Bareboat Charter Agreement

1. Agreement To Let And Hire. Whereas Charterer desires to bareboat charter the Vessel from Owner and  Owner desires to bareboat charter the Vessel to Charterer under the terms and conditions set forth herein. Owner agrees to let, and the Charterer agrees to bareboat charter the Vessel for the Charter Period for use by Charterer as a recreational / pleasure vessel. 

2. Use Of Vessel. Charterer agrees that the Vessel shall be employed exclusively as a recreational/pleasure  vessel for the sole and proper use of themselves, their family, guests, and servants during the term of this  Agreement. Charterer shall not transport passengers for hire, transport cargo, or engage in any trade nor violate  the revenue laws, or any other laws of the United States. The Vessel shall only be used within the Navigation  Limits defined below. 

a. Navigational Limits. The vessel shall not navigate beyond the navigational limits set forth on page one  above. Violation of these limits shall be considered as theft or conversion of the vessel and treated  accordingly. The charterer agrees that all navigational limits are subject to weather, and the owner does  not guarantee the destination. 

b. Running Expenses/Storage. Charterer agrees to pay all running expenses during the Charter Period,  including, but not limited to, dockage, consumable goods, and any other expenses necessary to maintain  the Vessel and its occupants in good order during the Charter Period. 

c. Compliance With Laws. The charterer shall ensure compliance with all state and federal laws, US Coast  Guard regulations, and the laws and regulations of any jurisdiction into whose waters the vessel shall  enter during the course of this agreement, for the duration of the charter. 

(1) If the Charterer or any of the Charterer's guests commits any offense contrary to the laws and  regulations of any jurisdiction, resulting in the Vessel being detained, arrested, seized, or fined, the  Charterer shall indemnify the Owner against all loss, damage, and expense incurred by the Owner as a  result. The Owner may, by notice to the Charterer, terminate this Agreement forthwith. (2) Charterer shall be liable for fines, penalties, damages, and forfeitures as a result of negligence or  intentional acts of the Charterer, the Charterer's Guests, or Invitees, and the Charterer shall indemnify,  hold harmless, and defend the Owner for such acts. 

d. Vessel Operation. The charterer understands that no person shall operate the vessel if they are unable,  physically or mentally, to operate in a safe and competent manner. 

e. Zero Tolerance For Drugs or Contraband. Charterer has been informed by the Owner of the U.S. Coast  Guard's policy of "zero tolerance" for drugs aboard vessels and warrants to the Owner that there will be  no illegal drugs or other contraband brought aboard the vessel at any time during the Charter Period or  extension thereof. Charterer further agrees to fully indemnify the Owner for any losses the Owner suffers  in the event of a breach of this covenant. Charterer further agrees to indemnify the Owner from any and  all losses, fines, penalties, damage, and any other type of loss, including legal fees and costs through the  appellate level, incurred by the Owner in defending any action brought against them by a governmental  agency, whether local, state, federal, or foreign as a result of the violation of any governmental regulation  or contraband laws. 

f. Vessel Survey / Inspection. If the Charterer desires, as part of this Agreement, they may request a survey  of the Vessel at their expense to take place before the charter period and again at the end of the charter  period to assess the Vessel's condition, or they may waive this right to survey. 

g. Damage. Charterer agrees to pay out of pocket for all uninsured loss or damage, excessive cleaning, or  associated costs arising from the charter. 

h. No Swimming/SCUBA/Snorkeling/waterskiing from Vessel. The charterer shall not permit any swimming,  scuba diving, snorkeling, water skiing, or towing of recreational water toys from the vessel. i. Vessel Weight Limit / Capacity. The charterer shall not exceed, or allow members of the charterer's party  to exceed, the total passenger/weight capacity of vessels as listed on page one of this agreement.

3. Waiver of All Warranties and Breakdowns. It is agreed by the parties that the Charterer has had an  opportunity to inspect and survey the Vessel, at their own expense, and, subject to the provisions set forth below,  accepts the Vessel as fit for any and all purposes. The Owner specifically disclaims all warranties, whether express  or implied, concerning the seaworthiness of and/or fitness of the Vessel for a particular purpose to which the  Charterer will put it. 

4. Tracker: The vessel is equipped with an electronic tracking device/system (“System”). The System is the  property of the Owner and has been installed to protect the Owner's interests in the vessel by keeping track of its  location. By signing this Agreement, the Charterer agrees that the Owner may use the System to track the vessel's  location and the Owner may, in its sole discretion, call the Charterer during the charter if the vessel enters a  geographical area that is either not safe or not recommended for sailing. 

5. Insurance, Liability and Indemnification. Owner shall, on behalf of Charterer and for its benefit, procure  and maintain the following insurance to cover potential claims against Charterer and Owner, as provided herein,  arising out of Charterer's use of the vessel as a recreational/pleasure vessel. Owner and Charterer agree to look first to said policies to cover any claims asserted which may be covered under them. 

a. Insurance: The Owner shall procure and maintain the following insurance related to the operation of the  Vessel during the term of this Charter, including (1) Hull and Machinery Insurance to the full extent of the  value of the Vessel; (2) Crew Liability Extension in a minimum coverage amount of $1,000,000; (3) Uninsured  Boaters Coverage in an amount of $497,400 per occurrence; (4) Limited Pollution Extension in a minimum  coverage amount of $1,000,000; and (5) Commercial Passenger Liability Extension in a minimum coverage  amount of $1,000,000. Said insurance shall waive subrogation against the Charterer. Charterer shall be  responsible for paying any deductible amounts that become due under any of these insurances without  reimbursement from the Owner. 

b. Liability: Charterer shall be solely liable for any and all claims of any kind arising out of or related to this  Agreement and the Charterer's use of the Vessel, howsoever caused (except those due to the gross  negligence or willful misconduct of the Owner), including (1) claims within the deductible of the insurance  policies required, (2) liability for covered claims in excess of the limits of said policies, (3) all claims which  are not covered by the aforementioned policies, or (4) claims for which coverage is voided due to the  violation of this Agreement by the Charterer. 

c. Indemnification: Charterer further agrees to defend, indemnify, and hold harmless Owner and Owner's  agents, including but not limited to Passage Nautical Enterprises, Inc., against any and all claims arising out  of Charterer's use of the vessel which are not covered by the insurance provided above for any reason,  including Charterer's violation of this Agreement, and including claims which are below the deductible for  such coverage or which are in excess of the policy limits of such policies.. 

6. Manning Requirements. Charterer agrees that the Vessel will only be operated with an approved Skipper  (the “Skipper”) aboard the Vessel throughout the Charter Period. Charterer warrants and agrees that they have or  will use a Skipper experienced and competent in the handling of a yacht of the type and size as the Vessel, and that  the Skipper will have the appropriate Coast Guard License and/or sufficient knowledge of seamanship, piloting,  mechanical systems, and rules of the road to safely operate the Vessel in compliance with all applicable laws and  regulations. 

Charter is free to select any skipper who is qualified to operate the vessel for the charter period. However, all  skippers who are not pre-approved by underwriters prior to the commencement of the charter must be approved  by underwriters prior to the vessel's delivery to the charter. In order to become approved by underwriters, each  skipper must submit a resume and statement of relevant qualifications to underwriters. The approval process  typically takes a minimum of three weeks.

Charterer shall provide the name of its selected Skipper on Page One of this Agreement where indicated, and that  individual shall be the only Skipper of the Vessel during the Charter Period. Operation of the Vessel by anyone else  during the Charter Period is a violation of this Agreement and may result in the insurance being voided. For  Charterer's convenience, the underwriters have pre-approved the Skippers listed in Appendix 1 to this Agreement,  who have experience skippering the Vessel. 

Charterer agrees that it alone will be the employer of any Skipper selected by Charterer, and that said Skipper will  be so notified and agree that they are not the employees or borrowed servants of the Owner, and will make no  claims of any kind against Owner on the basis of any alleged employment relationship. 

Charter is free to select any crew who is qualified to operate the vessel for the charter period. However, all  skippers who are not pre-approved by underwriters prior to the commencement of the charter must be approved  by underwriters prior to the vessel's delivery to the charter. In order to become approved by underwriters, each  skipper must submit a resume and statement of relevant qualifications to underwriters. The approval process  typically takes a minimum of three weeks.

7. Liens. Charterer, their agents and employees have no right to empower or permit or allow the creation of  any maritime liens against the aforementioned Vessel. Charterer agrees to indemnify, defend and hold the Owner  harmless from any charges, suits, liens or losses in connection therewith, including reasonable attorney's fees. 

8. Non-Assignment. Charterer may not assign or sub-charter the Vessel without the Owner's prior written  permission, which may be withheld for any reason at the Owner's absolute discretion. 

9. Responsibilities. Charterer agrees to promptly report any damage to or problems with the Vessel to the  Owner. If Charterer does not promptly report the damage immediately to the Owner, it is a breach of this  Agreement. 

10. Bareboat Charter. This Charter is, and at all times shall be construed as, a Bareboat Charter and the  Charterer assumes all the responsibilities as if he were the owner of the vessel, subject to the provisions herein.  Charterer further agrees to indemnify, defend, and hold the Owner harmless from and against any claims, liens, or  suits that arise out of or are related to this Agreement, save and except as provided in Paragraph 4 above. 

11. Limitation of Damages. Notwithstanding anything to the contrary set forth in this Agreement, any damages  awarded on account of a breach of this Agreement shall be limited to actual, out-of-pocket monetary damages and  shall not include consequential, indirect, special or punitive damages. 

12. Electronic Signatures / Counterparts. This Agreement may be executed in two or more counterparts, each  of which shall be deemed an original, and all of which together shall constitute a single agreement. An electronic,  facsimile, or scanned signature to this Agreement shall be deemed equivalent to an original signature.