Exhibit 10.7


 


FIRST AMENDMENT TO INTERCOMPANY SUBORDINATION
AGREEMENT


 


This FIRST AMENDMENT TO INTERCOMPANY
SUBORDINATION AGREEMENT (this “Amendment”) is entered into as of May 13,
2005, among 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 (formerly known as Peninsula Gaming
Company, LLC), a Delaware limited liability company (“DJO”; together
with OED and DJW, hereinafter collectively referred to as the “Borrowers”
and each individually, a “Borrower”), PENINSULA GAMING CORP. (formerly
known as The Old Evangeline Downs Capital Corp.), a Delaware corporation (“OED
Capital”), PENINSULA GAMING, LLC, a Delaware limited liability company (“Peninsula
Gaming”), OED ACQUISITION, LLC, a Delaware limited liability company (“OEDA”),
and WELLS FARGO FOOTHILL, INC., a California corporation, as agent for the
Lenders (as defined in the Senior Loan Agreement defined below) (“Agent”).


 


W I T N E S S E T H:


 


WHEREAS, Borrowers, Agent
and the Lenders (as defined therein) are parties to that certain Loan and
Security Agreement dated as of June 16, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”);


 


WHEREAS, as an inducement
for Agent and the Lenders to enter into the Loan Agreement, OED, DJO, OED
Capital, Peninsula Gaming, OEDA and Agent executed and delivered that certain Intercompany
Subordination Agreement dated as of June 16, 2004 (the “Intercompany
Subordination Agreement”; capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Intercompany
Subordination Agreement), in favor of Agent for the benefit of the Lender Group;


 


WHEREAS, Borrowers, Agent
and the Lenders have agreed to amend the Loan Agreement pursuant to that
certain Second Amendment to Loan and Security Agreement dated as of even date
herewith (the “Second Amendment to Loan Agreement”); and


 


WHEREAS, OED, DJO, OED
Capital, Peninsula Gaming, OEDA and Agent have agreed to amend the Intercompany
Subordination Agreement to permit the joinder of DJW on the terms and
conditions set forth herein;


 


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


 


1.             Amendments to the Intercompany
Subordination Agreement.  The
Intercompany Subordination Agreement is hereby amended to the extent necessary
to permit the joinder of DJW as a Borrower, a Debtor and a Subordinated Lender
thereunder.  Each reference to a “Borrower”,
“Debtor” and “Subordinated Lender” in the Intercompany Subordination Agreement
shall be deemed to include DJW.  DJW, by
its signature below, becomes a “Borrower”, “Debtor” and “Subordinated Lender” under
the Intercompany Subordination Agreement with the same force and effect as if
originally named therein as a “Borrower”,


 





















 


“Debtor” and “Subordinated Lender” and DJW hereby (a) agrees to all
of the terms and provisions of the Intercompany Subordination Agreement applicable
to it as a “Borrower”, “Debtor” and “Subordinated Lender” thereunder and (b) represents
and warrants that the representations and warranties made by it as a “Borrower”,
“Debtor” and “Subordinated Lender” thereunder are true and correct on and as of
the date hereof.


 


2.             No Other
Amendments or Waivers.  Except in
connection with the amendments set forth above, the execution, delivery and
effectiveness of this Amendment shall not operate as an amendment of any right,
power or remedy of Agent or the Lenders under the Intercompany Subordination
Agreement or any of the other Loan Documents, nor constitute a waiver of any
provision of the Intercompany Subordination Agreement or any of the other Loan
Documents.  Except for the amendments set
forth above, the text of the Intercompany Subordination Agreement and all other
Loan Documents shall remain unchanged and in full force and effect and such
Person hereby ratifies and confirms its obligations thereunder.  This Amendment shall not constitute a
modification of the Intercompany Subordination Agreement or any of the other
Loan Documents or a course of dealing with Agent or the Lenders at variance
with the Intercompany Subordination Agreement or the other Loan Documents such
as to require further notice by Agent or the Lenders to require strict
compliance with the terms of the Intercompany Subordination Agreement and the
other Loan Documents in the future, except as expressly set forth herein.  Each of OED, DJO, DJW, OED Capital, Peninsula
Gaming and OEDA acknowledges and expressly agrees that Agent and the Lenders
reserve the right to, and do in fact, require strict compliance with all terms
and provisions of the Intercompany Subordination Agreement and the other Loan
Documents, as amended herein.  None of
OED, DJO, DJW, OED Capital, Peninsula Gaming and OEDA has knowledge of any
challenge to Agent’s or any Lender’s claims arising under the Loan Documents,
or to the effectiveness of the Loan Documents.


 


3.             Conditions
Precedent to Effectiveness.  This
Amendment shall become effective as of the date hereof when, and only when, Agent
shall have received, in form and substance satisfactory to Agent:


 


(a)           counterparts of this
Amendment duly executed and delivered by OED, DJO, DJW, OED Capital, Peninsula
Gaming, OEDA and Agent;


 


(b)           evidence in form and
substance satisfactory to Agent that OED, DJO, DJW, OED Capital, Peninsula
Gaming and OEDA shall have received all licenses (including the Gaming
Licenses), approvals or evidence of other actions required by any Governmental
Authority, including the Louisiana Regulatory Authorities and the Iowa Gaming
Authorities, in connection with the execution and delivery by OED, DJO, DJW,
OED Capital, Peninsula Gaming and OEDA of this Amendment or with the
consummation of the transactions contemplated hereby; and


 


(c)           such other information,
documents, instruments or approvals as Agent or Agent’s counsel may reasonably
require.


 


4.             Representations
and Warranties of OED, DJO, DJW, OED Capital, Peninsula Gaming and OEDA.  In consideration of the execution and
delivery of this Amendment by


 


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Agent, each of OED, DJO, DJW, OED Capital, Peninsula Gaming and OEDA hereby
represents and warrants in favor of Agent and the Lenders as follows:


 


(a)           As to each Person, the
execution, delivery, and performance by such Person of this Amendment have been
duly authorized by all necessary action on the part of such Person;


 


(b)           As to each Person, the
execution, delivery, and performance by such Person of this Amendment do not
and will not (i) violate any provision of federal, state, or local law or
regulation applicable to such Person, the Governing Documents of such Person,
or any order, judgment, or decree of any court or other Governmental Authority
binding on such Person, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation of such Person, (iii) result in or require
the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of such Person, other than Permitted Liens (as defined in
the Loan Agreement), or (iv) require any approval of such Person’s members
or shareholders or any approval or consent of any Person under any material
contractual obligation of such Person;


 


(c)           The execution,
delivery, and performance by such Person of this Amendment do not and will not
require any registration with, consent, or approval of, or notice to, or other
action with or by, any Governmental Authority or other person or entity, other
than any consent or approval that has been obtained and remains in full force
and effect;


 


(d)           As to each Person, this
Amendment, when executed and delivered by such Person, will be the legally
valid and binding obligation of such Person, enforceable against such Person in
accordance with its terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors’ rights generally;


 


(e)           No Default or Event of
Default exists under the Intercompany Subordination Agreement or the other Loan
Documents; and


 


(f)            As of the date hereof,
all representations and warranties of such Person set forth in the Intercompany
Subordination Agreement and the other Loan Documents are true, correct and
complete in all material respects, except to the extent such representation or
warranty expressly relates to an earlier date (in which case such statement was
true and correct on and as of such earlier date).


 


5.             Counterparts.  This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement.  In proving this Amendment in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is
sought.  Any signatures delivered by a
party by facsimile transmission or by e-mail transmission of an adobe file
format document (also known as a PDF file) shall be deemed an original
signature hereto.


 


6.             Reference to and
Effect on the Loan Documents.  Upon
the effectiveness of this Amendment, on and after the date hereof, each
reference in the Intercompany Subordination


 


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Agreement to “this Agreement”, “hereunder”, “hereof” or words of like
import referring to the Intercompany Subordination Agreement, and each
reference in the other Loan Documents to “the Intercompany Subordination
Agreement”, “thereunder”, “thereof” or words of like import referring to the Intercompany
Subordination Agreement, shall mean and be a reference to the Intercompany
Subordination Agreement as amended hereby.


 


7.             Costs, Expenses
and Taxes.  OED, DJO, DJW, OED
Capital, Peninsula Gaming and OEDA agree, jointly and severally, to pay on
demand all costs and expenses in connection with the preparation, execution,
and delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including, without limitation, the fees and out-of-pocket
expenses of counsel for Agent with respect thereto and with respect to advising
Agent as to its rights and responsibilities hereunder and thereunder.  In addition, OED, DJO, DJW, OED Capital,
Peninsula Gaming and OEDA agree, jointly and severally, to pay any and all
stamp and other taxes payable or determined to be payable in connection with
the execution and delivery of this Amendment and the other instruments and
documents to be delivered hereunder, and agree to save Agent and the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.


 


8.             Section Titles.  The section titles contained in this
Amendment are included for the sake of convenience only, shall be without
substantive meaning or content of any kind whatsoever, and are not a part of
the agreement between the parties.


 


9.             Entire Agreement.  This Amendment and the other Loan Documents
constitute the entire agreement and understanding between the parties hereto
with respect to the transactions contemplated hereby and thereby and supersede
all prior negotiations, understandings and agreements between such parties with
respect to such transactions.


 


10.           GOVERNING LAW.  THIS AMENDMENT SHALL BE CONSTRUED AND
ENFORCED AND THE RIGHTS AND DUTIES OF THE PARTIES SHALL BE GOVERNED BY, IN ALL
RESPECTS IN ACCORDANCE WITH, THE LAWS AND DECISIONS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.


 


11.           Loan Document.  This Amendment shall be deemed to be a Loan
Document for all purposes.


 


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left blank.]


 


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


 


	
   

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

  a Louisiana limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Natalie A. Schramm

  	
   

  
	
   

  	
   

  	
  Name:

  	
             Natalie
  A. Schramm

  	
   

  
	
   

  	
   

  	
  Title:

  	
    Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIAMOND JO, LLC (formerly
  known as

  Peninsula Gaming Company, LLC), a Delaware

  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Natalie A. Schramm

  	
   

  
	
   

  	
   

  	
  Name:

  	
             Natalie
  A. Schramm

  	
   

  
	
   

  	
   

  	
  Title:

  	
    Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIAMOND JO WORTH, LLC, a
  Delaware

  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Natalie A. Schramm

  	
   

  
	
   

  	
   

  	
  Name:

  	
             Natalie
  A. Schramm

  	
   

  
	
   

  	
   

  	
  Title:

  	
    Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PENINSULA GAMING CORP.
  (formerly

  known as The Old Evangeline Downs Capital

  Corp.), a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Natalie A. Schramm

  	
   

  
	
   

  	
   

  	
  Name:

  	
             Natalie
  A. Schramm

  	
   

  
	
   

  	
   

  	
  Title:

  	
    Chief
  Financial Officer

  	
   

  
												



 


 


FIRST AMENDMENT TO INTERCOMPANY SUBORDINATION AGREEMENT


 





















 


	
   

  	
  OED ACQUISITION, LLC,

  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Natalie A. Schramm

  	
   

  
	
   

  	
   

  	
  Name:

  	
            Natalie
  A. Schramm

  	
   

  
	
   

  	
   

  	
  Title:

  	
    Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PENINSULA GAMING, LLC, a Delaware

  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Natalie A. Schramm

  	
   

  
	
   

  	
   

  	
  Name:

  	
            Natalie
  A. Schramm

  	
   

  
	
   

  	
   

  	
  Title:

  	
    Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO FOOTHILL, INC.,

  a California corporation, as agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Larissa Megadichian

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Larissa
  Megadichian

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Vice
  President

  	
   

  
											



 


 


FIRST AMENDMENT TO
INTERCOMPANY SUBORDINATION AGREEMENT