt, (ii) the Agent’s election, in any proceeding instituted under Chapter 11
of Title 11 of the United States Code (11 U.S.C. Sec. 101 et seq.) (the “Bankruptcy Code”), of
the application of Section 1111 (b)(2) of the Bankruptcy Code, and/or (iii) any
making of loans to, or grant of a security interest under Section 364 of the
Bankruptcy Code by, the Debtors as debtors-in-possession.







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7.           Waiver of Marshaling; No
Offset.  Each Subordinated Lender agrees that the Agent shall
have no obligation to marshal any part of the Collateral or any such other
property, instruments, documents, agreements or guaranties before enforcing its
rights against any other part of the Collateral or its rights herein as against
such Subordinated Lender.  In the event such Subordinated Lender is or
becomes indebted to any Debtor, including, without limitation, under any
documents or instruments evidencing the Subordinated Debt, each Subordinated
Lender agrees that it shall pay such indebtedness in accordance with its terms
and shall not deduct from or set off against any amounts owed to such Debtor any
amounts such Debtor claims are due to it with respect to the Subordinated
Debt.




8.           No Contest of Security
Interest.  No Subordinated Lender shall contest the validity,
perfection or enforceability of any lien or security interest granted to the
Agent by any Debtor in connection with the Senior Debt, and each Subordinated
Lender agrees to cooperate in the defense of any action contesting the validity,
perfection or enforceability of such liens or security interests.




9.           Subordination Not Affected,
Etc.  Nothing in this Agreement shall be construed as affecting
or in any way limiting the extension of new or additional financial
accommodation by the Lender Group to the Borrowers and the terms and conditions
hereof shall apply to such new and additional financial
accommodations.  Notwithstanding the preceding sentence or anything
contained in this Agreement to the contrary, none of the provisions of this
Agreement shall be deemed or construed to constitute a commitment or an
obligation on the part of the Lender Group to make any future loans, advances or
other extensions of credit or financial accommodation to the
Borrowers.  Each Subordinated Lender understands and agrees that all
accrued interest, charges, expenses, attorneys’ fees and other liabilities and
obligations under the Senior Loan Agreement shall constitute part of the Senior
Debt, and nothing in this Agreement shall be construed as affecting or in any
way limiting any indulgence granted by the Lender Group with respect to any
existing financial accommodation to the Borrowers.  The subordinations
effected, and the rights created, hereby shall not be affected by (a) any
amendment of or any addition of or supplement to any instrument, document or
agreement relating to the Senior Debt, (b) any exercise or non-exercise of any
right, power or remedy under or in respect of the Senior Debt or any instrument,
document or agreement relating thereto, (c) the release, sale, exchange or
surrender, in whole or in part, of any part of the Collateral or any additional
collateral to which the Agent may become entitled, (d) any release of any
guarantor of or pledgor securing the Senior Debt or any security for such pledge
or guaranty, or (e) any waiver, consent, release, indulgence, extension,
renewal, modification, delay or other action, inaction or omission in respect of
the Senior Debt or any instrument, document or agreement relating thereto or any
security therefor or pledge or guaranty thereof, whether or not each
Subordinated Lender shall have had notice or knowledge of any of the foregoing
and regardless of whether such Subordinated Lender shall have consented or
objected thereto.  Any provision of any document, instrument or
agreement evidencing, securing or otherwise relating to the Subordinated Debt
purporting to limit or restrict in any way any Debtor’s ability to enter into
any agreement with the Agent to amend or modify any document, instrument or
agreement evidencing, securing or otherwise relating to the Senior Debt shall be
deemed of no force or effect until the Senior Debt has been repaid in full in
cash to the satisfaction of the Lender Group and the Commitments have been
terminated.







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10.           Voided
Payments.  Notwithstanding anything herein that may be
construed to the contrary, to the extent that any Debtor makes any payment on
the Senior Debt which, within twelve (12) months of the date of such payment, is
subsequently invalidated, declared to be fraudulent, avoidable or preferential,
set aside or is required to be repaid to a trustee, receiver, the estate of such
Debtor or any other party under any bankruptcy act, state or Federal law, common
law or equitable cause (such payment being hereinafter referred to as a “Voided Payment”),
then, to the extent of such Voided Payment, that portion of the Senior Debt that
had been previously satisfied by such Voided Payment shall be revived and
continue in full force and effect as if such Voided Payment had never been
made.  In the event that a Voided Payment is sought to be recovered
from the Agent or any other member of the Lender Group under the Senior Loan
Agreement, an “Event
of Default” under the Senior Loan Agreement shall be deemed to have
occurred and to be continuing from the date of such recovery from the Agent or
any such other member of the Lender Group of such Voided Payment until the full
amount of such Voided Payment is fully and finally restored to the Agent or such
other member of the Lender Group and until such time the provisions of this
Agreement shall be in full force and effect.




11.           Violation of Agreement by
Debtors.  Each Debtor hereby consents to this Agreement, agrees
to abide by the terms hereof, agrees to make no payments or distributions
contrary to the terms and provisions hereof and to do every act and thing
necessary to carry out such terms and provisions.  Each Debtor agrees
that should it make any payment in contravention of any provision of this
Agreement the maturity of said Senior Debt may be accelerated in accordance with
the terms of the Senior Loan Agreement.




12.           Waiver.  Irrespective
of the due date of any of the Subordinated Debt, each Subordinated Lender hereby
expressly waives any and all rights to payment by any Debtor of the Subordinated
Debt prior to repayment in full in cash of the Senior Debt and termination of
the Commitments.




13.           Immediate
Effect.  This Agreement shall be effective immediately upon its
execution by each of the parties hereto, and there are no conditions precedent
or subsequent to the effectiveness of this Agreement.




14.           Inducement.  As
an inducement to, and part of the consideration for, the Lender Group’s
extension of credit to the Borrowers, which each Subordinated Lender and the
Debtors acknowledge that the Agent and the other members of the Lender Group
would be unwilling to do without this Agreement, each Subordinated Lender
agrees, among other things, (i) to subordinate the Subordinated Lien to the
Senior Lien, (ii) to subordinate the Subordinated Debt to the Senior Debt, and
(iii) to forebear from exercising any creditor’s remedy or taking any action
against any Debtor upon any of its obligations to each Subordinated Lender until
the Senior Debt has been paid in full in cash to the satisfaction of the Lender
Group and termination of the Commitments.




15.           Successors and Assigns;
Continuing Effect, etc.  This Agreement is being entered into
for the benefit of, and shall be binding upon, the Agent, each Subordinated
Lender, the Debtors and their respective successors and assigns.  The
Agent or any other member of the Lender Group under the Senior Loan Agreement
may assign or participate out to other parties any
portion of its interest under the Senior Debt and no such assignee or
participant shall be required to become a signatory hereto.  Any
assignee or transferee of each Subordinated Lender shall execute and deliver to
the other parties hereto an agreement pursuant to which they will become parties
hereto as fully as if they were signatories hereto and providing for the
effectiveness of this Agreement as to such transferee or assignee and other
parties.  This Agreement shall be a continuing agreement, shall be
irrevocable and shall remain in full force and effect so long as any of the
Senior Debt or the Subordinated Debt is outstanding and so long as the Senior
Loan Agreement has not been terminated and the Commitments remain in
place.







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16.           Notification of
Defaults.  Each Subordinated Lender shall immediately give
written notice to the Agent of a default or an event of default by the Debtors
under the Subordinated Debt.  Each Subordinated Lender understands
that, subject to any grace or cure period under such Subordinated Lender’s
agreements with the Debtors, any default by the Debtors under the Subordinated
Debt is, automatically, an event of default of the Debtors under the Senior
Debt.  Nothing in this Agreement shall be interpreted to limit or
restrict the right of the Agent and each Subordinated Lender to waive any
default under their respective documents, and each  Subordinated
Lender agrees that any waiver by each Subordinated Lender will be in writing and
provided to the Agent.




17.           Notices.  Any
notices, consents, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to be
given to any party or parties (a) upon delivery to the address of the party or
parties set forth below if delivered in person or by courier or if sent by
certified or registered mail (return receipt requested), or (b) upon dispatch if
transmitted by telecopy or other means of facsimile transmission, in any case to
the party or parties at the telecopy numbers set forth below:




If
      to a Debtor:
              PENINSULA
      GAMING, LLCc/o
      Peninsula Gaming Partners, LLC600
      Star Brewery Dr., Ste. 110Dubuque,
      Iowa  52001Attn:  Natalie
      SchrammFax
      No.  (563) 690-1394If
      to a SubordinatedLender:
              PENINSULA
      GAMING, LLCc/o
      Peninsula Gaming Partners, LLC600
      Star Brewery Dr., Ste. 110Dubuque,
      Iowa  52001Attn:  Natalie
      SchrammFax
      No.  (563)
690-1394







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If
      to Senior Lender:
            WELLS FARGO FOOTHILL,
      INC.


2450
      Colorado Avenue, Suite 3000 West


Santa
      Monica, California 90404


Attention:
      Business Finance Division Manager


Fax
      No. (310) 453-7413




with
      copies to:
            PAUL, HASTINGS, JANOFSKY &
      WALKER LLP


600
      Peachtree Street, NE, Suite 2400


Atlanta,
      Georgia 30308-2222


Attention:
      Cindy J. K. Davis, Esq.


Fax
      No. (404) 815-2424




Any party
hereto may designate any other address or telecopy number, as applicable, to
which any notices or other communications shall be given by notice duly given
hereunder; provided,however, that any
such notice of other address or telecopy number shall be deemed to have been
given hereunder only when actually received by the party to which it is
addressed.




18.           Amendments;
Modifications.  This Agreement may not be modified, altered or
amended except by an agreement in writing executed by all of the parties
hereto.




19.           Amendment of Loan
Documents.  Each Subordinated Lender and the Debtors agree to
forbear from (a) modifying, altering or amending any payment term of any loan
document or any other document, instrument or agreement evidencing the
Subordinated Debt, (b) modifying, altering or amending any other term of any
loan document or any other document, instrument or agreement evidencing the
Subordinated Debt in any manner adverse to either the Debtors or the Agent, and
(c) from granting (in the case of the Debtors) and receiving (in the case of any
Subordinated Lender) any collateral or other security of any nature to secure
the Subordinated Debt.




20.           Cost and Expenses of
Enforcement.  Each Subordinated Lender agrees to pay all costs
and expenses including, without limitation, reasonable attorneys’, paralegals’
and other professionals’ fees of every kind, paid or incurred by the Agent in
enforcing its rights hereunder against each Subordinated Lender, including, but
not limited to, litigation instituted in a state or federal court, as
hereinafter provided (including proceedings under the Bankruptcy Code) in
endeavoring to collect the Senior Debt or in so enforcing this Agreement, or in
defending against any defense, cause of action, counterclaim, setoff or cross
claim based on any act of commission or omission by the Agent with respect to
the Senior Debt promptly on demand of the Agent or other person paying or
incurring the same.




21.           TO
INDUCE THE AGENT AND THE OTHER MEMBERS OF THE LENDER GROUP TO AFFORD FINANCIAL
ACCOMMODATIONS TO THE BORROWERS, EACH SUBORDINATED LENDER IRREVOCABLY AGREES
THAT ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF
THIS AGREEMENT SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING SITUS IN
THE CITY OF NEW YORK, NEW YORK AND EACH SUBORDINATED LENDER
HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL
COURT LOCATED AND HAVING ITS SITUS IN SAID CITY AND STATE.  EACH
SUBORDINATED LENDER HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS,
AND EACH SUBORDINATED LENDER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS.  THE PARTIES CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE AGENT OR EACH
SUBORDINATED LENDER AT THE RESPECTIVE ADDRESSES SET FORTH HEREIN IN THE MANNER
PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT, OR
OTHERWISE.







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22.           Waiver of Claims; Trial by
Jury.  EACH SUBORDINATED LENDER WAIVES EVERY DEFENSE, CAUSE OF
ACTION, COUNTERCLAIM OR SETOFF, THAT SUCH SUBORDINATED LENDER MAY NOW HAVE, OR
HEREAFTER MAY HAVE, TO ANY ACTION BY THE AGENT IN ENFORCING THIS AGREEMENT AND
RATIFIES AND CONFIRMS WHATEVER THE AGENT MAY DO PURSUANT TO THE TERMS HEREOF AND
AGREES THAT THE AGENT SHALL NOT BE LIABLE FOR ANY ERRORS OF JUDGMENT OR MISTAKE
OF FACT OR LAW EXCEPT FOR WILLFUL MISCONDUCT OF AGENT.  THE AGENT AND
EACH SUBORDINATED LENDER, AND EACH ONE OF THEM, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE IRREVOCABLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
RIGHT ANY ONE OF THEM MAY HAVE TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL
PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH
OR ANY COURSE OF CONDUCT OR COURSE OF DEALING, IN WHICH THE AGENT AND EACH
SUBORDINATED LENDER ARE ADVERSE PARTIES.  THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER GROUP TO MAKE LOANS AND OTHER FINANCIAL ACCOMMODATIONS
TO THE BORROWERS.




23.           Governing Law; Benefit of
Agreement.  This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without regard to
the conflict of law, principles thereof other than Sections 5-1401 and 5-1402 of
the New York General Obligations Law.  All of the understandings,
agreements, covenants and representations contained herein are solely for the
benefit of the Agent, the other members of the Lender Group and each
Subordinated Lender, and there are no other persons who are intended to be
benefited in any way whatsoever by this Agreement.




24.           Severability.  In
the event any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.







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25.           Counterparts.  This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement.  Delivery of an executed
counterpart of this Agreement by telefacsimile or other electronic method of
transmission shall be equally as effective as delivery of an original executed
counterpart of this Agreement.




26.           Perfection and Release of
Liens.  Upon the Agent’s reasonable request (which request
shall be in writing), each Subordinated Lender hereby agrees to execute and
deliver such documents, instruments, lien releases, assignments and financing
statements and do such acts as may be necessary in order for the Agent to
establish and maintain a first, valid, prior and perfected security interest in
the Collateral.  In the event of any sale or other disposition of all
or any part of the Collateral prior to payment in full of the Senior Debt, upon
request by the Agent, each Subordinated Lender shall execute releases,
assignments, UCC terminations and other similar agreements that are reasonably
requested by the Agent from time to time.  Until payment and
satisfaction in full of the Senior Debt, each Subordinated Lender shall
cooperate fully in releasing the Subordinated Lien, if in existence at such
time, as soon as practicable upon the reasonable request of the
Agent.









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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.







PENINSULA GAMING, LLC, a
      Delawarea
      Louisiana liability companyBy:
            /s/Natalie
      SchrammName:  Natalie
      SchrammTitle:  CFOTHE
      OLD EVANGELINE DOWNS, L.L.C.a
      Louisiana liability companyBy:
            /s/Natalie
      SchrammName:  Natalie
      SchrammTitle:  CFODIAMOND JO WORTH, LLC, a
      Delawarelimited
      liability companyBy:
            /s/Natalie
      SchrammName:  Natalie
      SchrammTitle:  CFODIAMOND JO, LLC, a
    Delawarelimited
      liability companyBy:
            /s/Natalie
      SchrammName:  Natalie
      SchrammTitle:  CFOBELLE OF ORLEANS, L.L.C., a
      Louisianalimited
      liability companyBy:
            /s/Natalie
      SchrammName:  Natalie
      SchrammTitle:  CFO





Amended and Restated Intercompany Subordination
Agreement


PENINSULA GAMING CORP., a
      Delawarelimited
      liability companyBy:
            /s/Natalie
      SchrammName:  Natalie
      SchrammTitle:  CFO  Amended
and Restated Intercompany Subordination Agreement







WELLS FARGO FOOTHILL,
    INC.,a
      California corporation as agentBy:
            /s/Patrick
      McCormackName:  Patrick
      McCormackTitle:   
      Vice President
















Amended
and Restated Intercompany Subordination Agreement