PROPERTY MANAGEMENT AGREEMENT THIS AGREEMENT is between Chippewa Retreat Resort Condominium & Spa Association, Inc., a Wisconsin non-stock corporation (“Chippewa Retreat”), and Caretakers, LLC, a Wisconsin Limited Liability Company (“Caretakers”). For good and valuable consideration, including the mutual covenants contained in this Agreement, the parties agree as follows: I APPOINTMENT AND TERM 1. Chippewa Retreat is the association of owners of units in Chippewa Retreat Condominium and Spa (the "Condominium"). The Condominium was created by a condominium declaration (the "Declaration"). Chippewa Retreat hereby appoints Caretakers, and Caretakers hereby accepts appointment as the property manager for Chippewa Retreat pursuant to and in accordance with the terms hereof. The term of this Agreement shall be from the date hereof until terminated. Either party may terminate this Agreement upon 90 days' written notice to the other. 2. Caretakers shall operate as an independent contractor, and neither it nor its employees are to be considered as employees of Chippewa Retreat for any purpose.
II DUTIES OF CARETAKERS Caretakers’ duties hereunder shall include the following:
1. Caretakers shall hire, in its own name, all personnel necessary for the efficient discharge of the duties of Caretakers hereunder. Compensation for the services of such employees shall be Caretakers’ responsibility. Caretakers reserves the right to hire and dismiss its managers, assistants and other employees. 2. Caretakers shall cause the Common Elements to be maintained, repaired and altered in the condition deemed advisable by Chippewa Retreat as set forth below, subject to budgetary constraints and limitations or caveats to such responsibility directed by Chippewa Retreat. The term "Common Elements" as used herein shall mean those Common Elements (as defined in the Declaration) which Chippewa Retreat is responsible under the Declaration for maintaining and does not include any Common Elements or Limited Common Elements (as defined in the Declaration) which persons other than Chippewa Retreat are responsible for maintaining. Caretakers shall: A. Recommend to Chippewa Retreat such maintenance and repairs as may be necessary to preserve the physical condition and improve the attractiveness of the Common Elements. B. Inspect the exterior of all buildings and adjacent grounds and take such reasonable prompt action so as to preserve the tidiness and order of the Common Elements except as otherwise directed. The cleanup of litter from the grounds shall be accomplished by Caretakers’ personnel. Inspections shall typically be completed on at least a weekly basis, 52
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weeks per year. Included in the work to be provided by Caretakers as and when needed are: i. Clean grounds. ii. Replace missing or burnt out light bulbs within the Common Elements, if any. iii. Clean Common Elements as needed. iv. Take such reasonable measures as necessary to preserve the safety, cleanliness or upkeep of the Common Elements, including the calling for police or fire protection or medical assistance as appropriate. All theft, vandalism and damage shall be reported as soon as practicable to Chippewa Retreat. C. In the event of an emergency requiring immediate repairs to preserve the safety and health of persons or the property of Chippewa Retreat or of any condominium owners, Caretakers shall cause necessary and reasonable repairs to be made and will charge the actual expense thereof to Chippewa Retreat. Chippewa Retreat will be notified of the emergency and the repairs required as soon as practicable. D. Have fire extinguishers inspected annually and smoke detectors semiannually, and obtain necessary regulatory review. E. Arrange adequate trash removal. 3. As agent for Chippewa Retreat, contract for necessary services and purchase all supplies necessary to properly repair and/or improve the Common
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Elements, as approved and budgeted by Chippewa Retreat's board of directors. 4. Review all bills in connection with the management and operation of Chippewa Retreat and the Common Elements and cause all such bills and other expenses to be paid. Sums disbursed for categories not budgeted for or pre-approved by Chippewa Retreat shall require approval in advance of payment by Chippewa Retreat. Except in case of emergency, the approval of Chippewa Retreat is necessary for any expenditure of over Two Thousand Dollars ($2,000.00) for any one item of ordinary repairs or alterations. 5.Provide, on a twice per month basis (with a maximum of 20 days between checks) a daytime check of each unoccupied unit for which the unit owner has authorized such checks. For each check, Caretakers shall: A. Knock loudly and, if no answer, enter. B. Check visually for proper appearance (i.e., no signs of vandalism, etc.). C. Verify that the heating system is operating properly. D. Verify electrical and water operation. E. Check for presence of approved fire extinguisher and operating smoke alarm. F. Contact owner or owner’s representative if any problems. G. Take emergency measures when required.
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In addition to the foregoing, Caretakers shall be responsible for making checks of unoccupied units after unusually severe weather conditions which could produce damage. 6. Except as set forth herein, Caretakers has no authority or responsibility for maintenance of, or repairs to, individual units in the Condominium. Such maintenance and repairs shall be the sole responsibility of the owners individually. Each unit owner may separately contract with Caretakers on an individual basis for the provision of certain maintenance and other related services. 7. Maintain a permanent collection and ongoing update of official records, books and accounts, which records shall be subject to examination by Chippewa Retreat or its authorized agents at all reasonable hours. 8. Caretakers shall bill the condominium owners for Chippewa Retreat-approved assessments and exercise reasonable diligence in an effort to collect all assessments due from owners. Chippewa Retreat authorizes Caretakers to request, demand, receive and receipt for any and all charges which may at any time be or become due to Chippewa Retreat. Any assessments remaining uncollected shall be turned over to Chippewa Retreat for collection, lien or foreclosure, and the cost thereof shall be an expense of Chippewa Retreat and shall be paid by Chippewa Retreat. If requested, Caretakers will take responsibility for and cause such proceedings to be conducted at Chippewa Retreat’s expense.
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9. Assist Chippewa Retreat in obtaining bids for insurance coverage for each year. Caretakers shall be named as additional insured party under Chippewa Retreat's liability policies. Caretakers shall maintain permanent records of all insurance coverage carried on behalf of Chippewa Retreat. Caretakers shall report to the insurance carrier and to Chippewa Retreat all accidents or claims relating to the ownership, operation and maintenance of Chippewa Retreat. 10. At least sixty (60) days prior to the commencement of each fiscal year, Caretakers shall prepare and deliver to Chippewa Retreat’s President and Treasurer a proposed operating budget setting forth an itemized statement of the anticipated receipts and disbursements for the new fiscal year based upon the anticipated assessments, and taking into account the general condition of the Common Elements. Such budget shall include Caretakers’ recommendations on capital improvements and maintenance, as well as expense reimbursement for Chippewa Retreat members on Chippewa Retreat business approved or directed by the Chippewa Retreat Board. The annual budget approved by Chippewa Retreat shall constitute a major control under which Caretakers shall operate. The budget shall be subject to modification and approval by Chippewa Retreat to implementation. 11. Caretakers shall mail a quarterly financial report to Chippewa Retreat Directors. 12. A Caretakers’ representative shall attend all Chippewa Retreat meetings each year, up to six meetings, including meetings of the Board of Directors and
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condominium owners, and special meetings and committee meetings when invited. 13. Provide essentially 24-hour-per day, 365 days-per-year desk clerk coverage on or near the Condominium. If the Condominium's front desk is not staffed, onsite personnel will be available during the day and on-call personnel will be available during the night. 14. Give master keys only to authorized personnel. 15. Provide such other services as are mutually agreed upon. 16. Assist owners in providing financial information pertinent to real estate transactions, delivering emergency messages and assisting Chippewa Retreat’s General Manager. 17. Caretakers is not obligated to provide access through this Agreement to any of the amenities in the spa located or to be constructed in Unit 7 of the Condominium (the "Lodge"), and, in fact, Chippewa Retreat and Caretakers agree and understand that access to the Lodge amenities is to be provided only to Lodge Fitness Facility members only through whatever rental management agreement may be entered into between Chippewa Retreat, individual condominium owners and CareTakers. It is further understood that Caretakers will not provide any other maintenance, housekeeping, or other services to individual owners other than pursuant to separate agreements with such owners.
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III BANK ACCOUNTS AND ACCOUNTING MATTERS 1. Caretakers shall maintain separate and independent bank accounts for Chippewa Retreat throughout the term of this Agreement. When possible, funds shall be kept in an interest-bearing account for the benefit of Chippewa Retreat. 2. All Caretakers employees and agents who handle Chippewa Retreat funds shall be covered by an employee dishonesty policy in an amount of not less than Twenty-Five Thousand Dollars ($25,000.00), unless Chippewa Retreat authorizes in writing a lesser limit. 3. Caretakers shall render to Chippewa Retreat’s Treasurer a monthly statement of receipts and disbursements, income statement and balance sheet, and all other records reasonably requested by Chippewa Retreat. 4. Within thirty (30) days after the end of each calendar year, Caretakers shall submit to Chippewa Retreat Treasurer completed financial records relating to Chippewa Retreat for the preceding year. 5. Caretakers shall have prepared any federal, state and local tax return required to be filed for Chippewa Retreat at Chippewa Retreat's expense by an independent CPA. 6. Caretakers shall cooperate with any independent certified public accountant or auditor selected, retained and paid for by Chippewa Retreat to examine applicable records. IV
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COMPENSATION AND EXPENSES 1. For the period beginning January 1, 2005 and ending December 31, 2005, Caretakers shall be paid, in 4 equal quarterly installments, an annual property management fee equal to $1,4000.00. The fee for any partial years shall be prorated. The amount of the fee will increase annually during the term of this Agreement on each January 1, commencing January 1, 2006, at the same rate of increases in the Consumer Price Index-U.S. City Average, All Items (198284 = 100). 2. Caretakers shall provide without charge its overhead costs such as clerical and office supplies, rent for its office, telephone, photocopies, and postage. 3. CareTakers has agreed to lease, operate and manage two (2) of the common elements of the condominium for the benefit of the owners; namely the Pool & Tennis Complex and the Boathouse. a. CareTakers will receive all income and be responsible for all expenses associated with the operation and management of these common elements. b. CareTakers will set the days and hours of operation of these common elements. c. Owners will use these common elements free of charge. d. If owner elects to rent their condominium through the Rental Management Agreement, guests of Chippewa Retreat lodging at the condominiums under the program will use these common elements free of charge.
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e. CareTakers’ lease with Chippewa Retreat is made part of this Property Management Agreement by attachment. V MISCELLANEOUS 1. Should any dispute arise as to the interpretation of any clause in the Agreement, it shall be decided by arbitration as follows: a. Chippewa Retreat and Caretakers shall each select an arbitrator, and those arbitrators shall select a third arbitrator. b. The issues in dispute shall be committed to writing, and a copy shall be furnished to the arbitrators. c. The fees and expenses of the arbitrators shall be borne by the parties equally. d. The parties agree that the findings of a majority of the three arbitrators shall be conclusive on them, their heirs, successors and assigns. e. The arbitration shall take place in Vilas or Oneida Counties, Wisconsin or such other place as the parties mutually agree. 2. This Agreement sets forth the entire understanding of the parties and shall not be changed or terminated orally. 3. Whenever in this Agreement provision is made for the exercise of any discretion by, or the approval or consent of any party, then such discretion, approval or consent shall not be unreasonably exercised, withheld or delayed.
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4. Whenever the consent, approval or direction of Chippewa Retreat is required herein, Caretakers shall obtain same from the President of Chippewa Retreat or from the President's designee. 5. This Agreement is made and delivered in the state of Wisconsin and shall be construed and enforced in accordance with the laws thereof. The terms hereof shall be binding upon and inure to the benefit of the parties hereto and to their respective successors and assigns. 6. Upon termination of this Agreement, all parties shall cooperate to insure an orderly transition to new management. Caretakers shall promptly complete and deliver all accounts and records to Chippewa Retreat, including but not limited to financial statements, owners’ lists, files and keys. Chippewa Retreat shall furnish Caretakers with a copy of the Declaration of the Condominium and of its Articles of Incorporation and Bylaws of Chippewa Retreat, together with any amendment, changes and deletions which members shall from time to time approve at the time at which they shall be come effective.IN WITNESS WHEREOF, the parties have executed this Agreement.
Date: January 1, 2005
Chippewa Retreat Resort Condominium & Spa Association, Inc.
By: ________________________________ John J. McGraw, President
Date: January 1, 2005
Caretakers, LLC
By: ________________________________
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John J. McGraw, Member
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CHIPPEWA RETREAT RESORT CONDOMINIUM & SPA ASSOCIATION, INC. 2005 BUDGET Income From Owners(4) Capital Repairs Common Utility Repairs Common Garbage Common Electric Common Element Insurance Caretakers, LLC Management Fee(5)(6) $24,000.00(1) $ -200.00 -1,000.00 -1,200.00 -600.00 -7,000.00(2) -14,000.00(3)
Total Notes:
$0.00
1. Condominium Association Dues a. $250.00 Monthly Residential (Residential Condominiums 1-6) b. $500.00 Monthly For The Lodge (Commercial Condominium 7) 2. Insurance estimated @ $1,000.00/Unit for 7 Units (Building Shell Only) 3. Management Fee To Cover All Grounds Maintenance and Office Management Expenses. 4. Owners Expenses Billed Direct a. Natural Gas (WE Energies) b. Electric (Excel Energy) c. Satellite TV (CareTakers, LLC) d. Monthly Phone Fee $30.00 Per Unit (CareTakers, LLC) e. Real Estate Taxes (Manitowish Waters/Vilas County) 5. CareTakers, LLC Owns Condominium 7 Which Is A Commercial Condominium. 6. CareTakers, LLC Leases The Boathouse And The Pool & Tennis Complex for $1.00/Year. CareTakers, LLC Is Responsible For All Income And Expenses Resulting From The Operation Of These Common Elements.
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Chippewa Retreat Resort Condominium & Spa Association, Inc. COMMERCIAL LEASE AGREEMENT THIS AGREEMENT made, entered into and executed this the 1st day of January, 2005, by and between Chippewa Retreat Resort Condominium & Spa Association, Inc. (hereinafter "Lessor"), and CareTakers, LLC (hereinafter "Lessee"). Lessor and Lessee contract and agree as follows: 1. Lessor hereby leases unto Lessee the following land and any improvements thereon (hereinafter "the leased property"): [address] 35 Deer Park Road [improvements] The Boathouse, The Outdoor Pool & Tennis Complex.
2.
The term of this lease shall be for a primary term of five (5) years, commencing on January 1, 2005, and expiring at midnight on December 31, 2009, unless extended as provided for herein. This lease can be extended at the end of the primary term for an additional term of five (5) years by Lessee giving Lessor notice of his intent to extend the lease thirty (30) days prior to the expiration of the primary term.
3.
During the primary term, Lessee shall pay to Lessor, as rental, the sum of One Dollar ($1.00) per year, in advance, on or before January 1st of each year. During any extended term, Lessee shall pay to Lessor, as rental, the sum of One Dollar ($1.00) per year, in advance, on or before January 1st of each year.
4. The leased property may be used for the following purposes and for no other purposes: Retail Sales to and Entertainment of Condominium Owners, Resort Guests and Members of the Public under a Valid “Membership” or those from the Public holding a Valid “Day Pass”; “Valid” at the sole discretion of CareTakers.
5. Indemnity: Lessor and Lessee shall indemnify and save harmless the other from any and all losses, fines, suits, damages, expenses, claims, demands and actions of any kind resulting from their negligence, breach, or violation or non-performance of any condition hereof.
6. Insurance: Lessee shall, during the entire term of the Lease keep in full force and effect a policy of public liability insurance with respect to the Property and the business operated by Lessee on the Property and which the limits of general liability shall be in the amount of One Million Dollars ($1,000,000.00) combined single limit, naming Lessor as additional insured. Such coverage shall include a broad form
general liability endorsement. The policy shall contain a clause that the Lessee will not cancel or change the insurance without first giving the Lessor ten (10) days prior written notice.
7. Lessor shall during the term hereof, at it's sole expense, provide and keep in force insurance on the buildings associated with this lease against loss or damage by fire and extended coverage, in an amount equal to one hundred percent (100%) of the full insurable value thereof, which insurance shall be placed with an insurance company or companies approved by Lessor and licensed to do business in the state of Wisconsin. The term "full insurable value" shall mean actual replacement value of the buildings (exclusive of costs of excavation, foundations and footings below ground level). The insurance required under this paragraph shall be carried in the name of the Lessor and Lessee and shall provide that any proceeds thereunder shall be paid to Lessor and Lessee and any applicable mortgage holder, according to their respective interests.
8. Duplicate originals or certificates of insurance of the policies provided shall be furnished by Lessor and Lessee to each other and shall contain an agreement by the insurer that such policy or policies shall not be canceled without at least ten (10) days prior notice to the Lessor and Lessee.
9. Lessee shall pay all taxes assessed against all personal property located on the premises and shall also pay all privilege, excise and other taxes duly assessed. Lessee shall pay said taxes when due so as to prevent the assessment of any late fees or penalties.
10. Lessee shall pay for all water, electricity, and other utilities used on the premises.
11. Lessee shall pay all wages for hourly and salaried workers needed to operate these areas for the benefit of the owners, guests of the resort and the public paying to use these facilities.
12. Lessor shall be solely responsible for maintaining the roof, foundation and exterior of the buildings and all parking areas in good repair for their intended use. All repairs, maintenance, replacement or reconstruction to the interior of the portion of the building leased by Lessee, including but not limited to replacement of glass doors and windows and repair of the associated plumbing, are to be made by Lessor at Lessor's expense. If Lessor fails to make such repairs or replacements promptly or within
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fifteen (15) days of occurrence, Lessee may, at its option, make such repairs or replacements and Lessor shall repay the costs thereof to Lessee on demand.
13. Lessee will keep the leased property in a clean and wholesome condition and will comply at all times with all lawful health and police regulations.
14. Lessee shall promptly comply with all of the ordinances of the Town of Manitowish Waters, Vilas County, or of any other governmental body applicable for said premises and to all ordinances and requirements enforced by the state board of health, sanitary, fire or police departments of the Town of Manitowish Waters for the correction, prevention and abatement of nuisances in and about or connected with the Property because of Lessee's use thereof during the term of this Agreement, all at Lessee's expense. Lessee shall provide for the removal of its own trash, waste paper, boxes and cartons and shall not permit any accumulation of such materials. Lessee shall not engage in any act which shall constitute a nuisance.
15. If Lessee shall make default in the payment of the rent, or any part thereof or any other sums due under the terms hereof, when due as herein provided, or in any of the other covenants, agreements, conditions or undertakings herein contained, and such default shall continue for thirty days after notice thereof in writing to Lessee, or if (a) any proceeding under the bankruptcy act of the United States is begun by or against the Lessee, and an order of adjudication, or order approving the petition, be entered in such proceedings, or (b) a receiver or trustee is appointed for substantially all of the Lessee's business or assets, or (c) if Lessee shall make an assignment for the benefit of creditors, or (d) if Lessee shall vacate or abandon the leased property, then, and in any such event, it shall be lawful for the Lessor, at his election, to declare the term hereof ended and to re-enter the leased property, and to repossess and enjoy the said premises and any buildings and improvements situated thereon without such a reentry and repossession working a forfeiture of the rents to be paid and the covenants to be performed by the Lessee during the full term of this agreement. If any default shall be made in any covenant, agreement, condition, or undertaking which cannot with due diligence be cured within a period of 30 days, and if notice thereof in writing shall have been given to the Lessee, and if the Lessee, prior to the expiration of 30 days from and after the giving of such notice, shall commence to satisfy the cause of such default and shall proceed diligently and with reasonable dispatch to take all steps and do all work required to cure such default, then the Lessor shall not have the right to declare said term ended by reason of such default; provided, however, that the curing of any default in such manner shall not be construed to limit or restrict the right of Lessor to declare the said term ended and enforce all of their rights and remedies hereunder for any other default not so cured.
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16. The foregoing provision for the termination of this lease for any default in any of its covenants shall not operate to exclude or suspend any other remedy of the Lessor for breach of any of said covenants, or for the recovery of said rent for the full term, and in the event of the termination or default in any of the terms of this lease as aforesaid.
17. Lessee shall permit Lessor and his agents to enter the Property at all reasonable times for any of the following purposes to inspect the same: (i) to maintain the building in which the said premises are located, (ii) to make repairs to the Property as the Lessor is obligated or may elect to make, and (iii) to post notices of non-responsibility for alterations or additions or repairs.
18. If Property, including improvements thereon, are injured by fire or other casualty, Lessee shall have the exclusive right and option to either terminate this Agreement or reconstruct and/or repair the said damaged improvements and continue this Lease under its terms and conditions as if no such casualty occurred by giving written notice to Lessor of Lessee's intention to so continue this Lease within thirty (30) days after the date of said damage or casualty. In the event that Lessee so elects to continue this Lease, any insurance proceeds payable as a result of said fire or casualty shall be first applied to pay the reconstruction or repair of said improvements, and any balance of such insurance proceeds after payment of said reconstruction or repair shall be paid to whoever owns the insurance policy under which payment is made.
19. If, during the term of this Agreement, the Property shall be taken or condemned, either in whole or part, by competent authorities for public or quasi-public use, Lessee shall have the option to terminate this Agreement as of the date of taking. If Lessee elects not to terminate this Agreement, then this Agreement shall continue in full force and effect.
20. It is understood and agreed that the relationship of the parties hereto is strictly that of Lessor and Lessee and that the Lessor has no ownership in the Lessee's enterprise and the Agreement shall not be construed as a joint venture or partnership. The Lessee is not and shall not be deemed to be an agent or representative of the Lessor.
21. All covenants, conditions and agreements and undertakings contained in this Agreement shall extend to and be binding on the respective heirs, successors and assigns of the respective parties hereto the same as if they were in every case named and expressed.
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22. It is further understood and agreed by and between the Lessor and Lessee that, on account of breach or default by either party of any of their obligations hereunder, it shall become necessary for the other party to employ and/or consult with an attorney to give advice, or to enforce or demand any of either party's rights or remedies hereunder, then, and in any such event, the defaulting or breaching party shall pay all attorney fees, court costs and other expenses occasioned by such default(s) or breach(es).
23. Written notice to Lessee, all rent checks and all notices from Lessee to Lessor shall be served or sent to: 37A Deer Park Road, Manitowish Waters, WI 54545.
24. Until further written notice to Lessor, all notices from Lessor to Lessee shall be served or sent to Lessee at the following address: 37A Deer Park Road, Manitowish Waters, WI 54545.
25. All notices to be given under this Agreement shall be in writing and shall be served personally or sent by United States certified or registered mail.
26. This Agreement contains all of the agreements and conditions made between the parties hereto and may not be modified orally or in any other manner other than by agreement in writing signed by all parties hereto or their respective successors in interest. 27. If any section, paragraph, sentence or portion of this Agreement or the application thereof to any party or circumstance shall, to any extent, be or become invalid or illegal, such provision is and shall be null and void, but, to the extent that said null and void provisions do not materially change the overall agreement and intent of this entire agreement, the remainder of this Agreement shall not be affected thereby and each remaining provision of this Agreement shall be valid and enforceable to the fullest extent provided by law.This Agreement shall be governed in accordance with the laws of the State of Wisconsin.
28. Lessee shall have the right to make such alterations and improvements to the Property as it deems necessary or desirable upon giving written notice of same to Lessor. Such alterations and improvements shall comply with all applicable construction laws and regulations and shall conform generally with the existing improvements on the Property. The Lessee shall keep the Property free from any and all liens arising out of the work performed or materials furnished in making such improvements.
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29. Lessee shall have the right to charge for access, services, food, beverages and other business related retail sales and services which Lessee conducts on or at the leased property and improvements. Lessee shall have the right to keep 100% of the income from these retail sales and services: a. To generate income to offset the expenses associated with operation of these leased property and improvements while conducting retail sales and services. b. To generate a profit from its efforts in offering these retail sales and services to Condominium Owners, Guests of Chippewa Retreat Resort and Members of the public frequenting these leased property and improvements through the membership process.
* * * WITNESS the signatures of the parties, this the 1st day of January, 2005.
LESSOR: LESSEE:
By: John J. McGraw Title: President
By: John J. McGraw Title: President
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