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July 15, 2024 Page 5 City of San Leandro/ACI Franchise Agreement D. Provide timely notice of matters which may affect either Party’s ability to perform under the 147 Agreement. 148 ARTICLE 2. 149 TERM OF AGREEMENT 150 2.1 TERM AND OPTION TO EXTEND 151 The Term of this Agreement shall commence February 1, 2025 (Commencement Date) and continue in 152 full force for a period of ten (10) years and five months, through and including June 30, 2035, unless the 153 Agreement is extended in accordance with this Section or terminated pursuant to Section 10.2. 154 At City’s sole discretion, this Agreement may be extended one (1) time without amendment for a period 155 of up to five (5) years. If City desires to extend the Agreement, City shall provide the Contractor with 156 written notice of its decision to extend the Agreement at least one (1) year before the expiration of the 157 initial Term. Such notice by City shall specify the duration of the extension. 158 Between the Effective Date and Commencement Date, Contractor shall perform all activities necessary to 159 prepare itself to start providing services required by this Agreement on the Commencement Date. 160 If City chooses to exercise its right to extend the Agreement and Contractor demonstrates to City’s 161 satisfaction that Contractor is in default of its loan covenants related to loans secured for equipment, 162 property, or operations for the purposes of performing its obligations under this Agreement, the Parties 163 shall initiate a cost-based Rate adjustment process (as described in Article 8 and Exhibit E2) to review 164 Contractor’s actual costs that will result in Rates being set at a level that will allow Contractor to fulfill its 165 loan covenants, provided that such loan covenants are common in the industry for similar types of loans, 166 and provided that the Rates have been approved in accordance with all applicable laws, regulations and 167 procedures. 168 2.2 CONDITIONS TO EFFECTIVENESS OF AGREEMENT 169 The obligation of City to permit this Agreement to become effective and to perform its undertakings 170 provided for in this Agreement is subject to the satisfaction of all the conditions below, each of which may 171 be waived, in written form only, in whole or in part by City. 172 A. Accuracy of Representations. The Contractor’s representations and warranties made in 173 Contractor’s Proposal and Article 11 of this Agreement are true and correct on and as of the 174 Effective Date. 175 B. Furnishings of Insurance and Performance Bond. Contractor has furnished evidence of the 176 insurance and performance bond required by Article 9 that is satisfactory to the City. 177 C. Absence of Litigation. To the best of Contractor’s knowledge, after reasonable investigation, there 178 is no action, suit, proceeding or investigation, at law or in equity, before or by any court or 179 governmental authority, commission, board, agency or instrumentality decided, pending or 180 threatened against Contractor wherein an unfavorable decision, ruling or finding, in any single case 181 or in the aggregate, would: 182 Docusign Envelope ID: 908A450D-1F36-4C09-B8A4-C1D639B5A05A