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CS"MCD SMG PROPOSED BUSINESS TERMS FOR AMENDMENT TO MANAGEMENT CONTRACT AT THE CABARRUS ARENA & EVENTS CENTER SMG is willing to structure an amendment to our current agreement that will provide catering and concession services for the Cabarrus Arena & Events Center. Scope of Service: Food and Beverage Services SMG will operate all food and beverage within each of the facilities. All food and beverage income will be included in the operational income of the Cabarrus Arena & Events Center. Term- same as current management agreement Information Current Scenario . Prior year food and beverage net income to facility was ($169,860) . Current agreement is with a third party contractor . The management of all revenue generation and expense allocation are the responsibility of the third pariy contractor. The financial loss does not impact the third party contractor's fee. SMG has determined that an in-house food and beveraGe oDeratlon will benefit the facllltv . The in-house operation will record all revenue and expenses through the financial records of the facility . SMG will be paid an incentive fee based on the following: o SMG will receive 5% of gross revenue from food and beverage services . SMG can earn additional Incentive subject to profit benchmarks . SMG will be entitled to an additional 5% fee if either of the following benchmarks are achieved; a net income to the faCility from food and beverage of $0 (break- even) or a net profit margin of 0% (including F&B fee) . Should the food and beverage operation achieve profitability, the Cabarrus Arena & Events Center will be entitled to the first $50K of profit. SMG would receive the next $50K of profit. All remaining profit would be Cabarrus Arena & Events Center's . All of the terms are subject to approval and verification of benchmarks e,. ~ '0