General Operations Lease Agreement



This General Operations Lease Agreement (hereinafter "Lease") is entered into by and between Frye Island Incorporated (hereinafter "FII"), a Maine Corporation, and Frye Island Municipal Services Corporation (hereinafter "MSC"), a body corporate and politic within the Town of  Standish, Maine.


WHEREAS, FII, as successor to Leisure Living Communities, Inc., is the legal owner of all common properties on Frye Island (hereinafter "Island"), including two ferries; and


WHEREAS, FII has the responsibility and authority to maintain and enhance the value of said common properties and to operate the Island, directly and/or under suitable agreements with other oraanizations, for the benefit of all FII shareholders; and


WHEREAS, MSC has been authorized by an act of the State of Maine to provide the essential services to all residents of the Island, which services may include: 1) operation and maintenance of ferries, docking ramps, roads & water system; 2) collection and disposal of refuse; and 3) provision of security; and


WHEREAS, MSC requires the use of certain FII properties in order to provide said essential services to the residents of the Island; and


WHEREAS, FII desires to lease certain common properties to MSC.


NOW THEREFORE, in consideration of one dollar and other valuable consideration, receipt of which is hereby mutually acknowledged, as well as the covenants and promises herein contained, the parties hereto agree as follows:


                I.              PROPERTY AND PREMISES. FII hereby leases, lets and demises to MSC and MSC hereby leases from FII the following properties which are needed for MSC operations: two ferry boats, Administration Building, Fire Barn Building, Community Center Building, Island Roads, and Island Water System. All of this property is on or near Frye Island, Standish Maine (hereinafter "Leased Property"). FII hereby reserves the right, in common with MSC, to use the office space and office equipment as previously shared during the 1982 through 1991 seasons.


II.            TERM. This Lease shall commence on January 1, 1992 and terminate on December 31, 1992. Unless otherwise canceled by either FII or MSC in writing, or replaced with a new agreement, this Lease will automatically renew on January 1 of each subsequent year.


                III.           RENT. MSC shall pay annually to FII as rent for the Leased Propety the sum of One Hundred Fourteen Thousand dollars ($114,000), payable in twelve installments with payment due on the twenty-fifth (25th) of each month during the term of this Lease. Installment payments shall be Nine Thousand Five Hundred dollars ($9,500).


                V.            ADDITIONAL PROPERTY. In addition to the Leased Property referred to in Paragraph I hereof, FII hereby leases, lets and demises to MSC and MSC hereby leases from FII, for no additional rent, the beaches, the tennis courts, swimming pool, and boat ramp located on Frye Island (hereinafter the "Additional Properly").


                V.            COMMON SERVICES. MSC will assume all responsibilities for the operation of Common Services previously provided by FII, including but not limited to all management, maintenance, personnel and payment obligations related thereto; provided, however, that the special services related to the operation of the Golf Club, the Yacht Club and the sale of real estate will remain with FII.


                VI.           CREDIT. To compensate MSC for the expenses associated with the responsibilities of providing the Common Services described in Paragraph V hereof, FII shall pay annually to MSC the sum of One Hundred Four Thousand Three Hundred Seventy Five dollars ($104,375), payable in eleven installments as a credit against the rent described in Paragraph III hereof. The first installment credit will be on the twenty­-fifth (25th) of February for an amount of Nine Thousand Three Hundred Seventy Five Dollars ($9,375). The next ten installment credits will be on the twenty-fifth (25th) of each month from March through December for an amount of Nine Thousand Five Hundred dollars ($9,500).


                VII.          MAINTENANCE. MSC shall maintain the Leased Property and Additional Property in the same condition as existed at the commencement of the term of this Lease. MSC will perform normal maintenance on the Leased Property and Additional Property during the term of this Lease.


                VIII.        INSURANCE AND TAXES. MSC will provide insurance coverage for the Leased Property and Additional Property. MSC covenants and agrees that it will carry insurance policies for any damages or injuries occurring on the demised premises and will exhibit to FII proof of such policy and the premium payments of the same upon demand by FII. MSC agrees to keep and save FII harmless and indemnified against and from the claims of any persons, including, but without limitation, any employees or invites of MSC, on account of any injury to or death of persons and damage to or destruction arising from or out of the use, occupancy or possession of the demised premises. MSC will pay the Town of Standish and the Town of Raymond property taxes on the Leased Property.


                IX.           UTILITIES. MSC will pay the utility charges assigned to the use and maintenance of the Leased Property and Additional Property.


                X.            FERRY TRAVEL. MSC shall provide FII employees and tenants (including employees of FII tenants) with reasonable access to the demised Ferries, as passengers, without charge provided that such passage on the Ferries is in connection with FII related business.


IN WITNESS WHEREOF, FII and MSC by the following officers have executed and delivered this Lease, in duplicate, as of the first day of January 1992.





                by:          (Signed)                                                 President                                               12-5-91

                                Joseph Potts                                         Office Held by Individual                   Date Signed




                by:          (Signed)                                                                Treasurer                                               12/20/91

                                James Kuiken                                        Office Held by Individual                                   Date Signed