Common use of Limitation on Profits and Reserves Clause in Contracts

Limitation on Profits and Reserves. During the period of tax exemption as provided herein, the Urban Renewal Entity shall be subject to a limitation of its profits pursuant to the provisions of N.J.S.A. 40A:20-15. This calculation shall be completed in accordance with the requirements of N.J.S.A. 40A:20-3(c) and this Agreement. The Urban Renewal Entity shall have the right to establish a reserve against vacancies, unpaid rentals, and reasonable contingencies in an amount up to ten percent (10%) of the Annual Gross Revenues of the Urban Renewal Entity for the last full fiscal year preceding the year and may retain such part of the excess Net Profits as is necessary to eliminate a deficiency in that reserve, as provided in N.J.S.A. 40A:20-15.