BAREBOAT CHARTER AND OPTION TO PURCHASE                             of the Casino Cruise Ship                                    EMPRESS II      THIS BAREBOAT CHARTER and Option to Purchase   (hereinafter   "Charter") madeand entered   into as of July 6, 2004 by and between   Cruise   Holdings II, LLC, aNevada limited liability company   (hereinafter   Owner), with an office and placeof business at 6171 McLeod Drive, Las Vegas,   Nevada 89120,   owner of the casinocruise ship EMPRESS II, United States   Official Number 998517   (hereinafter   the"Vessel"),   and Palm Beach Empress Inc., a Delaware corporation ("PBE"), with anoffice and place of business at One East 11th Street,   Suite 500, Riviera Beach,Florida   33404   and   Palm   Beach   Maritime    Corporation,    formerly   named   MJQCorporation,   a   Delaware   corporation   ("MJQ"),   with an   office   and   place ofbusiness at One East 11th   Street,   Suite 500,   Riviera   Beach,   Florida   33404,jointly and severally as Charterer (PBE and MJQ are hereinafter individually andcollectively   referred   to as,   the   "Charterer").   The Owner,   as   Lessor,   andCharterer,   as Lessee,   are also parties to that certain   Master Lease   ("MasterLease")   of even date   herewith,   wherein   Owner   agrees to lease the   Vessel toCharterer   and   Charterer   agrees to lease the Vessel from Owner.   The terms andprovisions   of the Master   Lease are hereby   incorporated   herein by   reference;provided,   however,   in the event of any conflict   between any provisions of theMaster Lease and this Charter, the provisions of this Charter shall control.                                W I T N E S S E T H:      NOW THEREFORE,   upon the terms and conditions   hereinafter set forth, Owneragrees to charter   and   Charterer   agrees to accept   under   charter   the Vessel.                                    ARTICLE 1                                DESCRIPTION OF VESSEL      The Vessel is a United States   registered   vessel (official number 998517),more particularly  <PAGE>  described in Appendix A attached hereto.                                     ARTICLE 2                                  PERIOD OF CHARTER

      A. The period of this Charter shall be for five (5) years   (hereinafter the"Original   Period")   from the date of delivery   as   hereinafter   provided.   ThisCharter   shall   automatically   supercede   and   terminate   any existing   bareboatcharter of the   Vessel,   including   without   limitation   that   certain   bareboatcharter   between   Charterer   and ITG Vegas,   Inc.,   a Nevada   corporation   ("ITGVegas").      B. At the   end of the   Charter   Period,   provided   no   payment   default   byCharterer   exists   hereunder,   Owner   agrees to   deliver   title to the Vessel toCharterer pursuant to the terms and conditions set out in Article 19 hereof.                                     ARTICLE 3                                MONTHLY CHARTER HIRE      A. The Charterer shall pay charter   hire("Charter Hire") monthly in arrearson or before the first day of each calendar month commencing on the first day ofthe first month   following the date of delivery and continuing   thereafter for aperiod of twelve   (12)   months at the rate of   Eighty-Two   Thousand   Six HundredNinety-Five Dollars (US$82,695.00) per month, and the first day of each calendarmonth thereafter for forty-eight (48)   consecutive   months until   termination ofthe Charter as provided herein at the rate of One Hundred   Seventy-One   ThousandSeven Hundred Two and 54/100ths   Dollars   (US$171,702.54)   per month or pro ratafor any part of a month.   Any Charter   Hire paid in advance and not earned shallbe promptly   refunded to the Charterer by Owner,   including any unearned CharterHire paid in   advance   during   the month in which the   Vessel may be sold to theCharterer.   Payment   of Charter   Hire   shall be made to the Owner by   electronicfunds transfer as directed by Owner or, if no directions are given by Owner,   tothe Owner at 6171 McLeod Drive,   Las Vegas,   Nevada   89120,   and shall be deemedpaid when it is received by the Owner.   The first   monthly   Charter Hire paymentshall be made, pro rata, on the first day of the first month   following the dateof delivery and all subsequent payments shall be made on or before the first dayof each calendar month thereafter.      The   amounts   of   Charter   Hire set   forth in the first   paragraph   of thisArticle 3A is derived   from an                                         2<PAGE>  amortization table set forth in Schedule A-1 to the Master Lease I ("Schedule"),incorporated herein by reference, which is and, insofar as it may be modified inaccordance herewith shall be, determined based upon an original principal amount

of $6   million   with   interest   at   16.54%,   payable   initially   in   sixty   (60)consecutive   installments,   payable   monthly in arrears on the first day of eachcalendar month, in level payments the first twelve (12) of which shall be in theamount of $82,695 and the next   forty-eight (48) of which shall be in the amountof $171,702.54;   provided, however, that the first payment shall be adjusted prorata based upon the number of days from the date hereof   through   and   includingJuly 31, 2004. Beginning July 15, 2005, Charterer shall have the right to prepaythe Charter   Hire   hereunder   by paying the   Casualty   Value as set forth in theSchedule,   representing   a premium of seven   percent (7%) if prepaid on or afterJuly 15, 2005 and before July 15, 2006, five percent (5%) if prepaid on or afterJuly 15, 2006 and before July 15,   2007,   three (3%) if prepaid on or after July15, 2007 and before July 15,   2008,   and without   premium if prepaid on or afterJuly 15, 2008.   Ninety-Seven percent (97%) of all Cash Flow Sweep (as defined inArticle 3B below)   payments made before July 15, 2008,   and one hundred   percent(100%) of such   payments   made   thereafter,   shall be applied   to the   principalportion of the Casualty Value and to the principal   portion of   installments   ofCharter Hire in the inverse order of the maturities thereof. The level amount ofeach installment of Charter Hire set forth herein shall continue notwithstandingany   prepayment or Cash Flow Sweep   payment,   with the result that the number ofpayments   required   to pay the entire   Casualty   Value or Charter   Hire shall bereduced.   With each   prepayment and each Cash Flow Sweep   payment,   the Scheduleshall be modified to reflect a new amortization schedule reflecting the adjustedCasualty   Value and the portion   thereof   representing   principal.   Owner shall,within five (5) business   days after the date of any partial   prepayment or CashFlow Sweep   payment,   provide to   Charterer   a new   amortization   schedule   withCasualty   Values and   showing   the   principal   portion   thereof in the form of aproposed amendment to the Schedule.   Charterer shall have five (5) business daysfrom   the   date   of   receipt   thereof   to   notify   Owner,   in   writing,   of   itsdisagreement with any amounts shown therein.   If Charterer fails to notify Ownerof its   disagreement as to the amendment to the Schedule,   then the amendment tothe   Schedule   submitted   by Owner shall be deemed   correct and binding upon theparties   hereto.   If Charterer   notifies Owner within such five (5) business dayperiod that it disagrees with the amended   Schedule   provided by Owner,   and theparties   are not able to resolve   such   disagreement,   at the   request of eitherparty,                                         3<PAGE>  the parties shall retain a mutually   agreed upon   independent   certified   publicaccounting   firm to recalculate   the   amortization   schedule and Casualty Values(and showing the principal   portion   thereof) to be attached as the amendment tothe   Schedule,   which shall be final,   conclusive   and binding upon the parties.Once the   Casualty   Value in effect   hereunder   is reduced   to zero,   no further

payments   of Charter   Hire   shall be payable   hereunder.   Any   amendment   to theSchedule   approved   by the   parties in   accordance   with this   Section 3.A shallsupercede   any   previous   schedule,   and   in the   event   the   provisions   of anyamendment to the Schedule   conflict with the   provisions of any prior   Schedule,the provisions of the amended Schedule shall control.      Owner is on this date   depositing   $6 million into blocked bank account no.35012862   with Silver State Bank (the "Blocked   Account"),   the funds from whichare to be   released   from time to time to PBE for   purposes   of paying   expensesincurred in   refurbishing   the Vessel and preparing the Vessel for its inauguralvoyage,   all subject to the terms of that certain Blocked   Account   Agreement ofeven date herewith among PBE, Owner,   Silver State Bank,   PDS-Funding 2004-A LLCand   others.   To the extent   less than $6 million is   released   from the BlockedAccount to PBE pursuant to such Blocked Account Agreement, such deficiency shallbe   applied   to reduce   the   principal   portion   of the   Casualty   Value and theinstallments of Charter Hire in the inverse order of their maturities,   with thesame effect   (including but not limited to the need for an amendment to ScheduleI hereto) as set forth in the immediately preceding paragraph.       B. In addition to the monthly Charter Hire,   Charterer shall make an annualpayment that will be credited   against the Purchase   Option   Exercise   Price andalso   against   installments   of Charter   Hire,   as set forth in this Article 3.B("Cash Flow   Sweep").   The amount of the annual Cash Flow Sweep payment shall bedetermined by multiplying the Cash Flow Sweep   Percentage,   defined below, to anamount equal to the combined   annual   EBITDA   (earnings   before   interest,   tax,depreciation and   amortization)   with respect to the Vessel and a second vessel,the PALM BEACH PRINCESS (Panama No. 14348-84-E and IMO No. 8402937)(the   "SecondVessel"),   operated by   Charterer   or, by way of a   sub-demise   charter(s),   ITGVegas, or ITG Palm Beach,   LLC, a Delaware limited   liability company ("ITG PalmBeach"), for the prior fiscal year less Capital Expenditures, as defined herein,and less,   to the extent not   otherwise   expensed or deducted,   any   "AdditionalPayments" under and as defined in Articles 3.B and 19.B of the two   Sub-Chartersof even date   herewith   between   Charterer,   ITG Palm Beach and ITG   Vegas,   butwithout   regard to any Cash Flow Sweep   payments.   The initial fiscal year shallcommence on July 1, 2004. The Cash Flow                                          4<PAGE>  Sweep calculation   shall be based upon the annual audited   financial   statementsprovided by each   Charterer or ITG Vegas or other operator of the Vessel and theSecond Vessel to Owner within ninety (90) days of fiscal   year-end.   Owner shallsubmit to Charterer the calculation of the amount of Cash Flow Sweep payment dueto Owner   within five (5) days of Owner's   receipt of annual   audited   financial

statements   from each Charterer or ITG Vegas.   "Capital   Expenditures"   means anamount equal to four percent (4%) of the net operating   revenue   resulting   fromthe   operations   of the   Vessel   and the   Second   Vessel.   The Cash   Flow   SweepPercentage   will be   determined   based on the annual   EBITDAR   (earnings   beforeinterest, taxes, depreciation, amortization and rents) generated by and from theVessel and the Second Vessel, as reflected in accordance with generally acceptedaccounting   principles   then in effect in the United   States,   in the   financialstatements   provided to Owner by Charterer or ITG Vegas, as follows (all amountsin millions of dollars): ------------------------------ -------------------------------------------------EBITDAR                         Cash Flow Sweep Percentage of EBITDA less                                Capital Expenditures------------------------------ -------------------------------------------------More than $10.0                 None------------------------------ -------------------------------------------------Between $8.0 and $10.0           15% (fifteen percent)------------------------------ -------------------------------------------------Less than $8.0                  30% (thirty percent)------------------------------ ------------------------------------------------- The Cash Flow Sweep   payment shall be due to Owner on the later of the fifteenth(15th) day after the end of the first   quarter of the   following   fiscal year orfifteen (15) days after the submission by Owner to Charterer of the statement ofthe amount of Cash Flow Sweep payment due to Owner.      C. At the end of each quarter of the current fiscal year,   Charterer   shallprovide a year-to-date   calculation of EBITDAR,   annualized based on seasonalityfactors   provided   by Owner and   attached as Exhibit A   ("Annualized   EBITDAR").Based upon the   product of   Annualized   EBITDAR   and   10/12ths   ("YTD   Result"),Charterer   agrees to deposit the   following   percentage of   year-to-date   EBITDA("YTD   EBITDA" and such   percentage,   the "Escrow   Amount") into an account (the"Cashflow   Account") for the benefit of Owner,   in accordance   with that certainAccount Agreement of even date herewith among Charterer,   Owner, Cruise HoldingsI, LLC, a Nevada limited liability company and SILVER STATE BANK, a Nevada Statechartered banking corporation ("Silver State"):                                         5<PAGE>  -------------------------------------------------- ---------------------------                  YTD RESULT                               ESCROW AMOUNT-------------------------------------------------- ---------------------------YTD Result is less than $10 Million, but greater    50% of YTD EBITDA

than $8 Million-------------------------------------------------- ---------------------------YTD Result is less than $8 Million                  100% of YTD EBITDA-------------------------------------------------- ---------------------------YTD Result is greater than $10 Million              NONE-------------------------------------------------- --------------------------- The applicable   Escrow Amount shall be paid to the Cashflow Account on or beforethe   fifteenth   (15th) day after the end of the   respective   quarter of the thencurrent   fiscal year. At the end of each   subsequent   quarter of the   applicablefiscal year, if the YTD Result is greater than $10,000,000.00,   all funds in theCashflow   Account,   if any,   shall be   remitted   to ITG Vegas for the account ofCharterer;   and if the YTD Result is between   $8,000,000.00 and   $10,000,000.00,any amount previously   deposited in the Cashflow Account in excess of 50% of YTDEBITDA will be remitted to ITG Vegas for the account of Charterer. At the end ofeach   fiscal   year,   any funds held in the   Cashflow   Account   pursuant   to thisparagraph   3.C.   shall be   applied   to any Cash   Flow   Sweep   payment   due underparagraph 3.B., above. Owner and Charterer acknowledge and agree that the EscrowAmount shall be determined   for each fiscal quarter and fiscal year by Owner andpayment in full by Charterer of the Escrow Amounts   hereunder   shall satisfy theCharterer's   obligations   under this   Paragraph   3.C for both the Vessel and theSecond Vessel.      D. Charterer   shall not make any deductions   from the Charter Hire,   exceptwith respect to the following:           (1)Time   actually lost by reasons of action or failure to act of Owneror Owner's   creditors or claimants   other than the Charterer or its   affiliates,except to the extent such delays were caused or contributed to by Charterer.           (2) Any   disbursements   for Owner's account,   provided Owner agrees inwriting.           (3)   Any   previous    overpayments   of   Charter   Hire,    excluding   anyoverpayments of Charter Hire concerning   which a bonafide dispute may exist, butin the latter event the Owner shall furnish an adequate bank   guarantee or othergood and sufficient security on request of the Charterer.           (4) Any sums to which Charterer is entitled under Article 12 herein.                                     ARTICLE 4                                   ON-HIRE SURVEY      A.   Charterer   has made its own   independent   assessment   of the Vessel andaccepts the Vessel As-Is And   Where-Is   and the parties   agree not to require an

on-hire survey. Any damage or deficiencies in either                                          6<PAGE>  the hull,   equipment and/or machinery   affecting either the seaworthiness of theVessel or its capability to operate in its intended   service or the   maintenanceof the   Vessel's   classification   society   certificates   or U.   S.   Coast   Guardrequired documents,   certificates, or certifications required to operate in U.S.waters, if any,   discovered at any time prior to or during this Charter shall bethe sole responsibility of Charterer and any such damage or deficiency shall notin any way alter, amend or excuse Charterer's obligations under this Charter.      B. Charterer's acceptance of the Vessel under this Charter shall constitutean   admission   by   the   Charterer   of   full   performance   by   the   Owner   of itsobligations   with respect to the condition of the Vessel on Delivery per Article5.   Thereafter,   the Charterer shall not be entitled to make or assert any claimagainst the Owner on account of agreement,   representation   or warranty,   eitherexpress or implied,   with respect to the condition,   seaworthiness or fitness ofthe Vessel. Failure of the Charterer to make an inspection of the Vessel and itsappurtenances shall be entirely at its own risk.                                     ARTICLE 5                               DELIVERY OF THE VESSEL      A. The Vessel will be delivered   by Owner   hereunder to Charterer at a safeand   accessible   berth or   anchorage   at   Joliet,   Illinois   on the date   hereof("Delivery").      B.    Representatives   of   Owner   and   Charterer   shall   jointly   execute   aCertificate of Delivery and   Acceptance,   in the form attached hereto and markedas Appendix B, acknowledging the delivery and receipt of the Vessel.      C. Due to the   planned   modification   of the   Vessel,   the Vessel   shall beaccepted As Is and Where Is, not in class and without any required United StatesCoast Guard Certificate of Inspection.   Charterer will obtain,   independent fromOwner, all classification and Coast Guard certificates for the Vessel and if anyof the Vessel's   classification or Coast Guard   certificates   require renewal atthe time of Delivery, such renewals shall be paid for by Charterer and Chartereraccepts full   responsibility   for obtaining any   classification   or certificatesrequired for the Vessel. The Charterer shall keep the Vessel's documentation andclassification   certificates   in full force and   effect   during the term of thisCharter or any extensions   thereof,   providing   copies of such   certificates   to

Owner when   issued,   and shall   renew all such   certificates   at the time of anyRedelivery   under   Article 13 whether or not due for renewal,   unless   otherwiseagreed to by the parties.                                         7<PAGE>       D. Concurrently with the Delivery of the Vessel hereunder,   the Owner shallassign to the   Charterer   all of its   rights,   title and   interest in and to anywarranties and guaranties   which the Owner may have,   provided that the same, ifstill in effect,   shall be reassigned to Owner upon Redelivery of the Vessel. Ifany such   warranty or guaranty is not fully   assignable   to the   Charterer,   theOwner shall cooperate with Charterer to enforce its rights thereunder.                                     ARTICLE 6                          USE AND OPERATION OF THE VESSEL      A. The Charterer shall have the full use of the Vessel and,   subject to thetrading   limits of Article 24 hereof,   may employ the Vessel in any lawful tradeor trades in accordance with the laws and regulations of the Vessel's flag stateand any country where the Vessel may be operated, as the Charterer may from timeto time   elect,   and it agrees to comply   with all   local,   state,   and   federalregulations pertaining to the operation of the Vessel in the United States.      B. During the Charter Period the Vessel shall be under the complete controlof the Charterer,   who shall have exclusive possession,   control, and command ofthe   Vessel,   subject   to the terms   hereof,   and   assumes   full   responsibilitytherefor,   including port charges,   agencies,   fines,   assessments and penaltiesincurred due to   Charterer's   use and   operation of the Vessel.   Nothing   hereincontained   shall   be   construed   as   constituting   any   implied   restriction   onCharterer's right,   during the Charter Period,   consistent with this Charter, toemploy the Vessel for its own account or for the account of others,   either on avoyage or time charter basis,   as the Charterer may from time to time determine,provided   however,   Charterer must first obtain written consent of Owner,   whichshall not be   unreasonably   withheld,   before   entering   into any voyage or timecharter.      C.   This   Charter   is a full   and   complete   demise   of the   Vessel   to theCharterer.   From the time of delivery to the termination of the Charter,   at itsown expense,   the Charterer shall either itself or through a maritime managementor agency contract, man, victual, navigate, including engaging other vessels andpilots,   operate,   maintain in a good state of repair and in efficient operatingcondition,   insure and supply the Vessel. The Charterer shall be responsible for

all   charges   and   expenses of every kind and nature   whatsoever   incidental   toCharterer's use and operation of the Vessel under the Charter   including withoutlimitation fuel,   lubricating oil, and water.   Charterer shall return the Vesselto Owner at the expiration of                                         8<PAGE>  this   Charter   in the event   Charterer   does not elect to   purchase   the   Vesselpursuant   to   Article 19 hereof,   in the same good order and   condition   as whenreceived,   reasonable   wear and tear   excepted,   in   accordance   with Article 13herein.      D. (1)   Except for a lien for wages of a   stevedore,   wages for the crew ofthe vessel,   general average or salvage including   contract salvage,   and exceptfor   maritime   tort   liens   covered   (subject   to a   reasonable   deductible)   byinsurance or protection and indemnity entry, Charterer will not create or sufferto be continued any security interest, lien, encumbrance or charge on the Vesselor any income therefrom. In due course, and in any event within thirty (30) daysafter the same becomes due and payable,   the   Charterer   will pay or cause to bedischarged or make adequate provision for the payment or discharge of all claimsor demands which,   if not paid or discharged,   might result in the creation of asecurity interest,   lien, encumbrance or charge against the Vessel or any incometherefrom, and will cause the Vessel to be released or discharged from each suchsecurity interest, lien, encumbrance or charge therefor.           (2) If a complaint   shall be filed against the Vessel or if the Vesselshall be seized,   arrested and/or taken into custody or sequestered by virtue ofany legal   proceedings   in any court,   the Charterer   shall within ten (10) daysthereafter   cause the Vessel to be   released   and   discharged.   Charterer   shallremain   liable for the payment of Charter Hire   throughout   any of the foregoingevents.      E. Charterer agrees, at its expense,   to drydock the Vessel for the purposeof cleaning   and   painting the   Vessel's   bottom when   necessary   and making anyrequired repairs, inspections or surveys, but not less than twice in every sixtymonths unless Owner otherwise agrees or as required by applicable ClassificationSociety rules,   and when drydocking is due,   Charterer agrees to send the Vesselto a port   where the   Vessel   can so   drydock,   clean and   paint.   All   expensesincidental to such drydocking and all charges   incurred in connection   therewithshall be for the Charterer's account,   regardless of whether Owner's repairs, ifany, are concurrently   made,   provided that the Owner's repairs do not delay theoperation of the Vessel or increase the cost to Charterer. 

     F. Charterer will pay and discharge when and as due and payable, all taxes,assessments, excises, levies, documentation and registration fees, duties, finesand penalties   and other   governmental   charges   including   without   limitation,sales, use,   franchise,   property,   gross receipts and occupation taxes lawfullyimposed   upon   the   Vessel   or   the   ownership,   use,   operation,   registration,documentation   or   maintenance                                         9<PAGE>  thereof   during the term of the Charter or on any Charter Hire or other   amountspayable hereunder,   other than taxes and other charges imposed on or measured bythe net income or capital of the Owner.                                     ARTICLE 7                          CONTINUED REGISTRATION OF VESSEL      The Vessel shall be kept   documented   under the laws and flag of the UnitedStates during the period of this Charter.   Charterer warrants it is a citizen ofthe United States and entitled to own and operate vessels   documented   under thelaws of the United States with the privilege of engaging in the Coastwise trade.                                     ARTICLE 8                         EQUIPMENT, OUTFIT AND FURNISHINGS      The   Charterer   shall have the use,   without   extra cost,   of all equipment(which shall include equipment for cabin,   crew, and galley,   navigational aids,and   technical   equipment,    furnishings,    furniture,    and   fittings)   outfit,appliance

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