SSF, INC. DBA VOLVO OF ORANGE COUNTY - 2015

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VOLVO OBLIGATIONS. 2.1 Operating Agreement; Continuous Operation. Volvo hereby covenants and agrees to continuously conduct or cause to be conducted Required Operations within the City during the entire Operating Period. Such continuous operations shall be subject to the force majeure provisions of Section 5.11 hereof. 2.2 Maximization of Sales Tax. At all times during the Operating Period, Volvo shall designate its dealership and sales office in the City as the point of sale for sales and use tax purposes in all automotive retail sales and service operations that originate from within the City. 2.3 Payment of Taxes. Volvo shall pay or cause to be paid any and all taxes applicable to or arising out of Volvo's lease, operation and /or use of its dealership and sales office in the City, including, without limitation, all taxes attributable to sales occurring at such office, except that Volvo retains its right to protest and contest County of Orange decisions related to the value of its interest in any property or leasehold. Volvo shall make or cause to be made timely sales and use tax payments to the State Board of Equalization, except that Volvo retains its right to protest and contest State Board of Equalization assessments or decisions that Volvo believes to be erroneous. 2.4 Compliance with Laws. Subject to Volvo's right to contest same, Volvo shall conduct or cause to be conducted all activities within the City and shall perform its obligations under this Agreement in conformity with all applicable federal, state, and local laws, ordinances, and regulations. Nothing in this Agreement is a representation or warranty by City that any tenant improvement or other construction work performed by Volvo within the City on or after the date of this Agreement is not a public work as defined in Labor Code Sections 1720, et seq., including but not limited to Sections 1771 and 1781. 3. CITY CONSIDERATION PAYMENTS. 3.1 Payment of City Consideration to Volvo. 3.1.1 Calculation of City Consideration. In consideration for Volvo's undertakings pursuant to this Agreement, City shall make payments of City Consideration to Volvo after the end of each Contract Year, as follows: 3.1.1.1 Subject to Paragraph 3.1.1.2 below, for Required Operations conducted by Volvo in the Operating Period, City shall pay Volvo the City Consideration based on the actual net amount of Sales Tax directly received by the City from the State Board of Equalization during that Contract Year. Subject to the terms of Section 3.1.2, the payment of City Consideration for each Contract Year shall be made in a single lump sum payment within one hundred and twenty (120) days following the end of that Contract Year. 3.1.1.2 City Consideration shall be payable from any source of funds legally available to City. In this regard, it is understood and agreed that the Sales Tax from Volvo's Required Operations in the City is being used merely as a measure of the amount of City Consideration payments that are periodically owed by City to Volvo, and that City does not and legally cannot pledge any portion of that Sales Tax to Volvo.