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Gratitude Yachting Center's

Chesapeake Bay Charter Management Program Upper Bay: 5990 Lawton Avenue Rock Hall, MD 21661 Phone: (410) 639-7111 / Fax: (410) 639-7345 gratitude@gratitudeyachting.com 1


• Are you interested in purchasing a new or previously owned Island Packet, Eastern Boat or Menorquin Trawler but are not sure when? • Do you have various personal, family or business responsibilities that keep you busy many weekends? • Does the idea of offsetting expenses of yacht ownership have an appeal to you? • Would you like to own a yacht now? If you answered yes to these questions, Gratitude Yachting Center’s charter management program could be right for you. With more than 25 years of Chesapeake Bay charter management experience our program offers safe, durable, comfortable and well-equipped yachts with tremendous chartering appeal. Our seasoned charter management staff ensures that your yacht is always in “Bristol” condition, ready to cruise and provides the following services: Advertising Services: • National, Local and Internet • Boat Show Displays (Annapolis, Bay Bridg, Baltimore, Richmond, etc.) • Distribution of Charter Brochures & Packages Administrative Services: • Communications with Charter Inquiries • Charter Scheduling • Charter Contracts • Variety of Seasonal Mailings • Banking, Credit Card and Credit Card Fees • Accounting to Include Owner’s Monthly Revenue Check and Year-End 1099 Misc. Income Form • Importantly, Gratitude Covers the Difference Between the Security Deposit and Owner’s Insurance Deductible should a mishap occur. Dockside Services Include But Are Not Limited To: • Cleaning and Preparation for Charter • Replenishment of Paper Goods, Propane, Cleaning Supplies and Ice • Laundry • Charter check-outs • Docking lessons if required or requested (additional fee to charter customer) • Scheduled Maintenance at Owner’s Request • 7 Day a Week Charter Response (Cell Phone, Radio, Chase Boat/Car Dispatch) • Inventory, Yacht Check-In and Post Charter Inspection

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About Gratitude Yachting Center Founded in 1980 in Rock Hall, we are the oldest continuous yacht brokerage and charter service on the Eastern Shore of Maryland located directly on the Chesapeake Bay. Our office in Deltaville, VA was opened in 1990 to extend services to the lower Chesapeake Bay area. As Island Packet’s longest-lived dealership, we have more experience outfitting Island Packets for cruising and chartering than anyone else. We are the recipient of Island Packet’s Golden Wrench Service and Warranty award since the program’s inception. In addition to new yacht sales, our company offers charter, charter management, yacht servicing, and brokerage. Enjoying boating ourselves, we organize annual events including the World’s Largest Island Packet Rendezvous and the Myers Cup Race. Gratitude Yachting Center is cofounder of the Maryland School of Sailing and Seamanship, employing Island Packets exclusively for ASA certified offshore and Chesapeake Bay courses. You will find courses and classes of every level to assist you with learning or improving your yachting skills.

Your Responsibilities as Yacht Owner in Our Charter Fleet Yacht owners in the Gratitude Yachting Center fleet are responsible for: • • • • • •

Yacht Insurance (approx. 1% of hull value) Slip Fees (depending on length of model, approximately $3000 per season) Scheduled Maintenance Costs (Other than routine charter cleaning or warranty work are spring commissioning, bottom painting, oil changes, etc. @ approx. $2,500 per season) Winter Storage and Winterization Yacht Loan Principal and Interest Payments 50% Gratitude Yachting Center Charter Management Fee

How Charter Boats Are Equipped Our charter customers are as discriminating as our owners. Aside from the cost of the charter itself, the prime factors considered by charter customers are quality, reputation, ease of handling, performance, interior layout and the equipment provided. Our policy is to provide customers with all the equipment and conveniences for a safe, comfortable and enjoyable charter. The boats are equipped with the following equipment (at minimum) : • • • • • • • •

Necessary Safety Gear Navigation Kit Charts Cleaning and Boat Care Items Depthsounder Wind Direction/Wind Speed VHF Radio Stereo

• • • • • • • •

Full Galley Equipment Roller Furling Head Sails Self-Tailing Winches Knotmeter Dockside Heat/Air Conditioning Dodger With Awning or Bimini Cabin Fans Refrigeration 3


Term of Charter Agreement Our primary objective is to maintain a stable fleet on which we can confidently base future activity. We require a contractual agreement on an annual basis. The age of the yacht in itself is not a criteria for remaining in the fleet. Condition and appearance, as well as, continual upgrades of equipment are paramount.

Your Boat Will Be Taken Care Of Our reputation is on the line every time one of our charter boats departs our dock, or when someone visits the fleet at Gratitude Marina. We also realize that many of our charter customers are potential owners and we only have one opportunity to make a good first impression. You can be assured that your yacht will be well maintained and cared for. We have been awarded the 2005 “Best of the Bay Charter Fleet” by the readers of Chesapeake Bay magazine and our most discriminating sailors. Our staff, having over 70 years combined experience in the marine industry, is intimately familiar with all aspects of your yacht. Our close attention to all systems ensures that the yachts are well maintained and go out in top condition. Problems that may develop during charter are minimized, if not eliminated. Your yacht’s factory warranty on all yacht systems guarantees that all issues are addressed in a timely fashion. A charter resume must be submitted to us, and if necessary, we will contact references provided. At the time of boarding we perform a complete inventory of equipment aboard and go through all systems on the vessel. If, at this time, we feel that the charter customer does not have necessary skills to handle the yacht, we allow them the option to forfeit their charter deposit or hire a captain until their competency meets required levels. This policy does not encourage an individual to misrepresent his or her skills on the resume. All charter customers are required to submit a security deposit. In the event of damage, Gratitude Yachting Center stands for the difference between the security deposit and the amount of the yacht owner’s insurance deductible. Gratitude Yachting Center is dedicated to chartering and sees the addition of boats to the charter fleet as a means of satisfying customer demands. As the interest in boating and this form of recreation continues to increase in popularity, we gladly welcome new yachts into our fleet.

Benefits of Charter Management Ownership Ownership sooner than planned Many of our charter owners have an agenda whereby they plan on purchasing a yacht after a significant event such as the sale of a house, retirement, last child’s graduation from college, etc. We find that our charter management program enables the purchase of a yacht now at today’s prices and extremely low interest rates with significant offset of the costs of ownership. Significant tax deductions In most cases the owner can deduct mortgage interest, dock fees, maintenance and inspection


expenses. Remember that advice from your personal financial manager or advisor will help you determine your maximum tax benefits.


A mature and popular fleet You will become part of Gratitude’s long established and popular fleet. We have a long history with many happy customers and owners. Your boat will be asked for by name during bookings and will be recognized in various Chesapeake ports of call.

Anticipated Charter Activity Our Chesapeake Bay fleet can experience charter activity from May through October. Depending on weather, we often have charter activity in April and November. We plan for a good balance between owner usage, charter activity and time available for maintenance. The income from this plan should pay for approximately one half your expenses (principal and interest, maintenance, insurance and winter storage). All of our yachts are chartered on a rotation basis so that at the end of the season, owner usage dependent, all individual yacht income should be comparable.

Charter Fleet Accounting At the end of every month, charter revenue checks are drawn to the owners for the month’s activity along with the names of the charter customers. Statements and checks are prepared and mailed to owners within the first ten days of each month. At the end of each year, owners are provided with a Form 1099, Miscellaneous Income, for their accounting purposes.

Charter Activity On The Chesapeake Bay The Chesapeake Bay is a safe and beautiful estuary and is excellent for chartering. There are many exciting destinations and safe anchorages within a ½ day’s sail of Rock Hall. We continue to grow our charter base and see 75% of repeat customers year after year. Recently, we have noticed an increase of European charter customers, particularly from England and Germany, who love Rock Hall, the Chesapeake and our selection of well-maintained, safe and comfortable yachts. The interest in chartering increases each season as more people become interested in sailing and our area. Popular bookings are 3 day weekends and 5 day mid-weeks with exceptions occurring for longer family or group vacations. Our owners decide how much personal use and enjoyment they would like each season from their yachts. We do not place any restraints on our owners, but strongly suggest that holiday weekends are available to Gratitude for bookings. The owner’s portion of the gross revenue is 50%. The 2007 Charter Revenue Chart below is an estimate for the season based on steady charter bookings from May through October.


Does This Sound Like You? Tom and Kay Beckett formerly of La Grange, Illinois recently visited us. We originally met them at the Annapolis Boat Show as they began their search for the perfect cruising yacht. They were contemplating their retirement plans and when they could finally purchase a yacht and go sailing. They believed that their yacht purchase was a few years off. Visiting Gratitude’s display in Annapolis, they were immediately taken with the Island Packet. It fit all the criteria of a yacht they wanted to own and eventually cruise. At that point in time Tom was a hospital administrator and Kay worked as an accountant. Tom and Kay immediately saw the fit between Gratitude’s charter management program and their long-range plans. Tom and Kay took advantage of boat show pricing, the charter program and became owners 3 years sooner than they thought possible. Their dream of owning an Island Packet became a reality. They later discovered that the price of their boat had significantly increased over that 3 year time period resulting in a significant savings to them by purchasing sooner. Purchasing their yacht enabled Tom and Kay to: • • • • •

Own an Island Packet immediately Take advantage of special pricing Offset expenses of ownership Enjoy their Island Packet sooner than they thought for vacations and long weekends Prepare their Island Packet for live-aboard and offshore cruising while in the program

Tom reminded us during their visit, “This was the perfect thing, the best thing for us. All our goals and dreams were coming true plus a wonderful surprise. We were Island Packet owners much sooner than we ever expected. The charter management program was perfect for us.”

What’s the next step? Talk to Gratitude Yachting Center today. We can discuss our program, financing sources, yachts, equipment choices and then talk in detail about how this can work for you. Just like Tom and Kay Beckett, this could be the perfect way for you to realize your ownership and cruising dreams.


SAMPLE OF OUR RESUME’ OF BOATING EXPERIENCE Name: Address:

DOB:

Home Phone: Fax Phone: Name of Boat to be Chartered: Length of Boat: Requested Charter Dates: From:

Work Phone: E-mail: Type: To:

1. Do you or have you previously owned a boat? ( ) Yes ( ) No If yes, What type: LOA: Years Owned: Primary Cruising Area: Years of Cruising Experience: Power

Sail

2. Have you Chartered a boat previously? ( ) Yes ( ) No If Yes, What type: LOA: Charter Company: Cruising Area: Dates: Did you serve as Skipper? ( ) Yes ( ) No Relevant Details: 3. Are you familiar with piloting? ( ) Yes ( ) No If Yes, to what extent? 4. Are you familiar with the use of? Charts: Compass: VHF, Ship to Shore Radio or Radiotelephone: Radar, Autopilot and Advanced Marine Electronics: Generator: Other Navigational Aids:

Yes ( ) ( ) ( ) ( ) ( ) ( )

No ( ) ( ) ( ) ( ) ( ) ( )

5. Have you done any offshore sailing, cruising or navigating: ( ) Yes ( ) No If Yes, Please provide particulars. 6. Boating Courses taken: 7. Any Boating Accidents? ( ) Yes ( ) No If Yes, details: 8. Are you a yacht and/or power squadron member? ( ) Yes ( ) No If Yes, Please list name and address:


9. Are other members of your crew experienced? ( ) Yes ( ) No If Yes, Please highlight details:

10. Other cruising references:

Please detail your experience and capabilities with the following: A. MANEUVERING IN: 1. Close quarters and confined spaces such as slip-ways: 2. High Traffic Areas: 3. Rip Tide: B. DOCKING AT: 1. Slip with fixed pilings: 2. Slip with floating docks: C. ANCHORING IN: 1. Calm conditions: 2. Conditions with wind exceeding knots: D. MOORING: E. HANDLING TWIN SCREW: F. LINE HANDLING AND USE OF FENDERS:

AFFIDAVIT This is to certify that I (the applicant) am experienced in all aspects of the handling and operation of a boat such as the type and size indicated above, including practical knowledge of seamanship, piloting and the Rules of the Road; and I certify to the accuracy of the statements above.

Signature of Applicant

Date

Witness

Date


Gratitude Yachting Center Charter Management