Document:

EXHIBIT 10.1A

                              EMPLOYMENT AGREEMENT

         THIS  EMPLOYMENT  AGREEMENT (the  "Agreement") is made and entered into
effective this 29th day of July 2004 by and between Natalie Schramm (hereinafter
referred  to as  "Employee")  and  Peninsula  Gaming,  LLC, a  Delaware  limited
liability company (hereinafter referred to as "Employer").

         WHEREAS,  the  Employer  and  the  Employee  desire  to  enter  into an
employment agreement on the terms and conditions hereinafter provided.

         NOW, THEREFORE, in consideration of the promises made in this Agreement
and for other good and valuable  consideration,  the receipt and  sufficiency of
which are acknowledged by the parties, the parties agrees as follows:

         1.  TERM OF AGREEMENT.  The term of the Agreement  shall be for a three
(3) year period  commencing  July 1, 2004  through  June 30, 2007 (the  "Initial
Term").  This Agreement  shall  automatically  renew and continue for successive
one-year  terms  commencing  at the  end of the  Initial  Term  and  every  year
thereafter,  unless  either  party gives the other party  written  notice of the
party's  intention not to renew this  Agreement  for a further  one-year term at
least thirty (30) days prior to the expiration of a term,  unless  terminated by
agreement of the parties or pursuant to Section 2 of this Agreement (the Initial
Term,  together with any subsequent renewal period,  hereinafter  referred to as
the "Term").

         2. TERMINATION. This Agreement may be terminated at any time before any
expiration  date by the  agreement  of the  parties,  and may be  terminated  by
Employee  upon ninety (90) days advance  written  notice to the Chief  Executive
Officer of the  Employer.  In the event that this  Agreement  is  terminated  by
Employee  upon  ninety  (90) days  advance  written  notice,  Employee  shall be
entitled to  continue  receiving  her regular  salary for so long as Employee is
permitted to and actually  continues to render  services to Employer  during the
ninety  (90) day period  following  such  notice.  If  Employee  is  directed by
Employer  to cease  work prior to  expiration  of the  ninety  (90) day  period,
Employee  shall  nevertheless  be entitled to receive her regular salary for the
ninety (90) day period.  In addition,  this  Agreement  may be terminated by the
Employer  immediately  upon the occurrence of any of the following  events:  (a)
Employee's  death,  (b) Employee  becoming  physically  or mentally  disabled (a
"Disability"), which Disability renders Employee unable to perform, as certified
by a mutually agreeable  competent medical physician,  a substantial  portion of
Employee's  duties  hereunder  for a  continuous  period of sixty (60) days or a
total of ninety (90) days in any three hundred  sixty-five (365) day period, (c)
Employee's commission of an act of embezzlement, fraud, misappropriation against
the Employer, (d) Employee's conviction of, or entry of a plea of guilty or nolo
contendere or its equivalent of, a felony,  (e) Employee's  continued neglect or
failure to  discharge  Employee's  duties or  responsibilities  or the  repeated
taking of any action prohibited by Employee's immediate supervisor, the managing
member  or the  board of  managers  of the  Employer  materially  affecting  the
fundamental  operating  results of the  Employer,  or  Employee's  engagement of
conduct  injurious to the Employer or having an adverse effect on the Employer's
reputation  or  business  operations,  all of which  threatens  or is  likely to
threaten  the  licensed  status  of  the  Employee  or  the  Employer,  (f)  the
revocation,   suspension   for  more  than  thirty  (30)  days,   or

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voluntary  relinquishment of any gaming license necessary for the performance of
Employee's  duties  hereunder,  or (g)  Employee's  breach or  violation  of any
material term or material provision of this Agreement;  provided, however, that,
in the case of clauses  (e), (f) and (g) of this  Section 2,  Employee  shall be
entitled to thirty (30) days notice of termination, during which thirty (30) day
period  Employee shall have the right to remedy any such breach or default,  but
in no event will  Employee  be  entitled to more than one thirty (30) day notice
for breach of violation of the same offense;  subsequent  commission of the same
offense shall warrant  immediate  termination.  In the event of a termination of
this Agreement by Employer,  other than for violation or breach of subparagraphs
(a), (b), (c),  (d), (e), (f) or (g) or this  paragraph,  during any Term of the
Agreement, Employee shall be entitled to receive as severance pay the greater of
(a) the balance of base  compensation  due to Employee for the  remainder of the
Term, or (b) twelve month's  compensation,  which payments shall be made as they
would otherwise have become due under the payroll schedule of Employer. Employee
shall also be  entitled  to receive a prorated  share of the cash bonus to which
Employee otherwise would be entitled had Employee's  employment continued to the
end of the Term, as provided in paragraph 4(a). In addition,  the employee shall
also be entitled to receive the  immediate  payment for the value of all Granted
Units  previously  vested,  as described  in  paragraph 4 (b) below.

         3.  DUTIES.  Employee  shall carry out the duties and  responsibilities
generally  as  identified  as the Chief  Financial  Officer of the  Employer and
General  Manager  of the  Diamond  Jo,  LLC,  consistent  with the  terms of the
Position  Description  appended to the  Agreement  as Exhibit A and which may be
amended  from  time  to  time,   consistent  with  the   above-defined   general
responsibilities   by  the  Employer's   Chief   Executive   Officer.   Employer
acknowledges  and agrees that Employee,  in her sole  discretion,  shall set the
time period,  number of hours and location that  Employee  works in carrying out
her duties under this Agreement.  Employer further  acknowledges and agrees that
Employee may provide  consulting and other  services to third parties,  provided
such services do not significantly  interfere with the performance of Employee's
duties under this Agreement, and further provided such services would not result
in a breach by Employee of the non-competition or non-disclosure  agreements set
forth in Section 8 of this Agreement.

         4. COMPENSATION AND BENEFITS.

                  a. Employee shall be paid by Employer (i) as compensation  for
         her services for the twelve month period  commencing on the date hereof
         the  base  annual  salary  of  Two  Hundred  Thirty  Thousand   Dollars
         ($230,000).  Employee's  base  annual  salary  shall be  reviewed on an
         annual basis and adjusted upward annually by not less than five percent
         (5%) of the prior year's compensation.  In addition to the base salary,
         upon  January 1st of each year of service with the  Employer,  Employee
         shall be entitled to receive a cash bonus payable by the Employer based
         on Employee's  performance  during the previous  calendar  year,  which
         shall be consistent with past practices  and/or the bonus plan in place
         for similarly  situated  executive officers of the Employer and, in any
         event,  no less than $20,000 per year. If this  Agreement is terminated
         prior to  completion  of any Term,  EMPLOYEE  shall be  eligible  for a
         prorated  bonus at  termination.

                  b.  Additionally,  Employee  shall be  entitled  to an initial
         grant, under Peninsula Gaming Partners LLC's incentive units plan, of a
         profits  interest  representing

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         no less  than  0.5% of its  outstanding  capital  interests  on a fully
         diluted basis (the "Granted Units").  (i) twenty-five  percent (25%) of
         the Granted  Units shall  automatically  vest on the date of  execution
         hereof  and for so  long as no  termination  of  this  Agreement  or of
         Employee's  employment with the Employer hereunder shall have occurred,
         (ii)  twenty-five  percent (25%) of the Granted Units shall vest on the
         first anniversary of the date hereof,  (iii) twenty-five  percent (25%)
         of the Granted Units shall vest on the second  anniversary  of the date
         hereof and (iv)  twenty-five  percent  (25%) of the Granted Units shall
         vest on the third anniversary of the date hereof.  Upon any termination
         of  this  Agreement  or of  Employee's  employment  with  the  Employer
         hereunder, all Granted Units that shall have not yet vested pursuant to
         the  preceding  sentence  as of  such  date  of  termination  shall  be
         forfeited by Employee and  cancelled  upon such  termination;  Provided
         however that in connection with any  termination  arising out of a sale
         of the business (as  contemplated  in paragraph 5 hereof),  all granted
         units shall be deemed vested. All Granted Units which shall have vested
         as of the date of  termination or expiration of the Term,  shall,  upon
         the request of the  Employee,  be redeemed by the  Employer for cash at
         fair  market  value,  within 90 days of the date of said  request.  For
         purposes of redemption,  "fair market value" shall be determined by the
         board in it's reasonable discretion.

                  c.  To the extent not inconsistent with Employee's status as a
         salaried  employee  under a  continuing  contract,  Employee  shall  be
         entitled to all  benefits  accorded  executive  officers of Employer in
         accordance with the terms of the Employer's personnel policies.

         5. SALE OF EMPLOYER'S  BUSINESS.  In the event the controlling interest
in the Employer or substantially all of the Employer's assets and operations are
transferred or sold to an unrelated entity or person at any time during any Term
of this Agreement,  Employee shall receive at the time of such sale as severance
pay an amount equal to twelve (12) months' base salary. This paragraph shall not
be  applicable so long as the transfer is to or for the benefit of Brent Stevens
or so long as  Brent  Stevens  remains  as  Managing  Member  and/or  CEO of the
Employer.

         6. INDEMNIFICATION.  Employer shall indemnify, defend and hold and save
Employee, her heirs,  administrators or executors and each of them harmless from
any and all actions and causes of action, claims, demand,  liabilities,  losses,
damages  or  expenses,  of  whatsoever  kind and  nature,  including  judgments,
interest and reasonable attorney's fees and all other reasonable costs, expenses
and charges which Employee,  her heirs,  administrators or executors and each of
them shall or may at any time or from time to time,  subsequent to the effective
date of this Agreement,  sustain or incur, or become subject to by reason of any
claim or claims against  Employee,  her heirs,  administrators  or executors and
each of them while acting within the scope of her  employment,  except for gross
negligence,  misconduct  or  criminal  acts  or  omissions  on the  part  of the
Employee, and provided that Employee, her heirs,  administrators or executors or
one of them  properly  and  promptly  notifies  Employer  of  adverse  claims or
threatened or actual lawsuits.  Employee, her heirs, administrators or executors
as appropriate,

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shall provide complete cooperation to Employer, its attorneys and agents in such
case to the extent possible.

         7. NON-COMPETITION AGREEMENT.

                  a.  Both parties acknowledge  that the Employee's  position is
         one of considerable  responsibility and requires considerable training,
         relationships  and  contacts  with  customers,  clients  and  potential
         customers and clients,  and experience  that it will take a substantial
         amount of Employer's  time to replace an employee who has received such
         training,  relationships,  contacts  and  experience  as are  typically
         afforded by Employer; and

                  b.  As a condition of employment  and  continued employment of
         Employee by Employer,  the parties mutually agree that  confidentiality
         of  material  matters is required in  connection  with the  business of
         Employer  and in  connection  with  the  operations  and the  names  of
         Employer's  customers and clients,  and that  accordingly,  it is vital
         that Employer be protected from direct or indirect competition from key
         employees  whose  employment  might be terminated by or from  Employer,
         said protection  required during employment and for a reasonable period
         of time after termination thereof.

                  c.  It is hereby  agreed by and between the parties that, as a
         part of the valuable  consideration  of the  employment  and  continued
         employment of Employee by Employer:

                  (1)      That  Employee   shall  treat  and  keep  secret  all
                           material matters  relating  directly or indirectly to
                           the business of Employer,  including  but not limited
                           to,   the   content   of  all   manuals,   memoranda,
                           production,   marketing,   promotional  and  training
                           materials, financial statements, sales and operations
                           records,   business   methods,   systems  and  forms,
                           production   records,   billing  rates,  cost  rates,
                           employee  salaries and work  histories,  customer and
                           client lists, mailing lists,  processes,  inventions,
                           formulas,  job production  and cost records,  special
                           terms  with   customers  and  clients  or  any  other
                           material information relative to the past, present or
                           prospective  customers  and  operations as completely
                           confidential  information entrusted to her solely for
                           use in  her  capacity  as an  employee  of  Employer.
                           Employee  further  agrees not to keep  and/or use any
                           papers,   records,  or  any  information   whatsoever
                           relative  to any of the  matters  referred  to in the
                           preceding sentence,  nor shall Employee furnish, make
                           available or otherwise  divulge such  information  to
                           any  person   during  or  after  her   employment  by
                           Employer,  unless specifically instructed to do so in
                           writing  signed by the  Chief  Executive  Officer  of
                           Employer.

                  (2)      That if for any reason Employee shall  voluntarily or
                           involuntarily  terminate  her  employment or Employer
                           shall terminate  Employee,  it is specifically agreed
                           and understood that Employee, for a period of one (1)
                           year from the date of termination,  shall not, within
                           a radius of one hundred (100) miles of Dubuque,  Iowa
                           or Opelousas,  Louisiana  and/or any entities  within
                           Peninsula Gaming, LLC (the  "Territories"),  directly
                           or indirectly

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                           engage  in,  be  interested  in,  or  in  any  manner
                           whatsoever  be  connected  with  any  casino  located
                           within  the  Territory.  (3)  That if for any  reason
                           Employee shall voluntarily or involuntarily terminate
                           her employment or Employer shall terminate  Employee,
                           it  is   specifically   agreed  and  understood  that
                           Employee,  for a period of one (1) year from the date
                           of termination, shall not, directly or indirectly, in
                           any   capacity   whatsoever,   hire  or  solicit  for
                           employment any employee of Employer.

         8.  ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS.  This Agreement  contains
the  entire  agreement  of the  parties  and  there  are no  other  promises  or
conditions  in any other  agreement  whether  oral or  written.  This  Agreement
supersedes any prior written or oral agreement between the parties.

         9.  AMENDMENTS.  This  Agreement  may be modified  or  amended,  if the
amendment is made in writing and is signed by both parties.

         10.  SEVERABILITY.  If any provision of this Agreement shall be held to
be invalid or  unenforceable  for any reason,  the  remaining  provisions  shall
continue to be valid and  enforceable.  If a court finds that any  provision  of
this Agreement is invalid or unenforceable,  but that by limiting such provision
it would become valid and enforceable, then such provision shall be deemed to be
written, construed and enforced as so limited.

         11. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce
any provision of this Agreement shall not be construed as a waiver or limitation
of that party's right to subsequently  enforce and compel strict compliance with
every provision of this Agreement.

         12. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of Iowa.

         13.  REPRESENTATION.  The undersigned  persons executing this Agreement
for and on behalf of  Employer  as its sole  Managing  Member and as its General
Manager  represent that they are fully authorized to sign this Agreement for and
on behalf of Employer, and Employee may rely upon this representation.

         IN WITNESS  WHEREOF,  the parties  hereto have executed this  Agreement
effective the day and year first above written.

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<PAGE>

EMPLOYER:                                        EMPLOYEE:

  Peninsula Gaming Company, LLC

By:      /s/ M. Brent Stevens                       /s/ Natalie A. Schramm
   ---------------------------------------       -------------------------------
         Name: M. Brent Stevens                  Name: Natalie Schramm
         Title: Chief Executive Officer

                                       6EXHIBIT 10.1B

                              EMPLOYMENT AGREEMENT

         THIS  EMPLOYMENT  AGREEMENT (the  "Agreement") is made and entered into
effective this 14th day of July 2004, by and between Jonathan Swain (hereinafter
referred  to as  "Employee")  and  Peninsula  Gaming,  LLC, a  Delaware  limited
liability company (hereinafter referred to as "Employer").

         WHEREAS,  the  Employer  and  the  Employee  desire  to  enter  into an
employment agreement on the terms and conditions hereinafter provided.

         NOW, THEREFORE, in consideration of the promises made in this Agreement
and for other good and valuable  consideration,  the receipt and  sufficiency of
which are acknowledged by the parties, the parties agree as follows:

         1. TERM OF AGREEMENT.  The term of the Agreement  shall be for a 3 year
period  commencing  July 14, 2004 through July 14, 2007 (the  "Term").  No later
than ninety (90) days prior to the expiration of the Term, Employer shall notify
the Employee  whether the Agreement will be extended beyond the initial Term. In
the event the Employer  requests that the Employee continue his employment after
the  expiration  date (the  "Extended  Term"),  the parties agree to immediately
negotiate the provisions of the Extended Term in good faith.  Provided  however,
if the  negotiations  for the Extended Term are not completed by the  expiration
date of the Term, the Employee may elect to continue his  employment  during the
completion of the negotiations  under the same terms and conditions as contained
the Agreement. The minimum period for any Extension Term shall be one (1) year.

         2. TERMINATION. This Agreement may be terminated at any time before any
expiration  date by the  agreement  of the  parties,  and may be  terminated  by
Employee  upon ninety (90) days advance  written  notice to the Chief  Executive
Officer of the  Employer.  In the event that this  Agreement  is  terminated  by
Employee  upon  ninety  (90) days  advance  written  notice,  Employee  shall be
entitled  to  continue  receiving  his base  salary for so long as  Employee  is
permitted to and actually  continues to render  services to Employer  during the
ninety  (90) day period  following  such  notice.  If  Employee  is  directed by
Employer  to cease work  prior to  expiration  of the ninety  (90) day period (a
"Mutual  Termination"),  Employee shall  nevertheless be entitled to receive his
regular salary for the ninety (90) day period.  In addition,  this Agreement may
be  terminated  by the Employer  immediately  upon the  occurrence of any of the
following  events:  (a) Employee's  death, (b) Employee  becoming  physically or
mentally disabled (a "Disability"),  which Disability renders Employee unable to
perform,  as certified by a mutually agreeable  competent medical  physician,  a
substantial  portion of Employee's  duties hereunder for a continuous  period of
sixty (60) days or a total of ninety (90) days in any three  hundred  sixty-five
(365) day period,  (c) Employee's  commission of an act of embezzlement,  fraud,
misappropriation against the Employer, (d) Employee's conviction of, or entry of
a plea of  guilty  or nolo  contendere  or its  equivalent  of,  a  felony,  (e)
Employee's  continued  negligence or failure to discharge  Employee's  duties or
responsibilities  or the repeated taking of any action  prohibited by Employee's
immediate  supervisor,  the  managing  member  or the board of  managers  of the
Employer,  (f) Employee's  being under the influence of illegal drugs or chronic
alcohol  abuse  while  performing  his  duties  hereunder,  (g) the  revocation,
suspension  for more than thirty (30)

<PAGE>

days,  or  voluntary  relinquishment  of any gaming  license  necessary  for the
performance  of  Employee's  duties  hereunder,  or  (h)  Employee's  breach  or
violation of any material term or material  provision of this Agreement (each of
the  foregoing  clauses (a) through (h) are herein  referred to as "For Cause");
provided,  however,  that,  in the case of clauses (e),  (f), (g) or (h) of this
Section 2, Employee shall be entitled a detailed explanation of the offense. The
Employer  shall  provide  thirty (30) days notice of  termination,  during which
thirty (30) day period  Employee  shall have the right to remedy any such breach
or  default,  but in no event will  Employee be entitled to more than one thirty
(30)  day  notice  for  breach  of  violation  of the same  offense;  subsequent
commission of the same offense shall warrant immediate termination. In the event
of a termination of this Agreement by Employer,  other than in connection with a
Mutual  Termination  or For Cause,  during the Term of the  Agreement,  Employee
shall be entitled to receive (A) as severance  pay the lesser of (a) the balance
of base  compensation  due to Employee  for the  remainder  of the Term,  or (b)
twelve  months base  compensation,  which  payments  shall be made as they would
otherwise  have become due under the payroll  schedule  of  Employer,  and (B) a
prorated share of the cash bonus to which Employee  otherwise  would be entitled
had Employee's  employment continued to the end of the then current calendar, as
provided in paragraph 4(a); provided,  however, that as a condition of receiving
any  severance  payments  under this  agreement,  Employee  will be  required to
execute a settlement  and general  release of claims  against the Employer,  its
officers,  managers,  members,  agents,  employees,  successors and assigns, for
matters  arising out of or relating to Employee's  employment with the Employer,
in a form acceptable to the Employer.

         3. DUTIES.  Employee shall carry out the duties and responsibilities as
the Chief Operating  Officer ("COO") of the Employer.  The Employee shall have a
direct  reporting  relationship  to the Chief  Executive  Officer  ("CEO").  The
Employee's duties shall include the authority to hire, supervise, discipline and
terminate employees of the company,  provided however, the Employee may hire and
terminate  employees  with  annual  salaries  in  excess  of  $100,000  only  in
accordance with the Employer's organizational  documents.  Employee shall devote
Employee's full business time, attention and ability to the business and affairs
of the Employer,  shall comply with all of the Employer's  policies and codes of
conduct,  a copy of which has been provided to the Employee.  The Employee shall
use his best efforts to carry out Employee's  responsibilities as COO faithfully
and efficiently in a professional manner.  Employer acknowledges and agrees that
Employee, in his sole discretion,  shall set the location that Employee works in
carrying out his duties as the COO under this Agreement, provided however, it is
understood  that an office of the  company  from  which  the  Employee  shall be
entitled  to work  shall be located in Las  Vegas,  Nevada.  Employee  shall not
provide  any paid  consulting  or other  services to third  parties  without the
Employer's  prior consent,  which consent shall not be unreasonably  withheld or
delayed;  provided,  that such  consent may be withheld in the  Employer's  sole
discretion in the event that such  consulting or other services would  interfere
with the  performance of Employee's  duties as COO under this Agreement or would
result  in a  breach  by  Employee  of  the  non-competition  or  non-disclosure
agreements set forth in Section 8 of this Agreement.

4.     COMPENSATION AND BENEFITS.

                  a. Employee shall be paid by Employer as compensation  for his
         services for the twelve month period  commencing on the date hereof the
         base annual salary of four

<PAGE>

         hundred  thousand  dollars  ($400,000),  payable in accordance with the
         payroll policy of the Employer,  less such  deductions or amounts to be
         withheld as shall be required by applicable  law and  regulations or as
         elected by the Employer for any employee benefit plans of the Employer.
         Upon  execution  of this  Agreement,  Employee  shall be paid a signing
         bonus of $30,000, and, provided that the Employee's employment with the
         Employer  hereunder shall have not yet terminated,  on October 4, 2004,
         Employee  shall be entitled to receive an additional  bonus of $30,000.
         In addition to the base salary,  on January 1, 2005, if Employee  shall
         remain  employed  by the  Employer as of such date,  Employee  shall be
         entitled to receive a bonus in respect of Employee's  employment during
         the 2004 calendar year equal to (i) $100,000 times (ii) a fraction, (A)
         the  numerator  of which  equals the  actual  number of  calendar  days
         elapsed from, and including,  the date hereof  through,  but excluding,
         January 1, 2005, and (B) the denominator of which equals 365; provided,
         however, that the foregoing bonus may be increased,  but not decreased,
         as  determined  by the chief  executive  officer  of the  Employer.  On
         January 1 of each calendar year of the Term  thereafter,  commencing on
         January 1, 2006, if Employee  shall remain  employed by the Employer as
         of such date,  Employee shall be entitled to receive a cash bonus of no
         less than $100,000 and up to $300,000, payable by the Employer based on
         Employee's  performance  during the  previous  employment  year,  which
         performance  shall be based on meeting or exceeding the approved budget
         targets established by the COO and CEO. Such payments shall at least be
         consistent  with past  practices  and/or  the  bonus  plan in place for
         similarly situated executive officers of the Employer.

                  b.  Additionally,  the Employee  shall be issued 30,000 Common
         Units of Peninsula  Gaming  Partners  LLC,  which  represents 2% of its
         outstanding  capital  interests on a fully  diluted basis (the "Granted
         Units").  For  so  long  as no  termination  of  this  Agreement  or of
         Employee's  employment with the Employer hereunder shall have occurred,
         (i)  twenty-five  percent  (25%) of the Granted Units shall vest on the
         date hereof,  (ii) twenty-five percent (25%) of the Granted Units shall
         vest on the first  anniversary  of the date hereof,  (iii)  twenty-five
         percent (25%) of the Granted Units shall vest on the second anniversary
         of the date hereof and (iv)  twenty-five  percent  (25%) of the Granted
         Units shall vest on the third anniversary of the date hereof.  Upon any
         termination  of this  Agreement or of  Employee's  employment  with the
         Employer hereunder either (A) by the Employer for any reason other than
         For Cause or (B) by the Employee as a result of a material reduction in
         the  Employee's  salary  or   responsibilities   hereunder  ("For  Good
         Reason"),  all Granted Units that shall have not yet vested pursuant to
         the preceding sentence as of such date of termination shall immediately
         vest as of the date of such  termination.  Upon any termination of this
         Agreement  or of  Employee's  employment  with the  Employer  hereunder
         either (A) by the Employer For Cause or (B) by the Employee  other than
         For Good  Reason,  all  Granted  Units  that  shall have not yet vested
         pursuant to the preceding sentence as of such date of termination shall
         be forfeited by Employee and cancelled upon such termination.  Upon any
         termination  of this  Agreement or of  Employee's  employment  with the
         Employer  hereunder for any reason,  all Granted Units which shall have
         vested as of the date of termination or expiration of the Term,  shall,
         upon the request of the Employee,  be redeemed by the Employer for cash
         at fair market value,  within 90 days of the date of said request.  For
         purposes of  redemption,  "fair market value" shall be determined by an
         independent  Certified Public Accountant

<PAGE>

         (the "CPA") selected by mutual agreement of Employer and Employee.  The
         CPA shall consider the enterprise  value of the company in the event of
         a sale, without any reduction based upon the fact that the interests to
         be redeemed represent a minority interest. The determination of the CPA
         shall be binding upon the parties.

                  c. To the extent not inconsistent  with Employee's status as a
         salaried employee under a continuing  contract,  Employee shall, during
         the continuation of Employee's employment by the Employer hereunder, be
         entitled to all  benefits  accorded  executive  officers of Employer in
         accordance  with  the  terms  of  the  Employer's  personnel  policies,
         including a deferred  compensation  plan to be implemented by Employer.
         At a minimum,  benefits  shall  included,  health  insurance and a life
         insurance policy from an AM Best A rated company for the face amount of
         One-Million Dollars ($1,000,000).

                  d.  The  Employer  shall  promptly   reimburse   Employee  for
         reasonable  out-of-pocket  housing  and lodging  expenses in  Louisiana
         incurred  in  connection   with  the   fulfillment  of  the  Employee's
         obligations to the Employer hereunder.  Further,  the Employee shall be
         entitled to three (3) weeks of paid vacation for each year of the Term.

         5. SALE OF EMPLOYER'S  BUSINESS.  In the event the controlling interest
in the Employer or substantially all of the Employer's assets and operations are
transferred  or sold and the sale or  transfer  is closed at any time during the
Term of this  Agreement or any Extended  Term,  and,  within  twelve (12) months
following  the  closing  of  such  sale or  transfer,  either  (a) the  Employer
terminates  Employee's employment hereunder for any reason other than For Cause,
or (b) the Employee shall terminate the Employee's employment hereunder For Good
Reason,  Employee  shall be entitled to receive (A) as severance pay the balance
of base  compensation  due to  Employee  for the  remainder  of the Term,  which
payments shall be made as they would otherwise have become due under the payroll
schedule  of  Employer,  and the  redemption  of the  Granted  Units as provided
paragraph  4(b) above,  (B) a prorated share of the cash bonus to which Employee
otherwise  would be entitled had Employee's  employment  continued to the end of
the then current  calendar,  as provided in  paragraph  4(a).  Employee  will be
required  to execute a  settlement  and  general  release of claims  against the
Employer, its officers, directors,  shareholders,  agents, employees, successors
and assigns,  for matters  arising out of or relating to  Employee's  employment
with the Employer, in a form acceptable to the Employer.  "Controlling interest"
is  defined as the  majority  ownership  of the  Employer  or a majority  of the
members of the managing board of the Employer.

         6. INDEMNIFICATION.  Employer shall indemnify, defend and hold and save
Employee, his heirs,  administrators or executors and each of them harmless from
any and all actions and causes of action, claims, demand,  liabilities,  losses,
damages  or  expenses,  of  whatsoever  kind and  nature,  including  judgments,
interest and reasonable attorney's fees and all other reasonable costs, expenses
and charges which Employee,  his heirs,  administrators or executors and each of
them shall or may at any time or from time to time,  subsequent to the effective
date of this Agreement,  sustain or incur, or become subject to by reason of any
claim or claims against  Employee,  his heirs,  administrators  or executors and
each of them while acting within the scope of his  employment,  except for gross
negligence,  misconduct  or  criminal  acts  or  omissions  on the  part  of the
Employee, and provided that Employee, his heirs,  administrators or executors or
one of them  properly  and  promptly  notifies  Employer  of  adverse  claims or

<PAGE>

threatened or actual lawsuits.  Employee, his heirs, administrators or executors
as appropriate,  shall provide complete  cooperation to Employer,  its attorneys
and agents in such case to the extent possible.

7.         NON-COMPETITION AGREEMENT.

                  a. Both parties  acknowledge  that the Employee's  position is
         one of considerable  responsibility and requires considerable training,
         relationships  and  contacts  with  customers,  clients  and  potential
         customers and clients,  and experience  that it will take a substantial
         amount of Employer's  time to replace an employee who has received such
         training,  relationships,  contacts  and  experience  as are  typically
         afforded by Employer.

                  b. As a condition of employment  and  continued  employment of
         Employee by Employer,  the parties mutually agree that  confidentiality
         is  required  in  connection  with  the  business  of  Employer  and in
         connection  with the operations  and the names of Employer's  customers
         and  clients,  and that  accordingly,  it is  vital  that  Employer  be
         protected from direct or indirect  competition from key employees whose
         employment  might be terminated by or from  Employer,  said  protection
         required  during  employment and for a reasonable  period of time after
         termination thereof.

                  c. It is hereby  agreed by and between the parties  that, as a
         part of the valuable  consideration  of the  employment  and  continued
         employment of Employee by Employer:

                           (1) That  Employee  shall  treat and keep  secret all
                  matters  relating  directly or  indirectly  to the business of
                  Employer,  including  but not  limited  to, the content of all
                  manuals,  memoranda,  production,  marketing,  promotional and
                  training materials, financial statements, sales and operations
                  records,  business  methods,  systems  and  forms,  production
                  records, billing rates, cost rates, employee salaries and work
                  histories,   customer  and  client   lists,   mailing   lists,
                  processes,  inventions,  formulas,  job  production  and  cost
                  records, special terms with customers and clients or any other
                  information  relative  to the  past,  present  or  prospective
                  customers   and   operations   as   completely    confidential
                  information entrusted to him solely for use in his capacity as
                  an employee of Employer.  Employee  further agrees not to keep
                  and/or use any papers,  records, or any information whatsoever
                  relative  to any of the matters  referred to in the  preceding
                  sentence,  nor  shall  Employee  furnish,  make  available  or
                  otherwise  divulge such  information  to any person  during or
                  after  his   employment  by  Employer,   unless   specifically
                  instructed to do so in writing  signed by the Chief  Executive
                  Officer of Employer.

                           (2) That if for any reason Employee shall voluntarily
                  or  involuntarily  terminate his  employment or Employer shall
                  terminate  Employee,  it is specifically agreed and understood
                  that  Employee,  for  a  period  commencing  on  the  date  of
                  termination  and  terminating on the earlier of (i) the normal
                  expiration of the then effective Term or Extended Term or (ii)
                  the one (1) year anniversary of the date of termination, shall
                  not,  within a radius of one  hundred  (100) miles of Dubuque,
                  Iowa  or  Opelousas,  Louisiana  and/or  any  entities  within
                  Peninsula  Gaming,  LLC  (the   "Territories"),   directly  or
                  indirectly  engage  in, be  interested  in,

<PAGE>

                  or in any manner  whatsoever  be connected  with any casino or
                  racino located within the Territories.  The Territories  shall
                  not include the State of Nevada.

                           (3) That if for any reason Employee shall voluntarily
                  or  involuntarily  terminate his  employment or Employer shall
                  terminate  Employee,  it is specifically agreed and understood
                  that  Employee,  for a period of one (1) year from the date of
                  termination,   shall  not,  directly  or  indirectly,  in  any
                  capacity  whatsoever,  hire  or  solicit  for  employment  any
                  individual  employed  as an  employee  of Employer at any time
                  during the three (3) months preceding the date of termination.

         8. ENTIRE AGREEMENT;  SUCCESSORS AND ASSIGNS.  This Agreement  contains
the  entire  agreement  of the  parties  and  there  are no  other  promises  or
conditions  in any other  agreement  whether  oral or  written.  This  Agreement
supersedes any prior written or oral agreement between the parties.

         9.  AMENDMENTS.  This  Agreement  may be modified  or  amended,  if the
amendment is made in writing and is signed by both parties.

         10.  SEVERABILITY.  If any provision of this Agreement shall be held to
be invalid or  unenforceable  for any reason,  the  remaining  provisions  shall
continue to be valid and  enforceable.  If a court finds that any  provision  of
this Agreement is invalid or unenforceable,  but that by limiting such provision
it would become valid and enforceable, then such provision shall be deemed to be
written, construed and enforced as so limited.

         11. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce
any provision of this Agreement shall not be construed as a waiver or limitation
of that party's right to subsequently  enforce and compel strict compliance with
every provision of this Agreement.

         12. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of Iowa. Any dispute arising out of the Agreement,  or the  interpretation
of is  terms,  whether  monetary  or  otherwise,  shall be  decided  by  binding
Arbitration  pursuant  to the  Commercial  Arbitration  Rules  of  the  American
Arbitration  Association ("AAA"). The Arbitration shall be heard before a single
arbitrator in Las Vegas, Nevada, under the expedited rules of the AAA. The costs
of the  arbitration  shall be borne  equally by Employer and Employee  with each
side to bear their own attorneys fees and costs.

         13.  NOTICES.  Any  notice  or  communication   required  or  permitted
hereunder shall be in writing and shall be delivered by certified, registered or
express  mail,  postage  prepaid.  Any such notice shall be deemed given when so
delivered, as follows:

                  (i)      If to Employer, to:

<PAGE>

                           M. Brent Stevens
                           Peninsula Gaming, LLC
                           c/o Jefferies & Company
                           11100 Santa Monica Blvd, 10th Floor
                           Los Angeles, CA  90025

                           with a copy (which shall not constitute notice) to:

                           Mayer, Brown, Rowe & Maw
                           1675 Broadway
                           New York, New York 10019
                           Attn:  Ronald S. Brody
                           Telecopy:  212-262-1910

                  (ii)     If to the Employee, to:

                           [------------------------]
                           [------------------------]
                           [------------------------]
                           [------------------------]

                  Any party may change its  address  for  notices  hereunder  by
                  notice to the other party in accordance with this Section 13.

<PAGE>

         IN WITNESS  WHEREOF,  the parties  hereto have executed this  Agreement
effective the day and year first above written.

                                      EMPLOYER:

                                      Peninsula Gaming, LLC

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

                                      EMPLOYEE:

                                      Name:    /s/ Jonathan Swain
                                           -------------------------------------

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