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FOOD fi BEVERAGE AGREEMEIIT <br />C. No consents or approvals are necessary under any agreement to which SMGFB <br />may be a party or may be boutjd thereby in connection with the execution and delivery of this <br />Agreement by SMGFB. <br />6. COMPENSATION <br />Subject to all of the terms and conditions contained herein, and in consideration of the <br />Services provided by SMGFB hereunder and SMG's grant to SMGFB of the right to provide the <br />Services hereunder, the parties hereto shall be compensated, without setoff, as follows: <br />A. SMG shall pay to SMGFB a base fee of five percent (5%) of the Gross <br />Revenues (the "Base Fee"). Payment of the Base Fee shall be made from Gross Revenues on the <br />twentieth (20`h) day of each month in arrears for the most recently completed month during the Term <br />and any Renewal Term. <br />B. In addition to the Base Fee and only in the event that for any Fiscal Year during <br />the Tenn and any Renewal Term in which the Net Operating Income is zero or positive, SMG shall <br />pay to SMGFB an incentive fee equal to five percent (5%) of Gross Revenue for any such Fiscal Year <br />during the Term and any Renewal Term of this Agreement (the "Incentive F.ee"). Payment under this <br />Section 6B shall be made annually and in accordance with the terms set forth in Section 7 below. <br />C. For purposes of this Agreement, the term "Positive.Net Operating Income" <br />shall mean Net:Op~eratinglncome ]ess;any.IncentiveFeepayable undex Section6(B) above. Positive <br />Net Operating Income for each Fiscal Year during the Tenn and any Renewal Term shall be <br />distributed to the Facility and SMGFB as follows: (i) the first FiftyThousand Dollars ($SQ000) of <br />Positive Net Operating Income shall, be for the account of the Facility, (ii) the.next Fifty Thousand <br />Dollars ($50,000) of Positive.Net:Operating Income_shall be for..the account of SMGFB; and (iii) any <br />Positive Net Operating Income in:exGess. of $100,000shall'be.:for.the account.of the Facility, <br />Payments under this Section 6C shall be made annually and in accordance with the terms set forth in <br />Section 7 below. <br />7. REPORTING,~ACCOUNTING, AND PAYMENT OBLIGATIONS <br />A. SMGFB': shall keep complete and accurate records of all receipts in connection <br />with the Services and shall keep complete and accurate books of account with respect thereof. The <br />County and SMG shall have acoess, during business Hours, to all books and records of SMGFB <br />relating to its Gross Revenue and Operating Expenses. SMGFB will follow its established <br />bookkeeping procedures and will make every effort to endeavor to comply with any County requests <br />relating to the maintenance of records.. The County and SMG shall have. the right,. at any time. and. <br />from time to time, to cause nationally recognized independent auditors selected by the County or SMG <br />to audit all of the books of $M~FB relating to the Services. If any such audit demonstrates that the <br />amount due to the Facility as sat forth in the Annual Statement (defined below in Section 7C) is <br />materially understated or the amount due to SMGFB is materially overstated, SMGFB shall pay to <br />Facility the cost of such audit and shall promptly pay to the Facility that proper amount of the <br />understatement or the overstatement, as the case maybe. <br />4 <br />Copyright 1999 by SMG Food and Beverage, rLLC. All rights resmved. ~ ~ ( 3 <br />B 424244v.2 <br />