Sizeler Property Investors Inc 10-K Annual Report

Management Agreement

The Company has a management agreement (the "Management Agreement") with Sizeler Real Estate Management Co., Inc. (the "Management Company"). The Management Company is a wholly-owned subsidiary of Sizeler Realty Co., Inc. ("Sizeler"), which is owned by Sidney W. Lassen and members of the families of Mr. Lassen and his wife. The executive officers of the Company also serve as executive officers of Sizeler (see "Information Concerning Directors" and "Executive Officers").

Under the Management Agreement, which was entered into when the Company was organized in October 1986, the Management Company performs leasing and management services with respect to the operation of all of the Company's properties, including collecting rents, making repairs, cleaning and maintenance, etc. Upon request of the Company, the Management Company performs or causes to be performed advertising, promotion, market research and management information and data processing services (collectively, "Additional Services"), as well as development services in the event the Company desires to construct new projects or renovate or expand existing projects.

The fee for managing the properties is of gross revenues, including minimum and percentage rents, charges for utilities, heating and cooling charges, insurance contributions and real estate taxes, which is payable monthly as rents are received. As compensation for its leasing services, the Management Company receives a leasing fee equal to of the total fixed minimum rental payable during the term of the lease with respect to new leases and expansions of existing leases, and of the total fixed minimum rental payable during the term of the lease on renewal leases, said amount being payable 50% upon execution of the lease document and 50% upon commencement of the new or extended lease term.

In addition to the leasing fee, the Management Company receives and per square foot of gross leasable area incident to new and renewal leases, respectively, to defray in-house legal expenses where such leases are negotiated and drafted by the Management Company's in-house legal staff ("Lease Negotiation Costs").

The Management Agreement also provides for an allocation of the expenses ("Common Administration Costs") associated with certain common administration services between the Company and the Management Company based upon actual costs incurred and extent of utilization; Common Administration Costs include postage, telephone, data processing and photocopying expenses and the cost of office supplies and equipment from third parties.

The fee for Additional Services is of the Management Company's direct costs of providing such services, including salaries of Management Company employees performing such services; in addition, the Management Company is entitled to be reimbursed for all reasonable out-of-pocket expenses incurred in connection with any Additional Services. For development services, the Management Company receives a fee equal to of all hard costs (excluding land cost) associated with development and major renovations (projects whose direct costs exceed ).

In the event the Company acquires additional investment property through the efforts of the Management Company, the Management Company will be entitled to an origination fee equal to of the costs of the property so acquired.

In the event that total operating expenses (as defined) of the Company in any fiscal year exceed the greater of (a) of its average invested assets (as defined) or (b) of its net income (as defined) for that year, the Management Agreement obligates the Management Company to reimburse (to the extent of payments it has received for management services only) the Company the amount by which the aggregate annual operating expenses incurred by the Company exceed the limitation. (The foregoing limitations are collectively referred to as the "Fee Limitations.")

For the year ended December 31, , the Management Company was paid a total of under the Management Agreement, which included for the management fee, for the origination fee, for the leasing fee, for the Lease Negotiation Costs and for Common Administration Costs. The management fee was not subject to offset by reason of the Fee Limitations.

The Company's By-Laws require that the directors who are not affiliated with the Management Company or Sizeler and are not employees of the Company (the "Unaffiliated Directors") determine at least annually that the compensation the Company contracts to pay for management services is reasonable in relation to the nature and quality of services performed and that such compensation is within the limits prescribed in the Management Agreement. The determination is to be based upon such factors as the Unaffiliated Directors deem appropriate, including the size of the fee in relation to the size, composition and profitability of the Company's real property interests under management, the rates charged to other real estate investment trusts ("REITS") and to investors other than REITs by firms performing similar services, the amount of additional revenues realized by such firm and its affiliates for other services performed for the Company, the quality and extent of services furnished by the management firm, the performance of the Company's properties under management (including income, conservation or appreciation of capital) and the quality of those properties. The Unaffiliated Directors have approved the compensation paid to the Management Company for the year ended December 31, 1991 and the formula for determining the compensation payable for the current fiscal year.

The Management Agreement is renewable annually by the parties, subject to a determination by a majority of the Unaffiliated Directors that the Management Company's performance has been satisfactory, and subject to the termination rights of the parties. The Management Agreement may be terminated for any reason by either party upon written notice.

Sizeler Property Investors, Inc 4/1/92