THE CORPORATION OF THE TOWN OF PENETANGUISHENE

Schedule “A” to By-law 2008-35

COMMERCIAL VESSEL LEASE AGREEMENT

FOR TOUR AND CHARTER BOAT OPERATORS

BETWEEN:

THE CORPORATION OF THE TOWN OF PENETANGUISHENE

(hereinafter called the “Town”)

OF THE FIRST PART

-and-

ARGEE BOAT CRUISES LIMITED

(hereinafter called the “Operator”)

OF THE SECOND PART

WHEREAS the Town manages the Town Dock - Port of Historic Penetanguishene, leased by the Town from the Crown, represented by the Federal Minister of Fisheries and Oceans.

AND WHEREAS the Operator has negotiated a lease with the Town to operate a Tour Boat or Charter Boat from the Town Dock – Port of Historic Penetanguishene.

NOW THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:

1.TERM

This lease becomes null and void in the year following the termination of the Head Lease of dock facilities between the government of Canada and the Corporation of the Town of Penetanguishene. In the event that the Town assumes ownership of the dock facilities, the parties agree to renegotiate a new lease agreement between the Town and the Operator subject to mutual agreement.

The Lease agreement shall be for the year 2008.

The Operator shall have permission from the Town to operate one boat from the Town Dock for the Summer Season of May 1stto October 15th, for the year 2008.

It is understood between the Operator and the Town, that the Operator leaves the vessel in the water for twelve months of the year inclusive of winter months, all at the sole risk of the Operator. Winter Season shall be defined as October 16thto May 1st.

The right of renewal is provided pursuant to Clause #22 herein.

2.BERTHING POSITION

The Operator shall have reserved to its exclusive use, the berthing position in the area commencing at the most westerly bollard on the north side of cement pier and extending eastward to a point one hundred and twenty five (125) feet from the point of commencement as shown on Schedule “B” attached hereto and the Operator acknowledges no right to berth in any other position on the cement pier. The Boat shall be berthed starboard to the coping wall.

3.VESSEL

The Operator’s right to berth is restricted to the vessel named MS Georgian Queen having a length overall of One Hundred Twenty feet (120’).

4.RIGHTS

The Operator’s only right or permission to the use of the pier is to operate and berth its vessel.

5.SIGNS

The Operator is entitled to erect one (1) signon the ticket kiosk to name the Tour Boat for which tickets are being sold. The sign size, design and location shall be approved by the Town. One (1) additional sign may be placed by the Operator at the entrance to the Town Dock – Port of Historic Penetanguishene area managed by the Town with the written approval of the Town.

6.KIOSK USE

The ticket kiosk shall be used only for the sale of tickets for the vessel and for souvenirs associated with the promotion of the tour boat and for the storage of supplies related to the operation of the boat.

7.KIOSK SERVICES

Electricity and telephone service may be installed in a safe but temporary manner as approved by the Town. All costs incurred related to the provision of electricity from the male end of the plug shall be the responsibility of the Operator.

8.BERTHING ASSISTANCE

The Town is not required to supply any assistance to the Operator in the berthing of the vessel, which shall be the sole responsibility of the Operator, however Town staff may assist as circumstances warrant.

9.SUMMER BERTHING FEE

The Operator shall pay for the berthing of the MS Georgian Queen Tour Boat, as a fee for this lease for the Summer Season in the year in accordance with the fees outlined in Schedule “A” attached hereto.

The license fee shall be payable by cash, visa or cheque on or before the 31stday of July 2008and shall apply to the Summer Season.

  1. WINTER SEASON FEE

For the Winter Seasons the Operator shall pay a Winter Season fee in accordance with the fee outlined in Schedule “A”.

Winter Season fees shall be payable by certified cheque on or before the 31stday of October 2008 and shall apply to Winter Season berthing. The Operator, may at his sole discretion, pay both the Summer Berthing and Winter Season Fee on the 31st day of July each year.

  1. SURCHARGES

The fore-mentioned feesin Clause #9 and Clause #10 do not include hydro service charges. Hydro service charges to the vessel shall be determined by the Town through appropriate reading of dedicated service meter on October 15th of each calendar year and an invoice will be provided to the Operator reflecting consumption charges. Rates shall be consistent with Barrie Hydro consumption rates.

The Operator is responsible for any Municipal, Provincial or Federal taxes that are now or may be levied on the facilities used by the Operator or on rents charged by the Town under this Agreement.

12.PARKING

This Agreement includesthe provision for the parking of two companyvehicles in area approved by the Harbour Master. Two overnight passes shall be provided by the Town as part of the fee paid for berthing the vessel. Bus parking is prohibited in the immediate Dock area. Bus parking will be permitted in the Launching Ramp parking area, as approved by the Town.Additional parking spaces may be leased.

13.CUSTOMER SOLICITATION

The Operator undertakes and agreesnot to solicit customers within the Town Dock area. This provision is limited to the active solicitation of customers by the Operator and does not apply to the posting of approved signs/posters or any public inquires made to Town Dock or Tourist Information Centre staff regarding the cruise offerings.

14.TOWN DIRECTIONS

The Operator undertakes and agrees to follow the reasonable directions of the Town with respect to all matters arising from this Agreement and without limiting the generality of the foregoing, particularly those directions having to do with safety, sanitation and the abatement of noise or nuisance.

15.INDEMNIFICATION AND WAIVER

The Operator releases the Town from all claims, causes of action and demands for personal injury or damage to the vessel, gang plank, or kiosk, and the Operator indemnifies the Town from all actions, causes of action, suits, costs, claims and demands resulting from the use of the kiosk and of the berthing of the vessel. The Operator’s indemnification extends to personal injury and property damage from the use of the kiosk, gang plank with persons boarding and disembarking from the vessel.

16.NOTICE

Notice shall be given by the Operator to the Town in writing addressed and mailed by registered mail to:

The Corporation of the Town of Penetanguishene

P.O. Box 5009, 10 Robert Street West,

Penetanguishene, Ontario L9M 2G2

ATTN: Town Clerk

Notice shall be given by the Town to the Operator in writing addressed and mailed by registered mail to:

Argee Boat Cruises Limited (MS Georgian Queen)

c/o Mr. Steve Robillard,

P.O. Box5205,

Penetanguishene, Ontario L9M 2G4

Formal Notice shall be deemed to have been given on the date of mailing.

17.CANCELLATION

The Town shall be entitled to cancel this Agreement in the event the Operator should fail to perform its obligations, covenants, agreements and requirements as herein provided for failing to perform, observe and fulfill the reasonable directions of the Town within fifteen (15) days of notice by the Town to the Operator of the failure.

In the event of any cancellation of this Agreement for any cause, the whole prepaid annual license fee paid by the Operator shall be forfeited to the Town as liquidated damages.

18.ASSIGNMENT

This Agreement shall be assignable by the Operator only upon the sale by the Operator of the vessel and upon the consent of the Town in writing.

19.NEW WATER AND ELECTRICAL SERVICES

In the event that it is determined by the Operator that new or additional hydro electric power facilities or water facilities are required, then they may be installed by the Operator with all costs being assumed by the Operator and installation shall be to Municipal standards and subject to the written approval of the Town.

20.UNABLE TO OPERATE

In the event that the Operator is unable to operate during a year in the term of this agreement due to the loss of the vessel, the agreement will become null and void for the vessel for that year if the Town is so advised in writing by April 15th of that year. Alternatively, the Operator shall be permitted to replace the Georgian Queen vessel with a similar vessel providing that the new vessel does not exceed the length of the Georgian Queen.

21.REQUIRED DOCUMENTATION

The Operator (or its agent) is to provide to the Town upon request, the following documentation:

a)Evidence that the vessel complies with Transport Canadaregulations or other governing legislation pertaining to the use of tour (passenger) vessels.

b)Evidence, including certified copy of permits, that the company and Operator complies with all environmental requirements regarding fuelling the vessel and waste disposal concerns and that a copy of its approved “disaster action plan” be on file with the Town and the Harbour Master.

c)Insurance Certificate that is satisfactory to the Town is in force and that the Town be named as Insured in respect of said Policy of Insurance.

d)That the Operator meets all occupational health and safety requirements.

22.RENEWAL

The Operator shall provide to the Town written notification of intent not to renew the lease agreement not less than forty-five (45) days prior to the final day of the Summer Season by September 1, 2008.

Both the Town and the Operator hereby agree to undertake discussions to renewthe lease agreement under the same terms and conditions.

23.RIGHT OF FIRST REFUSAL AS TO LOCATION

If another charter tour boat operator enters into an agreement with the Town for lease of space at the Town Dock – Port of Historic Penetanguishene, Argee Boat Cruises Limited is to be given the right of first refusal as to locations provided, Argee Boat Cruises Limited will have seven days to respond after written notice is delivered.

The license fee for berthing in a new location will be no less than that negotiated fee with the new Operator and that rate becomes the base rate for future years subject to any increase listed under Clause #9.

24.COVENANTS

It is agreed between the parties hereto that every covenant shall enure to the benefit of and be binding upon the parties hereto, and their heirs, executors, administrators, successors and assigns and that all covenants herein contained shall be construed as being joint and several and that when the context so required or permits the singular number shall be read as if the plural were expressed, and the masculine gender as if the feminine or neuter, as the case may be, were expressed.

25.LIMITATION OF AGREEMENT

The operator acknowledges that this Agreement creates no rights beyond those expressly provided for herein.

26.AGREEMENT

This Agreement will be governed by and be construed according to the laws of the Province of Ontario and the laws of Canada applicable therein

IN WITNESSWHEREOF the said parties have by their proper officers hereunto set their hands and seals.

DATED this ______day of ______, 2008.

SIGNED, SEALED AND DELIVERED)The Corporation of the

In the presence of)Town of Penetanguishene

)

)

) per:

)MAYOR

)

)

) per:

)CLERK

)

)Argee Boat Cruises Limited

)

)

) per:

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