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8.03 Fixed Management Fee. <br />8.03.1 :annual Fixed Management Fee. The annual fixed management fee to be <br />paid to OPERATOR ("Fixed Management Fee") shall represent 50% of the Total <br />Management Fee Attainable as follows: <br />Total Management <br />Operating Year 50% Fixed Fee <br />Fee Attainable <br />July 1, 2015 to June 30, 2016 $204,000 $102,000 <br />On July 1, 2016 and on each July I" thereafter the amounts indicated above, for the ensuing <br />year, shall be increased in the same proportion as changes in the Consumer Price Index, All <br />Urban Consumers, San Francisco -Oakland -San Jose area; base years 1982-1984 = 100 <br />published by the U.S. Dept. of Labor, ("CPI") shall have occurred since July 1, 2015. <br />8.03.2 Payment of Fixed Management Fee. The Fixed Management Fee shall be <br />paid in equal monthly installments on the last day of each month. <br />8.04 Incentive Management Fee. <br />8.04.1 Incentive Management Fee. In addition to the Fixed Management Fee, <br />CITY shall pay OPERATOR an incentive fee of up to 50% of the Total Management Fee <br />Attainable (as set forth in Section 8.03.1) (the "Incentive Management Fee"). The intent of <br />the Incentive Management Fee is to provide an incentive to OPERATOR to improve the <br />marketing and quality of the Golf Course, thereby increasing the number of rounds of golf <br />and Gross Revenues. CITY shall pay OPERATOR an Incentive Management Fee equal to: <br />(a) fifteen percent (15%) of the difference between the Gross Revenues (excluding food and <br />beverage sales, Pro Shop merchandise sales and lesson fees) and the Base Performance <br />Standard for Golf set forth in Section 8.04.2 if the Base Performance Standard for Golf is <br />met; and (b) fifteen percent (15%) of the difference between the Gross Revenues from both <br />food and beverage sales and Pro Shop merchandise sales and the Base Performance Standard <br />for Merchandise and Food/Beverage set forth in Section 8.04.3 if the Base Performance <br />Standard for Merchandise and Food/Beverage is met. <br />8.04.2 Base Performance Standards for Golf. CITY shall pay OPERATOR that <br />portion of the Incentive Management Fee described in subsection 8.04.1(a) above if the <br />following base performance standard for Gross Revenues excluding food and beverage sales, <br />Pro Shop merchandise sales and lesson fees (the "Base Performance Standard for Golf ') is <br />met or exceeded: <br />Contract Year beginning July 1, 2015 <br />$3,000,000 <br />Contract Year beginning July 1, 2016 <br />$3,050,000 <br />Contract Year beginning July 1, 2017 <br />$3,100,000 <br />Contract Year beginning July 1, 2018 <br />$3,150,000 <br />Contract Year beginning July 1, 2019 <br />$3,200,000 <br />8.04.3 Base Performance Standard for Merchandise and Food/Beverage. CITY <br />shall pay OPERATOR that portion of the Incentive Management Fee described in Section <br />8.04.1(b) if the following base performance standard for revenue generated from food and <br />Page 2 of 5 <br />