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charter management

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Charter Management Terms and Conditions

Note: These terms are for Charter Management Only.

1 AGREEMENT TO LET

The Owner shall let and the Manager shall manage the Yacht in accordance with the Manager's obligations for the Charter Management Period for the Charter Fee.

2 OWNER'S OBLIGATIONS

2.1 To deliver and berth the Yacht at the Base Port and equip the Yacht to the standard specified by Capitania (Portuguese Authority). Acceptance of the Yacht by the Manager shall imply prima facie that the Yacht is in good order.

2.2 To keep the Yacht insured for its full market value against fire and all the usual marine and Collision risks with protection and indemnity cover of at least €750,000 but not so as to cover the first €500 of any claim, or damage to sails (unless caused by dismasting or collision) through the Manager's own fleet insurance policy. The Owner also undertakes to inform the broker or underwriter that the Yacht shall be used for commercial charters.

2.3 To notify the Manager in advance of the dates upon which the Yacht will be required for the Owner's use. The Yacht shall not be available for charter during such periods provided always that any charters agreed by the Manager prior to receiving such notice from the Owner shall have precedence over the Owner's requirements.

2.4 To give the Manager not less than six months notice of intention to terminate this agreement. In the event that the Owner does not give six months notice, a payment equal to any loss of charter income to be paid to the Manager in lieu of notice provided always that the Owner shall be entitled to terminate this Agreement thirty days after giving written notice to the Manager if the Manager fails to meet any of its obligations under this Agreement.

2.5 To indemnify the Manager within thirty days of the presentation of receipts against all reasonable expenses incurred by the Manager in respect of the repair or replacements of any equipment agreed as between the Manager and the Owner as being unserviceable due to fair wear and tear unless such expense is recoverable and is in fact recovered by the Manager either under warranty from the manufacturer or from the hirer of the Yacht or from the insurer of the same.

2.6 To allow the manager to display plastic removable hull graphics on each side of the hull depicting the Managers logo/name (these graphics can be removed on longer periods of Owners usage with the Managers consent).

3 MANAGER'S OBLIGATIONS

The Manager undertakes as follows:-

3.1 To pay the Owner 60% of all charter fees received inclusive of VAT for the Charter Management Period, such fees (if any) to be paid monthly on the 15th day of each calendar month thereafter for the duration of this Agreement provided that this percentage be reviewed annually and failing agreement between the parties as to a revision, each party shall be entitled to terminate this Agreement thirty days after giving written notice.

3.2 To berth, maintain and keep the Yacht, her gear and equipment including the equipment listed in any specific inventory attached at the Owners expense in good order and condition and in all respects fit and serviceable for chartering. Should any particular works be required on the yacht which cannot be regarded as routine maintenance the Manager shall not incur expenditure in excess of €500 without the prior approval of the Owner which shall not be unreasonably withheld.

3.3 To use its best endeavours to charter the Yacht, save for such periods as the Manager may in its discretion decide the Yacht is required for maintenance, repair or trial.

3.4 To charter the Yacht only to charterers in respect of whom the Manager has taken reasonable steps to satisfy itself that such persons are sufficiently experienced, qualified and competent to safely navigate and handle the Yacht.

3.5 To promote and advertise the yacht for charter as the Manager may at its discretion decide at its expense.

3.6 To arrange for the yacht to be cleaned, fuelled, watered and victualled as may be necessary at the commencement and completion of each charter and to inspect all gear, equipment and inventory as attached at the termination of each charter.

3.7 Receive the charterers on and off the Yacht and collect a security deposit to the value of the insurance excess but not greater than €1,000 from the charterer. The manager shall check and maintain the inventory of the Yachts gear and equipment and check the same before and after each charter and ensure that any deficiencies are made good and paid for by the charterer out of the security deposit except for items considered by the manager to be defective by age or natural wear and tear. The manager shall refund the security deposit in whole or in part after taking account the cost of fuel and any deficiencies at the termination of each charter.

3.8 Administer and prepare all necessary documentation, certificates and inspections and acquire any necessary license to charter the Yacht as may be required from time to time at the Owners expense.

3.9 To give the Owner not less than 6 months notice of its intention to terminate this agreement provided always that the Manager shall be entitled to terminate this agreement thirty days after giving written notice if the Owner fails to pay any sums reasonably due to the Manager in reasonable time or reasonably to approve expenditure required for the maintenance of the Yacht under the terms of this Agreement.

4. ACCOUNTING PROCEDURES

4.1 The Manager shall pay the Owner the Charter Fee by cheque or bank transfer to the owners nominated account.

4.2 Where the Owner is registered for VAT the owner shall render a VAT invoice to the Manager for the monthly fee within 14 days of receiving payment of the same.

4.3 The Manager shall render further VAT accounts to the Owner from time to time in respect of sums expended for the Owners account for the repair of the yacht.

5. DURATION OF AGREEMENT

This Agreement shall take effect from the date herein whereupon the Yacht is to be delivered to the Manager and certified in accordance with pertinent Capitania regulations until this Agreement is terminated in accordance with the Charter Management Period or until the Yacht becomes a constructive or actual total loss or otherwise suffers damage such that she cannot be repaired to a standard which would make her in all respects fit for further chartering.

DEFINITIONS

"Charter management Period"

from to and any extension of time that might be mutually agreed between the parties;

"Cruising Limits"

Portugal and Southwest Atlantic Spain;

"Charter Fee"

60% of charter fees inclusive of VAT (TVA) paid monthly subject to annual review;

"Base Port"

Portimão Marina or Lagos Marina "Owner" and "Manager" shall include the persons and organization named above and their respective successors in title.