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3.3 New Contract If (i) the County intends, upon termination or expiration of the Management Term or Renewal Term to continue to provide management at the Facility through a private provider and (ii) this Agreement has not been terminated upon a default by SMG, then the County will during the final year of the Management Term (unless the County exercises its option to renew under Section 3.2) or Renewal Term, as the case may be, negotiate and discuss in good faith a new contract or arrangement with SMG for the provision of such services following the comple- tion of such term. The obligation to negotiate with SMG is not intended to guarantee any con- tract rights for a future contract with SMG or any specific terms of a new contract. 4. SMG's Compensation. 4.1 Fixed Fee As base compensation to SMG for providing the services herein specified during the Management Term, the County shall pay SMG during the Management Term a periodic fixed fee of $100,312 per Fiscal Year ( "Fixed Fee "), which amount shall be adjusted upward on the first day of each Fiscal Year, commencing with the Fiscal Year ending June 30, 2015, by the percentage change in the Consumer Price Index -- All Urban Consumers (CPI -U) -- U.S. City Average -- All Items, during the one year period ending in June immediately preceding such Fis- cal Year, as published by the Bureau of Labor Statistics of the U.S. Department of Labor, or of any revised or successor index hereafter published by the Bureau of Labor Statistics or other agency of the United States Government succeeding to its functions ("CPI"). The foregoing an- nual fixed compensation shall be payable in equal monthly installments due on or before the last day of each month during such Fiscal Year, and SMG, provided it is not in default (as described in Section 12.1) hereunder, shall be entitled to draw such amounts from the account described in Section 5.6. In the event of a Renewal Term, the parties shall mutually agree upon the amount, terms and conditions of SMG's remuneration under this Section 4 for its performance hereund- er. 4.2 Incentive Fee (a) Amount SMG shall be entitled to an annual incentive fee with respect to each Fiscal Year during the Management Term which shall be equal to the amount calculated in accordance with (i) below; provided however that in no event shall the total incentive fees for any Fiscal Year exceed 100% of the periodic fixed fee payable pursuant to Section 4.1 for such Fiscal Year, and; provided further, that SMG will not be eligible in any Fiscal Year for the Quan- titative Incentive Fee (as defined below) unless the County approved annual budget of net oper- ating income is met or exceeded for such Fiscal Year: (i) Quantitative Incentive Fee SMG shall be entitled to an annual quantitative Incentive Fee ( "Quantitative Incentive Fee ") with respect to each Fiscal Year during the Management Term equal to fifteen percent (15 %) of the excess Operating Revenue over the Operating Revenue Benchmark; provided, however, that the Quantita- pdfconvert. 9450.1. cabarms_agreement_2015. doc 11 F -1 Attachment number 1 Page 91