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1. DEFINED TERMS. <br />The following terms when used in this Agreement shall have the meanings set forth <br />below: <br />"City Consideration" shall mean the amounts to be paid by City to IPC for IPC's <br />conduct of the Required Operations during the Operating Period. The City Consideration paid <br />for the Operating Period shall be an amount equal to (i) fifty percent (50%) of up to $1,400,000 <br />of Sales Tax generated in the City from the Required Operations during each Contract Year, plus <br />(ii) seventy percent (70%) of any Sales Tax exceeding $1,400,000 generated from the Required <br />Operations within the City during that Contract Year. <br />"Commencement Date" shall mean the date on which IPC relocates its headquarters for <br />its California business and southern California sales office to the City of Santa Ana and <br />commences operations in the City, as set forth in a written notice from IPC to the City. The City <br />and IPC acknowledge that IPC may not commence operations in the City of Santa Ana until IPC <br />leases space, completes construction of tenant improvements, and thereafter relocates sales staff <br />and initiates sales activities. The parties anticipate that such operations may not commence until <br />approximately January 1, 2014. <br />"Contract Year" shall mean the period from January 1 to December 31 during each year <br />of the Operating Period. For the purposes of this Agreement, the first Contract Year ends on <br />December 31, 2014. <br />"Covered Parties" shall mean the City and its elected and appointed boards, members, <br />officials, officers, agents, representatives, employees and volunteers. <br />"Effective Date" shall mean the date first written on page 1 of this Agreement. <br />"Operating Period" shall mean the period commencing as of the Commencement Date, <br />and continuing until and expiring on December 31, 2028; provided, however, that IPC may <br />terminate this Agreement for any reason (or no reason) at any time upon one hundred eighty <br />(180) days' written notice to the City. <br />"Petroleum Business" refers to the operation by IPC in the City of a sales office selling <br />petroleum products and products ancillary to the sale of refined petroleum that generate Sales <br />Tax revenue. <br />"Quarter" shall mean any three (3) month period commencing on January 1, 2013, and <br />thereafter on April 1, July 1 and October 1 during the Operating Period. If the quarterly or other <br />periods used by the State Board of Equalization in calculating or making Sales Tax payments to <br />City differ from City's fiscal quarters described above, the parties shall modify the timing (but <br />not the amount) of the City Consideration payments to coincide with the periods used by the <br />State Board of Equalization. <br />"Required Operations" shall collectively refer to the following on and with respect to <br />IPC conducting its Petroleum Business in the City: (i) IPC retaining and continuing to own or <br />lease sufficient facilities in the City to allow the Petroleum Business to be conducted; (ii) IPC's <br />111030876-0001 <br />5940427.2 a0740 11 25K-6