Covenant Payment Amount. The consideration to be paid to the Owner in exchange for the Covenants and Owner’s performance of its obligations set forth in this Covenant Agreement, and subject to satisfaction of all conditions precedent thereto, shall consist of City’s payment to the Owner for each Computation Quarter during the Eligibility Period that the City receives Sales Tax Revenue, an amount equal to (a) the sum of (1) fifty percent (50%) of the Sales Tax Revenues attributable to annual taxable sales for the calendar year which includes such Computation Quarter, as determined on a cumulative basis for such calendar year, plus (b) an amount equal to fifty percent (50%) of the Sales Tax Revenues attributable to Owner’s self-accrual of use tax which is directly allocated to the City, including, without limitation, in connection with Owner’s purchase of machinery and equipment from outside of California during such Computation Quarter. Any such payment due pursuant to this Section shall not be due unless Owner has completely fulfilled its material obligations under this Covenant Agreement, including, without limitation, the Covenants. Should such condition precedent not be satisfied for each Computation Quarter, then City shall have no obligation under this Section 3.2 to make any Covenant Payments to Owner in such Computation Quarter.
Covenant Payment Amount. In consideration of Owner’s performance of its obligations set forth in this Agreement, and subject to satisfaction of all conditions precedent thereto, the City shall, for each Operating Year during the Eligibility Period that the City receives Local Sales Tax Revenues, pay to Owner: (1) for Operating Years 1-4, an amount equal to the sum of fifty percent (50%) of the Local Sales Tax Revenues received above the annual base amount of One Hundred Thousand Dollars ($100,000); and (2) for Operating Years 5-8, an amount equal to the sum of fifty percent (50%) of the Local Sales Tax Revenues received above the annual base amount of One Hundred and Twenty Five Thousand Dollars ($125,000) annually (collectively, the “Covenant Payment”). Owner understands and agrees that the increased sales tax revenue created by the passage of Measure Q shall not be included in the DocuSign Envelope ID: 38A1EA6B-AD61-4A57-9232-346E4807CE41 calculation of the Covenant Payment, meaning that the calculations provided in this Section shall be calculated with a sales tax rate of 7.75%. The cumulative total of any and all Covenant Payments paid by the City pursuant to this Agreement shall not exceed Eight Hundred Thousand Dollars ($800,000) (“Maximum Covenant Payment Amount”).
