Exhibit 10.5

 

EXCLUSIVE GLOBAL SUBCONTRACT AGREEMENT (RELATED PARTY) BY AND
BETWEEN CENTRO NP AND CENTRO SUPER MANAGEMENT JOINT VENTURE 2,
LLC

 

THIS AGREEMENT, made as of this 28th day of March, 2008, and effective as of
April 20, 2007, by and between Centro NP LLC, a Maryland limited liability
company, with offices at 420 Lexington Avenue, New York, New York, 10170
(“Manager”), and Centro Super Management Joint Venture 2, LLC, a Delaware
limited liability company, with offices at 420 Lexington Avenue, New York, New
York, 10170 (hereinafter called “Sub-Manager”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the agreements listed in Schedule A hereto (hereinafter
called the “Related Party Management Agreements”), Manager and/or its
subsidiaries have contracted to act  as manager for certain properties owned by
Manager and its subsidiaries (hereinafter called the “Projects”) with
responsibilities for, among other things, managing, operating, maintaining,
leasing, and servicing such properties on behalf of the owners of the Projects;

 

WHEREAS, Manager desires that Sub-Manager provide the services required to be
provided by Manager under the Related Party Management Agreements; and

 

NOW THEREFORE, in consideration of the mutual promises hereafter contained, and
of the sum of ONE DOLLAR ($1.00), by each to the other in hand paid, the receipt
hereof is hereby acknowledged, the parties hereto, intending to be legally
bound, covenant and agree with each other as following:

 

1.             Employment.

 

Manager hereby employs Sub-Manager as its sole and exclusive agent to perform
the professional and other services described in and required by this Agreement
to be performed by Sub-Manager with respect to the Related Party Management
Agreements, and Sub-Manager undertakes said employment as the exclusive manager
of the Projects and on all other terms, conditions, provisions and
qualifications set forth in this Agreement.

 

Manager hereby constitutes and appoints the Sub-Manager and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full power and authority in the place and stead of Manager
and in the name of Manager or in its own name, from time to time in the
Sub-Manager’s discretion, for the purpose of carrying out the obligations of
Manager under the Related Party Management Agreements and to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish such obligations in the name of and
on behalf of Manager.

 

2.             Services.

 

Sub-Manager shall perform all services required to be performed by Manager
pursuant to the Related Party Management Agreements.

 

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3.             Sub-Manager’s Authority to Contract.

 

Sub-Manager is hereby authorized to enter into contracts relating to the
Projects to the extent the Manager is so permitted under the Related Party
Management Agreements.

 

4.             Term and Termination.

 

The term of this Agreement shall commence on the date hereof (“Commencement
Date”) and shall extend until canceled by Manager as to any specified Projects
(or as to all Projects); provided, however, that once this Agreement is
cancelled as to any individual Project, the entire Agreement is cancelled as to
that specified Project or Projects (i.e., this Agreement may not be terminated
in part as to any specified Project).

 

5.             Compensation.

 

To the extent Manager receives such payment under the Third Party Management
Agreements, Manager shall reimburse Sub-Manager for all direct and indirect
costs and expenses incurred by Sub-Manager in carrying out the duties imposed on
Sub-Manager by the terms of this Agreement, including, without limitation, based
upon a reasonable allocation of such costs made by Sub-Manager, of the cost of
Sub-Manager’s overhead and non-specific costs that otherwise can not be
allocated to the Projects, professional fees (including legal, audit, advisory,
directors’, management executive service, and similar fees) corporate insurance
expense (including, without limitation, directors’ and officers’ insurance) and
other expenses of a similar nature (collectively, “Costs and Expenses”). Subject
in all respects to the Deferral and Subordination of Compensation provision set
forth in Section 6 hereof, such Costs and Expenses shall be payable monthly
based on the costs estimated to be reimbursed by Manager to Sub-Manager over a
twelve (12) month period with a reconciliation done at the end of each calendar
year. Manager agrees that, to the extent permitted under the terms of the Third
Party Management Agreements, it shall submit promptly the expenses of
Sub-Manager in connection with its performance of its obligations hereunder to
the counterparties to the Third Party Management Agreements for reimbursement
thereunder.  The compensation payable to Sub-Manager shall be equal to an annual
fee of five percent (5%) of the Costs and Expenses (the “Management Fee”).

 

6.             Subordination of Compensation.

 

(a)           Notwithstanding anything to the contrary in Section 5 hereof, no
portion of any Management Fee or Leasing Commission shall be due and payable to
Sub-Manager until such time as the Senior Indebtedness is Paid-in-Full (as such
terms are defined below) unless otherwise agreed to in writing by the holders of
the Senior Indebtedness, the obligation of Manager to pay such amounts being
deferred without cost or penalty.

 

(b)           This Agreement and any and all rights, interests and liens
(whether choate or inchoate) owed, claimed or held by Sub-Manager in and to the
Related Party Management Agreements (other than reimbursement of Costs and
Expenses), are and shall be in all respects subordinate and inferior to the
rights, interests and liens created, or to be created, for the benefit of

 

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the lenders under (a) the Amended and Restated Revolving Credit Agreement, dated
July 31, 2007, by and among Centro NP LLC, the lenders party thereto, and Bank
of America, N.A., as agent for the lenders and (b) the Amended and Restated Loan
Agreement, dated August 1, 2007, by and among Super LLC, CPT Manager Limited, as
responsible entity of the Centro Property Trust, and Centro Properties Limited,
the lenders party thereto, and JPMorgan Chase Bank, N.A., as agent for the
lenders (such indebtedness, as the same may be amended, modified, renewed,
restructured or refinanced, being hereinafter collectively referred to as
“Senior Indebtedness”).

 

(c)           Other than for reimbursement of Costs and Expenses, so long as the
terms of the Senior Indebtedness do not permit any such payment (which payment
has not been permitted as of the date hereof), no payment of any kind or
character whatsoever (including cash, securities or other property) shall be
made by or on behalf of Manager or any other person or entity on its behalf with
respect to this Agreement unless and until the Senior Indebtedness has been
Paid-in-Full.  “Paid-in-Full” means, with respect to the Senior Indebtedness,
the payment-in full in cash of all Senior Indebtedness and the termination of
all commitments related thereto.  If any payment of any kind or character
whatsoever in respect of this Agreement shall (despite these subordination
provisions) be made by Manager or any person or entity on its behalf to or for
the benefit of Sub-Manager in violation of the foregoing sentence, such payment
shall be held in trust by Sub-Manager or its recipient for the benefit of, and
shall be paid over or delivered to, the holders of Senior Indebtedness (or their
representatives) as directed by the lenders holding Senior Indebtedness.

 

7.             [INTENTIONALLY OMITTED]

 

8.             Indemnification and Insurance.

 

Except for acts of gross negligence or willful misconduct on the part of
Sub-Manager, Manager shall indemnify Sub-Manager from claims, losses, expenses
and liabilities arising out of damage to property (including loss of use
thereof), or injury to or death of persons (including the Projects and persons
of the parties hereto and their agents, servants, employees and contractors),
arising out of or occasioned by or in connection with the existence, use or
condition of the Projects, and all reasonable costs, fees and attorney’s
expenses in connection therewith.  Except as set forth in the previous sentence,
Manager shall promptly and diligently, at Manager’s expense, defend against any
claim, demand, action or proceeding commenced against Sub-Manager, or against it
and Manager, jointly or severally arising out of or in connection with the
Projects.  The indemnification hereunder shall survive termination of this
Agreement for those circumstances occurring prior to said termination for one
year.

 

Except for acts of gross negligence or willful misconduct on the part of
Manager, Sub-Manager shall indemnify Manager from claims, losses, expenses and
liabilities arising out of damage to property (including loss of use thereof),
or injury to or death of persons (including the Projects and persons of the
parties hereto and their agents, servants, employees and contractors), arising
out of or occasioned by or in connection with the services provided by
Sub-Manager hereunder, and all reasonable costs, fees and attorney’s expenses in
connection therewith.  Except as set forth in the previous sentence, Sub-Manager
shall promptly and diligently, at Sub-Manager’s expense, defend against any
claim, demand, action or proceeding commenced against Manager, or against it and
Sub-Manager, jointly or severally arising out of or in connection with
 Sub-Manager’s

 

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duties under this Agreement.  The indemnification hereunder shall survive
termination of this Agreement for those circumstances occurring prior to said
termination for one year.

 

It is further agreed that each of Sub-Manager and Manager, upon request, will
provide evidence to the other of insurance coverage in the form of Certificates
of Insurance.

 

9.             Notices.

 

All notices by either party to the other hereunder shall be served by certified
or registered mail, postage prepaid or hand carried, addressed to such party at
the address as such party may designate from time to time by written notice in
accordance herewith.

 

10.           Representative.

 

Manager hereby designates Michael Carroll as its authorized representative and
hereby authorizes him to approve (or disapprove, as the case may be) proposals
submitted by Sub-Manager pursuant to this Agreement and to execute in the name
of Manager any and all documents to be executed by Manager to enable Sub-Manager
to carry out its duties hereunder.  In the event of a change as to the
authorized representative, Manager shall within TEN (10) DAYS advise Sub-Manager
of the appointment of the successor or successors by notice in accordance
herewith.

 

11.           Interpretation.

 

The captions set forth herein are for convenience only and shall not govern the
meaning of any terms of this Agreement.  This Agreement sets forth the entire
agreement between the parties, and no amendment or alteration hereof or change
hereto shall be binding unless same shall be in writing and signed by both of
the parties hereto.

 

12.           Additional Provisions.

 

(a)           Sub-Manager shall promptly notify Manager of any damage or
destruction to a Project or the occasion of any event which may lead to claims
being brought against Manager or Sub-Manager.

 

(b)           Sub-Manager shall comply with the obligations of Manager under the
Related Party Management Agreements.

 

(c)           Manager shall designate the accountant and legal counsel whom
Sub-Manager shall use in connection with the performance of its services under
this Agreement.

 

(d)           Manager shall receive credit for all rebates, commissions,
discounts and allowances so that all expenses charged Manager shall be net.

 

(e)           All leases shall limit liability of Manager to the Projects and
contain such other provisions as are required by Manager (or as required under
the Related Party Management Agreements).  Manager shall receive one original
lease for each lease negotiated by Sub-Manager.

 

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(f)            Upon termination of this Agreement, Sub-Manager shall deliver to
Manager any and all leases, accounting records, files and other documents
relating to the Projects.  Sub-Manager shall reasonably cooperate in
transitioning the management of the Projects to a new manager.

 

(g)           Those funds collected from tenants to defray overhead and
administrative expenses or common costs of operation and maintenance are
understood to be funds collected from operation of a Project, or incidental
thereto, and sums received by Sub-Manager pursuant to laws of the Projects, are
therefore to be deposited to the account of the Manager.

 

13.           This Agreement may not be assigned by Sub-Manager without the
written consent of Manager.

 

14.           This Agreement shall inure to the benefit of and be binding upon
the parties hereto and each of their successors, executors, administrators,
heirs and assigns.

 

15.           This Agreement may be executed in several counterparts, each of
which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.

 

 

 

Sub-Manager:

 

 

 

 

 

 

 

Centro Super Management Joint Venture 2, LLC,
Delaware limited liability company

 

 

 

 

By:

/s/ Steven Siegel

 

Name:

Steven Siegel

 

Title:

Executive Vice President

 

 

 

 

 

 

 

Manager:

 

 

 

 

 

 

 

Centro NP LLC, a Delaware limited liability
company

 

 

 

 

 

 

 

By:

/s/ Steven Siegel

 

Name:

Steven Siegel

 

Title:

Executive Vice President

 

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