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4.5 Blanket Policies. Any insurance policies provided by Manager under this Article may be effected under policies of blanket insurance which cover other properties in addition to the Facility, and in such case an allocable portion of the premiums for such blanket policies of insurance, as established in the approved Annual Plan, shall be charged to the Facility, as an Operating Expense. ARTICLE 4 - MANAGEMENT FEE 5.1 Base Management Fee. In consideration of Manager's services during the Term, Owner shall pay to Manager a "Base Management Fee" equal to One Hundred Fifty Thousand Dollars ($150,000) per year, payable in twelve (12) monthly installments of $12,500. With the first year of this Agreement beginning prior to July 1, the additional months shall be pro -rated at $12,500 per month and paid to Manager in monthly installments. The Base Management Fee shall be paid to Manager in accordance with Section 5.3 of this Agreement. 5.2 Incentive Management Fee. In addition to the Base Management Fee, Owner shall further pay to Manager an "Incentive Management Fee" equal to twenty percent (20%) of the amount by which Net Operating Income for a given Operating Year exceeds $750,000. For purposes of this provision, Net Operating Income shall mean Gross Revenues minus Operating Expenses. 5.3 Payment Schedule. Owner shall pay Manager the Base Management Fee in advance, no later than ten (10) days following the first day of each month during the Term. Owner shall pay the Incentive Management Fee, if any, to Manager within forty-five (45) days following the final calculation of financial results for the Facility for the preceding Operating Year (based on Owner's July 1 — June 30 fiscal year). The Base Management Fee and Incentive Management Fee are sometimes referred to herein as "Fees". ARTICLE 6 - BANK ACCOUNTS; WORKING FUNDS; RECORDS AND REPORTS; REMOVAL OF PROPERTY 6.1 Bank Account. In connection with operation and management of the Facility, the following shall be established, and shall be subject to Owner's audit and inspection: 6.1.1 Owner Account and Operating Account. Owner shall establish a bank account for the Facility at a banking institution or institutions reasonably selected by Owner, such account to be in Owner's name (the "Owner Account"). Manager shall also establish a bank account for the Facility at a banking institution or institutions reasonably approved by Owner, Management Agreement Between June 1, 2020 City of San Leandro and American Golf Corporation Page 16 of 28