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July 15, 2024 Page 42 City of San Leandro/ACI Franchise Agreement Contractor shall submit all reports to the City Contract Manager electronically via email using software 1664 acceptable to the City. 1665 City reserves the right to require Contractor to provide additional reports or documents, or to provide 1666 earlier submittal of scheduled reports (e.g., to meet State reporting timelines for SB 1383) as City Contract 1667 Manager reasonably determines to be required for the administration of this Agreement or compliance 1668 with Applicable Law. 1669 6.3 PERFORMANCE REVIEW AND AUDIT 1670 The City may conduct, and Contractor shall cooperate with, one (1) performance review and/or one (1) 1671 detailed financial audit at any point during the Term of this Agreement to verify Contractor has fulfilled 1672 its financial and operational obligations under this Agreement. If the Term of this Agreement is extended 1673 in accordance with Section 2.1, the City may conduct one (1) additional performance review and/or 1674 financial audit during the extension period. The purpose of such review and audit shall be, without 1675 limitation, to review Complaints, billings, and fee payments to City, and to determine if Contractor has 1676 met the performance standards described in this Agreement (including, without limitation, performance 1677 standards established in Exhibit F). As part of any performance review, the City may choose to conduct a 1678 Customer service survey which may be performed by a qualified third-party service provider to generate 1679 statistically valid results. City may choose to enlist professional service providers to perform such review 1680 and audit, and Contractor shall be required to pay City’s actual costs for such services up to forty thousand 1681 dollars ($40,000) per audit, up to eighty-five thousand dollars ($85,000) per performance review, and up 1682 to thirty-five thousand dollars ($35,000) for the cost of performing a Customer service survey (such 1683 amounts shall be adjusted annually by the annual percentage change in CPI-U, calculated in accordance 1684 with Exhibit E). Contractor may not influence or control the City’s selection of professional service 1685 providers. Contractor shall cooperate with the City and its agents during the review and audit process. If 1686 any noncompliance with the Agreement is found, the City may direct the Contractor to correct the 1687 inadequacies in accordance with Article 10 of this Agreement. The Contractor can recover the cost of each 1688 audit by including the costs in the Contractor’s Compensation as an “Other Adjustment” pursuant to 1689 Exhibit E1, Section 2.F in the applicable Rate Period mutually agreed between City and Contractor. 1690 ARTICLE 7. 1691 CITY REIMBURSEMENTS 1692 7.1 FRANCHISE FEE 1693 The Contractor shall pay a Franchise Fee to City each quarter. Contractor has proposed and City has agreed 1694 that the amount of the Franchise Fee shall be equal to Two million four hundred thousand dollars 1695 ($2,400,000) per year and shall be paid in equal quarterly installments. Contractor and City agree the 1696 Franchise Fee is a negotiated amount that is reasonably related to the value of the rights granted to 1697 Contractor under this Agreement. City may use the Franchise Fee for any lawful purpose. The Franchise 1698 Fee shall be considered a reduction of Contractor’s profit in the calculations performed in Exhibit E. 1699 Accordingly, the Franchise Fee is a cost paid solely by Contractor. The Franchise Fee amount shall be 1700 increased annually by the same percentage as the Rate Adjustment Factor calculated for that Rate Period. 1701 Docusign Envelope ID: 908A450D-1F36-4C09-B8A4-C1D639B5A05A