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                                                                   EXHIBIT 10.5

                                CHARTER AGREEMENT

         This CHARTER AGREEMENT is made this 1st day of October 1999, between
CSL DEVELOPMENT CORPORATION, a Delaware corporation, Three Christina Centre, 201
North Walnut Street, Wilmington DE 19801, (the "Owner"), and Casino Padre
Investment Company LLC, a Nevada limited liability company, 1610 Barrancas
Avenue, Pensacola, Florida 32501 (the "Operator"):

         The Owner is the registered Owner of the vessel M/V Entertainer, O.N.
500051, built in Warren, Rhode Island in 1965, and converted at Bender
ShipBuilding & Repair Co., Inc., Mobile, Alabama in January 1995, a U.S.
registered ship (the "Vessel").

1.       Charter, Vessel; Charter Period. Upon the terms and conditions of this
         Dry Boat Charter, Owner agrees to let and Operator agrees to hire the
         Vessel, together with the gear, machinery, equipment, furnishings and
         other articles and appurtenances thereto ("Owner's supplied equipment")
         as well as certain casino equipment as shown on the inventory lists, to
         be jointly prepared by Owner and Operator, and attached hereto in the
         form of Exhibits I through III and incorporated herein, for a Charter,
         commencing on October 1, 1999, and continuing until September 30, 2001,
         unless extended by written agreement or unless sooner terminated as
         otherwise herein provided.

2.       Inventory. An inventory shall be made jointly by Owner and Operator
         prior to delivery of the Vessel of all galley, salon, bar and public
         rooms furnishings and gaming equipment that is to be available for
         Operator's use as of the date of delivery of the Vessel, and shall be
         signed by Operator and Owner as of the time of delivery of the Vessel.
         A photo log will be taken to record Vessel delivery condition (for
         Owner's account). At the time of redelivery, this Inventory shall be
         checked at Operator's expense and any missing or damaged articles shall
         be replaced or paid for by Operator at cost price.

3.       Charter Hire. The Charter Hire shall be $1,500,000 annually. In
         addition, Operator shall pay all applicable state and federal taxes
         resulting from Charter and operation of the Vessel. The monthly Charter
         Hire payments of One-Hundred Twenty-Five Thousand Dollars ($125,000.00)
         plus applicable taxes thereon shall be paid by Operator quarterly in
         advance to Owner by wire transfer to Owner's account or by check as
         instructed by Owner in writing. Operator shall concurrently fax to
         Owner a copy of each such payment. All amounts expressed as dollars in
         this Agreement shall mean United States dollars. All deposits shall be
         deemed earned and non-refundable.

4.       Deposit. Upon execution of this Agreement, Operator shall pay to Owner
         One-Hundred Twenty-Five Thousand Dollars ($125,000.00) plus applicable
         taxes representing the first full month's Charter Hire. Prior to the
         Vessel departing from Pensacola, Operator shall pay to Owner the sum of
         Two-Hundred Fifty-Thousand Dollars ($250,000.00) plus applicable taxes
         representing the first three month's Charter Hire. Failure to make any
         of these deposits will constitute a breach of this Agreement and it
         shall immediately become null and void. All deposits hereunder are
         non-refundable.

5.       Term. The term of this Agreement shall be an initial term of
         twenty-four (24) months commencing October 1, 1999, or at such time as
         Operator takes delivery of the Vessel, whichever shall occur first.

6.       Operator's Inspection and Owner's Warranties. At the time of delivery
         of the Vessel, it shall, at Owner's sole expense have current U.S.
         Coast Guard certification and an ABS Load Line certification for its
         Port of Operation and shall be technically ready to trade in U.S.
         waters (Certifications for Operator's crew, safety inspection, and
         inspection by OCMI for Certificate of Inspection at new port of
         operation are Operator's responsibility).

         Upon acceptance of the Vessel by Operator, it is understood and agreed
         by the Operator that the charter is on an "as is" basis and no warranty
         either real, expressed, or implied and no representation as to
         condition, seaworthiness, merchantability or fitness for any purpose or
         use whatsoever of the Vessel (including among other uses gambling
         activities), including but not limited to whether current or future
         United States Federal

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         or State law or regulations, will permit the Vessel to operate for
         Operator's intended purposes as a day cruise vessel in its intended
         area of operation, has been given by the Owner or its authorized
         representatives. It is further agreed that the Owner shall have no
         responsibility for any incidental, special or consequential damages or
         any other damages of any nature whatsoever arising from this Agreement,
         including, without limitation, damages for lost profits or personal
         injury, which result or are claimed to result from any defect, failure,
         fault, or condition in the Vessel or related assets. The warranties set
         forth in this section are in lieu of all other warranties, whether
         express or implied or statutory, and there are no warranties which
         extend beyond the description on the face hereof.

7.       Escrow Deposit. Upon the execution of this Agreement, the Operator
         shall deposit the sum of Five-Hundred Thousand Dollars ($500,000.00)
         (the "escrow deposit") in Trust with Bank of Pensacola (the "Escrow
         Agent") which sum shall be deposited in a money market account with all
         interest thereon accruing in the account as additional security. In
         lieu of a cash deposit, the Operator may deposit a Certificate of
         Deposit or U.S. Treasury Bonds satisfactory to Owner and endorsed for
         benefit of Owner or an unconditional and irrevocable Letter of
         Guarantee in favor of Owner in form and from a Federally chartered U.S.
         Bank acceptable to Owner. The deposit shall be security in favor of
         Owner and Mortgagee to cover any and all monies which may be payable by
         the Operator to the Owner under this Agreement included but not limited
         to:

         a.       Unpaid Charter Hire;

         b.       Insurance deductible, attorney fees, third party
                  administration charges in connection with any employee or
                  passenger injury claims;

         c.       Amounts payable under any indemnity;

         d.       Damages;

         e.       Vessel repair;

         f.       Unpaid salaries and wages of Operator's employees;

         g.       Unpaid bills of Operator's vendors and suppliers;

         h.       Unpaid charges of any nature that may become a lien on the
                  Vessel; and

         i.       Discharge of any liens created by the Operator

         The deposit shall be continuously maintained at $500,000 during the
         remaining term of this Agreement except that it shall be increased by
         $25,000 for each filed claim for injury in excess of six claims.

         Payment of the deposit or a portion thereof by Escrow Agent shall be
         made on demand upon receipt of demand and affidavit of nonpayment and
         default from Owner in which event Escrow Agent shall immediately comply
         with Owner's demand for payment.

         The deposit shall remain in trust with Escrow Agent during the term of
         the Charter and for a period of 365 days after the Vessel has been
         returned to Owner. At the end of such 365 day period, if no arbitration
         or dispute is pending and if no claims have been made against the
         deposit, the balance of the deposit, if any, shall be returned to
         Operator together with the interest. If any arbitration or dispute is
         pending or any claim is made against the deposit, then the monies shall
         remain in escrow until final resolution is made of such claims and all
         appeal periods have expired.

         All of the Parties herein hereby release and discharge Escrow Agent,
         and its officers, directors and employees from any and all actions,
         proceedings, claims, demands or other liability arising from the
         performance of said services by Escrow Agent and further all of the
         Parties herein shall at all times indemnify and keep indemnified, and
         hold harmless and defend Escrow Agent and its officers, directors and
         employees, from the same arising from the performance of said services
         by Escrow Agent. The sole duty of Escrow Agent shall be to make payment
         honestly in response to demands pursuant to the above terms and
         conditions.

8.       The Mortgage. The Vessel is subject to a First Preferred Ship's
         Mortgage in favor of Bank of Pensacola. This Charter shall be subject
         and subordinate to the Mortgage and any new or additional mortgages.

9.       Time for Delivery and Use of Vessel. The Vessel, together with Owner's
         supplied equipment, shall be delivered to and taken over by the
         Operator no later than October 1, 1999, after Owner's receipt of all
         deposits as set forth in Paragraph 4 above, and the Certificates of
         Insurance referenced in Paragraph 24 and after the Deposit to Escrow
         Agent referenced in Paragraph 7. The Operator having already inspected
         the Vessel is

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         satisfied that the Vessel is suitable for its required purpose, and the
         Operator is responsible for obtaining from the authorities necessary
         approvals to operate the Vessel in its proposed area of operations and
         for its intended purpose. The Vessel shall not carry more passengers or
         cargo than can lawfully and safely be carried and shall not in any
         event exceed the number of passengers as stipulated by local and survey
         authorities. Cargo capacity is limited to passengers personal luggage
         only. The Vessel shall not sail in any territorial waters outside the
         United States. Vessel shall only operate out of South Padre Island
         ("Port of Operation") as may be permitted by its then current survey,
         and shall be restricted to voyage within the number of miles from shore
         as permitted by its then current survey.

10.      Risk of Loss Prior to Delivery. The risk of loss, damage or destruction
         of the Vessel shall be borne by Owner until this transaction is
         consummated by delivery (evidenced by written acknowledgment received
         by Owner from Operator or Operator's vessel captain) of the Vessel to
         Operator. In the event there is no such delivery due to loss, damage or
         destruction of the Vessel, any monies paid by Operator, shall be
         returned to Operator and this Agreement shall be deemed null and void.

11.      Documentation. Throughout the Charter period, the Operator at its
         expense will maintain the registration and documentation of Vessel in
         Owner's name under the laws and regulations of the United States. Owner
         will, at the expense of Operator, execute such documents and furnish
         such information as Operator may reasonably require to enable Operator
         to obtain and maintain the documentation of the Vessel, and Operator
         will not permit the Vessel to be registered or documented or operated
         under any flag other than that of the United States or suffer or permit
         to be done anything which might injuriously affect or prejudice in any
         way the registration and documentation of the Vessel under the laws and
         regulations of The United States. Owner will not change the Port of
         Documentation of the Vessel.

12.      Maintenance. Operator shall have full responsibility for maintenance
         and repair of the Vessel and all of its fixtures, furnishings and
         equipment throughout the Charter period and at its expense will (a)
         maintain and preserve the Vessel and maintain and preserve or replace
         Owner's supplied equipment to the end that (i) the Vessel and her
         equipment will at all times during the Charter period be in the same
         condition, running order and repair as on delivery, and (ii) the Vessel
         shall be tight, staunch, strong and well and sufficient tackled,
         appareled, furnished, equipped and in every respect seaworthy and in
         good operating condition, and (b) cause the Vessel to be overhauled,
         drydocked, cleaned and bottom-painted as may be required to maintain
         the Vessel in class to maintain its load line certificate and in
         compliance with all regulatory and survey requirements. Operator will
         notify Owner of each proposed drydocking as far in advance as
         practicable. All replacement to Owner's supplied equipment placed on or
         installed in the Vessel shall be of identical or superior quality free
         and clear of all liens, encumbrances and rights of others and shall
         immediately become the property of Owner and be subject to this
         Charter.

         Operator will permit representatives of Owner at any time and without
         notice to inspect the Vessel and the Vessel's logs, papers and cargo
         but in such a manner as to not unduly disrupt the operations of the
         Vessel. All reasonable expenses in connection with any such inspection
         shall be paid by Operator. Operator agrees to undertake at its expense
         to perform any repair work that in Owner's reasonable opinion is
         necessary.

         Without limitation, any repair or maintenance requested by Owner shall
         be deemed reasonable and shall be performed promptly if:

         a.       Requested by U.S. Coast Guard, the American Bureau of Shipping
                  or any other regulatory agency having jurisdiction over the
                  Vessel.

         b.       As to any matter affecting passenger safety or comfort to a
                  standard that existed on the date of this Agreement as
                  determined by Boris Kirilloff, the Naval Architect who
                  supervised conversion of the Vessel in 1995 or another Naval
                  Architect selected by Owner.

         c.       As to any matter relating to the maintaining of the
                  mechanical, electrical, plumbing, and HVAC to a standard that
                  existed on the date of this Agreement as determined by
                  International Marine Diesel Specialists, Inc., independent
                  Marine consultants.

13.      Relocation Expenses. All of the preparation expenses for relocating the
         Vessel and all of the expenses incurred in relocating the Vessel shall
         be paid by Operator.

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14.      Payment of Taxes and Compliance with Governmental Laws and Regulations.
         All applicable state and federal taxes on the Charter payment and taxes
         that may be imposed as a result of the operation or from income earned
         by Operator are the responsibility of Operator and Operator shall
         indemnify, defend and hold Owner harmless from payment of same and
         shall not permit any lien to be imposed against the Vessel with regard
         to the same. Any and all taxes that may be imposed against the Owner as
         a result of income earned by Owner (except for sales tax on the
         Charter) are the responsibility of Owner and Owner shall indemnify,
         defend and hold Operator harmless from payment of same and shall not
         permit any lien to be imposed against the Vessel with regard to the
         same. Any duties, taxes or fees on the Vessel of any country, state,
         city, regulatory or taxing authority incurred prior to the date of this
         Agreement shall be the responsibility of the Owner, and validation of
         such payment is the responsibility of Owner. Any duties, taxes, or fees
         of the Vessel, incurred on or after the date of this Agreement shall be
         the responsibility of Operator, and validation of such payment is the
         responsibility of Operator. Further, the Operator warrants that the
         Operator shall comply with all operational requirements imposed by any
         governmental agency or law of the United States including but not
         limited to surveys or other inspections.

         It shall be Operator's responsibility to comply with all United States
         Federal, State and local laws and regulations relating to crew manning
         and operation of the Vessel, including compliance with all drug and
         alcohol regulations.

         Operator warrants that during the term of this Charter the Vessel will
         comply with all applicable U.S. Federal and State laws and regulations
         relating to navigation, pollution and safety, including, but not
         limited to, the U.S.C.G. Regulations contained in Titles 33 and 46 of
         the Code of Federal Regulations, as amended, and will reimburse Owner
         for any expenses, insurance premiums, costs of modifications to the
         Vessel, or other costs that Mortgagee and/or Owner may incur in
         complying with such laws and regulations.

15.      Assignment and Sub-Demise. The Operator shall not assign this Agreement
         nor transfer possession or control the Vessel or cause a change in
         control in or of the Operator or of management except with the prior
         consent in writing of the Owner. The Operator may not sub-let the
         Vessel.

16.      Sale, Option to Purchase and Right of First Refusal.

         a.       The Owner may continue to market the Vessel for sale subject
                  to the terms and conditions of this Agreement. Operator shall
                  provide reasonable access and inspection, including reasonable
                  sea trials, to the Vessel during normal business hours to
                  Owner and prospective buyers in connection with Owner's
                  marketing of the Vessel of sale. Such inspections shall be at
                  such times as the Vessel is in port. Sea trials shall be
                  conducted at times when there are no regularly scheduled
                  cruises for the Vessel. Such inspections and sea trials shall
                  be at Owner's expenses.

         b.       Owner hereby grants Operator the irrevocable option to
                  purchase the Vessel and equipment thereon, provided Operator
                  is not then in default of this Agreement, during the term of
                  the charter period for a purchase price of Six Million Dollars
                  ($6,000,000.00) exclusive of any on-board equipment not owned
                  by Owner, for cash. Owner shall deliver and warrant good title
                  to the Vessel, free and clear of all liens and encumbrances or
                  Operator shall have the right to apply the purchase price to
                  satisfy any such liens and encumbrances. Should Operator
                  desire to purchase the Vessel, Operator shall give written
                  notice to Owner of Operator's exercise of this right to
                  purchase. The closing of the purchase shall be at a place
                  designated by Owner which may include but not be limited to
                  the Vessel while it is out of the territorial waters of the
                  United States. Fifty percent (50%) of the Charter Hire
                  payments that are provided for by the terms of the Charter and
                  which have been made prior to the time that the option is
                  exercised and the purchase is closed shall be applied and
                  credited to the purchase price if the option is exercised and
                  the purchase price is paid on or before 365 days from the date
                  of the Agreement.

17.      Officers and Crew. During the Charter period, the Operator shall
         provide and pay the master and such other officers and seamen as
         required by the authorities and governments that shall have
         jurisdiction in the areas in which the Vessel is to be operated and, in
         any event, a sufficient complement of master, officers and seamen as
         shall be required for the safe and efficient operation of the Vessel.
         The Operator shall at all times

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         indemnify and keep indemnified, and hold harmless and defend the Owner,
         Vessel and Mortgagee and their servants or agents from any actions,
         proceedings, claims or demands made against them or any one of them by
         any master, officer or crew member of the Vessel for crew's wages,
         salvage or otherwise. The senior captain and chief engineer shall be
         employees of Operator but must be pre-approved in writing by Owner
         which approval shall not be unreasonably withheld. At Owner's option,
         the master, marine manager and/or chief engineer may be employed by
         Owner in which event their salary will be reimbursed to Owner by
         Operator.

18.      Working Expenses. The Operator shall provide and pay for all
         provisions, fuel oil, greases and other consumables and shall pay all
         port charges, pilotage, agencies, commissions and all other charges
         whatsoever.

19.      Liens Against Vessel. During the Charter period, neither the Operator,
         nor its agents, nor the Master of the Vessel, shall have any right,
         power, or authority to create, incur, or permit to be imposed upon the
         Vessel any liens whatsoever except for crews' wages and salvage. The
         Operator agrees to carry a properly certified copy of this Agreement,
         and any addendum thereto, with the ship's papers. In no event shall
         Operator procure or permit to be procured for the Vessel any supplies,
         necessaries or services, except for crew services and salvage, without
         previously obtaining a statement signed by an authorized representative
         of the furnisher thereof acknowledging such supplies, necessaries or
         services are being furnished on the credit of the Operator and not on
         the credit of the Vessel or her Owner or Mortgagee, and that the
         furnisher claims no maritime lien against the Vessel, and therefore
         waives any such lien that may arise from operation of law or customer,
         usage and practice. The Operator shall notify any person furnishing
         repairs, supplies, towage, or other necessaries to the Vessel that
         neither the Operator, nor its agents, nor the Master, has any right to
         create, incur, or permit to be imposed upon the Vessel any liens
         whatsoever. Such notice shall be in writing with copy to Owner. The
         Operator further agrees to fasten to the Vessel at all points of
         entrance, in the engine room, the wheelhouse, and other locations in
         the Vessel where notices are normally displayed, and to maintain during
         the life of this Agreement, a conspicuous notice reading as follows:

                  "This Vessel is the property of CSL Development Corporation.
                  It is under charter to Casino Padre Investment Company LLC and
                  by the terms of the Charter Agreement, neither Casino Padre
                  Investment Company LLC or the Master nor anyone in possession
                  of the vessel has any right, power, or authority to create,
                  incur, or permit to be imposed upon the Vessel any liens
                  whatsoever."

         Should any lien or liens, excluding the Preferred Mortgages, be placed
         against the Vessel for any reason whatsoever including but not limited
         to crew's wages, salvage, or otherwise, Operator is responsible and
         agrees at its expense and cost to discharge and eliminate any and all
         such liens within 24 hours of placement of said lien. Failure to do so
         shall at Owner's option, result in immediate termination of this
         Charter Agreement. Owner, at its option, may discharge liens with funds
         from the Escrow Deposit as set forth in paragraph 7(h) herein.

         Operator waives any lien it currently has or may have in the future
         against the Vessel.

20.      Survey.

         a.       On or before delivery, Owner shall cause to be issued such
                  U.S. Coast Guard and regulatory certificates to the Vessel
                  sufficient to permit transit of the Vessel to its destination.
                  The United States Coast Guard, shall inspect the Vessel's work
                  list, manning and preparation for the sea voyage prior to
                  delivery and issue current Certificate of Inspection.

         b.       The Vessel is a U.S. registered Vessel as evidenced by the
                  Survey Certificate inspected by the Operator. The Vessel shall
                  remain a U.S. registered ship.

         c.       After the delivery, Operator shall be responsible for keeping
                  the Vessel in Survey and in obtaining the necessary approvals
                  from the surveying authorities, depending on its area of
                  operation. The Vessel

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                  shall be dry docked as required by the authorities, and during
                  that period the Operator shall pay all costs and expenses of
                  the dry docking and Survey.

21.      Change of Name. Operator shall have the right, at its expense, to
         rename and to change the name of the Vessel, to paint the Vessel it its
         own colors, to install and display its tack insignia, and to fly its
         own house flag. Owner will, at the cost and expense of Operator,
         cooperate in the execution and filing of any documents necessary to
         affect a change in the name of the Vessel. At time of redelivery to
         Owner, Operator, at its expense, shall return Vessel to its original
         colors, flag and name.

22.      Owner Cooperation. Operator intends to operate the Vessel as a day
         cruise vessel on voyages out of the Port of Operation. Operator will be
         required to obtain necessary approvals from United States governmental
         authorities, including the United States Coast Guard, for operation of
         the Vessel. Owner shall fully cooperate and assist Operator, as
         reasonably necessary, with regard to Operator's dealings with such
         authorities. Such cooperation shall include Owners making the Marine
         Manager or other appropriate representative of Owner reasonably
         available at mutually convenient times and places for meetings with
         such authorities, provided however that Operator shall pay a reasonable
         fee and reasonable travel expenses, including lodging and meals of
         Owner's representatives.

21.      Security Bonds. Any security bonds or deposits required by the
         governments or other authorities in the area of operation shall be
         provided by the operator and all costs and expenses incurred in
         providing such shall be met by the Operator.

22.      Area of Operation. The Vessel shall only be employed in lawful trade
         and carriage of passengers from the Port of Operation only. Further,
         the Vessel may only be operated in such areas or in such parts of that
         area in which the Vessel can be safely operated and can always safely
         lie afloat and within the limits imposed by the authorities under which
         the Vessel is registered.

23.      Notice of Loss, Requisition, Liable, Sale, Casualties. In the event of
         (a) actual total loss of the Vessel, (b) requisition of the use of or
         title to, or seizure of, the Vessel by any governmental authority or
         persons acting under the color thereof, (c) the filing of any libel
         against the Vessel, or the attachment, levying upon, detection,
         sequestration or taking into custody of the Vessel in connection with
         any proceeding, and (d) Marshal's or other sale of the Vessel, or (e)
         any casualty, accident or damage to the Vessel, Operator will
         immediately give verbal notice thereof (containing full particulars) to
         Owner and Mortgagee and no later than 24 hours given written notice by
         facsimile and registered mail.

24.      Insurance.

         a.       Hull & Machinery. During the term of this Agreement, the
                  Vessel and Owner's supplied equipment shall be kept insured by
                  the Operator at its expense against Fire, Collision, Hull,
                  Machinery, Salvage marine and War Risks in the names of the
                  Operator, the Owner and Mortgagee as their interests may
                  appear. The hull and machinery insurance coverage shall be for
                  an amount no less than $6,500,000 and for on-board gambling
                  equipment in the amount no less than $700,000 with a carrier
                  acceptable to Owner exclusive of coverage for any equipment
                  owned or leased by Operator. Operator, at its expense, shall
                  carry appropriate personal property insurance with a carrier
                  reasonably suitable to Owner for any equipment owned or leased
                  by operator in an amount equal to its fair market value.

         b.       Protection and Indemnity. The Operator shall purchase
                  Protection and Indemnity Insurance with a carrier acceptable
                  to Owner in the names of the Operator, the Owner and Mortgagee
                  as their interests may appear, in an amount not less than U.S.
                  Ten Million Dollars ($10,000,000.00) the cost of which shall
                  be payable by the Operator. Deductibles, if any, shall not
                  exceed Twenty-Five Thousand Dollars ($25,000.00). Operators
                  shall be responsible for the deductible on any insurance claim
                  for injury to anyone on the vessel including but not limited
                  to employees, independent contractors, concessionaires,
                  passengers and guests.

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         c.       Carrier and Coverage. The insurances shall be underwritten by
                  a first class insurer who shall be approved by the Owner and
                  Mortgagee, and Certificates of Currency showing the Owner's
                  and Mortgagee's interest shall be supplied to the Owner and
                  Mortgagee. The above insurance shall include both an Innocent
                  Owner's Interest Clause and a Loss Payable and
                  Non-Cancellation Clause in forms similar to those examples as
                  set forth on Exhibit ____ attached hereto and incorporated
                  herein acceptable to Owner.

25.      War.

         a.       Unless the Owner's consent in writing be first obtained, the
                  Vessel shall not be ordered to voyage to nor continue to any
                  place or on any voyage nor be used on any service which will
                  bring the Vessel within a zone which is dangerous as a result
                  of any actual or threatened act of war, war-like operations,
                  acts of piracy or hostility, revolution, civil war, civil
                  commotion or the operation of international law, nor be
                  exposed in any way to any risks or penalties whatsoever
                  consequent upon the imposition of sanctions, nor carry goods
                  that may in any way expose the Vessel to any risks of seizure,
                  capture, penalties or any other interferences of any kind
                  whatsoever by belligerent or fighting powers or parties or by
                  governments or rulers.

         b.       Should the Vessel approach or be brought or ordered within
                  such zone or be exposed in any way to the said risks, the
                  Charter Hire payments shall be paid for all the time lost,
                  including any loss owing to loss or injury to the Master,
                  officers or crew or to the action of the crew in refusing to
                  proceed to such zone or to be exposed to such risks.

         c.       If the insurance and/or war risks insurance premiums are
                  increased by reason of or during the existence of any matters
                  set forth in Sub-Paragraph _____, the amount of the increase
                  shall be paid by the Operator.

         d.       The Operator shall have the liberty to comply with any orders
                  or directions as to departure, arrival, routes, ports of call,
                  stoppages, destinations, delivery or in any other ways
                  whatsoever given by any government or any person or body
                  acting or purporting to act with the authority of such
                  government of by any committee or any persons having under the
                  terms of the way risk insurance on the Vessel the right to
                  give such orders or directions.

26.      Salvage. The Operator will not permit the Vessel to be used in salvage
         operations of any nature save as required by law. All delays occasioned
         by attempting or rendering towage or salvage services as required by
         law or repairing damage occasioned thereby shall be borne by the
         Operator, and all benefits arising from such salvage operations shall
         be for the Operator's sole benefit.

27.      Modification. During the term of this Agreement, the Operator shall not
         modify or alter the Vessel in any respect without the prior approval of
         the Owner in writing, which consent (in case of minor and not
         structural modifications) shall not unreasonably be withheld. Any
         modifications or alterations to the Vessel agreed by the Owner shall be
         carried out to a standard approved by the Owner and the Survey
         authorities, and the cost and expenses incurred in such modifications
         or alterations shall be paid by the Operator.

28.      Corporate Authority. Operator and Owner warrant that they each have the
         power and authority to enter into this Agreement and all other
         documents executed, received or delivered hereunder. Each represents
         that all necessary corporate and stock Owner action has been to
         authorize and direct the execution hereof by Operator and Owner and to
         consummate this transaction, and that Operator shall obtain, as
         required, permits and approvals in accordance with all governmental
         regulatory requirements.

29.      Re-Delivery. At the expiration of the Charter period (unless this
         Charter shall have been sooner terminated pursuant to its terms),
         Operator at its expense will re-deliver the Vessel to Owner at a Port
         on the Atlantic or Gulf Coast to be designated by Owner.

30.      No Set-Off. No payment of Charter Hire or other payment required to be
         made by Operator by the terms of this Charter shall be subject to any
         right of set-off, counterclaim, defense, abatement, suspension,
         deferment or reduction, and Operator shall have no right to terminate
         this Charter (except as expressly provided herein)

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         or to be released, relieved or discharged from any obligation or
         liability under this Charter for any reason whatsoever, including
         without limitation: (a) any damage to, or loss, requisition, seizure,
         forfeiture or Marshal's or other sale of the Vessel; (b) any libel,
         attachment, levy, detention, sequestration or taking into custody of
         the Vessel, or any restriction of or prevention of or interference with
         the use of the Vessel; (c) any title defect or encumbrance or any
         disposition from the Vessel not by reason of some act, omission or
         breach on the part of Owner or a third party, whether or not resulting
         from accident and whether or not without fault on the part of Operator,
         Operator will continue to make all payments required of Operator by the
         terms of this Charter without interruption or abatement.

31.      Events of Default; Retaking. If any of the following events ("Events of
         Default") shall occur, namely, if (a) Operator shall fail to pay any
         Charter Hire on the due date hereof, or (b) Operator shall fail to
         perform or comply with any of the provisions of this Charter; then and
         in any such event, Owner may, at its option, immediately withdraw the
         Vessel from the service of Operator upon giving written notice to
         Operator, without compensation of liability to Operator and without
         prejudice to any claim for damage suffered or to be suffered by reason
         of any such default which Owner might otherwise have had against
         Operator in the absence of such withdrawal, and, upon the giving of
         such notice, retaking this Vessel, wherever found, whether upon the
         high seas or in any port, harbor or other place, without prior demand
         and without legal process, and for that purpose enter upon any dock,
         pier or other premises where the Vessel may be and take possession
         thereof, or require Operator, at Operator's expense, forthwith to
         redeliver the Vessel to Owner at such port as Owner may require and/or
         exercise any rights and privileges Owner may have in law and/or in
         equity.

32.      Assignment of Lease. Operator does hereby assign, transfer and set over
         unto the Owner, with the right to reassign, all of its rights, title
         and interest in and to the Lease and in and to the demised premises and
         berth located at One Padre Blvd, South Padre Island, Texas, as set
         forth in Exhibit _____ attached hereto; it being expressly understood
         and agreed that this Assignment of lease is made by the Operator to the
         Owner upon the following terms, covenants, limitations, and conditions:

         a.       Operator shall retain possession of the leased premises in
                  accordance with the terms and conditions of the Lease so long
                  as no default is made in this Charter Agreement.

         b.       If default be made by the Operator in the performance of the
                  Charter, then Owner shall have the option of taking over the
                  leased premises, provided, however, that in the event Owner
                  elects to exercise said option of taking over the demised
                  premises for the purpose of operating the same, written notice
                  of its election so to do shall be mailed promptly by Owner to
                  the Lessor. Upon the exercise of such option, the Owner shall
                  be deemed to be substituted as the Lessee in said Lease in the
                  place and instead of the Operator, and shall be deemed to have
                  assumed expressly all of the terms, covenants, and obligations
                  of the Lease theretofore applicable to the Operator, and shall
                  likewise be entitled to enjoy all of the rights and privileges
                  granted to the Operator under the terms and conditions of the
                  Lease, with the right to reassign same.

         c.       It is understood and agreed that so long as the Owner shall
                  not have exercised its option under the foregoing provisions
                  hereof as to the leased premises, the Owner shall not be
                  liable for rent or any obligation of the Operator under and by
                  virtue of or in connection with the Lease, and the Operator
                  shall remain liable for such rent and obligations.

         d.       a condition precedent to this Charter taking effect, Lessor
                  shall execute its approval in form set forth in Exhibit _____.

33.      Termination of Agreement and Turnover of Business. In the event that
         this Agreement terminates for any reason whatsoever, other than by
         Operator exercising and closing on its option to purchase the Vessel,
         including but not limited to, termination of the initial term (or
         extensions thereof), or upon a material default by Operator hereunder,
         then in that event, Operator at Owner's sole option, shall use
         reasonable efforts to deliver and turn over the business conducted on
         the vessel as a going concern and without disruption in service ("the
         Turnover"). The Turnover shall include but not be limited to:

         a.       Operator delivery to Owner of the name, address and pay
                  schedule of each employee;

Charter Agreement Casino Padre
October 1, 1999                         8
<PAGE>   9
         b.       Operator granting a release of any employee who will not be
                  employed by Operator or its affiliates from any contractual
                  arrangement that would prevent said employee from being
                  employed by Owner;

         c.       All customer lists and rating cards;

         d.       All mailing lists;

         e.       An assignment of all telephone numbers and yellow page
                  listings;

         f.       All advertising promotion and collateral material;

         g.       An assignment of all media contracts;

         h.       All software including but not limited to reservations and
                  accounting software;

         i.       Group sales lists, lead lists and existing group contracts;

         j.       Operating manuals;

         k.       Internal controls; and

         l.       Employee procedure manuals.

34.      Right of First Refusal. In the event that Operator elects for the
         business to be turned over, then in that event, Owner shall have the
         right of first refusal for a period of thirty (30) days to purchase at
         a mutually agreed upon fair market value, all furniture, fixtures and
         equipment used by Operator in the conduct of the Business.

35.      Remedies Cumulative. Each and every power and remedy herein given to
         Owner or otherwise existing shall be cumulative and in addition to
         every other remedy herein so given or now or hereafter existing at law,
         in equity, in admiralty, or under statute, and each and every power and
         remedy, whether herein so given or otherwise existing, maybe exercised
         from time to time and as often and in such order as may be deemed
         expedient by Owner, and the exercise, or the beginning of the exercise,
         of any power or remedy shall not be construed to be a waiver of the
         right to exercise at the same time, or thereafter, any other right,
         power or remedy. No delay or omission by Owner in the exercise of any
         right or power or in the pursuit of any remedy shall impair any such
         right or be construed a waiver of any default or to be an acquiescence
         therein.

36.      Owner May Cure Defaults; Reimbursement of Expenses. If Operator shall
         fail to perform or observe any of the terms of this Charter, Owner may
         , in its discretion, do all acts and make all expenditures necessary to
         remedy such failure, including without limitation, the taking out of
         insurance on the Vessel and entry upon the Vessel to make repairs, and
         Operator shall promptly reimburse Owner, with interest at the rate of
         12% per annum for any and all expenditures so made; but Owner, though
         privileged so to do, shall be under no obligation to Operator to do any
         such act or make any such expenditures nor shall the making thereof
         relieve Operator of any default in that respect. Operator will also
         reimburse Owner promptly, with interest at the rate of 12% per annum
         for any and all expenditures made by Owner at any time in withdrawing
         the Vessel from service of Operator or otherwise protecting its rights
         hereunder and for any and all damages sustained by Owner from or by
         reason of any default or defaults of Operator.

37.      Purchase of fuel and inventory. The Operator shall purchase from the
         Owner the fuel on the vessel at the time of the closing at the cost
         price thereof to the Owner and the Operator shall pay the Owner for the
         same at the time of delivery of the Vessel. The written statement of
         the Marine Manager as to the amount of fuel on the Vessel at such time
         shall be accepted as conclusive by the parties. Operator shall purchase
         all unopened liquor and groceries, unopened food stuffs, paper and
         plastic goods, stores, disposables, oils, lubricants, and other
         operating inventories on the Vessel from Owner at Owner's invoiced
         cost.

38.      Indemnity. The Operator shall at all times indemnify and keep
         indemnified, and hold harmless and defend the Owner and Mortgagee and
         their servants or agents from any actions, proceedings, claims or
         demands made against them or anyone of them by any passenger, servant
         or agent or guest of the Operator arising out of any act of any
         passenger, servant, agent or guest of the Operator.

         Should the Vessel be arrested, confiscated or detained as a result of
         the act or omission of the Operator or of the unlawful use of the
         Vessel by the Operator during the currency of this Agreement, the
         Operator indemnifies the Owner against all costs, expenses and damages
         sustained by the Owner resulting from such arrest, confiscation or
         detention. Operator shall take all steps reasonably required to insure
         that no illegal drugs or other substances are transported aboard the
         Vessel, whether by crew, passengers or otherwise.

Charter Agreement Casino Padre
October 1, 1999                        9
<PAGE>   10

         Such steps shall include, but not be limited to, the adoption of
         policies specifically prohibiting the use or carriage of illegal drugs
         aboard the Vessel and publicizing such policies to passengers and crew.

39.      Insolvency of Operator. The filing of any petition in bankruptcy, or
         the adjudication of Operator as a bankrupt or insolvent, or the
         appointment of a receiver or trustee to take possession of all or
         substantially all of the assets of Operator, or a general assignment by
         Operator for the benefit of creditors, or any action taken or suffered
         by Operator under any state or federal Insolvency or Bankruptcy Act
         shall constitute a breach and a default of this agreement by Operator
         and in such event Owner may at its option terminate this Agreement and
         exercise any and all of its rights as set forth in this Agreement.

         It is understood and agreed that neither this Agreement, or any
         interest herein or hereunder, or any estate created hereby, shall pass
         by operation of law under any state or Federal Insolvency or Bankruptcy
         Act to any trustee, receiver, assignee for the benefit of creditors, or
         any other person whatsoever without the express written consent of
         Owner and Mortgagee first had and obtained. Any purported transfer in
         violation of the provisions of this Paragraph shall constitute a breach
         and a default of this Agreement and in such event Owner may at its
         option declare this Agreement terminated and exercise any and all of
         its rights and remedies as set forth in this Agreement.

40.      Arbitration. If at any time any question, dispute or difference
         whatsoever shall arise between the parties hereto out of or in
         connection with this Agreement which the parties cannot settle by
         reaching a mutual understanding, then any party shall give notice to
         the other in writing of the existence of such question, dispute or
         difference, and the same shall be submitted within fourteen days (14)
         days, of such notice by a party, to and thereafter shall be settled and
         decided by arbitration in accordance with the laws of the State of
         Florida which arbitration shall be final. Such dispute or difference
         shall be referred to the decision of three (3) arbitrators who are
         members of the American Maritime Association, who shall conduct all
         proceedings in Pensacola, Florida. Within seven (7) days of such notice
         by a party to the other of such question, dispute or difference, each
         party shall select one arbitrator and thereafter such arbitrators shall
         in turn mutually select the third arbitrator. If any party fails to
         select an arbitrator within the seven (7) days, the other party may
         select such arbitrator.

41.      Applicable law. This Agreement shall be interpreted in accordance with
         the laws of the State of Florida. All arbitration and litigation shall
         take place in Escambia County, Florida and the parties hereto agree and
         consent to jurisdiction of the State and Federal courts located in
         Escambia County, Florida.

42.      Notices. All notices, requests, demands or other communications to or
         upon the respective parties hereto shall be deemed to have been duly
         given or made seven (7) business days after dispatch if set by prepaid
         registered post and one (1) business day after dispatch if made by
         telex, cable or facsimile transmission to the party to which such
         notice, request, demand or other communication is required or permitted
         to be given or made under this Agreement addressed as follows:

         If to the Owner:           CSL Development Corporation
                                    Three Christina Centre
                                    201 North Walnut Street
                                    Wilmington DE 19801

         If to the Operator:        Casino Padre Investment Company LLC
                                    1610 Barrancas Avenue
                                    Pensacola FL 32501

43.      Time. This is of the essence for the performance of all obligations and
         the satisfaction of all conditions of this Agreement.

44.      Attorneys' Fees. Should any party hereto employ an attorney for the
         purpose of enforcing or construing this Agreement, or any judgment
         based on this Agreement, in any legal proceeding whatsoever, including
         but not limited to insolvency, bankruptcy, arbitration, declaratory
         relief, or other litigation as well as any appeals thereof, the
         prevailing party shall be entitled to receive from the other party or
         parties thereof reimbursement

Charter Agreement Casino Padre
October 1, 1999                        10
<PAGE>   11

         for reasonable attorneys' fees and costs, including, but not limited
         to, service of process costs, filing fees, court and court reporter
         costs, investigative costs, expert witness fees, and the cost of any
         bonds, and such reimbursement shall be included in any judgment or
         final order issued in that proceeding.

45.      Counterparts. This Agreement may be executed in any manner of identical
         counterparts, each of which shall be deemed to be an original, and all
         of which together shall be deemed to be one and the same instrument
         when each party has signed one (1) such counterpart. In addition,
         facsimile signed copies of this Agreement shall serve and have the
         effect of binding originals until such time as the parties hereto are
         able to exchange original signed copies.

46.      Severability. In the event that any of the terms, conditions, or
         provisions of this Agreement are held to be illegal, unenforceable, or
         invalid by any court of competent jurisdiction, the legality, validity,
         and enforceability of the remaining terms, conditions, or provisions
         shall not be affected thereby.

47.      Lien on Equipment. Operator does hereby pledge to Owner as security for
         the Charter payments and performance of this Charter, all furniture,
         fixtures, gaming equipment, cash in banks, and personal property of
         every nature used by Operator whether located on the Vessel or
         elsewhere. Operator agrees to execute any further documentation
         necessary to protect Owner's security interest in the above.

48.      Guarantee and Pledge of Ownership Interest. For valuable consideration,
         N/A , and N/A jointly and severally, ("Guarantor") do hereby guarantee
         the performance of the terms and conditions and the payments of the
         sums set forth in this Agreement by Operator. Notice of Default, Demand
         for Payment, and Demand for Performance as a Condition to Liability on
         this Guarantee are hereby waived. In addition, Guarantor agrees to pay
         any attorneys' fees and costs incurred in enforcing this Guarantee, and
         hereby waive diligence, demand and Notice of Non-Payment and of
         Non-Performance, and authorize extensions of time and changes in the
         terms of this Agreement without notice to and without affecting the
         liability of the Guarantor. It is further agreed that any assignment of
         this Agreement shall not release the Guarantor from his obligations as
         Guarantor hereunder. Guarantor hereby further waives the right to
         require Owner to proceed against Operator or its assignees, or to
         pursue any other remedy in its power and Guarantor hereby authorizes
         Owner to proceed directly against the Guarantor. Performance of the
         Guarantee shall be secured by a pledge of all of Guarantor's interest
         in Operator which interest will represent no less than One-Hundred
         percent (100%).

49.      Complete Agreement. The parties acknowledge receipt of a copy of this
         Agreement; that the terms of the Agreement are the entire agreement
         between them; and that they have not received or relied on any
         representations that are not expressed in this Agreement. NO PRIOR,
         PRESENT, OR FUTURE AGREEMENTS OR REPRESENTATIONS WILL BE RELIED ON OR
         WILL BIND THE PARTIES UNLESS IN WRITING AND INCORPORATED INTO THIS
         AGREEMENT. Modifications of this Agreement will not be binding unless
         in writing, signed and delivered by the party to be bound. Handwritten
         or typewritten terms inserted in or attached to this Agreement prevail
         over preprinted terms. Signatures, initials and modifications
         communicated by facsimile or telecopy will be considered as original.
         The parties should promptly deliver originals of faxed or telecopied
         documents. If any provision of this Agreement is or becomes invalid or
         unenforceable, all remaining provisions will continue to be fully
         effective unless said provision specifically provides to the contrary.

50.      Pilot, Tugboat or Stevedor Negligence. The Operator shall be
         responsible for all losses substained by Owner or Vessel or Mortgagee
         through the negligence of pilots, tugboats or stevedores, even Operator
         and/or it's Agents engage or furnish such services.

51.      Tickets. Operator shall use a form of passenger ticket approved by the
         insurance carrier.

52.      Attorney Disclosure. Operator is aware that Charles S. Liberis is an
         attorney and represents that Charles S. Liberis has not given any legal
         advice to Operator. Operator further represents that it has received
         its own independent legal advice regarding this Agreement or that
         Operator has voluntarily chosen not to seek independent legal advice in
         connection with this Agreement.

Charter Agreement Casino Padre
October 1, 1999                        11

<PAGE>   12

53.      Miscellaneous. This Agreement constitutes the entire agreement between
         the Parties hereto and it is agreed and understood that there are no
         other duties, obligations, liability or warranties implied or
         otherwise. This Agreement is binding on Owner and Operator, their
         successors or assigns, as soon as executed by both parties hereto.

         WITNESS:                           OWNER:
                                            CSL DEVELOPMENT CORPORATION,
                                            A DELAWARE CORPORATION

                                            By: /s/ Debbie Scullin
-----------------------------               -----------------------------
                                            Its: Vice President

                                            OPERATOR:

                                            CASINO PADRE INVESTMENT
                                            COMPANY LLC, A NEVADA LIMITED
                                            LIABILITY COMPANY

                                            By: /s/ Charles S. Liberis
-----------------------------               -----------------------------
                                            Its: Managing Member

                                            GUARANTOR(S):

-----------------------------               By: N/A

Charter Agreement Casino Padre
October 1, 1999                        12
<PAGE>   13
CSL DEVELOPMENT CORPORATION [LETTERHEAD]
-------------------------------------------------------------------------------

November 2, 1999

Casino Padre Investment Company, LLC
One Padre Blvd.
South Padre Island TX 78597

RE:      AMENDMENT TO CHARTER AGREEMENT

Gentlemen:

The purpose of this letter is to confirm an amendment to the Charter Agreement
to comply with the Private Placement Memorandum of Casino Padre Investment
Company, LLC of August 1999 and the agreements between the investors, Wayne
Welch and Mark Echols, as follows:

1.       The first three months charter deposit ($375,000.00) and the damage
         deposit ($200,000.00) are hereby waived in consideration of receiving a
         fifty percent (50%) interest in working capital and a fifty percent
         (50%) distribution of operating income.

This letter will serve as the formal amendment to the Charter Agreement.

Sincerely,

CSL DEVELOPMENT CORPORATION

/s/ Debbie Scullin

Debbie Scullin
Vice President

Agreed and Accepted:
Casino Padre Investment Company, LLC

By:  /s/ Charles S. Liberis                                  Date:11/2/99
    --------------------------------------------
    Charles S. Liberis, Managing Member<PAGE>   1
                                                                   EXHIBIT 10.6

         10.6 OPERATING AGREEMENT CASINO PADRE INVESTMENT COMPANY, LLC

<PAGE>   2

<TABLE>
<S>      <C>                                                         <C>
SECTION 1. OFFICES

SECTION 2. MEMBERS
         A. ANNUAL MEETING ......................................... 1
         B. SPECIAL MEETING ........................................ 1
         C. PLACE OF MEETING ....................................... 1
         D. MEETINGS ............................................... 1
         E. RECORD DATE ............................................ 1
         F. VOTING LIST ............................................ 2
         G. VOTING  PROCEDURES ..................................... 2
         H. PROXIES ................................................ 2
         I. TELEPHONIC  COMMUNICATION .............................. 2
         J. VOTING BY CERTAIN  MEMBERS ............................. 2
         K. INFORMAL ACTION OF MEMBERS ............................. 3

SECTION 3. MANAGEMENT .............................................. 3
         A. MANAGER ................................................ 3
         B. GENERAL POWERS ......................................... 3
         C. LIMITATION ON AUTHORITY OF MEMBERS ..................... 3
         D. GENERAL STANDARDS OF CONDUCT FOR MANAGERS .............. 4
         E. REMOVAL OF MANAGERS .................................... 4
         F. INDEMNIFICATION OF MANAGERS ............................ 4

SECTION 4. FINANCIAL ............................................... 5
         A. CONTRIBUTIONS .......................................... 5
         B. CAPITAL ACCOUNTS ....................................... 5
         C. PROFITS, LOSSES AND DISTRIBUTIONS ...................... 6
         D. COMPLIANCE WITH INTERNAL REVENUE CODE .................. 6

SECTION 5. CERTIFICATES OF MEMBERSHIP INTEREST AND TRANSFER......... 6
         A. CERTIFICATES ........................................... 6
         B. CERTIFICATE REGISTER ................................... 6
         C. TRANSFERS OF MEMBERSHIP INTERESTS ...................... 6
         D. CONDITIONS PRECEDENT TO TRANSFER ....................... 7
         E. NO DISSOLUTION OR TERMINATION .......................... 7
         F. PROHIBITION OF ASSIGNMENT .............................. 7

SECTION 6. DISSOLUTION OF THE COMPANY AND CONTINUANCE
      OF THE COMPANY'S BUSINESS .................................... 8

SECTION 7. AMENDMENT OF ARTICLES OF ORGANIZATION,
      RESTATEMENT THEREOF, MERGER, SALE, OR DISSOLUTION ............ 8

</TABLE>

<PAGE>   3

<TABLE>
<S>                                                                    <C>
SECTION 8. LIQUIDATION ................................................ 8
         A. DISTRIBUTIONS ON LIQUIDATION .............................. 8
         B. COMPLIANCE WITH INTERNAL REVENUE CODE REGULATIONS.......... 9
         C. PROFITS, GAINS AND LOSSES DURING WINDING UP ............... 9
         D. NO RIGHT TO DEMAND DISTRIBUTIONS IN-KIND .................. 9

SECTION 9. MISCELLANEOUS .............................................. 9
         A. INDEMNIFICATION ........................................... 9
         B. APPLICABLE LAW ............................................ 9
         C. CAPTIONS .................................................. 9
         D. VALIDITY .................................................. 9
         E. BINDING EFFECT ............................................ 9
         F. INTERPRETATION ............................................ 9
         G. COUNTERPARTS .............................................. 9
         H. WAIVER OF NOTICE ......................................... 10
         I. FISCAL YEAR .............................................. 10
         J. MANAGER AS ATTORNEY-IN-FACT FOR MEMBERS .................. 10

SECTION 10. CONSENT TO OPERATING AGREEMENT ........................... 10
</TABLE>
<PAGE>   4

                                  APPENDIX "D"

                     CASINO PADRE INVESTMENT COMPANY, LLC.

                              OPERATING AGREEMENT
                                       OF
                      CASINO PADRE INVESTMENT COMPANY, LLC

<PAGE>   5

                              OPERATING AGREEMENT
                                      OF
                     CASINO PADRE INVESTMENT COMPANY, L.C.

The following operating Agreement is adopted pursuant to applicable provisions
of the State of Nevada:

                              SECTION 1. OFFICES.

The principal office of the company shall be located at 1610 Barrancas Avenue
Pensacola, Florida 32501 or at such other address as the company should choose
from time to time. The registered office and agent of the company required
under the Nevada Limited Liability Company Act shall be as initially provided
in the Articles of Organization, and shall be subject to change from time to
time as duly provided by law.

                              SECTION 2. MEMBERS.

A. ANNUAL MEETING. The annual meeting of members shall be held each year
during the month of June, on such date and at such time as determined by the
Manager. The Manager shall give the annual company report and general review of
business status of the company. Any other business properly coming before the
membership may be discussed and acted upon.

B. SPECIAL MEETING. Special meetings of the members may be called by the
Manager or by the holders of at least 20% of all votes entitled to be cast on
any issue proposed to be considered at the proposed special meeting.

C. PLACE OF MEETING. The Manager may designate any place in or outside the
State of Nevada as the meeting place for any annual meeting or special meeting
of the members. A consent signed by all members may designate any place, either
in or out of the State of Nevada, as the place for holding such meeting.

D. NOTICE OF MEETINGS. Written notice stating the date, time, and place of the
meeting and, in the case of any special meeting, a description of the purpose
or purposes for which the meeting is called, shall be mailed to each member of
record entitled to vote at the meeting, unless oral notice is reasonable under
the circumstances, not fewer than ten nor more than sixty days before the date
of the meeting, by or at the direction of the Manager or persons calling the
meeting. Such written notice is effective when mailed addressed to the members'
addresses shown in the company's record of members, with postage prepaid.
Attendance at any meeting constitutes a waiver of notice required to be given,
unless such attending member appears for the purpose of objecting to the
calling of the meeting.

E. RECORD DATE. For purposes of determining members entitled to notice or to
vote at any meeting of members or any adjournment thereof, or entitled to
receive payment of any distribution, or in order to make a determination of
members for any other purpose, the Manager may fix in advance a date as the
record date of any such determination of members; such date in any case to be
not more than seventy days and, prior to

                                       1
<PAGE>   6

the date on which the particular action, requiring such determination of
members, is to be taken. If no record date is fixed for determination of
members entitled to vote or members entitled to receive payment of any
distribution, the date on which the notice of meeting is mailed or the date on
which the Manager's declaration of any distribution is adopted, as the case may
be, shall be the record date for such determination of members.

When a determination of members entitled to vote at any meeting of members has
been made as provided herein, such determination shall apply to any adjournment
of such meeting, unless the Manager fixes a new record date, which the Manager
must do if the meeting is adjourned to a date more than ninety days after the
date fixed for the original meeting.

F. VOTING LIST. The Manager, who shall have charge of the membership books for
Certificates of Membership interest of the company shall make, within three
business days after notice of each meeting of members is given, a complete
alphabetical list of the members entitled to notice of such meeting or any
adjournment thereof, with the address of each member and the number of Units of
Ownership applicable to each member. Such members list must be available for
inspection by any member, beginning three days after notice of the meeting is
given for which a list was prepared, and continuing through the meeting, at the
company's principal office. Such list shall be available to any member,
member's agent or attorney, for written inspection and copying during regular
business hours at the requesting member's expense. The company shall make the
members list available at the meeting, and any member, member's agent or
attorney, is entitled to inspect the list during the meeting.

G. VOTING PROCEDURES. Each member shall be entitled to vote based upon the
number of Units of ownership owned by the member. Each Certificate of
Membership shall state the number of Units of Ownership owned by such member.
Each member's vote shall have a value equal to such member's proportion of
Units of Ownership when compared to total outstanding Units of ownership
issued. Example: If 80 Units of Ownership are issued, and a member owns 2 Units
of Ownership, such member will be entitled to cast 2 votes, which votes shall
have a value of 2/80 of the total votes entitled to be cast.

A quorum of members is required to conduct any business at a meeting of
members, and a quorum shall consist of a majority of votes entitled to be cast.

H. PROXIES. At all meetings of members, a member may vote by proxy executed in
writing by the member or by such member's duly authorized attorney in fact. An
appointment of a proxy is effective when received by the Manager or other
officer or agent authorized to tabulate votes, and the company is entitled to
accept the proxy's vote or other action as that of the member making the
appointment. An appointment is valid for eleven months unless a longer period
is expressly provided in the appointment form. The death or incapacity of the
member appointing a proxy does not affect the right of the company to accept
the proxy's authority under the appointment unless notice of the death or
incapacity is received by the Manager or other officer or agent authorized to
tabulate votes.

I. TELEPHONIC COMMUNICATION. The Manager may permit any or all members to
participate in a regular or special meeting by, or conduct the meeting through
the use of, any means of communication by which all members participating may
simultaneously hear each other during the meeting. A member participating in a
meeting by this means is deemed to be present in person at the meeting.

J. VOTING BY CERTAIN MEMBERS. Membership interests held in the name of a
corporation, partnership or company may be voted by such officer, partner,
agent or proxy as the Bylaws of such entity may

                                       2
<PAGE>   7

prescribe, or, in the absence of such provision, as the Board of Directors or
other governing body of such entity may determine. Membership interests held by
a personal representative, administrator, executor, guardian or conservator may
be voted by such person, either in person or by proxy, without a transfer of
the Membership interest into the name of such person. Membership interests held
in joint tenancy with rights of survivorship may be voted by any joint owner,
and such joint owner's vote shall be accepted unless the Manager has knowledge
that another joint owner dissents.

K. INFORMAL ACTION OF MEMBERS. Except as otherwise provided by law or this
Agreement, any action required to be taken at a meeting of the members, or any
other action which may be taken at a meeting of the members, may be taken
without a meeting if one or more written consents, setting forth the action so
taken, are signed by the holders of Units of Ownership representing a majority
of the total votes entitled to be cast with respect the subject matter thereof
(or such other greater percentage as may be required by law or this Agreement)
and delivered to the Manager; provided that notice of the intended action to be
taken (in writing or by facsimile) is provided to all members at least ten days
prior to the date of the written consents.

A written consent shall bear the date of signature of each member who signs the
consent and no written consent shall b effective unless, within sixty days of
the earliest dated consent delivered to the Manager, written consents signed by
a sufficient number of holders are delivered to the Manager. A consent signed
under this provision has the effect of a meeting vote and may be described as
such in any document.

Prompt notice of the taking of action without a meeting by less than unanimous
written consent shall be given to those members who have not consented in
writing.

                             SECTION 3. MANAGEMENT

A. MANAGER. sureBET Casinos, Inc. ("sureBET") is hereby appointed the manager
of the Company (the "Manager"). The business and affairs of the Company shall
be managed under the direction and control of the Manager, and all powers of
the Company shall be exercised by or under the authority of the Manager. No
other person shall have any right or authority to act for or bind the Company
except as permitted in this Operating Agreement.

B. GENERAL POWERS. The Manager shall have the full power to execute and
deliver, for and on behalf of the Company, any and all documents and
instruments which may be necessary or desirable to carry on the business of the
Company, including without limitation, any and all deeds, contracts, leases,
mortgages, deeds of trust, promissory notes, security agreements, and financing
statements pertaining to the Company's assets or obligations, and to authorize
the confession of judgement against the Company. No person dealing with the
Manager need inquire into the validity or propriety of any document or
instrument executed in the name of the Company by the Manager, or as to the
authority of the Manager in executing the same.

C. LIMITATION ON AUTHORITY OF MEMBERS. No Member is an agent of the Company
solely by virtue of being a Member, and no Member has authority to act for the
Company solely by virtue of being a Member. This Section supercedes any
authority granted to the Members pursuant to the Act. Any Member who takes any
action or binds the Company in violation of this Section shall be solely
responsible for any loss and expense incurred by the Company as a result of the
unauthorized action and shall indemnify and hold the Company harmless with
respect to the loss or expense.

                                       3
<PAGE>   8

D. GENERAL STANDARDS OF CONDUCT FOR MANAGERS. A Manager shall discharge that
Manager's duties as a Manager in good faith, with the care an ordinary prudent
person in a like position would exercise under similar circumstances, and in a
manner the Manager believes to be in the best interests of the company.

E. REMOVAL OF MANAGERS. The Members may remove the Manager and elect a new
manager only if:

(1) The Management Company or any of its officers or Directors convicted of a
felony or misdemeanor (other than a conviction for a traffic offense), or if
the Owner reasonably believes The Management Company jeopardizes or causes the
withdrawal of any gaming license, permit or authorization necessary to conduct
the business of the Owner, or

(2) There shall be filed by The Management Company in any court pursuant to any
statute either of the United States or of any state a petition in bankruptcy or
insolvency or for a reorganization or for the appointment of a receiver or
trustee of all or a substantial part of The Management Company's property, or
if The Management Company makes an assignment for or petitions for or enters
into an arrangement for the benefit of creditors or if an involuntary petition
in bankruptcy is filed against The Management Company which is not dismissed
within ninety (90) days thereafter.

F. INDEMNIFICATION OF MANAGERS. The Partnership, its receiver, or its trustee
shall indemnify and save harmless, and pay all judgement and claims against
each Manager or officer or Director of the Manager, including for acts of
negligence of any of the forgoing, relating to any liability or damage incurred
by reason by any act performed or omitted to be preformed by that Manager,
officer, or director in connection with the business of the Partnership,
including Attorneys' fees incurred by the Company, officer, or director in
connection with the defense of any action based on any act or omission, which
attorneys' fees may be paid as incurred, including all such liabilities under
federal and state securities laws ( including the Securities Act of 1933, as
amended) as permitted by law.

The Partnership, its receiver, or its trustee shall indemnify and hold
harmless, to the maximum extent permitted by law, each Manager and Unit Holder
from and against any and all liabilities, sums paid in settlement of claims (if
such settlement is consented to by the Manager), obligations, charges, actions
(formal or informal), claims ( including but not limited , claims for personal
injury under any theory or for real or personal property damage), liens, taxes,
administrative proceedings, losses, damages (including without limitation,
punitive damages), penalties, fines, court cost, administrative service fees,
response and remediation costs, stabilization costs, encapsulation costs,
treatment, storage, or disposal costs, groundwater monitoring or environmental
study, sampling, or monitoring cost, other courses of action, and any other
costs and reasonable expenses ( including, without limitation, reasonable
attorneys', experts', and consultants' fees and disbursements and
investigating, laboratory, and data review fees) imposed upon or incurred by
any Manager or Unit Holder ( whether or not indemnified against by any other
party) arising from and after the date of this agreement directly or indirectly
out of:

         (i) The past, present, or future treatment, storage, disposal,
         generation, use, transport, movement, presence, release, threatened
         release, spill, emission, injection, leaching, dumping, escaping, or
         seeping of any Hazardous Substances, material containing or alleged to
         contain Hazardous Substances at or from any past, present, or future
         properties, or assets of the Company; or

                                       4
<PAGE>   9

         (ii) The violation or alleged violation by the Company or any third
         party of any Environmental Laws with regard to past, present or future
         ownership, operation, use, or occupying of any property or asset of
         the Company.

In the event of any action by a Unit Holder against any Manager, including a
derivative suit, the Company shall indemnify, save harmless, and pay all
expenses of the Manager including attorneys' fees, incurred in the defense of
that action, if that Manager is successful in the action.

Except as may be otherwise provided in this agreement, the Company shall
indemnify, save harmless and pay all expenses, costs, or liabilities of any
Manager who for the benefit of the Company makes any deposit' acquires any
option, or makes any similar payment or assumes any obligation in connection
with any property proposed to be acquired by the Company and who suffers any
financial loss as a result of that action excluding any guarantees or leases
entered into by the Manager to acquire or finance the Project.

Not withstanding anything contained in this section to the contrary, no Manager
or Unit Holder shall be indemnified from any liability for fraud, bad faith,
willful misconduct, or gross negligence.

In the event that any subsection or provision is determined to be invalid in
whole or in part, the remainder of this section shall be enforced to the
maximum extent permitted by law.

                             SECTION 4. FINANCIAL.

A. CONTRIBUTIONS. Ownership interests in the company will be held in the form
of Units of Ownership, and each member's Certificate of Membership shall
disclose the Units of Ownership to which said member has title. Members may
make contributions, as provided in Section 490A.801, in the form of cash,
property, or services performed. There are no initial members of the company
and the no Units held as of August 22, 1999.

The company shall authorize a total of not more than 80 Units to be issued.
Additional Units over and above 80 would only be authorized upon approval of
the Manager and approval by not less than 75% of the members.

B. CAPITAL ACCOUNTS. A separate capital account shall be maintained for each
member. Each member's capital account shall be increased by:

         (1)      The cumulative amount of cash and the net fair market value
                  of any property that has been contributed to the capital of
                  the company by such member (or such member's predecessors in
                  interest); and

         (2)      The cumulative amount of the company's net profit that has
                  been allocated to such member (or such member's predecessors
                  in interest); and

                  shall be decreased by:

         (1)      The cumulative amount of the company's net loss that have
                  been allocated to such member (or predecessors in interest of
                  such member);

         (2)      The cumulative amount of cash and the fair market value of
                  all other property that has been distributed to such member
                  (or predecessors in interest of such member).

                                       5
<PAGE>   10

C. PROFITS, LOSSES AND DISTRIBUTIONS. Except as may be required by Section
704(c) of the Internal Revenue Code, the profits, losses, and distributions of
the company shall be allocated among the members in proportion to each member's
respective percentage of Units of Ownership when compared with total Units of
ownership issued. The company shall make, to the extent possible and advisable,
one or more tax distributions (the "Tax Distributions") to its members totaling
an amount equal to the additional state and federal income taxes owed by the
members as a result of the members' ownership of Units of the company. Such Tax
Distributions shall be computed by the company's accountants assuming that each
member is an Nevada resident subject to the highest marginal state and federal
tax rates applicable to individuals (taking into consideration the
deductibility of income taxes) for the calendar year in which the company's tax
year ends. Any and all distributions shall be proportionate to Units owned. No
member has the right to demand and receive any distribution from the company
other than in cash.

No distribution shall be made if as a result thereof the company would not be
able to pay its debts as they become due in the usual course of business, if
the company would be in violation of any loan agreement, or if the company's
total assets would be less than the sum of its total liabilities.

D. COMPLIANCE WITH INTERNAL REVENUE CODE. The provisions of this Section as
they relate to the maintenance of capital accounts are intended, and shall be
construed, and, if necessary, modified, to cause the allocations of profits,
losses, income, gain and credit to have substantial economic effect under the
Regulations promulgated under Section 704 (b) of the Internal Revenue Code.
Notwithstanding anything herein to the contrary, this Agreement shall not be
construed as creating a deficit restoration obligation or otherwise personally
obligate any member to make a capital contribution in excess of such member's
initial contribution.

         SECTION 5. CERTIFICATES OF MEMBERSHIP INTEREST AND TRANSFER.

A. CERTIFICATES. Certificates representing each member's membership interest
shall be in such form as shall be determined by the Manager. Such certificates
shall be signed by the Manager and shall be consecutively numbered or otherwise
identified. Certificates shall bear a legend which indicates that the
membership interest represented by the certificate cannot be transferred or
assigned except in compliance with this Agreement. In case of a lost, destroyed
or mutilated certificate, a new one may be issued upon such terms and indemnity
to the company as the Manager may prescribe.

B. CERTIFICATE REGISTER. The name and address of the member to whom each
certificate is issued, together with the capital contribution and the date of
issue, shall be entered in the Certificate Register of the company. Any and all
changes in members or their amount of capital contribution shall be reflected
by the Manager in the Certificate Register of the company.

C. TRANSFERS OF MEMBERSHIP INTERESTS. Any sale, exchange or transfer of a
member's interest in the company shall not be effective unless the transaction
is approved (1) by the Manager, in writing, and (2) by a vote of the members
holding a majority of the remaining Units and by a majority vote of the
remaining members (per capita) at a meeting of the members.

The granting of a security interest, pledge, lien, or encumbrance against any
membership interest shall be distinguished from a sale, exchange or transfer of
a member's interest as above provided. Such various grant of security interests
shall not cause the member to cease to be a member, and shall not deprive the
member of such member's voting rights. Whether such pledge, grant of security

                                       6
<PAGE>   11

interest, lien, or other encumbrance results in a transfer of the member's
right to distributions shall depend upon the terms of such pledge, grant of
security interest, lien, or other encumbrance. The company and the Manager
shall be entitled to be saved, indemnified, and held harmless by all interested
parties to the transaction in respect to any distribution or other action taken
in reliance upon any pledge, grant of security interest, lien, or encumbrance,
or in respect to any such action taken in respect to an assignment. The fact
that a member's interest may have been attached, executed upon, or charged by
the court in any way shall not vitiate the provisions relating to approval
being required for membership by a Manager and a majority of other members as
heretofore stated.

If a member dies, or a court of competent jurisdiction adjudges a member to be
incompetent, the member's executor, administrator, guardian, conservator, or
other legal representative may exercise all of the member's rights for the
purpose of settling the member's estate or administering the member's property;
and if the member is a corporation, trust, or other entity, and is dissolved or
terminated, the powers of that member may be exercised by its legal
representative or successor.

D. CONDITIONS PRECEDENT TO TRANSFER. In addition to the conditions set forth
above, no sale, exchange or transfer of a member's membership interest shall be
effective unless and until all of the following conditions have been satisfied;

         (1)      The instrument of transfer shall be in form and substance
                  reasonably satisfactory to the Manager;

         (2)      The transferor and transferee named therein shall execute and
                  acknowledge such other instrument or instruments as the
                  Manager may deem necessary or desirable to effectuate the
                  acceptance of the transferee as a member;

         (3)      The transferee shall execute a written acceptance of all of
                  the terms and provisions of this Agreement as, and to the
                  extent that, the same may have been amended;

         (4)      The transferee shall meet all applicable licensing and other
                  regulatory requirements imposed by any applicable racing and
                  gaming commission; and

         (5)      The transferor or transferee shall pay all reasonable expenses
                  connected with acceptance of a member and incurred as a result
                  of security issues or regulatory matters arising as a result
                  of such transfer, including, but not limited to, legal fees
                  and costs.

E. NO DISSOLUTION OR TERMINATION. The transfer of a membership interest in the
company pursuant to the terms of this Section shall not dissolve or terminate
the company. No Member shall have the right to have the company dissolved or to
have such Member's capital contribution returned except as provided in this
Agreement.

F. PROHIBITION OF ASSIGNMENT. Notwithstanding the foregoing provisions of this
Section, no sale, exchange or transfer of a member's membership interest may be
made if the membership interest sought to be sold, exchanged or transferred,
when added to the total of all other membership interests sold, exchanged or
transferred within the period of twelve (12) consecutive months prior thereto,
would result in the termination of the company under Section 708 of the
Internal Revenue Code. In the event of a transfer of any membership interest,
the members will determine, in their sole discretion, whether or not the
company will elect pursuant to Section 754 of the Internal Revenue Code (or
corresponding provisions of future law) to adjust the basis of the assets of
the company.

                                       7
<PAGE>   12

          SECTION 6. DISSOLUTION OF THE COMPANY AND CONTINUANCE OF THE
                              COMPANY'S BUSINESS.

The withdrawal, death or dissolution, adjudication of incompetence or
adjudication of bankruptcy of a member ("Triggering Events") shall immediately
dissolve the company unless a majority in interest of the remaining members, as
defined in Rev. Proc. 94-46, agree to continue the business of the company.
Said vote shall be taken as soon as is practical, but not more than 90 days
after the company first has knowledge of a Triggering Event. A member shall
immediately notify the Manager of any Triggering Event of which the member has
knowledge.

         SECTION 7. AMENDMENT OF ARTICLES OF ORGANIZATION, RESTATEMENT
                     THEREOF, MERGER, SALE, OR DISSOLUTION.

The applicable provisions of the Code of Nevada as amended shall govern any
amendments to the Articles of Organization, Restatement thereof, merger of the
company, or dissolution of the company, except where other voting percentages
are specified in this Operating Agreement. A 75% affirmative vote of all
members entitled to vote, based upon the proportionate ownership of Units of
Ownership to which the voter holds title in the company, shall be required to
approve the following matters:

         (1)   The dissolution and winding up of the company,

         (2)   The sale, exchange, lease, mortgage, pledge, or other transfer
               of all or substantially all of the assets of the company other
               than in the ordinary course of business,

         (3)   Merger of the company with another entity, or

         (4)   An amendment to the Articles of Organization or Operating
               Agreement, after notice and opportunity for discussion.

                            SECTION 8. LIQUIDATION.

A. DISTRIBUTIONS ON LIQUIDATION. Upon dissolution of the company as provided
in Sections 7 and 8, if such dissolution is not followed by the agreement to
continue the company under Section 7, the company shall immediately commence to
wind up its affairs and liquidate. The company assets shall be distributed in
payment of the liabilities of the company and to the members in the following
order:

         (a)   To creditors by the payment or provision for payment of the
               debts and liabilities of the company (other than any loans or
               advances that may have been made by any of the members to the
               company) and the expenses of liquidation;

         (b)   To the setting up of any reserves that the members deem
               reasonably necessary for any contingent or unforeseen
               liabilities or obligations of the company. Such reserves shall
               be paid over by the members to a bank or other institutional
               escrow agent, to be held for the purpose of disbursing such
               reserves in payment of the aforementioned contingencies, and at
               the expiration of such period as the members deem advisable, to
               distribute the balance in the manner provided in this Section 9
               and in the order stated herein;

         (c)   To the repayment of any loans or advances that may have been
               made by any of the members to the company, but if the amount
               available for such repayment shall be insufficient, then pro
               rata on account thereof; and

         (d)   To the members in payment of their capital accounts at the date
               of distribution.

                                       8
<PAGE>   13

B. COMPLIANCE WITH INTERNAL REVENUE CODE REGULATIONS. In the event the company
is "liquidated" within the meaning of Treas. Reg. 1. 704-1 (b) (2) (ii) (g) ,
distributions shall be made pursuant to this Section 9 (if such liquidation
constitutes a dissolution of the Company) to the Members who have positive
Capital Accounts in compliance with Treas. Reg. 1.704-1(b)(2)(ii)(b)(2) (after
giving effect to all contributions, distributions, and allocations for all
taxable years, including the year during which such liquidation occurs).

C. PROFITS, GAINS AND LOSSES DURING WINDING UP. The members shall continue to
share profits and losses during the winding up of the company's affairs in
accordance with their respective percentage of Units as if they were not
winding up its affairs. Any gain or loss on disposition of company assets in
the process of liquidating and winding up its affairs shall be credited or
debited to the members in accordance with Section 5. Any company assets
distributed in-kind to the members in the liquidation shall be valued and
treated as though the assets were sold and the cash proceeds were distributed.
The difference between the value of each asset distributed in-kind and its tax
basis shall be treated as a gain or loss on sale of the asset and shall be
credited or debited to the members in accordance with the provisions of Section
5.

D. NO RIGHT TO DEMAND DISTRIBUTIONS IN-KIND. No member shall have the right to
demand or receive property other than cash for such member's Units.

                           SECTION 9. MISCELLANEOUS.

A. INDEMNIFICATION. The company shall indemnify any person who was or is a
party defendant or is threatened to be made a party defendant in any civil,
administrative, or criminal action by reason of the fact that such person is or
was a member, Manager, committee member, employee or agent of the company, and
may defend, save and hold said individual harmless in connection with all
matters performed by said individual in good faith and in a manner reasonably
believed by said person to be in or not opposed to the best interest of the
company.

B. APPLICABLE LAW. This Agreement and the rights and obligations of the
parties hereunder shall be construed and interpreted in accordance with the
laws of the State of Nevada.

C. CAPTIONS. Paragraphs, titles, or captions in no way define, limit, extend or
describe the scope of this Agreement nor the intent of any of its provisions.

D. VALIDITY. If any provision of this Agreement, or the application of such
provision to any person or circumstance, shall be held invalid or
unenforceable, the remainder of this Agreement, or the application of such
provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby.

E. BINDING EFFECT. This Agreement shall inure to and bind all members, as well
as their estates, heirs, personal representatives, successors and assigns.

F. INTERPRETATION. As used herein, the masculine includes the feminine and
neuter and the singular includes the plural.

G. COUNTERPARTS. This Agreement or any certificate or amendment pursuant
thereto may be executed in counterparts, all of which taken together shall be
deemed one original agreement, and shall be binding upon all parties hereto
notwithstanding that all parties are not signatory to the same counterpart.

                                       9
<PAGE>   14

H. WAIVER OF NOTICE. Whenever any notice is required to be given pursuant to
the provisions of the Act, the Articles of Organization of the company or this
Agreement, a waiver thereof, in writing, signed by the person or entity
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice.

I . FISCAL YEAR. The fiscal year of the company shall be from January 1
through December 31 of each year.

J.  MANAGER AS ATTORNEY-IN-FACT FOR MEMBERS .

     APPOINTMENT. Each of the Members irrevocably constitutes and appoints,
with full power of substitution, the Manager, its true and lawful
attorney-in-fact with full power and authority in its name, place and stead to
execute, certify, acknowledge, deliver, swear to, file and record at the
appropriate public offices:

         (a) All certificates and other instruments and any amendment thereof,
which the President deems appropriate to form, qualify or continue the business
of the Company as a limited liability company;

         (b) Any other instrument or document which may be required to be filed
by the Company under the laws of any state or which the President deems
advisable to file; and

         (c) Any instrument or document, including amendments to this
Agreement, which may be required to effect the continuation of the Company the
admission of a substituted Member, or the dissolution and termination of the
Company (provided such continuation, admission or dissolution and termination
are in accordance with this Agreement), or to reflect any reductions in the
amount of capital of Members.

         DURATION. The appointment by each member of the Manager as its
attorney-in-fact is irrevocable and shall be deemed to be a power coupled with
an interest and shall survive the incompetency, Bankruptcy or dissolution of
any person giving such power, except, that in the event of the transfer by a
Member of all or any part of its interest, this power of attorney shall survive
such transfer only until such time, if any, as the transferee shall have been
admitted to the Company as a substituted Member and all required documents and
instruments shall have been duly executed, filed and recorded to effect such
substitution.

                  SECTION 10. CONSENT TO OPERATING AGREEMENT.

 Each member shall receive a copy of this Operating Agreement. The undersigned,
being all the members of Casino Padre Investment Company, LLC, an Nevada
limited liability company, by signing below, hereby evidence their adoption and
ratification of the foregoing Operating Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                      10
<PAGE>   15

                                 SIGNATURE PAGE

                                       TO

                   CASINO PADRE INVESTMENT COMPANY, L. L .C.

                              OPERATING AGREEMENT

IN WITNESS WHEREOF, the undersigned have each executed, or caused to be
executed, this Agreement.

         NAME                          No. Of Shares                  Date
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