LA 1619: MANAGEMENT AGREEMENT WITH CAPPED INCENTIVE COMPENSATION FOR PORTFOLIO OF SPECIALTY SHOPPING CENTERS OWNED BY MULTIPLE OWNERS $99.95
SHOPPING CENTER PORTFOLIO MANAGEMENT AGREEMENT
THIS SHOPPING CENTER MANAGEMENT AGREEMENT (the "Agreement") is entered into and made effective as of __________________, 20__ (the "Effective Date") between the entities set forth on Exhibit A (each an "Owner"; collectively referred to herein as "Owners"), and RETAIL PROPERTY MANAGEMENT, a ______________ ("Property Manager") having its principal office in ____________, ____________ (such office herein referred to sometimes as the "Corporate Office"). Owners and Property Manager are sometimes referred to in this Agreement collectively as the "Parties" and individually as a "Party".
A. Owners are the owners or lessees of those certain retail shopping centers listed on Exhibit B attached hereto together with the building and other improvements located thereon (each a "Center"; collectively referred to herein as the "Centers"). The allocated gross leasable area for each Center is set forth on Exhibit B, with an aggregate of ________________ square feet of gross leasable area for all of the Centers ("GLA").
B. Owners and Property Manager wish to enter into this Agreement pursuant to which Property Manager will manage the Centers upon the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. APPOINTMENT AND TERM. Owners hereby grant to Property Manager, as an independent contractor, and Property Manager accepts, the sole and exclusive right to manage, operate and lease the Centers subject to the terms and provisions of this Agreement.
1.1 Term. The term of this Agreement shall begin on ____________, 20__ (the
2.1 Management Leasing Fee. As compensation for services to be provided by Property Manager pursuant to this Agreement ("Compensation"), Owners shall pay Property Manager:
(a) Management and Leasing Fee. An annual "Management and Leasing Fee" in an amount equal to the product of (x) _________ Dollars ($_____) and (y) the GLA, as the same may be reduced pursuant to the terms of this Agreement; plus
(b) Incentive Fee.
(i) An annual management "Incentive Fee" in an amount equal to _____% of the amount by which Net Operating Income (as defined herein) for the Centers in any calendar year exceeds the Net Operating Income for the twelve calendar months ending on ________, 20__ (the "Base Period"); provided however, the Net Operating Income for the Base Period shall be adjusted by increasing or decreasing the management fee payable during the Base Period to an amount equal to $_______ per square foot of GLA); and provided, further, the annual Incentive Fee shall in no event exceed $__________ (the "NOI Cap") or such reduced amount in the event one or more Centers are not subject to this Agreement as more particularly described in Section 2.1(c). If the Commencement Date occurs on a date other than January 1 or this Agreement terminates on a date other than December 31, the Incentive Fee for either the first year or the last year of this Agreement or both, to the extent applicable, shall be prorated and equal to _____% of the amount by which Net Operating Income for that portion of the calendar year exceeds Net Operating Income for the same portion of the calendar year in the Base Period but not to exceed a prorated portion of the NOI Cap. A calculation of the Net Operating Income for the Base Period, with the management fee adjustment described above is attached hereto as Exhibit C.
(ii) For purposes of this Agreement "Net Operating Income" shall mean for any period, the Operating Revenues (as defined below) for such period less Operating Expenses (as defined below) for such period.
"Operating Revenues" shall mean all operating revenues of the Centers calculated on the accrual basis in accordance with generally accepted accounting principles ("GAAP") other than straight lining of rents including, payments from a tenant for the early termination of a tenant lease, business interruption insurance proceeds, vending income but excluding (i) extraordinary items of income as defined under GAAP applied on a consistent basis, (ii) sales, excise or any similar taxes collected, (iii) proceeds of sales involving dispositions of capital assets, furniture and equipment or operating equipment, (iv) proceeds from any financing, (v) any capital contributions or loans made by Owner or the equity holders in Owner, (vi) security deposits delivered by tenants (unless applied to rental income upon termination of a lease), (vii) rents paid for more than one month in advance, and (viii) proceeds from condemnation or sale in lieu of or under threat of condemnation, proceeds of insurance (other than business interruption insurance proceeds).
"Operating Expenses" shall mean all costs and expenses of the Centers calculated on an accrual basis in accordance with GAAP, including, without limitation, the Management and Leasing Fee payable hereunder, real estate taxes, insurance premiums and employee costs but excluding (i) depreciation and amortization, (ii) income taxes, (iii) interest expense and (iv) other items which would be capitalized under GAAP, such as, tenant allowances and property improvements.
(c) Reductions in Management and Leasing Fee and Incentive Fee. In the event one or more Centers are no longer subject to this Agreement,
(i) the NOI Cap shall be reduced by an amount equal to the product of (x) the NOI Cap and (y) the percentage for such Center as set forth in the column entitled "Base Year NOI Percentage" on Exhibit B attached hereto;
(ii) the total GLA shall be reduced by an amount equal to the allocated GLA for each Center no longer subject to this Agreement as set forth on the column entitled "Allocated GLA" on Exhibit B attached hereto; and
(iii) the Net Operating Income for any such Center shall be excluded from the calculation of the Base Period Net Operating Income and all subsequent years for purposes of determining the Incentive Fee.
End of Excerpt
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