PENINSULA GAMING CORP. (Form: 8-K, Received: 02/04/2011 17:26:23)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 8-K

________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 31, 2011

Commission File Number 333-117800

Peninsula Gaming, LLC		Peninsula Gaming Corp.
(Exact name of registrant as specified in its charter)		(Exact name of registrant as specified in its charter)

Delaware		Delaware
(State or other jurisdiction of incorporation or organization)		(State or other jurisdiction of incorporation or organization)

20-0800583		25-1902805
(I.R.S. Employer Identification No.)		(I.R.S. Employer Identification No.)

301 Bell Street

Dubuque, Iowa 52001

(Address of executive offices, including zip code)

(563) 690-4975

(Registrant’s telephone number, including area code)

________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01. Entry into a Material Definitive Agreement

Amendment to Amended and Restated Loan and Security Agreement

On February 2, 2011, Peninsula Gaming, LLC (“PGL”), Diamond Jo, LLC (“DJL”), The Old Evangeline Downs, L.L.C. (“EVD”), Belle of Orleans, L.L.C. (“ABC”), Diamond Jo Worth, LLC (“DJW”) and Kansas Star Casino, LLC (“KSC” and, together with PGL, DJL, EVD, DJW and ABC, the “Borrowers”), the lenders that are signatories thereto (the “Lenders”) and Wells Fargo Capital Finance, Inc. (f/k/a Wells Fargo Foothill, Inc.), as the arranger and agent for the Lenders, entered into a Second Amendment to Amended and Restated Loan and Security Agreement (the “Second Amendment”), a copy of which is attached as Exhibit 10.1 to this Form 8-K, amending the Amended and Restated Loan and Security Agreement, dated as of October 29, 2009, as amended by the First Amendment to Amended and Restated Loan and Security Agreement, dated as of June 15, 2010 (as so amended, the “Loan and Security Agreement”), which, among other things, (i) permits the issuance of up to $80.0 million in aggregate principal amount of additional 8⅜% Senior Secured Notes due 2015 (the “Secured Notes”) issued under that certain indenture, dated as of August 6, 2009 (the “Secured Notes Indenture”), (ii) provides for a reduction in the maximum revolver amount under the facility from $58.5 million to $50.0 million, (iii) extends the maturity date of the facility from January 15, 2014 to January 15, 2015 and (iv) permits certain capital expenditures in connection with the development of the Kansas Star Casino, Hotel and Event Center in Sumner County, Kansas (the “Kansas Star Development Project”).

The preceding summary of the Second Amendment is not intended to be complete and is qualified in its entirety by reference to the Second Amendment filed as an exhibit to this Form 8-K.

Kansas Lottery Gaming Facility Management Contract

On January 31, 2011, KSC became a party to that certain Lottery Gaming Facility Management Contract (the “Management Contract”) with the State of Kansas (the “State”). The Management Contract confers upon KSC the exclusive right to operate a lottery gaming business in the south central gaming zone in Kansas for a period of 15 years, which may be renewed by the Kansas Lottery Commission. The Management Contract gives KSC the right, subject to certain limitations, to own and develop all of the assets of the casino and related amenities and the right to manage the operation of the games on behalf of the State. Pursuant to the Management Contract, the State will retain 27-31% of gross gaming revenue, based on a tiered revenue structure, and KSC will receive the balance of gross gaming revenue and retain all non-gaming revenue.

In addition, the Management Contract requires KSC to construct the gaming facility, at its own expense, within certain construction benchmarks. The Management Contract provides for the opening to the public of an interim gaming facility within 13 months after January 14, 2011 (the “effective date”), the completion of the first phase of construction of the gaming facility within 24 months after the effective date and the completion of the second phase of construction for an expanded gaming facility within 48 months after the effective date. A copy of the Management Contract is attached as Exhibit 10.2 to this Form 8-K. The preceding summary of the Management Contract is not intended to be complete and is qualified in its entirety by reference to the Management Contract filed as an exhibit to this Form 8-K.

Item 8.01. Other Events

Receipt of Requisite Consents in Consent Solicitation

On February 1, 2011, PGL issued the press release attached as Exhibit 99.1 to this Form 8-K and incorporated by reference herein announcing that the Issuers have received the requisite consents to adopt certain proposed amendments to the Secured Notes Indenture pursuant to their previously announced consent solicitation for the Secured Notes. The Issuers and U.S. Bank National Association, the trustee under the Secured Notes Indenture, have executed a supplemental indenture giving effect to such proposed amendments. A copy of the supplemental indenture is attached as Exhibit 10.3 to this Form 8-K. The preceding summary of the supplemental indenture is not intended to be complete and is qualified in its entirety by reference to the supplemental indenture filed as an exhibit to this Form 8-K.

Launch and Pricing of Secured Notes Offering

On February 2, 2011, PGL announced a proposed offering of $80 million in aggregate principal amount of Secured Notes, which Secured Notes priced the same day at 105%, plus accrued interest from August 15, 2010. The private offering of Secured Notes is expected to close on February 9, 2011. This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any securities. PGL issued the press releases attached as Exhibits 99.2 and 99.3, respectively, to this Form 8-K and incorporated by reference herein announcing the launch and pricing of such Secured Notes offering.

The net proceeds from the offering of the Secured Notes will be used primarily to develop the first phase of PGL’s new gaming facility in Mulvane, Kansas and for general corporate purposes.

The Secured Notes are being offered only to qualified institutional buyers under Rule 144A of the Securities Act and to non-U.S. persons outside of the United States in compliance with Regulation S of the Securities Act. The Secured Notes have not been registered under the Securities Act, any other federal securities laws or the securities laws of any state, and until so registered, the Secured Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.

Addition of KSC as Borrower and Guarantor

In connection with the transactions described in this Form 8-K, PGL has added KSC as a borrower under the Loan and Security Agreement and as a guarantor under each of the Secured Notes Indenture and the indenture governing the Unsecured Notes.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit No.		Description

10.1		Second Amendment to Amended and Restated Loan and Security Agreement, dated February 2, 2011 (filed herewith).
10.2		Lottery Gaming Facility Management Contract, dated October 19, 2010 (filed herewith).
10.3		Fourth Supplemental Indenture to the Secured Notes Indenture, dated February 1, 2011 (filed herewith).
99.1		Press Release of Peninsula Gaming, LLC, dated February 2, 2011 (filed herewith).
99.2		Press Release of Peninsula Gaming, LLC, dated February 2, 2011 (filed herewith).
99.3		Press Release of Peninsula Gaming, LLC, dated February 3, 2011 (filed herewith).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 4, 2011

	PENINSULA GAMING, LLC


	By: /s/ Natalie Schramm
	Name: Natalie Schramm
	Title: Chief Financial Officer


	PENINSULA GAMING CORP.


	By: /s/ Natalie Schrammm
	Name: Natalie Schramm
	Title: Chief Financial Officer

EXHIBIT 10.1

SECOND AMENDMENT

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “ Amendment ”) is entered into as of February 2, 2011, by and among PENINSULA GAMING, LLC , a Delaware limited liability company (“ Parent ”), DIAMOND JO, LLC , a Delaware limited liability company (“ DJL ”), THE OLD EVANGELINE DOWNS, L.L.C. , a Louisiana limited liability company (“ OED ”), DIAMOND JO WORTH, LLC , a Delaware limited liability company (“ DJW ”), BELLE OF ORLEANS, L.L.C. , a Louisiana limited liability company (“ Amelia Belle ”), KANSAS STAR CASINO, LLC , a Kansas limited liability company (“ Kansas Star ”; and together with Parent, DJL, OED, DJW and Amelia Belle, referred to hereinafter each individually as a “ Borrower ”, and individually and collectively, as “ Borrowers ”), PENINSULA GAMING CORP. , a Delaware corporation (“ Guarantor ”), the Lenders (as defined in the hereinafter defined Loan Agreement) signatories hereto, and WELLS FARGO CAPITAL FINANCE, INC. (formerly known as Wells Fargo Foothill, Inc.), a California corporation, as the arranger and agent for the Lenders (“ Agent ”).

W I T N E S S E T H:

WHEREAS, Borrowers, Agent, and the Lenders are parties to that certain Amended and Restated Loan and Security Agreement, dated as of October 29, 2009, as amended by that certain First Amendment to Amended and Restated Loan and Security Agreement, dated as of June 15, 2010 (as further amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”; capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement), pursuant to which the Lender Group has agreed to make the Advances and other extensions of credit to Borrowers from time to time pursuant to the terms and conditions thereof and the other Loan Documents;

WHEREAS, Borrowers requested that certain terms and conditions of the Loan Agreement be amended and the Lender Group has agreed to the requested amendments on the terms and conditions provided 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 Loan Agreement .

(a) Section 1.1 of the Loan Agreement, Definitions , is hereby modified and amended by amending and restating the following definitions in their entirety as follows:

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(b) “ Applicable Capital Gain Tax Rate ” means a rate equal to the sum of:

(a) the highest marginal Federal income tax rate applicable to net capital gain of an individual who is a citizen of the United States, plus

(b) to the extent the relevant entity is subject to treatment on a basis under applicable state or local income tax law substantially similar to a Federal Flow Through Entity, (i) the greatest of (v) an amount equal to the sum of the highest marginal state and local income tax rates applicable to net capital gain of an individual who is a resident of the State of California, (x) an amount equal to the sum of the highest marginal state and local income tax rates applicable to net capital gain of an individual who is a resident of the State of Louisiana, (y) an amount equal to the sum of the highest marginal state and local income tax rates applicable to net capital gain of an individual who is a resident of the State of Iowa and (z) an amount equal to the sum of the highest marginal state and local income tax rates applicable to net capital gain of an individual who is a resident of the State of Kansas, multiplied by (ii) a factor equal to 1 minus the highest marginal Federal income tax rate described in clause (a) above.

“ Applicable Income Tax Rate ” means a rate equal to the sum of:

(a) the highest marginal Federal ordinary income tax rate applicable to an individual who is a citizen of the United States, plus

(b) to the extent the relevant entity is subject to treatment on a basis under applicable state or local income tax law substantially similar to a Federal Flow Through Entity, (i) the greatest of (v) an amount equal to the sum of the highest marginal state and local ordinary income tax rates applicable to an individual who is a resident of the State of California, (x) an amount equal to the sum of the highest marginal state and local ordinary income tax rates applicable to an individual who is a resident of the State of Louisiana, (y) an amount equal to the sum of the highest marginal state and local ordinary income tax rates applicable to an individual who is a resident of the State of Iowa and (z) an amount equal to the sum of the highest marginal state and local ordinary income tax rates applicable to an individual who is a resident of the State of Kansas, multiplied by (ii) a factor equal to 1 minus the highest marginal Federal income tax rate described in clause (a) above.

“ Base LIBOR Rate ” means the rate per annum rate appearing on Bloomberg L.P.’s (the “ Service ”) Page BBAM1/(Official BBA USD Dollar Libor Fixings) (or on any successor or substitute page of such Service, or any successor to or substitute for such Service) 2 Business Days prior to the commencement of the requested Interest Period, for a term and in an amount comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance with the Agreement, which determination shall be conclusive in the absence of manifest error.

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“ Base Rate ” means, the greater of (a) the rate of interest announced within Wells Fargo at its principal office in San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publication or publications as Wells Fargo may designate and (b) the Federal Funds Rate plus 0.50%.

“ Borrower ” and “ Borrowers ” means, individually, each of Parent, OED, DJL, DJW, Amelia Belle and Kansas Star, and individually and collectively, jointly and severally, Parent, OED, DJL, DJW, Amelia Belle and Kansas Star.

“ Designated Account Bank ” means any bank that becomes a Designated Account Bank in accordance with Section 2.9 .

“ Excluded Assets ” means (a) the lease for the off track betting parlor operated by Parent in New Iberia, Louisiana; (b) cash (other than cash deposited in Deposit Accounts or cash constituting proceeds of Collateral); (c) assets securing Purchase Money Obligations or Capitalized Lease Obligations permitted to be incurred under this Agreement to the extent a second Lien would not be permitted under the documents evidencing such obligations; (d) any agreements, permits, licenses (including Gaming Licenses), or the like solely in the event and to the extent that: (i) such agreements, permits, licenses, or the like (including any parcels of the Warner Land that are subject to the mortgage granted by OED to the seller of such land) cannot be subjected to a consensual security interest in favor of Agent without the consent of the licensor or other party to such agreement, permit, license, or the like; (ii) any such restriction is effective and enforceable under applicable law (including pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code); and (iii) such consent is not obtainable by any Borrower or the granting of the Lien therein would violate any Gaming License or any law, rule, order or regulation imposed by any Gaming Authority; provided , that each Borrower 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 agreement, permit, license (including a Gaming License) or the like to obtain all requisite consents to enable such Borrower to provide a security interest in such agreement, permit, license (including Gaming Licenses) or the like; (e) any lease entered into after the Closing Date by any Borrower or Restricted Subsidiary for off-track betting parlors or similar facilities; (f) Deposit Accounts or Securities Accounts used solely for payroll, employee wage or benefit payments and trust or escrow purposes so long as no Person has been granted a Lien on such property other than the purported beneficiary of any such funds in such Securities Accounts and Deposit Accounts; (g) the facility (including all related real property and amenities), currently owned by DJW, known as “Pheasant Links” located in Emmons, Minnesota on which a “member’s only” 9-hole golf course and 9-station sporting clay course and hunting facility is located; and (h) any other property or asset of Parent or any Restricted Subsidiary not already contained in this definition of “ Excluded Assets ” (other than any Deposit Account) acquired after the Closing Date in which a security interest cannot be perfected by the filing of a financing statement under the

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Uniform Commercial Code of the relevant jurisdiction, so long as the fair market value, as reasonably determined in good faith by the manager of Parent, of all such properties or assets does not, in the aggregate, exceed $2,500,000; provided , further , however , that (i) Excluded Assets shall not include (and, accordingly, the Collateral shall include) any and all proceeds of any of the assets described in clause (d) above or the value of such assets or the value (including, but not limited to, enterprise value) derived from such assets in the operations of the Borrowers’ business, the restructure or disposition of such assets and any and all proceeds of any of the assets described in the other clauses above or of any other Collateral to the extent such proceeds do not constitute Excluded Assets, (ii) any agreement, permit, license, or the like qualifying as an Excluded Asset under clause (d) above no longer shall constitute an Excluded Asset (and instead shall constitute Collateral) immediately from and after such time as the licensor or other party to such agreement, permit, license, or the like consents to the grant of a security interest in favor of Agent in such agreement, permit, license, or the like or the prohibition against granting a security interest therein in favor of Agent shall cease to be effective or enforceable and (iii) in the case of clauses (a) – (e) , and (g) – (i) , a Borrower or Restricted Subsidiary does not grant a Lien on such property to any other Person.

“ Fee Letter ” means that certain Amended and Restated Fee Letter, dated as of the Second Amendment Effective Date, between the Borrowers and the Lenders signatory thereto.

“ Gaming 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 (including Native American governments), any state, province or city or other political subdivision thereof, whether now or hereafter existing, or any officer or official thereof, including the Louisiana Regulatory Authorities, the Iowa Regulatory Authorities and the Kansas Regulatory Authorities, and any other agency with authority to regulate any gaming or racing operation (or proposed gaming or racing operation) owned, managed or operated by any Borrower or any of its Restricted Subsidiaries.

“ Gaming License ” means any material license, franchise, registration, qualification, findings of suitability, management contract or other approval or authorization required to own, lease, operate or otherwise conduct or manage riverboat, dockside or land-based gaming activities, including racing facilities and activities, in any state or jurisdiction in which any Borrower or any of its Restricted Subsidiaries conduct business or propose to conduct business (including, without limitation, all such licenses and management contracts granted by the Louisiana Regulatory Authorities, granted by the Iowa Regulatory Authorities under Chapter 99F of the Iowa Code and granted by the Kansas Regulatory Authorities), and all applicable liquor and tobacco licenses.

“ Gaming Property ” or “ Gaming Properties ” means one or more of the foregoing: (a)(i) the Diamond Jo Casino, (ii) the Evangeline Downs, (iii) the Diamond Jo Worth Casino, (iv) the Amelia Belle Casino and (v) the Kansas Star Casino, in each case, so long as it is owned by a Borrower or a Restricted Subsidiary; and (b) any other gaming f acility or gaming operation owned and controlled or to be owned and controlled after the Closing Date by a Borrower or a Restricted Subsidiary and that contains, or that based upon a plan approved by such Borrower’s Managers will contain upon the completion of the construction or development thereof, an aggregate of at least 500 slot machines or other gaming devices, provided, in each case, that the property and assets (other than Excluded Assets) of such Gaming Property constitute Collateral.

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“ Interest Period ” means, with respect to each LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2 or 3 months thereafter; provided , however , that (a) if any Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended (subject to clauses (c)-(e) below) to the next succeeding Business Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (c) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (d) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is 1, 2 or 3 months after the date on which the Interest Period began, as applicable, and (e) Borrowers may not elect an Interest Period which will end after the Maturity Date.

“ Maximum Revolver Amount ” means $50,000,000.

“ Operating Assets ” means, collectively (i) the Diamond Joe Casino, (ii) the Diamond Jo Worth Casino, (iii) the Evangeline Downs, (iv) the Amelia Belle Casino and (v) the Kansas Star Casino.

“ Secured Notes ” means the “Notes” (as such term is defined in the Secured Notes Indenture) and for the avoidance of doubt shall include the Additional Secured Notes.

“ Swing Lender ” means Wells Fargo Capital Finance, Inc. or any other Lender that, at the request of a Borrower and with the consent of Agent agrees, in such Lender’s sole discretion, to become the Swing Lender under Section 2.3(d) .

“ Unsecured Notes ” means the “Notes” (as such term is defined in the Unsecured Notes Indenture) and for the avoidance of doubt shall include the Additional Unsecured Notes.

(c) Section 1.1 of the Loan Agreement, Definitions , is hereby further modified and amended by adding the following definitions thereto in the appropriate alphabetical order:

“ Additional Notes ” means the Additional Secured Notes and the Additional Unsecured Notes.

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“ Additional Secured Notes ” means the $80,000,000 of additional notes pursuant to a Rule 144A private placement as a tack-on to the Secured Notes.

“ Additional Unsecured Notes ” means the $50,000,000 of additional notes issued pursuant to a Rule 144A private placement as a tack-on to the Unsecured Notes.

“ Kansas Regulatory Authorities ” means the Kansas Lottery Commission, the Kansas Racing and Gaming Commission, the Kansas Lottery Gaming Facility Review Board and any successor Gaming Authorities in Kansas.

“ Kansas Star ” means Kansas Star Casino, LLC, a Kansas limited liability company.

“ Kansas Star Casino ” means the casino located in Mulvane, Kansas in Sumner County which is to be developed, owned and operated by Kansas Star and named the Kansas Star Casino, Hotel & Event Center.

“ Second Amendment ” means that certain Second Amendment to Amended and Restated Loan and Security Agreement, dated as of February 2, 2011.

“ Second Amendment Effective Date ” means February 2, 2011.

“ WFCF Commitment Letter ” means that certain commitment letter, dated as of December 8, 2010, by Wells Fargo Capital Finance, Inc. to Credit Suisse Securities (USA) LLC, Credit Suisse AG, Cayman Islands Branch and Peninsula Gaming, LLC.

(d) Section 1.1 of the Loan Agreement, Definitions , is hereby further modified and amended by adding deleting the definition of “Wells Fargo Foothill” and inserting the following definition in lieu thereof:

“ Wells Fargo Capital Finance ” means Wells Fargo Capital Finance, Inc., a California corporation, and its successors and assigns.

(e) The Loan Agreement is hereby amended and modified by replacing all references to “Wells Fargo Foothill” with “Wells Fargo Capital Finance.”

(f) Section 3.4 of the Loan Agreement, Term , is hereby modified and amended by deleting the date set forth in such section and inserting the following in lieu thereof:

“January 15, 2015”;

(g) Section 6.3 of the Loan Agreement, Financial Statements, Reports, Certificates , is hereby modified and amended by deleting clause (d)(i) thereof in its entirety and inserting the following in lieu thereof:

“(i) any filings or monthly reports submitted by any Borrower to the Louisiana Regulatory Authorities, the Iowa Regulatory Authorities, the Kansas

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Regulatory Authorities or any other Gaming Authority other than such filings or monthly reports submitted in the ordinary course of business,”

(h) Section 6.3 of the Loan Agreement, Financial Statements, Reports, Certificates , is hereby modified and amended by deleting clause (h) thereof in its entirety and inserting the following in lieu thereof:

“(h) as soon as any Borrower has knowledge thereof, notice of any proposed legislation or administrative action specifically affecting any Borrower’s or any Restricted Subsidiary’s gaming activities or any Gaming Property submitted to the floor for business before any Governmental Authority in the state of Louisiana, Iowa or Kansas or any other state where a Gaming Property may be located (including the state legislature or any committee thereof),”

(i) Section 7.1 of the Loan Agreement, Indebtedness , is hereby modified and amended by deleting clause (c) thereof in its entirety and inserting the following in lieu thereof:

“(c) Indebtedness represented by Capitalized Lease Obligations or Purchase Money Obligations; provided, that the aggregate principal amount of such Indebtedness outstanding at any time does not exceed an amount equal to $10,000,000 times the number of Gaming Properties owned and controlled by any of the Borrowers or their respective Restricted Subsidiaries on the date of incurrence of such Indebtedness;”

(j) Section 7.1 of the Loan Agreement, Indebtedness , is hereby modified and amended by deleting clause (g) thereof in its entirety and inserting the following in lieu thereof:

“(g) Indebtedness outstanding under (i) the Secured Notes Documents in an aggregate principal amount outstanding not to exceed at any time $320,000,000 less any principal repayments made after the Closing Date and (ii) the Unsecured Notes Documents in an aggregate principal amount outstanding not to exceed at any time $355,000,000 less any principal repayments made after the Closing Date;”

(k) Section 7.1 of the Loan Agreement, Indebtedness , is hereby modified and amended by deleting clause (m) thereof in its entirety and inserting the following in lieu thereof:

“(m) unsecured Indebtedness not otherwise permitted by clauses (a) through (l) above or clause (n) or (o) below in an aggregate principal amount (or accreted value, as applicable) at any time outstanding (including all Refinancing Indebtedness incurred in connection therewith), not to exceed $15,000,000 plus the amount of Unsecured Notes repurchased by the Borrowers pursuant to Section 7.8; provided , however that in no event shall the Indebtedness permitted pursuant to this clause (m) exceed $50,000,000;”

(l) Section 7.8(b) of the Loan Agreement, Prepayments and Amendments , is hereby modified and amended by deleting clause (i)(A) thereof in its entirety and inserting the following in lieu thereof:

(m) “(A) have the effect of (1) increasing principal, interest, fee or other payment obligations thereunder (other than through the issuance of Additional Notes permitted

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(n) pursuant to Section 7.1), (2) adding additional collateral or other guarantors (other than as contemplated as of the Closing Date); provided that such additional collateral or other guarantors may be added so long as a Lien on such additional collateral is granted or such other guarantor is added as a Borrower or Guarantor under the Loan Documents, as applicable, (3) shortening the maturity or increasing the amortization of the obligations thereunder, (4) making the covenants, defaults or other provisions thereof more burdensome, or (5) altering the subordination provisions thereof or”

(o) Section 7.20(b) of the Loan Agreement, Capital Expenditures , is hereby modified and amended by deleting clause (b)(i) thereof in its entirety and inserting the following in lieu thereof:

“(i) Except as provided in Sections 7.20(b)(ii) and 7.20(b)(iii) , make capital expenditures in any fiscal year in excess of $20,000,000 (each such applicable amount with respect to each such fiscal year, the “ Base Amount ” for such fiscal year); provided , however , that if the aggregate amount of any capital expenditures made in the fiscal year immediately preceding such fiscal year did not equal or exceed $20,000,000 for such preceding fiscal year, then the Base Amount for the current fiscal year shall be increased by an amount equal to such unused amount of the Base Amount in the immediately preceding fiscal year.”

(p) Section 7.20(b) of the Loan Agreement, Capital Expenditures , is hereby modified and amended by deleting clause (b)(ii)(B) thereof in its entirety and inserting the following in lieu thereof:

“(B) Intentionally omitted.”

(q) Section 7.20(b) of the Loan Agreement, Capital Expenditures , is hereby modified and amended by deleting clause (b)(iii) thereof in its entirety and inserting the following in lieu thereof:

“(iii) Intentionally omitted.”

(r) Section 7.20(b) of the Loan Agreement, Capital Expenditures , is hereby modified and amended by adding the following clause (b)(v) after clause (b)(iv) thereof:

“(v) Further, in addition to the capital expenditures permitted by Sections 7.20(b)(i) , 7.20(b)(ii) and 7.20(b)(iii) , so long as no Default or Event of Default has occurred and is continuing or would result as a consequence thereof, Borrowers may make capital expenditures in the amount of $325,000,000 (inclusive of the $25,000,000 privilege fee deposited with the State of Kansas) to design, develop, construct and furnish the Kansas Star Casino.”

(s) Article 8 of the Loan Agreement, Events of Default , is hereby modified and amended by deleting Section 8.16 thereof in its entirety and inserting the following in lieu thereof:

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(t) “8.16 If any Governmental Authority (including the Louisiana, Iowa or Kansas state legislature) restricts the ability of any Borrower to operate, or restricts, limits or prohibits any Borrower from operating, its gaming business as conducted on the Closing Date or as otherwise permitted by Agent, and such restriction, limit or prohibition results in a Material Adverse Change;”

(u) Schedule C-1 to the Loan Agreement, Commitments , is hereby modified and amended by deleting such schedule in its entirety and inserting the schedule attached hereto as Exhibit A in lieu thereof.

(v) Schedule D-1 to the Loan Agreement, Designated Account , is hereby modified and amended by deleting such schedule in its entirety and inserting the schedule attached hereto as Exhibit B in lieu thereof.

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 Loan Agreement or any of the other Loan Documents, nor constitute a waiver of any provision of the Loan Agreement or any of the other Loan Documents. Except for the amendments set forth above, the text of the Loan Agreement (including, without limitation, the schedules thereto) and all other Loan Documents shall remain unchanged and in full force and effect and Borrowers and Guarantors hereby ratify and confirm their respective obligations thereunder. This Amendment shall not constitute a modification of the Loan Agreement or any of the other Loan Documents or a course of dealing with Agent or the Lenders at variance with the Loan 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 Loan Agreement and the other Loan Documents in the future, except as expressly set forth herein. Borrowers and Guarantors acknowledge and expressly agree that Agent and the Lenders reserve the right to, and do in fact, require strict compliance with all terms and provisions of the Loan Agreement and the other Loan Documents, as amended herein. Neither Borrowers nor Guarantors have any 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, the following conditions have been satisfied, as determined by Agent in its sole and absolute discretion:

(a) Agent shall have received, in form and substance satisfactory to Agent, counterparts of this Amendment duly executed and delivered by Borrowers, Agent and the Lenders;

(b) Agent shall have received, in form and substance satisfactory to Agent, counterparts of that certain Amended and Restated Fee Letter duly executed and delivered by Borrowers, Agent and the Lenders;

(c) there not having occurred any event, change or condition since December 31, 2009 that, individually or in the aggregate, has had, or could reasonably be expected to have,

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(d) a material adverse effect on the business, assets, liabilities, operations, condition (financial or otherwise) or operating results of the Company and its subsidiaries, taken as a whole;

(e) there shall be not have been any other issues of debt securities or commercial bank or other credit facilities of the Company or its subsidiaries being announced, offered, placed or arranged (other than the Additional Notes and equipment financings) and after giving effect to the issuance of the Additional Notes, the Borrowers and their respective Subsidiaries shall have outstanding no Indebtedness other than the Indebtedness set forth on Schedule 7.1(b);

(f) the Agent shall have received (a) U.S. GAAP audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Company for the 2007, 2008 and 2009 fiscal years (and, to the extent available, the related unaudited consolidating financial statements) and (b) U.S. GAAP unaudited consolidated and (to the extent available) consolidating balance sheets and related statements of income, stockholders’ equity and cash flows of the Company for (i) the fiscal quarter ended September 30, 2010 and (ii) the fiscal months of October 2010 and November 2010;

(g) the Agent shall have received a certificate from the chief financial officer of the Parent in form and substance satisfactory to the Agent certifying that the Parent and its subsidiaries, on a consolidated basis after giving effect to the issuance of the Additional Notes and the execution of the Second Amendment, are solvent;

(h) the Agent shall have received, at least five (5) Business Days prior to the Second Amendment Effective Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act;

(i) the receipt by Agent of a fee in the amount of $1,100,000 as provided for in that certain commitment letter, dated as of December 8, 2010 (the “ WFCF Commitment Letter ”), in connection with the Alternative Transaction (as defined in the WFCF Commitment Letter);

(j) Agent shall have received opinions of Borrowers’ and Guarantors’ counsel in form and substance reasonably satisfactory to Agent; and

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

4. Conditions Subsequent . The obligation of the Lenders to continue to make Advances (or otherwise extend credit under the Loan Agreement) is subject to the fulfillment, on or before the date applicable thereto, of the conditions subsequent set forth on Exhibit C (the failure by Borrowers to so perform or cause to be performed such conditions subsequent as and when required by the terms thereof, shall constitute an immediate Event of Default).

5. Representations and Warranties . In consideration of the execution and delivery of this Amendment by Agent and the Lenders, each Borrower and each Guarantor (Borrowers and Guarantor are referred to hereinafter collectively as the “ Loan Parties ” and each as a “ Loan Party ”) hereby represents and warrants in favor of Agent and the Lenders as follows:

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

(b) as to each Loan Party, the execution, delivery, and performance by such Loan Party of this Amendment do not and will not (i) violate any provision of federal, state, or local law or regulation applicable to such Loan Party, the Governing Documents of any Loan Party, or any order, judgment, or decree of any court or other Governmental Authority binding on such Loan Party, (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 Loan Party (including, without limitation, any of the Notes Documents), (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of such Loan Party, other than Permitted Liens, or (iv) require any approval of such Loan Party’s members or shareholders or any approval or consent of any Person under any material contractual obligation of such Loan Party;

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

(d) as to each Loan Party, the Loan Documents to which such Loan Party is a party (including, without limitation, the Loan Agreement, this Amendment and all other documents contemplated hereby), when executed and delivered by such Loan Party, will be the legally valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with their respective 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 Loan Agreement or the other Loan Documents; and

(f) as of the date hereof, all representations and warranties of each Loan Party set forth in the Loan 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 in all material respects on and as of such earlier date).

6. 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 other electronic transmission shall be deemed an original signature hereto.

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7. Reference to and Effect on the Loan Documents . Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the Loan Agreement, and each reference in the other Loan Documents to “the Loan Agreement” “thereunder,” “thereof” or words of like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as amended hereby.

8. Affirmation of Guaranty . By executing this Amendment, Guarantor hereby acknowledges, consents and agrees that all of its obligations and liability under the Guaranty to which it is a party and the other Loan Documents to which it is a party remain in full force and effect, and that the execution and delivery of this Amendment and any and all documents executed in connection herewith shall not alter, amend, reduce or modify its obligations and liability under such Guaranty or any of the other Loan Documents to which it is a party.

9. Release . In consideration for the accommodations provided pursuant to this Amendment, and acknowledging that Agent and the Lenders will be specifically relying on the following provisions as a material inducement in entering into this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrowers and Guarantor hereby releases, remises and forever discharges Agent and the Lenders and their respective agents, servants, employees, directors, officers, attorneys, accountants, consultants, affiliates, representatives, receivers, trustees, subsidiaries, predecessors, successors and assigns (collectively, the “ Released Parties ”) from any and all claims, damages, losses, demands, liabilities, obligations, actions and causes of action whatsoever (whether arising in contract or in tort, and whether at law or in equity), whether known or unknown, matured or contingent, liquidated or unliquidated, in any way arising from, in connection with, or in any way concerning or relating to the Loan Agreement, the other Loan Documents, and/or any dealings with any of the Released Parties in connection with the transactions contemplated by such documents or this Amendment prior to date hereof. This release shall be and remain in full force and effect notwithstanding the discovery by Borrowers and Guarantor after the date hereof (a) of any new or additional claim against any Released Party, (b) of any new or additional facts in any way relating to the subject matter of this release, (c) that any fact relied upon by it was incorrect or (d) that any representation made by any Released Party was untrue or that any Released Party concealed any fact, circumstance or claim relevant to Borrowers’ and Guarantor’s execution of this release; provided , however , this release shall not extend to any claims arising after the execution of this Amendment.

10. Costs, Expenses and Taxes . Borrowers 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 reasonable 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, Borrowers 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. Borrowers hereby acknowledge and agree that Agent may, without prior notice to Borrowers, charge such costs and fees to Borrowers’ Loan Account pursuant to Section 2.6(d) of the Loan Agreement.

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11. 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.

12. 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.

13. GOVERNING LAW . THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

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

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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.

BORROWERS:	PENINSULA GAMING, LLC, a Delaware limited liability company

	By:	/s/Natalie Schramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

	DIAMOND JO, LLC, a Delaware limited liability company

	By:	/s/Natalie Schramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

	THE OLD EVANGELINE DOWNS, L.L.C., a Louisiana limited liability company

	By:	/s/Natalie Schramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

	DIAMOND JO WORTH, LLC, a Delaware limited liability company

	By:	/s/Natalie Schramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

	BELLE OF ORLEANS, L.L.C., a Louisiana limited liability company

	By:	/s/Natalie Schramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

SECOND AMENDMENT TO LOAN AGREEMENT

	KANSAS STAR CASINO, LLC, a Kansas limited liability company

	By:	/s/Natalie Schramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

SECOND AMENDMENT TO LOAN AGREEMENT

AGENT AND LENDERS	WELLS FARGO CAPITAL FINANCE, INC. (formerly known as Wells Fargo Foothill, Inc.), a California corporation, as Agent and as a Lender

	By:	/s/Patrick McCormack
		Name: Patrick McCormack
		Title: Vice President

SECOND AMENDMENT TO LOAN AGREEMENT

ACKNOWLEDGED AND AGREED: GUARANTOR:	PENINSULA GAMING CORP., a Delaware limited liability company

	By:	/s/Natalie Schramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

SECOND AMENDMENT TO LOAN AGREEMENT

Exhibit A

SCHEDULE C-1

COMMITMENTS

Lenders	Commitment
Wells Fargo Capital Finance, Inc.	$50,000,000


All Lenders	$50,000,000

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Exhibit B

SCHEDULE D-1

DESIGNATED ACCOUNTS

Borrower	Account Number	Bank; Address; ABA Number
Peninsula Gaming, LLC	2012177	American Trust and Savings Bank 895 Main Street Dubuque, IA 52001 ABA Number: 073900522
Diamond Jo, LLC	2002256	American Trust and Savings Bank 895 Main Street Dubuque, IA 52001 ABA Number: 073900522
Diamond Jo Worth, LLC	2024172	American Trust and Savings Bank 895 Main Street Dubuque, IA 52001 ABA Number: 073900522
The Old Evangeline Downs, L.L.C.	2080312205	Capital One N.A. 3838 West Congress Street Lafayette, LA 70506 ABA Number: 065000090
Belle of Orleans, L.L.C.	2081416373	Capital One N.A. 3838 West Congress Street Lafayette, LA 70506 ABA Number: 065000090
Kansas Star Casino, LLC	2435161639	American Trust and Savings Bank 895 Main Street Dubuque, IA 52001 ABA Number: 073900522

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Exhibit C

Conditions Subsequent

A. On or before February 15, 2011, or such later date as Agent in its sole and absolute discretion may agree to, Agent shall have the following:

1. Evidence satisfactory to it that the Borrowers shall have issued the principal amount of not less than $80,000,000 of Additional Secured Notes

2. Agent shall have received true, correct and complete copies of all of the documents executed in connection with the issuance of the Additional Secured Notes, together with the certificate of an officer of the Parent certifying the same and that such documents have not been amended, modified or supplemented

B. On or before March 2, 2011, or such later date as Agent in its sole and absolute discretion may agree to, Agent shall have received fully-executed counterparts from Borrowers, Guarantor and the Lenders (if applicable) to the following documents:

3. Reaffirmation Agreement by Peninsula Gaming, LLC, Diamond Jo, LLC, The Old Evangeline Downs, L.L.C., Diamond Jo Worth, LLC, Peninsula Gaming Corp., Peninsula Gaming Partners, LLC and Belle of Orleans, L.L.C. in favor of Agent

4. Delivery of certificate representing equity interests in Evangeline Hospitality, LLC and power for same endorsed in blank

5. Delivery of note receivable (Evangeline Hospitality, LLC) and allonge for same endorsed in blank

6. Amendments to Mortgages for the following properties:

(a) Dubuque County, Iowa (Sixth Amendment to Iowa Shore Mortgage)

(b) Worth County, Iowa (Modification of Mortgage, Leasehold Mortgage, Assignment of Rents, Security Agreement and Fixture Financing Statement)

7. Bring Down Title Endorsements

8. First Amendment to First Preferred Ship Mortgage by Belle of Orleans, L.L.C. in favor of Agent

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EXHIBIT 10.2

LOTTERY GAMING FACILITY MANAGEMENT CONTRACT

(Pursuant to the Kansas Expanded Lottery Act)

This LOTTERY GAMING FACILITY MANAGEMENT CONTRACT (“Agreement”) is for the development, construction, and management of a Lottery Gaming Facility, the business of which will be owned and operated by the Kansas Lottery, to be located in the South Central Gaming Zone.

This Agreement is between the Kansas Lottery, which is acting on behalf of the State of Kansas in accordance with the Kansas Expanded Lottery Act, K.S.A. 2008 Supp. 74-8733 through 74-8773, and Peninsula Gaming Partners, LLC, a Delaware limited liability company (“Manager”).

NOW THEREFORE, in consideration for the mutual promises and covenants between the parties, it is agreed that:

1. Certain Defined Terms . The capitalized terms listed below will have the following meanings. Any other capitalized terms not specifically defined in this Agreement will have the meanings attributed to them in the Kansas Lottery Act, the Kansas Expanded Lottery Act, or the rules and regulations implementing those Acts, as the case may be, and as amended from time to time.

"Ancillary Lottery Gaming Facility Operations" means additional non-lottery facility game products and services not owned and operated by the state which may be included in the overall development associated with the Lottery Gaming Facility. Such operations may include, but are not limited to, restaurants, hotels, motels, museums or entertainment facilities.

“Application for Lottery Gaming Facility Manager” means the competitive proposal and all attachments submitted to the Kansas Lottery by Manager under the Kansas Expanded Lottery Act for the privilege of being designated the Lottery Gaming Facility Manager in the South Central Gaming Zone.

“Business Plan” means the document prepared by Manager and approved by the Executive Director, at least annually, setting out the management activities anticipated for the Lottery Gaming Facility as provided below in Paragraph 11 for an upcoming Fiscal Year or portion of Fiscal Year as the case may be.

“Commencement Date” means the date specified in writing when the Executive Director first determines Manager has satisfied all conditions required by this Agreement so that Lottery Facility Games may be offered for play at the Lottery Gaming Facility.

“Commission” means the Kansas Lottery Commission.

“Effective Date” means the date this Agreement is signed by all the parties and all required approvals for the Agreement are obtained in accordance with the Kansas Expanded Lottery Act and rules and regulations promulgated pursuant thereto, subject to Section 9 of this Agreement.

“Electronic Gaming Machine” means any electronic, electromechanical, video or computerized device, contrivance or machine authorized by the Kansas Lottery which, upon insertion of cash, tokens, electronic cards or any consideration, is available to play, operate or simulate the play of a game authorized by the Kansas Lottery pursuant to the Kansas Expanded Lottery Act, including, but not limited to, bingo, poker, roulette, blackjack, keno and slot machines, and which may deliver or entitle the Player operating the machine to receive cash, tokens, merchandise or credits that may be redeemed for cash, tokens, service or merchandise. Electronic Gaming Machines may use bill validators and may be single-position reel-type, single or multi-game video and single-position multi-game video electronic game, including, but not limited to, poker, blackjack and slot machines. Electronic Gaming Machines are one type of Lottery Facility Games.

“Executive Director” means the executive director of the Kansas Lottery.

“Fiscal Year” means the accounting year established for the Lottery Gaming Facility, which is specified here to be the twelve month period commencing January 1 and ending on December 31 , and includes any partial (short) year.

“Gray Machine” means any mechanical, electro-mechanical or electronic device, available to the public for play that is capable of being used for gambling, that is: (1) not authorized by the Kansas Lottery; (2) not linked to the lottery central computer system as required by the Kansas Expanded Lottery Act; or (3) capable of simulating a game played on an Electronic Gaming Machine or any similar gambling game authorized pursuant to the Kansas Expanded Lottery Act.

“Immediately” means as soon as reasonably practicable given the circumstances of the incident but in no case more than 24 hours.

“Kansas Expanded Lottery Act” means the provisions contained in K.S.A. 2008 Supp. 74-8733 et seq. , and amendments thereto which may become effective during this Agreement’s term.

“Kansas Lottery” means the state agency created by the Kansas Lottery Act, K.S.A. 74-8701, et seq ., as amended, to operate a lottery or lotteries pursuant to the Kansas Lottery Act or the Kansas Expanded Lottery Act.

“Lottery Facility Games” means any Electronic Gaming Machines and any other games authorized, as of January 1, 2007, to be conducted or operated at a tribal gaming facility, as defined in K.S.A. 74-9802, and amendments thereto, located within the State of Kansas’ boundaries and are owned and operated by the Kansas Lottery.

“Lottery Gaming Enterprise” means the entertainment enterprise and all facilities and operations associated therewith, including a Lottery Gaming Facility and Ancillary Lottery Gaming Facility Operations, as more fully set forth in the Manager’s Application for Lottery Gaming Facility Manager.

“Lottery Gaming Facility” means (i) that portion of the Lottery Gaming Enterprise used for the purposes of operating, managing and maintaining Lottery Facility Games, as more fully described in the Application for Lottery Gaming Facility Manager filed by Manager with the Kansas Lottery and Exhibit C. or (ii) a temporary facility for the purposes of operating, managing and maintaining Lottery Facility Games as approved by the Executive Director.

“Lottery Gaming Facility Revenues” means the total revenues from the play of Lottery Facility Games operated at the Lottery Gaming Facility after all related Prizes are paid. This term does not include (i) money generated from Ancillary Lottery Gaming Facility Operations (to which the Kansas Lottery has no financial interest) even if the revenue is generated within the Lottery Gaming Facility or (ii) Promotional Credit(s).

“Player” means a person who: (1) takes part in a Lottery Facility Game by paying consideration or using Promotional Credit for the chance of winning a Prize; and (2) is lawfully eligible to play a Lottery Facility Game under the Kansas Expanded Lottery Act or applicable rules and regulations.

“Progressive Electronic Game” means a game played on one or more Electronic Gaming Machines for which at least one payoff increases uniformly as the game is played and the Prize is determined by application of a formula to the income of independent, local, or interlinked Electronic Gaming Machines.

“Promotional Credit” means any non-cashable credit, coupon or voucher redeemable by a Player at a Lottery Gaming Facility for use in playing Lottery Facility Games that is provided to a Player by Manager on a discretionary basis for purposes of promoting the Lottery Gaming Facility in accordance with a promotional program approved by the Executive Director.

“Promotional Item” means any non-cash, complimentary service or discount provided to a Player by Manager on a discretionary basis for purposes of promoting the Lottery Gaming Facility in accordance with a promotional program approved by the Executive Director.

“Prize” means any money, cash, tokens, merchandise, or credits redeemable for cash or play in a Lottery Facility Game that a Player may be entitled to as an award for playing a Lottery Facility Game under the rules of that game. For any Electronic Gaming Machines offering progressive winnings to a Player based on the use of Electronic Gaming Machines in a Progressive Electronic Game, “Prize” also includes a percentage of every wager played on a Progressive Electronic Game that is contributed to a growing jackpot amount to a successful Player as an award for playing an Electronic Gaming Machine under the rules of that Progressive Electronic Game, but does not include the reset amount. “Prize” does not include any administrative fees or other expenses associated with an Electronic Gaming Machine’s acquisition, operation, maintenance or replacement that are not payable to a winning Player.

2. Date Agreement Becomes Binding . This Agreement will become effective and binding on the Effective Date; except that the parties agree that Paragraphs 2, 8, 20, 28, 30, 31, 54, 57, 58, 60, 66, 70, 71 and 72 will become effective and binding on the parties immediately upon this Agreement’s approval by the Commission.

3. Term of Agreement . This Agreement will terminate fifteen (15) years after the Commencement Date or by operation of law, unless this Agreement is terminated earlier, renegotiated, or renewed, in accordance with the terms set out below.

4. Commencement Date Deadline . The Commencement Date will occur no later than 13 months after the Effective Date. This deadline will be extended by the number of days determined by the Executive Director that Manager is unable to perform its responsibilities under this Agreement due to:

Court order restricting the authority of the Commission or the Kansas Lottery to own and operate Lottery Facility Games at the Lottery Gaming Facility under the Kansas Expanded Lottery Act or under this Agreement, or enjoining Manager from performing under this Agreement;

Any force majeure cause as provided in Paragraph 63;

Any other reason determined by the Executive Director in his sole discretion that adversely impacted Manager’s ability to perform; or

Any delay, not caused or enhanced by Manager, in Manager securing any and all licenses, credentials, permits and approvals necessary to construct and operate the lottery Gaming Enterprise, or any aspect thereof, provided that Manager shall have made timely application for such permits and approvals, and shall have diligently prosecuted the same.

5. Renewal of Agreement . Prior to the expiration of this Agreement but not before completion of the minimum infrastructure investment and provided Manager has maintained the Lottery Gaming Facility in accordance with the terms of the Lottery Facility Management Contract, as certified by the Executive Director, Manager or the Kansas Lottery may request to negotiate renewal of this Agreement under K.S.A. 2008 Supp. 74-8734(h)(1) for the maximum extended term allowed under the law. If prior to the expiration of this Agreement the parties do not renew this Agreement as provided herein, the parties shall enter into good faith negotiations for a new lottery gaming facility management contract consistent with and on substantially the same terms as this Agreement, as provided in K.S.A. 2008 Supp. 74-8734(p). The parties shall negotiate in good faith and in the event the parties are unable to agree the Kansas Lottery shall proceed in accordance with any options available to it under the Kansas Expanded Lottery Act, in existence at that time. Nothing in this Agreement is intended to be interpreted to restrict or to be prejudicial to any right or remedy Manager may have at law or equity to compel the Lottery to comply with the provisions of this Section 5.

6. Manager’s Representations and Warranties . Manager represents and warrants to the Kansas Lottery as follows:

Manager is a limited liability company in good standing under the laws of the State of Kansas, and is duly qualified to do business as such in Kansas.

Manager has full power, authority, and legal right to perform and observe the provisions in this Agreement, the requirements imposed by the Kansas Expanded Lottery Act, the rules and regulations imposed by the Commission, and the rules and regulations imposed by the Kansas Racing and Gaming Commission.

Subject to the condition that all approvals required by the Kansas Expanded Lottery Act are obtained, this Agreement constitutes a valid and binding obligation on Manager that is fully enforceable in accordance with its terms, and does not constitute a breach of, or default under, any other agreement to which Manager is a party or any of its assets are bound or affected.

During this Agreement’s term, Manager will, at its own expense, keep in full force and affect its legal existence, rights and franchises required in order for it to observe all of this Agreement’s terms and conditions. Upon receiving any information or notice contrary to the representations contained in this subsection during this Agreement’s term, Manager must immediately notify the Executive Director in writing with full details regarding the same.

Manager has acquired fee title or the ability to acquire fee title to the premises on which the Lottery Gaming Facility will be located, free and clear of any liens, encumbrances, covenants, charges, burdens or claims, except (i) those which do not materially and adversely affect the use by Manager of the premises as a Lottery Gaming Enterprise, and (ii) any secured liens directly related to the Lottery Gaming Enterprise, which will be disclosed to the Executive Director concurrently with Manager’s acquisition of the property or for which the Executive Director’s prior approval has been obtained.

The Lottery Gaming Enterprise and the operations thereof at all times will conform in all material respects with all applicable material zoning, planning, building, licensing, and environmental laws and regulations of governmental authorities (federal, state, or local) having jurisdiction over the Lottery Gaming Enterprise, including any amendments to such laws or regulations occurring after this Agreement’s execution. Such laws include, but are not limited to, the federal Money Laundering Control Act of 1986, the Bank Secrecy Act of 1970, and the USA Patriot Act of 2001, and amendments thereto. The Manager shall defend, indemnify and hold the Kansas Lottery and the State of Kansas and all employees of the Kansas Lottery and the State of Kansas harmless from any liability or expenses resulting from any failure by the Manager to comply with the provisions of this subsection (f).

There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body pending or, to the knowledge of the Manager, threatened against or affecting the Manager or its principals, and in which an adverse result would in any way diminish or adversely impact the Manager’s ability to fulfill its obligations under this Lottery Gaming Facility Management Contract. No revenue bonds, state tax abatement, local tax abatement, tax increment financing or similar financing will be used to finance or will be applied to any part of Manager’s Lottery Gaming Enterprise.

The Lottery Gaming Enterprise will comply in all material respects with all environmental laws and regulations, and, except in material compliance with environmental laws and regulations agrees that to the best of its knowledge (1) that no pollutants, contaminants, solid wastes, or toxic or hazardous substances will be stored, treated, generated, disposed of, or allowed to exist at the Lottery Gaming Facility or the location of any related Ancillary Lottery Gaming Facility Operations, except in compliance with all applicable laws; (2) Manager will take all reasonable and prudent steps to prevent an unlawful release of hazardous substances onto the Lottery Gaming Facility or the location of any related Ancillary Lottery Gaming Facility Operations or onto any other property; (3) that no asbestos will be incorporated into or disposed of on the Lottery Gaming Facility or the location of any related Ancillary Lottery Gaming Facility Operations; (4) that no underground storage tanks will be located on the Lottery Gaming Facility or the location of any related Ancillary Lottery Gaming Facility Operations, except as approved by the Executive Director; and (5) that no investigation, order, agreement, notice, demand or settlement with respect to any of the above is threatened, anticipated, or in existence with respect to the Lottery Gaming Facility or the location of any related Ancillary Lottery Gaming Facility Operations. Upon receiving any information or notice contrary to the representations contained in this subsection, Manager must promptly notify the Executive Director in writing with full details regarding the same. Manager and its principals have executed the Environmental Compliance Agreement attached as Exhibit A. Manager shall defend, indemnify and hold the Kansas Lottery and the State of Kansas harmless from any liability or expenses resulting from any failure by Manager to comply with the provisions of this subsection (h).

Manager will provide to the Executive Director a certificate or certificates of insurance containing all of the insurance provision requirements provided in this Agreement as follows: as respects the builder’s risk and liability including worker’s compensation covering construction activities, prior to the commencement of construction activities, and as respects all other insurance, prior to the commencement of any operations presenting an insurable risk. Each insurance policy obtained by Manager to comply with the insurance provision requirements must provide that if the insurance is canceled for any reason whatsoever, or the same is allowed to lapse or expire, or there be any reduction in amount, or any material change is made in the coverage, such cancellation, lapse, expiration, reduction or change shall not be effective as to the Kansas Lottery or the State of Kansas until at least thirty (30) days after receipt by the Executive Director of written notice by the insurer of such cancellation, lapse, expiration, reduction or change.

Manager will comply with all rules, regulations or policies imposed by the Kansas Racing and Gaming Commission now or in the future for the oversight of all operations at the Lottery Gaming Facility including, but not limited to: oversight of internal controls; adherence to technical standards adopted by the Kansas Racing and Gaming Commission; oversight of security; performance of background investigations; determinations of qualifications and any required certifications, credentialing or licensing of Manager’s officers, directors, board members, employees, contractors and agents; auditing of Lottery Gaming Facility Revenues; maintenance and integrity of all Lottery Facility Games approved by the Executive Director for play at the Lottery Gaming Facility; maintenance of facility exclusion lists; player tracking, rewards, clubs, coupons or other incentive programs; oversight of progressive payout systems and programs; oversight of unclaimed winnings; oversight of lost patron monies; or responsible gaming. Manager understands and agrees that failure to adhere to the Kansas Racing and Gaming Commission’s rules, regulations, or technical standards may result in the imposition of fines, or other sanctions or penalties against Manager. Upon receiving any information or notice claiming a violation of any requirement of the Kansas Racing and Gaming Commission or any other governmental entity with jurisdiction over gaming-related activities after the Effective Date, Manager must immediately notify the Executive Director in writing with full details regarding the same.

Manager, at a minimum, meets and will continue to meet the following criteria: (1) has sufficient access to financial resources to support the activities required of it by this Agreement and the Kansas Expanded Lottery Act; (2) is current in filing all applicable tax returns and in payment of all taxes, interest and penalties owed to the state of Kansas and any taxing subdivisions where the Manager is located in the state of Kansas, excluding items under formal appeal pursuant to applicable statutes; and (3) Manager or its direct or indirect principals, affiliates or officers and/or members have at least three consecutive years’ experience in the management of gaming which would be class III gaming, as defined in K.S.A. 46-2301, and amendments thereto, operated pursuant to state or federal law.

Manager will comply with all applicable rules and regulations imposed now, or in the future, by the Kansas Lottery.

Except as may be authorized by applicable law and confirmed in writing by the Executive Director, Manager will not own, lease, license, or control the rights to: (1) any software, hardware, computer chip, EPROMS (erasable, programmable, read-only memory), flash drives, CD-ROM or other computerized device required to operate the games available for play on the Lottery Facility Games, (2) any software, hardware, computer chip, EPROMS (erasable, programmable, read-only memory), flash drives, CD-ROM or other computerized device containing information regarding or affecting an Lottery Facility Game’s chance of winning, awarding of Prizes, or setting the consideration paid by a Player, such as the random number generator or payout tables; (3) any CPUs or other electronic components involved in the operation and calculation or display of game play (e.g., game controller electronics and components housing the game or system firmware program storage media or EPROMS); or (4) any communication controller electronics, and components housing the communication control program that is used for communicating financial data, program information and security events to the central computer authorized by the Executive Director for purposes of security, real-time monitoring and auditing, as well as ticket validation and any other system used that affects the integrity of the Lottery Facility Games made available at the Lottery Gaming Facility.

Manager acknowledges and agrees the State of Kansas, acting through the Commission and the Kansas Lottery, pursuant to their statutory authority, has the sole right to own, lease and operate the Lottery Facility Games placed at the Lottery Gaming Facility and has the full, complete and ultimate ownership and operational control of the gaming operation of the Lottery Gaming Facility. Manager further acknowledges and agrees the Kansas Lottery explicitly retains the power to overrule any action of Manager affecting the gaming operation without prior notice and the Kansas Lottery retains full control over all decisions concerning Lottery Facility Games. No Gray Machines will be permitted at the Lottery Gaming Facility.

Manager, on behalf of the Kansas Lottery, will be responsible at all times for processing payment of all Prizes and matters relating thereto, including the withholding of income taxes and reporting of Prizes in accordance with all applicable laws and regulations.

Manager has a required resolution of endorsement from the City of Mulvane and/or the Sumner County Board of County Commissioners, which is attached as Exhibit B.

The undersigned is duly authorized to execute and deliver this Lottery Gaming Facility Management Contract on behalf of Manager.

7. The Kansas Lottery’s Representations and Warranties . The Kansas Lottery represents and warrants to Manager as follows:

The Kansas Lottery is duly established under the Kansas Lottery Act and the Kansas Expanded Lottery Act, and has the power to enter into the transactions contemplated by this Lottery Gaming Facility Management Contract and to carry out its obligations. Based upon the representations of Manager as to the utilization of the Lottery Gaming Facility, the Kansas Lottery has the authority to take the actions contemplated by applicable statute.

The Executive Director is duly authorized to execute and deliver this Lottery Gaming Facility Management Contract.

Neither the execution and delivery of this Lottery Gaming Facility Management Contract, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the provisions of this Agreement will conflict with or result in a breach of any of the terms, conditions or provisions of any other contract to which the Commission or Kansas Lottery is a party or by which either is bound, or will constitute default under any of the foregoing.

8. Kansas Expanded Lottery Act Litigation . Manager acknowledges it enters into this Agreement with the understanding that the Kansas Expanded Lottery Act and/or the implementation of that Act by the Kansas Lottery or the Commission, may come under review by courts of competent jurisdiction from time to time during this Agreement’s term. Manager agrees it will proceed with its responsibilities under this Agreement at its own risk as to the Kansas Expanded Lottery Act’s validity, or the validity of the implementation of that Act by any state agency, except that nothing in this section will be interpreted to restrict, waive or delete any rights Manager may have to seek repayment of Managers’ privilege fee if the Kansas Expanded Lottery Act were to be amended or repealed by a legislative body or declared unconstitutional in a future proceeding. At the time of the execution of this Agreement, anything contained in this Agreement notwithstanding, Kansas Lottery hereby represents and warrants, to the knowledge of Kansas Lottery, that there is no action, suit, proceeding, at law or in equity, before or by any court, public board or body, naming the Kansas Lottery as a party, arising out of or in connection with the Kansas Expanded Lottery Act (including constitutionality and the applicant contracting process.) In the event litigation is commenced , against Manager or the Kansas Lottery, arising out of or in connection with the Kansas Expanded Lottery Act (including constitutionality, implementation, and the applicant contracting process) related to this Agreement and requesting relief in the form of an injunction or termination of this Agreement or the invalidation of the Kansas Expanded Lottery Act, and the Plaintiff’s constitutional claims are successful through trial court rulings on motions for summary judgment, Manager may suspend construction, if not yet complete, until receipt of an order, at the trial level or on appeal, upholding the Kansas Expanded Lottery Act or its implementation as applied to this Agreement.

9. Required Approvals Prior to this Agreement Becoming Effective. Subject to the terms of Paragraph 2, this Agreement will not become effective until it is approved, as required by the Kansas Expanded Lottery Act, by all three of the following public entities: (a) the Commission; (b) the Lottery Gaming Facility Review Board; and (c) the Kansas Racing and Gaming Commission.

10. Conditions Precedent to Lottery Gaming Facility Opening . Prior to permitting initial public access to the Lottery Gaming Facility, Manager must (as and when applicable):

a)	Be in compliance with all statutory requirements imposed by the Kansas Expanded Lottery Act, as amended, for placing Lottery Facility Games at the Lottery Gaming Facility.

Be in compliance with all rules and regulations, written policies, or written standards imposed by the Kansas Lottery Commission for placing Lottery Facility Games at the Lottery Gaming Facility.

Be in compliance with all rules and regulations, licensing requirements, written policies, or written standards imposed by the Kansas Racing and Gaming Commission for placing Lottery Facility Games at the Lottery Gaming Facility.

Have in an operational condition Manager’s portion of the central communication system specified by the Executive Director for the purposes of security, monitoring and auditing of Electronic Gaming Machines placed at the Lottery Gaming Facility.

Have current written approvals from the Executive Director for all Lottery Gaming Facility activities as required by this Agreement.

Be in compliance with all material local zoning requirements applicable to the Lottery Gaming Facility.

Have delivered to the Secretary of State, with a copy to Executive Director, Manager’s irrevocable consent to the jurisdiction and courts of the State of Kansas in accordance with K.S.A. 2008 Supp. 74-8755.

Obtain and maintain all necessary governmental permits and licenses/certifications when and as may be required by law in connection with the operation of the Lottery Gaming Facility.

Be in compliance with all other requirements in this Agreement as and when applicable.

11. Manager’s Business Plan . The Executive Director and Manager will jointly develop a Business Plan, which will be based upon and not inconsistent with Manager’s Application for Lottery Gaming Facility Manager, promptly after the Effective Date. This Business Plan will provide in reasonable detail for the Lottery Gaming Facility’s pre-opening activities in preparation for operation after the Commencement Date, hours of operation with 24 hour operations seven days a week being permitted by the Executive Director, advertising, marketing, public relations, number and type of Lottery Facility Games to be available to the public, process for selection of such games, Prizes, theoretical hold percentages, budget, Promotional Credits and procedures for controlling and accounting for the use of Promotional Credits, Promotional Items and procedures for controlling and accounting for the use of Promotional Items, special events or activities planned or anticipated by Manager during the period of time covered by the Business Plan, and other management activities to be performed by Manager consistent with the Kansas Expanded Lottery Act and applicable law that either the Manager or the Executive Director wants to address in the Business Plan. Once approved by the Executive Director, Manager will implement the approved Business Plan in all material respects. The Executive Director, in consultation with Manager, may amend the Business Plan from time to time to promote the Lottery Gaming Facility’s competitive position in the market in order to enhance, to the extent profitable to Manager, Lottery Gaming Facility Revenues. At any time, Manager may propose to the Executive Director for his approval any amendments to the Business Plan. The initial Business Plan will include Manager’s proposed name for the Lottery Gaming Facility, which must be approved by the Executive Director. Any subsequent change to the facility’s name must be approved by the Executive Director. The Manager and Executive Director will make a good faith effort to complete the initial Business Plan and Budget by the Effective Date.

12. Ancillary Lottery Gaming Facility Operations. At the same time that Manager and the Executive Director develop a proposed Business Plan for the Lottery Gaming Facility, Manager separately will provide the Executive Director with Manager’s anticipated business plan and budget for all Ancillary Lottery Gaming Facilities Operations that Manager anticipates developing in conjunction with the Lottery Gaming Facility, such as restaurants, hotels, motels or entertainment facilities. Manager agrees not to conduct any Ancillary Lottery Gaming Facility Operations that the Executive Director determines would: (a) result in an appearance that reflects adversely on the Kansas Lottery or the Kansas Lottery Commission as the owner and operator of the Lottery Facility Games; or (b) violate any regulatory standards or local zoning laws.

13. Lottery Gaming Facility Construction . Manager will diligently construct at its own expense the Lottery Gaming Facility substantially in accordance with Manager’s Application for Lottery Gaming Facility Manager, Exhibit C to this Agreement, and the plans and specifications. Prior to beginning construction, the Executive Director must approve the final plans and specifications for the Lottery Gaming Facility (or in lieu thereof such other construction-related documents acceptable to the Executive Director that are suitable for this purpose) to ensure construction will conform with the Manager’s Application for Lottery Gaming Facility Manager, Exhibit C to this Agreement, and Manager’s representation to the Kansas Lottery Commission, Lottery Gaming Facility Review Board, the Kansas Racing and Gaming Commission, or the governing body of the city or county where the Lottery Gaming Facility is to be located, provided however, that Manager cannot be held in breach of this paragraph for any oral statements, representations or obligations without being first presented with a copy of the actual recording and/or verified court reporter transcript of the Manager’s actual statement(s) alleged to create such representation and/or obligations. With the approval of the Executive Director, Manager retains the option, but is not obligated, to construct a temporary Lottery Gaming Facility under the terms of this Agreement and the Kansas Expanded Lottery Act. Subject to Exhibit C, all construction of the temporary Lottery Gaming Facility must be completed and the Lottery Facility Games ready for play by the public within that facility no later than 13 months after the Effective Date and the Lottery Gaming Facility must be completed and ready for play no later than 24 months after the Effective Date, unless a time extension is approved by the Executive Director. The schedule setting out Manager’s anticipated benchmarks for construction completion is attached as Exhibit C. For each month between the Effective Date and the Commencement Date, Manager will report no less than monthly as directed by the Executive Director on Manager’s progress toward completing construction, implementing the Business Plan, and opening the Lottery Gaming Facility to the public. No material alterations to the scope and design of the plan for the Lottery Gaming Facility increasing or decreasing the total costs by more than four percent (4%) of the total cost provided for in Manager’s Application for Lottery Gaming Facility Manager may be made without the Executive Director’s written approval unless such change materially affects the floor plan, surveillance, or security for the Lottery Gaming Facility in which case the Executive Director’s approval is required for any material change regardless of the dollar amount. The Executive Director will promptly notify Manager of his approval or rejection of any proposed change. Manager will not need to obtain the Executive Director’s approval for expenditures covered by the Manager’s contingency budget.

14. Construction Related to Ancillary Lottery Gaming Facilities Operations . Manager, at its sole cost and expense, must diligently construct the buildings and related improvements for its Ancillary Lottery Gaming Facility Operations substantially in accordance with Manager’s Application for Lottery Gaming Facility Manager, Exhibit C, and Manager’s representations to the Kansas Lottery Commission, Lottery Gaming Facility Review Board, the Kansas Racing and Gaming Commission, or the governing body of the city or county where the Lottery Gaming Facility is to be located, provided however, that Manager cannot be held in breach of this paragraph for any oral statements, representations or obligations without being first presented with a copy of the actual recording and/or verified court reporter transcript of the Manager’s actual statement(s) alleged to create such representation and/or obligations. In addition to any other remedy available to the Executive Director under this Agreement, solely with respect to this Paragraph 14, Manager’s failure to substantially perform its Ancillary Lottery Gaming Facility Operations obligations according to objectively verifiable standards (for example, if the plans provide for the building of a restaurant and the restaurant is not built) and, provided such failure cannot be disputed in good faith, will authorize the Executive Director to withhold payment of Manager’s compensation for which it would otherwise be entitled under Paragraph 26, less such amounts necessary for Manager to meet all cash operating payments, obligations and liabilities payable pursuant to the Budget and debt service payments payable to third-party lenders, after the date that is forty-five (45) days following the Executive Director’s written notice to Manager of such failure until the breach is cured. If the Executive Director withholds Manager’s compensation as provided in this paragraph, he will deposit the applicable funds in an interest bearing account, which account (to the extent of Manager’s interest therein) can be pledged to lender subject to Executive Director’s rights therein, until the Executive Director determines the breach is cured, at which time the compensation and interest held by the Executive Director will be promptly returned to Manager. Provided, however, if within 180 days of the date each amount is withheld as provided herein, Manager has not cured such default or has commenced a cure for such default but is not prosecuting the same to completion, the Kansas Lottery shall be entitled to retain each amount and interest so withheld.

15. Manager’s Construction-Related Responsibilities. Manager will be responsible for the management, construction, and all aspects of construction-related activities concerning the Lottery Gaming Facility and the buildings and related improvements for its Ancillary Lottery Gaming Facility Operations. These responsibilities include, but are not necessarily limited to, the following:

The direction of all construction activities;

The direction and coordination of the performance of the architect, the other consultants and contractors;

Causing all construction activities to be carried out in a good and workmanlike manner, all in substantial compliance with the Manager’s Application for Lottery Gaming Facility Manager;

Preparing the Lottery Gaming Facility to accommodate the central communication system as required by the Executive Director in accordance with the vendor contract for that central communication system, including installation of all specified power and communication services;

Correcting or remedying or causing to be corrected or remedied, any violations of applicable law;

Arranging for the preparation of all working drawings and specifications;

Preparing or arranging for the preparation of all construction contracts and arranging for the preparation and execution of all other related documentation required in accordance with the development obligations undertaken by Manager;

Securing financing, if necessary, including mortgage liens on the real property and improvements and liens on personal property, for the construction of the Lottery Gaming Facility or the building and improvements related to the Ancillary Gaming Facility Operations, including completing the necessary documentation therefor;

Maintaining appropriate cost-accounting records in accordance with generally accepted accounting principles;

Obtaining all necessary government approvals, consents, permits, and licenses/certifications;

Providing legal support related to the development and construction responsibilities undertaken by Manager; and

Ensuring all required insurance is maintained in force.

Provide information to any representative of the Kansas Lottery relating to costs and/or completion of work, including information related to Manager’s compliance with its minimum investment in infrastructure requirements, budgets are adhered to in accordance with this Agreement and that Manager’s application and representations described in paragraphs 13 and 14 are being met, including periodic site inspections. An independent representative may be hired by the Kansas Lottery to verify such investment. Manager shall reimburse the Kansas Lottery for all expenses reasonably incurred for or by such representative in the sum not to exceed $7,500.00 per month.

16. Exclusive Use of Lottery Gaming Facility . The Lottery Gaming Facility will be used exclusively for the playing of Lottery Facility Games owned and operated by the Kansas Lottery, and the ancillary management activities approved by the Executive Director, which may include, but are not limited to, beverage service, food service, entertainment, retail, promotional, and ATM facilities. Manager may not permit any other business activities within the Lottery Gaming Facility without the prior written consent of the Executive Director.

17. Approval of Manager’s Floor Plan. Prior to opening the Lottery Gaming Facility, Manager must submit its proposed floor plan to the Executive Director for approval. This floor plan must show the location of all Lottery Facility Games, count rooms, cages and other equipment and facilities to be contained within the Lottery Gaming Facility. No material change affecting surveillance or security, or any other material aspect of operations may be made to the approved floor plan without the Executive Director’s prior written approval. Manager must perform its duties in accordance with the floor plan approved by the Executive Director, except to the extent necessary for Manager to implement pre-approved changes to the plan. The Executive Director, after consultation with Manager, will determine the location within the floor plan for each game, or type of game, to be offered to the public at the Lottery Gaming Facility. The Manager may, in cooperation with the Executive Director, locate or relocate Electronic Gaming Machines within the boundaries/areas initially designated for Electronic Gaming Machines to enhance Lottery Gaming Facility Revenues and profits after providing notice to the Executive Director. The Executive Director shall review any proposed change to the Floor Plan for location of Lottery Games and shall render a decision within 3 business days.

18. Approval of Manager’s Surveillance Plan. Prior to opening the Lottery Gaming Facility, Manager must submit its proposed surveillance plan to the Executive Director for approval. This surveillance plan at a minimum must contain all items required by applicable rule and regulation. No material change to the approved surveillance plan may be made without the Executive Director’s prior written approval. Manager must perform its duties in accordance with the surveillance plan approved by the Executive Director, except to the extent necessary for Manager to implement pre-approved changes to the plan.

19. Approval of Manager’s Security Plan. Prior to opening the Lottery Gaming Facility, Manager must submit its proposed policies and procedures relating to security to the Executive Director for approval. This security plan at a minimum must contain all items required by applicable rule and regulation. No material change to the approved security plan may be made without the Executive Director’s prior written approval. Manager must perform its duties in accordance with the security plan approved by the Executive Director, except to the extent necessary for Manager to implement pre-approved changes to the plan.

20. Privilege Fee Payment . No later than thirty (30) days after the Commission approves this Agreement, Manager must pay to the state treasurer of the State of Kansas a privilege fee of $25 million. This payment to the state treasurer will be deposited into the state treasury and credited to the Lottery Gaming Facility Manager Fund, which is a temporary fund created pursuant to the Kansas Expanded Lottery Act. Notwithstanding any other provision in this Agreement, if Manager fails to pay this privilege fee within 30 days after the Commission’s approval, this Agreement will be void and Manager will forfeit any rights it may have to be a Lottery Gaming Facility Manager under the Kansas Expanded Lottery Act. Once all required approvals for this Agreement are obtained in accordance with the Kansas Expanded Lottery Act, the Manager’s privilege fee will be transferred from the Lottery Gaming Facility Manager Fund to the Expanded Lottery Act Revenues Fund as provided by law. If (a) the required approvals for this Agreement are not obtained in accordance with the Kansas Expanded Lottery Act or (b) if Manager withdraws its application to be Lottery Gaming Facility Manager in the South Central Gaming Zone prior to approval of the Kansas Racing and Gaming Commission, the Executive Director will promptly direct the state treasurer to refund, without interest, Manager’s privilege fee payment. Nothing in this Agreement will be interpreted to restrict or to be prejudicial to any right or remedy Manager may have at law or equity (i) to compel the Executive Director to make any direction to the state treasurer as provided in this paragraph 20, (ii) if the state treasurer fails to comply with such direction, to compel the state treasurer to refund Manager’s privilege fee, or (iii) to exercise any other right Manager may have under this Agreement or at law or equity to a refund of the privilege fee.

21. Lottery Facility Game Ownership . The Manager must purchase or lease, on behalf of the State of Kansas, for the Kansas Lottery all Lottery Facility Games, including all necessary equipment such as approved tables, felt, dice, cards, chips, layouts, or intellectual property rights as determined by the Executive Director. Manager has no authority under this Agreement to own, purchase or lease any Lottery Facility Games, except on behalf of the State of Kansas and through the Kansas Lottery. Notwithstanding the foregoing or anything to the contrary in this Agreement, the Manager shall be entitled to all depreciation or amortization deductions related to the Lottery Facility Games. The Executive Director, in consultation with Manager, will select the Lottery Facility Games to be offered for play at the Lottery Gaming Facility and determine the Prizes to be awarded for the play of such games. The Executive Director will determine and approve all rules of play and gaming policies that are applicable to the play of all Lottery Facility Games offered at the Lottery Gaming Facility. Subject to the prior approval of the Executive Director, Manager may purchase, lease, sell, transfer and trade-in the Lottery Facility Games at the Lottery Gaming Facility on behalf of the State of Kansas. Notwithstanding the foregoing, Manager may grant a security interest in all Lottery Facility Games arising in connection with the financing and/or lease of same. So long as Manager complies with its duties to the Kansas Lottery under this Agreement and the Kansas Expanded Lottery Act, the Kansas Lottery agrees that the Manager may manage the Lottery Gaming Facility and its investment in the Lottery Gaming Facility in a manner that maximizes its profitability.

22 . Control Software Licensing and Ownership . The Kansas Lottery will be the licensee, owner and possessor of the right to use all control software and logic chips required to operate the games available on the Lottery Facility Games at the Lottery Gaming Facility. This includes: (a) any software, hardware, computer chip, EPROMS (erasable, programmable, read-only memory), flash drives, CD-ROM or other computerized device required to operate the games available for play on the Lottery Facility Games, (b) any software, hardware, computer chip, EPROMS (erasable, programmable, read-only memory), flash drives, CD-ROM or other computerized device containing information regarding or affecting a Lottery Facility Game’s chance of winning, awarding of prizes, or setting the consideration paid by a Player, such as the random number generator or payout tables; (c) CPUs and other electronic components involved in the operation and calculation or display of game play (e.g., game controller electronics and components housing the game or system firmware program storage media or EPROMS); or (d) communication controller electronics, and components housing the communication control program that is used for communicating financial data, program information and security events to the central computer authorized by the Executive Director for purposes of security, real-time monitoring and auditing, as well as ticket validation and any other system used that affects the integrity of the Lottery Facility Games made available to Players at the Lottery Gaming Facility. Manager will transfer to the Kansas Lottery any rights obtained by Manager to use all control software and logic chips required to operate the games available on the Lottery Facility Games available to Players at the Lottery Gaming Facility. The Executive Director must approve all agreements concerning software licensing and ownership affecting the Lottery Facility Games made available to Players at the Lottery Gaming Facility in a timely manner.

23. Daily Electronic Payment of Lottery Gaming Facility Revenues . Manager must pay all Lottery Gaming Facility Revenues daily to the Executive Director as provided by applicable regulation. Manager will make this payment electronically in accordance with the Executive Director’s written instructions, which will conform to necessary banking practices. These instructions may be changed from time to time in the Executive Director’s sole discretion with reasonable notice to Manager. The Executive Director, in consultation with Manager, will develop a process so that Manager may audit and reconcile Lottery Gaming Facility Revenues after the daily payments are made. Notwithstanding any other provision in this Agreement, Manager’s failure to make a daily electronic payment of Lottery Gaming Facility Revenues as required by this Agreement will be deemed an event of default unless the payment cannot be achieved due to the unavailability of bank services, force majeure events, or malfunctions in the central communications system not within Manager’s control in which case the payment must be made on the first succeeding day that such services are available or such events or malfunctions cease. If Manager fails to comply with this paragraph, the Executive Director may, but is not required to, immediately terminate this Agreement if Manager does not cure its failure within 24 hours of receiving written notice of Manager’s failure to comply, provided that Manager’s failure to make the required daily payment is not intentional.

24. Payment Obligation is Unconditional . Manager’s obligation to make the daily payments of all Lottery Gaming Facility Revenues required above is a general obligation of Manager and is absolute and unconditional irrespective of any defense or any rights of setoff, recoupment, or counterclaim Manager may otherwise have against the Commission, the Kansas Lottery, or any agency of the State of Kansas. Manager agrees it will not suspend, discontinue or abate any daily payment required above for any cause whatsoever including, without limiting the generality of the foregoing, failure of consideration, destruction of or damage to the Lottery Gaming Facility, commercial frustration of purpose, any change in the tax or other laws, any administrative rulings of or administrative actions by the State of Kansas or any political subdivision thereof, or any failure by any agency or entity acting on behalf of the State of Kansas to perform and observe any agreement, whether expressed or implied, or any duty, liability or obligation arising out of or in connection with this Lottery Gaming Facility Management Contract, or otherwise. Subject to the foregoing provisions, nothing contained in this paragraph shall be construed to release the Kansas Lottery from the performance of any of the agreements on its part contained in this Lottery Gaming Facility Management Contract or to affect Manager’s right to seek reimbursement or damages from the Kansas Lottery as provided in this Agreement. Manager must not grant, authorize or permit any interest in the Lottery Gaming Facility Revenues that are to be remitted daily to the State to be given to anyone.

25. Setoff Right Against Manager . Any amounts owed to Manager under this Agreement are subject to set off by the state, municipalities, or certain others in accordance with K.S.A. 75-6201, et seq ., and amendments thereto.

26. Total Compensation Paid to Lottery Gaming Facility Manager . As its sole compensation for the management services for the Lottery Gaming Facility as set out in this Agreement, Manager will be paid the following percentages of the Lottery Gaming Facility Revenues generated at the Lottery Gaming Facility calculated with respect to the then current Fiscal Year, as follows: (a) 73% of all Lottery Gaming Facility Revenues up to $180 million; (b) 71% on all Lottery Gaming Facility Revenues above $180 million up to $220 million; and (c) 69% on all Lottery Gaming Facility Revenues above $220 million.

The Executive Director shall cause this payment to Manager on no less than a monthly basis, in arrears, in immediately available funds by electronic transfer into a bank account specified by Manager, which account may be changed from time to time in Manager’s sole discretion upon reasonable written notice to the Kansas Lottery, based on the previous period’s Lottery Gaming Facility Revenues. Before paying the Manager, the Executive Director may first deduct Manager’s share of Kansas Lottery expenses and share of Kansas Racing and Gaming Commission expenses incurred for oversight and regulation as provided in Paragraph 28 below, or the Manager may be billed for those expenses as the Executive Director may direct. Manager may pledge, encumber or grant any interest in the compensation to be paid Manager, subject to the deductions and setoffs provided for in this Agreement and subject further to the Executive Director’s authority under Paragraph 14.

27. Payments to Problem Gaming and Addictions Grant Fund and Local Governments. Manager acknowledges and agrees the Executive Director will cause two percent (2%) of Lottery Gaming Facility Revenues to be paid to the problem gaming and addictions grant fund established by K.S.A. 2008 Supp. 79-4805, and amendments thereto. Manager further acknowledges and agrees the Executive Director will cause three percent (3%) of the Lottery Gaming Facility Revenues to be paid to the city and/or counties in compliance with K.S.A. 2008 Supp.74-8734(h)(16), and amendments thereto. It is hereby acknowledged and agreed that such payments shall not be paid from the compensation payable to Manager pursuant to paragraph 26.

28. Manager’s Payments for Kansas Lottery’s Expenses and Kansas Racing and Gaming Commission’s Costs for Oversight and Regulation . Manager must pay the expenses of the Kansas Lottery and the Kansas Racing and Gaming Commission, as follows:

Manager’s share of the Kansas Lottery’s expenses directly attributable to Manager and the Kansas Lottery’s proportionate share of other expenses incurred for the implementation and operation of the Kansas Expanded Lottery Act and this Agreement will be paid in accordance with this sub-paragraph (a). Expenses incurred by the Kansas Lottery will be billed directly to Manager by the Kansas Lottery within thirty (30) days of the Commission’s approval of this Agreement and must be paid by Manager within thirty (30) days of billing. Thereafter, and prior to the Commencement Date, the Executive Director will bill Manager periodically for the Kansas Lottery’s expenses and Manager will pay such expenses within thirty (30) days of billing. After the Commencement Date, the Executive Director may deduct Manager’s share of Kansas Lottery expenses before making Manager’s compensation payment10 days after providing a statement of such expenses as provided above in Paragraph 26. Manager’s share of Kansas Lottery expenses will be calculated by taking the costs incurred by the Kansas Lottery that are directly attributed to Manager and Manager’s Lottery Gaming Facility, and adding to that amount the Kansas Lottery’s common expenses attributable to all racetrack and lottery gaming facility managers as a result of the Kansas Lottery’s activities pursuant to the Kansas Expanded Lottery Act, which common expenses will be divided equally among all managers.

All costs incurred by the Kansas Racing and Gaming Commission for its oversight and regulation of Manager and the Lottery Gaming Facility in accordance with the requirements for calculating and paying such costs as determined by the executive director of the Kansas Racing and Gaming Commission. Manager acknowledges and agrees this obligation includes the requirement that Manager pay it’s pro rata share of the anticipated expenses of the Lottery Gaming Facility Review Board, which will be billed to Manager after the Kansas Lottery Commission’s approval of this Agreement. If Manager fails to pay these expenses when due, this Agreement may be void, and Manager may forfeit any rights it may have to be a Lottery Gaming Facility Manager under the Kansas Expanded Lottery Act ten (10) days after receiving written notice from the Kansas Racing and Gaming Commission of Manager’s failure to timely pay. Manager further acknowledges that the executive director of the Kansas Racing and Gaming Commission may assess each manager, whose agreement is approved by the Lottery Gaming Facility Review Board, a proportionate share of all costs incurred by the Kansas Racing and Gaming Commission since 2007 Senate Bill 66 became effective on April 19, 2007, that are attributable to that agency’s responsibilities under the Kansas Expanded Lottery Act.

Manager’s share of the expenses incurred for the central computer system, which share will be based proportionately on Lottery Gaming Facility Revenues generated by the Electronic Gaming Machines placed at Manager’s Lottery Gaming Facility in comparison to the revenues generated by the Kansas Lottery at Racetrack Gaming Facilities and Lottery Gaming Facilities that are part of the central computer system.

29. Manager’s Maintenance Responsibilities . Manager must:

Keep the Lottery Gaming Facility and all property and improvements associated with its Ancillary Lottery Gaming Facility Operations in good repair and in a reasonably safe condition;

Make all necessary repairs and replacements to the Lottery Gaming Facility, including maintaining in an operational condition Manager’s portion of the central communication system as required by the Executive Director in accordance with the vendor contract for that central communication system, and all property and improvements associated with its Ancillary Lottery Gaming Facility Operations (whether ordinary or extraordinary, structural or nonstructural, foreseen or unforeseen);

Maintain the Lottery Gaming Facility and all property and improvements associated with its Ancillary Lottery Gaming Facility Operations in first class condition, ordinary wear and tear excepted, including, without limitation, interior and exterior cleaning, painting and decorating, replacement of lighting fixtures, wall coverings, floors and floor coverings, furnishings, plumbing, electrical, HVAC and any structural or mechanical repairs and any other maintenance or replacement requirements that may be commercially reasonable.

30. Prohibitions Applicable to the State . The Kansas Lottery, acting on behalf of the State of Kansas, agrees by entering into this Agreement that:

Neither the Kansas Lottery nor the State of Kansas will enter into a management contract for, more than four (4) lottery gaming facilities or similar facilities in the four gaming zones outlined in the Kansas Expanded Lottery Act with one Lottery Gaming Facility in each gaming zone;

Neither the Kansas Lottery nor the State of Kansas will designate additional areas of the state where operation of Lottery Gaming Facilities or similar gaming facilities will be authorized, other than those set out in the Kansas Expanded Lottery Act; or

Neither the Kansas Lottery nor the State of Kansas will operate an aggregate of more than 2,800 Electronic Gaming Machines at all pari-mutuel licensee locations.

31. State Payment for Breach . Manager will be entitled, as its sole monetary remedy, to payment in an amount equal to the actual privilege fee paid by Manager, plus interest on such amount, compounded annually at the rate of ten percent (10%), if the State of Kansas violates any provision in Paragraph 30 above during the term of this Agreement. The parties acknowledge and agree that nothing in this paragraph will be interpreted to prevent or limit any rights Manager may have to seek specific performance or other equitable relief against the Kansas Lottery or the State of Kansas to enforce the prohibitions contained in Paragraph 30. Nothing in this paragraph will be deemed a waiver of the immunities and protections reserved to the State of Kansas under the Eleventh Amendment to the Constitution of the United States.

32. Executive Director’s On-Site Personnel . The Executive Director may appoint one or more persons to oversee on-site the Lottery Facility Games at the Lottery Gaming Facility and Manager’s performance under this Agreement. Such person(s) will report to the Executive Director, and have such authority as the Executive Director in writing may determine. Such person(s) will oversee operations, observe gaming activities, enforce gaming rules and policies, resolve disputes between Manager and Players, and perform such other tasks as directed by the Executive Director. All determinations made by such persons will be subject to review by the Executive Director, provided that Manager may act and rely upon written and verbal determinations made by the Executive Director’s on-site personnel until Manager receives written notice from the Executive Director amending or reversing any such determination.

33. Deactivation and Possession of Lottery Facility Games . Upon order of the Executive Director, any or all Lottery Facility Games located at the Lottery Gaming Facility will be subject to immediate deactivation and/or cessation of operation. At any time, the Executive Director will be entitled to physically secure or take possession of any or all Lottery Facility Games and any related equipment necessary to play such games.

34. Insurance Required . At the time provided in Paragraph 6(i) above, and at all times thereafter, including without limitation during any period of construction of the Lottery Gaming Facility, Manager must maintain or cause to be maintained insurance against such risks and for such amounts as are customarily insured against by businesses of like size and type paying, as the same become due and payable, all premiums in respect thereto, including, but not necessarily limited to:

Insurance against loss or damage by fire, lightning, and other casualties, with a uniform standard extended coverage endorsement, such insurance to be in an amount not less than the full replacement value of the Lottery Gaming Facility, exclusive of excavations and foundations, as determined by a recognized appraiser or insurer selected by Manager or an amount not less than the maximum foreseeable loss, as determined by a property insurance carrier provided the policy provides a replacement cost endorsement up to the limit of the policy with customary and reasonable deductibles approved by the Executive Director; or as an alternative to the foregoing, Manager may insure the Lottery Gaming Facility under a blanket insurance policy or policies covering not only the Lottery Gaming Facility but other properties as well, provided a periodic appraisal is performed at intervals determined by the Executive Director and provided to the Executive Director.

Workers' compensation insurance, disability benefits insurance, and each other form of insurance which Manager is required by law to provide, covering loss resulting from injury, sickness, disability or death of Manager’s employees who are located at or assigned to the Lottery Gaming Facility.

Commercial General Liability Insurance against loss or losses from liabilities imposed by law or assumed in any written contract and arising from personal injury and death or damage to the property of others caused by any accident or occurrence, with limits of not less than $10,000,000 per accident or occurrence on account of personal injury, including death resulting there from, and $10,000,000 per accident or occurrence on account of damage to the property of others , excluding liability imposed upon Manager by any applicable worker's compensation law. These liability limits may be satisfied by any combination of primary and excess liability policies. The primary general liability insurance may have a self-insured retention and the excess liability policy may have a commercially-reasonable deductible, as determined by the Executive Director. These liability insurance requirements may be satisfied by blanket policies in the aggregate amount of not less than $10,000,000.

Business interruption insurance against the perils enumerated in subparagraph (a) and in amounts determined by the Executive Director to be appropriate and commercially reasonable to protect both the Kansas Lottery’s and Manager’s financial interests in the revenue produced by the Lottery Gaming Facility.

Employer’s practices liability coverage providing customary coverage for alleged violations of local, state or federal civil rights laws or ordinances, or employment discrimination laws.

Employee Dishonesty Combination Crime coverage in amount sufficient to cover all employees employed by Manager who are, or may be, responsible for handling any Lottery Gaming Facility Revenues or other monies belonging to the Kansas Lottery that come under the Manager’s custody or control.

35. Additional Provisions Regarding Insurance . In addition to the above, Manager must ensure that:

All insurance required in Paragraph 34 above names the Commission, the Kansas Lottery, and the State of Kansas as named insureds, or additional named insureds. All insurance will be procured and maintained in financially sound and generally recognized responsible insurance companies selected by the Manager, but authorized to write such insurance in Kansas. Such insurance may be written with deductible or self-insured retentions approved by the Executive Director in amounts comparable to those on similar policies carried by other companies engaged in the gaming industry for facilities similar in size, character and other respects to the Lottery Gaming Facility. All policies evidencing such insurance must provide for (1) payment of the losses of the Commission, the Kansas Lottery, the State of Kansas, and the Manager as their respective interest may appear, and (2) at least thirty (30) days written notice of the cancellation thereof to the Executive Director and the Manager. Policies referred to in this subparagraph (a) must include both the Kansas Lottery and the Manager as loss payees as their interest may appear.

All certificates of insurance from the insurers that such insurance is in force and effect, must be deposited with the Executive Director on or before the Effective Date, except as provided in paragraph 6(i) above. Prior to expiration of the policy evidenced by said certificates, Manager must furnish the Executive Director with evidence that the policy has been renewed or replaced or is no longer required by this Agreement. Copies of the actual insurance policies will be provided to the Executive Director promptly at his request.

Within one hundred twenty (120) days after the end of each Fiscal Year, the Manager must file with the Executive Director a certificate executed by the Manager to the effect that the insurance it maintains with respect to the Lottery Gaming Facility complies with this Agreement and that duplicate copies of all policies or certificates were filed with the Executive Director and are in full force and effect.

36. Kansas Lottery’s Right to Pay Insurance, Taxes, or Other Charges . If Manager fails (a) to pay any tax, assessment or other governmental charge required to be paid and not being formally contested by Manager in an appropriate forum with jurisdiction to hear such contests, or (b) to maintain any insurance required to be maintained, the Executive Director, in his discretion, and following written notice to Manager, may authorize the Kansas Lottery to make payment of such tax, assessment, or other governmental charge or the premium for such insurance. Manager will reimburse the Kansas Lottery for any amount so paid together with interest thereon from the date of payment at twelve percent (12%) per annum. The Kansas Lottery may set off such payments from any money otherwise due Manager.

37. Lottery Gaming Facility Damage, Destruction or Condemnation . If the Lottery Gaming Facility is damaged, destroyed or condemned (in whole or in part) at any time during the term of this Agreement, Manager must promptly replace, repair, rebuild, or restore the Lottery Gaming Facility to substantially the same condition and value as an operating entity as existed prior to such damage or destruction, to the extent insurance proceeds are available to cover such costs, with such changes, alterations and modifications as may be desired by Manager and approved by the Executive Director, and may use insurance or condemnation proceeds for all such purposes. If the Lottery Gaming Facility is damaged to an extent that it must be closed for business and Manager elects to rebuild the Lottery Gaming Facility at any point during the term of this Agreement, the term of this Agreement will be tolled until such time repairs and reconstruction of the Lottery Gaming Facility are sufficiently completed so as to allow Lottery Facility Games to be offered for play as determined by the Executive Director. The Kansas Lottery agrees to remit any insurance proceeds it receives as a result of the damage or destruction of the Lottery Gaming Facility or Lottery Facility Games (unless those proceeds are to cover the Kansas Lottery’s losses under Sections 23 or 26 of this Agreement) to the Manager for the specific replacement, repair, rebuilding or restoration loss for which the Kansas Lottery received any insurance proceeds. Notwithstanding the foregoing, Manager’s obligations to repair or replace the Lottery Gaming Facility or any Ancillary Lottery Gaming Facility Operations shall be limited to the extent of insurance proceeds made available as a result of such damage, casualty or accident. Manager will have no obligation to rebuild the Lottery Gaming Facility if such damage, destruction, or condemnation impacts at least 33% of the Lottery Gaming Facility and occurs within five years prior to the end of this Agreement’s term. Manager shall have one hundred-twenty (120) days from the damage or destruction to elect to rebuild. If Manager so elects not to rebuild the Lottery Gaming Facility within the last five years remaining on the term of this Agreement, the term of this Agreement as defined under Section 3 of this Agreement will immediately end and the Kansas Lottery shall have the ability to exercise any rights available to it under the terms of the Kansas Expanded Lottery Act.

38. Advertising, Marketing, and Promotion . Manager must use its commercially reasonable efforts to advertise, market, and promote the Lottery Gaming Facility in order to attract the public to the facility and reasonably enhance to the extent profitable to Manager Lottery Gaming Facility Revenues. Manager must comply with all applicable regulatory requirements imposed for such materials and activities. All advertising, marketing and promotion materials employed by Manager must be approved by the Executive Director prior to their first use. The Executive Director shall review all such materials within two (2) business days. Manager agrees that such materials may be disapproved if the Executive Director determines in his sole discretion that such materials would reasonably be expected to offend a substantial number of people (for reasons other than objections to lotteries or gaming activities generally), or violate any regulatory standards applicable to such materials. In addition, Manager must make available to the public the odds of winning any prize or prizes for games played on all Lottery Facility Games offered at the Lottery Gaming Facility to the extent possible given the nature of such games and subject to the Executive Director’s approval. Advertising, marketing and promotion materials shall include information regarding problem gambling as directed by the Executive Director. Subject to the approval of the Executive Director, Manager may also include the Lottery Gaming Facility in marketing programs which benefit other properties of Manager and its affiliates.

39. Players’ Club . The Executive Director may institute a Player’s club or similar incentive or promotional program applicable to some or all Racetrack Gaming Facilities or Lottery Gaming Facilities owned and operated by the Kansas Lottery. If the Executive Director institutes a Player’s club, the Executive Director agrees that: (a) Manager will have no direct or indirect responsibility to fund such a program or otherwise have any financial liability for such program; (b) Manager will not be required to provide the Executive Director with any customer data under Manager’s control for purposes of a Player’s club instituted by the Executive Director; (c) the Executive Director will not institute an incentive or awards programs in such Player’s club that is applicable to another Racetrack Gaming Facility or Lottery Gaming Facility without also making it available to Manager for use at the Lottery Gaming Facility; and, (d) the Executive Director shall reimburse Manager for any direct costs or indirect costs documented to and preapproved by the Executive Director incurred by Manager or the Lottery Gaming Enterprise as a result of the implementation, operation or maintenance of such Player’s club or program. As to subparagraph (b), Manager acknowledges that nothing in subparagraph (b) will be read to restrict the Executive Director’s access to any customer data for regulatory, security, responsible gaming oversight, or auditing purposes; and the Executive Director agrees customer data provided by Manager will not be used for any Player’s club or similar incentive or promotion program instituted by the Executive Director. Nothing in this paragraph will be read to prevent Manager from instituting its own Player’s club or similar incentive or promotional program at the Lottery Gaming Facility provided that such club or program is authorized by the Executive Director. The Executive Director agrees Manager has the right to establish a Player’s club that awards to Players credits based on their play at the Lottery Gaming Facility, provided that such awards programs are approved by the Executive Director.

40. Players’ Tracking System . The Executive Director may institute a Players’ tracking system applicable to some or all Racetrack Gaming Facilities or Lottery Gaming Facilities owned and operated by the Kansas Lottery. Manager will administer such program at the Lottery Gaming Facility as the Executive Director may provide. Nothing in this paragraph will be read to prevent Manager from instituting its own Player’s tracking system at the Lottery Gaming Facility provided that such system is authorized by the Executive Director. The Executive Director shall consult with Manager in developing a Player’s tracking system in an effort to avoid materially impairing any similar system being implemented by Manager. Notwithstanding, Manager shall have no financial responsibility for any of the costs and expenses associated with the implementation and operation of a Player’s tracking system by the Executive Director.

41. Use of Trademarks, Service Marks, Trade Names and Proprietary Information . Manager is authorized to employ any of the Kansas Lottery’s trademarks, trade names, and service marks in any advertising, marketing or promotion for the Lottery Gaming Facility or the Lottery Facility Games placed therein, subject to the Executive Director’s right to approve such advertising, marketing or promotion. Manager acknowledges it has no other right regarding the Kansas Lottery’s trademarks, service marks, and trade names. Manager will not be required to pay any royalty or other fee for this usage. In addition, the Executive Director may require Manager to place Kansas Lottery’s trademarks, trade names, or service marks at locations within the Lottery Gaming Facility as designated by the Executive Director in order to identify the games and gaming equipment as being owned and operated by the Kansas Lottery on behalf of the State of Kansas.

The Kansas Lottery is authorized to employ any of Manager’s trademarks, trade names, and service marks in any advertising, marketing or promotion for the Lottery Gaming Facility or the Lottery Facility Games placed therein, subject to the Manager’s right to approve such advertising, marketing or promotion. The Kansas Lottery acknowledges it has no other right regarding the Manager’s trademarks, service marks, and trade names. The Kansas Lottery will not be required to pay any royalty or other fee for this usage.

To the extent the Kansas Lottery obtains or has access to any Proprietary Information or Trade Secrets as defined in K.S.A. 60-3320 (4)(i)(ii) ("Information") of Manager or its affiliates, the Kansas Lottery agrees: (a) to maintain the confidentiality of such Information; (b) not to use such Information for any purpose other than as permitted under this Agreement; and (c) upon the termination of this Agreement, upon written request from Manager, to return same to Manager (including all copies thereof), including, but not limited to, documents, notes, memoranda, lists, computer programs and any summaries of such Information in the Kansas Lottery’s possession or control, but excluding any Information which the Kansas Lottery may retain pursuant to the express terms of this Agreement and that immediately upon termination of this Agreement the Kansas Lottery shall cease using all Information.

To the extent the Manager obtains or has access to any Proprietary Information or Trade Secrets as defined in K.S.A. 60-3320 (4)(i)(ii) ("Information") of the Kansas Lottery, the Manager or its affiliates agree: (a) to maintain the confidentiality of such Information; (b) not to use such Information for any purpose other than as permitted under this Agreement; and (c) upon the termination of this Agreement, upon written request from Kansas Lottery, to return same to the Kansas Lottery (including all copies thereof), including but not limited to documents, notes, memoranda, lists, computer programs and any summaries of such Information in the Manager’s possession or control, but excluding any Information which the Manager may retain pursuant to the express terms of this Agreement and that immediately upon termination of this Agreement the Manager shall cease using all Information.

Throughout the term, Manager or one of its affiliates may host and retain a database relating to customer’s activities at the Lottery Gaming Facility, including all customer information gathered in connection with any casino player loyalty program card or successor player or guest rewards program, and Manager or one of its affiliates shall own and be entitled to use any and all of the customer or other information gathered by Manager or its affiliates in connection with this Agreement or such programs. The Kansas Lottery shall have access to such information for the purposes of security, auditing, or enforcement.

Subject to the requirements of the Kansas Expanded Lottery Act and with Executive Director approval, Manager may purchase, lease, license, or otherwise obtain and have installed and maintained, either through Manager and its affiliates or Manager’s designated suppliers, any computer and other systems that Manager determines to be necessary for management of the Lottery Gaming Facility in accordance with the approved Budget and Business Plans; provided that such systems may not adversely affect the Kansas Lottery’s central computer system or affect a Lottery Facility Game’s elements of chance, consideration or prize.

42. Personnel . Manager will provide, supervise, direct the work of, discharge, and determine the compensation and other benefits of all personnel necessary to provide for the play of Lottery Facility Games at the Lottery Gaming Facility, except as otherwise noted in this Agreement, based upon a staffing plan in accordance with industry standards approved by the Executive Director. Such personnel will not be considered employees of the Kansas Lottery or any other agency or department of the State of Kansas. Manager may determine the compensation to be paid to all of its personnel working at the Lottery Gaming Facility provided that such compensation is substantially within the budget for personnel compensation approved by the Executive Director. Manager must ensure its personnel meet all applicable regulatory requirements imposed by the Commission or the Kansas Racing and Gaming Commission. Manager will not discriminate against any employee or applicant for employment because of race, creed, color, sex, age, or national origin nor violate any applicable law, regulation or local ordinance governing employer obligations.

43. Personnel Training . Manager will provide and direct employee recruitment, instructional programs, incentives, and on-the-job training necessary to ensure a first class facility for the playing of Lottery Facility Games by the public. Such trainings and other programs for personnel are subject to the Executive Director’s approval, but may be conducted on or off site, on the job, or by instructors at or from educational training facilities.

44. Key Employees . Manager agrees the personnel, or positions, as well as any independent contractors designated in Exhibit D, are considered Key Employees, whose ability to participate in the operation or management of the Lottery Gaming Facility are subject to the Executive Director’s approval within his sole discretion; provided, however, that nothing in this paragraph will restrict the right of either the Kansas Lottery or the Kansas Racing and Gaming Commission to take action regarding the license/certification held by any of Manager’s employees in accordance with applicable statutes or rules and regulations promulgated pursuant to law. The Executive Director may amend the Key Employees list at any time for any reason. Any notice of disapproval of a Key Employee or the amendment of the Key Employee list shall be in writing. Any Key Employee disapproved or deleted from the Key Employee list shall have a right to file a written request for reconsideration to the Executive Director, within thirty (30) days.

45. Books and Records; Financial Statements . Manager must maintain an accurate accounting system in connection with its management of the Lottery Gaming Facility. The books and records will be kept in accordance with generally accepted accounting principles maintained in accordance with current industry standards for similar gaming businesses. The books and records shall be maintained at all times either at the Lottery Gaming Facility or at such other locations as may be specified by regulation. The Executive Director, or his designees, shall have the right and privilege of examining these books and records at any time. In addition, the Executive Director may at any time obtain and pay for an audit performed by an independent certified public accountant. If this audit reveals a discrepancy greater than $10,000 in Lottery Gaming Facility Revenues or a cumulative discrepancy greater than $100,000 on any other line items previously reported to the Executive Director from the books and records provided by Manager, the audit’s cost will be reimbursed by Manager as a set off from the compensation to be paid Manager pursuant to Paragraph 25 above. On or before the 20 th day following the close of each month, Manager must furnish the Executive Director with a reasonably detailed operating statement for the Lottery Gaming Facility for that period, including year-to-date results.

46. Records Retention and Access . Manager must maintain all books and records regarding the Lottery Gaming Facility for a minimum period of five (5) years, or such other longer period as may be imposed by regulation or statute. Manager must permit access to such books and records as is legally required by law, regulation, or this Agreement, including giving access to the Post Auditor for the Kansas Legislature, the Executive Director or his designee, authorized representatives for the Kansas Racing and Gaming Commission, or any authorized representative of the United States government.

47. Budget and Business Plans for Each Fiscal Year . No later than forty-five (45) days prior to the commencement of each Fiscal Year, Manager must submit to the Executive Director a budget (the “Budget”) and a proposed Business Plan for the Lottery Gaming Facility for such Fiscal Year, containing reasonably detailed revenue and expense projections and providing projections for all material expenditures that Manager anticipates to be made, as well as all anticipated material capital expenditures and material expenditures for replacements. The Budget will accompany and be compatible with Manager’s proposed Business Plan for the upcoming Fiscal Year. The Budget is intended as, and will represent only, an estimate of the projected revenues and expenditures for the Fiscal Year based upon assumptions believed by Manager to be reasonable at the time of preparation. The Budget and proposed Business Plan for each upcoming Fiscal Year will be subject to the Executive Director’s approval and/or amendment. Thereafter, Manager will use reasonable efforts to achieve the budgetary goals reflected in the Budget, but the parties both recognize the Budget cannot be relied upon as an assurance of actual results for such Fiscal Year. Manager must promptly notify the Executive Director of any need to depart in any material way from the Budget if, in Manager’s judgment, adherence to the Budget is impractical or if such departure is necessary or desirable for the Lottery Gaming Facility’s efficient or profitable operation. Any such material deviations from the Budget are subject to the Executive Director’s approval. Until such time as a Budget or Business Plan is approved for any fiscal year, Manager may operate in substantial accordance with the previous fiscal year’s Budget or Business Plan as approved by the Executive Director. Notwithstanding the foregoing, if the Executive Director objects to any portion of a proposed Budget, Executive Director shall advise Manager of such objection (and deliver to Manager a reasonably detailed description of such objections, the “Disapproved Items”) and Manager and the Executive Director shall in good faith discuss and resolve the objection. If the Executive Director objects, the Manager shall promptly revise the Budget to address the Disapproved Items and shall resubmit the same to Executive Director until Executive Director approves such Disapproved Items. In addition, if any Disapproved Item is required to be paid pursuant to applicable federal, state or local law, rule, regulation, order or statute or by any governmental authority with jurisdiction with respect thereto, the cost and expense of which were approved pursuant to previous Budgets, then Manager shall be permitted to pay the same. Until such time that Executive Director approves such Disapproved Items, the most recently approved Budget shall apply other than with respect to the Disapproved Items with respect to which the previously approved Budget shall apply.

48. Bank Accounts . Manager shall establish or facilitate the establishment of the bank accounts listed below:

a special bank account in the name of the Kansas Lottery at a Kansas bank approved by the Executive Director and the Pooled Money Investment Board of the State of Kansas, with the Kansas Lottery being the only party authorized to draw from this account. This bank account will be used by Manager solely to deposit daily receipts of Lottery Gaming Facility Revenues, from which account the Lottery will cause an electronic sweep or otherwise transfer of funds pursuant to Paragraph 23 of this Agreement. Manager will have no right to grant any security interest to anyone regarding these funds or this account.

one account in Manager’s name at a bank in a jurisdiction of Manager’s choosing for the purposes of receiving its compensation payment from the Kansas Lottery pursuant to Paragraph 26. The Executive Director will cause Manager’s portion of the Lottery Gaming Facility Revenues to be electronically deposited into this account monthly;

one or more accounts into which amounts sufficient to cover all operating expenses and other costs of the Lottery Gaming Facility shall be deposited from time to time by Manager (by transfer of funds from the account in Paragraph 48(b) above or otherwise); and

such other accounts as Manager deems necessary or desirable.

49. Events of Default . Each of the following will constitute an event of default by Manager:

Manager’s failure to pay any amount owed the Kansas Lottery in the manner provided for in this Agreement, subject to Manager’s right to cure as provided in Paragraph 23, if the Kansas Lottery decides in its sole discretion to give notice of such default to Manager and, other than with respect to Paragraph 23, if Manager fails to cure such nonpayment within seven (7) days after the date on which such notice was received,

The filing of a voluntary assignment in bankruptcy or insolvency or a petition for reorganization under any bankruptcy law by Manager;

The consent to an involuntary petition in bankruptcy by Manager;

Entry of an order, judgment or decree by any court of competent jurisdiction, on application of a creditor, adjudicating Manager a bankrupt or insolvent or approving a petition seeking reorganization or appointing a receiver, trustee or liquidator of all or a substantial part of Manager’s assets, if such order, judgment or decree continues unstayed and in effect for a period of 120 consecutive days; or

Manager’s material failure to perform, keep or fulfill any other covenant, undertakings, obligations or conditions set out in this Agreement for a period of thirty (30) days after written notice of said failure from the Executive Director (unless a shorter period of time is specified in this Agreement); provided, however, that if the default is not susceptible of being cured within this thirty (30) day period and the defaulting party with due diligence takes and continues action to cure, then no event of default will be deemed to have occurred until the failure to take or to continue to take such action; or

Withdrawal of any approval granted, loss or suspension of any license/certification issued to Manager by the Kansas Racing and Gaming Commission or any other regulatory entity with jurisdiction over Manager’s activities unless such withdrawal, suspension or loss is being contested by Manager in the appropriate forum with jurisdiction over the agency action at issue.

50. Remedies on Default . If an event of default occurs as provided in Paragraph 49 above, the Executive Director may, without prejudice to any other legal or equitable remedy which he may have, give Manager notice of the Kansas Lottery’s intention to terminate this Agreement after the expiration of forty-five (45) days from the date of such notice and upon the expiration of such period, unless another cure period is expressly provided for, this Agreement will be deemed terminated; provided, however, that nothing in this paragraph, or in this Agreement, will be construed to restrict the Executive Director’s authority to: (a) immediately cease operation of any or all Lottery Facility Games at the Lottery Gaming Facility for any reason; or (b) physically secure or take possession of any or all Lottery Facility Games and any related equipment necessary to play such games. Manager acknowledges and agrees that once this Agreement is terminated, the Kansas Lottery thereafter will be free to enter into a management contract with a new manager for another Lottery Gaming Facility in the Kansas gaming zone without penalty to the Kansas Lottery or further recourse by Manager. During the forty-five (45) day period between Manager’s receipt of notice of termination from the Executive Director and such termination becoming effective, the Executive Director shall cooperate in good faith with Manager in any effort undertaken by Manager to locate a third party to acquire the Lottery Gaming Enterprise and assume the obligations of Manager hereunder; provided, however, the Manager expressly acknowledges and agrees that any third party must comply with all statutory and licensure requirements and be able to perform all such obligations hereunder. Notwithstanding the foregoing, Manager further acknowledges that its failure to make any daily electronic payment of Lottery Gaming Facility Revenues as required by Paragraph 23 will authorize the Executive Director in his sole discretion to immediately terminate this Agreement.

51. Remedies Cumulative . No remedy conferred upon or reserved to the Kansas Lottery in this Agreement is intended to be exclusive of any other available remedy, but each and every such remedy will be cumulative and in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default will impair any such right or power or will be construed to be a waiver, but any such right and power may be exercised from time to time and as often as may be deemed expedient in favor of the Kansas Lottery.

52. Surrender Upon Termination . At the Executive Director’s request, Manager agrees that at the expiration or earlier termination of this Agreement, Manager will deliver to the Executive Director, or his designee, all books, records, accounting documents, computerized files, contracts, leases, licenses/certifications, permits or other governmental authorizations, files, supplies, keys, locks safe combinations, insurance policies not maintained as part of Manager’s blanket policies, warranty contracts and cards, operating instructions and other information, warranties and guaranties concerning all equipment relating to the Lottery Facility Games, as well as any maintenance or preventive maintenance programs, schedules and logs, records, inventories of personal property and equipment purchased on behalf of the Kansas Lottery or the State of Kansas, and all other information regarding the Lottery Facility Games, and all accounts and sums held or maintained by Manager on behalf of the Kansas Lottery. Notwithstanding the foregoing, Manager shall be entitled to retain copies of all documents, records, books, files and other materials delivered to the Executive Director. Manager will have a reasonable period of time, not to exceed forty-five (45) days from the termination date, to complete all accounting functions with respect to the Lottery Gaming Facility. Manager must cooperate with the Executive Director in changing any bank accounts maintained for the Kansas Lottery’s benefit. Manager must take all actions reasonably necessary to facilitate the orderly transition or termination of the management of the business of the Lottery Gaming Facility and must perform all reporting and accounting functions required by this Agreement for the period from the date of the last report or accounting to the termination date. If, at the termination of this Agreement, there are any Lottery Facility Games that were purchased by Manager on behalf of the Kansas Lottery with ownership transferred to the Kansas Lottery, then the Executive Director will transfer ownership of such games to Manager or Manager’s designee, if such transfer is lawful; but if such transfer is not lawful, then the Executive Director will refund to Manager the residual value received by the Executive Director in a sale of such game to an eligible buyer. The Kansas Lottery will also vacate the physical space where the Lottery Gaming Facility was located within forty-five (45) days of this Agreement’s termination.

53. Agreement to Pay Attorneys’ Fees and Expenses . If Manager defaults under any provision of this Agreement and the Kansas Lottery should employ attorneys or incur other expenses for the collection of amounts payable or to enforce performance or observance of Manager’s obligations under this Agreement, Manager must pay, on demand, the reasonable fees of such attorneys and such other expenses incurred by the Kansas Lottery, if the Kansas Lottery is the prevailing party.

54. Manager’s Indemnification Responsibilities . In addition to any other indemnification obligations provided in this Agreement or by law, Manager agrees to do the following to the fullest extent allowed by law:

To hold and save harmless the State of Kansas, Commission, Commission members, the Executive Director, the Kansas Lottery, Kansas Lottery staff, Kansas Racing and Gaming Commission, Kansas Racing and Gaming Commission members, the Kansas Racing and Gaming Commission’s executive director, and Kansas Racing and Gaming Commission staff (each an “Indemnified Party”) from liability for injury to persons or damages to property by reason of Manager’s activities in carrying out the provisions of, or any way connected with this Agreement.

To hold and save harmless any Indemnified Party upon demand for any money or other property which they are required to pay out for any reasons whatsoever, whether the payment is for a budgeted expense or any other charges or debts incurred or assumed by Manager, or any other party, or judgments, settlement or expenses in defense of any claim, civil action, proceeding, charge, or prosecution made, instituted or maintained against Manager or an Indemnified Party jointly or severally, affecting or because of the condition or use of the Lottery Gaming Facility, or acts or failure to act by Manager or Manager’s agents, or arising out of or based upon any law, regulation, requirement, contract or award related to the hours of employment, working conditions, wages and/or compensation of employees or former employees at the Lottery Gaming Facility, or any other cause in connection with the Lottery Gaming Facility’s management or Manager’s activities related to any Ancillary Lottery Gaming Facility Operations. This entire Paragraph 54 does not include any action against the Indemnified Parties or their staff regarding the constitutionality of the Kansas Expanded Lottery Act or misconduct by an Indemnified Party that is found to be negligent, willful or malicious.

To hold and save harmless any Indemnified Party from liability for any claim arising as a result of the selection of Manager under the Kansas Expanded Lottery Act to manage the Lottery Gaming Facility in the South Central Zone, the denial of some other potential manager in making that selection, the process used in making the selection, or the process used in applying to become a Lottery Gaming Facility Manager under the Kansas Expanded Lottery Act.

d)	To hold and save harmless any Indemnified Party from liability for any violation or breach of this Agreement by Manager, its employees, or agents.

e)	To hold and save harmless any Indemnified Party from liability for any claims alleging negligent acts or omissions by Manager, its officers, employees, agents, board members, contractors, subcontractors or agents in the performance of this Agreement.

To hold and save harmless any Indemnified Party from liability for any claims alleging violations of any intellectual property right for any intellectual property supplied by Manager under this Agreement, including but not limited to, infringement of patents, trademarks, trade dress, trade secrets, or copyrights arising from Manager’s performance under this Agreement.

Manager’s duties under this paragraph will survive the termination or expiration of this Agreement. To the extent Manager is responsible to defend any Indemnified Party as required under this Agreement, Manager agrees to defend (with counsel approved by the Executive Director), at Manager’s sole expense, any Indemnified Party, and to pay on demand all costs and expenses related to such defense regarding any indemnification right provided for in this paragraph. The Kansas Lottery shall cooperate in any such defense and will promptly provide notice to Manager of any potential liability arising under this Paragraph 54. Manager’s obligations under this paragraph may be satisfied in whole, or in part, by insurance purchased at Manager’s expense, provided that Manager will be responsible for any indemnified liabilities in excess of insurance limits. Notwithstanding any provision to the contrary in this Agreement, Manager shall in no event be liable under any indemnification obligation provided in this Agreement to the extent such liability arises out of or is related to the negligent, willful or malicious conduct of any Indemnified Party or resulting from actions taken by Manager at the specific direction of the Executive Director, or any other Indemnified Party that is specifically authorized under the Kansas Expanded Lottery Act or regulation promulgated thereunder to direct the actions of Manager. The provisions of this paragraph in no way eliminate or cancel the insurance protection and rights granted to the Kansas Lottery, the Commission, the State of Kansas and their agents and employees as set forth in Paragraphs 34 and 35 of this Agreement.

55. Compliance with Orders, Ordinances, Etc . Throughout this Agreement’s term, Manager will promptly comply in all material respects with all statutes, codes, laws, acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses/certifications, authorizations, directions and requirements of all federal, state, county, municipal and other governments, departments, commissions, boards, companies or associations insuring the premises, courts, authorities, officials and officers, foreseen or unforeseen, ordinary or extraordinary, which now or at any time hereafter may be applicable to the Lottery Gaming Facility or any part thereof, or to any use, manner of use or condition of the Lottery Gaming Facility or any part thereof. Notwithstanding these requirements, Manager may in good faith contest the validity of the applicability of any requirement of the nature referred to in this paragraph. In such event, Manager may fail to comply with the requirement or requirements so contested during the period of such contest and any appeal therefrom, so long as such non-compliance is permitted by law. Manager will give notice to the Executive Director of any such non-compliance.

56. Discharge of Liens and Encumbrances . Manager shall not permit or create or suffer to be permitted or created any lien upon the Lottery Gaming Facility Revenues or the Lottery Gaming Facility, or any part thereof, by reason of any labor, services or materials rendered or supplied or claimed to be rendered or supplied with respect to the Lottery Gaming Facility or any part thereof, except any liens expressly approved in writing by the Executive Director. Notwithstanding these requirements, Manager may in good faith contest any such lien. In such event, Manager, upon prior written notice to the Executive Director, may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal, unless the Executive Director requires Manager to promptly secure payment of all such unpaid items by filing the requisite bond, in form and substance satisfactory to the Executive Director, thereby causing a lien to be removed. Manager agrees this Agreement is not to be considered property, and will not permit this Agreement to be attached, garnished, or executed upon by any creditor for any reason, but such attachment, garnishment or execution shall not be grounds for default if Manager promptly contests and obtains vacation of such writs or secures a bond that causes the lien thereof to be removed. This Agreement is not transferable in bankruptcy without the Executive Director’s approval, provided that the Manager’s trustee, if Manager is insolvent or bankrupt, may continue to operate the Lottery Gaming Facility pursuant to this Agreement under order of the appropriate court for no longer than one year after the bankruptcy or insolvency of Manager.

57. Assignment . This Agreement may not be assigned in whole or in part without the Executive Director’s express written consent, which may be granted or withheld in his sole and absolute discretion, except that the parties recognize that consistent with the Manager’s original Application, the entire interest in this Agreement and the rights, duties and obligations herein shall be assigned to a wholly owned affiliate of the Applicant, the Kansas Star Casino, LLC provided such entity receives all required approvals. Additionally, this Agreement may be assigned in whole or in part to any Lender as provided in paragraph 78 hereto subject to Lender’s compliance with all statutory requirements, regulatory procedures, (including those related to suitability), and Executive Director approval.

58. Notices . All notices and other communications provided for under this Agreement, or any applicable statute or regulation, must be in writing and sent via (a) U.S. Mail, certified mail, return receipt requested, (b) recognized national overnight courier (e.g. FedEx, UPS, DHL, etc.), (c) hand delivery or (d) fax, if followed by notice under (a) or (b) at the addresses set forth below, or at such other address as such party may specify by written notice to the other parties hereto:

If to the Executive Director: Ed Van Petten

Kansas Lottery

128 N. Kansas Avenue

Topeka, KS 66603-3638

Telephone: 785-296-5703

Facsimile: 785-296-5722

If to Manager: James Adams

Vice President - Legal Affairs

Peninsula Gaming, LLC

600 Star Brewery Dr., Suite 110

Dubuque, IA 52001

Office: (563) 690-4975

James.Adams@peninsulagaming.com

With a copy to

John C. Frieden

Frieden, Unrein, Forbes & Biggs LLP

555 S Kansas Avenue, Suite 303

P O Box 639

Topeka, KS 66601-0639

TEL 785.354-1100

FAX 785.354.1113

jfrieden@fufblaw.com

Notice will be deemed given three days after mailing, if by certified mail, return receipt requested, the next business day after delivery to an overnight delivery service for next business day delivery, or on the date sent by fax if confirmation of receipt is obtained and retained and provided that notice under (a) or (b) above is sent the same day.

59. Amendments . Except as otherwise provided in this paragraph, no amendment, waiver, or consent as to any provision in this Agreement will be effective unless it is in writing and agreed to by the Executive Director and Manager, and each such waiver or consent will be effective only in the specific instance and for the specific purpose for which given. In addition, and notwithstanding any other provision in this Agreement, Manager acknowledges and agrees the Executive Director may overrule any action by Manager affecting operations within the Lottery Gaming Facility without prior notice to Manager, and that the Kansas Lottery maintains at all times full control over all decisions concerning the Lottery Facility Games placed at the Lottery Gaming Facility. This Agreement will also be modified, in whole or in part, in order to comply with future statutory enactments or judicial interpretations of applicable law by a court of competent jurisdiction. This Agreement is subject to modification, in whole or in part, or cancellation, as deemed necessary by the Executive Director to comply with any future statutory enactments, subsequent regulatory changes, or judicial interpretations of applicable law by a court of competent jurisdiction occurring after this Agreement’s execution, without additional consideration being exchanged between the parties. The parties agree nothing in this paragraph will be read to limit the remedies provided to Manager in Paragraphs 31 or 65. In addition, the parties will consider in good faith any proposals made to amend this Agreement during its term, to the extent, if any, they are authorized by law.

Notwithstanding, any provision to the contrary, it is understood, acknowledged and agreed to by the parties hereto that amendments to the KELA after the date of execution of this Agreement shall not impair either party’s legal entitlements or remedies that would have been available at law or equity before the date of any such amendment.

60. No Recourse; Special Obligation .

(a)

The Kansas Lottery’s obligations and agreements contained herein and any other instrument or document executed in connection with this Agreement, and any other instrument or document supplemental thereto or hereto, are deemed the obligations and agreements of the Kansas Lottery, and not of any member, officer, contractor (other than Manager), or employee of the Commission or Kansas Lottery in his or her individual capacity, and such individuals will not be liable personally hereon or thereon or be subject to any personal liability based upon or in respect hereof or thereof or of any transaction contemplated hereby or thereby.

(b)

The Manager’s obligations and agreements contained herein and any other instrument or document executed in connection with this Agreement and any other instrument or document supplemental thereto or hereto, are deemed the obligations and agreements of Manager, and not of any direct or indirect equity owner, member, partner, officer, director, contractor, or employee of Manager in his or its individual capacity, and such entities and individuals will not be liable personally hereon or thereon or be subject to any personal liability based upon or in respect hereof or thereof or of any transaction contemplated herby or thereby, with the exception of agreements, documents or instruments that are signed by any person or entity in his or its individual capacity, such as an individual disclosure form.

61. Severability . If any provision in this Agreement is determined to be invalid or unenforceable by any court with competent jurisdiction, such holding will not invalidate or render unenforceable any other provision, and the parties may renegotiate this Agreement to conform to any such court holding.

62. Binding Effect . This Agreement will inure to the benefit of, and will be binding upon, the State of Kansas, the Kansas Lottery, Manager, and their respective successors and assigns.

63. Force Majeure . With respect to any obligation to be performed by a party during this Agreement’s term, no party will be liable for failure to perform when prevented by any force majeure cause beyond the reasonable control of such party such as an act of God, weather, strike, lockout, breakdown, accident, order or regulation of or by any governmental authority, delay in obtaining any approval required by any governmental authority (and such delay is not caused by Manager), failure of supply or inability, by the exercise of reasonable diligence, to obtain supplies, parts or employees necessary to perform such obligation, or war or other emergency. The time within which such obligation must be performed will be extended for a period of time equivalent to the delay from such cause. But failure to perform by Manager’s subcontractors or agents will not be considered a force majeure unless such subcontractor or supplier is prevented from timely performance by a force majeure as described above. This paragraph will not apply to any financial difficulties of Manager, or any parent, subsidiary, or affiliated or associated company of Manager, but will apply to orders from any authorized governmental authority or court orders preventing Manager’s ability to perform. The provisions of this paragraph 63 notwithstanding, the parties agree the litigation components of the force majeure definition do not apply to Manager’s obligations to pay the privilege fee as required by Paragraph 20 above or to Manager’s obligations to pay the expenses of the Kansas Lottery or the Kansas Racing and Gaming Commission as required by Paragraph 28, except, in each case, if such litigation components restrict, prohibit or disallow Manager from making such payments (or any portion thereof), in which case Manager shall be permitted to comply with such litigation components and such compliance shall not be, nor shall it be deemed to be, an event of default hereunder.

64. Emergency Closings . If at any time during this Agreement’s term it becomes necessary in the Executive Director’s or Manager’s reasonable opinion to cease operations at the Lottery Gaming Facility in order to protect the facility or the health, safety and welfare of guests or employees for reasons of force majeure such as, but not limited to, acts of war, insurrection, civil strife and commotion, labor unrest, environmental risks or other casualty, then the Lottery Gaming Facility may be closed and cease operation of all or part of the facility. If this occurs based on Manager’s determination, Manager must immediately notify the Executive Director, who will then determine when the Lottery Gaming Facility is reopened without jeopardy to the facility, its guests or employees.

65. Manager’s Right to Cease Management Activities . Manager may cease management of the Lottery Gaming Facility and terminate this Agreement with no less than six months advance written notice if:

K.S.A. 2008 Supp. 74-8734(h)(1) or other applicable statute or regulation is amended to reduce the term of this Agreement;

Either K.S.A. 2008 Supp. 74-8734(h)(12) or (13) or other applicable statute or regulation are amended to increase the minimum percentages stated in K.S.A. 2008 Supp. 74-8734(h)(12) or (13) above the amounts provided for in this Agreement;

K.S.A. 2008 Supp. 74-8734 (h)(16) or other applicable statute or regulation is amended to increase above the aggregate the minimum percentages stated in K.S.A. 2008 Supp. 74-8734(h)(16) above the amounts provided for in this Agreement;

The Kansas Lottery fails to effect payment of Manager’s compensation as due under this Agreement and not otherwise in dispute, provided such failure of payment is not cured within ten (10) business days of notice by Manager to the Executive Director;

K.S.A. 2008 Supp. 74-8739 is amended to no longer permit the sale or service of alcoholic beverages at the Lottery Gaming Facility or Ancillary Lottery Gaming Facility Operations;

The Kansas Expanded Lottery Act is amended to preclude the Kansas Lottery from owning and operating table games at the Lottery Gaming Facility; or the Kansas Lottery, the Kansas Racing and Gaming Commission, or the State of Kansas otherwise (i) preclude the Kansas Lottery from owning and operating the Lottery Facility Games permitted as of the date of this Manager’s Application for Lottery Gaming Facility Manager, or (ii) reduces the number of Lottery Facility Games contemplated for all phases of the project by this Manager’s Application for Lottery Gaming Facility Manager.

A court of competent jurisdiction, after all appropriate appeals are exhausted, invalidates paragraph 30 above or the corresponding provisions of the Kansas Expanded Lottery Act;

The Lottery Gaming Facility operates at a financial loss to Manager at the net income level (as defined by GAAP and verified by an independent audit by an auditor approved by the Executive Director) during any rolling twelve (12) month period; and Manager gives the Executive Director at least 90-days’ advance written notice of Manager’s intent to cease management activities within forty-five (45) days after the end of said period;

The Executive Director exercises his right under Paragraph 33 or the Kansas Expanded Lottery Act to physically secure, deactive or cease operation of such a substantial number of Lottery Facility Games that the Lottery Gaming Facility is no longer commercially viable.

The Kansas Lottery or Kansas Racing and Gaming Commission prevents the Lottery Gaming Facility from operating 24 hours a day, 7 days a week, except as may be ordered by the Kansas Lottery or the Kansas Racing and Gaming Commission as a sanction within the legal exercise of their respective regulatory authority or by the Kansas Lottery under its contract or statutory authority; or

In the event the central computer system is implemented in a manner materially adverse to the competitive position of the Lottery Gaming Facility in the market or the Manager's ability to maximize Lottery Gaming Facility Revenues;

The parties agree that in addition to, or in lieu of, Manager’s right to cease management activities under this paragraph, Manager will have available to it any legal or equitable remedy against the State of Kansas, including any impairment of the obligations of this contract prohibited by Article I, Section 10, Clause 1 of the Constitution of the United States of America, if any of the circumstances stated above in sub-paragraphs (a), (b), (c), (d), (e) or (f) occur. Nothing in this paragraph will be deemed a waiver of the immunities and protections reserved to the State of Kansas under the Eleventh Amendment to the Constitution of the United States.

66. Manager’s Ability to Withdraw Application . Manager may withdraw its application to be a Lottery Gaming Facility Manager at any time prior to its approval by the Kansas Racing and Gaming Commission. Notice of Manager’s withdrawal must be given in writing to the Executive Director. If at the time of Manager’s withdrawal, Manager has paid a privilege fee to the state treasurer and credited to the Lottery Gaming Facility Manager Fund, the Executive Director will promptly notify the state treasurer of Manager’s withdrawal and direct the state treasurer to refund Manager’s privilege payment without interest. Manager acknowledges and agrees that if it withdraws its application pursuant to this paragraph, this Agreement will be void (with the exceptions of Sections 8, 28,(except that with respect to Section 28, Manager shall only be liable for any obligations which accrued prior to the date of its withdrawal), 54, 58, 60, 70, 71 and 72) and it will not be permitted to re-apply as a Lottery Gaming Facility Manager in the South Central Gaming Zone unless the application process is reopened. Manager will not be permitted any refund for payments made by Manager to reimburse the Kansas Lottery or the Kansas Racing and Gaming Commission’s expenses as required by this Agreement.

67. Financing Commitment for Construction and Additional Commitments and Incentives (if any) .

a)	In accordance with K.S.A. 2008 Supp. 74-8734(h)(9), Manager attaches as Exhibit E its financing commitment for construction of the Lottery Gaming Facility and ancillary facilities.

Manager is committing $1.5 million annually to the families of Sumner County, through the creation of the Kansas All-Star Scholars Fund “Ad Astra.” To support education in the region, all students in grades K-12 would be given a $100 educational reward card to be used at area merchants to purchase back-to-school supplies. These cards would be distributed at the time of enrollment each August. Certain restrictions would apply to the use of the card. Those and other operational questions would be addressed by a local non-profit board established to oversee the program. Further, all graduating high school seniors in Sumner County and Mulvane would be given a $1,000 scholarship to be used toward their post-secondary endeavors. A non-profit board, the Kansas All-Stars Scholars “Ad Astra” Board, would be appointed to oversee the administration of the program. This blue-ribbon panel would be comprised of local business leaders, K-12 education leaders and recognized leaders from the state’s higher education community. Its membership (5 members) would be appointed by state and local officials and serve set terms. The balance of funds remaining each year after funding the Kansas All-Star Scholars Fund “Ad Astra” will be contributed to Sumner County’s general fund.

68. Executive Director’s Approval . When it is provided in this Agreement that the Manager will submit a budget, plan or other issue for the Executive Director’s approval, the Executive Director will respond within 10 business days of the Kansas Lottery, provided that any request from Manager in which the Executive Director fails to respond in that time will be deemed denied. The Executive Director will not exercise his discretionary authority provided to him in this Agreement in an unreasonable, arbitrary or capricious manner.

69. Central Computer System . Manager acknowledges and agrees that all Electronic Gaming Machines at the Lottery Gaming Facility will be directly linked to a central computer at a location determined by the Executive Director for purposes of security, monitoring, auditing, and providing other available program information to the Kansas Lottery. The Executive Director will have sole authority to determine the functions and operational capacities to be performed through this central computer system by Manager, as well as the services provided by the vendor engaged by the Executive Director to provide the central computer system. In addition to all other functions to be performed by the central computer system, the Executive Director expressly reserves the authority to determine if this central computer system will be used to validate or redeem tickets issued by an Electronic Gaming Machine commonly referred to as “Ticket-in Ticket Out.”

70. Counterparts . This Agreement may be executed in counterparts, each of which will be an original and all of which will constitute one and the same instrument.

71. Applicable Law . This Agreement will be governed, construed, and enforced in accordance with Kansas law for contracts to be wholly performed within the state.

72. Jurisdiction and Venue . Any action by or between the parties challenging the constitutionality of, or arising out of, any provision of the Kansas Expanded Lottery Act, this Agreement, or any rule or regulation promulgated pursuant to the Kansas Expanded Lottery Act must be brought in the district court of Shawnee County, Kansas, unless a dispute is first subject to proceedings under the Kansas Administrative Procedure Act.

73. Headings Not Controlling; Construction; Survival . Each paragraph heading is prepared for convenience only and is not to control, affect the meaning, or be taken as an interpretation for any provision in this Agreement. Use of the word “including” in this Agreement does not mean including in a restrictive sense, but rather means in the sense of providing a non-exclusive illustration, as if the words “including without limitation” were included in the text. The terms and provisions of Paragraphs 2,8,20, 31, 48, 52, 54, 58, 60, 65, 71, 72, 73, 74 and 78 shall survive the termination of this Agreement.

74. No Joint Venture Created . Manager and the Kansas Lottery agree and acknowledge that by entering into this Agreement they are not entering into a joint venture.

75. Covenant for Continued Disclosure . Within 30 days after the close of the Fiscal Year, Manager must update all exhibits to this Agreement as designated by the Executive Director. Upon the Executive Director’s written request, Manager will provide such other information regarding the financial or legal undertakings of Manager, the Lottery Gaming Facility, or the Ancillary Lottery Gaming Facility Operations.

76. No Endorsement Made . By executing this Agreement the Kansas Lottery, the Kansas Racing and Gaming Commission, and the State of Kansas have not considered or endorsed the marketability of Manager’s securities or marketability of any securities of Manager’s affiliates.

77. Contractual Attachment . It is further agreed that the provisions found in the Contractual Provisions Attachment (Form DA-146a), and is attached as Exhibit F, are incorporated in this Agreement as though set out in full.

78. Lender Protection. The Kansas Lottery expressly recognizes the need for Manager to obtain favorable financing terms and the need for any third party lender (Lender) associated with the development of the Lottery Gaming Enterprise to protect its investment. Therefore, in connection with any financing from a Lender during the term of this Agreement or in connection with the construction of the Lottery Gaming Enterprise, the following provisions will apply:

The Kansas Lottery acknowledges that Manager may grant a security interest in, and/or grant a mortgage encumbering, the Lottery Gaming Enterprise, Lottery Facility Games, and any bank accounts of Manager referenced in Paragraph 48 but excluding any Collection Accounts

Upon a bankruptcy of Manager, or if the Kansas Lottery elects to terminate this Agreement for any other reason, it shall notify Lender, and Lender may request that the Kansas Lottery promptly enter into a new management agreement on substantially the same terms as this Agreement (New Management Agreement) with a new, Third Party Manager. Kansas Lottery need not consider such a request, however, unless a Lender has first: (i) cured all reasonably curable defaults to the extent required hereunder; (ii) reimbursed Kansas Lottery’s costs and expenses (including reasonable attorneys’ fees and expenses) to terminate this Agreement, recover the Lottery Gaming Facility, and enter into the New Management Agreement; and (iii) ensured that any new Third Party Manager and/or the New Management Agreement are in compliance with any and all statutory requirements, approvals or consents , and any regulatory procedures, including those related to suitability. The Kansas Lottery agrees to co-operate with a Lender in good faith to find a new acceptable Third Party Manager upon any such termination of Manager.

The Kansas Lottery agrees to notify Lender of any material amendments made under Section 59 of this Agreement.

Manager agrees to notify the Lottery of any Lender’s contact information and keep it current with the Lottery at all times. Manager’s failure to keep a Lender’s contact information current will nullify the Kansas Lottery’s duty of notice under (a), (b) or (c) of this Section.

The rights of Lender hereunder shall inure to the benefit of a Lender’s affiliate, assignee, designee, nominee, subsidiary, or others designated by Lender.

The Kansas Lottery agrees to provide any standard business consents, estoppels or similar instruments reasonably requested by Manager or Lender in connection with any such financing of the Lottery Gaming Enterprise or Lottery Facility Games.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Executive Director, on behalf of the Kansas Lottery, and Manager have caused this Agreement to be executed in their respective names, all as of the date first above written.

THE KANSAS LOTTERY

By:	/s/ Ed Van Petten	Dated: 10-19-10
	Name: Ed Van Petten, Executive Director

PENINSULA GAMING PARTNERS, LLC a Delaware limited liability company

By:	/s/ M. Brent Stevens	Dated: 9-8-10
	Name: M. Brent Stevens Title: Chief Executive Officer

EXHIBIT SCHEDULE

EXHIBIT A – Environmental Compliance and Indemnification Agreement

EXHIBIT B – County Endorsement

EXHIBIT C –Expected Construction Sequence

EXHIBIT D –Key Employees

EXHIBIT E– Financing Commitment Description

EXHIBIT F – DA-146a

ASSIGNMENT AND ASSUMPTION AGREEMENT

WHERE AS , Peninsula Gaming Partners, LLC (“PGP”), is a party to that certain Lottery Gaming Facility Management Contract for the South Central Gaming Zone, by and between PGP and the State of Kansas, dated October 19, 2010 (the “Management Contract”);

WHEREAS , PGP has established an indirect, wholly-owned operating subsidiary, Kansas Star Casino, LLC (“KSC”), to act as manager pursuant to the terms of the Management Contract; and

WHEREAS , PGP desires to assign the Management Contract to KSC and KSC desires to assume all liabilities thereunder.

NOW THEREFORE , in exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged:

Pursuant to the provisions of Section 57 of the Management Contract, PGP hereby assigns all of PGP’s right, title and interest in, and all obligations and liabilities under the Management Contract to KSC, and KSC hereby assumes all of PGP’s right, title and interest in, and all obligations and liabilities under, the Management Contract.

IN WITNESS WHEREOF , this Assignment and Assumption Agreement has been duly executed by the undersigned, and is effective as of January 31, 2011.

ASSIGNOR:	PENINSULA GAMING PARTNERS, LLC

	By:	/s/ NatalieSchramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

ASSIGNEE:	KANSAS STAR CASINO, LLC

	By:	/s/ NatalieSchramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

EXHIBIT 10.3

_____________________________________________

PENINSULA GAMING, LLC

AND

PENINSULA GAMING CORP.,

as Issuers

AND

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

FOURTH SUPPLEMENTAL INDENTURE

Dated as of February 1, 2011

TO THE

INDENTURE

Dated as of August 6, 2009

_____________________________________________

8⅜% Senior Secured Notes due 2015

NEWYORK 8019964 (2K)

FOURTH SUPPLEMENTAL INDENTURE

Fourth Supplemental Indenture (this “ Supplemental Indenture ”), dated as of February 1, 2011, among Peninsula Gaming, LLC, a Delaware limited liability company (the “ Company ”), Peninsula Gaming Corp., a Delaware corporation (“ PGC ” and, together with the Company, the “ Issuers ”) and U.S. Bank National Association, as trustee and collateral agent under the Indenture referred to below (the “ Trustee ”). Capitalized terms used herein but not otherwise defined shall have the meanings ascribed thereto in the Indenture.

W I T N E S S E T H

WHEREAS, the Issuers and the Trustee are parties to that certain Indenture, dated as of August 6, 2009 (as amended by a First Supplemental Indenture, dated as of October 29, 2010, a Second Supplemental Indenture, dated as of January 27, 2011 and a Third Supplemental Indenture, dated as of January 31, 2011, the “ Indenture ”), relating to the Issuers’ 8⅜% Senior Secured Notes due 2015 (the “ Notes ”);

WHEREAS, Section 9.2 of the Indenture permits the Issuers and the Trustee to amend the Indenture as set forth in Section 2.1 of this Supplemental Indenture with the consent of the Holders of a majority in aggregate principal amount of the outstanding Notes;

WHEREAS, the Issuers solicited consents (the “Consent Solicitation”) of the Holders to amend the Indenture as set forth in Section 2.1 of this Supplemental Indenture upon the terms and subject to the conditions set forth in the Issuers’ consent solicitation statement, dated January 27, 2011 (the “Consent Solicitation Statement”) and accompanying consent form (together with the Consent Solicitation Statement, as each may be amended, supplemented or modified from time to time, the “Consent Documents”);

WHEREAS, Holders of a majority in aggregate principal amount of outstanding Notes have consented to the amendments to the Indenture set forth in Section 2.1 of this Supplemental Indenture;

WHEREAS, the Issuers have requested the Trustee and the Trustee has agreed to join in the execution of this Supplemental Indenture pursuant to Sections 9.2 and 9.6 of the Indenture on the terms and subject to the conditions set forth below.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained, the Issuers and the Trustee mutually covenant and agree for the equal and proportionate benefit of the Holders from time to time of the Notes as follows:

ARTICLE I

INDENTURE

1.1 Integral Part . This Supplemental Indenture constitutes an integral part of the Indenture.

ARTICLE II

AMENDMENTS TO THE INDENTURE

2.1 Amendment to Section 2.14 . Section 2.14 of the Indenture is hereby amended and restated to read in its entirety as follows:

SECTION 2.14 Issuance of Additional Notes . The Issuers may, subject to Section 4.7 hereof and applicable law, issue Additional Notes, in an aggregate principal amount (immediately after giving effect to the incurrence of such Additional Notes and the application of the proceeds therefrom) not to exceed the Additional Notes Cap; provided , however , that the foregoing limitation shall not apply to an issuance of Additional Notes pursuant to Section 4.7(b)(i) hereof. The Notes issued on the Issue Date and any Additional Notes subsequently issued shall be treated as a single class for all purposes under this Indenture.

ARTICLE III

MISCELLANEOUS

3.1 The Trustee . The recitals in this Supplemental Indenture shall be taken as the statements of the Issuers, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture.

3.2 Limited Effect . Upon operativeness of the amendments contained in Section 2.1 hereof, this Supplemental Indenture shall be deemed to be an amendment to the Indenture, and the Indenture shall be ratified, approved and confirmed in each and every respect. All references to the Indenture in the Notes or any other document, instrument, agreement or writing shall, upon operativeness of the amendments contained in Section 2.1 hereof, be deemed to refer to the Indenture as amended.

3.5 Efectiveness. This Supplemental Indenture will become effective and binding upon the Issuers, the Trustee and the Holders upon its execution.

3.6 Operativeness . Section 2.1 of this Supplemental Indenture will become operative upon, and simultaneously with, and shall have no force or effect prior to, the consummation by the Issuers of the Consent Solicitation pursuant to the terms and conditions of the Consent Documents.

3.3 Counterparts; Facsimile Signatures . This Supplemental Indenture may be executed by the parties hereto in separate counterparts, including by facsimile, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

3.4 GOVERNING LAW . THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(B); PROVIDED, THAT WITH RESPECT TO THE CREATION, ATTACHMENT, PERFECTION, PRIORITY, ENFORCEMENT OF AND REMEDIES RELATING TO THE SECURITY INTEREST IN ANY REAL PROPERTY COLLATERAL, THE GOVERNING LAW MAY BE THE LAWS OF THE JURISDICTIONS WHERE SUCH COLLATERAL IS LOCATED WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF.

( signature pages follow )

NEWYORK 8019964 (2K)

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

	PENINSULA GAMING, LLC

	By:	/s/ Natalie Schramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

	PENINSULA GAMING CORP.

	By:	/s/ Natalie Schramm
		Name: Natalie Schramm
		Title: Chief Financial Officer

NEWYORK 8019964 (2K)

Peninsula Gaming

Fourth Supplemental Indenture – Senior Secured Notes

	U.S. BANK NATIONAL ASSOCIATION, as Trustee

	By:	/s/ Donald T. Hurrelbrink
		Name: Donald T. Hurrelbrink
		Title: Vice President

NEWYORK 8019964 (2K)

Peninsula Gaming

Fourth Supplemental Indenture – Senior Secured Notes

EXHIBIT 99.1

PRESS RELEASE

For Immediate Release

February 2, 2011

PENINSULA GAMING RECEIVES REQUISITE CONSENTS IN CONSENT SOLICITATION RELATING TO ITS 8⅜% SENIOR SECURED NOTES DUE 2015 AND EXECUTES SUPPLEMENTAL INDENTURE

Dubuque, Iowa – February 2, 2011 – Peninsula Gaming, LLC (the “Company”), a casino entertainment company with gaming operations in local markets in Iowa and Louisiana, announced today that the Company and Peninsula Gaming Corp., a wholly-owned subsidiary of the Company (together, the “Issuers”) have received the requisite consents to adopt the proposed amendments to the indenture (the “Secured Notes Indenture”) governing the Issuers’ 8⅜% Senior Secured Notes due 2015 (the “Secured Notes”) pursuant to their previously announced consent solicitation for the Secured Notes. Adoption of the proposed amendments requires the consents of holders of a majority in aggregate principal amount of the Secured Notes (the “Requisite Consents”).

The Issuers have notified U.S. Bank National Association, the trustee under the Secured Notes Indenture (the “Trustee”), that they have received the Requisite Consents, and consequently, the Issuers and the Trustee have executed a supplemental indenture giving effect to the proposed amendments (the “Supplemental Indenture”). As such, pursuant to the terms of the consent solicitation, consents may no longer be revoked.

The consent solicitation is scheduled to expire at 5:00 p.m., New York City time, on February 2, 2011, unless extended or earlier terminated (the “Expiration Date”). Holders of Secured Notes who validly deliver consents by the Expiration Date in the manner described in the consent solicitation statement will be eligible to receive consent consideration equal to $1.25 per $1,000 principal amount of Secured Notes for which consents have been delivered. Holders delivering consents after the Expiration Date will not receive consent consideration.

Consent consideration will be paid as promptly as practicable after the Expiration Date and the satisfaction or waiver of the applicable conditions, at which time the amendments to the Secured Notes Indenture contained in the Supplemental Indenture will become operative. If the amendments to the Secured Notes Indenture contained in the Supplemental Indenture become operative, such amendments will be binding upon all holders of Secured Notes, whether or not such holders have delivered consents.

The purpose of the consent solicitation is to obtain approval of the amendments to the Secured Notes Indenture contained in the Supplemental Indenture to enable the Issuers to issue additional second-lien notes under the Secured Notes Indenture pursuant to the first-lien senior secured debt basket of the Secured Notes Indenture (with any issuance of additional Secured Notes under that basket effectively reducing the amount of first-lien secured debt that can be incurred under the Secured Notes Indenture).

The Issuers have retained Credit Suisse Securities (USA) LLC to act as Solicitation Agent in connection with the consent solicitation.

Questions about the consent solicitation may be directed to Credit Suisse at (800) 820-1653 (toll free) or (212) 538-2147 (collect). Requests for copies of the consent solicitation statement and related documents, and assistance relating to the procedures for delivering consents, may be obtained by contacting i-Deal LLC, the Information and Tabulation Agent, at (888) 593-9546 (toll free).

This press release is not a solicitation of consents, and no recommendation is made, or has been authorized to be made, as to whether or not holders of Secured Notes should consent to the adoption of the proposed amendments pursuant to the consent solicitation. Each holder of Secured Notes must make its own decision as to whether to give its consent to the proposed amendments. The consent solicitation is being made solely pursuant to the consent solicitation statement, dated January 27, 2011. The consent solicitation is not being made to holders of Secured Notes in any jurisdiction in which the making thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

About Peninsula Gaming

The Company, through its subsidiaries, engages in the ownership and operation of casino and off-track betting parlors. It owns and operates the Diamond Jo casino in Dubuque, Iowa, the Diamond Jo casino in Worth County, Iowa, the Amelia Belle Casino in Amelia, Louisiana, the Evangeline Downs Racetrack and Casino in St. Landry Parish, Louisiana and five off-track betting parlors in Port Allen, New Iberia, Henderson, Eunice and St. Martinville, Louisiana. The Company was founded in 1999 and is based in Dubuque, Iowa. The Company is a subsidiary of Peninsula Gaming Partners, LLC.

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the securities laws. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company’s control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to, general economic conditions in the Company’s local and regional markets, competition, risks associated with new ventures and acquisitions, government regulation, including licensure requirements and legalization of gaming, availability and adequacy of the Company’s cash flows to satisfy the Company’s obligations, changes in interest rates, legal proceedings, future terrorist acts, loss due to casualty, weather or mechanical failure, and other factors detailed in the reports filed by the Company with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company assumes no obligation to update such information.

Contact:

Peninsula Gaming, LLC

301 Bell Street

Dubuque, Iowa 52001

Natalie A. Schramm, 563-690-4977

EXHIBIT 99.2

PRESS RELEASE

For Immediate Release

February 2, 2011

PENINSULA GAMING COMMENCES $80 MILLION

SENIOR SECURED NOTES OFFERING

Dubuque, Iowa – February 2, 2011 – Peninsula Gaming, LLC (the “Company”), a casino entertainment company with gaming operations in local markets in Iowa and Louisiana, announced today that the Company and Peninsula Gaming Corp., a wholly-owned subsidiary of the Company (together, the “Issuers”), are proposing to issue $80 million in aggregate principal amount of 8⅜% Senior Secured Notes due 2015 (the “Secured Notes”). The Secured Notes will be unconditionally guaranteed on a senior secured basis by each of the Company’s existing and future domestic restricted subsidiaries, other than Peninsula Gaming Corp., the co-issuer of the Secured Notes.

The net proceeds from the offering of the Secured Notes will be used primarily to develop the first phase of the Company’s new gaming facility in Mulvane, Kansas and for general corporate purposes.

The Secured Notes are being offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. persons outside of the United States in compliance with Regulation S of the Securities Act. The Secured Notes have not been registered under the Securities Act, any other federal securities laws or the securities laws of any state, and until so registered, the Secured Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any offer, solicitation or sale of the Secured Notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

About Peninsula Gaming

The Company, through its subsidiaries, engages in the ownership and operation of casino and off-track betting parlors. It owns and operates the Diamond Jo casino in Dubuque, Iowa, the Diamond Jo casino in Worth County, Iowa, the Amelia Belle Casino in Amelia, Louisiana, the Evangeline Downs Racetrack and Casino in St. Landry Parish, Louisiana and five off-track betting parlors in Port Allen, New Iberia, Henderson, Eunice, Louisiana and St. Martinville, Louisiana. The Company was founded in 1999 and is based in Dubuque, Iowa. The Company is a subsidiary of Peninsula Gaming Partners, LLC.

Forward Looking Statements

Contact:

Peninsula Gaming, LLC

301 Bell Street

Dubuque, Iowa 52001

Natalie A. Schramm, 563-690-4977

EXHIBIT 99.3

PRESS RELEASE

For Immediate Release

February 3, 2011

PENINSULA GAMING ANNOUNCES PRICING OF $80 MILLION SENIOR SECURED NOTES OFFERING

Dubuque, Iowa – February 3, 2011 – Peninsula Gaming, LLC (the “Company”), a casino entertainment company with gaming operations in local markets in Iowa and Louisiana, announced yesterday the pricing of $80.0 million in aggregate principal amount of 8⅜% Senior Secured Notes due 2015 (the “Notes”) at a price of 105%, plus accrued interest from August 15, 2010, in a private offering expected to close on February 9, 2011.

The net proceeds from the offering of the Notes will be used primarily to develop the first phase of the Company’s new gaming facility in Mulvane, Kansas and for other permissible corporate uses.

The Notes are being offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. persons outside of the United States in compliance with Regulation S of the Securities Act. The Notes have not been registered under the Securities Act, any other federal securities laws or the securities laws of any state, and until so registered, the Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Notes in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

About Peninsula Gaming

Forward Looking Statements

Contact:

Peninsula Gaming, LLC

301 Bell Street

Dubuque, Iowa 52001

Natalie A. Schramm, 563-690-4977