Beverly Hills City Council
March 1, 2022

AGENDA REPORT
Meeting Date: March 1, 2022
Item Number:

To: Honorable Mayor & City Council
From: Robert Welch, Utilities General Manager
Colonel James Burnley, Solid Waste Manager
Melissa Gomez, Senior Management Analyst
Subject: APPROVAL OF AN APPROPRIATION IN THE AMOUNT OF
$898,082.26 FROM THE SOLID WASTE ENTERPRISE FUND
RESERVES; AND

APPROVAL OF A CHANGE PURCHASE ORDER TO ARAKELIAN
ENTERPRISES INC. (REFERRED TO AS ATHENS SERVICES)
FOR SOLID WASTE SERVICES IN THE AMOUNT OF $1,367,117
FOR A TOTAL NOT-TO-EXCEED AMOUNT OF $8,391,606
Attachment: 1. December 10, 2019 Athens Agenda Report

RECOMMENDATION
Staff recommends that City Council move to approve an appropriation in the amount of $898,082.26 from the Solid Waste Enterprise Fund and approve a change purchase order to Arakelian Enterprises Inc. (Referred to as Athens Services) for solid waste services in the amount of $1,367,117 for a total not to exceed amount of $8,391,606.

INTRODUCTION
The City of Beverly Hills contracts with Athens Services for commercial solid waste collection and residential solid waste processing services. On December 10, 2019, City Council approved the third amendment to an agreement with Athens Services to continue solid waste services through March 30, 2022. City Council also approved a new franchise agreement with Athens Services during the same meeting to commence on April 1, 2022. The new agreement will result in a 61% increase in contractual services. In anticipation of the increase in cost for contractual services, the City conducted a cost of service study, resulting in rate increases from Fiscal Year 2021/22 through Fiscal Year 2025/26.

BEVERLY
HILLS
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D-13
Meeting Date: March 1, 2022

DISCUSSION
The City manages a robust solid waste program dedicated to commercial and residential customers to comply with several refuse and recycling laws. Those laws include AB 939, which requires the City to recycle 50% of all municipal waste collected, AB 341 and AB 1826, which require multi-family and commercial recycling and SB 1383, a new organics recycling law. The Solid Waste Commercial sub-program manages the collection of mixed waste and organic waste from all commercial businesses and some multi-family residential and municipal facilities, including schools. The City provides the services by contracting with Athens Services to collect and process all refuse at a material recovery facility. The Solid Waste Residential sub-program is responsible for collecting organic waste and mixed waste from single-family, duplex and the majority of multi-family residences. City staff collects the residential refuse and Athens Services processes it. In addition to the refuse collection programs, the City conducts extensive community outreach to increase awareness of the programs.

As previously mentioned, on December 10, 2019, City Council approved a new agreement with Athens Services to commence on April 1, 2022. The new agreement will result in a 61% increase in contractual services. This increase is primarily due to the rise in labor costs, the cost of regulatory compliance and the need for infrastructure development.

Prior to City Council approving the new agreement, the City posted an RFP in late 2016 and reviewed proposals in early 2017. Athens Services was the only responsive bidder.

At that time, the City decided to exercise an extension with Recology Los Angeles (Recology) (the hauler at that time) as opposed to accepting the Athens Services bid.

Athens Services eventually acquired Recology. In November 2018, Athens Services agreed to honor the proposed overall costs of its RFP response. To ensure the City was paying a fair price, the City’s contractor HF&H Consultants, LLC, conducted an audit, which discovered Athens Services had a net loss of $1,439,000 for the company’s commercial collection operations over the six months of July 1, 2018, to December 31, 2018. Based on the data analysis, the 61% rate increase would give Athens a 10% net income for the roll-off and commercial bin services net of commercial processing costs.

A review of residential processing costs determined that the proposed 61% rate increase would result in an estimated profit of 9%. These findings were presented to the Public Works Commission and City Council in prior meetings; see Attachment 1 as reference.

In addition to the audit conducted, in FY2019/2020 the City conducted a cost of service study, which included the increase in contractual services, and resulted in rate increases from Fiscal Year 2021/22 through Fiscal Year 2025/26. City Council approved the incremental rate adjustments and decided to lessen the impact on rate payers by using funding from the reserves.

There will be a three-month gap between the start of the new franchise agreement and the end of the current fiscal year purchase order for 2021-2022. To prepare for the increase in contractual services, staff is requesting an appropriation from the Solid Waste Enterprise Fund to cover the increase in cost from April 2022, through June 2022.

As a result, staff anticipates the need for an additional $258,691.34 to cover expenses for the Residential Solid Waste Program and $1,108,425.66 to cover expenses for the Commercial Solid Waste Program for a total increase of $1,367,117 to cover a 3-month period (4/1/22 - 6/30/22). The Solid Waste Budget currently has $269,305.48 available in the Residential program and $210,343.40 available in the Commercial program.

Meeting Date: March 1, 2022

Therefore, considering the funds that are currently available, the appropriation request amounts to $898,082.26, as outlined in Table 1 below.

Table 1
Available Balance
in FY 21/22 Budget
Estimated
Additional Funds
Needed to fund
Athens FY21/22
Appropriation Request
Solid Waste
Residential
Program
$ 269,305.48 $ 258,691.34
Not Needed. Current
Budget can cover
increase.

Solid Waste
Commercial
Program $ 210,343.40 $ 1,108,425.66 $ (898,082.26)
Total $ 1,367,117.00 $ (898,082.26)

FISCAL IMPACT
Staff is requesting City Council authorize an appropriation in the amount of $898,082.26 from the Solid Waste Enterprise Fund for the increase in cost for the Athens Services agreement. City Council is also asked to appropriate the funds from the Solid Waste Enterprise Fund and into the Commercial Contractual Services Account (83005202- 731800). In addition to the appropriation, Staff also requests a change purchase order in the amount of $1,367,117 for a total not-to-exceed amount of $8,391,606.

Jeff Muir,
Director of Finance
Shana Epstein,
Director of Public Works
Finance Approval Approved By
Attachment 1
Meeting Date:

Item Number:

To:

From:

Subject:

Attachments:

AGENDA REPORT
December 10, 2019
F-2
Honorable Mayor & City Council
Shana Epstein, Director of Public Works
Gil Borboa, P.E., Assistant Director of Public Works/Utilities Colonel J. Burnley, Solid Waste Manager
A. APPROVAL OF THE THIRD AMENDMENT TO

FRANCHISE AGREEMENT WITH ARAGO ENTERPRISES

LLC, OBA ATHENS ENVIRONMENTAL SERVICES FOR

COMMERCIAL SOLID WASTE COLLECTION SERVICES

AND RESIDENTIAL SOLID WASTE PROCESSING

8. APPROVAL OF FRANCHISE AGREEMENT BETWEEN

CITY OF BEVERLY HILLS AND ARAGO ENTERPRISES

LLC, OBA ATHENS ENVIRONMENTAL SERVICES FOR

COMMERCIAL SOLID WASTE COLLECTION AND

RESIDENTIAL SOLID WASTE PROCESSING SERVICES

1. November 19, 2019, Agenda Report with attachments

2. Athens Environmental Services Contingency Plan

3. Third Amendment to Current Agreement

4. New Franchise Agreement for Commercial Solid Waste
Collection and Residential Solid Waste Processing Services

RECOMMENDATION
Staff recommends City Council move to approve the following:
• Extend and amend the current Solid Waste Franchise Agreement with Araco Enterprises LLC
• Approve a new franchise agreement between the City of Beverly Hills and Araco Enterprises LLC, Oba Athens Environmental Services for Commercial Solid Waste Collection, and Residential Solid Waste Processing Services, which will commence April 1, 2022.

Meeting Date: December 10, 2019

INTRODUCTION
This report provides a follow up to the November 19, 2019, City Council meeting at which City Council was provided a recommendation to extend and amend the existing agreement with Athens for 24 months and to approve a new franchise agreement for a term of eight years, commencing April 1, 2022. Details are included in Attachment 1.

City Council gave direction to continue the discussion for further consideration at the December 10, 2019, meeting, pending the receipt of additional information. Specific issues and options are addressed below.

As context for the recommendation provided by Staff, it is important to note that Staff and HF&H Consultants were engaged in a series of meetings with Athens for a period of twenty-one months before coming to a resolution of the new proposed Franchise Agreement in September 2019. A vital factor of the negotiated agreement was a package deal: Athens agreed to honor its pricing from the 2016 Request For Proposal (RFP) for a two-year extended term, if the City would provide an eight-year term following the extension for a new franchise agreement with newly negotiated terms.

Consequently, the recommendation is based on achieving the best rates, with commitment to diversion for commercial and residential processing for the community, with a moderate degree of certainty over an eight-year period. Regarding the labor disputes referenced at the November 19
1h meeting, Athens has provided assurances to
the City of its continuation of services in the event of a labor stoppage (Attachment 2).

DISCUSSION
Various options for moving forward were discussed by City Council at its November 19, 2019, meeting. A representation of the risks and benefits are provided in the following discussion.

Option 1-Approve the Original (November 19, 2019) Recommendation Extend and amend the current Solid Waste Franchise Agreement with Araco Enterprises LLC and approve a new franchise agreement between the City of Beverly Hills and Araco Enterprises LLC, Oba Athens Environmental Services for Commercial Solid Waste Collection, and Residential Solid Waste Processing Services, which will commence April 1, 2022.

Benefits
By approving Option 1, the City will benefit from a 2016 bid proposal that was based on an evaluation from 2016 which resulted in a 61 % contractor compensation increase.

This contractor compensation increase will become effective on April 1, 2022. It is important to note that the increase does not reflect the anticipated increase to City of Beverly Hills customers. Customer solid waste rates in the City have not been adjusted since Fiscal Year 2011. The City performs customer billing and pays the hauler (contractor) separately. Nevertheless, a cost of service analysis, incorporating the use of a healthy fund balance in the Solid Waste Fund, is expected to moderate the increase to customers significantly below the 61 % contractor rate increase included in the new franchise agreement. A benefit of this known contractor cost increase of 61 %, is that it allows the City to plan and moderate any potential customer rate impact, versus an RFP unknown cost.

Meeting Date: December 10, 2019
The current conditions in the solid waste industry are quite different from 2016, due to factors including the rise in labor costs, the cost of regulatory compliance and the need for infrastructure development. Should the City perform a new solid waste RFP, a lower cost proposal from an alternate service provider for services starting 2022 is unlikely.

Another benefit in the current proposal is the provision for SB 1383 compliance. SB 1383 is a State mandate that will involve organic waste collection and processing, edible food recovery program, record keeping, reporting, education and outreach. In 2016, SB 1383 was not part of the original RFP. Staff negotiated the provision without adding cost from the original 2016 RFP.

The 60% hauler-collected diversion rate in the City's current agreement was based on the 2010 recycling market, when the recycling market was more favorable. The proposed 53% commercial hauler-collected diversion rate in the new franchise agreement is a result of the current recycling market and its greatly diminished demand for recyclable commodities. Recent RFP procurements for contractual hauler-collected diversion rates have been down, below 60%, in other jurisdictions in the region. Waste Management proposed 50% in the City of Manhattan Beach and Republic offered 40% in the City of Lawndale. With the current proposed 53% hauler-collected diversion rate, the City will still exceed the State 50% diversion requirement.

Another major benefit in Option 1 is the location of Athens' material recovery facility (MRF), which is located in Sun Valley, California. Currently, the City collects mixed waste and green waste from the residential routes and sends the material to Athens MRF for processing. The Athens MRF is the closest processing facility to the City, which provides mixed waste processing and organic waste pre-processing at a location that is in reasonable distance for commercial and residential collection trucks to direct haul.

Risk
The outcome and timing of Athens' current labor dispute remains unknown. The management of Athens Environmental Services provided a contingency plan to the City (See Attachment 2). The contingency plan lays out a course of action to be taken in the event of an employee work stoppage. The plan also assures no interruption in services.

In the event of a potential work stoppage, Athens will remain contractually responsible for providing services.

At the November 19, 2019, meeting, City Council discussed the possibility of adding language conditioning the approval of the new franchise agreement on Athens achieving substantial progress in the labor dispute. Athens has advised staff that they would not agree to such a condition because "substantial progress" is a vague and arbitrary term.

Option 2 - Approve only the extension and amendment to the current Solid Waste Franchise Agreement with Araco Enterprises LLC for 24 months and defer approving a new franchise agreement until May 2020. Presumably, Athens' labor issues may be resolved by this time and the City may evaluate accepting the new franchise agreement between the City of Beverly Hills and Araco Enterprises LLC, Oba Athens Environmental Services for Commercial Solid Waste Collection and Residential Solid Waste Processing Services. Should the Athens labor issues be resolved sooner than May 2020, City Council may consider approval of the new franchise agreement at such time.

Meeting Date: December 10, 2019
Benefits
The benefit in selecting Option 2 is that it provides City Council an opportunity to evaluate industry conditions before approving a new eight-year term.

Risk
The risk in selecting Option 2 is the possibility of the withdrawal of Athens' long-term proposal due to a change in terms and conditions from those initially negotiated and agreed upon, pending City Council approval. Athens may request an extraordinary rate increase due to losses on the contract. The six-month audit revealed a 53% net loss for Athens on the current contract.

Option 3 - Approve a 2-year extension and issue an RFP during this term for service beginning in April 2022. This option differs from Option 2 in that a new franchise agreement would only be issued following, and subject to, a competitive bidding process.

Benefits
A potential benefit in selecting Option 3 would be the opportunity for City Council to test the market and evaluate proposed pricing and services from alternate waste haulers.

Risk
In selecting Option 3, an RFP is likely to result in higher rates and lower diversion. An RFP may result in no bidders or bidders with multiple contract exceptions. Athens may withdraw the existing proposal due to the change of Agreement terms and the City will lose the pricing terms negotiated to date in the proposed Agreement. Athens may ask for an extraordinary rate increase to reduce losses during the extension term. Athens may potentially breach the Agreement due to the financial losses. Athens has represented to the City that the existing rates are not sustainable. Another risk factor to consider is limited number of mixed waste and organic waste processors and facility locations for direct hauling at reasonable cost. The commercial and residential sector depends on direct hauling of loads; the farther distance to transport the material, the more considerable increase in cost to operate. Given the space constraints throughout the City, the two-stream collection system is the most applicable collection system for the City to meet State mandates. The commercial and residential sector depends on direct hauling of loads. The farther distance to transport the material, the greater increase in cost to operate. A three-stream collection system is not applicable throughout the City due to space constraints; compliance to AB 341 cannot be achievable.

Option 4 - The City can explore the cost impact of providing commercial services with internal staff and equipment. A very preliminary estimate of initial capital equipment cost is $3.9 million, with an annualized cost for staffing and equipment cost at approximately $7.5 million, excluding roll-off cost. Additionally, the City would incur Internal Service Fund charges that are not estimated at this time. In comparison, Athens' cost, including the 61 % contractor cost increase and two annual CPI adjustments (and excluding rolloff), is approximately $7.2 million annually. A key component will be to contract with a material recovery facility to process the mixed waste. Likewise, the roll-off and temporary bin service will need to be contracted out due to the City's inability to accommodate storage space.

Meeting Date: December 10, 2019
Staff recommends Option 1 as the solution that meets State compliance, and best serves the community by cost and continuity.

FISCAL IMPACT
If approved, the proposed Solid Waste Agreement will become effective April 1, 2022, allowing approximately two years from the current date to phase in any customer rate adjustment options. Before the effective date of the Solid Waste Agreement, a rate study and fund balance will be evaluated to calculate future rate adjustment options.

Presently, Solid Waste Fund reserves remain at levels per the City's adopted policy of 50% of annual expenditures. As of June 30, 2018, the Comprehensive Annual Financial Report showed a cash balance of approximately $22.2 million and a fund balance of $20.1 million for the Solid Waste Fund. For Fiscal Year 2018, operating revenues were about $15.54 million, and operating expenses were $15.5 million.

Attachment 1
November 19, 2019, Agenda Report
with attachments

BEVERLY
HILLS
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AGENDA REPORT
Meeting Date:

Item Number:

To:

From:

Subject:

Attachments:

November 19, 2019
G-1
Honorable Mayor & City Council
Shana Epstein, Director of Public Works Gil Borboa, P.E., Assistant Director of Public Works/Utilities Colonel J. Burnley, Solid Waste Manager A. APPROVAL OF THE THIRD AMENDMENT OF EXISTING

SOLID WASTE FRANCHISE AGREEMENT

8. APPROVAL OF A NEW FRANCHISE AGREEMENT BETWEEN

CITY OF BEVERLY HILLS AND ARACO ENTERPRISES LLC, OBA ATHENS ENVIRONMENTAL SERVICES FOR

COMMERCIAL SOLID WASTE COLLECTION AND

RESIDENTIAL SOLID WASTE PROCESSING SERVICES

1. October 22, 2019 Study Session Staff Report Without
Attachments

2. October 22, 2019 Powerpoint Presentation Hand-Out

3. Third Amendment to Current Agreement

4. New Franchise Agreement for Commercial Solid Waste
Collection and Residential Solid Waste Processing Services

5. Contract Performance on Service Request Calls

6. Examples of Per Capita Diversion Target

7. Three Stream Diversion vs. Two Stream Diversion Tonnage Data

RECOMMENDATION
Staff recommends City Council move to:
• Extend and amend the current Solid Waste Franchise Agreement with Araco Enterprises LLC; and
• Approve a new franchise agreement between the City of Beverly Hills and Araco Enterprises LLC, Oba Athens Environmental Services for Commercial Solid Waste Collection and Residential Solid Waste Processing Services, which will commence April 1, 2022.

Meeting Date: November 19, 2019

INTRODUCTION
This report provides a follow up to the October 22, 2019, City Council Study Session discussion (Attachment 1 ). Staff recommends the extension and amendment of the current Solid Waste Franchise Agreement. The City would like to exercise its option under Section 2.5 to extend the current agreement on a month-to-month basis for up to twenty-four months, expiring on March 31, 2022. With this extension the City would continue to benefit from the current low rate schedule in the current agreement, set to expire March 31, 2020. This third Amendment (Attachment 2) will address three items in the current Agreement: ( 1) compliance with Assembly Bill 1826, (2) Sunday service rate correction and (3) contract language modification to provide the City more authority on contract assignments. Staff also recommends City Council approve a new Franchise Agreement (Attachment 3) between the City of Beverly Hills and Araco Enterprises LLC, Oba Athens Environmental Services for Commercial Solid Waste Collection and Residential Solid Waste Processing Services, which will commence on April 1, 2022. This new Franchise Agreement was negotiated based on the proposal Athens submitted in response to the City's competitive Request for Proposals (RFP), published in November of 2016. With rising labor costs, infrastructure, equipment and the cost for regulatory compliance, approving the Agreement is a prudent option. At the October 22, 2019, City Council Study Session, City Council had specific questions regarding contractor performance, diversion rate and sustainability. DISCUSSION
Service Standards
At the October 22, 2019, Study Session, City Council requested information on the Contractor's performance as it relates to customer satisfaction. In the Solid Waste Franchise Agreement, the Contractor has the obligation to meet certain service requirements for collection reliability, collection quality and customer responsiveness. During the period from September 2018 to August 2019, the City received 687 documented telephone call requests related to collection reliability and collection quality for commercial services. For perspective, the Public Works Department customer service call center receives over 100 calls per day regarding all Public Works-related issues. Of the 687 calls, 512 calls were performance measurable in the categories of collection reliability and collection quality. Of these 512 calls, 445 calls met standard and 67 calls did not. Attachment 4 provides a summary of Athens' performance on such service requests.

The overall rating for Athens' performance during this period was 87%. Very high performance standards are stipulated in the contract, i.e., bin cleaning and exchange required in one business day. Along with meeting contractual performance standard requirements, Athens is required to meet waste diversion compliance standards of 60% annually. In 2018, Athens' diversion rate met current contractual standards, even after assuming responsibility for Recology's non-compliant performance. Diversion Calculations Cal Recycle evaluates a jurisdiction's compliance with the recycling requirements of Assembly Bill 939 based on Senate Bill 1016. Senate Bill 1016 changed the diversion measurement criteria to a disposal based indicator - the per capita disposal rate - which

Meeting Date: November 19, 2019
uses only two factors: a jurisdiction's population (or in some cases employment) and its disposal reported by disposal facilities, i.e. permitted landfills. For Beverly Hills in 2018, the per capita disposal rate target was 9.8 pounds per person per day. The actual disposal rate for the City in 2018 was 7.3 pounds per person per day, equivalent to a 62% diversion rate. Attachment 5 provides additional information on the per capita disposal rate and disposal target. The City of Beverly Hills is a member of the Los Angeles Regional Agency (LARA). LARA is a consortium of 17 member Cities in Southern California. The City is recognized by Cal Recycle as a LARA member City. For state reporting, LARA disposal data is measured together as a Regional Agency. In 2018, the LARA disposal rate target was 7.1 pounds per person per day; actual disposal rate was 5.6 pounds per person per day, which is equivalent to a 60% diversion rate. It is important to note that the contractual hauler-collected diversion rate requirement, in the Athens agreement, is measuring a different metric (than CalRecycle's diversion metric) for the purpose of measuring the contract's performance. Although the contractual diversion rate obligation is important and plays a role in meeting a disposal target, it is not the sole criteria that CalRecycle measure for compliance. Cal Recycle also focuses on a jurisdiction's diversion program implementation. Recent RFP procurements for solid waste in other jurisdictions have been trending reductions in hauler-collected diversion rates, largely due to the global recycling markets. Waste Management proposed a 50% diversion for Manhattan Beach, down from 62% from their previous requirement. In the Lawndale 2011 agreement with Republic Services, the hauler-collected required diversion rate was 50%. The diversion requirement was subsequently amended to 45% beginning January 1, 2016, and 40% beginning January 1, 2017. In the new seven-year agreement with Republic starting January 1, 2020, the hauler-collected diversion requirement is 40%. In the proposed Athens Franchise Agreement, the hauler-collected diversion rate is reduced from 60% to 53%. The proposed 53% annual hauler-collected diversion rate still complies with Assembly Bill 939's fifty percent diversion mandate. The City will continue to strive to exceed regulations; diversion is not the sole factor the State uses to evaluate regulatory compliance for a jurisdiction. The State looks at overall source reduction programs, such as procurement practices and purchasing recycle products. The City meets the per capita target as a LARA member and as a separate jurisdiction. Two-Stream Collection System versus Three-Stream Collection System In 2004, the City switched to a two stream collection system which consists of residents placing trash and recycling in one bin (mixed waste) and green waste in a separate bin for residential properties. For commercial properties, mixed waste is collected in one bin. For properties with available space, customers could request a free sourceseparated recycling bin as well. Temporary construction bins are processed and recycled for higher diversion. In 2009, the City implemented a food waste bin for food established businesses, which continues to enhance the City's diversion rate.

Prior to switching from a three stream collection system to a two stream system in 2003, the City's hauler-collected diversion rate was 38% percent. In 2004, the City's haulercollected diversion rate increased to 45%. In the residential sector alone, the diversion

Meeting Date: November 19, 2019
rate increased by 13%. When the City introduced food waste collection to businesses in 2009, the hauler-collected diversion increased to 58%. Additional information is provided in Attachment 3. In 2011, the City's hauler-collected diversion rate reached 78%; in 2018, the City's hauler-collected diversion rate was 60%. A three stream collection system presents a challenge in the commercial and multifamily areas. Typically, there is insufficient space to accommodate the additional containers. Under a three stream collection system, with the implementation of Assembly Bill 1826 (AB 1826), a fourth container would be needed to accommodate the organics program. With two stream collection, the City would face the challenge of finding space for the 65-gallon organics cart for businesses required to comply with AB 1826. In addition, the City's current two stream collection system reduces the number of passes collection vehicles need to make for collection, reducing wear and tear on streets and collection vehicles and reducing staff hours. Waste and Sustainability Planning The management of solid waste will play an important role in sustainability. The manner in which waste is handled will impact public health, the environment and limited resources. Organic waste disposed of in landfills has been identified as a big contributor to greenhouse emissions, which have a negative effect on climate change. The State has taken steps to address environmental impacts through the passage of AB 1826 and Senate Bill 1383 (SB 1383). These regulatory Bills are designed to help reduce methane emission in landfills. In the proposed Franchise Agreement, provision for AB 1826 and SB 1383 are built into the agreement through the organic waste collection services and processing. Provisions for the edible food program of SB 1383 are addressed in the proposed agreement. Athens will coordinate with businesses that meet the requirement of the SB 1383 edible food donation program by connecting with food recovery partners and tracking the program participation for future outreach. The City will host a series of community workshops for the City's Sustainability Plan update late spring - early summer, 2020. These workshops will provide education and seek community input regarding the City's Sustainability Plan update. In 2014, the City implemented a ban on plastic carryout bags. As part of the Sustainability Plan update, a waste characterization study will be undertaken next year.

The purpose of the study is to identify non-recyclable items and single-use nonrecyclables. One example would be to identify hard to recycle items, such as styrofoam products and to explore potential bans as other local cities have done. Waste prevention should be a guiding principle in the City's waste management practices.

Community Engagement
Staff had the following meetings with the Public Works Solid Waste Ad Hoc Committee. the Public Works Commission and City Council Liaison.
• July 11, 2019, Public Works Commission Meeting
• August 8, 2019, Public Works Commission Meeting • September 4, 2019, City Council Public Works Liaison

Meeting Date: November 19, 2019
• October 22, 2019, City Council Study Session

FISCAL IMPACT
If approved, the proposed Solid Waste Agreement will become effective April 1, 2022, allowing approximately two years from the current date to phase in any customer rate adjustment options. Before the effective date of the Solid Waste Agreement, a rate study and fund balance will be evaluated to calculate future rate adjustment options.

Presently, Solid Waste Fund reserves remain at levels per the City's adopted policy of 50% of annual expenditures. As of June 30, 2018, the Comprehensive Annual Financial Report showed a cash balance of approximately $21.1 million and a fund balance of $19.5 million for the Solid Waste Fund. For Fiscal Year 2018, operating revenues were about $15.4 million and operating expenses were $15.3 million.

Attachment 1
Meeting Date:

To:

From:

Subject:

Attachments:

STAFF REPORT
October 22, 2019 Honorable Mayor & City Council
Shana Epstein, Director of Public Works
Gil Borboa, P.E., Assistant Director of Public Works/Utilities Colonel J. Burnley, Solid Waste Manager
Update on the Proposed Agreement Between City of Beverly Hills and Araco Enterprises LLC, Oba Athens Environmental Services for Commercial Solid Waste Collection and Residential Solid Waste Processing Services

1. Contractual Timeline

2. Public Works Commission Staff Report - July 11, 2019 3. Public Works Commission Staff Report-August 8, 2019 4. City Council Liaison Staff Report - September 4, 2019 5. Summary of Negotiated Contract Terms

INTRODUCTION
This report provides a brief history of the commercial solid waste collection services in Beverly Hills from 2004 forward, addressing specifically the City's contractual agreements with various commercial waste haulers. Presently, the City has the option of extending the existing contract with Athens to 2022 or issuing a Request for Proposal (RFP) to solicit bids at large for commercial solid waste collection services and residential solid waste processing. Staff recommends (1.) extending the existing contract, (2.) City Council support of the negotiated key terms of the extended agreement, and (3.) approval of the third amendment to the current agreement, in order to present the issue for approval at a future City Council meeting date.

BACKGROUND
The operation of this Agreement entails the Solid Waste collection services of all commercial businesses and some multi-family properties, provision of permanent and temporary bins, roll-off collection services of commercial and residential properties and processing of residential materials. City staff performs collection of all residential singlefamily and majority of the multi-family properties and transports the solid waste material to Athens material recovery facility located in Sun Valley, CA. The material is processed for recovery of recyclables. A timeline of the contractual arrangements from 2004

Meeting Date October 22, 2019
through March 2018, is provided in Attachment 1. The primary issue initially involved in the discussions with Athens was the consideration of Athens' request for an extraordinary rate increase, first received in September 2017, as indicated in the attached timeline. This discussion evolved into new contract terms negotiations, which negated the extraordinary rate increase request. DISCUSSION In October 2018, Athens provided an updated rate proposal with a phased-in rate increase through the term of the new contract. Implicit in this submittal was the withdrawal of Athens' extraordinary rate increase request if a suitable contract could be renegotiated. Also at this time, HF&H conducted a rate comparison of the Athens RFP proposal from March 2017, the rate increase proposal from August 2018, and the phased-in rate increase proposal from October 2018. Athens' RFP proposal was $6.4 million less than proposal dated August 2018, and $9.5 million less than the proposal dated August 2018. In November 2018, Athens agreed to honor the proposed overall costs of its RFP response on March 3, 2017, which included a 61% rate increase in contract expenditures, to be effective April 1, 2022, with a new Agreement. In March 2019, to facilitate an audit being conducted by HF&H, Athens provided the City with financial data of revenues and expenditures of roll-off and commercial bin services from July 1, 2018, to December 31, 2018. As part of the audit, HF&H conducted a site visit and traced reported revenues and expenses to the company's internal accounting records to validate the reported cost of services. Subsequent to the site visit, HF&H's audit finding resulted in a net loss of 53% ($1,439,000) for the company's commercial collection operations over the six months of July 1, 2018, to December 31, 2018. This audit included permanent and temporary commercial bin service and roll-off service. Based on the data analysis, the 61 % rate increase would give Athens a 10% net income for the roll-off and commercial bin services net of commercial processing costs. A review of residential processing costs determined that the proposed 61 % rate increase would result in an estimated profit of 9%. As stated above, the audit review over the six-month period revealed a 53% net loss in the Athens' commercial collection operations over the six months of July 1, 2018, to December 31, 2018. The proposed 61 % rate increase is an increase to the City's general contract expenditures in the solid waste program and not a reflection of the City's customer rates.

An adjustment in customer rates will be determined through cost of service study.

In a comparison of Athens' extraordinary rate increase proposals against the Request for Proposal (RFP) from March 3, 2017, submittal, the RFP was $6.4 million less than the proposal submitted on August 20, 2018, and $9.5 million less than the proposal submitted on October 12, 2018. Page 2 of 6 10/112019
Meeting Date: October 22, 2019
In light of the analysis of Athens' proposals and its operating/financial conditions, staff is recommending not releasing another RFP and to accept the conditions as negotiated by staff and consultants with Athens Environmental Services. Attachment 5 presents a Summary of Negotiated Terms.

Key Terms
The City Attorney's office, City staff and the HF&H rate Consultant worked on updating the draft agreement. Athens has agreed to the draft terms in the document. The Agreement is an eight-year term beginning April 1, 2022, with a City option to extend the agreement for up to twenty-four additional months. The terms of this Agreement will not go into effect until April 1, 2022. Some key highlights of the agreement are regulatory reporting on SB 1383, outreach on organics, food rescue and donation coordination with generators and facility disposal capacity guarantees. See attachment 5 (Summary of Negotiated Contract Terms). Included among the key terms is a Source-Separated Organics service. Compliance with AB 1826 requires this service to be included in the current contract as an organic cart rate of $45 per week service (source-separated organic waste). This provision is proposed to be initiated immediately as required by AB 1826, and will require a third amendment to the existing contract. In addition, the Sunday Service provision in the key terms will also be included in the third amendment.

City's Expenditures & Customer Rate Since Fiscal Year 201 O to 2018, the City's Solid Waste expenditures for the solid waste contractual services have only increased by 19%. By comparison, the compounded CPI for Los Angeles for the period 2010-2018 was 18%. Commercial and Residential Solid Waste rates to ratepayers have not increased since Fiscal Year 2011.

Customer Rate Comparison Chart
FY 2019-20 Commercial 3yd bin % Increase Municipality Compared to 1x week Existing Citv Rate City of Beverly Hills $ 115.80 - Commercial Mixed Waste - Processinq City of West $ 171.27 - Commercial Mixed Waste 48% Hollywood Processing City of Culver City $ 177.87- Municipal Collection 54%
City of Manhattan $ 201.29 - Estimated FY 2020-21 rate 74% Beach under new contract City of Santa Monica $ 207.43- Municipal Collection 79% $ 210.57 - Estimated 5-year
City of Redondo compounded rate increase 82% Beach effective 7 /1 /2023 ( excluding COLA)
City of Los Angeles $ 231.20 - Commercial Trash Bin and 100% Recycling Bin

Meeting Date: October 22, 2019
In comparing the City's current solid waste rates to surrounding Cities, the City's rates are 48% below the next lowest compared City. The most recent RFP for the City of Manhattan Beach yielded a 74% increase compared to the City's current rate. Solid Waste Recycling Industry - Price Impact The Solid Waste Industry has been experiencing a paradigm shift in the recycling market. Recent changes to international policies restricting imports of recyclable materials, coupled with the need to reduce contamination levels in recycling streams and declining global market value for some recyclables, have resulted in significant challenges for the solid waste and recycling industry, local governments and Californians. The industry has seen an approximate 90% decrease in recycling commodities prices for mixed paper since 2016. State Legislation on Organic Recycling - Price Impact In 2006, Assembly Bill (AB) 32, California's Global Warming Solutions Act, laid the foundation for current legislation by directing the California Air Resources Board to reduce toxic greenhouse gases to 1990 levels by 2020. Specifically, AB 32 requires California to adopt mandates aimed at achieving the maximum technologically and economically feasible greenhouse reductions. To meet the reduction goals set forth. regulations such as mandatory commercial recycling (AB 341, 2011) and organics recycling (AB 1826, 2014) were developed. AB 1594 (2014), mandates that as of January 1, 2020, the use of green material as alternative daily cover (ADC) will no longer constitute diversion through recycling and will instead be considered disposal in terms of measuring a jurisdiction's annual 50 percent per capita disposal rate. The most recent legislation, signed in September 2016, is the short-lived climate pollutants act known as Senate Bill (SB) 1383. This legislation established state targets to achieve a 50% reduction in the level of statewide disposal of organic waste by 2020, and a 75% reduction by 2025.

Recycling Market Conclusion
Recent changes to international policies restricting imports of recyclable materials have brought on increases in processing cost and a decline in market commodities. New state regulations, in efforts to reduce climate pollutants, have created a need for infrastructure investment, which has increased costs for the Solid Waste industry.

Recycling challenges for recyclables and organics present a need for local infrastructure investment to handle the demand from the global shift in shipping recyclables overseas. as well as managing organics to address global warming issues. With these challenges, the Solid Waste industry has experienced a rise in pricing. Actions to Date Throughout this process, a series of Solid Waste Ad Hoc (a subcommittee of Public Works Commissioners) meetings occurred to discuss the ongoing discussions and negotiations with Athens. On July 11, 2019, a staff report and presentation by HF&H Consultants provided the Public Works Commission a chronological summary of the Commercial Solid Waste Collection and Residential Solid Waste Franchise Agreement background and an update on negotiations. During the discussion at the July 11, 2019, Public Works Commission meeting, Commissioners requested postponement of recommendation until the August 81h meeting, pending the resolution of the three open items. Page 4 of 6 10/17/2019 Meeting Date: October 22, 2019
At the August 8, 2019, Public Works Commission meeting, staff reported to the Commission that a resolution for all three open items was reached. The Commission recommended moving the item forward to the City Council Liaison. The three open items were profit sharing for recyclable commodities over $539,000 annually, computer compatibility and Sunday service surcharge on accounts serviced less than seven days a week. Sunday service surcharge and new organic cart rate will need to be amended under the current agreement. On September 4, 2019, staff met with City Council Liaison (Councilmembers Gold and Wunderlich) and presented a summary of the negotiated contract terms. Staff recommended the City Council Liaison not release another RFP and to accept the conditions as negotiated by staff and consultants with Athens Environmental Services. The City Council Liaison recommended moving the item forward to City Council. Alternative Option City Council has the option to reject staff's recommendation and direct staff to issue a Request for Proposals. Next Steps Pending City Council approval of the recommendation, the following tentative timeline is anticipated:

Tentative Timeline
Date Action
October 2019 Present recommendation to Cit vCouncil durin a Stud vSession November or December 2019 Take recommendation to accept negotiated terms for contract extension to Cit vCouncil for A mroval
Janua rv2020 Com dete Cost of Service Stud v
Ja ruary 2020 - February 2020 Present rate study to Public Works Solid Waste Ad Hoc & Public Works Commission
Mid S tr ing o f 2020 Present rate stud ydurin gCityCouncil Stud ySession Late S mncot 2020 Be an Pro msition 218 notification trocess June 2020 Rate recommendation to Cit yCouncil Julv2020 Im tiemen: new customer rates Airil 2022 New Athens Contract Commences

FISCAL IMPACT
If approved by City Council, the proposed Solid Waste Agreement will become effective April 1, 2022, allowing approximately two years from the current date to phase in any rate adjustment options. Before the effective date of the Solid Waste Agreement, the cost of service. customer rates and fund balance will be evaluated to calculate future rate adjustment options. At present date, Solid Waste Fund reserves remain at levels per the City's adopted policy of 50% of annual expenditures, or $7.7 million. As of June 30, 2018, the Comprehensive Annual Financial Report showed a cash balance of approximately $21.1 million and fund balance of $19.5 million for the Solid Waste Fund. For Fiscal Year 2018, operating revenues were about $15.4 million and operating expenses were $15.3 million. Page 5 of 6 10/17/2019 Meeting Date: October 22, 2019
R
E
C
O
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Staff re
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m
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ends
City
C
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cil re
view and ap
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ve (1) ex
ercising the tw
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er the curre
nt co
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ct to ext
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nd through
M
arch 31, 20
2 2; (2) new
contra
ct terms as ne
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otiated by staff and cons
ulta
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with
Araco Enterpris
es LL
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BA
Athens Environm
ental S
ervic
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encing
A
pril 1, 20
2 2, and (3) the third
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ent to the current agree
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P
a
ge 6 of 6
Attachment 2
Laith Ezzet
Senior Vice President
April Hamud
Project Manager
HF&H Consultants
19200 Von Karman Avenue, Suite 36'0
Irvine, CA 92612
• Current Service Arrangements
• Chronology
• Items for City Council Consideration
• Cost of Compliance
• Recycling Commodity Trends
• Proposed Terms
• Audit Findings
• 2018 Rate Survey
• Cost of Service Study
• Schedule
1 Current Service Arrangements
·•
• City collects and delivers resldentlal solld
waste to Athens MRF
• Athens collects commercial solid waste
• Residential and commercial mixed solid
waste is processed by Athens to recover
recyclables
• City is part of LARA for CalRecycle
diversion reporting 61% in 2018
2 • Crown Disposal (2004)
• Assignment to Recology (2015)
• RFP for Solid Waste Services (2016)
- One proposal (from Athens)
- City decided to continue services with Recology
• Assignment to Athens {2017)
• Athens request for extraordinary rate
adjustment (One month after assignment)
3 • Athens agreed to negotiate proposed
extension based on its 2016 proposed
overall cost (2018)
• City exercised first extension to 3/31/2020
• City may further extend term to 3/31/2022
by providing notice by 12/31/2019
4 • Approve two-year extension to current contract to
3/31/2022 and provide notice to hauler by
12/31/2019
• Approve Amendment #3 to current agreement to
implement a commercial organics cart option and
allow Sunday service surcharge for bins with less
than 7x per week service.
• Approve new contract commencing on 4/1/2022.
5 AB 939 Established statewide landfill
diversion goal of 50% by 2000.

AB 341 Mandatory Commercial Recycling
starting in 2012; and State diversion
goal of 75% by 2020.

AB 1826 Mandatory Commercial Organics
Recycling Program (phased-in
beginning April, 2016)
6 SB 1383
AB 1594
Air emission and Edible Food
Recovery Programs (approved in
Sept. 2016; regulations under
development)
No diversion credit for green
material used as alternative daily
cover (ADC) after January 1, 2020
• New Regulations in China (National Sword)
• Recycling Market Impacts
7 Mixed Paper Prices
Excer t from Hauler's Presentation
Market Impacts of China Sworrt
$5
$5
March
2018
Jan.
8 Nov.

IAN. 1 MARCH 1
Import ban D 5% contamination
takes effect.-, limit takes effect.

I
F.MILY M. ENG /TIIE SEATTLE TIMES
July Sept.
2017
May
$97.50
r - - IULYlB
I China announces new
------- bans on Imported retycling, _
including mixed paper.
fan. March
2016
Nov.

REGrCWAl AVERAGE .,,......ii�
$77.50
$75
GO "4\TIONAL AVERAGE -----
20 40
80 Source .'#lecyc/mgl fbr lets net
China closes the door, prices crash
The average price paid to recyclers for a ton of mixed paper in the Pacific Northwest and across North America has plummeted in the last year.
$100 per ton of mixed paper
$200
$180
$160
$140
$120
$100
c
0 .... $80
t:
0 ..c .,, $60 �- .,,
:::,
$40
$20
$0
Corrugated Containers
c==Hegional Average - National Average
9 Curbside Recycled Materials
Average Price for Curbside Recycled Materials
Pacific Northwest, 1985-2018
$200
$180 t $160
e
:::: t
s
$100
r
tit -
$80
$60 sss
$40
$50
$20 $33
$0 -� ,- "T r -, • -,- ,- -,-- -----,- .,..- - T -,- ,- 1 ,-- ....- 1 1- ,-- -,-- ..,...----, 86 86 87 88 89 90 91 92 93 94 96 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 16 16 17 18 19 10 Manhattan Beach
I
I Redondo Beach
47% One-time Average Rate Increase
Compounded annual extraordinary
increase of over 60% over 5-years,
plus annual price index adjustment
11 One-time 61% Increase (RFP
Response)
8/20/18 Phase-In Proposal (1)
10/12/18 Phase-In Proposal (2)
$152 Million
$158 Million
$162 Million
(1) Annual rate increase of 18% for FY 2020 to FY 2022, 8°/o annually for FY 2023, then CPI thereafter.
(2) Annual rate increase of 9°/o for FY 2020 to FY 2022, 12°/o annually for FY 2023 to FY 2026, and 5o/o annually for FY 2027 to FY 2032. 12 • Term
- Eight years beginning Aprll 1, 2022
- City option to extend up to 24 months
• Initial Rates
- 61% contractor rate increase
- New organics cart rate ($45/month for lx
week service)
13 • Minimum Diversion Rates
- 53% for all hauler-collected commercial waste
(vs. 60% current requirement)
- 25% diversion for City-collected mixed
residential waste (versus 17% achieved in 2018)
• Recycling containers at 50% of trash rate
for same container size and frequency
(currently no additional charge).
• Continued recycling collection service to
the Beverly Hills School District and its
campuses at no additional charge.
14 • Should CalRecycle deem the mixed waste organics
recovery program not in compliance with SB 1383,
Athens shall offer source-separated food waste bins
at the restaurant bin rates, and regular refuse at
the non-restaurant bin rates.
• Processing of residential organics waste (food
waste and green waste)
• Organics outreach and reporting requirements
• SB 1383 Compliance
• Solid waste facility capacity guarantee
• Recyclable commodities revenue sharing
arrangement
15 • Athens submitted six months of financial data
for period of Jun. 30, 2018 - Dec. 31, 2018
- Six-month Commercial Net Loss as% of
Revenue: -53%
--� -- ...___ ________.
16 Net 10% 9% Income as% of Revenue
• 12-Month Projections Assuming 61 °/o
Contractor Rate Increase
2018 Rate Survey
Monthly Rates for Commercial 3 CY Bin,
Collected 1x Week
111 _
Beverly Hills
LA County Median
$115.80/month
$155.44/month
Beverly Hills ranked gth lowest
out of 63 reported cities
17 Athens Contract Cost as
Percentage of Total Rate Revenue
FY 2019
Residentia I: 17%
Commercial: 69%
18 • Phased-in Customer Rate Increases
o Residential
o Alley Maintenance
o Commercial
• Fund Balance Reserve
o $21.1 Million Cash Balance as of 6/30/2018
o $19.6 Million Fund Reserve* as of 6/30/2018
o Reserve is 128% of Annual Operating Revenues
o Target Reserve = 50% of Operating Revenues
*Fund Reserve is current assets less current liabilities less street improvement projects.
19 Activity Target Date

1. City Council to consider recommended
November 2019
contract actions

2. HF&H to complete Rate Study January 2020

3. Council to consider rate study results Spring 2020
I

4. Prop 218 Process Spring 2020

5. Implement new customer rates July 1, 2020

6. New Athens contract commences April 1, 2022
20 Recap:

Items for Ci Council Consideration
• Approve two-year extension to current contract to
3/31/2022 and provide notice to hauler by
12/31/2019
• Approve Amendment #3 to current agreement to
implement a commercial organics cart option and
allow Sunday service surcharge for bins with less
than 7x per week service.
• Approve new contract commencing on 4/1/2022.
21 Attachment 3

THIRD AMENDMENT TO

FRANCHISE AGREEMENT FOR COMMERCIAL SOLID WASTE COLLECTION

SERVICES AND RESIDENTIAL SOLID WASTE PROCESSING
This Third Amendment ("Amendment"), dated for reference , 2019, is entered into by and between the City of Beverly Hills, a municipal corporation organized and existing under the laws of the State of California ("City") and Araco Enterprises LLC, a Delaware limited liability company ("Company" or "Araco").

RECITALS
WHEREAS, City and Crown Disposal Co., Inc. ("Crown") entered into that certain Franchise Agreement for Commercial Solid Waste Collection Services and Residential Solid Waste Processing dated December 21, 2010 ("Franchise Agreement"); and WHEREAS, on or about January 6, 2015, City and Recology Los Angeles, a California corporation ("Recology") entered into that certain Consent to Assignment and First Amendment to Franchise Agreement ("Consent and First Amendment"), whereby City consented to the assignment of the Original Franchise Agreement to Recology subject to the provisions of the Consent and First Amendment, and City and Recology agreed to certain amendments of the original Franchise Agreement, and
WHEREAS, on or about August 8, 2017, City and Araco Enterprises, LLC, a Delaware limited liability company ("Araco") entered into that certain Consent to Assignment and Second Amendment to Franchise Agreement ("Consent and Second Amendment"), whereby City consented to the assignment of the Original Franchise Agreement to Araco subject to the provisions of the Consent and Second Amendment, and City and Araco agreed to certain amendments of the original Franchise Agreement; and
WHEREAS, the Original Franchise Agreement, as amended by the Consent and First Amendment and the Consent and Second Amendment, is referred to herein as the Franchise Agreement; and
WHEREAS, the State of California enacted Assembly Bill 1826 (AB 1826) in 2014, requiring the implementation of mandatory commercial organics recycling; and WHEREAS, concurrently herewith, the Parties propose to enter into a new Franchise Agreement For Commercial Solid Waste Collection And Residential Solid Waste Processing Services ("New Agreement"), which would have an Operative Date (as defined therein) of April 1, 2022, and Company has requested an extension of the term of the Franchise Agreement until the Operative Date of the New Agreement; and
WHEREAS, Company has also requested pre-approval of an assignment to Arakelian Enterprises, Inc., the Guarantor of Company's performance under the Franchise Agreement; and WHEREAS, City and Company wish to amend the Franchise Agreement to enable implementation of programs to achieve compliance with AB 1826, extend the term of the -1-
Franchise Agreement, and pre-approve an assignment of the Franchise Agreement to Arakelian Enterprises, Inc., and desire to enter into this Amendment for the purpose of setting forth their agreements and understandings with respect to these issues, NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Recitals: Definitions. The foregoing recitals are true and correct, and incorporated into this Amendment by this reference.

2. Definitions. Capitalized terms used in this Amendment and not otherwise defined herein shall have the meaning assigned to them in the Franchise Agreement.

Section 1.15 of the Franchise Agreement is hereby revised to read as follows:
"1.15 Company
"Company" means Araco Enterprises LLC, dba Athens Environmental Services, a Delaware limited liability company, and its officers, directors, employees, agents, subsidiaries, and subcontractors."
The following definitions are hereby added to Article 1:
"1.3A AB 1826
"Assembly Bill 1826" or "AB 1826" means Chapter 12.9 (commencing with Section 42649.8) of Part 3 of Division 30 of the Public Resources Code, as it now exists or may subsequently be amended."
"1.3 lA Organics Waste
"Organics Waste" means Green Waste or Food Waste, whether individually or in combination."

3. Term. Pursuant to Section 2.5 of the Agreement, City hereby extends the Term of the Agreement for 24 months, commencing April 1, 2020 and expiring on March 31, 2022 ("Extension Period"). Pursuant to Section 2.5, the Extension Period is on a month-to-month basis. During the Extension Period, and in addition to rights of termination set forth elsewhere in the Agreement, the Agreement may be terminated by City at any time, without cause, if City gives Company a 30-day written notice of termination.

4. Sunday Service Surcharge. The following shall be added as Section 3.1.8:
"3.1.8 Sunday Service Surcharge
Company shall provide Sunday service upon Customer's request. Effective __ , if Customer requests Sunday service for Container collection that is collected less than seven times per week, Company shall provide Sunday service at an additional surcharge -2-
not to exceed $65.00 per month per Container. The maximum Sunday Service Surcharge rate shall be adjusted according to procedures for Bin rate adjustment described in Section 5 .5 .1."

5. Organics Cart Service. The following shall be added as Section 3.2.7:
"3 .2. 7 Organics Waste Cart Program
Company shall provide all Customers required by law to participate in an Organics Waste diversion program with a program(s) compliant with CalRecycle's mandatory Organics Recycling requirements under AB 1826. Company shall identify Multi-Family, Commercial, and Industrial Premises required to arrange for Organics Waste Collection services under AB 1826, offer Organics Waste Collection to such Premises, and notify the City in the event of refusal to subscribe for Organics Waste Collection. Effective __ , Company shall provide 65-gallon Organics Cart service at a rate not to exceed $45.00 per month for once per week service, and $90.00 per month for twice per week service. The maximum Organics Cart rates shall be adjusted according to procedures for Bin rate adjustment described in Section 5.5.1."

6. Assignment. Paragraph B of Section 11.6 is hereby revised to read as follows:
"B. For purposes of this section when used in reference to Company, "assignment" includes, but is not limited to (1) a sale, exchange, or other transfer to a third party (including any Affiliate) of substantially all of Company's assets dedicated to service under this Agreement; (2) a sale, exchange, or other transfer of outstanding common stock of Company to a third party (including any Affiliate), provided such sale, exchange, or transfer may result in a change of control of Company; (3) any dissolution, reorganization, consolidation, merger, re-capitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction that results in a change of ownership or control of Company; ( 4) any assignment by operation of law, including insolvency or bankruptcy, an assignment for the benefit of creditors, writ of attachment for an execution being levied against this Agreement, appointment of a receiver taking possession of Company's property, or transfer occurring in the event of a probate proceeding; and (5) any combination of the foregoing (whether or not in related or contemporaneous transactions) that has the effect of a transfer or change of ownership or control of Company."

7. Assignment to Guarantor. Paragraph Eis hereby added to Section 11.6, as follows:
"E. Notwithstanding the forgoing, City hereby consents to an assignment of this Agreement by Company to Guarantor, Arakelian Enterprises, Inc. Any such assignment shall not require compliance with paragraph D of this Section. This consent by City shall be effective only if (i) Company notifies City of the proposed assignment to Arakelian Enterprises, Inc. at least 30 days prior to the effective date thereof; (ii) Arakelian Enterprises, Inc. assumes all rights and obligations of Company under this Agreement, as evidenced by a document in form reasonably acceptable to City, and (iii) there is no outstanding uncured default or event of default."
-3-

8. Effect of Amendment. Except as set forth in this Amendment, the terms of the Franchise Agreement (as previously amended), including all maximum rates in effect prior to the date of this Amendment, shall remain unchanged and in full force and effect.

TO EFFECTUATE THIS AMENDMENT, each of the parties has caused this Amendment to be executed by its authorized representative as of the date set forth below the authorized signature.

CITY:

CITY OF BEYERL Y HILLS,
a municipal corporation
JOHN A. MIRISCH
Mayor of the City of Beverly Hills, California
Dated: �������������-
ATTEST:

HUMAAHMED
City Clerk
-4-
APPROVED AS TO FORM:

LAURENCE S. WIENER
City Attorney

COMPANY
N
By
a
�
me:� :T.Ar-..k.Q..l,ec.K ..OZ
Title: "1«1ta.y,� �kv·
Date: Jtjl.s /2.,0I q
By:

Name:

Title:

APPROVED AS TO CONTENT
CHAVEZ
Risk Manager
-5-
Attachment 4

FRANCHISE

AGREEMENT

BETWEEN

CITY OF BEYERL Y HILLS
AND

ARACO ENTERPRISES LLC, DBA ATHENS ENVIRONMENTAL

SERVICES
FOR

COMMERCIAL SOLID WASTE COLLECTION

AND RESIDENTIAL SOLID WASTE PROCESSING SERVICES
* * *
November 12, 2019

FRANCHISE

AGREEMENT

BETWEEN

CITY OF BEYERL Y HILLS
AND

ARA CO ENTERPRISES LLC DBA A THENS ENVIRONMENT AL SERVICES FOR

COMMERCIAL SOLID WASTE COLLECTION

AND RESIDENTIAL SOLID WASTE PROCESSING SERVICES

TABLE OF CONTENTS
Page

RECITALS I
ARTICLE 1 3
DEFINITIONS 3

1.1 AB341 3

1.2 AB 939 3

1.3 AB 1826 3

1.4 AFFILIATE 3

1.5 AGREEMENT 4

1.6 BILLINGS 4

1.7 BIN 4

1.8 BULKY ITEM 4

1.9 BUSINESS DAY 5
I. l O CALRECYCLE 5
I.IICART 5

1.12 CITY 5

1.13 COLLECT/COLLECTION 5

1.14 COMMERCIAL AND INDUSTRIAL PREMISES 5

1.15 COMPANY 6

1. I 6 COMPANY COMPENSATION 6

1. I 7 CONSTRUCTION AND DEMOLITION WASTE 6

1.18 CONTAINERS 6

1.19 CUSTOMER 6

1.20 CPI 6
I .21 DISPOSAL 6
I .22 DISPOSAL SITE 6

1.23 EFFECTIVE DA TE 7

1.24 ENVIRONMENTAL LAWS 7
I .25 FACILITY 7
I .26 FOOD WASTE 7

1.27 FRANCHISE 8

1.28 GREEN WASTE 8

1.29 HAZARDOUS SUBSTANCE 8

1.30 HAZARDOUS WASTE 8

1.31 INERTS 9

1.3 2 MATERIALS RECOVERY FACILITY OR MRF 9

1.33 MIXED WASTE PROCESSING 9

1.34 MULTI-FAMILY 9

1.35 ORGANIC WASTE 9
November 12, 2019 (i) City of Beverly Hills

1.36 ORGANIC WASTE PROCESSING FACILITY 9

1.37 OWNER 10

1.38 PERSON 10

1.3 9 PREMISES 10

1.40 PRIOR AGREEMENT 10

1.41 PUTRESCIBLE WASTE, PUTRESCIBLE l O

1.42 RATE YEAR 10

1.43 RECYCLING 10

1.44 RECYCLABLE MATERIALS, RECYCLABLES 11

1.45 REFUSE 11

1.46 ROLLOFF Box············································································································································· 11

1.47 SB 1383 11

1.48 SOLID WASTE 11

1.49 STATE 11

1.50 TEMPORARY SERVICE 12

1.51 TRANSFORMATION 12
ARTICLE 2 13
GRANT AND ACCEPTANCE OF FRANCHISE 13

2.1 GRANT AND ACCEPTANCE OF FRANCHISE 13

2.2 ADMINISTRATIVE FEE 13

2.3 EXCLUSIVE NATURE OF FRANCHISE 13

2.4 OPERATIVE DATE 13

2.5 TERM OF AGREEMENT 14

2.6 CONDITIONS TO EFFECTIVENESS OF AGREEMENT 14

2.7 LIMITATIONS ON SCOPE OF FRANCHISE 15

2.8 CITY'S RIGHT TO DIRECT CHANGES 17

2.8.J Genera/ 17

2.8.2 New Diversion Programs 17

2.9 OWNERSHIP OF SOLID WASTE 18

2.10 COMPANY STATUS 18

2.11 BUSINESS LICENSE 19

2.12 ANNEXATIONS 19

2.13 GOVERNING REQUIREMENTS 19
ARTICLE 3 20
DIRECT SERVICES 20

3.1 REFUSE COLLECTION SERVICES 20

3.1.1 Permanent Bin Services 20

3.1.2 Rollo.ff Box Refuse Service 21

3.1.3 Temporary Bin Service 22

3.1.4 On-Call Bulky Item Pickup 22

3.1.5 Scout Service 23

3.1.6 Lids, Casters, Hasps and Locks 23

3.1.7 Overflowing Bins 23

3.1.8 Sunday Service Surcharge 2./

3.2 RECYCLING SERVICES 24

3.2.1 Recycling Bin and Cart Service 2./

3.2.2 Rollo.ff Box Recycling 25

3.2.3 Construction and Demolition Waste Recycling. 25

3.2.4 Organic Waste Collection Services /Restaurant Food Waste Diversion 25

3.2.5 Recyclable Commodities Revenue Sharing 27

3.2.6 Large Venue Event Assistance 28

3.3 GREEN WASTE PROGRAM 28

3.3.1 Rollo.ff Box Green Waste Service 28
November 12, 2019 (ii) City of Beverly Hills

3.3.2 Holiday Tree Collection Program 29

3.3.3 End Uses for Green Waste 29

3.4 WARNINGNOTICE 29

3.5 CITY SERVICES 30

3.5.1 City Facilities Collection 30

3.5.2 Special Events Collection 30

3.5.3 Emergency Collection and Disposal Service 30

3.5.4 Abandoned item Collection 30

3.5.5 Sidewalk Receptacle Collection 30

3. 5. 6 Containers 3 I

3.5. 7 Compost Program 32

3.5.8 Greys/one Mansion Support 32

3.5.9 Recycling Scholarship 33

3.6 DIVERSION REQUIREMENTS 33

3.7 OPERATIONS 33

3. 7.1 Schedules 33

3. 7.2 Vehicles 3./

3. 7.3 Litter Abatement 37

3. 7.4 Agreement Administration and Performance Monitoring 38

3. 7. 5 Personnel 38

3. 7.6 Employee/Subcontractor Identification Required 39

3. 7. 7 Fees and Gratuities 40

3. 7.8 Non-Discrimination 40

3. 7.9 Change in Collection Schedule 40

3. 7.10 Report of Accumulation of Solid Waste; Unauthorized Dumping ./0 3 .8 TRANSPORTATION, DISPOSAL AND PROCESSING 41

3.9 STATUS OF DISPOSAL SITE 41

3.10 DISPOSAL AND PROCESSING CAPACITY GUARANTEE 41

3.11 MATERIALS RECOVERY FACILITY 42

3.12 DEDICATED ROUTES 42

3.13 ROUTE AUDIT 42

3.14 SERVICE EXCEPTIONS; HAZARDOUS WASTE NOTIFICATIONS .44

3.15 HAZARDOUS WASTE MANAGEMENT COMPONENT .45
ARTICLE 4 46
OTHER SERVICES 46

4.1 CUSTOMERBILLING 46

4.1.1 City Billing 46

4.1.2 Option for Company to Perform Billing and Company Compensation ./6

4.2 CUSTOMER SERVICE 49

4.2. I Office Hours ./9

4.2.2 Missed Pick-ups 49

4.2.3 Complaint Documentation 49

4.2 . .:/ Resolution of Customer Complaints 50

4.2.5 Government Liaison 50

4.2.6 Computer Compatibility 50

4.3 COMMUNITY EVENTS 50

4.4 WASTE CHARACTERIZATION STUDIES 50
ARTICLE 5 52
COMPANY COl\'1PENSATION AND RATES 52

5.1 GENERAL 52

5.2 BILLING ADJUSTMENTS AND REFUNDS 53

5.3 INITIAL RATES 53
5 .4 SCHEDULE OF FUTURE ADJUSTMENTS 54
November 12, 2019 (iii) City of Beverly Hills

5.5 METHOD OF ADJUSTMENTS 54

5.5.1 Rate Adjustment Method 54

5.6 EXTRAORDINARY ADJUSTMENTS 55
ARTICLE 6 57
REVIEW OF SERVICES AND PERFORMANCE 57

6.1 PERFORMANCE HEARING 57

6.2 PERFORJ\1ANCE SATISFACTION SURVEY 58
ARTICLE 7 59
RECORDS, REPORTS AND INFORMATION REQUIREMENTS 59

7.1 GENERAL 59

7.2 RECORDS 59

7.2.1 General 59

7.2.2 Financial Records 60

7.2.3 Solid Waste Service Records 60

7.2.4 CERCLA Defense Records 60

7.2.5 Other Program Records 61

7.2.6 Cost of Audits 61

7.2. 7 Payments and Refunds 62

7.3 REPORTS 62

7.3.1 Report Formats and Schedule 62

7.3.2 Monthly Reports 63

7.3.3 Quarterly Reports 64

7.3.4 Annual Report 64

7.3.5 Financial Report 65

7.3.6 Employee Report 65

7.4 ADVERSE INFORMATION 65

7.5 RIGHT TO INSPECT RECORDS 66
ARTICLE 8 67
INDE1\1NIFICA TION, INSURANCE AND BONDS 67

8.1 lNDEMN!FICA TION 67

8.2 HAZARDOUS SUBSTANCES INDEMNIFICATION 68

8.3 DIVERSION GOAL INDEMNIFICATION AND GUARANTEE 70

8.4 INSURANCE 70

8.5 PERFORMANCE BOND 75

8.6 FORFEITURE OF PERFORMANCE BOND 76

8.7 PERFORJ\1ANCE SECURITY BEYOND SERVICE TERM 76

8.8 PROPERTY DAMAGE 76

8.9 PAVEMENT DAMAGE 77
ARTICLE 9 78
CITY'S RIGHT TO PERFORl\1 SERVICE 78

9.1 GENERAL 78

9.2 BILLING AND COMPENSATION TO CITY DURING CITY'S POSSESSION 79

9.3 CITY'S RIGHT TO RELINQUISH POSSESSION 79
9 .4 CITY'S POSSESSION NOT AT AKING 79

9.5 DURATION OF CITY'S POSSESSION 80
ARTICLE 10 81
DEFAULT, REMEDIES AND LIQUIDATED DAMAGES 81

10.1 EVENTS OF DEFAULT 81

10.2 RIGHT TO TERMINATE UPON DEFAULT 83

10.3 LIQUIDATEDDAMAGES 84
November 12, 2019 (iv) City of Beverly Hills

10.4 EXCUSE FROM PERFORJ\IIANCE 89
10 .5 ASSURANCE OF PERFORMANCE 91
ARTICLE 11 92
OTHER AGREEl\1ENTS OF THE PARTIES 92

11.1 RELATIONSHIP OF PARTIES 92

11.2 COMPLIANCE WITH LAW 92

11.3 GOVERNING LAW 92

11.4 JURISDICTION 92

11.5 RESOLUTION OF DISPUTES 93

11.6 ASSIGNMENT 93

11.7 AFFILIATED COMPANIES 95

11.8 CONTRACTING OR SUBCONTRACTING 96

11.9 BINDING ON ASSIGNS 96

11.10 COOPERATION IN PREPARATION FOR TERMINATION OR EXPIRATION OF CONTRACT 96

11.11 PARTIES IN INTEREST 97

11.12 WAIVER 97

11.13 COMPANY'S INVESTIGATION 97

11.14 CONDEMNATION 97

11.15 NOTICE 97

11.16 REPRESENTATIVES OF THE PARTIES 98

11.17 CITY FREE TO NEGOTIATE WITH THIRD PARTIES 99

11.18 COMPLIANCE WITH MUNICIPAL CODE 99

11.19 PRIVACY 99

11.20 COMPLIANCE WITH IMMIGRATION LAWS 100

11.21 PROPRIETARY INFORMATION, PUBLIC RECORDS 100

11.22 GUARANTEE OF COMPANY'S PERFORMANCE.. I 00

11.23 ATTORNEYS' FEES 100
ARTICLE 12 101
MISCELLANEOUS PROVISIONS 101

12.l ENTIRE AGREEMENT 101

12.2 SECTION HEADINGS 101

12.3 REFERENCES TO LAWS AND OTHER AGREEMENTS 101

12.4 CONFLICTS 101

12.5 INTERPRETATION 101

12.6 AMENDMENT TO AGREEMENT 101

12.7 SEVERABILITY 102

12.8 EXHIBITS 102

12.9 NON-WAIVERPROVISION 102

12.10 RlGHTS RESERVED TO CITY 102
12 .11 REASONABLE DETERMINATIONS 103

12.12 CONFLICT OF INTEREST 103

12.13 COUNTERPART EXECUTION 103

12.14 AUTHORITY AND EFFECTIVE DATE 103
Exhibits

1. Initial Rates

2. Rate Adjustment Formula

3. Corporate Guaranty

4. Company's Faithful Performance Bond

5. Notary Certification

6. Residential Solid Waste Processing and Disposal Agreement November 12, 2019 (v) City of Beverly Hills

FRANCHISE AGREEMENT
This Franchise Agreement ("Agreement"), effective on , 2019, is entered into by the City of Beverly Hills, a municipal corporation, organized and existing under the laws of the State of California, ("City") and Araco Enterprises LLC, dba Athens Environmental Services ("Company").

RECITALS:

A. The Legislature of the State of California, by enactment of the California Integrated Waste Management Act of 1989 ("the Act", California Public Resources Code Section 40000 et�-) has determined that it is in the public interest to authorize and require local agencies to make adequate provision for solid waste handling within their jurisdictions to meet the goals and objectives of the Act.

B. In accordance with the Act, City is required to implement its Source Reduction and Recycling Element (SRRE) in order to divert a minimum of 50 percent of its solid waste from landfill disposal.

C. In accordance with California Public Resources Code Section 40059(a)(2), City has determined that the public health, safety, and welfare require that an exclusive franchise be awarded to a qualified company for the collection, transportation, recycling, processing, and disposal of solid waste, and for other related services to meet the goals and objectives of the Act.

D. The current solid waste franchise agreement for commercial solid waste collection services will expire on March 31, 2022.

E. In accordance with Article 4.5 of the Beverly Hills Municipal Code, and Sections 49300 and 49500-49523 of the Public Resources Code, City is authorized to enter into exclusive franchise agreements for commercial solid waste collection services.

F. Under this Agreement, City desires to authorize Company to provide exclusive commercial solid waste collection services within the City and to furnish all personnel, equipment and supplies necessary to collect, pick up, remove and dispose of commercial solid November 12, 2019 -1- City of Beverly Hills
waste and recyclable materials, as defined herein, generated or accumulated by commercial, institutional, or industrial users or customers within the City.

G. City and Company are aware of the laws governing the safe collection, transport, recycling, and disposal of solid waste, including the Act, the Resource Conservation and Recovery Act ("RCRA"), and the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). The parties acknowledge that, by entering into this Agreement, City does not thereby become an "arranger" or a "generator," as those terms are used in CERCLA, and that Company, not City, is "arranging for" the collection, transport for disposal, and recycling of municipal solid waste from commercial accounts in the City.

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

November 12, 2019 -2- City of Beverly Hills
ARTICLE 1

DEFINITIONS
Whenever any term used in this Agreement has been defined by the provisions of Section 6-1.450 of Article 4.5 of Chapter 1, Title 6 of the Beverly Hills Municipal Code, or by Division 30, Part 1, Chapter 2 of the California Public Resources Code, the definitions in the Municipal Code or the Public Resources Code will apply unless the term is otherwise defined in this Agreement, in which case this Agreement will control. The following capitalized words and terms have the following meanings:

1.1 AB 341
"AB 341" means the California Jobs and Recycling Act of2011 (Chapter 476, Statues of 2011 [Chesbro, AB 341)), also commonly referred to as "AB 341", as amended, supplemented, superseded, and replaced from time to time.

1.2 AB 939
"AB 939" means the California Integrated Waste Management Act of 1989 (Division 30 of the California Public Resources Code), also commonly referred to as "AB 939," as amended, supplemented, superseded, and replaced from time to time.

1.3 AB 1826
"AB 1826" means the Organic Waste Recycling Act of2014 (Chapter 727, Statutes of 2014 modifying Division 30 of the California Public Resources Code), also commonly referred to as "AB 1826," as amended, supplemented, superseded, and replaced from time to time.

1.4 Affiliate
"Affiliate" means all businesses (including corporations, limited and general partnerships, and sole proprietorships) that are directly or indirectly related to Company by virtue of direct or indirect ownership interests or common management. An Affiliate includes a business in which Company owns a direct or indirect ownership interest, a business that has a direct or indirect ownership interest in Company, and a business that is also owned, controlled or managed by any business or individual that has a direct or indirect ownership interest in Company. For purposes of determining whether an indirect November 12, 2019 -3- City of Beverly Hills
ownership interest exists, the constructive ownership provisions of Section 3 l 8(a) of the Internal Revenue Code of 1986, in effect on the date of this Agreement, will apply; provided, however, that (a) "ten percent (10%)" will be substituted for "fifty percent (50%)" in Section 318(a)(2)(C), and in Section 318(a)(3)(C); and (b) Section 3 l 8(a)(5)(C) will be disregarded. For purposes of determining constructive or indirect ownership under Section 318(a), an ownership interest ofless than ten percent (10%) will be disregarded, and percentage interests will be determined on the basis of the percentage of voting interest or value that the ownership interest represents, whichever is greater.

1.5 Agreement
"Agreement" means this Franchise Agreement between City and Company for the Collection, transportation, Recycling, processing and Disposal of Solid Waste, and for all other services related to meeting the goals and objectives of the Act, including all exhibits and attachments, and any amendments.

1.6 Billings
"Billings" means statements of charges for services provided to accounts serviced under this Agreement, which statements are rendered by City or Company, or by others on behalf of City or Company, to Persons responsible for arranging for Solid Waste removal.

1.7 Bin
"Bin" means a metal container, including Containers with compactors attached, with a capacity of one-and-one-half to six cubic yards and having a hinged lid and wheels, that is serviced by a front-end loading truck.

1.8 Bulky Item
"Bulky Items" means large discarded items including, but are not limited to: discarded furniture (including chairs, sofas, mattresses, and rugs, but not carpeting); appliances (including refrigerators, ranges, washers, dryers, water heaters, dishwashers, plumbing, small household appliances and similar items, commonly known as "white goods"); electronic equipment (including stereos, televisions, computers, VCRs, and similar items commonly known as "brown goods"); wood waste, tree trunks, and large branches (if no longer than two feet in diameter, four feet in length, and 50 pounds in weight per bundle), November 12, 2019 -4- City of Beverly Hills
scrap wood, rocks, sod and earth, in the aggregate not exceeding one cubic yard per Collection; clothing; and tires. Bulky Items do not include such things as car bodies or Construction and Demolition Waste, or any other items that cannot be handled by two persons.

1.9 Business Day
"Business Day" means each calendar day, excluding Saturdays, Sundays and holidays.

1.10 CaIRecycle
"CalRecycle" means the State of California's Department of Resources Recycling and Recovery.

1.11 Cart
"Cart" means a plastic container with a capacity of no less than 30 and no greater than 300-gallons, having a hinged lid and wheels, that is serviced by an automated or semiautomated truck.

1.12 City
"City" means the City of Beverly Hills, a municipal corporation, and all the territory lying within the municipal boundaries of the City as presently existing or as these boundaries may be modified during the term of this Agreement.

1.13 Collect/Collection
"Collect" or "Collection" means to take physical possession, transport, and remove Solid Waste within and from the City.

1.14 Commercial and Industrial Premises
"Commercial and Industrial Premises" means property upon which business activity is conducted, including but not limited to retail sales, services, wholesale operations, manufacturing and industrial operations, but excluding businesses conducted upon residential property that are permitted under applicable zoning regulations and that do not constitute the primary use of the property.

November 12, 2019 -5- City of Beverly Hills

1.15 Company
"Company" means Araco Enterprises LLC, dba Athens Environmental Services, a Delaware limited liability company, and its officers, directors, employees, agents, subsidiaries, and subcontractors.

1.16 Company Compensation
"Company Compensation" means the revenue received by Company from Billings in return for providing services to accounts in accordance with this Agreement.

1.17 Construction and Demolition Waste
"Construction and Demolition Waste" means used or discarded construction materials removed from Premises during the construction or demolition of a structure.

1.18 Containers
"Containers" means all types of Solid Waste receptacles, including Carts, compactors, Bins, Rolloff Boxes, and Customer-provided receptacles.

1.19 Customer
"Customer" means the Person having ownership or control of any Premises in the City for which an account for Solid Waste Collection service has been established by Company under the scope of this Agreement, as further defined in Section 2.1.

1.20 CPI
"CPI" means the Consumer Price Index for garbage and trash collection services, (CUUROOOSEHG02), U.S. city average.

1.21 Disposal
"Disposal" means the final disposition of Solid Waste Collected by Company at a landfill in full compliance with all applicable laws and regulations.

1.22 Disposal Site
"Disposal Site" means the Solid Waste handling Facility or Facilities used for the final Disposal of Solid Waste Collected by Company. Chiquita Canyon Landfill and the San November 12, 2019 -6- City of Beverly Hills
Bernardino County-owned Landfills (Mid-Valley, Victorville, and San Timoteo Landfills) shall be the designated Disposal Site(s) under this Agreement unless and until another site is approved by City.

1.23 Effective Date
"Effective Date" shall have the meaning ascribed in Section 12.14.B.

1.24 Environmental Laws
"Environmental Laws" means all federal and state statutes and county and City ordinances concerning public health, safety and the environment including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 USC §9601 et seq.; the Resource Conservation and Recovery Act, 42 USC §6902 et seq.; the Federal Clean Water Act, 33 USC §1251 et seq.; the Toxic Substances Control Act, 15 USC § 160 I et seq.; the Occupational Safety and Health Act, 29 USC §651 et seq.; the California Hazardous Waste Control Act, California Health and Safety Code §25 I 00 et seq.; the California Toxic Substances Control Act, California Health and Safety Code §25300 et seq.; the Porter-Cologne Water Quality Control Act, California Water Code § 13000 et seq.; the Safe Drinking Water and Toxic Enforcement Act, California Health and Safety Code §25249.5 et seq.; as currently in force or as later amended, and all rules and regulations promulgated thereunder.

1.25 Facility
"Facility" means any plant or site, owned or leased and maintained, operated or used by Company for purposes of performing under this Agreement.

1.26 Food Waste
"Food Waste" means:
• All food (including fruits, vegetables, meat, poultry, seafood, shellfish, bones, rice, beans, pasta, bread, cheese and eggshells);
• Food-soiled paper (including waxed cardboard, napkins, paper towels, paper plates, paper milk cartons);
• Tea bags;
• Coffee grounds and filters
• Wooden crates;
November 12, 2019 -7- City of Beverly Hills
• Sawdust; and,
• Other compostable materials.

Food Waste is a subset of Organic Waste.

1.27 Franchise
"Franchise" means the exclusive right granted to Company by City, per Section 2.1, to provide Solid Waste services within the City in accordance with this Agreement.

1.28 Green Waste
"Green Waste" means leaves, grass, weeds, wood materials from trees and shrubs, palm fronds, yucca, large tree stumps, and holiday trees that are not more than four inches in diameter or four feet in length, and similar materials generated at any Premises. Green Waste is a subset of Organic Waste.

1.29 Hazardous Substance
"Hazardous Substance" means any of the following: (a) any substances defined, regulated or listed (directly or by reference) as "Hazardous Substances", "hazardous materials", "Hazardous Wastes", "toxic waste", "pollutant," "toxic substances," or similarly identified as hazardous to human health or the environment, in or pursuant to (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 USC §960 l et seq. (CERCLA); (ii) the Hazardous Materials Transportation Act, 49 USC §1802, et seq.; (iii) the Resource Conservation and Recovery Act, 42 USC §6901 et seq.; (iv) the Clean Water Act, 33 USC § 1251 et seq.; (v) California Health and Safety Code §§25115-25117, 25249.8, 25281, and 25316; (vi) the Clean Air Act, 42 USC §7901 et seq.; or (vii) California Water Code §13050; (b) any amendments, rules or regulations promulgated under those statutes that currently exist or may later be enacted; and (c) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic or regulated under any other applicable federal, state or local Environmental Laws currently existing or later enacted, including, without limitation, friable asbestos, polychlorinated biphenyl's ("PCBs"), petroleum, natural gas, synthetic fuel products, and by-products.

1.30 Hazardous Waste
"Hazardous Waste" means all substances defined as Hazardous Waste, acutely Hazardous Waste, or extremely Hazardous Waste by the State of California in Health and November 12, 2019 -8- City of Beverly Hills
Safety Code §25110.02, §25115, and §25117, or in any future amendments to or recodifications of these statutes, or identified and listed as Hazardous Waste by the US Environmental Protection Agency (EPA), pursuant to the Federal Resource Conservation and Recovery Act (42 USC §6901 et seq.), all future amendments thereto, and all rules and regulations promulgated thereunder.

1.31 Inerts
"Inerts" means that subset of Solid Waste that does not contain Hazardous Waste or soluble pollutants at concentrations in excess of applicable water quality objectives, and does not contain significant quantities of decomposable waste. Inerts include debris such as concrete and other materials generally accepted at Inert landfills.

1.32 Materials Recovery Facility or MRF
"Materials Recovery Facility" or "MRF" means a Facility licensed or permitted in accordance with the Act that separates secondary materials, such as paper and other fibers, plastic, mixed glass, and metal containers, and processes them for sale to end users.

1.33 Mixed Waste Processing
"Mixed Waste Processing" means the separation and sorting of Recyclables and other recoverable materials from Refuse at a Materials Recovery Facility where commingled loads of Solid Waste are processed.

1.34 Multi-Family
"Multi-Family" means a residential property with two or more dwelling units, regardless of whether the occupancy of those dwelling units is temporary or permanent.

1.35 Organic Waste
"Organic Waste" means Food Waste and Green Waste, collectively or individually.

1.36 Organic Waste Processing Facility
"Organic Waste Processing Facility" means a permitted Facility where Organic Waste is sorted, mulched or separated for the purposes of Recycling, reuse or composting.

November 12, 2019 -9- City of Beverly Hills

1.37 Owner
"Owner" means the Person holding legal title to real property constituting the Premises to which Solid Waste Collection service is to be provided under this Agreement, or the Person holding legal title to the Disposal Site, depending upon the context used in this Agreement.

1.38 Person
"Person" means any individual, firm, association, organization, partnership, limited liability company, corporation, business trust, joint venture, the United States, the State of California, the County of Los Angeles, and any town, city, or special purpose district.

1.39 Premises
"Premises" means any land or building in the City where Solid Waste is generated or accumulated.

1.40 Prior Agreement
"Prior Agreement" means the Franchise Agreement for Commercial Solid Waste Collection Services and Residential Solid Waste Processing dated December 21 20 I 0, as amended by the Consent to Assignment and First Amendment dated January 6, 2015, and the Consent to Assignment and Second Amendment dated August 8, 2017.

1.41 Putrescible Waste, Putrescible
"Putrescible Waste" and "Putrescible" refer to wastes that are capable of being decomposed by micro-organisms with sufficient rapidity to cause nuisances because of odors, gases, or other offensive conditions.

1.42 Rate Year
"Rate Year" means the twelve-month period from July I st to June 30 1h for each year of
the Agreement.

1.43 Recycling
"Recycling" means any process by which materials that would otherwise become Solid Waste are Collected (whether source-separated, co-mingled, or as mixed waste), November 12, 2019 -10- City of Beverly Hills
separated or processed and returned to the economic mainstream in the form of raw materials, or products or materials that are salvaged or recovered for reuse.

1.44 Recyclable Materials, Recyclables
"Recyclable Materials" and/or "Recyclables" means source-separated by-products and commingled Solid Waste of some potential economic value that are set aside, handled, packaged, or offered for Collection in a manner different from Refuse under this Agreement.

1.45 Refuse
"Refuse" means Putrescible and non-Putrescible Solid Waste or debris, except sewage, whether combustible or non-combustible.

1.46 Rolloff Box
"Rolloff Box'' means an open-top metal container or closed compactor box with a capacity of IO to 40 cubic yards that is serviced by a roll off truck.

1.47 SB 1383
"SB 1383" means the Short-Lived Climate Pollutants Act of 2016 (Chapter 395, Statutes of2016), as it may be amended from time to time.

1.48 Solid Waste
"Solid Waste" means all discarded Putrescible and non-Putrescible solid, semisolid, and liquid wastes Disposed with other Solid Waste, including Refuse, Construction and Demolition Wastes, Bulky Items, Recyclable Materials, Food Waste and Green Waste, or any combination thereof which are permitted to be disposed of in a Class Ill landfill, and which are included in the definition of "non-hazardous solid waste" set forth in the California Code of Regulations.

1.49 State
"State" means the State of California.

November 12, 2019 -11- City of Beverly Hills

1.50 Temporary Service
"Temporary Service" means Solid Waste Collection services that are provided on a project basis, such as construction and demolition projects and occasional clean-up projects, using a Roll off Box or Bin. Regular Collection of Solid Waste generated by the ongoing operations of a business is not included.

1.51 Transformation
"Transformation" has the meaning ascribed in Public Resources Code Section 40201.

November 12, 2019 -12- City of Beverly Hills
ARTICLE 2

GRANT AND ACCEPTANCE OF FRANCHISE

2.1 Grant and Acceptance of Franchise
Subject to the terms and conditions of this Agreement, City grants to Company, and Company accepts from City, the exclusive Franchise, right and privilege to provide Solid Waste Collection, transfer, transport, Recycling, processing, and Disposal services at all Commercial and Industrial Premises, and Multi-Family Customers receiving Refuse Bin service but not Refuse Cart service, within the City.

2.2 Administrative Fee
Company will pay to City an administrative fee in a one-time lump sum payment of One Hundred Fifty Thousand dollars ($150,000) within seven days after the execution of this Agreement to reimburse City for its staff time and out-of-pocket costs incurred in awarding this Franchise.

2.3 Exclusive Nature of Franchise
Company is responsible for enforcing the exclusivity of this Agreement. City has the right to enforce the exclusivity provisions if, in its sole discretion, it chooses to do so. If City is required to take administrative, law enforcement, or other legal action to protect Company's exclusive rights (including the adoption of any resolution or ordinance intended to facilitate the enforcement of those exclusive rights) Company must reimburse City for its reasonable administrative, law enforcement, or legal costs related to any such action.

2.4 Operative Date
The operative date of this Agreement is April 1, 2022 ("Operative Date"). The Operative Date is the date upon which Company will commence providing to Commercial and Industrial Customers the Solid Waste management services that are authorized by this Agreement, and commence providing to City the Solid Waste processing and disposal services set forth in the Residential Solid Waste Processing and Disposal Agreement attached hereto as Exhibit 6. Upon the Operative Date, this Agreement will supersede the Prior Agreement, which shall be of no further force or effect, except for indemnity obligations arising under the Prior Agreement before the Operative Date. There are November 12, 2019 -13- City of Beverly Hills
obligations (such as outreach plan and initial site visits in Section 3.2.4 and others) that occur prior to the Operative Date.

2.5 Term of Agreement
The term (''Term") of this Agreement is eight years, commencing on April 1, 2022, and expiring on March 31, 2030 (the "Initial Term"), unless earlier terminated pursuant to this Agreement. City, in its sole discretion, may authorize an extension of up to 24- months ("Extension Period"). The Extension Period shall be on a month-to-month basis. During the Extension Period, and in addition to rights of termination set forth elsewhere in this Agreement, this Agreement may be terminated by City at any time, without cause, if City gives Company a 30-day written notice of termination. City may, upon 90-days' advance written notice to Company prior to expiration of the Initial Term, exercise the 24-month extension option. If City provides this extension notice, then the Agreement Term will automatically renew on a month-to-month basis, up to a total of 24 months, unless earlier terminated pursuant to this Agreement. If the 24-month extension is exercised in full by City, the total Term of the Agreement will be IO years, unless earlier terminated pursuant to this Agreement.

2.6 Conditions to Effectiveness of Agreement
The effectiveness of this Agreement, and the performance of City's obligations, are subject to the satisfaction of all conditions set out below, any of which may be waived by City in whole or in part.
a) Accuracy of Representations. Representations and warranties made by Company in this Agreement are true and correct as of the Effective Date, as defined in Section 12.14.B.
b) Absence of Litigation. There is no litigation pending that challenges the award of this Franchise to Company, or the execution of this Agreement, or that seeks to restrain or enjoin its performance.
c) Furnishing oflnsurance and Bonds. Company has furnished evidence of the insurance and bonds required by Article 8.

November 12, 2019 -14- City of Beverly Hills
d) Effectiveness of City Council Action. City's action approving this Agreement has become effective under California law prior to the Effective Date of this Agreement.

2. 7 Limitations on Scope of Franchise
A. The Franchise granted to Company is exclusive except for the categories of Solid Waste listed in this section. The granting of this Franchise does not preclude the categories of Solid Waste listed below from being delivered to, Collected, and transported by others, provided that no Person is excused from obtaining from City any authorization that is required by law:

1. Single-Family Solid Waste Collection services and Multi-Family Solid Waste Collection services to Customers using Carts.

2. Recyclable Materials that are source-separated from Solid Waste by the Customer and which Customer sells or is otherwise
compensated for by other Persons in a manner resulting in a net payment to the Customer.

3. Construction and Demolition Waste that is incidentally removed by a duly-licensed construction or demolition company, or as part of a total service offered by such licensed company or by City, and where the licensed company uses its own vehicles, equipment and employees to Collect the material, and that the company provides proof of delivery of each load to a City approved C&D
Recycling/processing Facility to City. Company will encourage the processing of demolition and construction debris originating in the City at Company's facility by offering a discounted rate.

4. Solid Waste, including Recyclable Materials and Green Waste, which is removed from any Premises by the Customer, and which is transported personally by the Customer (or by the Customer's fulltime employees) to a processing or Disposal Facility.

5. Recyclable Materials and Organic Waste that are source-separated at any Premises by the Customer and donated to youth, civic, or charitable organizations.

November 12, 2019 -15- City of Beverly Hills

6. Containers delivered for Recycling under the California Beverage Container Recycling Litter Reduction Act, Sections 14500, et�·, California Public Resources Code.

7. Green Waste removed from Premises by a gardening, landscaping, or tree trimming company using its own equipment and employees as an incidental part of a total service offered by the company.

8. Animal waste and remains from any slaughterhouse or butcher shops for use as tallow.

9. By-products of sewage treatment, including sludge, sludge ash, grit and screenings.

10. Hazardous Waste, medical waste, and radioactive waste, regardless of its source.

11. The casual or emergency Collection, removal, Disposal or diversion of Solid Waste by City through City officers or employees in the normal course of their employment.

12. Food Waste or other Organic Waste diverted from_Disposal by delivery to hog farms or otherwise used as animal feed.

B. Company acknowledges that City may permit other Persons besides Company to Collect the types of Solid Waste listed in this section, without obtaining approval of Company. City may enter into agreements with other entities for the Solid Waste and Recycling services not provided for in this Agreement, including, but not limited to, Disposal of street-sweeping debris and Green Waste from City landscaping maintenance operations, contract services, "niche" Recycling services, and household Hazardous Waste pickups.

C. The grant to Company of this exclusive Franchise will be interpreted in a manner consistent with state and federal laws. The scope of this exclusive Franchise will be limited by current and future state and federal laws regulating Solid Waste handling, control of Recyclable Materials, Solid Waste flow control, and related matters. If future interpretations of current law, or the enactment of new laws or local ordinances, limit the ability of City to lawfully provide for the scope of Franchise services specifically set November 12, 2019 -16- City of Beverly Hills
forth, Company agrees that the scope of the Franchise will be limited to those services that may be lawfully provided, and City will not be responsible for any lost profits that may be claimed by Company. In that event, it is the responsibility of Company to minimize the financial impact to whatever extent is reasonably feasible.

2.8 City's Right to Direct Changes

2.8.1 General
City may direct Company to perform additional services (including new diversion programs) or to modify the manner in which it performs existing services or bills for services. Pilot programs and innovative services that may entail new Collection methods, different kinds of services or new requirements for Customers, and alternative rate structures are included among the kinds of changes that City may direct. Company acknowledges that State or City law may increase the diversion requirement during the term of this Agreement and Company agrees to propose services to meet such diversion requirements. Company shall be entitled to an adjustment in its Company Compensation for providing such additional or modified services to the extent that such services are not used to meet existing Agreement requirements such as the minimum diversion requirement in Section 3.6, including a profit factor equal to ten percent (10%) of the incremental cost of such additional or modified services. If the City and Company cannot agree on compensation for new or additional services, then City may contract with other parties for such services, which shall be considered exempt from the exclusivity provisions of Section 2.1.

2.8.2 New Diversion Programs
Company must present, within 30 days of a request from City, a proposal to provide additional or expanded diversion services. The proposal must contain a complete description of the following:

Collection methodology to be employed (equipment, manpower, etc.). • Equipment to be used (vehicle number, types, capacity, age, etc.).

Labor requirements (number of employees by classification).

Type of Containers to be used.

November 12, 2019 -17- City of Beverly Hills
Program publicity, education and marketing.

Projection of the annual financial results of the program's operations in an operating statement format including documentation of the key assumptions underlying the projections and the support for those assumptions.

2.9 Ownership of Solid Waste
When Solid Waste is placed in Containers and properly placed at the designated Collection location, ownership and the right to possession will transfer directly from the Customer to Company by operation of this Agreement. Subject to Company's objective to meet the source reduction and Recycling goals that apply to City, and City's right to direct Company to process and dispose of Solid Waste at a specified Solid Waste Facility or at a specific Disposal Site, if City exercises that right by providing specific written direction to Company, then Company has the right to retain, recycle, process, dispose of, and otherwise use that Solid Waste, or any part thereof, in any lawful manner or for any lawful purpose. Subject to the provisions of this Agreement, Company has the right to retain any benefit resulting from its right to retain, recycle, process, dispose of, or reuse the Solid Waste, Green Waste, and Recyclable Materials that it Collects. Solid Waste, Green Waste, and Recyclable Materials, or any part thereof, that is Disposed of at a Disposal Site or Sites (whether landfill, Transformation Facility, transfer station, processing Facility, or Material Recovery Facility) will become the property of the owner or operator of the Disposal Site once deposited there by Company. City may obtain ownership or possession of Solid Waste placed for Collection upon written notice of its intent to do so; however, nothing in this Agreement may be construed as giving rise to any inference that City has such ownership or possession unless such written notice has been given to Company. Nothing in this section is intended to affect Company's right to retain of its portion of Recyclables revenue after remitting to City its share as described under Section 3.2.5 of this Agreement.

2.10 Company Status
Company represents and warrants to City the following:

I. Company is duly organized, validly existing, and in good standing under all applicable laws;

2. Company is duly qualified to transact business in the State of California; November 12, 2019 -18- City of Beverly Hills

3. Company has all necessary licenses, permits, and certifications to provide the services required by this Agreement.

4. Company is authorized to enter into and perform its obligations under this Agreement;

5. Company's Board of Directors or partners of Company (or the shareholders, if necessary) have taken all actions required by law, the articles of incorporation, the bylaws or otherwise, to authorize the execution of this Agreement; and,

6. The persons signing this Agreement on behalf of Company have authority to do so.

2.11 Business License
As a condition of this Agreement, Company must obtain and maintain a business license to operate in the City of Beverly Hills, and any other licenses or permits that may be required by federal, state, county or city law, ordinance or regulation. No services may be provided under this Agreement until such business license has been obtained, and all fees paid therefore, by Company.

2.12 Annexations
This Agreement will extend to any territory annexed to City during its term, except to the extent that Collection by Company within that annexed territory would violate the provisions of Public Resources Code Section 49520. In that event, this Agreement will become effective in that area at the earliest possible date authorized by law, and City will cooperate with Company to fulfill any requirement necessary for Company to serve the annexed area consistent with this section.

2.13 Governing Requirements
Company must comply with all provisions of this Agreement, City's Municipal Code, and all other applicable laws, rules and regulations that pertain to the Collection, storage, transport and Disposal of Solid Waste and the Collection and marketing of Recyclable Materials. Company is responsible for obtaining and maintaining all permits and licenses required by regulatory authorities for the Commercial Solid Waste Collection and Disposal services authorized by this Agreement.

November 12, 2019 -19- City of Beverly Hills
ARTICLE 3

DIRECT SERVICES

3.1 Refuse Collection Services
A. The work to be performed by Company includes, but is not limited to, the furnishing of all labor, supervision, equipment, materials, supplies, and other items necessary to perform the services required. The designation of, and specification of requirements for, particular items of labor or equipment does not relieve Company of the duty to furnish all others, as may be required, whether or not identified elsewhere in this Agreement.

B. The work to be performed by Company will be performed in a thorough and professional manner so that Customers within the City are provided with reliable, courteous and high-quality Solid Waste Collection services at all times.

C. Company is responsible for the proper placement of Solid Waste Containers, and must return all Bins to their respective Collection areas with lids in a closed, secured, or locked position, as may be applicable.

3.1.1 Permanent Bin Services
A. Company will provide Bins and Bin Collection service to Commercial and Industrial Customers and to Multi-Family Customers that use Bins. Company will Collect and remove all Refuse that is placed in Bins from Multi-Family properties and Commercial and Industrial Premises receiving Bin service, at least once every calendar week or more frequently if necessary to handle the waste stream from the Premises where the Bins are located. Where feasible, and when authorized in advance by City, Solid Waste Bins may be shared by Customers.

B. Company must supply all necessary equipment to provide Solid Waste Collection Bin services to Commercial and Industrial Customers occupying buildings with covered parking areas having entrances with a minimum height of 7'6".

C. Special consideration will be given when determining the pickup area to ensure that the flow of traffic is not impeded.

November 12, 2019 -20- City of Beverly Hills
D. Existing Customers shall continue to be charged either Bin rates or restaurant Bin rates, as such rates are included in Exhibit I and as maybe subsequently adjusted, based upon which of the two rate schedules (Bin or restaurant Bin) the Customer was being Billed under immediately prior to the start of service under this Agreement. Company may not charge restaurant Bin rates to new Customers or to Customers previously charged standard Bin rates without prior written City approval.

E. Company may not transfer Bin Customers to or from Refuse Cart Collection without prior written City approval.

F. All Refuse Collected shall be sent to a Materials Recovery Facility for processing to recover Recyclables prior to landfilling residual waste.

3.1.2 Rolloff Box Refuse Service
Company must provide Rolloff Box service to all Customers requesting service at a rate not to exceed the City-approved maximum rate contained in Exhibit I. For any container request received by 1 :00 p.m., Company shall deliver container by the next Business Day. If Company does not provide the requested container within one Business Day of request for orders placed before 1 :00 p.m., or within two Business Days of request for orders placed on or after I :00 p.m., Customer or City can call and receive Rolloff Box Service from another company. Maximum rate is approved pull rate, plus Disposal cost, or processing cost. The Disposal or processing cost per ton may not exceed the actual rate charged to Company or the Disposal rate as adjusted in accordance with Article 5, whichever is lower.

If Company arrives to pull a RolloffBox at a scheduled time agreed upon with the Customer and Company must wait more than 30 minutes after notifying City of blockage to access the Rolloff Box through no fault of Company, a dry run fee shall be permitted per the City-approved rate schedule.

If City notifies Company of RolloffBox order cancellation before Company's vehicle has left the Company's facility/yard, Company shall not charge a dry run fee.

If Customer requests a RolloffBox delivery or pull on Monday through Saturday, between the hours of 5:00 pm to 5:00 a.m., and all day Sunday, Company shall be permitted to charge an after-hours surcharge per the City-approved rate schedule. If both delivery and pull are requested after hours, only one after-hours surcharge applies. AfterNovember 12, 2019 -21- City of Beverly Hills hour surcharge does not apply to morning deliveries or pulls starting at 5:00 a.m ..

Monday through Saturday.

3.1.3 Temporary Bin Service
Company must provide Temporary Bin Service to all Customers requesting that service.

For any container request received by 1 :00 p.m., Company shall deliver container by the next Business Day. If Company does not provide the requested container within one Business Day of request for orders placed before 1 :00 p.m., or within two Business Days of request for orders placed on or after 1 :00 p.m., Customer or City can call and receive Temporary Bin Service from another company. If Company arrives to service the Bin at a scheduled time agreed upon with the Customer and Company must wait more than 30 minutes after notifying City of blockage to access the Bin through no fault of Company, a dry run fee shall be permitted per the City-approved rate schedule.

If City notifies Company of Temporary Bin order cancellation before Company's vehicle has left the Company's facility/yard, Company shall not charge a dry run fee.

3.1.4 On-Call Bulky Item Pickup
A. Company will provide Bulky Item pickup service to all Customers.

Customers will be instructed in educational materials to provide Company within one Business Day's notice for pickup service. Company may charge Commercial and Industrial Customers for pickups in accordance with the rate schedule contained in Exhibit 1, based on the number and type of items. Multi-Family Customers, including group homes, shall receive this service at no additional charge. Timing and place of pickup must be arranged so traffic and sidewalks are not obstructed prior to or during pickup.

B. Bulky Item Collected by Company may not be landfilled or Disposed of until the following hierarchy has been followed by Company:

1. Reuse as is.

2. Disassemble for reuse or Recycling.

3. Recycle (through participation of charitable organizations).

4. Disposal.

November 12, 2019 -22- City of Beverly Hills

3.1.5 Scout Service
A monthly scout fee may, at Company's request, be authorized by City. City staff must first verify that the location of a Solid Waste (Refuse, Recycling, or Organics) Bin requires the Company's personnel to manually move that Bin 50 feet or more, as measured from the Container's enclosure to the normal point of Collection, or that a scout vehicle is operationally required, such as to move the Bin to the Collection point because physical conditions of the Customer's property (e.g., steep inclines), or access to the container by the Collection truck, reasonably prevent the crew from manually positioning the container. Company may request written advance City approval to charge a scout service fee for a Bin that has a compaction device attached and must be manually moved to the point of Collection a distance less than fifty (50) feet; City may approve the application of such a fee in its sole discretion on a case by case basis. When so authorized, the scout fee will be added to Company's monthly invoice to City for Solid Waste and/or Recycling Bin Collection services, and will be in the amount set forth in Exhibit 1. Company will obtain advance approval from City for each Customer location where Company proposes to assess a scout fee. Bins that are placed out in street prior to service, and after service shall not remain on the street for more than one hour in the public right-of-way unless otherwise approved by the City.

3.1.6 Lids, Casters, Hasps and Locks
When justified for efficient Bin Collection service or where necessary to deter scavenging and the unauthorized removal of materials from Bins placed in unsecured locations, City may require the use of Bins having lids, as well as casters, hasps or locks.

Upon request from City, Company must provide Containers with casters, hasps or locks.

Every lock for such Bins must be "keyed-alike" throughout City. Two keys will be furnished to the Customer. The amount of the caster, hasp or lock service fee will, at the request of Company, be authorized by City in addition to the maximum monthly rates, fees, and charges authorized in this Agreement for monthly Solid Waste Bin Collection services.

3.1.7 Overflowing Bins
Overflowing Bins must be Collected within 24 hours of notification at no additional charge. Company may request City approval to increase a Customer's capacity or service frequency if Company documents three instances of an overflowing Bin requiring November 12, 2019 -23- City of Beverly Hills
cleanup in one month, documents these instances with photographs, places a warning on the container and provides a copy of the warning and photograph to the Customer.

Warning notice shall include the possibility of a service increase if the problem is not rectified. The warning notice shall be approved in form by City.

3.1.8 Sunday Service Surcharge
Company shall provide Sunday service upon Customer's request. If Customer requests Sunday service for Container collection that is collected less than seven times per week, Company shall provide Sunday service at a rate not to exceed the City-approved maximum rate contained in Exhibit 1. The Sunday Service Surcharge rate shall be adjusted according to procedures for Bin rate adjustment described in Section 5.5.1.

3.2 Recycling Services

3.2.1 Recycling Bin and Cart Service
Company agrees to provide Recycling Bin Collection service to all Customers requesting it at fifty-percent (50%) of the Refuse rate for the same Bin size and frequency.

Recycling Carts are separately identified in the City-approved rate schedule and shall be billed at the City-approved rates. Company agrees to provide, at no additional charge, Recycling Collection service to the Beverly Hills School District and its campuses.

Source separated Recyclables Collected under this section must be Collected on a separate route from Refuse. Company may collect commingled and source separated Recyclables with another city's recyclables as long as Recyclables tonnage is reasonably allocated among jurisdictions based on Customers' weekly Recycling container capacities. Company may purchase Recyclable Materials from its Customers as well.

Company will provide Recycling Containers in sufficient quantities to meet the Recycling needs of each Customer. Recycling Collection programs will be made available at a minimum for: aluminum cans; glass jars and bottles; steel, bi-metal, and tin cans; empty aerosol containers; PET plastic; HDPE plastic; plastics types 3 - 7; plastic bags, shrink wrap, plastic toys and tools, and other plastic materials (if readily identifiable as being recyclable);juice boxes and milk cartons (aseptic packaging, Tetra Pak© and waxed cardboard); scrap metal, coat hangers and metal foil; newspaper; mixed paper (e.g., ledger, computer, junk mail, magazines, paperback books, cereal boxes, envelopes, paper shopping bags, and non-metallic wrapping paper); corrugated November 12, 2019 -24- City of Beverly Hills
cardboard; telephone books; and florescent tubes. Company will also make programs available for all other Recyclable Materials for which it has established markets.

3.2.2 Rolloff Box Recycling
Company must provide Rolloff Box service for Recyclables. Company may bill City for pull, plus processing costs per ton.

3.2.3 Construction and Demolition Waste Recycling
Company will make reasonable efforts to prevent Construction and Demolition Waste that is suitable for Recycling from being taken to a landfill by:

Transporting all Construction and Demolition Waste loads to an alternate Facility where they will be processed for reuse.

Inquiring of all Rolloff Box Customers about the type of Solid Waste to be generated, instructing all potential Construction and Demolition Waste generators on how to divert such materials, and providing a "how-to" brochure with alternative processing Facility contact information.

Contacting contractors on a list provided by City on a regular basis to educate them on Construction and Demolition Waste diversion.

Complying with CalRecycle and CALGreen requirements for the processing and diversion of Construction and Demolition Waste material. As of January I, 2017, the state-mandated diversion requirement for Construction and Demolition Waste is 65%.

Company shall divert a minimum of 80% from construction and demolition projects for buildings pursuing green building compliance in accordance with City of Beverly Hills Municipal Code, and provide certification of the actual diversion rate for material Collected from the project. Company may Bill Customers requesting 95% diversion for "extraordinary performance" under LEED an additional fee in accordance with the Cityapproved rate schedule.

3.2.4 Organic Waste Collection Services /Restaurant Food Waste Diversion 3 .2.4.1 Source-Separated Organics Service
November 12, 2019 -25- City of Beverly Hills
Company shall make arrangements to provide Organic Waste Collection services to Multi-Family and Commercial accounts to comply with State requirements for mandatory Commercial Organics Recycling under AB 1826 and SB 1383. Company shall provide 65-gallon source-separated Organics Cart service. Company agrees to assist City to identify Multi-Family and Commercial Premises required to arrange for Organic Material Collection services under State law, offer Organic Waste Collection to such Premises, and notify the City in the event of refusal to subscribe for Organic Waste Collection. 3 .2.4.2 Mixed-Waste Food Generating Establishment Route As an alternative to source-separated Organic Waste Collection, or in combination with source-separated Collection, Company may Collect Solid Waste from food-generating establishments such as restaurants, hotels, and any other applicable entities on a separate route, reverse-sort this Solid Waste to remove non-cornpostables, and send all remaining Solid Waste for composting. This program shall be offered to Customers that generate predominately compostable Solid Waste. Such Customers shall not be required to source separate Food Waste from other material and may have all Refuse disposed in, and Collected from, one Container. This service shall be provided at the City-approved restaurant bin rates included in Exhibit 1 and as subsequently amended. Company shall receive City approval before adding or deleting Customers from this program.

Should CalRecycle deem the mixed waste organics recovery program to be not in compliance with SB 1383 or other regulatory requirements, Company shall offer sourceseparated Organics Waste Bins at the restaurant bin rates and regular Refuse at the nonrestaurant bin rates.

3.2.4.3 Organics Outreach and Reporting
One year (12 months) prior to the Operative Date, Company will provide an outreach plan to City for approval, identifying the site visit schedule for which a Company representative will visit each Commercial Customers' Premises for the purpose of assessing levels of Food Waste and Green Waste generation, assessing when Organics Waste collection service must be established to meet the requirements of Public Resources Code Section 42649.81, and encouraging all Commercial Customers to establish Organics Waste collection service as required by CalRecycle. Company will contact Commercial Customers and provide site visits according to the approved schedule. The initial site visits shall be completed prior to the Operative Date. Beginning November 12, 2019 -26- City of Beverly Hills
January I, 2023, and annually thereafter, Company representative will follow up with Commercial Customers not subscribing to the Organics Waste Collection service who are required under AB 1826 or SB 1383 Requirements to participate. The Company representative shall assist customers with selecting appropriate Containers and Container sizing, identifying acceptable Food Waste materials for collection and processing, and attempting to resolve any logistical impediments to providing Organics Waste collection service.

Company will develop its own Organics-specific instructional materials for use in educating participating Customers. Company will create and distribute a letter to all Commercial Customers. Additional materials may include instructional posters, brochures, or other formats as mutually agreed to between City and Company. As with all outreach material, all items must be submitted for review and approval by City prior to distribution.

Company shall assist City by gathering required Customer data, performing site visits, public outreach, and other requirements in order to comply with State requirements and regulations such as mandatory Commercial Recycling (AB 341) and mandatory Organics Recycling (AB 1826), and control of short-lived climate pollutants (SB 1383). The parties acknowledge that CalRecycle is in the process of implementing SB 1383 (Public Resources Code Section 42652 et seq.), which establishes targets to achieve a 50 percent reduction in the level of the statewide disposal of Organic Waste from the 2014 level by 2020 and a 75 percent reduction by 2025. The law grants CalRecycle the regulatory authority required to achieve the organic waste disposal reduction targets and establishes an additional target that not less than 20 percent of currently disposed edible food is recovered for human consumption by 2025.

Company shall coordinate food rescue and donation efforts with each Customer deemed to generate Organics Waste as required by Ca!Recycle. Company will identify food recovery opportunities at Beverly Hills businesses, address concerns, encourage participation by connecting with food recovery partners, and track potential participants for future outreach.

3.2.5 Recyclable Commodities Revenue Sharing
Company is responsible for the marketing and sale of all Recyclable materials Collected and/or processed under this Agreement. If commingled or source separated Recyclable November 12, 2019 -27- City of Beverly Hills
Materials are Collected in vehicles with recyclable material from other jurisdictions, Company shall allocate City's commodity revenue based on weekly Recycling container capacity. Company shall remit to City 50% of all commodity net sales revenue from sale of Recyclables Materials after processing (including but not limited to source separated Recyclables, commingled Recyclables, Recyclables recovered through the processing of mixed waste including Solid Waste Collected by Company, residential waste delivered by City and processed by Company, and refuse-derived fuel (RDF)), which exceed $554,000 in Recyclable net sales revenue annually, measured for each contract year from April 1 to March 31. For purposes of this calculation, Recyclables shall exclude Recyclables from Rolloff Box loads direct-hauled to third-party material processors per Section 5.1.C and all Construction and Demolition Waste. Company shall provide a quarterly report which includes breakdown of sales by commodity and by type of customer (Residential, Commercial, Rolloff ( excluding Rolloff direct-hauled to thirdparty material processors)), along with a remittance payment, if any. Negative values shall not be included or used as offsets against commodity revenues. For the purposes of this Section, net sales revenue means gross sales proceeds actually received by Company for commodities net of third-party transportation costs for commodities picked up by commodity buyers from Company's facilities, but without any deduction for Company's processing costs.

3.2.6 Large Venue Event Assistance
Company will assist planners of large venue events with reporting and planning needs as may be useful in meeting the requirements of Public Resource Code Sections 42648- 42648. 7 at no additional charge. Company will make staff available to assist the City as needed. Recycling, Refuse Collection, and Disposal service shall be provided in accordance with the City-approved rate schedule and as otherwise described in this Agreement.

3.3 Green Waste Program

3.3.1 Rolloff Box Green Waste Service
Company must make Rolloff Box Green Waste Collection available to all Customers at a rate of pull, plus actual dump fee, not to exceed the Rollo ff Box Refuse rate for Collection and Disposal.

November 12, 2019 -28- City of Beverly Hills

3.3.2 Holiday Tree Collection Program
Company must Collect holiday trees placed for Collection from all Customers (including both Multi-Family and Commercial and Industrial) serviced under this Agreement at no additional charge for the period from December 26 until January 31. Trees must be cut into lengths no longer than six feet, be free of ornaments, garlands, and tinsel, and stands must be removed. Trees must be diverted from Disposal.

3.3.3 End Uses for Green Waste
Company must divert Green Waste materials, including holiday trees Collected under Section 3.3.2, from Disposal. Company must provide end uses for Green Waste that maximize diversion credits for City in accordance with regulations established by Cal Recycle.

3.4 Warning Notice
Company must warn Customers who have non-Recyclable Materials in their Recycling Containers, non-Organic material in their Organics Containers, or Organic Waste or Recyclables in their Trash Containers as required by CaJRecycle under SB 1383 with a mailed warning notice as well as a notice placed on the Container. If, after three written warnings in a six-month period, the Container continues to be contaminated, a contamination fee may be charged in accordance with the approved rate schedule.

Company must leave instructive warning notices on the contaminated Containers, indicating the issue, how to correct it, and that the Customer will be charged a contamination fee if behavior is not corrected. The format of the warning notice must be approved by City. Company shall report monthly to City any warning notices issued, including the customer name, service address, the date contamination was observed, the person who conducted the inspection, any photographic evidence of the violation that was obtained, and any other information reasonably requested by the City. Company will also provide copies of written notices to the City on a monthly basis, or at other times when requested by the City. With City approval, Company may remove Recycling Containers from Customers who repeatedly fail to sort properly and to segregate recyclable materials, resulting in a minimum of20% contamination and Company may increase the Customer's current mixed waste container size and/or frequency. Company must report monthly to City any warning notices issued, and Company will provide Customer with a minimum of two warnings prior to requesting removal of Container.

November 12, 2019 -29- City of Beverly Hills

3.5 City Services

3.5.1 City Facilities Collection
Company must Collect and Dispose of all Solid Waste generated and Recyclable Materials accumulated at Premises owned or operated by City in accordance with the City-approved rate schedule. These Premises include, but are not limited to, offices, parks, and street maintenance operations. Collections will be scheduled at a time mutually agreed upon by Company and City.

3.5.2 Special Events Collection
Company will provide Refuse and Recycling Bin and Rolloff Box Collection service at City-designated events and may charge for this service in accordance with the Cityapproved rate schedule. Company shall provide up to twenty (20) "Bag Buddy" bag holders and liners for the Collection of Refuse and Recyclables as needed at all events at no additional cost. City crews will Collect Refuse and Recyclable Materials from smaller Containers placed throughout the event and deposit the material in Company-provided Bins and Rolloff Boxes.

3.5.3 Emergency Collection and Disposal Service
At City's request, Company will assist with emergency Collection and Disposal service resulting from a major disaster, such as an earthquake, storm, riot or civil disturbance, or as otherwise determined necessary by City, by providing Collection vehicles and drivers normally assigned to City. Company will be paid in accordance with the City-approved rate schedule.

3.5.4 Abandoned Item Collection
Company will Collect all acceptable non-hazardous waste items abandoned in the City's public rights-of-way, or on City's public property, within one Business Day of observation by Company or of notification from City to do so. These services, including Disposal costs, will be provided at no additional charge.

3.5.5 Sidewalk Receptacle Collection
Upon thirty (30) days written notice from City, any time after execution of this Agreement, Company shall Collect Solid Waste from all public litter Containers, or November 12, 2019 -30- City of Beverly Hills
"sidewalk receptacles," in the City on at least a daily basis. Company shall wipe down the top lid of each sidewalk receptacle when servicing. Company shall process all Solid Waste Collected to recover Recyclables. Collection may be required to service sidewalk receptacles more frequently during and following City special events. Sidewalk receptacles may periodically require a second daily collection if container is overflowing, and City will notify Company of containers requiring a second collection. City shall provide sidewalk receptacles and may add additional receptacles throughout the City during the term of this contract. Company shall provide replacement liners for receptacles in the Business Triangle and at other locations designated by City that use liners. City will be responsible for power washing and replacing damaged Containers for as long as City has a designated site for a clarifier at the City's Public Works yard. If City no longer has this designated space at the City's Public Works yard, Company shall be responsible for cleaning Containers as requested by City and shall receive additional compensation for providing these services as shown in the City-approved rate schedule.

3.5.6 Containers
Company will provide Customers with Bins, Rolloff Boxes or compactors, upon request, for Collection of Solid Waste.

A. Maintenance. Company must maintain its Containers in a clean condition, free from Putrescible residue. Containers will be constructed of heavy metal, or other suitable, durable material, and will be watertight and well painted. Wheels, forklift slots, and other appurtenances, which were designed for movement, loading, or unloading of the container, must be maintained in good repair. Company shall repair or replace a damaged or missing container by the next Businesses Day after observation by Company or notification by City or Customer.

B. Cleaning. Customers may request Bin and Rolloff Box cleanings, including bin compactor containers, in accordance with the City-approved rate schedule. The Customer's first Container cleaning per calendar year is at no additional charge.

Company must remove graffiti from any container within three days of request by City or Customers. Unsanitary Containers must be replaced within one day after a request by City or Customers.

C. Identification. Each container placed in City by Company must have the name and phone number of Company in letters not less than three inches high on the exterior of November 12, 2019 -31- City of Beverly Hills
the container so as to be visible when the container is placed for use. Company must identify the Containers that are assigned to each Commercial and Industrial Customer, and each Multi-Family Customer with Bin service, and identify the current service level for Bin Customers, by means mutually agreeable between City and Company.

Information on labels must be updated immediately to reflect changes. Company must repaint Bins upon City's request.

D. Bin Color. Refuse, including mixed waste, Bins shall all be painted a consistent color. Source separated Recycling Bins shall be all painted a consistent color, different than the Refuse/mixed waste Bin color.

E. Rolloff Box Coverage Requirement. Company must properly cover all open Rolloff Boxes during transport as required by the State Vehicle Code.

F. City Option to Purchase Commercial Bins. Company agrees to provide City or new service provider the option to purchase some or all of the permanent Commercial Bins in service at the end of the contract term at depreciated book value. Company shall provide a detailed report to City annually within 30 days of calendar year end documenting the depreciated book value. City may exercise its option for City or new service provider to purchase some or all of the Bins at the end of the term by providing Company written notice at any time during the term but no later than 30 days prior to contract expiration, including any optional extensions. City or new service provider will make payment for Bins within 90 days following the end of the term.

3.5.7 Compost Program
Company shall provide free compost to City for City's special events and City's community give back program at no additional charge. Compost shall be delivered on pallets in 20 pound bag units. Company shall cause the compost to be delivered within 48 hours of any request. Company shall provide free bags of compost at annual Earth Day events as well as bulk compost at the City Yard. Company will provide a discount for bulk deliveries of compost, mulch, or wood chips for residents.

3.5.8 Greystone Mansion Support
Company shall provide support for the Greystone Mansion historic landmark of up to $5,000.00 per calendar year, as donors or suppliers of compost or soil amendments for landscaping the property.

November 12, 2019 -32- City of Beverly Hills

3.5.9 Recycling Scholarship
Company will offer students attending Beverly Hills High School four recycling scholarships per year to promote sustainability studies. The four scholarships will be in the amount of $500.00, for a total of $2,000.00 per year. Company may also participate in school assemblies or site visits to promote Recycling.

3.6 Diversion Requirements
The minimum amount that must be diverted through Recycling, Green Waste and Food Waste Collection, Mixed Waste Processing, and Transformation is 53% of the Solid Waste Collected by Company during each year of this Agreement. Diversion achieved by Transformation will be credited toward this 53% requirement only to the extent that the State provides City with diversion credit for this tonnage.

The City-wide diversion rate as reported to CalRecycle exceeds 50%. Should, in any year under this Agreement, City not reach the AB 939's 50% diversion goal for its entire waste stream, and if City determines that Company has not maximized diversion from the services and programs contemplated under this Agreement, Company will undertake reasonable efforts to implement programs and to provide equipment necessary in order for City to meet the 50% diversion goal.

3.7 Operations

3.7.1 Schedules
A. To preserve peace and quiet, no Solid Waste may be Collected from Bins at, or within 500 feet of, occupied residential premises, senior citizen housing facilities, motels, or hotels between the hours of 9:00 p.m. and 7:00 a.m. Monday through Friday, and 9:00 p.m. and 8:00 a.m. Saturday through Sunday. Company's Collection vehicles must not be operated in or adjacent to any residential area of City between the hours of 9:00 p.m. and 7:00 a.m. Site and route-specific exemptions may be made to this limitation by written notice provided by City's Director of Public Works. Company will adjust the early morning start point of Collection routes to address and minimize service complaints when requested by the City. If the regularly scheduled Collection day falls on New Year's Day, Thanksgiving Day or Christmas Day, alternate Collection must be performed on the following day, unless the holiday falls on a Saturday, in which case Collection must be made up on the following Monday. All other Collection days falling November 12, 2019 -33- City of Beverly Hills
on a legal holiday will remain as scheduled. Company may be requested by City or Customer, and is permitted, to perform limited Collections on holidays in areas where business traffic continues over the holiday and Facility requires daily Collection.

B. Company must be prepared to review with City its operations plan outlining the Collection routes, intervals of Collection and Collection times for all materials Collected under this Agreement at least 30 days prior to the start of service under this Agreement, and once annually upon 30-day written notice requesting this review. More frequent reviews may be required if operations are not satisfactory, based on documented observations or reports of complaints. If the operations plan is determined by City to be inadequate, Company must revise its plan, incorporate any changes into a revised plan, and review that revised plan with City within 30 calendar days.

3.7.2 \Tehicles
A. General. Company must provide Collection vehicles sufficient in number and capacity to efficiently perform the work required by this Agreement in strict accordance with its terms. Any additional vehicles or routes that may be required to meet the service standards during the term of this Agreement must be provided at Company's sole expense. Company must have available on Collection days sufficient back-up vehicles for each type of Collection vehicle used to respond to complaints and emergencies.

B. Specifications. Company shall use Bin Collection vehicles and Roll-off Box Collection vehicles powered by liquefied natural gas (LNG) or compressed natural gas (CNG) only. Container delivery vehicles, scout vehicles, supervisor pickup trucks, and vehicles used for holiday tree collection, special events, and Bulky Item Collection are only required to use LNG or CNG fuel to the extent required by law, including SCAQMD and Air Resource Board regulations. Company must be in compliance with all rules and regulations currently in force or as they may be revised or implemented during the contract term, including SCAQMD Rule 1193, and the Air Resource Board's emission standards for Refuse removal vehicles. Company will Collect from Bins using front loaders. At no time may Company use vehicles for the Collection of Solid Waste (Bin, Rolloff or other) in the City that are more than 10 years old. All vehicles used by Company in providing Solid Waste Collection services must be registered with the California Department of Motor Vehicles. All such vehicles must have watertight bodies November 12, 2019 -34- City of Beverly Hills
designed to prevent leakage, spillage or overflow. All such vehicles shall use GPS technology to track route performance. Company shall provide to City a web portal link that allows read-only access of GPS data in real time.

C. Vehicle Identification. Vehicles must be marked as directed by City.

Company may be asked to include Company's name, local telephone number, and a unique vehicle identification number designed by Company. Required markings must be prominently displayed on all vehicles, in letters and numbers no less than three inches high. Vehicles must all be painted in a standard color.

D. Vehicle as City Billboard. Company must dedicate one (and, if requested, two) sides of all Collection vehicle packer bodies to display a City billboard, with dimensions as determined by City. Company is responsible for affixing and removing this signage and for production costs once per contract year (April I to March 31 ), up to two sides. City will pay for all design costs and for re-signing more than once per year. Company may not allow any other advertising on its Collection vehicles.

E. Cleaning and Maintenance
I. Company must maintain all of its properties, vehicles, facilities, and equipment used in providing service under this Agreement in a safe, neat, clean, and operable condition at all times.

2. Vehicles used in the Collection of Solid Waste shall be painted, washed, and steam-cleaned on a regular basis in order to present a clean appearance. City may inspect vehicles at any time to determine compliance with this Agreement. Company will also make vehicles available to the Los Angeles County Health Department for inspection, at any frequency it requests. Company agrees to replace or repair, to City's satisfaction, any vehicle that City determines to be of unsightly appearance, leaking, or in unsatisfactory operating condition.

3. Company must repaint all vehicles used in the Collection of Solid Waste within 60 days following notice from City, if City determines that their appearance warrants painting. City may not request that vehicles be painted more than once every three years.

4. Company must inspect each vehicle daily to ensure that all equipment is operating properly. Vehicles that are not operating properly, or vehicles in November 12, 2019 -35- City of Beverly Hills
an unsafe or excessively noisy condition, must be removed from service until repaired and operating properly. Company must reasonably perform all scheduled maintenance functions in accordance with the manufacturer's specifications and schedule. Company must keep accurate records of all vehicle maintenance, recorded according to date and mileage ( or hours of operation) and make those records available to City upon request.

5. Company must repair, or arrange for the repair of, all of its vehicles and equipment for which repairs are needed because of accident, breakdown, or any other cause so as to maintain all equipment in a safe and operable condition.

Company must maintain accurate records ofrepair, which shall include the date and mileage ( or hours of operation), nature of repair, and the verification by signature of a maintenance supervisor that the repair has been properly performed.

6. Upon request by City, Company will furnish to City a written inventory of all equipment, including Collection vehicles, used in providing service, and will update the inventory annually. The inventory must list all equipment by manufacturer, ID number, date of acquisition, type, and capacity.

F. Operation. Vehicles must be operated in compliance with the California Vehicle Code, and all applicable local ordinances. Company may not load vehicles in excess of the manufacturer's recommendations or limitations imposed by state or local weight restrictions on vehicles.

Equipment must comply with US EPA noise emission regulations, currently codified at 40 CFR Part 205, and other applicable noise control regulations, and must incorporate noise control features throughout the vehicle. In no event may the noise level of equipment used for Collection exceed 75 dB when measured at a distance of 25 feet from the vehicle, five feet from the ground. Company must submit to City, upon City's request, a certificate of noise level testing of all vehicles by an independent testing entity.

Company must store all equipment in safe and secure locations in accordance with City's zoning regulations.

G. City Inspection Per Code. City may cause any vehicle used in the performance of this Agreement to be inspected and tested at any commercially reasonable time and in such manner as may be appropriate to determine that the vehicle is being maintained in compliance with applicable provisions of the State Vehicle Code, including all smog equipment requirements. City may direct the removal of any vehicle from November 12, 2019 -36- City of Beverly Hills
service if that vehicle is found to be in non conformance with applicable codes. No vehicle that City has directed to be removed from service may be returned to service until it conforms to the State Vehicle Code, and City approves its return to service.

H. Vehicle Inspections. Company must submit the Safety Compliance Report/Terminal Record Update from its Biennial Inspection of Terminal, or BIT. If Company receives a terminal rating below satisfactory, Company is in violation of this Agreement. Company has the time allowed by the Department of California Highway Patrol ("CHP") to cure violations and to bring the terminal rating up to satisfactory. If the CHP does not adjust the rating to satisfactory or better within six months, then Company will be considered in default, and City may terminate this Agreement.

I. Correction of Defects. Following any inspection, the Director of Public Works has the right to cause Company, at its sole cost and expense, to recondition or replace any vehicle or equipment found to be unsafe, unsanitary or unsightly. The Director of Public Works determination may be appealed to the City Council, which decision will be final.

3.7.3 Litter Abatement
A. Minimization of Spills. Company must use due care to prevent Solid Waste or fluids from leaking, or being spilled or scattered during the Collection or transportation process. If any Solid Waste or fluids leak or are spilled during Collection, Company must promptly clean up those materials. Each Collection vehicle must carry a broom and shovel at all times for this purpose.

Company may not transfer loads from one vehicle to another on any public street without City's prior written approval, unless it is necessary to do so because of mechanical failure, accidental damage to a vehicle, or a pre-approved method of Solid Waste transfer between vehicles.

B. Clean Up. During the Collection or transportation process, Company must clean up litter in the immediate vicinity of any Solid Waste storage or Collection area, whether or not Company has caused the litter. Company must inform the Customer of instances of repeated spillage not caused by Company and must report that spillage to City. City will attempt to rectify such situations with the Customer if Company has already attempted to do so without success.

November 12, 2019 -37- City of Beverly Hills

3.7.4 Agreement Administration and Performance Monitoring City has the right to observe and review Company's operations and to enter Company's premises at all reasonable hours and with reasonable notice for the purposes of such observation and review.

3.7.5 Personnel
A. Company, and its agents and employees, in the performance of services authorized by this Agreement, acts in an independent capacity and not as an officer, employee, or agent of City.

B. Company will comply with City background check procedures. All Company employees shall meet the same standard as City employees. Company shall conduct criminal background checks and drivers' license checks, either in-house or through hiring an outside agency. Company will provide any adverse information discovered to City. A criminal record or Department of Motor Vehicles violations are not automatic bars to employment, but require a case by case review by Company and City to evaluate public safety issues. City's decision in such instances shall be final.

C. Company must employ sufficient personnel, qualified by reason of education, training and experience, to discharge adequately all services authorized to be performed by Company under this Agreement. Company must provide service of the highest quality at all times, and personnel retained to perform this Agreement must be courteous to the public, competent, and otherwise fully qualified to fulfill Company's obligations. Company's personnel must have the ability to reasonably communicate with Customers, and all of Company's supervisors must have the ability to speak, read, and understand the English language.

D. Company will establish and vigorously enforce an educational program that will train Company's employees in the identification of Hazardous Waste.

Company's employees must not knowingly place Hazardous Waste in the Collection vehicles, nor knowingly dispose of Hazardous Waste at the processing Facility or Disposal Site.

E. Company will designate a field supervisor who is experienced in Solid Waste Collection procedures and, if applicable, Recycling programs. Company's field supervisor will be available to City representatives during all hours of Company's November 12, 2019 -38- City of Beverly Hills
operations, and be available to be onsite in the City during collection operations within thirty (30) minutes notice from City. Company's field supervisor must maintain oversight and quality control of the operations.

F. Company must promptly notify City of any replacement or reassignment of managerial or supervisory personnel who are directly involved in the performance of this Agreement.

G. All employees of Company performing services authorized by this Agreement must be dressed in clean uniforms, and no portion of the uniform may be removed while working. Each uniform, or a badge secured thereto, must set forth the name of Company's employee and the name of Company.

H. Company must not discriminate against any employee or applicant for employment because of the employee's or applicant's race, religion, national origin, ancestry, sex, sexual preference, age or physical handicap. Company will designate an individual who will enforce Company's nondiscrimination policies. If requested by City, Company will establish and maintain an Affirmative Action Plan that will describe the methods by which Company will meet its obligations to refrain from discriminatory practices in the hiring and supervision of all employees. Company will maintain records pertaining to the implementation of that plan and will make those records available for inspection by City upon request.

I. All services to be performed by Company under this Agreement will be performed in such a manner as not to disturb the public peace or to create a public nuisance. In this regard, Company will develop and enforce operational policies for its employees to eliminate the following: (i) racing the engine of the Collection vehicle while compacting Solid Waste; (ii) the loud playing of radios; (iii) shouting and yelling by employees; and (iv) parking Collection vehicles in such a manner as to intentionally prevent other vehicles from passing. Company's failure to adhere to these operational policies may subject Company to penalties in accordance with the schedule set forth in Section 10.3 of this Agreement.

3.7.6 Employee/Subcontractor Identification Required
A. Company must provide its employees, Affiliates, and subcontractors with identification for all individuals who may make personal contact with residents or businesses in City. City may require Company to notify Customers yearly of the form of November 12, 2019 -39- City of Beverly Hills
that identification. Company will provide to City a list of current employees, Affiliates, and subcontractors upon request.

B. City reserves the right to perform through law enforcement agencies a security and identification check upon Company and its present and future employees, in accordance with accepted procedures established by City, or for probable cause. Upon City's request, Company will remove any Company employee from the account with or without cause.

3.7.7 Fees and Gratuities
Company must not, nor will it permit any agent, employee, or subcontractor employed by it, to request, solicit, demand, or accept, either directly or indirectly, any compensation or gratuity for the Collection, transportation, Recycling, processing, or Disposal of Solid Waste except as authorized by this Agreement.

3.7.8 Non-Discrimination
Company may not discriminate in the provision of service on account of race, color, religion, sex, age, physical handicap or medical condition in violation of any applicable federal or state law.

3.7.9 Change in Collection Schedule
Any changes in the route map or Collection schedule will require the prior approval of City. City may require changes in the route map or Collection schedule to improve service, to resolve complaints, or for other reasons.

3.7.10 Report of Accumulation of Solid Waste; Unauthorized Dumping Company will direct its drivers to note the addresses of any Premises at which they observe that Solid Waste is accumulating and is not being delivered for Collection; and the address, or other location description, at which Solid Waste has been dumped in an apparently unauthorized manner. Company will deliver the address or description to City within five working days of that observation. Company will cooperate with City in the investigation and prosecution of any violations of City's Municipal Code, health codes, or other laws.

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3.8 Transportation, Disposal and Processing
A. Company will transport all Refuse Collected under Section 3.1 to a transfer station, MRF, Transformation Facility or Disposal Site. Unless City obtains ownership of the Solid Waste or Refuse stream as described in Section 2.9, the Disposal Site(s) designated by Company are the sites identified in Section 1.22. Company will make all reasonable efforts to separate Recyclable Materials from Refuse for diversion from landfill Disposal.

B. Company must maintain complete, accurate and up-to-date records of the quantities of Solid Waste transported to the transfer station, MRF, Transformation Facility or Disposal Site and will cooperate with City in any audits or investigations of those quantities.

C. City reserves the right to designate at a later date the Solid Waste Facility (whether landfill, Transformation Facility, transfer station, processing Facility or Material Recovery Facility). City and Company will use their best efforts to obtain indemnification against CERCLA, state Environmental Laws, and related claims from the operator of the landfill or other Facility that City designates. If City selects a Disposal Site or other Facility, City or Company is entitled to a rate adjustment to offset an increase or decrease in rates due to a significant change in tip fee or transportation costs.

3.9 Status of Disposal Site
Any Disposal Site used by Company must be designed and constructed in accordance with 23 California Code of Regulations Section 2510 et seq. ("Subchapter 15"). Any such landfill must have been issued all permits from federal, state, regional, county and municipal agencies necessary for it to operate as a Class III Sanitary Landfill and must be in full compliance with those permits.

3.10 Disposal and Processing Capacity Guarantee
Company warrants and guarantees to City that Araco Enterprises, LLC will have capacity at Athens Material Recovery Facility in Sun Valley, at Crown Recycling Services located at 9147 De Garmo Avenue in Sun Valley, and at Company's Organic Waste Processing Facilities for all Solid Waste Collected by Company or City throughout the term of this Agreement and guarantees that adequate capacity has been contractually reserved for the City's Solid Waste at those Facilities. Company will retain or obtain ownership of those November 12, 2019 -41- City of Beverly Hills
Facilities, or obtain contracts with the Facilities guaranteeing such capacity for the term of this Agreement.

City collects Solid Waste from single-family residences and from multi-family residences that use Carts. Concurrently herewith, Company has executed the Residential Solid Waste Processing and Disposal Agreement attached hereto as Exhibit 6, regarding the residential Solid Waste collected by City. Company's guarantee pursuant to this Section includes the obligations set forth in the Residential Solid Waste Processing and Disposal Agreement, which is incorporated herein by this reference.

3.11 Materials Recovery Facility
Company will send all Refuse Collected to the materials recovery facilities (MRFs) located at 11121 Pendleton St., Sun Valley and at 14048 Valley Blvd, La Puente, and/or Crown Recycling Services located at 9147 De Garmo Avenue in Sun Valley for Mixed Waste Processing prior to transferring residual waste to the Disposal Site.

3.12 Dedicated Routes
Solid Waste Collected in the City (with the exception of commingled or source-separated Recyclables and source-separated Organic Waste material) shall not be commingled in Collection vehicles with Solid Waste from other jurisdictions unless and until Company has obtained written advance approval from City as to Company's method of tonnage allocation.

3.13 Route Audit
Once during the first year and every three years thereafter, Company will conduct an audit of its Collection routes in the City. The route audit, at a minimum, will consist of an independent physical observation by a person, other than the route driver or route supervisor, of each Bin Customer in the City. The route audit information must include, at a minimum, the following information for each account:
• Route Number.
• Truck Number.
• Account Name.
• Account Number.
• Account Service Address.

November 12, 2019 -42- City of Beverly Hills
• Service Level per Billing System (Quantity, Size, Frequency). • Service Level per Routing System.
• Observed Containers (Quantity and Size).
• Bin condition.
• Proper signage.
• Graffiti.

Within 30 days after the completion of the route audit, Company must submit to City a report summarizing the results of that audit. This summary must include:
• Identification of the routes.
• Truck numbers.
• Number of accounts, by route and in total.
• Types of Billing and service exceptions observed.
• Number of Billing and service exceptions by type.
• Total monthly Billing, pre-audit.
• Total monthly Billing, post-audit (subsequent to corrections of identified exceptions). • Percentage of Billing and service exceptions:
o Percentage of the number of accounts with errors to the total number of accounts served.
o Percentage of the "net" change in monthly Billing as a result of the audit to the total pre-audit monthly Billing.
o Percentage of the "absolute" change in net monthly Billing as a result of the audit to the total "pre-audit" monthly Billing.

The first route audit report shall be submitted to the City by March 31, 2023, which subsequent reports due March 31 every three years thereafter. The report must include a description of the procedures followed to complete the route audit. This description must include the names and titles of those supervising the route audits and the names and titles of those performing the observations. The report must also include a description of the pre-audit training of the route auditors, particularly if temporary personnel are used.

The report must also include a description of the changes and Company's plans to resolve the exceptions. The results of the route audit must be available for review by City's representative.

November 12, 2019 -43- City of Beverly Hills

3.14 Service Exceptions; Hazardous Waste Notifications
A. Failure to Collect. When Solid Waste is not Collected from a Customer, Company will notify the Customer in writing, at the time Collection is not made, through the use of a "tag" or otherwise, of the reasons why the Collection was not made.

Company must make a record of the rejected Collection, setting forth the name and address of the Commercial and Industrial Customer and the reason for refusal to Collect.

Company must send copy of this record to City by the next Business Day, unless paragraph (B) below is applicable.

B. Hazardous Waste Inspection and Reporting. Company reserves the right and has the duty under law to inspect Solid Waste put out for Collection and to reject Solid Waste observed to be contaminated with Hazardous Waste. Company has the right not to collect Hazardous Waste put out with Solid Waste. Company must seal the container with tape and mark the container to notify City and its Fire Department of the hazard. Company must report the presence of hazardous materials to City's Fire Department and to City's Director of Public Works not more than two hours after discovering them. Company must notify other agencies with jurisdiction, if appropriate, of reportable quantities of Hazardous Waste observed in Solid Waste anywhere within City. These may include the California Department of Toxic Substances Control, local emergency response providers, and the National Response Center. Company must follow City guidelines in situations where hazardous materials must be reported to and removed by the Los Angeles County Hazardous Materials Team (HAZMA T).

Within 24 hours after the removal of the hazardous materials from the Container, Company must Collect and Dispose of all Solid Waste remaining in the Container.

In addition to other required notifications, if Company's employees observe any substances that they reasonably believe to contain Hazardous Wastes unlawfully disposed of or released on any City property, including storm drains, streets or other public rights of way, Company will immediately notify the Director of Public Works.

C. Hazardous Waste Diversion Records. Company must maintain records showing the types and quantities of Hazardous Waste found in Solid Waste and which was inadvertently Collected from Customers within City, but diverted from landfilling.

November 12, 2019 -44- City of Beverly Hills

3.15 Hazardous Waste Management Component
Company must maintain a Hazardous Waste management plan and make it available to City upon request. This includes but is not limited to the Company's procedures for addressing medical waste or other hazardous materials that are identified in Solid Waste Containers prior to collection or that is identified after collection. Company is responsible for any costs related to the inadvertent collection of medical or hazardous waste and may seek recovery directly from customers if the customer can be identified. In no instance shall City be responsible for such costs.

November 12, 2019 -45- City of Beverly Hills
ARTICLE 4

OTHER SERVICES

4.1 Customer Billing

4.1.1 City Billing
A. City is solely responsible for Billing all Customers, effectuating all Collections, and pursuing all delinquent accounts.

B. If City is required, as a result of non-payment, to temporarily terminate service for a Commercial or Industrial account, then City will give written notice to Company of that termination. Company will cooperate with all reasonable requests of City that relate to the Collection of accounts receivable.

4.1.2 Option for Company to Perform Billing and Company Compensation A. If requested by City, Company will perform Billing of Commercial and/or Roll-off Box Customers with contractor rates in Exhibit I increased as follows:
1 % increase to all Commercial contractor rates for Company to perform Commercial Billing
1 % increase to all Roll-off Box contractor rates for Company to perform Roll-off Box Billing
B. Company shall Bill Commercial Bin and/or Roll-Off Box Customers monthly, no sooner than the first day of the month for which service is being Billed, with payment due no sooner than thirty (30) days after the invoice date.

Company assumes the risk of non-payment.

C. All Bills must include service description, including Container size, frequency of service, any special services (such as locking lid service), and period billed for. City must approve Company Billings as to content and format of invoice. All Bills must carry a due date, not "due upon receipt." Bills will not separately itemize City fees, surcharges, disposal components or other breakdown November 12, 2019 -46- City of Beverly Hills
of rates without advance written approval from City. Bills shall include Company's telephone number for Billing and service inquiries.

D. If any Customer disputes a Billing statement provided by Company, Company shall provide notice thereof to the City Manager, with a copy of the Billing invoice and the nature of the dispute (including copies of any correspondence from the Customer). Company shall use its best efforts to resolve such disputes within seven (7) days of receipt of notice from the Company of such dispute. If such dispute cannot be mutually resolved by the Company and the Customer within such seven (7) day period, the dispute will be submitted to the City Manager for binding dispute resolution. Company acknowledges that the determination of the City Manager relating to such dispute shall be final and unappealable.

E. Once a payment is thirty (30) days past due the invoice date, Company must send the Customer a notice that service will be suspended if payment is not made within an additional 30-day period. Company may suspend a Customer's service only after compliance with the provisions of this subsection. City is not responsible for, nor will it assist with, the Collection of delinquent Accounts.

Company is authorized to charge late fees not to exceed 2% per month. Company may send reminder notices during the initial 30-day delinquency period.

F. Company may charge a reactivation fee in accordance with the Cityapproved rate schedule in Exhibit 1 only if Containers have been removed due to non-payment. Notwithstanding the above, and solely in the event of a Billing dispute, and in order to avoid negatively impacting the public health and safety, Company will continue to provide service to the Customer, if directed to do so by City, without regard to the status of that Customer's account. Payment for such continued services will be negotiated with the City.

G. Should Company determine that Company has under-billed a Customer, or Customers, Company may back-Bill for no more than three (3) months. If Company Bills Customers for any service charges not on the Cityapproved rate schedule, or not otherwise approved in writing by the City, such charges shall be refunded to Customers at City or Customer's request or as soon as discovered by Company; Company shall refund up to three years of past unapproved Billings.

November 12, 2019 -47- City of Beverly Hills
H. If directed by City, Company shall remit to City a Franchise Fee or other City fees as determined by the City. The Company shall be entitled to a rate adjustment equal to the pass-through amount of the City fee. (I) On or before the thirtieth (30th) day following the end of each month during the Term of this Agreement, Company
shall remit the Franchise Fee based upon services provided to City the previous month. If the fees are not paid on or before the thirtieth (30th) day, Company shall, along with fee payment, pay a late fee of 10%, plus interest at 12% per annum for amounts more than 30 days past due.
(2) Company shall prepare and submit a fee payment statement with each fee payment that includes receipts by sector (e.g., commercial, roll-off), by month, and supporting fee
calculations for each fee.
(3) Franchise Fee payments are based upon the prior month's Gross Receipts, and some Customers may pay late;
therefore, payments will continue to be due following
termination of Company's provision of service under this Agreement for as long as Company receives any Gross
Receipts derived from providing service under this
Agreement.

I. Company shall staff a toll-free telephone line to assist Customers, at a minimum, during the hours the office is required to be open per Section 4.2.1.

Company shall provide a representative, an answering service or answering machine during all other hours. Calls received by answering service or machine shall be responded to on the next Business Day.

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4.2 Customer Service

4.2.1 Office Hours
Company will have an office with a live operator and staff available to City, at a minimum, from 8:00 A.M. to 5:00 P.M., Monday through Friday, excluding holidays, and from 8:00 A.M. to 12:00 P.M. on Saturday. Company must provide City staff with the phone number of a live person who may be reached 24 hours a day. Company will provide a real-time communication system between City and Company supervisors.

Company will provide and maintain all communication equipment.

4.2.2 Missed Pick-ups
When notified of a missed pick-up, Company must Collect the Refuse, Recyclable Materials, Food Waste or Green Waste within twenty-four hours, and Company will make a good faith effort to collect a missed pick-up on the same day if notified by I :00 p.m. on the same day.

4.2.3 Complaint Documentation
All service complaints will be directed to Company. Daily logs of complaints concerning Collection of Solid Waste must be retained for a minimum of24 months and must be available to City at all times upon request.

Company must log all complaints received by telephone, and the log must include the date and time the complaint was received, name, address and telephone number of caller, description of complaint, employee recording complaint, and the action taken by Company to remedy the complaint. All written Customer complaints and inquiries must be date-stamped when received. All complaints received from Customers or forwarded by City must be initially responded to within 12 hours of receipt.

All Customer service records and logs kept by Company will be available to City upon request and at no cost to City. At any time during regular Company business hours, City will have access to Company's Customer service department for purposes that may include monitoring the quality of Customer service or researching Customer complaints.

November 12, 2019 -49- City of Beverly Hills

4.2.4 Resolution of Customer Complaints
Disputes between Company and its Customers regarding the services provided under this Agreement may be resolved by City. City's decision will be final and binding.

Intervention by City is not a condition precedent to any rights or remedies third parties might otherwise have in any dispute with Company. Nothing in this section is intended to affect the remedies of third parties against Company.

4.2.5 Government Liaison
Company must designate in writing a "Government Liaison" who will be responsible for working with City's designated representatives to resolve Customer complaints. City has the right to approve Company's designated liaison.

4.2.6 Computer Compatibility
Company must maintain an interface with the City's Customer Service and Work Order Management system. Company shall be responsible for costs related to interfacing with the City's Customer Service and Work Order Management system. The interface must provide electronic time stamping ofreceipt ofrequest by Company and resolution of request by Company. The interface must be fully operational six months after the City provides interface access to Customer Service and Work Order Management system (unless such date is extended by written notice to Company from City's Director of Public Works). Company acknowledges that the system must be available for use prior to the Operative Date of this Agreement in order to support customer service and billing functions under the City's Prior Agreement.

4.3 Community Events
At the direction of City, Company must participate in and promote Recycling and other diversion techniques at community events and local activities.

4.4 Waste Characterization Studies
Company agrees to participate and cooperate with City and its agents and to accomplish studies and data collection and prepare reports, as needed and directed by City, to determine weights and volumes of Solid Waste Collected and characterize Solid Waste generated, disposed, transformed, diverted or otherwise handled/processed, by Customer November 12, 2019 -50- City of Beverly Hills
type (Single Family, Multi-Family, Commercial), to satisfy the requirements of AB 939 and the City's sustainability and environmental objectives. Company will at its sole expense conduct such a waste generation and characterization study upon request of City, but not more than once every two (2) years.

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ARTICLE 5

COMPANY COMPENSATION AND RATES

5.1 General
A. The compensation provided for in this Article 5 constitutes the entire compensation due to Company under this Agreement for all services, labor, equipment, materials, supplies, taxes, insurance, bonds, overhead, Disposal, transfer, profit, and all other things necessary to perform all the services required. The Parties agree that the rates to be charged by Company to Customers are set by Company as a private contractor in the marketplace. City's role with respect to rate setting is to establish rate ceilings for the protection of Customers given the exclusive status afforded Company by this Agreement and given the nature of the services it is to provide. Accordingly, the Parties agree that this Agreement shall be construed to maintain the status of the rates Company chooses to charge its Customers as privately-established rates and not as property-related fees within the scope of Article XIII D of the California Constitution or taxes within the scope of Articles XIII A and XIII C and XIII C Section I subd. e of the California Constitution.

B. Company will, on the next Business Day, forward to City copies of Disposal tickets from Rolloff Box loads to enable City to bill Customers for RolloffBox service. Rolloff Box service will be billed per pull, plus dump fee per ton, for Refuse, or processing cost per ton for Recyclables. The maximum fees paid to Company are included in Exhibit 1, as adjusted in accordance with Article 5. If revenue is received for Recyclables from such Rolloff Box, the revenue must be applied as a credit against the pull charge billed to City. Hauler shall provide reasonable documentation of revenue received, and number oftons collected, used to determine Recyclables revenue credit.

C. Company is entitled to retain a portion of proceeds from the sale of Recyclable Materials in accordance with Section 3.2.5, with the exception of Recyclables revenues from Rolloff Box loads direct-hauled to third-party material processors, which is returned to City pursuant to paragraph B.

D. No later than the fifteenth day of each month, Company will submit to City an invoice of costs incurred during the preceding month for services rendered, plus all supporting documentation that is requested by City.

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E. City will review the monthly invoice and supporting documentation that is submitted by Company. Any adjustments that are determined by City to be necessary will be communicated in writing to Company and will be reflected in City's payment to Company.

F. Not later than 30 days after receipt of Company's monthly invoice, City will remit payment for the invoiced amount, plus or minus such adjustments as City determines are justified following review of the invoice and the supporting documentation.

G. If City fails to notify Company in a timely manner of the closing of a Commercial or Industrial account, then Company will be entitled to receive payment for all services rendered to that account prior to the date of notification.

5.2 Billing Adjustments and Refunds
If Company's invoice to City is later identified to contain undercharges to customer accounts, any adjustments shall be limited to those identified within 90 days of invoicing, and any back billing shall not exceed a period of 90 days. If City does not bill customer for Company's service due to Company's data error or lack of data, Company will not receive compensation for that service. If Company's invoice to City contains overcharges, such overcharges shall be credited back to the City up to a period of three years from the invoice date.

5.3 Initial Rates
The maximum rates for the partial Rate Year April 1, 2022 through June 30, 2022, and the Rate Year July 1, 2022 through June 3 0, 2023, shall be the contractor rates effective as of March 31, 2022, under the Prior Agreement, increased by 61 %, less any extraordinary rate adjustments granted by City Council from the approval of this Agreement to March 31, 2022 (the "Adjusted Rate Schedule"). The Organics Cart rate shall not be increased by the one-time 61 % adjustment. On or before April 1, 2022, the Adjusted Rate Schedule shall be attached to this Agreement as Exhibit I. For example, if City Council approved a 5% extraordinary rate increase after the approval of this Agreement and before the Operative Date of April 1, 2022, the rate increase on April 1, 2022 would be 61 % - 5% = 56%. The rates may not exceed those set forth in Exhibit 1, unless modified by a written amendment to this Agreement. Unless and until the maximum rates set forth on Exhibit 1 are adjusted, Company will provide the services November 12, 2019 -53- City of Beverly Hills
required by this Agreement and will charge no more than the maximum rates authorized by Exhibit 1, except as provided in this article.

5.4 Schedule of Future Adjustments
Beginning with the Rate Year commencing on July 1, 2023, and for all subsequent Rate Years, Company may request an annual adjustment to the maximum rates shown in Exhibit 1. Company must submit its request in writing, to be delivered to City in person or by certified mail, at least 90 days prior to the start of the new Rate Year, based on the method of adjustment described in Section 5.5. Failure to submit a written request at least 90 days prior to the start of the new Rate Year will result in Company waiving its right to request an increase for the subsequent year, or to request that the increase be made up in a future year. City may decrease the rates in accordance with Section 5.5 if the weighted rate adjustment index decreases. If any rates would decline based upon Section 5.5 calculations and a rate decrease is not implemented, the subsequent rate adjustment shall be based upon the average changes in indices since previous rate adjustment instead of the average change over the prior year.

5.5 Method of Adjustments
In accordance with Section 5.4, Company may request an annual adjustment to the maximum rates according to the formulas and example calculations shown in Exhibit 2, subject to review and approval of City. Future adjustments will be effective on July 1 of any Rate Year, beginning July 1, 2023.

5.5.1 Rate Adjustment Method
The maximum rates shall be based upon the percentage change in the average annual published Consumer Price Index ("CPI"), for Garbage and Trash Collection (CUUROOOOSEHG02), U.S. City average, as published by the United States Department of Labor, Bureau of Labor Statistics, between the calendar year ended the December prior to the Rate Year anniversary date, and the calendar year ended the prior December, or 5%, whichever is lower. For example, for the first rate increase or decrease effective July 1, 2023, the change in indices shall be measured as the percentage change from the average of the monthly indices for calendar year 2022 to the average of the monthly indices for calendar year 2021. An example calculation is included in Exhibit 2. If the index is discontinued, an alternative index must be approved by the City Manager.

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5.6 Extraordinary Adjustments
Company may request an adjustment to maximum rates at times other than those specified in Section 5 .4 in the event of extraordinary changes in the cost of providing service. Such extraordinary changes may not include changes in tipping fees for Refuse Disposal, or Recyclable Material, or Green Waste processing costs, changes in the market value of Recyclables from the values assumed by Company, changes in costs related to the price or availability of waste-to-energy facilities, changes in costs related to the availability of diversion credit for Green Waste used as landfill alternative daily cover (ADC), inaccurate estimates by Company of its proposed cost of operations, the implementation or elimination of mandatory Recycling requirements by City or State (including requirements related to or developing from California Health and Safety Code Section 38500-38599), or the inability of Company to Dispose of any Solid Waste at a selected landfill, whether due to closure of the Disposal Site or otherwise. The only exception that would authorize an extraordinary adjustment based upon changes to the Refuse Disposal gate rate would be an increase in a direct per ton surcharge assessed at the Disposal Site by federal, state or local regulatory agencies after the Effective Date of this Agreement. Company is expected to comply with SCAQMD Rule 1193, and the Air Resource Board's proposed new emission standards for Refuse removal vehicles, as well as other federal, state and local laws and regulations that may be enacted during the term of this Agreement, for no additional compensation. No adjustment will be considered or approved as a result of unionization of the work force or a change in wage rates or employee benefits. Extraordinary rate adjustments shall only be effective after approval by City Council and may not be applied retroactively.

For each request for an adjustment to the maximum rates under this section, Company must prepare a schedule documenting the extraordinary changes in costs. The request must be prepared in a form acceptable to City with support for assumptions made by Company in preparing the estimate. Company shall also submit a schedule showing how its total costs and total revenues have changed over the past three years for the services provided under this Agreement. City will review Company's request and, in City's sole judgment, make the final determination on the appropriate amount of the adjustment, if any.

City may request a copy of Company's annual financial statements in connection with City's review of Company's rate adjustment request. City shall review Company's request and, in City's sole judgment and absolute, unfettered discretion, make the final November 12, 2019 -55- City of Beverly Hills
determination as to whether an adjustment to the maximum rates will be made, and, if an adjustment is permitted, the appropriate amount of the adjustment. City may consider increases or decreases in Company's total revenues and total cost of services when reviewing an extraordinary rate adjustment request. City may require Company to fund a review of any extraordinary rate adjustment, by a third party of the City's choosing, up to $35,000 per request.

November 12, 2019 -56- City of Beverly Hills
ARTICLE 6

REVIEW OF SERVICES AND PERFORMANCE

6.1 Performance Hearing
A. City may hold a public hearing on or about the second anniversary of the Operative Date of this Agreement, and annually thereafter, at which hearing Company must participate, to review the Solid Waste Collection, source reduction, processing diversion services, and overall performance. The purpose of the hearing is to provide for a discussion and review of technological, economic, and regulatory changes in Collection, source reduction, Recycling, processing and Disposal to ensure the continuation of advanced Solid Waste Collection, source reduction, and Recycling and Disposal systems, and to ensure that services are being provided with adequate quality, effectiveness and economy.

B. Forty-five days after receiving notice from City of a Solid Waste services and performance review hearing, Company must, at a minimum, submit a report to City containing the following:
(I) Recommended changes in service or new services to improve City's ability to meet the goals of the Act and to contain costs and minimize impacts on rates. (2) Specific plans of Company for the provision of changed or new services. (3) Results of the most recent route audit as described in Section 3.13.

C. The reports required by this Agreement regarding Customer complaints will be used as one basis for review. Company may submit other relevant performance information and reports for consideration. City may request Company to submit specific information for the hearing. In addition, any Customer may submit comments or complaints during or before the hearing, either orally or in writing, and these will also be considered.

D. Topics for discussion and review at the public hearing may include, but will not be limited to, services provided, route audit results, feasibility of providing new services, application of new technologies, Customer complaints, amendments to this Agreement, developments in the law, new initiatives for meeting or exceeding the AB 939 goals, regulatory constraints, and Company's performance. City and Company may each select November 12, 2019 -57- City of Beverly Hills
additional topics for discussion at any Solid Waste services and performance review hearing.

E. Not later than 60 days after the conclusion of the public hearing, City may issue a report. As a result of the review, City may require Company to provide expanded or new services within a reasonable time and for reasonable rates and compensation, and City may direct or take corrective actions for any performance inadequacies.

6.2 Performance Satisfaction Survey
If requested by City, Company will conduct a survey at Company's expense in preparation for the public hearing. The purpose of the survey is to determine Customer satisfaction with current Collection services and Customer service provided by Company.

The survey must be distributed to a minimum of 10% of the Customers, selected at random. Company will obtain City approval of survey content and format prior to distribution and will incorporate City content, if requested by City. Alternatively, City may choose to draft the survey. Survey results must be made available to City 30 days prior to the public hearing. City will instruct Company whether surveys shall be returned to City or to Company. If requested by City, Company shall summarize and tabulate results.

November 12, 2019 -58- City of Beverly Hills
ARTICLE 7

RECORDS, REPORTS AND INFORMATION REQUIREMENTS

7.1 General
Company must maintain such accounting, statistical and other records related to its performance under this Agreement as may be necessary to prepare the financial statements and other reports required by this Agreement. Company must also conduct data collection, information and record keeping, and reporting activities necessary to comply with applicable laws and regulations and to meet the reporting and Solid Waste program management needs of City, including the reporting obligations imposed by the Act. In this regard, the requirements set out in this and other articles of this Agreement will not be considered limiting or necessarily complete. This article is intended only to highlight the general nature of records and reports and does not precisely define what records and reports are to be submitted, or their content. Upon the written direction of City, the records and reports to be maintained and provided by Company in accordance with this and other articles of this Agreement must be adjusted in number, format, or frequency.

7.2 Records

7.2.1 General
A. Company must maintain records required to conduct its operations, to support requests it may make to City, and to respond to requests from City regarding the conduct of Company's business. Adequate security must be maintained to protect records from events that can reasonably be anticipated, such as a fire, theft or earthquake.

Electronically-maintained data and records must be protected and backed up. All records must be maintained for five years, and the last five years of records must be maintained for an additional five years after the expiration of this Agreement. After minimum holding periods are met, Company will notify City 90 days before destroying records.

B. The records of other entities conducting operations authorized by this Agreement must be provided or made available to City's representatives during normal business hours. City may review or use any of the records described in this section for any purpose. Such records include, but are not limited to, financial, Solid Waste and November 12, 2019 -59- City of Beverly Hills
Recyclable Materials, CERCLA and Disposal records. Failure to provide these records may be considered a material breach of this Agreement.

7.2.2 Financial Records
Financial records must be maintained. Expense and revenue information for City must be segregated from other geographical areas served by Company.

7.2.3 Solid Waste Service Records
Records relating to the following matters must be maintained by Company:
a) Customer services.
b) Routes.
c) Facilities, equipment and personnel.
d) Complaints.
e) Missed pickups.
f) Number of Refuse, Food Waste, Recycling, and Green Waste Containers. g) Tons Collected, processed, diverted, and Disposed by type of service, waste stream, and Customers.
h) Weight of each category of Recyclable Material recovered at a MRF, if a MRF is used.

7.2.4 CERCLA Defense Records
City views its ability to defend against claims asserted under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and any related litigation as a matter of great importance. For this reason, City must have the ability to prove where Solid Waste Collected in City was taken for Disposal, as well as where it was not taken. Company must implement and maintain data retention and preservation systems that document where Solid Waste Collected in City was landfilled (and therefore establish where it was not landfilled) for not less than five years following the termination of this Agreement, including extensions. Company will notify City Clerk November 12, 2019 -60- City of Beverly Hills
and City Attorney before destroying any such records and offer to provide all records to City. The provisions of this section will survive the expiration of the term of this Agreement during which Solid Waste Collection services are provided.

7.2.5 Other Program Records
Records for other Solid Waste programs and services will be tailored to specific needs.

In general, they will include:
• Plans, tasks, and milestones.
• Accomplishments, such as activities conducted, quantities of products used, produced or distributed, and numbers of participants and responses. 7 .2.6 Cost of Audits
City may conduct an audit of Company at any time. The scope of the audit, and auditing party, will be determined by City and the scope may include, but is not limited to, compliance with terms of this Agreement, customer service levels and Billing, fee payments, gross receipts, tonnage, and verification of diversion rate.

Company will fund an audit to be contracted for by the City with a third-party after the first year and every three years thereafter. The first hauler-funded audit, to be performed during 2024, will be based on Company's reports and records from April 1, 2022 through December 31, 2023. Audits will be performed every third year thereafter, ( e.g., the audit performed during 2027 will be based upon reports and records from calendar year 2026, and may include 2024 and 2025 if requested by City). Company will reimburse to the City the cost of such audits not to exceed $90,000 for the first audit, and not to exceed $60,000 for the second audit. If the optional term extensions are authorized or the term is otherwise extended, audits will continue every three years, with the audit cost increased by $5,000 for each subsequent audit. For example, the third audit cost would be $65,000.

Costs incurred by Company for conducting its own route audits, as required under this Agreement, are not included as part of this audit cost.

If an audit discloses inaccuracies in reported disposal tonnage of more than 2% or billing inaccuracies affecting more than 2% of the accounts tested, City may expand the scope of the audit and also recover additional audit costs from the Company.

November 12, 2019 -61- City of Beverly Hills
City retains the right to audit Company after the term of this Agreement, provided City initiates audit within twelve months of the termination of the Agreement. If the last full calendar year under the Agreement would have been subject to the biennial audit, Company shall fund this final audit as stated above. City may not release the performance bond in accordance with Section 8.7 until the audit has been completed and reviewed and any adjustments required by the audit have been made.

7.2.7 Payments and Refunds
If an audit by City discloses for the period under review that compensation to Company was overpaid, or that Customers were overcharged, due to Company's failure to promptly notify City of service level or other Customer changes, or for any other reason, then, in addition to any other remedy that may be available to City, Company must pay to City any overpayment of compensation or refund any overcharges directly to the Customers, or both. Any refunds to Customers will be due and payable 30 days following the date of the audit.

7.3 Reports

7.3.1 Report Formats and Schedule
A. Records must be maintained in a format that facilitates the use of data contained in them to structure reports, as needed, that can be used, among other things, to:

1. Establish rates and evaluate the efficiency of operations.

2. Evaluate past and current progress towards achieving the Act goals and objectives.

3. Determine the need for adjustments to Solid Waste programs.

4. Evaluate Customer service and complaints.

B. Company may propose report formats that are responsive to the objectives of each report. The format of each report requires City approval. Company will submit all reports by electronic means in a format that is compatible with City's software and computers at no additional charge, if requested by City. When requested by City, an November 12, 2019 -62- City of Beverly Hills
authorized Company official will certify, under penalty of perjury, that the report being submitted is true and correct.

C. Monthly reports must be submitted within 20 calendar days after the end of each month. Quarterly reports must be submitted within 20 calendar days after the end of the calendar quarter. If requested, Company's complaint summary, described in Section 7.3.3.A, will be sent to the Director of Public Works within five days of request.

Annual reports must be submitted before January 31 following the reporting year.

All reports must be submitted to:

Director of Public Works
Department of Public Works
345 North Foothill Blvd.

Beverly Hills, CA 90210

7.3.2 Monthly Reports
The following information is the minimum required to be reported monthly:

A. Tons of Commercial/Industrial Solid Waste Collected by Company for the previous month, sorted by type of service (Refuse, Food Waste, Recycling, Green Waste) and by type of Customer Bin, RolloffBox), and the facilities where the tonnage was Disposed of or processed. Bulky Items must be separately reported.

B. Tons of Residential Solid Waste Collected by City and delivered to Company's facility for the previous month as per Exhibit 6, sorted by type of material (Refuse, Organic Waste, Recycling) and the facilities where the tonnage was Disposed of or processed.

C. Materials recovered. Statement showing kinds of material and the quantity sold (in tons).

D. Narrative summary of problems encountered (including scavenging) and actions taken with recommendations for City, as appropriate.

E. Warning notices issued for contaminated Recyclable Materials and Organics Waste Containers.

November 12, 2019 -63- City of Beverly Hills
F. Additional information that may be requested by Cal Recycle or City related to Recycling and Organics programs, including but not limited to compliance activities related to SB 1383.
7 .3.3 Quarterly Reports
Quarterly reports should contain, at a minimum, the information required in the monthly reports plus the following:

A. Complaint summary for the quarter, in an electronic format acceptable to City, identifying the nature of complaints.

B. Other information or reports that City may reasonably request.

7.3.4 Annual Report
The annual report is due January 31 of each year and will essentially combine the information contained in the monthly and quarterly reports, and will also include:

A. A complete inventory of equipment used to provide all services (such as vehicles, Containers by size, and the type of waste Collected by each type of Container).

B. Results ofroute audits, including a summary of the number of Containers by size and service level, and type of service (Refuse, Food Waste, Recycling, Green Waste), and Rolloff Box pulls per month by material type.

C. CERCLA records required under Section 7.2.4.

D. Copies of Hazardous Waste diversion records showing types and quantities, if any, of Hazardous Waste that was inadvertently Collected, but diverted from landfilling.

E. Number of routes and route hours per day by type of service.

F. List of customers and service levels of the customers participating in the mandatory organics recycling programs in compliance with AB 1826, and list of customers and service levels not in compliance with AB 1826.

G. Dates and details of site visits to customers not in compliance with AB 1826 or SB 1383 Requirements.

November 12, 2019 -64- City of Beverly Hills
H. Dates and details of site visits to customers regarding food rescue and donation efforts.

7.3.5 Financial Report
A. City may, at its option, request from Company annual audited financial reports and statements for the most recently completed fiscal year in connection with a rate adjustment, performance audit, Billing audit, or verification of other information required under this Agreement.

B. Financial statements must include a supplemental schedule showing Company's results of operations, including the specific revenues and expenses related to the operations under this Agreement, separated from others included in those financial statements. The supplemental schedule may be audited, reviewed, or compiled, as determined by City. The financial statements and footnotes must be prepared in accordance with Generally Accepted Accounting Principles (GAAP) and audited in accordance with Generally Accepted Auditing Standards (GAAS), by a certified public accountant (CPA) licensed to practice in the State of California. The cost of preparation of the financial statements and audit will be borne by Company as a direct cost of service.

7.3.6 Employee Report
At the request of the City, Company shall provide the number of employees who are performing services under the service contract and the wage rates, benefits, and job classifications of those employees.

If the franchise agreement is awarded to a new contractor at the end of the agreement term, Company shall provide the names, addresses, dates of hire, wages, benefit levels, and job classifications of employees to the successor contractor as required by AB 1669.

7.4 Adverse Information
A. Reporting Adverse Information. Company must provide City with two copies of all reports, pleadings, applications, notifications, notices of violation, or other communications specifically related to Company's performance of services under this Agreement, that are submitted by Company to, or received by Company from, the United States or California Environmental Protection Agency, CalRecycle, the Securities and Exchange Commission, or any other federal, state or local agency, including any federal November 12, 2019 -65- City of Beverly Hills
or state court. Copies must be submitted to City simultaneously with Company's filing or submission of such matters to those agencies. Company's routine correspondence to those agencies need not be submitted to City, but it must be made available to City promptly upon City's written request.

B. Failure to Report. The refusal or failure of Company to file any required report, or to provide required information, or the inclusion of any materially false or misleading statement or representation by Company in any required report will be deemed a material breach of the Agreement, as described in Article 10, and will subject Company to all remedies that are available to City.

7.5 Right to Inspect Records
City has the right to review the documents or records necessary to evaluate annual reports, compensation applications, and Company's performance under this Agreement.

Company's failure to make those records readily available will be deemed a material breach of this Agreement.

November 12, 2019 -66- City of Beverly Hills
ARTICLE 8

INDEMNIFICATION, INSURANCE AND BONDS

8.1 Indemnification
A. Company will indemnify and hold harmless City, its elected and appointed boards, commissions, officers, employees, and agents ( collectively, "Indernnitees") from and against any and all loss, liability, penalty, forfeiture, claim, demand, action, proceeding or suit in law or equity of every kind and description (including, but not limited to, injury to and death of any person and damage to property, or for contribution or indemnity claimed by third parties) including attorney's fees, arising or resulting from and in any way connected with (a) the negligence or willful misconduct of Company, its officers, employees, agents, subsidiaries, Affiliates, or subcontractors in performing services under this Agreement; (b) the failure of Company, its officers, employees, agents, subsidiaries, Affiliates or subcontractors to comply in all respects with the provisions of this Agreement, applicable laws (including, without limitation, the Environmental Laws), ordinances and regulations, or applicable permits and licenses; or (c) the acts of Company, its officers, employees, agents, subsidiaries, Affiliates, or subcontractors in performing services under this Agreement for which strict liability is imposed by law (including, without limitation, the Environmental Laws). The foregoing indemnity applies regardless of whether such loss, liability, penalty, forfeiture, claim, demand, action, proceeding, suit, injury, death or damage is also caused in part by any of the Indemnitees' negligence, but does not extend to matters resulting from the Indemnitees' sole negligence, willful misconduct, or breach of this Agreement.

Company will, upon demand of City, at Company's sole cost and expense, defend (with attorneys acceptable to City) the Indemnitees against any claims, actions, suits in law or equity or other proceedings, whether judicial, quasi-judicial or administrative in nature, arising or resulting from any of the events referenced above.

B. Company, upon demand of City, made by and through City Attorney, will protect City and appear in and defend the Indemnitees in any claims or actions by third parties, whether judicial, administrative, or otherwise, including, but not limited to disputes and litigation over the definitions of "Solid Waste" or "Recyclable Material," or the limits of City's authority with respect to the grant of licenses or agreements, exclusive or otherwise, asserting rights under the Dormant Commerce Clause or federal or state laws to provide Solid Waste services in City. This Section 8.1 will survive the expiration November 12, 2019 -67- City of Beverly Hills
of the term during which Collection services are to be provided under this Agreement.

City and Company will confer following any trial to decide jointly whether to appeal or to oppose any appeal. If City and Company jointly agree to appeal, or to oppose any appeal, City and Company will share equally the costs of appeal. If either City or Company decide to appeal, or to oppose an appeal, and the other decides not to appeal, or to oppose an appeal, the party that decides to appeal, or to oppose an appeal, will bear all fees and costs of the appeal or the opposition to the appeal.

C. Company's duty to indemnify and defend against the above-referenced events arising during the term of this Agreement, and as it may be extended, will survive the expiration or earlier termination of this Agreement.

8.2 Hazardous Substances Indemnification
A. Without regard to any insurance coverage or requirements, and without limiting the above-referenced indemnification obligation in any way, Company will, to the maximum extent permitted by law, defend (with counsel acceptable to City), reimburse, indemnify, and hold harmless City and its past and present officers, council members, employees, consultants and agents ("Indemnified Parties") from and against all claims, actions, liabilities, damages, demands, judgments, losses, costs, liens, expenses, suits, attorneys' fees, consultant fees, penalties and all other losses, damages, fees and expenses of whatever kind or nature ("Claims") (including but not limited to response costs, investigative costs, assessment costs, monitoring costs, treatment costs, cleanup costs, removal costs, remediation costs, and similar costs, damages and expenses) that arise out of, or are alleged to arise out of, or in any way relate to any action, inaction or omission of Company that:

1. Results in any demand, claim, notice, order, or lawsuit, asserting that any Indemnified Party is liable, responsible, or in any manner obligated to investigate, assess, monitor, study, test, treat, remove, remediate, or otherwise clean up, any hazardous contaminant (as defined below); or

2. Relates to material Collected, transported, Recycled, processed, treated or Disposed of by Company.

B. Company's obligations under this section apply, without limitation, to:

November 12, 2019 -68- City of Beverly Hills

1. Any Claims brought pursuant to or based on the provisions of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 9601 et seq., the California Hazardous Substances Account Act (California Health & Safety Code Sections 25300 et seq.), the California Hazardous Waste Control Laws (California Health and Safety Code Sections 25100 et seq.), the California PorterCologne Act (California Water Code Section 13000 et seq.), and all amendments thereto and regulations thereunder, and any other federal, state, regional, or local environmental statutory or regulatory provisions.

2. Any Claims based on or arising out of, or alleged to be arising out of, the ownership, use, lease, sale, design, construction, maintenance or operation by Company of any Facility.

3. Any Claims based on or arising out of, or alleged to be arising out of, the marketing, sale, distribution, storage, transportation, Disposal, processing or use of any materials recovered by Company.

4. Any Claims based on or arising out of, or alleged to be arising out of, the breach of any express or implied warranty, representation or covenant arising out of or in connection with this Agreement.

C. The foregoing indemnity and defense obligations apply irrespective of the negligence or willful misconduct of Company or any Affiliate or subsidiary of Company.

D. For purposes of this section, the term "hazardous contaminant" means any "hazardous material," as that term is defined under California Health & Safety Code Section 25501(1); any "Hazardous Substance," as that term is defined in this Agreement or under California Health & Safety Code Sections 25281 (f), 25501 (e), 25501.1 and under Title 42, Section 9601(14) of the United States Code; any "Hazardous Waste," as that term is defined under Title 42, Section 6093(5) of the United States Code and under California Health & Safety Code Section 25550(111); any chemical that the Governor has identified as a chemical known to the state to cause cancer or reproductive toxicity pursuant to California Health & Safety Code Section 25249.8; any crude oil or refined or unrefined petroleum product or any fraction or derivative thereof; and any asbestos or asbestos-containing material. The term "hazardous contaminant" will be deemed to include any additional substances that are identified in amendments to the aboveNovember 12, 2019 -69- City of Beverly Hills referenced statutory and regulatory provisions, whether adopted before or after the date of execution of this Agreement.

E. The provisions of this section will be given the broadest possible interpretation and will survive the expiration or earlier termination of this Agreement.

8.3 Diversion Goal Indemnification and Guarantee
A. To the extent authorized by law, Company agrees to protect and defend Indemnitees with counsel selected by Company and approved by City, to pay all costs and fees (including, without limitation, fees and charges of engineers, architects, attorneys and other professionals, and costs of exhibits, reports and other similar defense expenses) and to indemnify and hold harmless City from and against all fines or penalties imposed by CalRecycle if the source reduction and Recycling goals, or any other requirements of the Act, are not met by City with respect to the waste stream Collected under this Agreement and agrees to protect and defend Indemnitees with counsel selected by Company and approved by City, to pay all costs and fees (including, without limitation, fees and charges of engineers, architects, attorneys and other professionals, and costs of exhibits, reports and other similar defense expenses) and to.

B. Company warrants and represents that it is familiar with City's waste characterization study set forth in City's Source Reduction and Recycling Element ("SRRE"), and that it has the ability to and will provide sufficient programs and services to ensure that City will meet or exceed the diversion requirements (including, without limitation, amounts of Solid Waste to be diverted, time frames for diversion, and any other requirements) set forth in the Act, with respect to that portion of the Solid Waste generated in the City that is the subject of this Agreement.

C. The provisions of this section will be given the broadest possible interpretation and will survive the expiration or earlier termination of this Agreement.

8.4 Insurance
Company shall maintain in effect the insurance required by this Section 8.4 throughout the term of this Agreement. City does not waive any rights against Company that it may have under the above-referenced hold harmless agreements because of acceptance by City, or the deposit with City by Company, of the insurance policies described below in November 12, 2019 -70- City of Beverly Hills
this section. The insurance required is in addition to and separate from all other obligations of Company contained in this Agreement.

A. Minimum Scope oflnsurance. Coverage must be at least as broad as:

1. The most recent editions of Insurance Services Office Commercial General Liability coverage ("Occurrence" form CG 1996 or later).

2. The most recent editions oflnsurance Services Office form number CA 00 0 I covering Automobile Liability, Code I "any auto," and endorsement CA 00 25.

3. Workers' Compensation insurance as required by the California Labor Code and Employers' Liability insurance.

B. Minimum Limits of Insurance. Company must maintain in force for the term of this Agreement limits no less than:

1. General Liability: Ten Million Dollars ($10,000,000) limit aggregate, and Five Million Dollars ($5,000,000) limit per occurrence, for bodily injury, personal injury, and property damage per year. If Commercial General Liability insurance or other form with a general aggregate limit is used, either the general aggregate limit will apply separately to this project location, or the general aggregate limit will be twice the required occurrence limit. Such limits can be achieved through a combination of primary and excess liability policies.

2. Automobile Liability: Five Million Dollars ($5,000,000) per accident for bodily injury and property damage. Such limits can be achieved through a combination of primary and excess liability policies.

3. Workers' Compensation and Employers' Liability: Workers' compensation limits as required by the Labor Code of the State of California and Employers' Liability limits of One Million Dollars ($1,000,000) per accident.

C. Deductibles and Self-Insured Retentions. All deductibles or selfinsured retentions must be declared to and approved by City. At the option of City, Company may either: (1) cause the insurer to reduce or eliminate such deductibles or self-insured retentions as respects the Indemnitees; or (2) procure a bond guaranteeing November 12, 2019 -71- City of Beverly Hills
payment of all losses and expenses ofrelated investigations, claim administration, and defense in the amount of those deductibles or self-insured retentions.

D. Other Insurance Provisions. The policies must contain, or be endorsed to contain, the following provisions:

I. General Liability and Automobile Liability Coverages. a) City and its officers and employees must be named as additional insureds by policy endorsement as respects: liability arising out of activities performed by or on behalf of Company; premises owned, leased or used by Company; and vehicles owned, leased, hired or borrowed by Company. The coverage must contain no limitations on the scope of protection afforded to City, its elective and appointive boards, commissions, officials, employees, agents or volunteers, unless specifically agreed to in writing by City.
b) Company's insurance coverage must be primary insurance with respect to the Indemnitees. Any insurance or self-insurance maintained by City, its officials, elective and appointive boards, commissions, employees, agents or volunteers will be excess of Company's insurance and will not contribute with it. c) Any failure to comply with reporting provisions of the policies will not affect coverage provided to the Indemnitees. d) Coverage must state that Company's insurance will apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.

2. Workers' Compensation and Employers' Liability Coverage. The insurer must agree to waive all rights of subrogation against the Indemnitees for losses arising from work performed by Company for City.

3. All Coverages. Each insurance policy required by this section must be endorsed to state that coverage will not be suspended, voided, canceled by either party, or reduced in coverage or in limits unless 30 days' prior written notice by certified mail, return receipt requested, has been given to City.

E. Acceptability of Insurers. The insurance policies required by this section must be issued by an insurance company or companies authorized to do business in the November 12, 2019 -72- City of Beverly Hills
State of California and with a rating in the most recent edition of Best's Insurance Guide of size category VII or larger, and a rating classification of A or better.

F. Verification of Coverage. Prior to the performance of any work under this Agreement, and at all times during its term, Company must maintain on file with the City Clerk a certificate or certificates of insurance, evidencing that the above-referenced policies are in effect and in the required amounts. These policies must contain an endorsement naming City, its appointed and elected officials, officers, employees and agents, as additional insureds. The policies must also state that the insurance coverage will not be canceled or reduced except on 30 days' prior written notice to City, and must specifically state that the coverage contained in the policies affords insurance as required by the terms of this Agreement. Company agrees that it will not cancel or reduce that insurance coverage.

Company must furnish City with certificates of insurance and with original endorsements effecting the coverage required by this section. The certificates and endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements must be on forms provided by or acceptable to City and must be received and approved by City before work commences. City reserves the right at any time to require complete, certified copies of all required insurance policies.

Renewal certificates will be furnished periodically to City to demonstrate maintenance of the required insurance coverage throughout the term of this Agreement.

G. Companies and Subcontractors. Company must include all other companies and subcontractors as insureds under its policies or furnish separate certificates and endorsements for each other company and subcontractor. All coverages for companies and subcontractors will be subject to all of the requirements stated in this section.

H. Required Endorsements

1. The Workers' Compensation policy must contain an endorsement in substantially the following form:

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"Thirty (30) days prior written notice by certified mail, return receipt requested, must be given to the City in the event of cancellation, reduction in coverage, or non-renewal of this policy. Such notice shall be sent to:

Director of Public Works
Department of Public Works
City of Beverly Hills
345 Foothill Road.

Beverly Hills, CA 90210-3808

2. The General Liability policy must contain endorsements in substantially the following form:
a) "Thirty (30) days prior written notice must be given to the City in the event of cancellation, reduction in coverage, or non-renewal of this policy. Such notice shall be sent to:

Director of Public Works
Department of Public Works
City of Beverly Hills
345 Foothill Road
Beverly Hills, CA 90210-3 808
b) "The City, its officers, elective and appointive boards, commissions, employees, and agents are additional
insureds on this policy."
c) "This policy shall be considered primary insurance as respects any other valid and collectible insurance
maintained by the City, including any self-insured retention or program of self-insurance, and any other insurance will be considered excess insurance only."
d) "Inclusion of the City as an insured will not affect the City's rights as respects any claim, demand, suit or
judgment brought or recovered against Company. This
policy will protect Company and the City in the same
manner as though a separate policy had been issued to
each, but this will not operate to increase Company's
liability as set forth in the policy beyond the amount shown or to which Company would have been liable if only one
party had been named as an insured."
November 12, 2019 -74- City of Beverly Hills
I. Other Insurance Requirements

1. Company will establish an insurance policy repository and maintain copies of insurance policies required under th is Agreement for I 00 years after the end of the term during which Collection services are to be provided. Company must notify City's Risk Manager and City Attorney before destroying copies of these policies.

This provision will survive the expiration of the period during which Collection services are to be provided under this Agreement.

2. If any services are delegated to another company or subcontractor, Company must require that company or subcontractor to provide statutory workers' compensation insurance and employers' liability insurance for all of the other company's or subcontractor's employees engaged in the work in accordance with this section. The liability insurance required by this section must cover each company or subcontractor, or the company or subcontractor must furnish evidence of liability insurance that meets all of the requirements of this section.

3. Company must comply with all requirements of the insurers issuing policies. The carrying of insurance will not relieve Company from any obligation under this Agreement. If any claim exceeding the amount of any deductibles or selfinsured reserves is made by any third party against Company, or any subsidiary, Affiliate, or subcontractor, on account of any occurrence related to this Agreement, Company must promptly report the facts in writing to the insurance carrier and to City.

4. If Company fails to procure and maintain any insurance required by this Agreement, City may take out and maintain, at Company's expense, such insurance as it may deem proper and deduct its cost from any moneys due Company.

8.5 Performance Bond
Concurrently with the execution of this Agreement, Company must deliver to City a performance bond issued by an admitted surety insurer with a Best's Insurance Guide Rating of not less than A-VII. The performance bond must be in the amount of Eight Hundred Thousand Dollars ($800,000), similar to the form provided in Exhibit 4, and must secure the faithful performance of this Agreement, including, without limitation, payment of any penalty and the funding of any work to cure a breach of this Agreement.

The performance bond must contain the original notarized signature of an authorized officer of the surety and be accompanied by a certified and current copy of that officer's November 12, 2019 -75- City of Beverly Hills
power of attorney. The performance bond must be unconditional and remain in force (through annual renewals) during the term of the Agreement. The performance bond will be null and void at the expiration of the term of this Agreement only if Company faithfully performs all terms and conditions of this Agreement.

8.6 Forfeiture of Performance Bond
If Company for any reason becomes unable, or fails in any way, to perform as required by this Agreement, City may declare a forfeiture of al I or a portion of the performance bond that is necessary to compensate and make City whole. Upon full or partial forfeiture of the performance bond, Company must restore the performance bond to its face amount within 30 days of City's declaration. Failure to restore the performance bond to its full amount within 30 days will be a material breach of contract.

8.7 Performance Security Beyond Service Term
Some Agreement requirements extend beyond the term of this Agreement and other requirements, such as minimum diversion rates, will not be substantiated until after the final service date. Therefore, Company shall not terminate the performance bond and will renew it to ensure continuous availability to City, until receiving a written release from City. Permission from City to discontinue holding this performance security does not relieve Company of payments to City or other contractual obligations that may be due, or may become due.

8.8 Property Damage
Company is responsible for any damage resulting from or directly attributable to any of its operations, and which it causes to: City's driving surfaces, whether or not paved; associated curbs, gutters and traffic control devices; other public improvements; and private roads and alleys.

Any physical damage to public or private property caused by Company's employees, or resulting from or directly attributable to any of its operations, must be expeditiously repaired, or caused to be repaired, by Company at Company's sole expense. If the damage is to public property, and City determines that it (City) should cause the repairs to be completed, Company shall pay to City all costs incurred by City in completing the repairs, within ten (10) days of demand for payment from City.

November 12, 2019 -76- City of Beverly Hills

8.9 Pavement Damage
Company is responsible for damage to City's driving surfaces, whether paved or not paved, beyond normal wear and tear. Company understands that performance under this Agreement may involve the operation of its Collection vehicles over private roads and streets. Disputes between Company and its Customers over damage to private pavement are civil matters, and complaints of damage will be referred to Company as matters within the scope of Section 8.1.

November 12, 2019 -77- City of Beverly Hills
ARTICLE 9

CITY'S RIGHT TO PERFORM SERVICE

9.1 General
A. In addition to all other rights and remedies of City under this Agreement, at law or in equity, if Company, for any reason, fails, refuses, or is unable to Collect, Recycle, process, transport, or Dispose of any Solid Waste as required by this Agreement, at the time and in the manner provided, for a period of more than 72 hours, and if, as a result, Solid Waste accumulates in City in a manner that endangers the public health, safety, or welfare, then City has the right, but not the obligation, upon notice to Company and during the period of such emergency as determined by City, (1) to perform, or cause to be performed, any of those services with its own or other personnel, without liability to Company; and (2) to take possession of any or all of Company's land, equipment, and other property that is used or useful in the Collection and transportation of Solid Waste, and to use that property to Collect and transport any Solid Waste generated within City that Company would otherwise be obligated to Collect, transport, and properly Dispose of or process.

B. Notice of Company's failure, refusal or neglect to Collect, transport and properly Dispose of or process Solid Waste may be given verbally by telephone to Company at its principal office and will be effective immediately. Written confirmation of that verbal notification must be sent to Company within 24 hours.

C. Company agrees that in such event:

1. It will take direction from City to effect the transfer of possession of equipment and property to City for City's use.

2. It will, if City so requests, keep in good repair and condition all of such equipment and property, provide all motor vehicles with fuel, oil and other service, and provide such other services as may be necessary to maintain that property in operational condition.

3. City may immediately engage any personnel necessary or useful for the Collection and transportation of Solid Waste, including, if City so desires, employees previously or then employed by Company. Company will, if City so requests, November 12, 2019 -78- City of Beverly Hills
furnish to City the services of any management or office personnel employed by Company whose services are necessary or useful for Solid Waste Collection, transportation, processing, and Disposal operations and for the Billing and Collection of fees for these services.

4. City will assume complete responsibility for the proper and normal use of Company's equipment and facilities while in its possession.

D. If the interruption or discontinuance in service is caused by any of the events listed in Section 10.4, City will pay to Company the reasonable rental value of the equipment and facilities, possession of which is taken by City, for the period of City's possession, if any, which extends beyond the period of time for which Company has rendered bills in advance of service for the category of service involved.

9.2 Billing and Compensation to City During City's Possession During such time that City is providing Solid Waste services, as provided above, City will bill and Collect payment from all users of the above-mentioned services, as described in Section 4.1, and Company shall not be entitled to any compensation.

Further, Company will reimburse City for all costs and expenses incurred by City beyond the amount billed and received by City after taking possession of the above-mentioned equipment and property for Solid Waste service. This reimbursement will be made from time to time after submission by City to Company of a statement listing those costs and expenses, but in no event later than five working days after each submission.

9.3 City's Right to Relinquish Possession
City may at any time in its discretion relinquish possession of any of the abovereferenced property to Company and demand that Company resume the Solid Waste services authorized by this Agreement, and Company will be obligated to resume the same.

9.4 City's Possession Not A Taking
City's exercise of its rights under this article: (1) does not constitute a taking of private property for which compensation must be paid; (2) will not create any liability on the part of City to Company; and (3) does not exempt Company from the indemnity provisions of Article 8, which are intended to extend to circumstances arising under this article; November 12, 2019 -79- City of Beverly Hills
provided that Company is not required to indemnify City against claims and damages arising from the sole negligence of City, its elective and appointive boards, commissions, officers, employees and agents in the operation of Company's Collection vehicles during the time that City has taken possession of those vehicles.

9.5 Duration of City's Possession
City's right under this article to take temporary possession of Company's facilities and equipment, and to provide Collection services, will terminate when City determines that those services can be resumed by Company, or when City no longer reasonably requires the use of those facilities and equipment.

November 12, 2019 -80- City of Beverly Hills
ARTICLE 10

DEFAULT, REMEDIES AND LIQUIDATED DAMAGES

10.1 Events of Default
Where Company's violation is determined to involve any of the following, each of which is deemed to constitute a material provision of this Agreement, City may invoke the remedies authorized by this Agreement:

A. Fraud, Deceit or Misrepresentation. Company engages in, or attempts to practice, any fraud or deceit upon City, or makes a misrepresentation to City regarding material information.

B. Insolvency or Bankruptcy. Company becomes insolvent, is unable or unwilling to pay its debts, files a bankruptcy petition, or takes steps to liquidate its assets.

C. Failure to Maintain Coverage. Company fails to provide or to maintain the Workers' Compensation, liability, or indemnification coverage required by this Agreement.

D. Violations of Regulations. Company violates any orders of any regulatory body having jurisdiction over Company relating to this Agreement; provided that Company may contest any such orders by appropriate proceedings conducted in good faith, in which case no breach of this Agreement will be deemed to have occurred until a final decision adverse to Company is entered.

E. Failure to Perform. Company ceases to provide all or a portion of the Collection, processing, or Recycling services, or any other Solid Waste handling services required under this Agreement for a period of two consecutive days or more, except to the extent excused under Section 10.4.

F. Failure to Pay. Company fails to make any payments required under this Agreement or refuses to provide City, within 10 days of a demand, with required information, reports or records in a timely manner as provided for in this Agreement.

G. Failure to Cooperate with Audits. Company fails to complete, perform, or cooperate with any audit that is required or authorized by this Agreement; provided November 12, 2019 -81- City of Beverly Hills
that City must provide Company with written notice of that failure, and Company will have 30 days to cure any deficiency.

H. Failure to Submit Reports or Documentation. Company fails to complete or to provide reports or documents to City as required by this Agreement within 60 days of their due date and 30 days after receipt of written notice from City that such reports or documents have not been submitted.

I. Acts or Omissions.

1. Any other act or omission by Company relative to the services provided under this Agreement that violates the material terms, conditions or requirements of this Agreement, the Act, or any law, statute, ordinance, order, directive, rule, or regulation issued thereunder, or Company's failure to remedy any such violation within the time specified in City's written notice of the violation or, if Company cannot reasonably remedy the breach within the time specified in that notice, then Company's failure to commence to remedy such breach within the time set forth and to thereafter diligently effect such remedy.

2. Any situation in which Company, or any of its officers, directors or employees, is found guilty of any crime related to the performance of this Agreement, anti-trust violations, illegal transport or Disposal of hazardous or toxic materials, or bribery of public officials. The term "found guilty" is deemed to include any judicial determination that Company, or any of its officers, directors or employees, is guilty, as well as any admission of guilt by Company or any of its officers, directors or employees including, but not limited to, the plea of "guilty", "nolo contendere", "no contest", and "guilty to a lesser charge."
J. False or Misleading Statements. Any representation made to City by Company in connection with or as an inducement to entering into this Agreement, or any future amendment to this Agreement, that proves to be false or misleading in any material respect as of the time such representation is made, whether or not that representation is incorporated into this Agreement.

K. Attachment. The seizure of, attachment of, or levy on, Company's operating assets, including without limitation its equipment, maintenance or office facilities, or any part thereof.

November 12, 2019 -82- City of Beverly Hills
L. Failure to Provide Assurance of Performance. Company's failure to provide reasonable assurance of performance as required under Section 10.5.

M. Commingling of Recyclables With Refuse/Landfilling of Recyclables.

If Company empties Containers of properly set out Recyclable Materials into a Refuse load, or transports Recyclable Materials or Green Waste loads to a landfill or other location at which the material will not be diverted from landfilling.

N. Failure to Meet 53% Diversion Goal. Company fails to divert at least 53% of all Solid Waste it Collects, per Section 3.6 for two consecutive calendar years.

Company will have 48 hours from the time it is notified by City to cure any default arising under paragraphs C, E, F, G, H, K,L, and M above; provided, however, that City will not be obligated to provide Company with notice and an opportunity to cure, for other than paragraph M, if Company has committed the same or a similar breach within a 24-month period. Company is not entitled to receive notice of default, or an opportunity to cure a default, with respect to those matters listed above in paragraphs A, B, D, I, J, and N.

10.2 Right to Terminate Upon Default
If Company commits a material breach with regard to any of the matters listed above in paragraphs A through N of Section 10.1 (and, if permitted to cure, does not cure the breach within 48 hours), City will be entitled to unilaterally terminate this Agreement or to impose other sanctions, including financial sanctions, temporary suspensions, or any other conditions City deems appropriate short of termination. If City decides to terminate this Agreement upon a default by Company, City will have the right to do so upon giving 10 days' notice to Company, and City will not be required to take any further action, such as holding a public hearing or bringing suit.

City's right to terminate this Agreement and to take possession of Company's Facility are not exclusive, and City's termination of this Agreement will not constitute an election of remedies. Instead, these remedies are in addition to all other legal and equitable rights and remedies that City has.

In view of the nature of this Agreement, the need for timely, continuous, and high-quality service, the time required to effect alternative service, and the rights granted by City to Company, the remedy of monetary damages for a breach by Company is inadequate, and November 12, 2019 -83- City of Beverly Hills
City is entitled to seek injunctive relief and specific performance relating to any breach of this Agreement.

10.3 Liquidated Damages
A. General. The parties agree that, as of the date of execution of this Agreement, it is impractical, if not impossible, to reasonably ascertain the extent of damages that would be incurred by City as a result of a breach by Company of its obligations. The factors relating to the impracticability of ascertaining damages include, but are not limited to, the fact that: (i) substantial damage results to members of the public who are denied services or denied quality or reliable service; (ii) breaches cause inconvenience, anxiety, frustration, and deprivation of the benefits of the Agreement to individual members of the general public for whose benefit this Agreement exists, in subjective ways and in varying degrees of intensity that are incapable of measurement in precise monetary terms; (iii) the services provided under this Agreement might be available at substantially lower costs than alternative services, and the monetary loss resulting from denial of services or denial of quality or reliable services is impossible to calculate in precise monetary terms; and (iv) the termination of this Agreement for such breaches, and other remedies are, at best, a means of future correction and not remedies that make the public whole for past breaches.

B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The parties acknowledge that consistent, reliable Solid Waste Collection service is of utmost importance to City and that City has relied on Company's representations about its quality of service commitment in awarding the Franchise to it.

The parties further acknowledge that some quantified standards of performance are necessary and appropriate to ensure consistent and reliable service and performance. It is further acknowledged that if Company fails to achieve the performance standards, or fails to submit required documents in a timely manner, City and its residents will suffer damages, and that it is and will be impractical and extremely difficult to ascertain and determine the exact amount of those damages. Therefore, without prejudice to City's right to treat Company's non-performance as an event of default under this article, the parties agree that the following liquidated damage amounts represent a reasonable estimate, considering all of the circumstances existing on the date of this Agreement, including the relationship of the sums specified to the range of harm to City that reasonably could be anticipated and the expectation that proof of actual damages would be costly or impractical. In placing their initials in the blanks provided, each party November 12, 2019 -84- City of Beverly Hills
confirms the accuracy of the statements made above and the fact that each party has had ample opportunity to consult with legal counsel and to obtain an explanation of these liquidated damage provisions prior to execution of this Agreement.

Company
Initial Here ff}_
City
Initial Here _
Company agrees to pay as liquidated damages, and not as a penalty, the amounts set forth below:

1. Collection Reliabilitv
a) For each failure to commence service to a new Customer account within seven days after notice of order is provided to Company by City, which exceeds five such failures annually: $150.00
b) For each failure to deliver Containers on the day scheduled for delivery, which exceeds five such failures annually (for Rolloff Box and Temporary Service, see 2.f below): $ 50.00
c) For each failure to Collect Solid Waste, which has been properly set out for Collection, from an established Customer account or accounts, on the scheduled Collection day and not Collected by 5:00 P.M. the following day, and for each additional day in which the Collection is not made up, which exceeds 10 such failures annually: $150.00/day
d) For each failure to Collect Solid Waste, which has been properly set out for Collection, from the same Customer on two consecutive scheduled pickup days: $150.00

2. Collection Oualitv
a) For each occurrence of damage to private property, which exceeds five such occurrences annually: $250.00
b) For each failure to collect Container within one hour of staging prior to Collection, and to return empty Containers within one hour of Collection to avoid pedestrian or vehicular traffic impediments, which exceeds 5 such failures annually, in accordance with Section 3.1.5: $150.00
November 12, 2019 -85- City of Beverly Hills
c) For each failure to clean up Solid Waste spilled from Solid Waste Containers within 90 minutes, which exceeds 10 such failures annually:$150.00 d) For each occurrence of Collecting Solid Waste during unauthorized hours, which exceeds five such occurrences annually: $250.00 e) For each failure to clean or replace Containers in
accordance with Section 3.5.6 of this Agreement, which exceeds 10 such failures annually: $150.00
f) For each failure to deliver a Rolloff Box or temporary Bin within one Business day of a Customer's request for orders placed before 1 :00 p.m., and within two Business days for orders placed on or after l :00 p.m.: $ 250.00 g) For each occurrence, in excess of one per month, of
disturbing the public peace or creating a public nuisance as prohibited by Section 3.7.5 (J) of this Agreement: $100.00
h) For each failure to properly mark a Container with
identification labels in accordance with Section 3.5.6.C of this Agreement, within five (5) Business Days of City notification of an improperly-marked container:
$25.00 per Container per day
i) For each occurrence Company Collects commingled or
source-separated Recyclables on a mixed waste or Refuse route rather than on a separate Recycling route per Section 3 .2.1:
$250.00 per container per occurrence

3. Customer Responsiveness
a) For each failure to initially respond to a Customer
complaint within one Business Day, and for each additional day during which the complaint is not addressed: $250.00
required by Article 4:
b) For each failure to process Customer complaints to City as $250.00
c) For each failure to notify City within one hour from the time Company has remedied a complaint forwarded by City: $10.00 November 12, 2019 -86- City of Beverly Hills
d) For each failure to remove graffiti from Containers, or to replace with Containers bearing no graffiti, within three days of request from City or Customers: $150.00
e) For each failure to process a claim for damages within 30 days from the date submitted to Company: $100.00
t) For each additional 30-day increment of time in which Company has failed to resolve a claim for damages within 30 days from the claim date: $100.00

4. Diversion Program
For each ton below the minimum number of tons required to be diverted to reach the minimum diversion percentage for all tonnage Collected under this Agreement, as measured each calendar year (and for April 1, 2022 to December 31, 2022) (see Section 3.6):
$25.00 /ton

5. Timeliness of Submissions to City
Any report will be considered late until such time as a correct and complete report is received by City. For each calendar day a report is late, the daily liquidated damage amount will be:
a)
b)
c)
Monthly or Quarterly Reports:

Annual Reports:

Route Audit - Due March 31 of applicable years

6. Compliance with Computer Compatibility
$100 per day
$350 per day
$100 per day
For each day past six months after the City provides interface access to Customer Service and Work Order Management system (or subsequent date approved by City's Director of Public Works) that Company is not in compliance with Section 4.2.6, Computer Compatibility: $100 per day

7. Cooperation with Service Provider Transition
November 12, 2019 -87- City of Beverly Hills
a) For each day routing information requested by City in accordance with Section 11.10 is received after City-established due dates, both for preparation of a request for proposals and for new service provider's implementation of service : $1,000/day
b) For each day delivery of keys, access codes, remote
controls, or other means of access to Solid Waste and/or Recyclable Materials Containers is delayed beyond one (1) day prior to new service provider servicing Customers with access issues, as described in Section 11.10: $1,000/day c) For delay in not meeting the requirements contained in Sections 3 .13 (route audit) and 11.10 in a timely manner, in addition to the daily liquidated damages for breach under 7(a) and 7(b) above, liquidated damages of:
$10,000 per occurrence

8. Vehicle Compliance
For each vehicle in each month that Company uses a solid waste collection vehicle that is not in compliance with the natural gas fuel requirements of Section 3.7.2.B:
$1,000 per month per vehicle

9. Retention of Records
For failure to retain records in accordance with Section 7.2, including failure to retain for five years after the term of the Agreement and failure to notify City 90 days before destroying records:
$25,000 or actual damages, whichever is higher

10. Residential Waste Processing
For each ton below the minimum number of tons required to achieve the diversion guaranty of at least 25% ofresidential mixed waste delivered by City to Company for processing under Exhibit 6 as measured each calendar year (and for April 1, 2022 to December 31, 2022), and for any partial calendar year in the final contract year:
$25 per ton
November 12, 2019 -88- City of Beverly Hills
City may determine the occurrence of events giving rise to liquidated damages through the observations of its own employees or representatives, or through the investigation of Customer complaints.

Prior to assessing liquidated damages, City must give Company notice of its intention to do so. The notice will include a brief description of the event of non-performance.

Company may review (and make copies at its own expense) all non-confidential information in City's possession relating to the event of non-performance. Company may, within 10 days after receiving the notice, request a meeting with the City Manager.

Company may present evidence in writing and through testimony of its employees and others relevant to the event of non-performance. The City Manager will provide Company with a written explanation of the determination on each event of nonperformance prior to authorizing the assessment of liquidated damages. The decision of the City Manager will be final.

C. Amount. City may assess liquidated damages for each calendar day or each event, as appropriate, concerning which Company is determined to be liable.

D. Timing of Payment. Company must pay any liquidated damages imposed by City within IO days after they are assessed. If assessed damages are not paid within the I 0-day period, City may withhold any amount due from the next monthly payment to Company, proceed against the performance bond required by this Agreement, order the termination of the Franchise granted by this Agreement, or exercise any other right or remedy available to City under this Agreement or at law or in equity, or any combination of these remedies.

10.4 Excuse from Performance
A. The parties will be excused from performing their respective obligations under this Agreement if that performance is prevented by reason of floods, earthquakes, other natural disasters, war, civil insurrection, riots, acts of any government (including judicial action), and other catastrophic events that are beyond the control of and not the fault of the party claiming excuse from performance, provided that Company shall use all possible efforts to provide service during and after the event. If full service is not feasible, Company must provide service to Customers, or for waste streams, considered most urgent based on health and safety issues to the full extent possible. Company shall November 12, 2019 -89- City of Beverly Hills
provide alternative means of Disposal, such as drop-off sites, to the extent possible when regular Collection service is interrupted.

B. Labor unrest, including but not limited to strike, work stoppage or slowdown, sick-out, picketing, or other concerted job action conducted by Company's employees or directed at Company is an excuse from performance only to the extent that the following requirements are adhered to:
i. Company must provide a contingency plan to City prior to the start of services under this Agreement demonstrating how services will be provided during the period of labor unrest. The contingency plan is subject to City approval and Company shall amend the plan until it meets City requirements, including reasonably demonstrating how City's basic Collection and sanitary needs will be met to City's satisfaction.

11. Company must notify City: I) thirty days before the expiration of the labor agreement under which drivers servicing City are covered; 2) immediately upon receiving any indication that labor unrest may occur; and 3) of the daily status of events during a strike.
iii. Company must provide all notifications and meet all requirements of this contingency plan or City shall have the option to revoke this excuse from performance offered under this Agreement and may choose to use enforcement provisions under this Agreement, in which case Company is not excused from performance and Company shall be obligated to continue to provide service notwithstanding the occurrence of any or all of such events.

C. The party claiming excuse from performance must, within two days after that party has notice of such cause, give the other party notice of the facts constituting such cause and assert its claim to excuse under this section.

D. The interruption or discontinuance of Company's services caused by one or more of the events listed above, provided all other Agreement requirements are met, will not constitute a default by Company. Notwithstanding the foregoing, however, if Company is excused from performing its obligations for a period of ninety days if Company is following the contingency plan for labor unrest, or for any of the other causes listed in this section for a period of thirty (30) days or more, City will nevertheless have the right, in its sole discretion, to terminate this Agreement by giving IO days' November 12, 2019 -90- City of Beverly Hills
notice, in which case the provisions in Article 9 relative to taking possession of Company's land, equipment and other property, and engaging Company's personnel, will apply.

10.5 Assurance of Performance
City may, at its option and in addition to all other remedies it may have, demand from Company reasonable assurances of timely and proper performance of this Agreement, in such form as City may require. If Company fails or refuses to provide satisfactory assurances of timely and proper performance in the form and by the date required by City, that failure or refusal will constitute an event of default.

November 12, 2019 -91- City of Beverly Hills
ARTICLE 11

OTHER AGREEMENTS OF THE PARTIES

11.1 Relationship of Parties
The parties intend that Company will perform the services required by this Agreement as an independent contractor and not as an officer or employee of City, nor as a partner of or joint venture with City. No employee or agent of Company will be deemed to be an employee or agent of City. Except as expressly provided herein, Company will have the exclusive control over the manner and means of conducting the Solid Waste Collection services performed under this Agreement, and over all Persons performing those services.

Company is solely responsible for the acts and omissions of its officers, employees, subsidiaries, Affiliates, subcontractors, and agents. Neither Company nor its officers, employees, subsidiaries, Affiliates, subcontractors and agents will obtain any rights to retirement benefits, workers' compensation benefits, or any other benefits that accrue to City employees by virtue of their employment with City.

11.2 Compliance with Law
In providing the required services, Company must at all times, at its sole cost, comply with all applicable laws and regulations promulgated by federal, state, regional, or local administrative and regulatory agencies that are now in force and as they may be enacted or amended during the term of this Agreement.

11.3 Governing Law
This Agreement is governed by, and will be construed and enforced in accordance with, the laws of the State of California.

11.4 Jurisdiction
Any lawsuits between the parties arising out of this Agreement will be brought and concluded in the courts of the State of California, which shall have exclusive jurisdiction over such lawsuits. With respect to venue, the parties agree that this Agreement is made in and will be performed in Los Angeles County.

November 12, 2019 -92- City of Beverly Hills

11.5 Resolution of Disputes.

A. Disputes regarding the interpretation or application of any provisions of this Agreement will, to the extent reasonably feasible, be resolved through good faith negotiations between the parties. With the mutual consent of the parties, an arbitrator or a mediator may be engaged to conduct or to facilitate these negotiations and the resolution of disputes.

B. If any action at law or in equity is brought to enforce or interpret any provisions of this Agreement, the prevailing party in that action will be entitled to reasonable attorneys' fees, costs and necessary disbursements, in addition to such other relief as may be sought and awarded.

11.6 Assignment
A. Except as provided in Article 9 (City's Right to Perform Service), neither party may assign its rights, nor delegate, subcontract or otherwise transfer its obligations under this Agreement, to any other Person without the prior written consent of the other party. Any such assignment made without the consent of the other party is void, and the attempted assignment will constitute a material breach of this Agreement.

B. For purposes of this section when used in reference to Company, "assignment" includes, but is not limited to ( 1) a sale, exchange, or other transfer to a third party (including any Affiliate) of substantially all of Company's assets dedicated to service under this Agreement; (2) a sale, exchange, or other transfer of outstanding common stock of Company to a third party (including any Affiliate), provided such sale, exchange, or transfer may result in a change of control of Company; (3) any dissolution, reorganization, consolidation, merger, re-capitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction that results in a change of ownership or control of Company; ( 4) any assignment by operation of law, including insolvency or bankruptcy, an assignment for the benefit of creditors, writ of attachment for an execution being levied against this Agreement, appointment of a receiver taking possession of Company's property, or transfer occurring in the event of a probate proceeding; and (5) any combination of the foregoing (whether or not in related or contemporaneous transactions) that has the effect of a transfer or change of ownership or control of Company.

November 12, 2019 -93- City of Beverly Hills
C. Company acknowledges that this Agreement involves rendering a vital service to Customers serviced under this Agreement within City, and that City has selected Company to perform the specified services based on (1) Company's experience, skill and reputation for conducting its operations in a safe, effective, and responsible fashion, at all times in keeping with applicable Environmental Laws, regulations and best Solid Waste management practices; and (2) Company's financial resources to maintain the required equipment and to support its indemnity obligations to City under this Agreement. City has relied on each of these factors, among others, in choosing Company to perform the services to be rendered under this Agreement.

D. If Company requests City's consideration of and consent to an assignment, City may deny or approve that request in its sole discretion. No request by Company for consent to an assignment need be considered by City unless and until Company has met the following requirements:
(1) Company shall pay City its reasonable expenses for attorney's fees and investigation costs necessary to investigate the suitability of any proposed assignee, and to review and finalize any documentation required as a condition for approving any such assignment. An advance payment of fifty thousand dollars ($50,000) towards expenses shall be paid to City prior to City consideration of any assignment request and Company shall be responsible to pay all costs incurred by City in considering a request for assignment, including those in excess of this deposit amount, regardless of whether City consents to the assignment. Company must also pay a transfer fee to City equal to 1 % of the annual revenue for the most recent 12 months prior to the effective date of the proposed change of ownership, multiplied by the number of remaining years, or fraction thereof.
(2) Company must furnish City with audited financial statements covering the proposed assignee's operations for the immediately preceding three operating years.
(3) Company must furnish City with satisfactory proof: (a) that the proposed assignee has at least 10 years of Solid Waste management experience on a scale equal to or exceeding the scale of operations conducted by Company under this Agreement; (b) that in the last five years the proposed assignee has not received any significant citations from any federal, state, or local agency having jurisdiction over its Solid Waste management operations due to any material failure to comply with state, November 12, 2019 -94- City of Beverly Hills
federal or local Environmental Laws and that the assignee has provided City with a complete list of such citations; (c) that the proposed assignee has at all times conducted its operations in an environmentally safe and conscientious fashion; (d) that the proposed assignee conducts its Solid Waste management practices in full compliance with all federal, state and local laws regulating the Collection and Disposal of Solid Waste, including the handling of Hazardous Substances; and (e) any other information required by City to ensure that the proposed assignee can fulfill the terms of this Agreement in a timely, safe, and effective manner.
( 4) Under no circumstances will City be obligated to consider any proposed assignment if Company is in default at any time during the period of consideration.

E. Notwithstanding the forgoing, City hereby consents to an assignment of this Agreement by Company to Guarantor, Arakelian Enterprises, Inc. Any such assignment shall not require compliance with paragraph D of this Section. This consent by City shall be effective only if (i) Company notifies City of the proposed assignment to Arakelian Enterprises, Inc. at least 30 days prior to the effective date thereof; (ii) Arakelian Enterprises, Inc. assumes all rights and obligations of Company under this Agreement, as evidenced by a document in form reasonably acceptable to City, and (iii) there is no outstanding uncured default or event of default.

11.7 Affiliated Companies
A. Company represents to City that its accounting records will be maintained on a basis that shows the results of Company's operations under this Agreement separately from operations in other geographic locations, as if Company were an independent entity providing service only to City. The costs and revenues associated with providing service to City will not be combined, consolidated, or in any other way incorporated with those of other operations conducted by Company in other geographic locations, or with those operations of an Affiliate.

B. If Company enters into any financial transactions with a related entity for the provision of labor, equipment, supplies, services, capital, etc., related to the furnishing of service under this Agreement, that relationship must be disclosed to City, and in the financial reports submitted to City. In such event, City's rights to inspect records, and to obtain financial data, will extend to that related entity.

November 12, 2019 -95- City of Beverly Hills

11.8 Contracting or Subcontracting
Company must not engage any subcontractors for the Collection, transfer, processing, Recycling, or Disposal of Solid Waste without the prior written consent of City.

Transport from the transfer station to processing or Disposal Facilities is excluded from this prohibition.

11.9 Binding on Assigns
The provisions of this Agreement will inure to the benefit of and be binding on the permitted assigns of the parties.

11.10 Cooperation in Preparation for Termination or Expiration of Contract If the transition of services to another entity occurs by reason of the expiration of the term, default, termination, or otherwise, Company will cooperate with City and any subsequent Solid Waste enterprise to assist in an orderly transition that will include, but not be limited to, Company providing route lists, Billing and service-level information, and other operating records needed to service all properties covered by this Agreement.

Company's failure to cooperate with City following termination will be conclusively presumed to be grounds for specific performance and any other equitable relief necessary to enforce this covenant.

Company shall provide a new service provider with all keys, security codes and remote controls used to access garages and Bin enclosures. Company shall be responsible for coordinating transfer immediately after Company's final pickups, so as not to disrupt service. Company shall provide City with detailed route sheets containing service names and addresses, Billing names and addresses, monthly rate and service levels (number and size of Containers and pickup days) at least 90 days prior to the transition date, and provide an updated list two weeks before the transition and a final list of changes the day before the transition. Company shall provide means of access to the new service provider at least one full working day prior to the first day of Collection by another party, and always within sufficient time so as not to impede in any way the new service provider from easily servicing all Containers.

Company shall cooperate in good faith with City and new service provider in scheduling exchanges of Company Containers with Containers provided by the new service provider November 12, 2019 -96- City of Beverly Hills
so as to assure that Customers neither need to find storage for two sets of Containers nor go without a container for an inconvenient length of time.

11.11 Parties in Interest
Nothing in this Agreement, whether express or implied, is intended to confer any rights on any Persons other than the parties to it and their authorized representatives, successors, and assigns.

11.12 Waiver
The waiver by either party of any breach or violation of any provisions of this Agreement will not be deemed to be a waiver of any breach or violation of any other provision nor of any subsequent breach or violation of the same or any other provision. The subsequent acceptance by either party of any moneys that become due hereunder will not be deemed to be a waiver of any pre-existing or concurrent breach or violation by the other party of any provision of this Agreement.

11.13 Company's Investigation
Company has made an independent investigation, satisfactory to it, of the conditions and circumstances relating to this Agreement and the work to be performed.

11.14 Condemnation
City reserves its rights to acquire Company's property used in the performance of this Agreement by purchase or through the exercise of the right of eminent domain. This provision is in addition to, and is not intended to alter, the rights of the parties set forth in Article 9.

11.15 Notice
A. The representations of the parties who are primarily responsible for the administration of this Agreement and to whom notices, requests, demands, and other communications must be given, are as follows:

If to City:

November 12, 2019
City Manager
Beverly Hills City Hall
455 North Rexford Drive
Beverly Hills, CA 90210-3 713
-97- City of Beverly Hills
Copy to:

And to:

Director of Public Works
Department of Public Works
City of Beverly Hills
345 Foothill Road
Beverly Hills, CA 90210
City Attorney
Beverly Hills City Hall
455 North Rexford Drive
Beverly Hills, CA 90210
If to Company: Araco Enterprises LLC
14048 Valley Blvd.

City oflndustry, CA 91746
Attn: Legal Department
B. Notices, requests, demands, and other communications to be given by either party must be in writing and may be effected by personal delivery, by overnight courier, by facsimile transmission, by first class mail, or by certified mail, return receipt requested.

C. Notices, requests, demands, and other communications delivered or transmitted under paragraph (B) above will be deemed to have been duly received on the date ofreceipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day.

Otherwise, any such notice, request, demand, or communication will be deemed not to have been received until the next succeeding Business Day; provided, however, that notices given by first class mail will be deemed to have been received five Business Days after having been posted in the regular mail.

D. If the name of the principal representative or other recipients designated to receive the notices, requests, demands, and other communications, or the address or facsimile number of those persons, is changed, written notice must be given at least five working days before the effective date of that change. Notices given before actual receipt of a notice of change will not be invalidated by the change.

11.16 Representatives of the Parties
A. References in this Agreement to the "City" mean the City Council, and all actions to be taken by City must be taken by the City Council except as provided below.

The administration of this Agreement by City will be under the supervision and direction of City's Department of Public Works. The City Council has initially delegated authority November 12, 2019 -98- City of Beverly Hills
to the Director of Public Works designee to take all actions specified in this Agreement, unless otherwise stated. At any time in the future, the City Council may delegate, in writing, authority to other City employees, and may authorize those employees, in turn, to delegate in writing to subordinate employees some or all of that authority. Company may rely upon actions taken by those delegates if they are within the scope of the authority properly delegated to them.

B. Company will, by the Operative Date, designate in writing a responsible officer who will serve as the representative of Company in all matters related to this Agreement and will inform City in writing of that designation and of any limitations upon his or her authority to bind Company. City may rely upon actions taken by that designated representative as actions of Company unless they are outside the scope of the authority delegated by Company, as communicated to City.

11.17 City Free to Negotiate with Third Parties
Notwithstanding the exclusive nature of this Agreement, City may investigate all options for the Collection, transporting, Recycling, processing, and Disposal of Solid Waste at any time prior to the expiration of the term. Without limiting the generality of the foregoing, City may solicit proposals from Company and from third parties for the provision of Collection services, Disposal services, Recycling services, Food Waste or Green Waste services and processing, and any combination thereof, and may negotiate and execute agreements for such services that will take effect upon the expiration or earlier termination of this Agreement.

11.18 Compliance with Municipal Code
Company must comply with all applicable provisions of the City's Municipal Code and with all amendments to those provisions during the term of this Agreement.

11.19 Privacy
Company must strictly observe and protect the rights of privacy of Customers.

Information identifying individual Customers, or the contents of a Customer's waste stream, must not be revealed to any Person, governmental unit, or private entity, unless directed by a court oflaw, by statute, or upon authorization of the Customer. This provision will not be construed to preclude Company from preparing, participating in, or assisting in the preparation of waste characterization studies or waste stream analyses that November 12, 2019 -99- City of Beverly Hills
may be required by the Act. This provision does not apply to reports or records provided to City under this Agreement so long as City maintains reports or records with Customer identification as confidential information in accordance with this section.

11.20 Compliance with Immigration Laws.

In the performance of this Agreement, Company will comply with all applicable immigration laws.

11.21 Proprietary Information, Public Records
City acknowledges that certain records and reports of Company are proprietary and confidential. Company is obligated to permit City to inspect its records on demand and to provide copies to City when requested. City will endeavor to maintain the confidentiality of all proprietary information provided by Company. Notwithstanding the foregoing, and notwithstanding Section 11.19 (as it applies to City), any documents provided by Company to City that are public records may be disclosed in accordance with a proper public records request.

11.22 Guarantee of Company's Performance
Under a guarantee in substantially the form attached as Exhibit 3, Arakelian Enterprises, Inc., has agreed to guarantee Company's performance of this Agreement. The guarantee will be provided concurrently with Company's execution of this Agreement.

11.23 Attorneys' Fees
In any action or proceeding to enforce or interpret any of the terms of this Agreement, the prevailing party is entitled to an award to attorneys' fees in the amount reasonably incurred in the prosecution or defense of that action. The term "prevailing party" means the party entitled to recover costs of suit, upon the conclusion of the matter, in accordance with the laws of the State of California.

November 12, 2019 -100- City of Beverly Hills
ARTICLE 12

MISCELLANEOUS PROVISIONS

12.1 Entire Agreement
This Agreement, including the exhibits, constitutes the entire agreement between the parties with respect to the matters covered. No verbal agreement or understanding with any officer, agent, or employee of City, either before, during, or after the execution of this Agreement, will affect or modify any of the obligations herein contained, nor will any such verbal agreement or understanding entitle Company to any additional payment under the terms of this Agreement.

12.2 Section Headings
The article headings and section headings in this Agreement are for the convenience of reference only and are not intended to be used in construing this Agreement, nor are they intended to alter or affect any of its provisions.

12.3 References to Laws and Other Agreements
All references in this Agreement to laws will be understood to include existing laws as they may be subsequently amended or recodified, unless otherwise specifically provided.

This Agreement supersedes all agreements previously entered into by the parties.

12.4 Conflicts
If there is any conflict between the provisions of this Agreement and the provisions of the City's Municipal Code, the provisions of this Agreement will control.

12.5 Interpretation
This Agreement, including the attached exhibits, will be interpreted and construed reasonably, and neither for nor against either party, regardless of the degree to which either party participated in its drafting.

12.6 Amendment to Agreement
This Agreement may not be amended in any respect except by a writing signed by the parties.

November 12, 2019 -101- City of Beverly Hills

12. 7 Severability
If any non-material provision of this Agreement is for any reason deemed to be invalid or unenforceable, the invalidity or unenforceability of that provision will not affect any of the remaining provisions of this Agreement, which provisions will be enforced as if such invalid or unenforceable provision had not been included.

12.8 Exhibits
Each of the exhibits identified in this Agreement is attached and is incorporated by this reference.

12.9 Non-Waiver Provision
Failure of either party to exercise any of the remedies set forth in this Agreement within the time periods specified will not constitute a waiver of any rights of that party with regard to an event of nonperformance, whether determined to be a breach, excused performance, or unexcused default by the other party.

12.10 Rights Reserved to City.

A. In addition to all rights specifically reserved to City by this Agreement, City reserves every other right and power required to be reserved under the City's Municipal Code, and all other applicable laws or regulations, and Company, by its acceptance of this Agreement, agrees to comply with any action or requirement of City in its exercise of any such right or power.

B. City has the right to waive any provisions of this Agreement relating to Company's obligations, except those required by federal or state laws or regulations, if City determines (I) that it is in the public interest to do so; or (2) that the enforcement of such provision will impose an undue hardship on Company or its Customers. To be effective, such waiver must be in writing and signed by a duly authorized representative of City.

C. City has the right to intervene in any suit or proceeding concerning this Agreement to which Company is a party, and Company will not oppose such intervention by City.

November 12, 2019 -102- City of Beverly Hills

12.11 Reasonable Determinations
Where any provision of this Agreement requires the consent or approval of either party, such consent or approval will not be unreasonably or arbitrarily withheld.

12.12 Conflict of Interest
The parties agree that, to their knowledge, no member of the City Council, nor any other officer or employee of City, has any interest in this Agreement or the Solid Waste Franchise, whether contractual, financial or otherwise, which has not been disclosed as required by applicable law. In addition, if any contractual, financial, or other interest within the purview of applicable law comes to the knowledge of either party at any time, a full and complete disclosure of that information will be made in writing to the other party, even if that interest would not be considered a prohibited conflict of interest under applicable law.

12.13 Counterpart Execution
This Agreement may be executed in multiple counterparts, each of which will be deemed an original and all of which will constitute one and the same instrument.

12.14 Authority and Effective Date
A. Authority. The parties signing below represent and warrant that they have the requisite authority to bind the entities on whose behalf they are signing.

B. Effective Date. This Agreement will become effective on the date this Agreement is approved by the Beverly Hills City Council, or on the date specified by the City Council in its order or action approving this Agreement, whichever last occurs, and satisfaction of the conditions in Section 2.6 (the "Effective Date"). It is the intention of the parties that Company will first execute this Agreement and then submit it to City.

The City Clerk will insert the effective date in all counterparts of this Agreement, attest to their execution by a duly authorized officer of City, and transmit one or more fully executed counterparts to Company.

November 12, 2019 -103- City of Beverly Hills
TO EFFECTUATE THIS AGREEMENT, each of the parties has caused this Agreement to be executed by its authorized representative as of the date set forth below the authorized signature.

CITY:

ATTEST:

City Clerk
November 12, 2019 -104-

CITY OF BEYERL Y HILLS
a municipal corporation
By: _
Mayor of the
City of Beverly Hills, California
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Title:
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Name:

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City of Beverly Hills
APPROVED AS TO FORM:
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LAURENCE s. WIENER
City Attorney
APPROVED AS TO CONTENT:

GEORGE CHAVEZ
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ssistant Director of Public Works
�ARONL'HEUREUXDRESSEL
Risk Manager
November 12, 2019 -105- City of Beverly Hills
EXHIBIT 1

ADJUSTED RATE SCHEDULE OF

INITIAL MAXIMUM CONTRACTOR RATES
[INITIAL RATES TO BE UPDATED, EFFECTIVE APRIL 1, 2022, USING RATE ADJUSTMENT METHODOLOGY PER SECTION 5.3.]
(April 1, 2022 - June 30, 2023)
Cart & Bin Rates
Container Size
Number of pickups per week
1 2 3 4 5 6 7

1.5-yard - Refuse
2-yard - Refuse
3-yard - Refuse
4-yard - Refuse
3-yard w / compactor

1.5-yard - Recycling
2-yard - Recycling
3-yard - Recycling
4-yard - Recycling
96-Gal - Recycling
65-Gal - Organics (1)
Restaurant Bin Rates
Container Size
Number of pickups per week
1 2 3 4 5 6 7

1.5-yard
2-yard
3-yard
4-yard
3-yard w / compactor

1.5-yard - Recycling
2-yard - Recycling
3-yard - Recycling
4-yard - Recycling
96-Gal - Recycling
(1) Not subject to the initial 61 % rate adjustment per Section 5.3.

November 12, 2019 1-1 City of Beverly Hills
EXHIBIT 1 (continued)

ADJUSTED RA TE SCHEDULE OF

INITIAL MAXIMUM CONTRACTOR RA TES
[INITIAL RATES TO BE UPDATED, EFFECTIVE APRIL 1, 2022, USING RATE ADJUSTMENT METHODOLOGY PER SECTION 5.3.J
(April l, 2022 - June 30, 2023)
Scout Service Rates (additional charge per container)
Number of pickups per week
1 2 3 4 5 6 7
Charge Per Container (1)
Other Services
Service Rate
Temporary Bins - Per Pickup, disposal included:
. 3 Cubic Yard Bin, per pull $
. 6 Cubic Yard Bin. per pull NIA
Temporary Bin Dry Run Fee (alter 30 minutes) $
Bin cleanings above once per year $
Commercial_ Bulky Item Pick'!P Per_ltem: ___________________________________________________________________________ ··--··-·-······-·-· . __ ,,,ff••-·-·-··-·-··-··-·----·---·---------· ··-· -, ··-····-·-----·· . First Item On Each Service Call
-----·�--,- ----,�--• --�--H•,••,-•--• .. ••,n••••----·-----·---·--•--•--,.•·•---- ______ , ___ > -·• ····------··--·--··----------- .. -$ _per item _______ ·-------··---··-·-- ··-----------·---- ___ ,, - > ----· ---· . Each Additional Item Per Same Service Call $ per item $_ per month, per bin (not based on
Hasp and Lock Services (I) service frequency)
Extra Empty Charge for Regular Bin Service $__per bin per pickup Extra Empty Charge for Compactor Bin Service $__per bin per pickup Emergency Collection and Disposal
$ __ per hour, for one collection vehicle
and one crew
Sidewalk Receptacle Cleaning/Powerwash $ __ per receptacle Sunday Service Surcharge (refuse containers with less than 7x week service) $ ___ per month per container Sunday Service Surcharge (recycling containers with less than 7x week service) -50% of refuse rate $ ___ per month per container Commercial Container Reactivation Fee (2) $ 25.00 (3)
Contamination Fee (per Section 3.4) $50.00 per occurrence (3) ( 1) Applies to mixed waste, recycling, and/or organics containers. (2) Only if containers were removed for nonpayment. Company can charge fee if Company performs customer billing. (3) New rates effective April I, 2022. Not subject to 61% initial rate increase.

November 12, 2019 1-2 City of Beverly Hills
EXHIBIT 1 (continued)

INITIAL MAXIMUM CONTRACTOR RA TES
[INITIAL RATES TO BE UPDATED, EFFECTIVE APRIL 1, 2022, USING RATE ADJUSTMENT METHODOLOGY PER SECTION 5.3.]
(April 1, 2022 - June 30, 2023)
Rolloff Service
Service Type Rate
Pull Charge (per pull)
• Standard Rolloff Box $
• Compactor Rolloff Box $
Dump/Processing Charge (per ton)
• Dump Fee per ton (refuse transfer and disposal w/o processing) $ • Commingled Recyclables Processing Fee per ton (excluding material $ --
revenues credited to City)
• Mixed Waste Processing Fee per ton, including residue disposal $ • Inert Materials (asphalt, concrete, dirt, etc.) $
• Wood Waste $
• Green Waste $
IO-Yard Concrete Wash-Out Bin (low-boy pumping fee) $
95% C&D Roll-Off Box Diversion -Additional Fee for 95% diversion Extra$ --
/load
of construction and demolition debris roll-off box loads Rolloffbox dry run fee (after 30 minutes) $
Rolloff box cleanings above once per year (includes compactors) $ After-Hours Surcharge - Monday through Saturday between 5:00 pm $ --
to 5:00 a.m., and all day Sunday- Customer requests delivery and/or pull *
* After-hour surcharge does not apply to morning deliveries or pulls. If both delivery and pull are requested after hours, only one after-hours surcharge applies.

November 12, 2019 1-3 City of Beverly Hills
EXHIBIT 1 (continued)

INITIAL MAXIMUM RESIDENTIAL PROCESSING RATES
[INITIAL RA TES TO BE UPDATED, EFFECTIVE APRIL 1, 2022, USING RATE ADJUSTMENT METHODOLOGY PER SECTION 5.3.]
(April 1, 2022 - June 30, 2023)
Residential Processing Rates
Service Type Per Ton Rate
Residential Processing (per ton)
• Mixed Residential Refuse and Recyclables Processing $ • Residential Organics Waste (including green waste and food waste) $ • Inerts Diversion $
• Street Sweeping $
• C&D $
November 12, 2019 1-4 City of Beverly Hills
EXHIBIT 2

RATE ADJUSTMENT FORMULA

FOR COMMERCIAL AND ROLL-OFF CONTRACTOR RA TES AND

RESIDENTIAL PROCESSING RATES
November 12, 2019 2-1 City of Beverly Hills
EXHIBIT2A

RA TE ADJUSTMENT FOR COMMERCIAL AND ROLL-OFF CONTRACTOR RA TES AND RESIDENTIAL PROCESSING RA TES (Example Calculation)
Step One: Calculate percentage change in indices
A B c D
Percent Change ColumnD
Row Adjustment Factor Index Old Index Value New Index Value In Index Percentage or
((Column B/ 5%, whichever
Column..\)-]) is lower
I CPI: Water, Sewer, & Trash Collection (I) 221.659 229.106 3.4% 3.4% Step Two: Apply percentage change to rates

E F G H
Current Net Percentage
Rate Increase or Adjusted Net
Row Rate Category Contractor Rate Change (from
Decrease Contractor Rate
(2) Column D) (Column Ex (Column E +
Column F) Column G)
2 3-yd bin. Ix week Commercial /month $ 74.38 3.4% $ 2.53 s 76.91 3 3-yd bin, 2x week Commercial /month s 122.72 3.4% s 4.17 s 126.89 4 3-yd bin, 3x week Commercial /month s 168.85 3.4%, s 5.74 $ 174.59 5 3-yd bin, Ix week Restaurant /rnonth s 115.29 3.4% s 3.92 $ 119.21 6 3-yd bin, 2x week Restaurant /month $ 166.62 3.4% $ 5.67 $ 172.29 7 3-yd bin, 3x week Restaurant /month $ 217.94 3.4% s 7.41 $ 22535 8 Organics cart, Ix week s 45.00 3.4% s 1.53 $ 46.53
9 Organics cart, 2x week $ 90.00 3.4% $ 306 $ 93 06
10 Locking Lid /month $ 7.23 3.4% $ 0.25 s 7.48
II Temp 3-yd bm per service $ 95.71 3.4% s 3.25 s 98.96 12 Std Roll-off Box Pull Fee $ 151.49 3.4% $ 5 15 $ 156.64 13 Compactor Roll-off Box Pull Fee $ 199.58 3.4% s 6.79 $ 20637 14 Roll-off Disposal Fee /ton $ 37.29 3.4% $ 1.27 s 38.56 15 Roll-off Commingled Recyclables Fee /ton $ 18.81 3.4% $ 0.64 $ 19.45 16 Roll-off Mixed Waste Processing Fee /ton s 37.29 3.4% $ 1.27 s 38 56 17 Roll-off Inert Materials /ton $ 23.20 3.4% $ 0.79 s 23.99 18 Resid. Processing: Mixed refuse/recyclables per ton $ 24 20 3.4% $ 0.82 s 25.02 19 Resid. Processing: Organics processing per ton s 25 20 3.4% s 0.86 $ 26.06 20 Res id. Processing: Inerts per ton s 26.20 3.4% $ 0.89 $ 27.09 21 Resid. Processing Street sweeping debns per ton $ 27.20 3.4% $ 0.92 $ 28.12 22 Resid. Processing: C&D per ton $ 28.20 3.4% $ ,' 0.96 s 29.16 (1) Consumer Price Index Consumer Price Index (CUUROOOOSEHG) for All Urban Consumers, water and sewer and trash collection - U.S. city average, not seasonally adjusted, as published by the United States Department of Labor, Bureau of Labor Statistics, subject to a 5% cap, as shown in Column D above. Average annual change per Section 5.5 of agreement. (2) Example rates listed. Adjustment applies to all rates.

November 12, 2019 2-2 City of Beverly Hills
EXHIBIT2B

EXAMPLE CALCULATION FOR

AVERAGE ANNUAL CHANGE IN PUBLISHED PRICE INDICES
The rate adjustment index is calculated using the "average annual change" as demonstrated in the example below, measured for the calendar year ended in the December before each rate adjustment, as compared to the calendar year ended the prior December. The Bureau of Labor Statistics publishes the Consumer Price Index for Garbage and Trash Collection (CUUROOOSEHG02), U.S. city average, subject to a 5% cap per Section 5.5.

If a rate adjustment based on this CPI index were to be implemented as of July 1, 2018, the 2017 average annual index of 229.106 would have been the "New Index Value" to be used in Column B of the example rate adjustment formulas in Exhibit 2A, and the 2016 average annual index of 221.659 would have been the "Old Index Value" in Column A.

This would have resulted in a 3.4 % increase to the rates as calculated in Column C of Exhibit 2A.

Garbage and Trash Collection Services, CUUROOOOSEHG02
Year Jan Feb March April May June July August Sept Oct Nov Dec Average 2016 437.205 438.296 437.699 437.676 438.317 437.858 438.607 439.358 439.707 440.311 443.343 444.745 439.427 2017 446.266 447.699 446.987 447.129 447.272 448.046 448.328 448.717 449.008 452.196 453.820 453.596 449.089 Average Annual Change: 2.2%
November 12, 2019 2-3 City of Beverly Hills
EXHIBIT 3

CORPORATE GUARANTY
Guaranty
THIS GUARANTY ("Guaranty) is given as of the __ day of __ , 2019, and is made with reference to the following facts and circumstances:

A. Araco Enterprises LLC, ("Owner") is a corporation organized under the laws of the State of California. Arakelian Enterprises, Inc., ("Guarantor") is a corporation organized under the laws of the State of California. Owner is an affiliate of Guarantor.

B. Owner and the City of Beverly Hills ("City") have negotiated a Franchise Agreement for Commercial Solid Waste Collection Services dated as of _ ("Agreement"). A copy of this Agreement is attached.

C. It is a requirement of the Agreement, and a condition to City entering into the Agreement, that Guarantor guarantee Owner's performance of the Agreement.

D. Guarantor is providing this Guaranty to induce City to enter into the Agreement.

NOW, THEREFORE, in consideration of the foregoing, Guarantor agrees as follows:

1. Guaranty of the Agreement. Guarantor irrevocably and unconditionally guarantees to City the complete and timely performance by Owner of each and every term of the Agreement that Owner is required to perform. If Owner fails to perform any term of the Agreement, Guarantor will promptly and fully perform it in the place of the Owner, or cause it to be performed. Guarantor also guarantees payment to City of any damages, costs, or expenses that might become recoverable by City from Owner due to its breach of the Agreement.

2. Guarantor's Obligations Are Absolute. The obligations of Guarantor under this Guaranty are continuing, unconditional, and unlimited, and, with respect to any payment obligation of Owner under the Agreement, constitute a guarantee of payment and not of collection, and are not conditional upon the validity or enforceability of the Agreement. In any action brought against Guarantor to enforce, or for damages for breach of, its obligations under this Guaranty, Guarantor will be entitled to all defenses, if any, that would be available to the Owner in an action to enforce, or for damages for breach of, the Agreement (other than discharge of, or stay of proceedings to enforce, obligations under the Agreement under bankruptcy law).

November 12, 2019 3-1 City of Beverly Hills

3. Waivers. Guarantor has no right to terminate this Guaranty, or to be released, relieved, exonerated or discharged from its obligations under this Guaranty for any reason, including, without limitation: (a) the insolvency, bankruptcy, reorganization or cessation of existence of the Owner; (b) the actual or purported rejection by a trustee in bankruptcy of the Agreement, or any limitation on any claim in bankruptcy resulting from the actual or purported termination of the Agreement; (c) any waiver with respect to any of the obligations of the Agreement guaranteed hereunder, or the impairment or suspension of any of City's rights or remedies against the Owner; or (d) any merger or consolidation of the Owner with any other entity, or any sale, lease, or transfer of any or all the assets of the Owner. Without limiting the generality of the foregoing, Guarantor waives the rights and benefits under California Civil Code Section 2819.

Guarantor waives all benefits and defenses under California Civil Code Sections 2846, 2849, and 2850, including without limitation, the right to require City to (a) proceed against Owner; (b) proceed against or exhaust any security or collateral City may now or later hold; or (c) pursue any other right or remedy for Guarantor's benefit. Guarantor agrees that City may proceed against Guarantor for the obligations guaranteed herein without taking any action against Owner, or any other guarantor or pledgor, and without proceeding against or exhausting any security or collateral City may now or later hold. City may, in its sole discretion, exercise all rights and remedies available to it against Owner, or any other guarantor or pledgor, without impairing City's rights and remedies in enforcing this Guaranty.

Guarantor now waives, and agrees to waive at any future time, at the request of City to the extent now or then permitted by applicable law, all rights that Guarantor may have, or which at any later time may be conferred upon it, by statute, regulation or otherwise, to avoid any of its obligations under, or to terminate, cancel, or surrender this Guaranty. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following will not affect the liability of Guarantor: (a) at any time or from time to time, without notice to Guarantor, performance or compliance with the Agreement is waived; (b) any indemnification with respect to Owner's obligations under the Agreement, or any security therefore, is released or exchanged in whole or in part; or (c) any assignment of the Agreement is effected that does not require City's approval.

Guarantor expressly waives, diligence, presentment, demand for payment or performance, protest and all notices whatsoever, including, but not limited to, notices of nonpayment or non-performance, notices of protest, notices of any breach or default, and notices of acceptance of this Guaranty. If all or any portion of the obligations guaranteed under this November 12, 2019 3-2 City of Beverly Hills
Guaranty are paid or performed, Guarantor's obligations will continue and remain in full force and effect in the event that all or any part of such payment or performance is avoided or recovered directly or indirectly from City as a preference, fraudulent transfer, or otherwise, irrespective of (a) any notice of revocation given by Guarantor or Owner prior to such avoidance or recovery; and (b) payment in full of any obligations then outstanding.

4. Term. This Guaranty is not limited to any period of time, but will continue in full force and effect until all of the terms of the Agreement have been fully performed or otherwise discharged. Guarantor will remain fully responsible under this Guaranty without regard to the acceptance by City of any performance bond or other collateral to assure the performance of Owner's obligations under the Agreement. Guarantor will not be released from its obligations under this Guaranty so long as there is any claim by City against Owner arising out of the Agreement based on Owner's failure to perform, which failure has not been settled or discharged.

5. No Waivers. No delay by City in exercising any rights under this Guaranty, nor City's failure to exercise those rights, will operate as a waiver of those rights. No notice to or demand on Guarantor will be a waiver of any obligation of Guarantor, or right of City, to take other or further action without notice or demand. No modification or waiver of any provisions of this Guaranty will be effective unless it is in writing and signed by City and by Guarantor, nor will any waiver be effective except in the specific instance or matter for which it is given.

6. Attorneys' Fees. If Guarantor breaches its obligations under this Guaranty Guarantor will pay reasonable attorneys' fees, and all other reasonable costs and expenses that are incurred by City in enforcing this Guaranty, or that are incurred in any action or proceeding arising out of or relating to this Guaranty, including any action instituted to determine the respective rights and obligations of the parties under this Guaranty.

7. Governing Law: Jurisdiction. This Guaranty is and will be deemed to be a contract entered into under the laws of the State of California and will be governed and construed in accordance with the laws of California without regard to its conflicts of laws rules for all purposes including, but not limited to, matters of construction, validity, and performance.

Guarantor agrees that any action brought by City to enforce this Guaranty may be brought in any court of the State of California, and Guarantor consents to personal jurisdiction over it by those courts. Guarantor appoints the following person as its agent for service of process in California:

Attention Legal Department
November 12, 2019 3-3 City of Beverly Hills
Arakelian Enterprises, Inc.
14048 Valley Blvd.

City oflndustry, CA 91746

8. Severability. If any portion of this Guaranty is held to be invalid or unenforceable, such invalidity will not affect the remaining portions of this Guaranty, which portions are severable and will continue in full force and effect.

9. Binding On Successors. This Guaranty inures to the benefit of City and its successors and shall be binding upon Guarantor and its successors, including any transferee of substantially all of Guarantor's assets, and its shareholders in the event of Guarantor's dissolution or insolvency.

10. Authority. Guarantor represents and warrants that it has the corporate power and authority to give this Guaranty, that the execution of this Guaranty has been authorized by all necessary action under its articles of incorporation and by-laws, and that the person signing this Guaranty on its behalf has the authority to do so.

11. Notices. Notice shall be given in writing, deposited in the U.S. mail, registered or certified, first class postage prepaid, addressed as follows:

To City: City Manager
Beverly Hills City Hall
455 North Rexford Drive
Beverly Hills, CA 90210
with a copy to the City Attorney at the same address.

To the Guarantor: Attention Legal Department
Arakelian Enterprises, Inc.
14048 Valley Blvd.

City oflndustry, CA 91746
[NAME OF GUARANTOR]
By:

Authorized Representative
Title:

November 12, 2019 3-4 City of Beverly Hills
Date:

By:

Authorized Representative
Title:

Date:

November 12, 2019 3-5 City of Beverly Hills
EXHIBIT 4

FAITHFUL PERFORMANCE BOND
KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the City of Beverly Hills, California, a municipal corporation ("City") has awarded to Araco Enterprises LLC, ("Principal"), an exclusive franchise for the collection, processing, and disposal of commercial solid waste generated within the City; and WHEREAS, the exclusive franchise, identified as "Franchise Agreement for Commercial Solid Waste Collection Services" is incorporated by this reference; and WHEREAS, the Principal is required under the terms of the exclusive franchise to furnish a bond for its faithful performance;
NOW, THEREFORE, we, Principal and The Hanover Insurance Company, as Surety, are held and firmly bound unto City in the penal sum of Eight Hundred Thousand Dollars ($800,000), lawful money of the United States, for the payment of which we bind ourselves, our heirs, successors, executors, administrators, jointly and severally, firmly by these presents.

The condition of this obligation is such that the obligation will become null and void if the above-bounded Principal, his or its heirs, executors, administrators, successors, or assigns, will in all things stand to, abide by, well and truly keep and perform the covenants, conditions, and provisions in said exclusive franchise and any alteration thereof made as therein provided, on his or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and will indemnify and save harmless City, its officers, agents, and employees, as therein stipulated; otherwise, this obligation will be and remain in full force and effect.

As part of the obligation secured hereby, and in addition to the face amount specified, costs and reasonable expenses and fees will be included, including reasonable attorneys' fees incurred by City in successfully enforcing the obligation, all to be taxed as costs and included in any judgment rendered.

The Surety hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the exclusive franchise, the work to be performed thereunder, or the specifications accompanying the exclusive franchise will in any manner affect its obligations on this bond. The Surety hereby waives notice of any such change, extension of November 12, 2019 4-1 City of Beverly Hills
time, alteration, or addition to the terms of the exclusive franchise, the work, or the specifications.

IN WITNESS WHEREOF, this instrument has been duly executed by the abovenamed Principal and Surety on , 2019.

Note: All signatures must be acknowledged before a notary public. Attach appropriate acknowledgment.

ARACO ENTERPRISES LLC
(Type name of Principal)
14048 Valley Blvd
City oflndustry. CA 91746
(Type address of Principal)
(Signature of authorized officer)
(Title of officer)

THE HANOVER INSURANCE COMPANY
(Type name of Surety)
(Type address of Surety)
(Signature of authorized officer)
(Title of officer)
APPROVED AS TO FORM:

CITY ATTORNEY
November 12, 2019 4-2 City of Beverly Hills
EXHIBIT 5

NOTARY CERTIFICATION

STA TE OF CALIFORNIA)
COUNTY OF ) ss:

On , __ , before me, the undersigned, a Notary Public in and for the State of California, personally appeared-------------------- ---------------------' known to me to be the _
------------- of the Company that executed the within instrument on behalf of the Company therein named, and acknowledged to me that the Company executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal in the County of this day of , __ .

Notary Public
My Commission Expires:

November 12, 2019 5-1 City of Beverly Hills
EXHIBIT 6

RESIDENTIAL SOLID WASTE

PROCESSING AND DISPOSAL AGREEMENT
Araco Enterprises LLC (Company) warrants that it has made arrangements with Athens Material Recovery Facility located at 11211 Pendleton Street in Sun Valley and Crown Recycling Services located at 914 7 De Garmo A venue in Sun Valley to reserve capacity for and accept all solid waste generated by the City of Beverly Hills' (City's) residential customers at prices listed below throughout the term, including extensions, of the Franchise Agreement between the City of Beverly Hills and Company for Commercial Solid Waste Collection Services (Commercial Agreement). City will deliver the majority of the residential solid waste it collects to the Processing Facility. City may also deliver Inert materials generated from City projects for processing at Crown Recycling Services located at 9147 De Garmo Avenue in Sun Valley.

Processing Facility must accept waste delivered from City Monday through Sunday, observing only New Year's Day, Thanksgiving Day and Christmas Day as holidays. City can terminate this processing agreement upon 90-days' written notice to Company.

Initial Rates
The maximum processing rates for the partial Rate Year April 1, 2022 through June 30, 2022, and the Rate Year July I, 2022 through June 30, 2023, shall be the contractor processing rates effective as of March 31, 2022, under the Prior Agreement, increased by 61 %, less any extraordinary rate adjustments to the processing rates granted by City Council from the approval of this Agreement to March 31, 2022. For example, if City Council approved a 5% extraordinary rate increase after the approval of this Agreement and before the Operative Date of April I, 2022, the rate increase on April I, 2022 would be 6 I% - 5% = 56%.

Mixed residential refuse and recyclables processing (without separate commingled Recycling Cart program)
Effective April I, 2022, Company will accept any and all mixed residential refuse and recyclables from this program at the gate rate calculated as described above. Company will process all mixed Solid Waste to maximize recovery of Recyclables commodities, and dispose ofresidual waste. The guaranteed minimum recovery rate from this processing is 25% of the waste delivered by City.

November 12, 2019 6 - 1 City of Beverly Hills
Residential Organics Waste processing
Company will accept any and all of City's residential Organics Waste (including Green Waste and Food Waste) at the gate rate calculated as described above.

Inerts Diversion
Company will accept any and all Inerts collected by City crews from water, streets and other public works projects at a gate rate calculated as described above, and will divert 100% of Inerts from landfilling.

Street Sweeping
Company will accept any and all Sweet Sweeping debris collected by City crews from City streets and direct-hauled to Company's facility at a gate rate calculated as described above, and will divert 100% of Street Sweeping from landfilling.

Company will accept any and all construction and demolition (C&D) debris collected by City crews at a gate rate calculated as described above, and will maximize diversion of C&D debris from landfilling.

November 12, 2019 6-2 City of Beverly Hills
Rate Adjustments
Rate adjustments are effective as of July 1, with the first permissible rate adjustment on July 1, 2023, and shall follow the rate adjustment procedures per Section 5.4 and 5.5 of the Agreement.

This agreement will remain in effect for the duration of the term of the Commercial Agreement between Company and City, including contract extensions.

This disposal/processing capacity and rate guarantee is in addition to, and does not affect, the capacity guaranteed by Company for commercial waste (including multi-family Bin waste) generated in the City under the Commercial Agreement.

As Company has warranted to City that it has secured the above agreement on behalf of City, failure of Company to make these terms available to City will be considered a material breach by Company of the Commercial Agreement, putting Company in default and permitting City to terminate the Commercial Agreement.

Acknowledged By:

Company
November 12, 2019
�
Company
�
P-J...._ ,-. A�,� I\. 11L
,t.tf'\.t\O..f ,
'w.1 �k.r
11 I IS(UJl'l
6-3 City of Beverly Hills
Attachment 5
Commercial Service Calls I Performance Standard
Performanc Collectio Collectio Customer Met Did Not Non- Meet Performanc Categories Reliabilit Quality Responsivenes Standar Standar related Calls Calls/ 4i 4 Not Available
�
67 175 Work Orders

PERFORMANCE CATEGORIES
Collection Reliability
• New Bin Service • Missed I Pickup
• Failure to Deliver Bin on Scheduled Day
Collection Quality
• Property Damage
• Clean/Exchange Bin
• Container Return
• Solid Waste Spill Clean-ups
• Failure to deliver Roll-off or Temp Bin • Unauthorized Hours of Collection Customer Responsiveness
This data will be collected during the next bi-annual audit, and the asset management system will add when fully implemented. During this period, one property damage call was logged.
• Failure to Respond to Customer Complaint
• Failure to process customer complaint to City • Failure to notify City within one hour from the time the Company has remedied a complaint forwarded by City
• Failure to remove graffiti from containers
• Failure to process a claim for damages
• Company failed to process a claim for damages within 30 days Please note, in the "Did Not Meet Standard Category," many of these call requests were for bin cleanings or exchanges. The performance standard for this category is next business day completion. Next business day is a high standard.

Attachment 6
Example of Per Capita Diversion Target
Explanation of Per Capita Dh ersion Target Reporting
The reportmg procedure "installed by Senate Bill 1016 "m 2008 change how AB 939 50?o goal requirement is measured The procedure uses a per capita' 'Target" weight to represent the 5010 diversion threshold Per capita waste generation rates arc averaged for calendar years 2003-1> 06 to fonn the Total Generation Ba; eline amount (see graphic belov). Thiss halved to create the 50Po per capita •·ra1 get" f> reach jurisdiction. Both the Baseline and 50?o Disposal Target are calculated on a ··per capita" ha; is which results in the final '·SOl'o Per Capita Disposal Target" measurement and acliiev ement determination. 509'oD Ivers ion Ra te=
509'0 Equivalent Disposal Target fol 2014
50%
Total Generation
Baseline
(Disposal+
Diversion for
2003-06)
5CJ%
Disposal Target
(50% of Total
Generation)
Actual Per Capita
Disposal for
2014
2018 LARA and City of Beverly Hills Per Capita Target and Diversion Equivalent
LARA 14.2
Total Generation Baseline
(Disposal Diversion for 2003-06) City of Beverly Hills 19.6 9.8 7.3* Los Angeles Regional Agency disposal target total generation 71 and 2018 actual 5.6. City of Beverly Hills disposal target total generation 9.8 and 2018 actual 7 .3. •Both City and LARA 2018 actual PPPD are under the disposal target total generation.

Disposal Tons x 2000 lbs. per ton I Population/ 365 = PPD Disposed (pounds) (person) (day)
Attachment 7

THREE STREAM

COLLECTION SYSTEM
Vs

TWO STREAM

COLLECTION SYSTEM

THREE STREAM

DIVERSON
• YEAR COMMERCIAL RESIDENTIAL TOTAL
2002 40.38% 22.83%1 33.61%
� 2003 44.35% 27.36o/ 38.31°0 - - - - - � - - � - - - -- -

TWO STREAM DIVERSON
ll YEAR COMMERCIAL RESIDENTIAL TOTAL I 2004 46.79% 40.70%3 44.85% "' 2001: 46.03% 41.99%4 44.64�'
- -· - - - - - - - - - -
TWO STREAM DIVERSON WITH FOOD WASTE (RESTAURANT ROUTE}
YEAR
2009

COMMERCIAL

61.89%

RESIDENTIAL

51.70%5
TOTAL

57.96o/-,
1 Residential Recycle only 13.28% in 2002
2 Residential Recycle only 15.77% in 2003
3 Residential Mixed Waste only 23.70% in2004
4 Residential Mixed Waste only 22.76% in2005 5 Residential Mixed Waste only 25.00% in 2009 Attachment 2
Athens Environmental Services
Contingency Plan
ATHENS
July 9th, 2019
Mr. Colonel Burnley
Solid Waste Manager
City of Beverly Hills
455 North Rexford Drive
Beverly Hills, CA 90210
j bu [email protected]
Re: Work Stoppage Contingency
Dear Mr. Burnley,
Main: 800.633.9933 Recycling Services
9189 De Garmo Ave. Construction & Demolition Removal
Sun Valley, CA 91352 Organics Diversion
Solid Waste Collection
Athens-Env.com Street Sweeping
As follow-up to your request for further detailed information regarding Athens' contingency plans for potential work stoppage, please note the following points. • Crown and Sun Valley MRF's are non-union and will not be impacted for disposal or diversion • Supervisors, mechanics, helpers, scout and equipment delivery drivers are non-union and not impacted
o Supplemental support team is familiar with BH services • BH Commercial and Roll-off route drivers potentially impacted o It is our understanding that not all drivers would honor a work stoppage o Five Commercial Routes
o Five "equivalent" Rolloff routes/capacity
• All BH customers are routed and sequenced on daily route sheets o Custom notes per location for access and unique service requirements • Replacement capabilities for 10 potential Beverly Hills drivers impacted o Two Athens Environmental supervisors (Oscar Ruiz and Juan Ruiz) familiar and capable of operating BH routes
o Rolloff: Athens Services is non-union and operates 30+ Rolloff routes in the neighboring West Hollywood, West Los Angeles, and UCLA vicinities. Spare drivers would be available to immediately service BH Rolloff services.
o Commercial: Athens services over 85 commercial routes in the West Hollywood, West Los Angeles, and UCLA area.
o Athens Services maintains a 10% utility driver spare ratio throughout the company, equating to over 45 drivers in the network that could be available Athens is committed to resolving labor concerns and remains committed to providing BH with superb services. Please call me at (818) 504-1433 if you have any questions.

Sincerely, _,,(--:z:___
Greg Lammers
[email protected]
Executive Vice President
Attachment 3
Third Amendment to
Current Agreement

THIRD AMENDMENT TO

FRANCHISE AGREEMENT FOR COMMERCIAL SOLID WASTE COLLECTION

SERVICES AND RESIDENTIAL SOLID WASTE PROCESSING
This Third Amendment ("Amendment"), dated for reference , 2019, is entered into by and between the City of Beverly Hills, a municipal corporation organized and existing under the laws of the State of California ("City") and Araco Enterprises LLC, a Delaware limited liability company ("Company" or "Araco").

RECITALS
WHEREAS, City and Crown Disposal Co., Inc. ("Crown") entered into that certain Franchise Agreement for Commercial Solid Waste Collection Services and Residential Solid Waste Processing dated December 21, 2010 ("Franchise Agreement"); and WHEREAS, on or about January 6, 2015, City and Recology Los Angeles, a California corporation ("Recology") entered into that certain Consent to Assignment and First Amendment to Franchise Agreement ("Consent and First Amendment"), whereby City consented to the assignment of the Original Franchise Agreement to Recology subject to the provisions of the Consent and First Amendment, and City and Recology agreed to certain amendments of the original Franchise Agreement, and
WHEREAS, on or about August 8, 2017, City and Araco Enterprises, LLC, a Delaware limited liability company ("Araco") entered into that certain Consent to Assignment and Second Amendment to Franchise Agreement ("Consent and Second Amendment"), whereby City consented to the assignment of the Original Franchise Agreement to Araco subject to the provisions of the Consent and Second Amendment, and City and Araco agreed to certain amendments of the original Franchise Agreement; and
WHEREAS, the Original Franchise Agreement, as amended by the Consent and First Amendment and the Consent and Second Amendment, is referred to herein as the Franchise Agreement; and
WHEREAS, the State of California enacted Assembly Bill 1826 (AB 1826) in 2014, requiring the implementation of mandatory commercial organics recycling; and WHEREAS, concurrently herewith, the Parties propose to enter into a new Franchise Agreement For Commercial Solid Waste Collection And Residential Solid Waste Processing Services ("New Agreement"), which would have an Operative Date (as defined therein) of April 1, 2022, and Company has requested an extension of the term of the Franchise Agreement until the Operative Date of the New Agreement; and
WHEREAS, Company has also requested pre-approval of an assignment to Arakelian Enterprises, Inc., the Guarantor of Company's performance under the Franchise Agreement; and WHEREAS, City and Company wish to amend the Franchise Agreement to enable implementation of programs to achieve compliance with AB 1826, extend the term of the -1-
Franchise Agreement, and pre-approve an assignment of the Franchise Agreement to Arakelian Enterprises, Inc., and desire to enter into this Amendment for the purpose of setting forth their agreements and understandings with respect to these issues, NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Recitals; Definitions. The foregoing recitals are true and correct, and incorporated into this Amendment by this reference.

2. Definitions. Capitalized terms used in this Amendment and not otherwise defined herein shall have the meaning assigned to them in the Franchise Agreement.

Section 1.15 of the Franchise Agreement is hereby revised to read as follows:
"1.15 Company
"Company" means Araco Enterprises LLC, dba Athens Environmental Services, a Delaware limited liability company, and its officers, directors, employees, agents, subsidiaries, and subcontractors."
The following definitions are hereby added to Article 1 :
"l.3A AB 1826
"Assembly Bill 1826" or "AB 1826" means Chapter 12.9 ( commencing with Section 42649.8) of Part 3 of Division 30 of the Public Resources Code, as it now exists or may subsequently be amended."
"1.3 lA Organics Waste
"Organics Waste" means Green Waste or Food Waste, whether individually or in combination."

3. Term. Pursuant to Section 2.5 of the Agreement, City hereby extends the Tenn of the Agreement for 24 months, commencing April 1, 2020 and expiring on March 31, 2022 ("Extension Period"). Pursuant to Section 2.5, the Extension Period is on a month-to-month basis. During the Extension Period, and in addition to rights of termination set forth elsewhere in the Agreement, the Agreement may be terminated by City at any time, without cause, if City gives Company a 30-day written notice of termination.

4. Sunday Service Surcharge. The following shall be added as Section 3 .1.8:
"3 .1.8 Sunday Service Surcharge
Company shall provide Sunday service upon Customer's request. Effective _ if Customer requests Sunday service for Container collection that is collected less than seven times per week, Company shall provide Sunday service at an additional surcharge -2-
B0785-0014\2361636v I .doc
not to exceed $65.00 per month per Container. The maximum Sunday Service Surcharge rate shall be adjusted according to procedures for Bin rate adjustment described in Section 5 .5.1."

5. Organics Cart Service. The following shall be added as Section 3.2.7:
"3.2.7 Organics Waste Cart Program
Company shall provide all Customers required by law to participate in an Organics Waste diversion program with a program(s) compliant with CalRecycle's mandatory Organics Recycling requirements under AB 1826. Company shall identify Multi-Family, Commercial, and Industrial Premises required to arrange for Organics Waste Collection services under AB 1826, offer Organics Waste Collection to such Premises, and notify the City in the event of refusal to subscribe for Organics Waste Collection. Effective ___________ , Company shall provide 65-gallon Organics Cart service at a rate not to exceed $45.00 per month for once per week service, and $90.00 per month for twice per week service. The maximum Organics Cart rates shall be adjusted according to procedures for Bin rate adjustment described in Section 5.5.1."

6. Assignment. Paragraph B of Section 11.6 is hereby revised to read as follows:
"B. For purposes of this section when used in reference to Company, "assignment" includes, but is not limited to (I) a sale, exchange, or other transfer to a third party (including any Affiliate) of substantially all of Company's assets dedicated to service under this Agreement; (2) a sale, exchange, or other transfer of outstanding common stock of Company to a third party (including any Affiliate), provided such sale, exchange, or transfer may result in a change of control of Company; (3) any dissolution, reorganization, consolidation, merger, re-capitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction that results in a change of ownership or control of Company; ( 4) any assignment by operation oflaw, including insolvency or bankruptcy, an assignment for the benefit of creditors, writ of attachment for an execution being levied against this Agreement, appointment of a receiver taking possession of Company's property, or transfer occurring in the event of a probate proceeding; and (5) any combination of the foregoing (whether or not in related or contemporaneous transactions) that has the effect of a transfer or change of ownership or control of Company."

7. Assignment to Guarantor. Paragraph Eis hereby added to Section 11.6, as follows:
"E. Notwithstanding the forgoing, City hereby consents to an assignment of this Agreement by Company to Guarantor, Arakelian Enterprises, Inc. Any such assignment shall not require compliance with paragraph D of this Section. This consent by City shall be effective only if (i) Company notifies City of the proposed assignment to Arakelian Enterprises, Inc. at least 30 days prior to the effective date thereof; (ii) Arakelian Enterprises, Inc. assumes all rights and obligations of Company under this Agreement, as evidenced by a document in form reasonably acceptable to City, and (iii) there is no outstanding uncured default or event of default."
-3-
B0785-00141236 I 636v I .doc

8. Effect of Amendment. Except as set forth in this Amendment, the terms of the Franchise Agreement (as previously amended), including all maximum rates in effect prior to the date of this Amendment, shall remain unchanged and in full force and effect.

TO EFFECTUATE THIS AMENDMENT, each of the parties has caused this Amendment to be executed by its authorized representative as of the date set forth below the authorized signature.

CITY:

CITY OF BEYERL Y HILLS,
a municipal corporation
By:

JOHN A. MIRISCH
Mayor of the City of Beverly Hills, California
Dated: �������������
ATTEST:

HUMAAHMED
City Clerk
-4-
APPROVED AS TO FORM:

LJJ�CME)
.../
LAURENCE S . WIENER
City Attorney
By:

Name:

Title:

APPROVED AS TO CONTENT

GEORGE CHAVEZ
City Manager

A EPSTEIN
irector of Public Works
Risk Manager
-5-
Attachment 4
New Franchise Agreement for
Commercial Solid Waste Collection
and Residential Solid Waste
Processing Services

FRANCHISE

AGREEMENT

BETWEEN

CITY OF BEYERL Y HILLS
AND

ARACO ENTERPRISES LLC, DBA ATHENS ENVIRONMENTAL

SERVICES
FOR

COMMERCIAL SOLID WASTE COLLECTION

AND RESIDENTIAL SOLID WASTE PROCESSING SERVICES
* * *
December 10, 2019
80785-000 l \236713 7vl .doc
80785-000 l \2367137v I .doc

FRANCHISE

AGREEMENT

BETWEEN

CITY OF BEYERL Y HILLS
AND

ARA CO ENTERPRISES LLC DBA A THENS ENVIRONMENTAL SERVICES FOR

COMMERCIAL SOLID WASTE COLLECTION

AND RESIDENTIAL SOLID WASTE PROCESSING SERVICES

TABLE OF CONTENTS
Page

RECITALS I
ARTICLE 1 3
DEFINITIONS 3
I.I AB341 3

1.2 AB 939 3

1.3 AB 1826 3

1.4 AFFILIATE , 3

1.5 AGREEMENT 4

1.6 BILLINGS 4

1.7 BIN 4

1.8 BULKY ITEM 4

1.9 BUSINESS DAY 5
I. IO CALRECYCLE 5
I.I I CART 5

1.12 CITY 5
I . 13 COLLECT /COLLECTION 5

1.14 COMMERCIAL AND INDUSTRIAL PREMISES 5

1.15 COMPANY 6

1.16 COMPANY COMPENSATION 6

1.17 CONSTRUCTION AND DEMOLITION WASTE 6
I . 18 CONTAINERS 6

1.19 CUSTOMER 6

1.20 CPI 6

1.21 DISPOSAL 6

1.22 DISPOSAL SITE 6

1.23 EFFECTIVEDATE 7

1.24 ENVIRONMENT AL LAWS 7

1.25 FACILITY 7

1.26 FOOD WASTE 7

1.27 FRANCHISE 8

1.28 GREEN WASTE 8

1.29 HAZARDOUS SUBSTANCE 8

1.3 0 HAZARDOUS WASTE 8

1.3 I INERTS 9

1.32 MATERIALS RECOVERY FACILITYORMRF 9

1.33 MIXED WASTE PROCESSING 9

1.34 MULTI-FAMILY 9

1.35 ORGANIC WASTE 9
November 12, 2019 (i) City of Beverly Hills

1.36 ORGANIC WASTE PROCESSING FACILITY 9

1.37 OWNER 10

1.38 PERSON 10

1.39 PREMISES 10

1.40 PRIOR AGREEMENT 10

1.41 PUTRESC!BLE WASTE, PUTRESC!BLE l O

1.42 RATE YEAR 10

1.43 RECYCLING 10

1.44 RECYCLABLE MATERIALS, RECYCLABLES 11

1.45 REFUSE 11

1.46 ROLLO FF Box 11

1.47 SB 1383 11

1.48 SOLID WASTE 11

1.49 STATE 11

1.50 TEMPORARY SERVICE 12

1.51 TRANSFORMATION 12
ARTICLE 2 13
GRANT AND ACCEPTANCE OF FRANCHISE 13

2.1 GRANT AND ACCEPTANCE OF FRANCHISE 13

2.2 ADMINISTRATIVE FEE 13

2.3 EXCLUSIVE NATURE OF FRANCHISE 13

2.4 OPERATIVE DATE 13

2.5 TERM OF AGREEMENT 14

2.6 CONDITIONS TO EFFECTIVENESS OF AGREEMENT 14

2.7 LIMITATIONS ON SCOPE OF FRANCHISE 15

2.8 CITY'S RIGHT TO DIRECT CHANGES 17

2. 8.1 General 17

2.8.2 New Diversion Programs 17

2.9 OWNERSHIP OF SOLID WASTE 18

2.10 COMPANYSTATUS 18

2.11 BUSINESS LICENSE 19

2.12 ANNEXATIONS 19

2.13 GOVERNING REQUIREMENTS 19
ARTICLE 3 20
DIRECT SERVICES 20

3.1 REFUSE COLLECTION SERVICES 20

3.1.1 Permanent Bin Services 20

3.1.2 Rollo.ff Box Refuse Service 21

3.1.3 Temporary Bin Service 22

3.1.4 On-Call Bulky item Pickup 22

3.1.5 Scout Service 23

3.1.6 Lids, Casters, Hasps and Locks 23

3.1. 7 Overflowing Bins 2 3

3.1.8 Sunday Service Surcharge 2-1

3.2 RECYCLING SERVICES 24

3.2.1 Recycling Bin and Cart Service 2-1

3.2.2 Rollo.ff Box Recycling 25

3.2.3 Construction and Demolition Waste Recycling 25

3.2 . ./ Organic Waste Collection Services /Restaurant Food Waste Diversion 25

3.2.5 Recyclable Commodities Revenue Sharing 2 7

3.2.6 Large Venue Event Assistance 28

3.3 GREENWASTEPROGRAM 28

3.3.1 Rollo.ff Box Green Waste Service 28
November 12, 2019 (ii) City of Beverly Hills

3.3.2 Holiday Tree Collection Program 29

3.3.3 End Uses for Green Waste 29

3.4 WARNINGNOTICE 29

3.5 CITY SERVICES 30

3.5.1 City Facilities Collection 30

3.5.2 Special Events Collection 30

3.5.3 Emergency Collection and Disposal Service 30

3.5.4 Abandoned Item Collection 30

3.5.5 Sidewalk Receptacle Collection 30

3.5. 6 Containers 3 I

3.5. 7 Compost Program 32

3.5.8 Greystone Mansion Support 32

3.5. 9 Recycling Scholarship 33

3.6 DIVERSION REQUIREMENTS 33

3.7 OPERATIONS 33

3. 7. 1 Schedules 33

3. 7.2 Vehicles 34

3. 7.3 Litter Abatement 3 7

3. 7.4 Agreement Administration and Performance Monitoring 38

3. 7.5 Personnel 38

3. 7.6 Employee/Subcontractor Identification Required 39

3. 7. 7 Fees and Gratuities 40

3. 7.8 Non-Discrimination 40

3. 7.9 Change in Collection Schedule 40

3. 7.10 Report of Accumulation of Solid Waste; Unauthorized Dumping 40

3.8 TRANSPORTATION, DISPOSAL AND PROCESSING 41

3.9 STATUS OF DISPOSAL SITE 41
3 .10 DISPOSAL AND PROCESSING CAPACITY GUARANTEE .41

3.11 tv1ATERIALS RECOVERY FACILITY 42

3.12 DEDICATED ROUTES 42

3.13 ROUTE AUDIT 42
3 .14 SERVICE EXCEPTIONS; HAZARDOUS WASTE NOTIFICATIONS .44 3 .15 HAZARDOUS WASTE MANAGEMENT COMPONENT 45
ARTICLE 4 46
OTHER SERVICES 46

4.1 CUSTOMERBILLING 46

4. 1.1 City Billing 46

4. 1.2 Option for Company to Perform Billing and Company Compensation 46

4.2 CUSTOMER SERVICE 49

4.2.I Office Hours 49

4.2.2 lvfissed Pick-ups 49

4.2.3 Complaint Documentation 49

4.2.4 Resolution of Customer Complaints 50

4.2.5 Government Liaison 50

4.2.6 Computer Compatibility 50

4.3 COMMUNITY EVENTS 50

4.4 WASTE CHARACTERIZATION STUDIES 50
ARTICLE 5 52
COMPANY C01\,1PENSATION AND RATES 52

5.1 GENERAL 52

5.2 BILLING ADJUSTMENTS AND REFUNDS 53

5.3 INITIAL RATES 53

5.4 SCHEDULE OF FUTURE ADJUSTMENTS 54
November 12, 2019 (iii) City of Beverly Hills

5.5 METHODOFADJUSTMENTS 54

5.5.1 Rate Adjustment Method 5-1

5.6 EXTRAORDINARY ADJUSTMENTS 55
ARTICLE 6 57
REVIEW OF SERVICES AND PERFORMANCE 57

6.1 PERFORMANCE HEARING 57

6.2 PERFORMANCE SATISFACTION SURVEY 58
ARTICLE 7 59
RECORDS, REPORTS AND INFORMATION REQUIREMENTS 59

7.1 GENERAL 59

7.2 RECORDS 59

7.2.1 General 59

7.2.2 Financial Records 60

7.2.3 Solid Waste Service Records 60

7.2.4 CERCLA Defense Records 60

7.2.5 Other Program Records 61

7.2.6 Cost of Audits.... . 61

7. 2. 7 Payments and Refunds 62

7.3 REPORTS 62

7.3.1 Report Formats and Schedule 62

7.3.2 Monthly Reports 63

7.3.3 Quarterly Reports 64

7.3.4 Annual Report 64

7.3.5 Financial Report 65

7.3.6 Employee Report 65

7.4 ADVERSE INFORMATION 65

7.5 RIGHT TO INSPECT RECORDS 66
ARTICLE 8 67
INDEMNIFICATION, INSURANCE AND BONDS 67

8.1 INDEMNIFICATION 67

8.2 HAZARDOUS SUBSTANCES INDEMNIFICATION 68

8.3 DIVERSION GOAL INDEMNIFICATION AND GUARANTEE.. 70

8.4 INSURANCE 70

8.5 PERFORMANCE BOND 75

8.6 FORFEITURE OF PERFORMANCE BOND 76

8.7 PERFORMANCE SECURJTY BEYOND SERVICE TERM 76

8.8 PROPERTY DAMAGE 76

8.9 PAVEMENTDAMAGE 77
ARTICLE 9 78
CITY'S RIGHT TO PERFORM SERVICE 78

9.1 GENERAL 78

9.2 BILLING AND COMPENSATION TO CITY DURING CITY'S POSSESSION 79

9.3 CITY'S RIGHT TO RELINQUISH POSSESSION 79

9.4 CITY'S POSSESSION NOT AT AKING 79

9.5 DURATION OF CITY'S POSSESSION 80
ARTICLE 10 81
DEFAULT, REMEDIES AND LIQUIDATED DAMAGES 81

10.1 EVENTS OF DEFAULT 81

10.2 RIGHT TO TERMINATE UPON DEFAULT 83

10.3 LIQUIDATED DAMAGES 84
November 12, 2019 (iv) City of Beverly Hills

10.4 EXCUSE FROM PERFORMANCE 89

10.5 ASSURANCE OF PERFORMANCE 91
ARTICLE 11 92
OTHER AGREE!\1ENTS OF THE PARTIES 92

11.1 RELATIONSHIP OF PARTIES 92

11.2 COMPLIANCE WITH LA \V 92

11.3 GOVERNING LAW 92

11.4 JURJSDICTION 92

11.5 RESOLUTION OF DISPUTES 93

11.6 ASSIGNMENT 93

11.7 AFFILIATED COMPANIES 95

11.8 CONTRACTING OR SUBCONTRACTING 96

11.9 BINDING ON ASSIGNS 96

11.10 COOPERATION IN PREPARATION FOR TERMINATION OR EXPIRATION OF CONTRACT 96

11.11 PARTIES IN INTEREST 97

11.12 WAIVER 97

11.13 COMPANY'S INVESTIGATION 97

11.14 CONDEMNATION 97

11.15 NOTICE 97

11.16 REPRESENTATIVES OF THE PARTIES 98

11.17 CITY FREE TO NEGOTIATE WITH THIRD PARTIES 99

11.18 COMPLIANCE WITH MUNICIPAL CODE 99

11.19 PRJV ACY 99

11.20 COMPLIANCE WITH IMMIGRATION LAWS 100

11.21 PROPRIETARY INFORl\,1ATION, PUBLIC RECORDS 100

11.22 GUARANTEE OF COMPANY'S PERFORMANCE I 00

11.23 ATTORNEYS' FEES 100
ARTICLE 12 101
MISCELLANEOUS PROVISIONS 101

12.1 ENTIRE AGREEMENT 10 l

12.2 SECTION HEADINGS 101
12 .3 REFERENCES TO LAWS AND OTHER AGREEMENTS 101

12.4 CONFLICTS 10 I

12.5 INTERPRETATION 101

12.6 AMENDMENT TO AGREEMENT 101

12.7 SEVERABILITY 102

12.8 EXHIBITS 102

12.9 NON-WAIVER PROVISION 102

12.10 RIGHTS RESERVED TO CITY 102

12.11 REASONABLE DETERMINATIONS 103

12.12 CONFLICT OF INTEREST 103
12 .13 COUNTERPART EXECUTION 103

12.14 AUTHORITY AND EFFECTIVE DATE 103
Exhibits
I. Initial Rates

2. Rate Adjustment Formula

3. Corporate Guaranty

4. Company's Faithful Performance Bond

5. Notary Certification

6. Residential Solid Waste Processing and Disposal Agreement November 12, 2019 (v) City of Beverly Hills

FRANCHISE AGREEMENT
This Franchise Agreement ("Agreement"), effective on , 2019, is entered into by the City of Beverly Hills, a municipal corporation, organized and existing under the laws of the State of California, (''City") and Araco Enterprises LLC, dba Athens Environmental Services ("Company").

RECITALS:

A. The Legislature of the State of California, by enactment of the California Integrated Waste Management Act of 1989 ("the Act", California Public Resources Code Section 40000 et�-) has determined that it is in the public interest to authorize and require local agencies to make adequate provision for solid waste handling within their jurisdictions to meet the goals and objectives of the Act.

B. In accordance with the Act, City is required to implement its Source Reduction and Recycling Element (SRRE) in order to divert a minimum of 50 percent of its solid waste from landfill disposal.

C. In accordance with California Public Resources Code Section 40059(a)(2), City has determined that the public health, safety, and welfare require that an exclusive franchise be awarded to a qualified company for the collection, transportation, recycling, processing, and disposal of solid waste, and for other related services to meet the goals and objectives of the Act.

D. The current solid waste franchise agreement for commercial solid waste collection services will expire on March 31, 2022.

E. In accordance with Article 4.5 of the Beverly Hills Municipal Code, and Sections 49300 and 49500-49523 of the Public Resources Code, City is authorized to enter into exclusive franchise agreements for commercial solid waste collection services.

F. Under this Agreement, City desires to authorize Company to provide exclusive commercial solid waste collection services within the City and to furnish all personnel, equipment and supplies necessary to collect, pick up, remove and dispose of commercial solid November 12, 2019 -1- City of Beverly Hills
waste and recyclable materials, as defined herein, generated or accumulated by commercial, institutional, or industrial users or customers within the City.

G. City and Company are aware of the laws governing the safe collection, transport, recycling, and disposal of solid waste, including the Act, the Resource Conservation and Recovery Act ("RCRA"), and the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). The parties acknowledge that, by entering into this Agreement, City does not thereby become an "arranger" or a "generator," as those terms are used in CERCLA, and that Company, not City, is "arranging for" the collection, transport for disposal, and recycling of municipal solid waste from commercial accounts in the City.

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

November 12, 2019 -2- City of Beverly Hills
ARTICLE 1

DEFINITIONS
Whenever any term used in this Agreement has been defined by the provisions of Section 6-1.450 of Article 4.5 of Chapter 1, Title 6 of the Beverly Hills Municipal Code, or by Division 30, Part 1, Chapter 2 of the California Public Resources Code, the definitions in the Municipal Code or the Public Resources Code will apply unless the term is otherwise defined in this Agreement, in which case this Agreement will control. The following capitalized words and terms have the following meanings:

1.1 AB 341
"AB 341" means the California Jobs and Recycling Act of201 l (Chapter 476, Statues of 2011 [Chesbro, AB 341 ]), also commonly referred to as "AB 341 ", as amended, supplemented, superseded, and replaced from time to time.

1.2 AB 939
"AB 939" means the California Integrated Waste Management Act of 1989 (Division 30 of the California Public Resources Code), also commonly referred to as "AB 939," as amended, supplemented, superseded, and replaced from time to time.

1.3 AB 1826
"AB 1826" means the Organic Waste Recycling Act of2014 (Chapter 727, Statutes of 2014 modifying Division 30 of the California Public Resources Code), also commonly referred to as "AB 1826," as amended, supplemented, superseded, and replaced from time to time.

1.4 Affiliate
"Affiliate" means all businesses (including corporations, limited and general partnerships, and sole proprietorships) that are directly or indirectly related to Company by virtue of direct or indirect ownership interests or common management. An Affiliate includes a business in which Company owns a direct or indirect ownership interest, a business that has a direct or indirect ownership interest in Company, and a business that is also owned, controlled or managed by any business or individual that has a direct or indirect ownership interest in Company. For purposes of determining whether an indirect November 12, 2019 -3- City of Beverly Hills
ownership interest exists, the constructive ownership provisions of Section 318(a) of the Internal Revenue Code of 1986, in effect on the date of this Agreement, will apply; provided, however, that (a) "ten percent (I 0%)" will be substituted for "fifty percent (50%)" in Section 318(a)(2)(C), and in Section 318(a)(3)(C); and (b) Section 3 l 8(a)(5)(C) will be disregarded. For purposes of determining constructive or indirect ownership under Section 31 S(a), an ownership interest of less than ten percent (l 0%) will be disregarded, and percentage interests will be determined on the basis of the percentage of voting interest or value that the ownership interest represents, whichever is greater.

1.5 Agreement
"Agreement" means this Franchise Agreement between City and Company for the Collection, transportation, Recycling, processing and Disposal of Solid Waste, and for all other services related to meeting the goals and objectives of the Act, including all exhibits and attachments, and any amendments.

1.6 Billings
"Billings" means statements of charges for services provided to accounts serviced under this Agreement, which statements are rendered by City or Company, or by others on behalf of City or Company, to Persons responsible for arranging for Solid Waste removal.

1.7 Bin
"Bin" means a metal container, including Containers with compactors attached, with a capacity of one-and-one-half to six cubic yards and having a hinged lid and wheels, that is serviced by a front-end loading truck.

1.8 Bulky Item
"Bulky Items" means large discarded items including, but are not limited to: discarded furniture (including chairs, sofas, mattresses, and rugs, but not carpeting); appliances (including refrigerators, ranges, washers, dryers, water heaters, dishwashers, plumbing, small household appliances and similar items, commonly known as "white goods"); electronic equipment (including stereos, televisions, computers, VCRs, and similar items commonly known as "brown goods"); wood waste, tree trunks, and large branches (if no longer than two feet in diameter, four feet in length, and 50 pounds in weight per bundle), November 12, 2019 -4- City of Beverly Hills
scrap wood, rocks, sod and earth, in the aggregate not exceeding one cubic yard per Collection; clothing; and tires. Bulky Items do not include such things as car bodies or Construction and Demolition Waste, or any other items that cannot be handled by two persons.

1.9 Business Day
"Business Day" means each calendar day, excluding Saturdays, Sundays and holidays.

1.10 CalRecycle
"CalRecycle" means the State of California's Department of Resources Recycling and Recovery.

1.11 Cart
"Cart" means a plastic container with a capacity of no less than 30 and no greater than 300-gallons, having a hinged lid and wheels, that is serviced by an automated or semiautomated truck.

1.12 City
"City" means the City of Beverly Hills, a municipal corporation, and all the territory lying within the municipal boundaries of the City as presently existing or as these boundaries may be modified during the term of this Agreement.

1.13 Collect/Collection
"Collect" or "Collection" means to take physical possession, transport, and remove Solid Waste within and from the City.

1.14 Commercial and Industrial Premises
"Commercial and Industrial Premises" means property upon which business activity is conducted, including but not limited to retail sales, services, wholesale operations, manufacturing and industrial operations, but excluding businesses conducted upon residential property that are permitted under applicable zoning regulations and that do not constitute the primary use of the property.

November 12, 2019 -5- City of Beverly Hills

1.15 Company
"Company" means Araco Enterprises LLC, dba Athens Environmental Services, a Delaware limited liability company, and its officers, directors, employees, agents, subsidiaries, and subcontractors.

1.16 Company Compensation
"Company Compensation" means the revenue received by Company from Billings in return for providing services to accounts in accordance with this Agreement.

1.17 Construction and Demolition Waste
"Construction and Demolition Waste" means used or discarded construction materials removed from Premises during the construction or demolition of a structure.

1.18 Containers
"Containers" means all types of Solid Waste receptacles, including Carts, compactors, Bins, Rolloff Boxes, and Customer-provided receptacles.

1.19 Customer
"Customer" means the Person having ownership or control of any Premises in the City for which an account for Solid Waste Collection service has been established by Company under the scope of this Agreement, as further defined in Section 2.1.

1.20 CPI
"CPI" means the Consumer Price Index for garbage and trash collection services, (CUUROOOSEHG02), U.S. city average.

1.21 Disposal
"Disposal" means the final disposition of Solid Waste Collected by Company at a landfill in full compliance with all applicable laws and regulations.

1.22 Disposal Site
"Disposal Site" means the Solid Waste handling Facility or Facilities used for the final Disposal of Solid Waste Collected by Company. Chiquita Canyon Landfill and the San November 12, 2019 -6- City of Beverly Hills
Bernardino County-owned Landfills (Mid-Valley, Victorville, and San Timoteo Landfills) shall be the designated Disposal Site(s) under this Agreement unless and until another site is approved by City.

1.23 Effective Date
"Effective Date" shall have the meaning ascribed in Section 12.14.B.

1.24 Environmental Laws
"Environmental Laws" means all federal and state statutes and county and City ordinances concerning public health, safety and the environment including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 USC §9601 et seq.; the Resource Conservation and Recovery Act, 42 USC §6902 et seq.; the Federal Clean Water Act, 33 USC §1251 et seq.; the Toxic Substances Control Act, 15 USC §1601 et seq.; the Occupational Safety and Health Act, 29 USC §651 et seq.; the California Hazardous Waste Control Act, California Health and Safety Code §25100 et seq.; the California Toxic Substances Control Act, California Health and Safety Code §25300 et seq.; the Porter-Cologne Water Quality Control Act, California Water Code § 13000 et seq.; the Safe Drinking Water and Toxic Enforcement Act, California Health and Safety Code §25249.5 et seq.; as currently in force or as later amended, and all rules and regulations promulgated thereunder.

1.25 Facility
"Facility" means any plant or site, owned or leased and maintained, operated or used by Company for purposes of performing under this Agreement.

1.26 Food Waste
"Food Waste" means:
• All food (including fruits, vegetables, meat, poultry, seafood, shellfish, bones, rice, beans, pasta, bread, cheese and eggshells);
• Food-soiled paper (including waxed cardboard, napkins, paper towels, paper plates, paper milk cartons);
• Tea bags;
• Coffee grounds and filters
• Wooden crates;
November 12, 2019 -7- City of Beverly Hills
• Sawdust; and,
• Other compostable materials.

Food Waste is a subset of Organic Waste.

1.27 Franchise
"Franchise" means the exclusive right granted to Company by City, per Section 2.1, to provide Solid Waste services within the City in accordance with this Agreement.

1.28 Green Waste
"Green Waste" means leaves, grass, weeds, wood materials from trees and shrubs, palm fronds, yucca, large tree stumps, and holiday trees that are not more than four inches in diameter or four feet in length, and similar materials generated at any Premises. Green Waste is a subset of Organic Waste.

1.29 Hazardous Substance
"Hazardous Substance" means any of the following: (a) any substances defined, regulated or listed ( directly or by reference) as "Hazardous Substances", "hazardous materials", "Hazardous Wastes", "toxic waste", "pollutant," "toxic substances," or similarly identified as hazardous to human health or the environment, in or pursuant to (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 USC §960 l et seq. (CERCLA); (ii) the Hazardous Materials Transportation Act, 49 USC § 1802, et seq.; (iii) the Resource Conservation and Recovery Act, 42 USC §6901 et seq.; (iv) the Clean Water Act, 33 USC § 1251 et seq.; (v) California Health and Safety Code §§25115-25117, 25249.8, 25281, and 25316; (vi) the Clean Air Act, 42 USC §7901 et seq.; or (vii) California Water Code §13050; (b) any amendments, rules or regulations promulgated under those statutes that currently exist or may later be enacted; and (c) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic or regulated under any other applicable federal, state or local Environmental Laws currently existing or later enacted, including, without limitation, friable asbestos, polychlorinated biphenyl's ("PCBs"), petroleum, natural gas, synthetic fuel products, and by-products.

1.30 Hazardous Waste
"Hazardous Waste" means all substances defined as Hazardous Waste, acutely Hazardous Waste, or extremely Hazardous Waste by the State of California in Health and November 12, 2019 -8- City of Beverly Hills
Safety Code §25110.02, §25115, and §25117, or in any future amendments to or recodifications of these statutes, or identified and listed as Hazardous Waste by the US Environmental Protection Agency (EPA), pursuant to the Federal Resource Conservation and Recovery Act ( 42 USC §6901 et seq.), all future amendments thereto, and all rules and regulations promulgated thereunder.

1.31 Inerts
"Inerts" means that subset of Solid Waste that does not contain Hazardous Waste or soluble pollutants at concentrations in excess of applicable water quality objectives, and does not contain significant quantities of decomposable waste. Inerts include debris such as concrete and other materials generally accepted at Inert landfills.

1.32 Materials Recovery Facility or MRF
"Materials Recovery Facility" or "MRF" means a Facility licensed or permitted in accordance with the Act that separates secondary materials, such as paper and other fibers, plastic, mixed glass, and metal containers, and processes them for sale to end users.

1.33 Mixed Waste Processing
"Mixed Waste Processing" means the separation and sorting of Recyclables and other recoverable materials from Refuse at a Materials Recovery Facility where commingled loads of Solid Waste are processed.

1.34 Multi-Family
"Multi-Family" means a residential property with two or more dwelling units, regardless of whether the occupancy of those dwelling units is temporary or permanent.

1.35 Organic Waste
"Organic Waste" means Food Waste and Green Waste, collectively or individually.

1.36 Organic Waste Processing Facility
"Organic Waste Processing Facility" means a permitted Facility where Organic Waste is sorted, mulched or separated for the purposes of Recycling, reuse or composting.

November 12, 2019 -9- City of Beverly Hills

1.37 Owner
"Owner" means the Person holding legal title to real property constituting the Premises to which Solid Waste Collection service is to be provided under this Agreement, or the Person holding legal title to the Disposal Site, depending upon the context used in this Agreement.

1.38 Person
"Person" means any individual, firm, association, organization, partnership, limited liability company, corporation, business trust, joint venture, the United States, the State of California, the County of Los Angeles, and any town, city, or special purpose district.

1.39 Premises
"Premises" means any land or building in the City where Solid Waste is generated or accumulated.

1.40 Prior Agreement
"Prior Agreement" means the Franchise Agreement for Commercial Solid Waste Collection Services and Residential Solid Waste Processing dated December 21 20 I 0, as amended by the Consent to Assignment and First Amendment dated January 6, 2015, and the Consent to Assignment and Second Amendment dated August 8, 2017.

1.41 Putrescible Waste, Putrescible
"Putrescible Waste" and "Putrescible" refer to wastes that are capable of being decomposed by micro-organisms with sufficient rapidity to cause nuisances because of odors, gases, or other offensive conditions.

1.42 Rate Year
"Rate Year" means the twelve-month period from July 1st to June 30th for each year of the Agreement.

1.43 Recycling
"Recycling" means any process by which materials that would otherwise become Solid Waste are Collected (whether source-separated, co-mingled, or as mixed waste), November 12, 2019 -10- City of Beverly Hills
separated or processed and returned to the economic mainstream in the form of raw materials, or products or materials that are salvaged or recovered for reuse.

1.44 Recyclable Materials, Recyclables
"Recyclable Materials" and/or "Recyclables" means source-separated by-products and commingled Solid Waste of some potential economic value that are set aside, handled, packaged, or offered for Collection in a manner different from Refuse under this Agreement.

1.45 Refuse
"Refuse" means Putrescible and non-Putrescible Solid Waste or debris, except sewage, whether combustible or non-combustible.

1.46 Rolloff Box
"Rolloff Box" means an open-top metal container or closed compactor box with a capacity of IO to 40 cubic yards that is serviced by a roll off truck.

1.47 SB 1383
"SB 1383" means the Short-Lived Climate Pollutants Act of2016 (Chapter 395, Statutes of 2016), as it may be amended from time to time.

1.48 Solid Waste
"Solid Waste" means all discarded Putrescible and non-Putrescible solid, semisolid, and liquid wastes Disposed with other Solid Waste, including Refuse, Construction and Demolition Wastes, Bulky Items, Recyclable Materials, Food Waste and Green Waste, or any combination thereof which are permitted to be disposed of in a Class III landfill, and which are included in the definition of "non-hazardous solid waste" set forth in the California Code of Regulations.

1.49 State
"State" means the State of California.

November 12, 2019 -11- City of Beverly Hills

1.50 Temporary Service
"Temporary Service" means Solid Waste Collection services that are provided on a project basis, such as construction and demolition projects and occasional clean-up projects, using a Roll off Box or Bin. Regular Collection of Solid Waste generated by the ongoing operations of a business is not included.

1.51 Transformation
"Transformation" has the meaning ascribed in Public Resources Code Section 4020 I.

November 12, 2019 -12- City of Beverly Hills
ARTICLE 2

GRANT AND ACCEPTANCE OF FRANCHISE

2.1 Grant and Acceptance of Franchise
Subject to the terms and conditions of this Agreement, City grants to Company, and Company accepts from City, the exclusive Franchise, right and privilege to provide Solid Waste Collection, transfer, transport, Recycling, processing, and Disposal services at all Commercial and Industrial Premises, and Multi-Family Customers receiving Refuse Bin service but not Refuse Cart service, within the City.

2.2 Administrative Fee
Company will pay to City an administrative fee in a one-time lump sum payment of One Hundred Fifty Thousand dollars ($150,000) within seven days after the execution of this Agreement to reimburse City for its staff time and out-of-pocket costs incurred in awarding this Franchise.

2.3 Exclusive Nature of Franchise
Company is responsible for enforcing the exclusivity of this Agreement. City has the right to enforce the exclusivity provisions if, in its sole discretion, it chooses to do so. If City is required to take administrative, law enforcement, or other legal action to protect Company's exclusive rights (including the adoption of any resolution or ordinance intended to facilitate the enforcement of those exclusive rights) Company must reimburse City for its reasonable administrative, law enforcement, or legal costs related to any such action.

2.4 Operative Date
The operative date of this Agreement is April 1, 2022 ("Operative Date"). The Operative Date is the date upon which Company will commence providing to Commercial and Industrial Customers the Solid Waste management services that are authorized by this Agreement, and commence providing to City the Solid Waste processing and disposal services set forth in the Residential Solid Waste Processing and Disposal Agreement attached hereto as Exhibit 6. Upon the Operative Date, this Agreement will supersede the Prior Agreement, which shall be of no further force or effect, except for indemnity obligations arising under the Prior Agreement before the Operative Date. There are November 12, 2019 -13- City of Beverly Hills
obligations (such as outreach plan and initial site visits in Section 3.2.4 and others) that occur prior to the Operative Date.

2.5 Term of Agreement
The term ("Term") of this Agreement is eight years, commencing on April 1, 2022, and expiring on March 31, 2030 (the "Initial Term"), unless earlier terminated pursuant to this Agreement. City, in its sole discretion, may authorize an extension of up to 24- months ("Extension Period"). The Extension Period shall be on a month-to-month basis. During the Extension Period, and in addition to rights of termination set forth elsewhere in this Agreement, this Agreement may be terminated by City at any time, without cause, if City gives Company a 30-day written notice of termination. City may, upon 90-days' advance written notice to Company prior to expiration of the Initial Term, exercise the 24-month extension option. If City provides this extension notice, then the Agreement Term will automatically renew on a month-to-month basis, up to a total of24 months, unless earlier terminated pursuant to this Agreement. If the 24-month extension is exercised in full by City, the total Term of the Agreement will be 10 years, unless earlier terminated pursuant to this Agreement.

2.6 Conditions to Effectiveness of Agreement
The effectiveness of this Agreement, and the performance of City's obligations, are subject to the satisfaction of all conditions set out below, any of which may be waived by City in whole or in part.
a) Accuracy of Representations. Representations and warranties made by Company in this Agreement are true and correct as of the Effective Date, as defined in Section 12.14.B.
b) Absence of Litigation. There is no litigation pending that challenges the award of this Franchise to Company, or the execution of this Agreement, or that seeks to restrain or enjoin its performance.
c) Furnishing of Insurance and Bonds. Company has furnished evidence of the insurance and bonds required by Article 8.

November 12, 2019 -14- City of Beverly Hills
d) Effectiveness of City Council Action. City's action approving this Agreement has become effective under California law prior to the Effective Date of this Agreement.

2. 7 Limitations on Scope of Franchise
A. The Franchise granted to Company is exclusive except for the categories of Solid Waste listed in this section. The granting of this Franchise does not preclude the categories of Solid Waste listed below from being delivered to, Collected, and transported by others, provided that no Person is excused from obtaining from City any authorization that is required by law:

I. Single-Family Solid Waste Collection services and Multi-Family Solid Waste Collection services to Customers using Carts.

2. Recyclable Materials that are source-separated from Solid Waste by the Customer and which Customer sells or is otherwise
compensated for by other Persons in a manner resulting in a net payment to the Customer.

3. Construction and Demolition Waste that is incidentally removed by a duly-licensed construction or demolition company, or as part of a total service offered by such licensed company or by City, and where the licensed company uses its own vehicles, equipment and employees to Collect the material, and that the company provides proof of delivery of each load to a City approved C&D
Recycling/processing Facility to City. Company will encourage the processing of demolition and construction debris originating in the City at Company's facility by offering a discounted rate.

4. Solid Waste, including Recyclable Materials and Green Waste, which is removed from any Premises by the Customer, and which is transported personally by the Customer (or by the Customer's fulltime employees) to a processing or Disposal Facility.

5. Recyclable Materials and Organic Waste that are source-separated at any Premises by the Customer and donated to youth, civic, or charitable organizations.

November 12, 2019 -15- City of Beverly Hills

6. Containers delivered for Recycling under the California Beverage Container Recycling Litter Reduction Act, Sections 14500, et�-, California Public Resources Code.

7. Green Waste removed from Premises by a gardening, landscaping, or tree trimming company using its own equipment and employees as an incidental part of a total service offered by the company.

8. Animal waste and remains from any slaughterhouse or butcher shops for use as tallow.

9. By-products of sewage treatment, including sludge, sludge ash, grit and screenings.

I 0. Hazardous Waste, medical waste, and radioactive waste, regardless of its source.

11. The casual or emergency Collection, removal, Disposal or diversion of Solid Waste by City through City officers or employees in the normal course of their employment.

12. Food Waste or other Organic Waste diverted from Disposal by delivery to hog farms or otherwise used as animal feed.

B. Company acknowledges that City may permit other Persons besides Company to Collect the types of Solid Waste listed in this section, without obtaining approval of Company. City may enter into agreements with other entities for the Solid Waste and Recycling services not provided for in this Agreement, including, but not limited to, Disposal of street-sweeping debris and Green Waste from City landscaping maintenance operations, contract services, "niche" Recycling services, and household Hazardous Waste pickups.

C. The grant to Company of this exclusive Franchise will be interpreted in a manner consistent with state and federal laws. The scope of this exclusive Franchise will be limited by current and future state and federal laws regulating Solid Waste handling, control of Recyclable Materials, Solid Waste flow control, and related matters. If future interpretations of current Jaw, or the enactment of new laws or local ordinances, limit the ability of City to lawfully provide for the scope of Franchise services specifically set November 12, 2019 -16- City of Beverly Hills
forth, Company agrees that the scope of the Franchise will be limited to those services that may be lawfully provided, and City will not be responsible for any lost profits that may be claimed by Company. In that event, it is the responsibility of Company to minimize the financial impact to whatever extent is reasonably feasible.

2.8 City's Right to Direct Changes

2.8.1 General
City may direct Company to perform additional services (including new diversion programs) or to modify the manner in which it performs existing services or bills for services. Pilot programs and innovative services that may entail new Collection methods, different kinds of services or new requirements for Customers, and alternative rate structures are included among the kinds of changes that City may direct. Company acknowledges that State or City law may increase the diversion requirement during the term of this Agreement and Company agrees to propose services to meet such diversion requirements. Company shall be entitled to an adjustment in its Company Compensation for providing such additional or modified services to the extent that such services are not used to meet existing Agreement requirements such as the minimum diversion requirement in Section 3.6, including a profit factor equal to ten percent (10%) of the incremental cost of such additional or modified services. If the City and Company cannot agree on compensation for new or additional services, then City may contract with other parties for such services, which shall be considered exempt from the exclusivity provisions of Section 2.1.

2.8.2 New Diversion Programs
Company must present, within 30 days of a request from City, a proposal to provide additional or expanded diversion services. The proposal must contain a complete description of the following:

Collection methodology to be employed (equipment, manpower, etc.).

Equipment to be used (vehicle number, types, capacity, age, etc.).

Labor requirements (number of employees by classification).

Type of Containers to be used.

November 12, 2019 -17- City of Beverly Hills
Program publicity, education and marketing.

Projection of the annual financial results of the program's operations in an operating statement format including documentation of the key assumptions underlying the projections and the support for those assumptions.

2.9 Ownership of Solid Waste
When Solid Waste is placed in Containers and properly placed at the designated Collection location, ownership and the right to possession will transfer directly from the Customer to Company by operation of this Agreement. Subject to Company's objective to meet the source reduction and Recycling goals that apply to City, and City's right to direct Company to process and dispose of Solid Waste at a specified Solid Waste Facility or at a specific Disposal Site, if City exercises that right by providing specific written direction to Company, then Company has the right to retain, recycle, process, dispose of, and otherwise use that Solid Waste, or any part thereof, in any lawful manner or for any lawful purpose. Subject to the provisions of this Agreement, Company has the right to retain any benefit resulting from its right to retain, recycle, process, dispose of, or reuse the Solid Waste, Green Waste, and Recyclable Materials that it Collects. Solid Waste, Green Waste, and Recyclable Materials, or any part thereof, that is Disposed of at a Disposal Site or Sites (whether landfill, Transformation Facility, transfer station, processing Facility, or Material Recovery Facility) will become the property of the owner or operator of the Disposal Site once deposited there by Company. City may obtain ownership or possession of Solid Waste placed for Collection upon written notice of its intent to do so; however, nothing in this Agreement may be construed as giving rise to any inference that City has such ownership or possession unless such written notice has been given to Company. Nothing in this section is intended to affect Company's right to retain of its portion of Recyclables revenue after remitting to City its share as described under Section 3.2.5 of this Agreement.

2.10 Company Status
Company represents and warrants to City the following:

1. Company is duly organized, validly existing, and in good standing under all applicable laws;

2. Company is duly qualified to transact business in the State of California; November 12, 2019 -18- City of Beverly Hills

3. Company has all necessary licenses, permits, and certifications to provide the services required by this Agreement.

4. Company is authorized to enter into and perform its obligations under this Agreement;

5. Company's Board of Directors or partners of Company (or the shareholders, if necessary) have taken all actions required by law, the articles of incorporation, the bylaws or otherwise, to authorize the execution of this Agreement; and,

6. The persons signing this Agreement on behalf of Company have authority to do so.

2.11 Business License
As a condition of this Agreement, Company must obtain and maintain a business license to operate in the City of Beverly Hills, and any other licenses or permits that may be required by federal, state, county or city law, ordinance or regulation. No services may be provided under this Agreement until such business license has been obtained, and all fees paid therefore, by Company.

2.12 Annexations
This Agreement will extend to any territory annexed to City during its term, except to the extent that Collection by Company within that annexed territory would violate the provisions of Public Resources Code Section 49520. In that event, this Agreement will become effective in that area at the earliest possible date authorized by law, and City will cooperate with Company to fulfill any requirement necessary for Company to serve the annexed area consistent with this section.

2.13 Governing Requirements
Company must comply with all provisions of this Agreement, City's Municipal Code, and all other applicable laws, rules and regulations that pertain to the Collection, storage, transport and Disposal of Solid Waste and the Collection and marketing of Recyclable Materials. Company is responsible for obtaining and maintaining all permits and licenses required by regulatory authorities for the Commercial Solid Waste Collection and Disposal services authorized by this Agreement.

November 12, 2019 -19- City of Beverly Hills
ARTICLE3

DIRECT SERVICES

3.1 Refuse Collection Services
A. The work to be performed by Company includes, but is not limited to, the furnishing of all labor, supervision, equipment, materials, supplies, and other items necessary to perform the services required. The designation of, and specification of requirements for, particular items of labor or equipment does not relieve Company of the duty to furnish all others, as may be required, whether or not identified elsewhere in this Agreement.

B. The work to be performed by Company will be performed in a thorough and professional manner so that Customers within the City are provided with reliable, courteous and high-quality Solid Waste Collection services at all times.

C. Company is responsible for the proper placement of Solid Waste Containers, and must return all Bins to their respective Collection areas with lids in a closed, secured, or Jocked position, as may be applicable.

3.1.1 Permanent Bin Services
A. Company will provide Bins and Bin Collection service to Commercial and Industrial Customers and to Multi-Family Customers that use Bins. Company will Collect and remove all Refuse that is placed in Bins from Multi-Family properties and Commercial and Industrial Premises receiving Bin service, at least once every calendar week or more frequently if necessary to handle the waste stream from the Premises where the Bins are located. Where feasible, and when authorized in advance by City, Solid Waste Bins may be shared by Customers.

B. Company must supply all necessary equipment to provide Solid Waste Collection Bin services to Commercial and Industrial Customers occupying buildings with covered parking areas having entrances with a minimum height of 7'6".

C. Special consideration will be given when determining the pickup area to ensure that the flow of traffic is not impeded.

November 12, 2019 -20- City of Beverly Hills
D. Existing Customers shall continue to be charged either Bin rates or restaurant Bin rates, as such rates are included in Exhibit 1 and as maybe subsequently adjusted, based upon which of the two rate schedules (Bin or restaurant Bin) the Customer was being Billed under immediately prior to the start of service under this Agreement. Company may not charge restaurant Bin rates to new Customers or to Customers previously charged standard Bin rates without prior written City approval.

E. Company may not transfer Bin Customers to or from Refuse Cart Collection without prior written City approval.

F. All Refuse Collected shall be sent to a Materials Recovery Facility for processing to recover Recyclables prior to landfilling residual waste.

3.1.2 Rolloff Box Refuse Service
Company must provide Rolloff Box service to all Customers requesting service at a rate not to exceed the City-approved maximum rate contained in Exhibit I. For any container request received by 1 :00 p.m., Company shall deliver container by the next Business Day. If Company does not provide the requested container within one Business Day of request for orders placed before 1 :00 p.m., or within two Business Days of request for orders placed on or after I :00 p.m., Customer or City can call and receive Rolloff Box Service from another company. Maximum rate is approved pull rate, plus Disposal cost, or processing cost. The Disposal or processing cost per ton may not exceed the actual rate charged to Company or the Disposal rate as adjusted in accordance with Article 5, whichever is lower.

If Company arrives to pull a Roll off Box at a scheduled time agreed upon with the Customer and Company must wait more than 30 minutes after notifying City of blockage to access the RolloffBox through no fault of Company, a dry run fee shall be permitted per the City-approved rate schedule.

If City notifies Company of RolloffBox order cancellation before Company's vehicle has left the Company's facility/yard, Company shall not charge a dry run fee.

If Customer requests a Rolloff Box delivery or pull on Monday through Saturday, between the hours of 5:00 pm to 5:00 a.m., and all day Sunday, Company shall be permitted to charge an after-hours surcharge per the City-approved rate schedule. If both delivery and pull are requested after hours, only one after-hours surcharge applies. AfterNovember 12, 2019 -21- City of Beverly Hills hour surcharge does not apply to morning deliveries or pulls starting at 5:00 a.m ..

Monday through Saturday.

3.1.3 Temporary Bin Service
Company must provide Temporary Bin Service to all Customers requesting that service.

For any container request received by l :00 p.m., Company shall deliver container by the next Business Day. If Company does not provide the requested container within one Business Day of request for orders placed before 1 :00 p.m., or within two Business Days ofrequest for orders placed on or after 1 :00 p.m., Customer or City can call and receive Temporary Bin Service from another company. If Company arrives to service the Bin at a scheduled time agreed upon with the Customer and Company must wait more than 30 minutes after notifying City of blockage to access the Bin through no fault of Company, a dry run fee shall be permitted per the City-approved rate schedule.

If City notifies Company of Temporary Bin order cancellation before Company's vehicle has left the Company's facility/yard, Company shall not charge a dry run fee.

3.1.4 On-Call Bulky Item Pickup
A. Company will provide Bulky Item pickup service to all Customers.

Customers will be instructed in educational materials to provide Company within one Business Day's notice for pickup service. Company may charge Commercial and Industrial Customers for pickups in accordance with the rate schedule contained in Exhibit I, based on the number and type of items. Multi-Family Customers, including group homes, shall receive this service at no additional charge. Timing and place of pickup must be arranged so traffic and sidewalks are not obstructed prior to or during pickup.

B. Bulky Item Collected by Company may not be landfilled or Disposed of until the following hierarchy has been followed by Company:

1. Reuse as is.

2. Disassemble for reuse or Recycling.

3. Recycle (through participation of charitable organizations).

4. Disposal.

November 12, 2019 -22- City of Beverly Hills

3.1.5 Scout Service
A monthly scout fee may, at Company's request, be authorized by City. City staff must first verify that the location of a Solid Waste (Refuse, Recycling, or Organics) Bin requires the Company's personnel to manually move that Bin 50 feet or more, as measured from the Container's enclosure to the normal point of Collection, or that a scout vehicle is operationally required, such as to move the Bin to the Collection point because physical conditions of the Customer's property (e.g., steep inclines), or access to the container by the Collection truck, reasonably prevent the crew from manually positioning the container. Company may request written advance City approval to charge a scout service fee for a Bin that has a compaction device attached and must be manually moved to the point of Collection a distance less than fifty (50) feet; City may approve the application of such a fee in its sole discretion on a case by case basis. When so authorized, the scout fee will be added to Company's monthly invoice to City for Solid Waste and/or Recycling Bin Collection services, and will be in the amount set forth in Exhibit 1. Company will obtain advance approval from City for each Customer location where Company proposes to assess a scout fee. Bins that are placed out in street prior to service, and after service shall not remain on the street for more than one hour in the public right-of-way unless otherwise approved by the City.

3.1.6 Lids, Casters, Hasps and Locks
When justified for efficient Bin Collection service or where necessary to deter scavenging and the unauthorized removal of materials from Bins placed in unsecured locations, City may require the use of Bins having lids, as well as casters, hasps or locks.

Upon request from City, Company must provide Containers with casters, hasps or locks.

Every lock for such Bins must be "keyed-alike" throughout City. Two keys will be furnished to the Customer. The amount of the caster, hasp or lock service fee will, at the request of Company, be authorized by City in addition to the maximum monthly rates, fees, and charges authorized in this Agreement for monthly Solid Waste Bin Collection services.

3.1.7 Overflowing Bins
Overflowing Bins must be Collected within 24 hours of notification at no additional charge. Company may request City approval to increase a Customer's capacity or service frequency if Company documents three instances of an overflowing Bin requiring November 12, 2019 -23- City of Beverly Hills
cleanup in one month, documents these instances with photographs, places a warning on the container and provides a copy of the warning and photograph to the Customer.

Warning notice shall include the possibility of a service increase if the problem is not rectified. The warning notice shall be approved in form by City.

3.1.8 Sunday Service Surcharge
Company shall provide Sunday service upon Customer's request. If Customer requests Sunday service for Container collection that is collected less than seven times per week, Company shall provide Sunday service at a rate not to exceed the City-approved maximum rate contained in Exhibit 1. The Sunday Service Surcharge rate shall be adjusted according to procedures for Bin rate adjustment described in Section 5.5.1.

3.2 Recycling Services

3.2.1 Recycling Bin and Cart Service
Company agrees to provide Recycling Bin Collection service to all Customers requesting it at fifty-percent (50%) of the Refuse rate for the same Bin size and frequency.

Recycling Carts are separately identified in the City-approved rate schedule and shall be billed at the City-approved rates. Company agrees to provide, at no additional charge, Recycling Collection service to the Beverly Hills School District and its campuses.

Source separated Recyclables Collected under this section must be Collected on a separate route from Refuse. Company may collect commingled and source separated Recyclables with another city's recyclables as long as Recyclables tonnage is reasonably allocated among jurisdictions based on Customers' weekly Recycling container capacities. Company may purchase Recyclable Materials from its Customers as well.

Company will provide Recycling Containers in sufficient quantities to meet the Recycling needs of each Customer. Recycling Collection programs will be made available at a minimum for: aluminum cans; glass jars and bottles; steel, bi-metal, and tin cans; empty aerosol containers; PET plastic; HDPE plastic; plastics types 3 - 7; plastic bags, shrink wrap, plastic toys and tools, and other plastic materials (if readily identifiable as being recyclable); juice boxes and milk cartons (aseptic packaging, Tetra Pak© and waxed cardboard); scrap metal, coat hangers and metal foil; newspaper; mixed paper (e.g., ledger, computer, junk mail, magazines, paperback books, cereal boxes, envelopes, paper shopping bags, and non-metallic wrapping paper); corrugated November 12, 2019 -24- City of Beverly Hills
cardboard; telephone books; and florescent tubes. Company will also make programs available for all other Recyclable Materials for which it has established markets.

3.2.2 Rolloff Box Recycling
Company must provide Rolloff Box service for Recyclables. Company may bill City for pull, plus processing costs per ton.

3.2.3 Construction and Demolition Waste Recycling
Company will make reasonable efforts to prevent Construction and Demolition Waste that is suitable for Recycling from being taken to a landfill by:

Transporting all Construction and Demolition Waste loads to an alternate Facility where they will be processed for reuse.

Inquiring of all RolloffBox Customers about the type of Solid Waste to be generated, instructing all potential Construction and Demolition Waste generators on how to divert such materials, and providing a "how-to" brochure with alternative processing Facility contact information.

Contacting contractors on a list provided by City on a regular basis to educate them on Construction and Demolition Waste diversion.
• Complying with CalRecycle and CALGreen requirements for the processing and diversion of Construction and Demolition Waste material. As ofJanuary 1, 2017, the state-mandated diversion requirement for Construction and Demolition Waste is 65%.

Company shall divert a minimum of 80% from construction and demolition projects for buildings pursuing green building compliance in accordance with City of Beverly Hills Municipal Code, and provide certification of the actual diversion rate for material Collected from the project. Company may Bill Customers requesting 95% diversion for "extraordinary performance" under LEED an additional fee in accordance with the Cityapproved rate schedule.

3.2.4 Organic Waste Collection Services /Restaurant Food Waste Diversion 3 .2.4. l Source-Separated Organics Service
November 12, 2019 -25- City of Beverly Hills
Company shall make arrangements to provide Organic Waste Collection services to Multi-Family and Commercial accounts to comply with State requirements for mandatory Commercial Organics Recycling under AB 1826 and SB 1383. Company shall provide 65-gallon source-separated Organics Cart service. Company agrees to assist City to identify Multi-Family and Commercial Premises required to arrange for Organic Material Collection services under State law, offer Organic Waste Collection to such Premises, and notify the City in the event ofrefusal to subscribe for Organic Waste Collection. 3 .2.4.2 Mixed-Waste Food Generating Establishment Route As an alternative to source-separated Organic Waste Collection, or in combination with source-separated Collection, Company may Collect Solid Waste from food-generating establishments such as restaurants, hotels, and any other applicable entities on a separate route, reverse-sort this Solid Waste to remove non-compostables, and send all remaining Solid Waste for composting. This program shall be offered to Customers that generate predominately compostable Solid Waste. Such Customers shall not be required to source separate Food Waste from other material and may have all Refuse disposed in, and Collected from, one Container. This service shall be provided at the City-approved restaurant bin rates included in Exhibit I and as subsequently amended. Company shall receive City approval before adding or deleting Customers from this program.

Should CalRecycle deem the mixed waste organics recovery program to be not in compliance with SB 1383 or other regulatory requirements, Company shall offer sourceseparated Organics Waste Bins at the restaurant bin rates and regular Refuse at the nonrestaurant bin rates.

3.2.4.3 Organics Outreach and Reporting
One year (12 months) prior to the Operative Date, Company will provide an outreach plan to City for approval, identifying the site visit schedule for which a Company representative will visit each Commercial Customers' Premises for the purpose of assessing levels of Food Waste and Green Waste generation, assessing when Organics Waste collection service must be established to meet the requirements of Public Resources Code Section 42649 .81, and encouraging all Commercial Customers to establish Organics Waste collection service as required by CalRecycle. Company will contact Commercial Customers and provide site visits according to the approved schedule. The initial site visits shall be completed prior to the Operative Date. Beginning November 12, 2019 -26- City of Beverly Hills
January 1, 2023, and annually thereafter, Company representative will follow up with Commercial Customers not subscribing to the Organics Waste Collection service who are required under AB 1826 or SB 1383 Requirements to participate. The Company representative shall assist customers with selecting appropriate Containers and Container sizing, identifying acceptable Food Waste materials for collection and processing, and attempting to resolve any logistical impediments to providing Organics Waste collection service.

Company will develop its own Organics-specific instructional materials for use in educating participating Customers. Company will create and distribute a letter to all Commercial Customers. Additional materials may include instructional posters, brochures, or other formats as mutually agreed to between City and Company. As with all outreach material, all items must be submitted for review and approval by City prior to distribution.

Company shall assist City by gathering required Customer data, performing site visits, public outreach, and other requirements in order to comply with State requirements and regulations such as mandatory Commercial Recycling (AB 341) and mandatory Organics Recycling (AB 1826), and control of short-lived climate pollutants (SB 1383). The parties acknowledge that CalRecycle is in the process of implementing SB 1383 (Public Resources Code Section 42652 et seq.), which establishes targets to achieve a 50 percent reduction in the level of the statewide disposal of Organic Waste from the 2014 level by 2020 and a 75 percent reduction by 2025. The law grants CalRecycle the regulatory authority required to achieve the organic waste disposal reduction targets and establishes an additional target that not less than 20 percent of currently disposed edible food is recovered for human consumption by 2025.

Company shall coordinate food rescue and donation efforts with each Customer deemed to generate Organics Waste as required by CalRecycle. Company will identify food recovery opportunities at Beverly Hills businesses, address concerns, encourage participation by connecting with food recovery partners, and track potential participants for future outreach.

3.2.5 Recyclable Commodities Revenue Sharing
Company is responsible for the marketing and sale of all Recyclable materials Collected and/or processed under this Agreement. If commingled or source separated Recyclable November 12, 2019 -27- City of Beverly Hills
Materials are Collected in vehicles with recyclable material from other jurisdictions, Company shall allocate City's commodity revenue based on weekly Recycling container capacity. Company shall remit to City 50% of all commodity net sales revenue from sale of Recyclables Materials after processing (including but not limited to source separated Recyclables, commingled Recyclables, Recyclables recovered through the processing of mixed waste including Solid Waste Collected by Company, residential waste delivered by City and processed by Company, and refuse-derived fuel (RDF)), which exceed $554,000 in Recyclable net sales revenue annually, measured for each contract year from April l to March 31. For purposes of this calculation, Recyclables shall exclude Recyclables from Rolloff Box loads direct-hauled to third-party material processors per Section 5.1.C and all Construction and Demolition Waste. Company shall provide a quarterly report which includes breakdown of sales by commodity and by type of customer (Residential, Commercial, Rolloff ( excluding Rolloff direct-hauled to thirdparty material processors)), along with a remittance payment, if any. Negative values shall not be included or used as offsets against commodity revenues. For the purposes of this Section, net sales revenue means gross sales proceeds actually received by Company for commodities net of third-party transportation costs for commodities picked up by commodity buyers from Company's facilities, but without any deduction for Company's processing costs.

3.2.6 Large Venue Event Assistance
Company will assist planners oflarge venue events with reporting and planning needs as may be useful in meeting the requirements of Public Resource Code Sections 42648- 42648.7 at no additional charge. Company will make staff available to assist the City as needed. Recycling, Refuse Collection, and Disposal service shall be provided in accordance with the City-approved rate schedule and as otherwise described in this Agreement.

3.3 Green Waste Program

3.3.1 Rolloff Box Green Waste Service
Company must make Rolloff Box Green Waste Collection available to all Customers at a rate of pull, plus actual dump fee, not to exceed the Rolloff Box Refuse rate for Collection and Disposal.

November 12, 2019 -28- City of Beverly Hills

3.3.2 Holiday Tree Collection Program
Company must Collect holiday trees placed for Collection from all Customers (including both Multi-Family and Commercial and Industrial) serviced under this Agreement at no additional charge for the period from December 26 until January 31. Trees must be cut into lengths no longer than six feet, be free of ornaments, garlands, and tinsel, and stands must be removed. Trees must be diverted from Disposal.

3.3.3 End Uses for Green Waste
Company must divert Green Waste materials, including holiday trees Collected under Section 3.3.2, from Disposal. Company must provide end uses for Green Waste that maximize diversion credits for City in accordance with regulations established by CalRecycle.

3.4 Warning Notice
Company must warn Customers who have non-Recyclable Materials in their Recycling Containers, non-Organic material in their Organics Containers, or Organic Waste or Recyclables in their Trash Containers as required by CalRecycle under SB 1383 with a mailed warning notice as well as a notice placed on the Container. If, after three written warnings in a six-month period, the Container continues to be contaminated, a contamination fee may be charged in accordance with the approved rate schedule.

Company must leave instructive warning notices on the contaminated Containers, indicating the issue, how to correct it, and that the Customer will be charged a contamination fee if behavior is not corrected. The format of the warning notice must be approved by City. Company shall report monthly to City any warning notices issued, including the customer name, service address, the date contamination was observed, the person who conducted the inspection, any photographic evidence of the violation that was obtained, and any other information reasonably requested by the City. Company will also provide copies of written notices to the City on a monthly basis, or at other times when requested by the City. With City approval, Company may remove Recycling Containers from Customers who repeatedly fail to sort properly and to segregate recyclable materials, resulting in a minimum of 20% contamination and Company may increase the Customer's current mixed waste container size and/or frequency. Company must report monthly to City any warning notices issued, and Company will provide Customer with a minimum of two warnings prior to requesting removal of Container.

November 12, 2019 -29- City of Beverly Hills

3.5 City Services

3.5.1 City Facilities Collection
Company must Collect and Dispose of all Solid Waste generated and Recyclable Materials accumulated at Premises owned or operated by City in accordance with the City-approved rate schedule. These Premises include, but are not limited to, offices, parks, and street maintenance operations. Collections will be scheduled at a time mutually agreed upon by Company and City.

3.5.2 Special Events Collection
Company will provide Refuse and Recycling Bin and Rolloff Box Collection service at City-designated events and may charge for this service in accordance with the Cityapproved rate schedule. Company shall provide up to twenty (20) "Bag Buddy" bag holders and liners for the Collection of Refuse and Recyclables as needed at all events at no additional cost. City crews will Collect Refuse and Recyclable Materials from smaller Containers placed throughout the event and deposit the material in Company-provided Bins and Rolloff Boxes.

3.5.3 Emergency Collection and Disposal Service
At City's request, Company will assist with emergency Collection and Disposal service resulting from a major disaster, such as an earthquake, storm, riot or civil disturbance, or as otherwise determined necessary by City, by providing Collection vehicles and drivers normally assigned to City. Company will be paid in accordance with the City-approved rate schedule.

3.5.4 Abandoned Item Collection
Company will Collect all acceptable non-hazardous waste items abandoned in the City's public rights-of-way, or on City's public property, within one Business Day of observation by Company or of notification from City to do so. These services, including Disposal costs, will be provided at no additional charge.

3.5.5 Sidewalk Receptacle Collection
Upon thirty (30) days written notice from City, any time after execution of this Agreement, Company shall Collect Solid Waste from all public litter Containers, or November 12, 2019 -30- City of Beverly Hills
"sidewalk receptacles," in the City on at least a daily basis. Company shall wipe down the top lid of each sidewalk receptacle when servicing. Company shall process all Solid Waste Collected to recover Recyclables. Collection may be required to service sidewalk receptacles more frequently during and following City special events. Sidewalk receptacles may periodically require a second daily collection if container is overflowing, and City will notify Company of containers requiring a second collection. City shall provide sidewalk receptacles and may add additional receptacles throughout the City during the term of this contract. Company shall provide replacement liners for receptacles in the Business Triangle and at other locations designated by City that use liners. City will be responsible for power washing and replacing damaged Containers for as long as City has a designated site for a clarifier at the City's Public Works yard. If City no longer has this designated space at the City's Public Works yard, Company shall be responsible for cleaning Containers as requested by City and shall receive additional compensation for providing these services as shown in the City-approved rate schedule.

3.5.6 Containers
Company will provide Customers with Bins, Rolloff Boxes or compactors, upon request, for Collection of Solid Waste.

A. Maintenance. Company must maintain its Containers in a clean condition, free from Putrescible residue. Containers will be constructed of heavy metal, or other suitable, durable material, and will be watertight and well painted. Wheels, forklift slots, and other appurtenances, which were designed for movement, loading, or unloading of the container, must be maintained in good repair. Company shall repair or replace a damaged or missing container by the next Businesses Day after observation by Company or notification by City or Customer.

B. Cleaning. Customers may request Bin and Roll off Box cleanings, including bin compactor containers, in accordance with the City-approved rate schedule. The Customer's first Container cleaning per calendar year is at no additional charge.

Company must remove graffiti from any container within three days of request by City or Customers. Unsanitary Containers must be replaced within one day after a request by City or Customers.

C. Identification. Each container placed in City by Company must have the name and phone number of Company in letters not less than three inches high on the exterior of November 12, 2019 -31- City of Beverly Hills
the container so as to be visible when the container is placed for use. Company must identify the Containers that are assigned to each Commercial and Industrial Customer, and each Multi-Family Customer with Bin service, and identify the current service level for Bin Customers, by means mutually agreeable between City and Company.

Information on labels must be updated immediately to reflect changes. Company must repaint Bins upon City's request.

D. Bin Color. Refuse, including mixed waste, Bins shall all be painted a consistent color. Source separated Recycling Bins shall be all painted a consistent color, different than the Refuse/mixed waste Bin color.

E. Rolloff Box Coverage Requirement. Company must properly cover all open Roll off Boxes during transport as required by the State Vehicle Code.

F. City Option to Purchase Commercial Bins. Company agrees to provide City or new service provider the option to purchase some or all of the permanent Commercial Bins in service at the end of the contract term at depreciated book value. Company shall provide a detailed report to City annually within 30 days of calendar year end documenting the depreciated book value. City may exercise its option for City or new service provider to purchase some or all of the Bins at the end of the term by providing Company written notice at any time during the term but no later than 30 days prior to contract expiration, including any optional extensions. City or new service provider will make payment for Bins within 90 days following the end of the term.

3.5.7 Compost Program
Company shall provide free compost to City for City's special events and City's community give back program at no additional charge. Compost shall be delivered on pallets in 20 pound bag units. Company shall cause the compost to be delivered within 48 hours of any request. Company shall provide free bags of compost at annual Earth Day events as well as bulk compost at the City Yard. Company will provide a discount for bulk deliveries of compost, mulch, or wood chips for residents.

3.5.8 Greystone Mansion Support
Company shall provide support for the Greystone Mansion historic landmark of up to $5,000.00 per calendar year, as donors or suppliers of compost or soil amendments for landscaping the property.

November 12, 2019 -32- City of Beverly Hills

3.5.9 Recycling Scholarship
Company will offer students attending Beverly Hills High School four recycling scholarships per year to promote sustainability studies. The four scholarships will be in the amount of $500.00, for a total of $2,000.00 per year. Company may also participate in school assemblies or site visits to promote Recycling.

3.6 Diversion Requirements
The minimum amount that must be diverted through Recycling, Green Waste and Food Waste Collection, Mixed Waste Processing, and Transformation is 53% of the Solid Waste Collected by Company during each year of this Agreement. Diversion achieved by Transformation will be credited toward this 53% requirement only to the extent that the State provides City with diversion credit for this tonnage.

The City-wide diversion rate as reported to CalRecycle exceeds 50%. Should, in any year under this Agreement, City not reach the AB 939's 50% diversion goal for its entire waste stream, and if City determines that Company has not maximized diversion from the services and programs contemplated under this Agreement, Company will undertake reasonable efforts to implement programs and to provide equipment necessary in order for City to meet the 50% diversion goal.

3. 7 Operations

3.7.1 Schedules
A. To preserve peace and quiet, no Solid Waste may be Collected from Bins at, or within 500 feet of, occupied residential premises, senior citizen housing facilities, motels, or hotels between the hours of 9:00 p.m. and 7:00 a.m. Monday through Friday, and 9:00 p.m. and 8:00 a.m. Saturday through Sunday. Company's Collection vehicles must not be operated in or adjacent to any residential area of City between the hours of 9:00 p.m. and 7:00 a.m. Site and route-specific exemptions may be made to this limitation by written notice provided by City's Director of Public Works. Company will adjust the early morning start point of Collection routes to address and minimize service complaints when requested by the City. If the regularly scheduled Collection day falls on New Year's Day, Thanksgiving Day or Christmas Day, alternate Collection must be performed on the following day, unless the holiday falls on a Saturday, in which case Collection must be made up on the following Monday. All other Collection days falling November 12, 2019 -33- City of Beverly Hills
on a legal holiday will remain as scheduled. Company may be requested by City or Customer, and is permitted, to perform limited Collections on holidays in areas where business traffic continues over the holiday and Facility requires daily Collection.

B. Company must be prepared to review with City its operations plan outlining the Collection routes, intervals of Collection and Collection times for all materials Collected under this Agreement at least 30 days prior to the start of service under this Agreement, and once annually upon 30-day written notice requesting this review. More frequent reviews may be required if operations are not satisfactory, based on documented observations or reports of complaints. If the operations plan is determined by City to be inadequate, Company must revise its plan, incorporate any changes into a revised plan, and review that revised plan with City within 30 calendar days.

3.7.2 Vehicles
A. General. Company must provide Collection vehicles sufficient in number and capacity to efficiently perform the work required by this Agreement in strict accordance with its terms. Any additional vehicles or routes that may be required to meet the service standards during the term of this Agreement must be provided at Company's sole expense. Company must have available on Collection days sufficient back-up vehicles for each type of Collection vehicle used to respond to complaints and emergencies.

B. Specifications. Company shall use Bin Collection vehicles and Roll-off Box Collection vehicles powered by liquefied natural gas (LNG) or compressed natural gas (CNG) only. Container delivery vehicles, scout vehicles, supervisor pickup trucks, and vehicles used for holiday tree collection, special events, and Bulky Item Collection are only required to use LNG or CNG fuel to the extent required by law, including SCAQMD and Air Resource Board regulations. Company must be in compliance with all rules and regulations currently in force or as they may be revised or implemented during the contract term, including SCAQMD Rule 1193, and the Air Resource Board's emission standards for Refuse removal vehicles. Company will Collect from Bins using front loaders. At no time may Company use vehicles for the Collection of Solid Waste (Bin, Rolloff or other) in the City that are more than 10 years old. All vehicles used by Company in providing Solid Waste Collection services must be registered with the California Department of Motor Vehicles. All such vehicles must have watertight bodies November 12, 2019 -34- City of Beverly Hills
designed to prevent leakage, spillage or overflow. All such vehicles shall use GPS technology to track route performance. Company shall provide to City a web portal link that allows read-only access of GPS data in real time.

C. Vehicle Identification. Vehicles must be marked as directed by City.

Company may be asked to include Company's name, local telephone number, and a unique vehicle identification number designed by Company. Required markings must be prominently displayed on all vehicles, in letters and numbers no less than three inches high. Vehicles must all be painted in a standard color.

D. Vehicle as City Billboard. Company must dedicate one (and, if requested, two) sides of all Collection vehicle packer bodies to display a City billboard, with dimensions as determined by City. Company is responsible for affixing and removing this signage and for production costs once per contract year (April I to March 31 ), up to two sides. City will pay for all design costs and for re-signing more than once per year. Company may not allow any other advertising on its Collection vehicles.

E. Cleaning and Maintenance

1. Company must maintain all of its properties, vehicles, facilities, and equipment used in providing service under this Agreement in a safe, neat, clean, and operable condition at all times.

2. Vehicles used in the Collection of Solid Waste shall be painted, washed, and steam-cleaned on a regular basis in order to present a clean appearance. City may inspect vehicles at any time to determine compliance with this Agreement. Company will also make vehicles available to the Los Angeles County Health Department for inspection, at any frequency it requests. Company agrees to replace or repair, to City's satisfaction, any vehicle that City determines to be of unsightly appearance, leaking, or in unsatisfactory operating condition.

3. Company must repaint all vehicles used in the Collection of Solid Waste within 60 days following notice from City, if City determines that their appearance warrants painting. City may not request that vehicles be painted more than once every three years.

4. Company must inspect each vehicle daily to ensure that all equipment is operating properly. Vehicles that are not operating properly, or vehicles in November 12, 2019 -35- City of Beverly Hills
an unsafe or excessively noisy condition, must be removed from service until repaired and operating properly. Company must reasonably perform all scheduled maintenance functions in accordance with the manufacturer's specifications and schedule. Company must keep accurate records of all vehicle maintenance, recorded according to date and mileage ( or hours of operation) and make those records available to City upon request.

5. Company must repair, or arrange for the repair of, all of its vehicles and equipment for which repairs are needed because of accident, breakdown, or any other cause so as to maintain all equipment in a safe and operable condition.

Company must maintain accurate records of repair, which shall include the date and mileage ( or hours of operation), nature of repair, and the verification by signature of a maintenance supervisor that the repair has been properly performed.

6. Upon request by City, Company will furnish to City a written inventory of all equipment, including Collection vehicles, used in providing service, and will update the inventory annually. The inventory must list all equipment by manufacturer, ID number, date of acquisition, type, and capacity.

F. Operation. Vehicles must be operated in compliance with the California Vehicle Code, and all applicable local ordinances. Company may not load vehicles in excess of the manufacturer's recommendations or limitations imposed by state or local weight restrictions on vehicles.

Equipment must comply with US EPA noise emission regulations, currently codified at 40 CFR Part 205, and other applicable noise control regulations, and must incorporate noise control features throughout the vehicle. In no event may the noise level of equipment used for Collection exceed 75 dB when measured at a distance of 25 feet from the vehicle, five feet from the ground. Company must submit to City, upon City's request, a certificate of noise level testing of all vehicles by an independent testing entity.

Company must store all equipment in safe and secure locations in accordance with City's zoning regulations.

G. City Inspection Per Code. City may cause any vehicle used in the performance of this Agreement to be inspected and tested at any commercially reasonable time and in such manner as may be appropriate to determine that the vehicle is being maintained in compliance with applicable provisions of the State Vehicle Code, including all smog equipment requirements. City may direct the removal of any vehicle from November 12, 2019 -36- City of Beverly Hills
service if that vehicle is found to be in nonconformance with applicable codes. No vehicle that City has directed to be removed from service may be returned to service until it conforms to the State Vehicle Code, and City approves its return to service.

H. Vehicle Inspections. Company must submit the Safety Compliance Report/Terminal Record Update from its Biennial Inspection of Terminal, or BIT. If Company receives a terminal rating below satisfactory, Company is in violation of this Agreement. Company has the time allowed by the Department of California Highway Patrol ("CHP") to cure violations and to bring the terminal rating up to satisfactory. If the CHP does not adjust the rating to satisfactory or better within six months, then Company will be considered in default, and City may terminate this Agreement.

I. Correction of Defects. Following any inspection, the Director of Public Works has the right to cause Company, at its sole cost and expense, to recondition or replace any vehicle or equipment found to be unsafe, unsanitary or unsightly. The Director of Public Works determination may be appealed to the City Council, which decision will be final.

3.7.3 Litter Abatement
A. Minimization of Spills. Company must use due care to prevent Solid Waste or fluids from leaking, or being spilled or scattered during the Collection or transportation process. If any Solid Waste or fluids leak or are spilled during Collection, Company must promptly clean up those materials. Each Collection vehicle must carry a broom and shovel at all times for this purpose.

Company may not transfer loads from one vehicle to another on any public street without City's prior written approval, unless it is necessary to do so because of mechanical failure, accidental damage to a vehicle, or a pre-approved method of Solid Waste transfer between vehicles.

B. Clean Up. During the Collection or transportation process, Company must clean up litter in the immediate vicinity of any Solid Waste storage or Collection area, whether or not Company has caused the litter. Company must inform the Customer of instances of repeated spillage not caused by Company and must report that spillage to City. City will attempt to rectify such situations with the Customer if Company has already attempted to do so without success.

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3.7.4 Agreement Administration and Performance Monitoring City has the right to observe and review Company's operations and to enter Company's premises at all reasonable hours and with reasonable notice for the purposes of such observation and review.

3.7.5 Personnel
A. Company, and its agents and employees, in the performance of services authorized by this Agreement, acts in an independent capacity and not as an officer, employee, or agent of City.

B. Company will comply with City background check procedures. All Company employees shall meet the same standard as City employees. Company shall conduct criminal background checks and drivers' license checks, either in-house or through hiring an outside agency. Company will provide any adverse information discovered to City. A criminal record or Department of Motor Vehicles violations are not automatic bars to employment, but require a case by case review by Company and City to evaluate public safety issues. City's decision in such instances shall be final.

C. Company must employ sufficient personnel, qualified by reason of education, training and experience, to discharge adequately all services authorized to be performed by Company under this Agreement. Company must provide service of the highest quality at all times, and personnel retained to perform this Agreement must be courteous to the public, competent, and otherwise fully qualified to fulfill Company's obligations. Company's personnel must have the ability to reasonably communicate with Customers, and all of Company's supervisors must have the ability to speak, read, and understand the English language.

D. Company will establish and vigorously enforce an educational program that will train Company's employees in the identification of Hazardous Waste.

Company's employees must not knowingly place Hazardous Waste in the Collection vehicles, nor knowingly dispose of Hazardous Waste at the processing Facility or Disposal Site.

E. Company will designate a field supervisor who is experienced in Solid Waste Collection procedures and, if applicable, Recycling programs. Company's field supervisor will be available to City representatives during all hours of Company's November 12, 2019 -38- City of Beverly Hills
operations, and be available to be onsite in the City during collection operations within thirty (30) minutes notice from City. Company's field supervisor must maintain oversight and quality control of the operations.

F. Company must promptly notify City of any replacement or reassignment of managerial or supervisory personnel who are directly involved in the performance of this Agreement.

G. All employees of Company performing services authorized by this Agreement must be dressed in clean uniforms, and no portion of the uniform may be removed while working. Each uniform, or a badge secured thereto, must set forth the name of Company's employee and the name of Company.

H. Company must not discriminate against any employee or applicant for employment because of the employee's or applicant's race, religion, national origin, ancestry, sex, sexual preference, age or physical handicap. Company will designate an individual who will enforce Company's nondiscrimination policies. If requested by City, Company will establish and maintain an Affirmative Action Plan that will describe the methods by which Company will meet its obligations to refrain from discriminatory practices in the hiring and supervision of all employees. Company will maintain records pertaining to the implementation of that plan and will make those records available for inspection by City upon request.

I. All services to be performed by Company under this Agreement will be performed in such a manner as not to disturb the public peace or to create a public nuisance. In this regard, Company will develop and enforce operational policies for its employees to eliminate the following: (i) racing the engine of the Collection vehicle while compacting Solid Waste; (ii) the loud playing of radios; (iii) shouting and yelling by employees; and (iv) parking Collection vehicles in such a manner as to intentionally prevent other vehicles from passing. Company's failure to adhere to these operational policies may subject Company to penalties in accordance with the schedule set forth in Section 10.3 of this Agreement.

3. 7.6 Employee/Subcontractor Identification Required
A. Company must provide its employees, Affiliates, and subcontractors with identification for all individuals who may make personal contact with residents or businesses in City. City may require Company to notify Customers yearly of the form of November 12, 2019 -39- City of Beverly Hills
that identification. Company will provide to City a list of current employees, Affiliates, and subcontractors upon request.

B. City reserves the right to perform through law enforcement agencies a security and identification check upon Company and its present and future employees, in accordance with accepted procedures established by City, or for probable cause. Upon City's request, Company will remove any Company employee from the account with or without cause.

3.7.7 Fees and Gratuities
Company must not, nor will it permit any agent, employee, or subcontractor employed by it, to request, solicit, demand, or accept, either directly or indirectly, any compensation or gratuity for the Collection, transportation, Recycling, processing, or Disposal of Solid Waste except as authorized by this Agreement.

3.7.8 Non-Discrimination
Company may not discriminate in the provision of service on account of race, color, religion, sex, age, physical handicap or medical condition in violation of any applicable federal or state law.

3.7.9 Change in Collection Schedule
Any changes in the route map or Collection schedule will require the prior approval of City. City may require changes in the route map or Collection schedule to improve service, to resolve complaints, or for other reasons.

3.7.10 Report of Accumulation of Solid Waste; Unauthorized Dumping Company will direct its drivers to note the addresses of any Premises at which they observe that Solid Waste is accumulating and is not being delivered for Collection; and the address, or other location description, at which Solid Waste has been dumped in an apparently unauthorized manner. Company will deliver the address or description to City within five working days of that observation. Company will cooperate with City in the investigation and prosecution of any violations of City's Municipal Code, health codes, or other laws.

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3.8 Transportation, Disposal and Processing
A. Company will transport all Refuse Collected under Section 3.1 to a transfer station, MRF, Transformation Facility or Disposal Site. Unless City obtains ownership of the Solid Waste or Refuse stream as described in Section 2.9, the Disposal Site(s) designated by Company are the sites identified in Section 1.22. Company will make all reasonable efforts to separate Recyclable Materials from Refuse for diversion from landfill Disposal.

B. Company must maintain complete, accurate and up-to-date records of the quantities of Solid Waste transported to the transfer station, MRF, Transformation Facility or Disposal Site and will cooperate with City in any audits or investigations of those quantities.

C. City reserves the right to designate at a later date the Solid Waste Facility (whether landfill, Transformation Facility, transfer station, processing Facility or Material Recovery Facility). City and Company will use their best efforts to obtain indemnification against CERCLA, state Environmental Laws, and related claims from the operator of the landfill or other Facility that City designates. If City selects a Disposal Site or other Facility, City or Company is entitled to a rate adjustment to offset an increase or decrease in rates due to a significant change in tip fee or transportation costs.

3.9 Status of Disposal Site
Any Disposal Site used by Company must be designed and constructed in accordance with 23 California Code of Regulations Section 2510 et�("Subchapter 15"). Any such landfill must have been issued all permits from federal, state, regional, county and municipal agencies necessary for it to operate as a Class III Sanitary Landfill and must be in full compliance with those permits.

3.10 Disposal and Processing Capacity Guarantee
Company warrants and guarantees to City that Araco Enterprises, LLC will have capacity at Athens Material Recovery Facility in Sun Valley, at Crown Recycling Services located at 9147 De Garmo Avenue in Sun Valley, and at Company's Organic Waste Processing Facilities for all Solid Waste Collected by Company or City throughout the term of this Agreement and guarantees that adequate capacity has been contractually reserved for the City's Solid Waste at those Facilities. Company will retain or obtain ownership of those November 12, 2019 -41- City of Beverly Hills
Facilities, or obtain contracts with the Facilities guaranteeing such capacity for the term of this Agreement.

City collects Solid Waste from single-family residences and from multi-family residences that use Carts. Concurrently herewith, Company has executed the Residential Solid Waste Processing and Disposal Agreement attached hereto as Exhibit 6, regarding the residential Solid Waste collected by City. Company's guarantee pursuant to this Section includes the obligations set forth in the Residential Solid Waste Processing and Disposal Agreement, which is incorporated herein by this reference.

3.11 Materials Recovery Facility
Company will send all Refuse Collected to the materials recovery facilities (MRFs) located at 11121 Pendleton St., Sun Valley and at 14048 Valley Blvd, La Puente, and/or Crown Recycling Services located at 9147 De Garmo Avenue in Sun Valley for Mixed Waste Processing prior to transferring residual waste to the Disposal Site.

3.12 Dedicated Routes
Solid Waste Collected in the City (with the exception of commingled or source-separated Recyclables and source-separated Organic Waste material) shall not be commingled in Collection vehicles with Solid Waste from other jurisdictions unless and until Company has obtained written advance approval from City as to Company's method of tonnage allocation.

3.13 Route Audit
Once during the first year and every three years thereafter, Company will conduct an audit of its Collection routes in the City. The route audit, at a minimum, will consist of an independent physical observation by a person, other than the route driver or route supervisor, of each Bin Customer in the City. The route audit information must include, at a minimum, the following information for each account:
• Route Number.
• Truck Number.
• Account Name.
• Account Number.
• Account Service Address.

November 12, 2019 -42- City of Beverly Hills
• Service Level per Billing System (Quantity, Size, Frequency). • Service Level per Routing System.
• Observed Containers (Quantity and Size).
• Bin condition.
• Proper signage.
• Graffiti.

Within 30 days after the completion of the route audit, Company must submit to City a report summarizing the results of that audit. This summary must include:
• Identification of the routes.
• Truck numbers.
• Number of accounts, by route and in total.
• Types of Billing and service exceptions observed.
• Number of Billing and service exceptions by type.
• Total monthly Billing, pre-audit.
• Total monthly Billing, post-audit (subsequent to corrections of identified exceptions). • Percentage of Billing and service exceptions:
o Percentage of the number of accounts with errors to the total number of accounts served.
o Percentage of the "net" change in monthly Billing as a result of the audit to the total pre-audit monthly Billing.
o Percentage of the "absolute" change in net monthly Billing as a result of the audit to the total "pre-audit" monthly Billing.

The first route audit report shall be submitted to the City by March 31, 2023, which subsequent reports due March 31 every three years thereafter. The report must include a description of the procedures followed to complete the route audit. This description must include the names and titles of those supervising the route audits and the names and titles of those performing the observations. The report must also include a description of the pre-audit training of the route auditors, particularly if temporary personnel are used.

The report must also include a description of the changes and Company's plans to resolve the exceptions. The results of the route audit must be available for review by City's representative.

November 12, 2019 -43- City of Beverly Hills

3.14 Service Exceptions; Hazardous Waste Notifications
A. Failure to Collect. When Solid Waste is not Collected from a Customer, Company will notify the Customer in writing, at the time Collection is not made, through the use of a "tag" or otherwise, of the reasons why the Collection was not made.

Company must make a record of the rejected Collection, setting forth the name and address of the Commercial and Industrial Customer and the reason for refusal to Collect.

Company must send copy of this record to City by the next Business Day, unless paragraph (B) below is applicable.

B. Hazardous Waste Inspection and Reporting. Company reserves the right and has the duty under law to inspect Solid Waste put out for Collection and to reject Solid Waste observed to be contaminated with Hazardous Waste. Company has the right not to collect Hazardous Waste put out with Solid Waste. Company must seal the container with tape and mark the container to notify City and its Fire Department of the hazard. Company must report the presence of hazardous materials to City's Fire Department and to City's Director of Public Works not more than two hours after discovering them. Company must notify other agencies with jurisdiction, if appropriate, of reportable quantities of Hazardous Waste observed in Solid Waste anywhere within City. These may include the California Department of Toxic Substances Control, local emergency response providers, and the National Response Center. Company must follow City guidelines in situations where hazardous materials must be reported to and removed by the Los Angeles County Hazardous Materials Team (HAZMA T).

Within 24 hours after the removal of the hazardous materials from the Container, Company must Collect and Dispose of all Solid Waste remaining in the Container.

In addition to other required notifications, if Company's employees observe any substances that they reasonably believe to contain Hazardous Wastes unlawfully disposed of or released on any City property, including storm drains, streets or other public rights of way, Company will immediately notify the Director of Public Works.

C. Hazardous Waste Diversion Records. Company must maintain records showing the types and quantities of Hazardous Waste found in Solid Waste and which was inadvertently Collected from Customers within City, but diverted from landfilling.

November 12, 2019 -44- City of Beverly Hills

3.15 Hazardous Waste Management Component
Company must maintain a Hazardous Waste management plan and make it available to City upon request. This includes but is not limited to the Company's procedures for addressing medical waste or other hazardous materials that are identified in Solid Waste Containers prior to collection or that is identified after collection. Company is responsible for any costs related to the inadvertent collection of medical or hazardous waste and may seek recovery directly from customers if the customer can be identified. In no instance shall City be responsible for such costs.

November 12, 2019 -45- City of Beverly Hills
ARTICLE 4

OTHER SERVICES

4.1 Customer Billing

4.1.1 City Billing
A. City is solely responsible for Billing all Customers, effectuating all Collections, and pursuing all delinquent accounts.

B. If City is required, as a result of non-payment, to temporarily terminate service for a Commercial or Industrial account, then City will give written notice to Company of that termination. Company will cooperate with all reasonable requests of City that relate to the Collection of accounts receivable.

4.1.2 Option for Company to Perform Billing and Company Compensation A. If requested by City, Company will perform Billing of Commercial and/or Roll-off Box Customers with contractor rates in Exhibit I increased as follows:
1 % increase to all Commercial contractor rates for Company to perform Commercial Billing
1 % increase to all Roll-off Box contractor rates for Company to perform Roll-off Box Billing
B. Company shall Bill Commercial Bin and/or Roll-Off Box Customers monthly, no sooner than the first day of the month for which service is being Billed, with payment due no sooner than thirty (30) days after the invoice date.

Company assumes the risk of non-payment.

C. All Bills must include service description, including Container size, frequency of service, any special services (such as locking lid service), and period billed for. City must approve Company Billings as to content and format of invoice. All Bills must carry a due date, not "due upon receipt." Bills will not separately itemize City fees, surcharges, disposal components or other breakdown November 12, 2019 -46- City of Beverly Hills
of rates without advance written approval from City. Bills shall include Company's telephone number for Billing and service inquiries.

D. If any Customer disputes a Billing statement provided by Company, Company shall provide notice thereof to the City Manager, with a copy of the Billing invoice and the nature of the dispute (including copies of any correspondence from the Customer). Company shall use its best efforts to resolve such disputes within seven (7) days of receipt of notice from the Company of such dispute. If such dispute cannot be mutually resolved by the Company and the Customer within such seven (7) day period, the dispute will be submitted to the City Manager for binding dispute resolution. Company acknowledges that the determination of the City Manager relating to such dispute shall be final and unappealable.

E. Once a payment is thirty (30) days past due the invoice date, Company must send the Customer a notice that service will be suspended if payment is not made within an additional 30-day period. Company may suspend a Customer's service only after compliance with the provisions of this subsection. City is not responsible for, nor will it assist with, the Collection of delinquent Accounts.

Company is authorized to charge late fees not to exceed 2% per month. Company may send reminder notices during the initial 30-day delinquency period.

F. Company may charge a reactivation fee in accordance with the Cityapproved rate schedule in Exhibit I only if Containers have been removed due to non-payment. Notwithstanding the above, and solely in the event of a Billing dispute, and in order to avoid negatively impacting the public health and safety, Company will continue to provide service to the Customer, if directed to do so by City, without regard to the status of that Customer's account. Payment for such continued services will be negotiated with the City.

G. Should Company determine that Company has under-billed a Customer, or Customers, Company may back-Bill for no more than three (3) months. If Company Bills Customers for any service charges not on the Cityapproved rate schedule, or not otherwise approved in writing by the City, such charges shall be refunded to Customers at City or Customer's request or as soon as discovered by Company; Company shall refund up to three years of past unapproved Billings.

November 12, 2019 -47- City of Beverly Hills
H. If directed by City, Company shall remit to City a Franchise Fee or other City fees as determined by the City. The Company shall be entitled to a rate adjustment equal to the pass-through amount of the City fee. (I) On or before the thirtieth (30th) day following the end of each month during the Term of this Agreement, Company
shall remit the Franchise Fee based upon services provided to City the previous month. If the fees are not paid on or before the thirtieth (30th) day, Company shall, along with fee payment, pay a late fee of 10%, plus interest at 12% per annum for amounts more than 30 days past due.
(2) Company shall prepare and submit a fee payment statement with each fee payment that includes receipts by sector (e.g., commercial, roll-off), by month, and supporting fee
calculations for each fee.
(3) Franchise Fee payments are based upon the prior month's Gross Receipts, and some Customers may pay late;
therefore, payments will continue to be due following
termination of Company's provision of service under this Agreement for as long as Company receives any Gross
Receipts derived from providing service under this
Agreement.

I. Company shall staff a toll-free telephone line to assist Customers, at a minimum, during the hours the office is required to be open per Section 4.2.1.

Company shall provide a representative, an answering service or answering machine during all other hours. Calls received by answering service or machine shall be responded to on the next Business Day.

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4.2 Customer Service

4.2.1 Office Hours
Company will have an office with a live operator and staff available to City, at a minimum, from 8:00 A.M. to 5:00 P.M., Monday through Friday, excluding holidays, and from 8:00 A.M. to 12:00 P.M. on Saturday. Company must provide City staff with the phone number of a live person who may be reached 24 hours a day. Company will provide a real-time communication system between City and Company supervisors.

Company will provide and maintain all communication equipment.

4.2.2 Missed Pick-ups
When notified of a missed pick-up, Company must Collect the Refuse, Recyclable Materials, Food Waste or Green Waste within twenty-four hours, and Company will make a good faith effort to collect a missed pick-up on the same day if notified by I :00 p.m. on the same day.

4.2.3 Complaint Documentation
All service complaints will be directed to Company. Daily logs of complaints concerning Collection of Solid Waste must be retained for a minimum of24 months and must be available to City at all times upon request.

Company must log all complaints received by telephone, and the log must include the date and time the complaint was received, name, address and telephone number of caller, description of complaint, employee recording complaint, and the action taken by Company to remedy the complaint. All written Customer complaints and inquiries must be date-stamped when received. All complaints received from Customers or forwarded by City must be initially responded to within 12 hours of receipt.

All Customer service records and logs kept by Company will be available to City upon request and at no cost to City. At any time during regular Company business hours, City will have access to Company's Customer service department for purposes that may include monitoring the quality of Customer service or researching Customer complaints.

November 12, 2019 -49- City of Beverly Hills

4.2.4 Resolution of Customer Complaints
Disputes between Company and its Customers regarding the services provided under this Agreement may be resolved by City. City's decision will be final and binding.

Intervention by City is not a condition precedent to any rights or remedies third parties might otherwise have in any dispute with Company. Nothing in this section is intended to affect the remedies of third parties against Company.

4.2.5 Government Liaison
Company must designate in writing a "Government Liaison" who will be responsible for working with City's designated representatives to resolve Customer complaints. City has the right to approve Company's designated liaison.

4.2.6 Computer Compatibility
Company must maintain an interface with the City's Customer Service and Work Order Management system. Company shall be responsible for costs related to interfacing with the City's Customer Service and Work Order Management system. The interface must provide electronic time stamping of receipt of request by Company and resolution of request by Company. The interface must be fully operational six months after the City provides interface access to Customer Service and Work Order Management system (unless such date is extended by written notice to Company from City's Director of Public Works). Company acknowledges that the system must be available for use prior to the Operative Date of this Agreement in order to support customer service and billing functions under the City's Prior Agreement.

4.3 Community Events
At the direction of City, Company must participate in and promote Recycling and other diversion techniques at community events and local activities.

4.4 Waste Characterization Studies
Company agrees to participate and cooperate with City and its agents and to accomplish studies and data collection and prepare reports, as needed and directed by City, to determine weights and volumes of Solid Waste Collected and characterize Solid Waste generated, disposed, transformed, diverted or otherwise handled/processed, by Customer November 12, 2019 -50- City of Beverly Hills
type (Single Family, Multi-Family, Commercial), to satisfy the requirements of AB 939 and the City's sustainability and environmental objectives. Company will at its sole expense conduct such a waste generation and characterization study upon request of City, but not more than once every two (2) years.

November 12, 2019 -51- City of Beverly Hills
ARTICLE 5

COMPANY COMPENSATION AND RATES

5.1 General
A. The compensation provided for in this Article 5 constitutes the entire compensation due to Company under this Agreement for all services, labor, equipment, materials, supplies, taxes, insurance, bonds, overhead, Disposal, transfer, profit, and all other things necessary to perform all the services required. The Parties agree that the rates to be charged by Company to Customers are set by Company as a private contractor in the marketplace. City's role with respect to rate setting is to establish rate ceilings for the protection of Customers given the exclusive status afforded Company by this Agreement and given the nature of the services it is to provide. Accordingly, the Parties agree that this Agreement shall be construed to maintain the status of the rates Company chooses to charge its Customers as privately-established rates and not as property-related fees within the scope of Article XIII D of the California Constitution or taxes within the scope of Articles Xlll A and XIII C and XIII C Section 1 subd. e of the California Constitution.

B. Company will, on the next Business Day, forward to City copies of Disposal tickets from Rolloff Box loads to enable City to bill Customers for RolloffBox service. Rolloff Box service will be billed per pull, plus dump fee per ton, for Refuse, or processing cost per ton for Recyclables. The maximum fees paid to Company are included in Exhibit 1, as adjusted in accordance with Article 5. If revenue is received for Recyclables from such Rolloff Box, the revenue must be applied as a credit against the pull charge billed to City. Hauler shall provide reasonable documentation of revenue received, and number oftons collected, used to determine Recyclables revenue credit.

C. Company is entitled to retain a portion of proceeds from the sale of Recyclable Materials in accordance with Section 3.2.5, with the exception of Recyclables revenues from Rolloff Box loads direct-hauled to third-party material processors, which is returned to City pursuant to paragraph B.

D. No later than the fifteenth day of each month, Company will submit to City an invoice of costs incurred during the preceding month for services rendered, plus all supporting documentation that is requested by City.

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E. City will review the monthly invoice and supporting documentation that is submitted by Company. Any adjustments that are determined by City to be necessary will be communicated in writing to Company and will be reflected in City's payment to Company.

F. Not later than 30 days after receipt of Company's monthly invoice, City will remit payment for the invoiced amount, plus or minus such adjustments as City determines are justified following review of the invoice and the supporting documentation.

G. If City fails to notify Company in a timely manner of the closing of a Commercial or Industrial account, then Company will be entitled to receive payment for all services rendered to that account prior to the date of notification.

5.2 Billing Adjustments and Refunds
If Company's invoice to City is later identified to contain undercharges to customer accounts, any adjustments shall be limited to those identified within 90 days of invoicing, and any back billing shall not exceed a period of90 days. If City does not bill customer for Company's service due to Company's data error or lack of data, Company will not receive compensation for that service. If Company's invoice to City contains overcharges, such overcharges shall be credited back to the City up to a period of three years from the invoice date.

5.3 Initial Rates
The maximum rates for the partial Rate Year April 1, 2022 through June 30, 2022, and the Rate Year July 1, 2022 through June 30, 2023, shall be the contractor rates effective as of March 31, 2022, under the Prior Agreement, increased by 61 %, less any extraordinary rate adjustments granted by City Council from the approval of this Agreement to March 31, 2022 (the "Adjusted Rate Schedule"). The Organics Cart rate shall not be increased by the one-time 61 % adjustment. On or before April 1, 2022, the Adjusted Rate Schedule shall be attached to this Agreement as Exhibit I. For example, if City Council approved a 5% extraordinary rate increase after the approval of this Agreement and before the Operative Date of April 1, 2022, the rate increase on April I, 2022 would be 61 % - 5% = 56%. The rates may not exceed those set forth in Exhibit 1, unless modified by a written amendment to this Agreement. Unless and until the maximum rates set forth on Exhibit 1 are adjusted, Company will provide the services November 12, 2019 -53- City of Beverly Hills
required by this Agreement and will charge no more than the maximum rates authorized by Exhibit I, except as provided in this article.

5.4 Schedule of Future Adjustments
Beginning with the Rate Year commencing on July l, 2023, and for all subsequent Rate Years, Company may request an annual adjustment to the maximum rates shown in Exhibit 1. Company must submit its request in writing, to be delivered to City in person or by certified mail, at least 90 days prior to the start of the new Rate Year, based on the method of adjustment described in Section 5 .5. Failure to submit a written request at least 90 days prior to the start of the new Rate Year will result in Company waiving its right to request an increase for the subsequent year, or to request that the increase be made up in a future year. City may decrease the rates in accordance with Section 5.5 if the weighted rate adjustment index decreases. If any rates would decline based upon Section 5.5 calculations and a rate decrease is not implemented, the subsequent rate adjustment shall be based upon the average changes in indices since previous rate adjustment instead of the average change over the prior year.

5.5 Method of Adjustments
In accordance with Section 5.4, Company may request an annual adjustment to the maximum rates according to the formulas and example calculations shown in Exhibit 2, subject to review and approval of City. Future adjustments will be effective on July I of any Rate Year, beginning July 1, 2023.

5.5.1 Rate Adjustment Method
The maximum rates shall be based upon the percentage change in the average annual published Consumer Price Index ("CPI"), for Garbage and Trash Collection (CUUROOOOSEHG02), U.S. City average, as published by the United States Department of Labor, Bureau of Labor Statistics, between the calendar year ended the December prior to the Rate Year anniversary date, and the calendar year ended the prior December, or 5%, whichever is lower. For example, for the first rate increase or decrease effective July 1, 2023, the change in indices shall be measured as the percentage change from the average of the monthly indices for calendar year 2022 to the average of the monthly indices for calendar year 2021. An example calculation is included in Exhibit 2. If the index is discontinued, an alternative index must be approved by the City Manager.

November 12, 2019 -54- City of Beverly Hi/ls

5.6 Extraordinary Adjustments
Company may request an adjustment to maximum rates at times other than those specified in Section 5 .4 in the event of extraordinary changes in the cost of providing service. Such extraordinary changes may not include changes in tipping fees for Refuse Disposal, or Recyclable Material, or Green Waste processing costs, changes in the market value of Recyclables from the values assumed by Company, changes in costs related to the price or availability of waste-to-energy facilities, changes in costs related to the availability of diversion credit for Green Waste used as landfill alternative daily cover (ADC), inaccurate estimates by Company of its proposed cost of operations, the implementation or elimination of mandatory Recycling requirements by City or State (including requirements related to or developing from California Health and Safety Code Section 38500-38599), or the inability of Company to Dispose of any Solid Waste at a selected landfill, whether due to closure of the Disposal Site or otherwise. The only exception that would authorize an extraordinary adjustment based upon changes to the Refuse Disposal gate rate would be an increase in a direct per ton surcharge assessed at the Disposal Site by federal, state or local regulatory agencies after the Effective Date of this Agreement. Company is expected to comply with SCAQMD Rule 1193, and the Air Resource Board's proposed new emission standards for Refuse removal vehicles, as well as other federal, state and local laws and regulations that may be enacted during the term of this Agreement, for no additional compensation. No adjustment will be considered or approved as a result of unionization of the work force or a change in wage rates or employee benefits. Extraordinary rate adjustments shall only be effective after approval by City Council and may not be applied retroactively.

For each request for an adjustment to the maximum rates under this section, Company must prepare a schedule documenting the extraordinary changes in costs. The request must be prepared in a form acceptable to City with support for assumptions made by Company in preparing the estimate. Company shall also submit a schedule showing how its total costs and total revenues have changed over the past three years for the services provided under this Agreement. City will review Company's request and, in City's sole judgment, make the final determination on the appropriate amount of the adjustment, if any.

City may request a copy of Company's annual financial statements in connection with City's review of Company's rate adjustment request. City shall review Company's request and, in City's sole judgment and absolute, unfettered discretion, make the final November 12, 2019 -55- City of Beverly Hills
determination as to whether an adjustment to the maximum rates will be made, and, if an adjustment is permitted, the appropriate amount of the adjustment. City may consider increases or decreases in Company's total revenues and total cost of services when reviewing an extraordinary rate adjustment request. City may require Company to fund a review of any extraordinary rate adjustment, by a third party of the City's choosing, up to $35,000 per request.

November 12, 2019 -56- City of Beverly Hills
ARTICLE 6

REVIEW OF SERVICES AND PERFORMANCE

6.1 Performance Hearing
A. City may hold a public hearing on or about the second anniversary of the Operative Date of this Agreement, and annually thereafter, at which hearing Company must participate, to review the Solid Waste Collection, source reduction, processing diversion services, and overall performance. The purpose of the hearing is to provide for a discussion and review of technological, economic, and regulatory changes in Collection, source reduction, Recycling, processing and Disposal to ensure the continuation of advanced Solid Waste Collection, source reduction, and Recycling and Disposal systems, and to ensure that services are being provided with adequate quality, effectiveness and economy.

B. Forty-five days after receiving notice from City of a Solid Waste services and performance review hearing, Company must, at a minimum, submit a report to City containing the following:
(1) Recommended changes in service or new services to improve City's ability to meet the goals of the Act and to contain costs and minimize impacts on rates. (2) Specific plans of Company for the provision of changed or new services. (3) Results of the most recent route audit as described in Section 3. I 3.

C. The reports required by this Agreement regarding Customer complaints will be used as one basis for review. Company may submit other relevant performance information and reports for consideration. City may request Company to submit specific information for the hearing. ln addition, any Customer may submit comments or complaints during or before the hearing, either orally or in writing, and these will also be considered.

D. Topics for discussion and review at the public hearing may include, but will not be limited to, services provided, route audit results, feasibility of providing new services, application of new technologies, Customer complaints, amendments to this Agreement, developments in the law, new initiatives for meeting or exceeding the AB 939 goals, regulatory constraints, and Company's performance. City and Company may each select November 12, 2019 -57- City of Beverly Hills
additional topics for discussion at any Solid Waste services and performance review hearing.

E. Not later than 60 days after the conclusion of the public hearing, City may issue a report. As a result of the review, City may require Company to provide expanded or new services within a reasonable time and for reasonable rates and compensation, and City may direct or take corrective actions for any performance inadequacies.

6.2 Performance Satisfaction Survey
lfrequested by City, Company will conduct a survey at Company's expense in preparation for the public hearing. The purpose of the survey is to determine Customer satisfaction with current Collection services and Customer service provided by Company.

The survey must be distributed to a minimum of 10% of the Customers, selected at random. Company will obtain City approval of survey content and format prior to distribution and will incorporate City content, ifrequested by City. Alternatively, City may choose to draft the survey. Survey results must be made available to City 30 days prior to the public hearing. City will instruct Company whether surveys shall be returned to City or to Company. If requested by City, Company shall summarize and tabulate results.

November 12, 2019 -58- City of Beverly Hills
ARTICLE 7

RECORDS, REPORTS AND INFORMATION REQUIREMENTS

7.1 General
Company must maintain such accounting, statistical and other records related to its performance under this Agreement as may be necessary to prepare the financial statements and other reports required by this Agreement. Company must also conduct data collection, information and record keeping, and reporting activities necessary to comply with applicable laws and regulations and to meet the reporting and Solid Waste program management needs of City, including the reporting obligations imposed by the Act. In this regard, the requirements set out in this and other articles of this Agreement will not be considered limiting or necessarily complete. This article is intended only to highlight the general nature ofrecords and reports and does not precisely define what records and reports are to be submitted, or their content. Upon the written direction of City, the records and reports to be maintained and provided by Company in accordance with this and other articles of this Agreement must be adjusted in number, format, or frequency.

7.2 Records

7.2.1 General
A. Company must maintain records required to conduct its operations, to support requests it may make to City, and to respond to requests from City regarding the conduct of Company's business. Adequate security must be maintained to protect records from events that can reasonably be anticipated, such as a fire, theft or earthquake.

Electronically-maintained data and records must be protected and backed up. All records must be maintained for five years, and the last five years of records must be maintained for an additional five years after the expiration of this Agreement. After minimum holding periods are met, Company will notify City 90 days before destroying records.

B. The records of other entities conducting operations authorized by this Agreement must be provided or made available to City's representatives during normal business hours. City may review or use any of the records described in this section for any purpose. Such records include, but are not limited to, financial, Solid Waste and November 12, 2019 -59- City of Beverly Hills
Recyclable Materials, CERCLA and Disposal records. Failure to provide these records may be considered a material breach of this Agreement.

7.2.2 Financial Records
Financial records must be maintained. Expense and revenue information for City must be segregated from other geographical areas served by Company.

7.2.3 Solid Waste Service Records
Records relating to the following matters must be maintained by Company:
a) Customer services.
b) Routes.
c) Facilities, equipment and personnel.
d) Complaints.
e) Missed pickups.
f) Number of Refuse, Food Waste, Recycling, and Green Waste Containers. g) Tons Collected, processed, diverted, and Disposed by type of service, waste stream, and Customers.
h) Weight of each category of Recyclable Material recovered at a MRF, if a MRF is used.

7.2.4 CERCLA Defense Records
City views its ability to defend against claims asserted under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and any related litigation as a matter of great importance. For this reason, City must have the ability to prove where Solid Waste Collected in City was taken for Disposal, as well as where it was not taken. Company must implement and maintain data retention and preservation systems that document where Solid Waste Collected in City was landfilled (and therefore establish where it was not landfilled) for not less than five years following the termination of this Agreement, including extensions. Company will notify City Clerk November 12, 2019 -60- City of Beverly Hills
and City Attorney before destroying any such records and offer to provide all records to City. The provisions of this section will survive the expiration of the term of this Agreement during which Solid Waste Collection services are provided.

7.2.5 Other Program Records
Records for other Solid Waste programs and services will be tailored to specific needs.

In general, they will include:
• Plans, tasks, and milestones.
• Accomplishments, such as activities conducted, quantities of products used, produced or distributed, and numbers of participants and responses.

7.2.6 Cost of Audits
City may conduct an audit of Company at any time. The scope of the audit, and auditing party, will be determined by City and the scope may include, but is not limited to, compliance with terms of this Agreement, customer service levels and Billing, fee payments, gross receipts, tonnage, and verification of diversion rate.

Company will fund an audit to be contracted for by the City with a third-party after the first year and every three years thereafter. The first hauler-funded audit, to be performed during 2024, will be based on Company's reports and records from April 1, 2022 through December 31, 2023. Audits will be performed every third year thereafter, ( e.g., the audit performed during 2027 will be based upon reports and records from calendar year 2026, and may include 2024 and 2025 if requested by City). Company will reimburse to the City the cost of such audits not to exceed $90,000 for the first audit, and not to exceed $60,000 for the second audit. If the optional term extensions are authorized or the term is otherwise extended, audits will continue every three years, with the audit cost increased by $5,000 for each subsequent audit. For example, the third audit cost would be $65,000.

Costs incurred by Company for conducting its own route audits, as required under this Agreement, are not included as part of this audit cost.

If an audit discloses inaccuracies in reported disposal tonnage of more than 2% or billing inaccuracies affecting more than 2% of the accounts tested, City may expand the scope of the audit and also recover additional audit costs from the Company.

November 12, 2019 -61- City of Beverly Hills
City retains the right to audit Company after the term of this Agreement, provided City initiates audit within twelve months of the termination of the Agreement. If the last full calendar year under the Agreement would have been subject to the biennial audit, Company shall fund this final audit as stated above. City may not release the performance bond in accordance with Section 8.7 until the audit has been completed and reviewed and any adjustments required by the audit have been made.

7.2.7 Payments and Refunds
If an audit by City discloses for the period under review that compensation to Company was overpaid, or that Customers were overcharged, due to Company's failure to promptly notify City of service level or other Customer changes, or for any other reason, then, in addition to any other remedy that may be available to City, Company must pay to City any overpayment of compensation or refund any overcharges directly to the Customers, or both. Any refunds to Customers will be due and payable 30 days following the date of the audit.

7.3 Reports

7.3.1 Report Formats and Schedule
A. Records must be maintained in a format that facilitates the use of data contained in them to structure reports, as needed, that can be used, among other things, to:

1. Establish rates and evaluate the efficiency of operations.

2. Evaluate past and current progress towards achieving the Act goals and objectives.

3. Determine the need for adjustments to Solid Waste programs.

4. Evaluate Customer service and complaints.

B. Company may propose report formats that are responsive to the objectives of each report. The format of each report requires City approval. Company will submit all reports by electronic means in a format that is compatible with City's software and computers at no additional charge, if requested by City. When requested by City, an November 12, 2019 -62- City of Beverly Hills
authorized Company official will certify, under penalty of perjury, that the report being submitted is true and correct.

C. Monthly reports must be submitted within 20 calendar days after the end of each month. Quarterly reports must be submitted within 20 calendar days after the end of the calendar quarter. If requested, Company's complaint summary, described in Section 7.3.3.A, will be sent to the Director of Public Works within five days ofrequest.

Annual reports must be submitted before January 31 following the reporting year.

All reports must be submitted to:

Director of Public Works
Department of Public Works
345 North Foothill Blvd.

Beverly Hills, CA 90210

7.3.2 Monthly Reports
The following information is the minimum required to be reported monthly:

A. Tons of Commercial/Industrial Solid Waste Collected by Company for the previous month, sorted by type of service (Refuse, Food Waste, Recycling, Green Waste) and by type of Customer Bin, RolloffBox), and the facilities where the tonnage was Disposed of or processed. Bulky Items must be separately reported.

B. Tons of Residential Solid Waste Collected by City and delivered to Company's facility for the previous month as per Exhibit 6, sorted by type of material (Refuse, Organic Waste, Recycling) and the facilities where the tonnage was Disposed of or processed.

C. Materials recovered. Statement showing kinds of material and the quantity sold (in tons).

D. Narrative summary of problems encountered (including scavenging) and actions taken with recommendations for City, as appropriate.

E. Warning notices issued for contaminated Recyclable Materials and Organics Waste Containers.

November 12, 2019 -63- City of Beverly Hills
F. Additional information that may be requested by CalRecycle or City related to Recycling and Organics programs, including but not limited to compliance activities related to SB 1383.
7 .3.3 Quarterly Reports
Quarterly reports should contain, at a minimum, the information required in the monthly reports plus the following:

A. Complaint summary for the quarter, in an electronic format acceptable to City, identifying the nature of complaints.

B. Other information or reports that City may reasonably request.

7.3.4 Annual Report
The annual report is due January 31 of each year and will essentially combine the information contained in the monthly and quarterly reports, and will also include:

A. A complete inventory of equipment used to provide all services (such as vehicles, Containers by size, and the type of waste Collected by each type of Container).

B. Results of route audits, including a summary of the number of Containers by size and service level, and type of service (Refuse, Food Waste, Recycling, Green Waste), and Rolloff Box pulls per month by material type.

C. CERCLA records required under Section 7.2.4.

D. Copies of Hazardous Waste diversion records showing types and quantities, if any, of Hazardous Waste that was inadvertently Collected, but diverted from landfilling.

E. Number of routes and route hours per day by type of service.

F. List of customers and service levels of the customers participating in the mandatory organics recycling programs in compliance with AB 1826, and list of customers and service levels not in compliance with AB 1826.

G. Dates and details of site visits to customers not in compliance with AB 1826 or SB 1383 Requirements.

November 12, 2019 -64- City of Beverly Hills
H. Dates and details of site visits to customers regarding food rescue and donation efforts.
7 .3.5 Financial Report
A. City may, at its option, request from Company annual audited financial reports and statements for the most recently completed fiscal year in connection with a rate adjustment, performance audit, Billing audit, or verification of other information required under this Agreement.

B. Financial statements must include a supplemental schedule showing Company's results of operations, including the specific revenues and expenses related to the operations under this Agreement, separated from others included in those financial statements. The supplemental schedule may be audited, reviewed, or compiled, as determined by City. The financial statements and footnotes must be prepared in accordance with Generally Accepted Accounting Principles (GAAP) and audited in accordance with Generally Accepted Auditing Standards (GAAS), by a certified public accountant (CPA) licensed to practice in the State of California. The cost of preparation of the financial statements and audit will be borne by Company as a direct cost of service.

7.3.6 Employee Report
At the request of the City, Company shall provide the number of employees who are performing services under the service contract and the wage rates, benefits, and job classifications of those employees.

If the franchise agreement is awarded to a new contractor at the end of the agreement term, Company shall provide the names, addresses, dates of hire, wages, benefit levels, and job classifications of employees to the successor contractor as required by AB 1669.

7.4 Adverse Information
A. Reporting Adverse Information. Company must provide City with two copies of all reports, pleadings, applications, notifications, notices of violation, or other communications specifically related to Company's performance of services under this Agreement, that are submitted by Company to, or received by Company from, the United States or California Environmental Protection Agency, CalRecycle, the Securities and Exchange Commission, or any other federal, state or local agency, including any federal November 12, 2019 -65- City of Beverly Hills
or state court. Copies must be submitted to City simultaneously with Company's filing or submission of such matters to those agencies. Company's routine correspondence to those agencies need not be submitted to City, but it must be made available to City promptly upon City's written request.

B. Failure to Report. The refusal or failure of Company to file any required report, or to provide required information, or the inclusion of any materially false or misleading statement or representation by Company in any required report will be deemed a material breach of the Agreement, as described in Article 10, and will subject Company to all remedies that are available to City.

7.5 Right to Inspect Records
City has the right to review the documents or records necessary to evaluate annual reports, compensation applications, and Company's performance under this Agreement.

Company's failure to make those records readily available will be deemed a material breach of this Agreement.

November 12, 2019 -66- City of Beverly Hills
ARTICLE 8

INDEMNIFICATION, INSURANCE AND BONDS

8.1 Indemnification
A. Company will indemnify and hold harmless City, its elected and appointed boards, commissions, officers, employees, and agents (collectively, "Indernnitees") from and against any and all loss, liability, penalty, forfeiture, claim, demand, action, proceeding or suit in law or equity of every kind and description (including, but not limited to, injury to and death of any person and damage to property, or for contribution or indemnity claimed by third parties) including attorney's fees, arising or resulting from and in any way connected with (a) the negligence or willful misconduct of Company, its officers, employees, agents, subsidiaries, Affiliates, or subcontractors in performing services under this Agreement; (b) the failure of Company, its officers, employees, agents, subsidiaries, Affiliates or subcontractors to comply in all respects with the provisions of this Agreement, applicable laws (including, without limitation, the Environmental Laws), ordinances and regulations, or applicable permits and licenses; or (c) the acts of Company, its officers, employees, agents, subsidiaries, Affiliates, or subcontractors in performing services under this Agreement for which strict liability is imposed by law (including, without limitation, the Environmental Laws). The foregoing indemnity applies regardless of whether such loss, liability, penalty, forfeiture, claim, demand, action, proceeding, suit, injury, death or damage is also caused in part by any of the Indemnitees' negligence, but does not extend to matters resulting from the Indemnitees' sole negligence, willful misconduct, or breach of this Agreement.

Company will, upon demand of City, at Company's sole cost and expense, defend (with attorneys acceptable to City) the Jndemnitees against any claims, actions, suits in law or equity or other proceedings, whether judicial, quasi-judicial or administrative in nature, arising or resulting from any of the events referenced above.

B. Company, upon demand of City, made by and through City Attorney, will protect City and appear in and defend the Indemnitees in any claims or actions by third parties, whether judicial, administrative, or otherwise, including, but not limited to disputes and litigation over the definitions of "Solid Waste" or "Recyclable Material," or the limits of City's authority with respect to the grant of licenses or agreements, exclusive or otherwise, asserting rights under the Dormant Commerce Clause or federal or state laws to provide Solid Waste services in City. This Section 8.1 will survive the expiration November 12, 2019 -67- City of Beverly Hills
of the term during which Collection services are to be provided under this Agreement.

City and Company will confer following any trial to decide jointly whether to appeal or to oppose any appeal. If City and Company jointly agree to appeal, or to oppose any appeal, City and Company wil 1 share equally the costs of appeal. If either City or Company decide to appeal, or to oppose an appeal, and the other decides not to appeal, or to oppose an appeal, the party that decides to appeal, or to oppose an appeal, will bear all fees and costs of the appeal or the opposition to the appeal.

C. Company's duty to indemnify and defend against the above-referenced events arising during the term of this Agreement, and as it may be extended, will survive the expiration or earlier termination of this Agreement.

8.2 Hazardous Substances Indemnification
A. Without regard to any insurance coverage or requirements, and without limiting the above-referenced indemnification obligation in any way, Company will, to the maximum extent permitted by law, defend (with counsel acceptable to City), reimburse, indemnify, and hold harmless City and its past and present officers, council members, employees, consultants and agents ("Indemnified Parties") from and against all claims, actions, liabilities, damages, demands, judgments, losses, costs, liens, expenses, suits, attorneys' fees, consultant fees, penalties and all other losses, damages, fees and expenses of whatever kind or nature ("Claims") (including but not limited to response costs, investigative costs, assessment costs, monitoring costs, treatment costs, cleanup costs, removal costs, remediation costs, and similar costs, damages and expenses) that arise out of, or are alleged to arise out of, or in any way relate to any action, inaction or omission of Company that:

1. Results in any demand, claim, notice, order, or lawsuit, asserting that any Indemnified Party is liable, responsible, or in any manner obligated to investigate, assess, monitor, study, test, treat, remove, remediate, or otherwise clean up, any hazardous contaminant (as defined below); or

2. Relates to material Collected, transported, Recycled, processed, treated or Disposed of by Company.

B. Company's obligations under this section apply, without limitation, to:

November 12, 2019 -68- City of Beverly Hills

1. Any Claims brought pursuant to or based on the provisions of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 9601 et seq., the California Hazardous Substances Account Act (California Health & Safety Code Sections 25300 et seq.), the California Hazardous Waste Control Laws (California Health and Safety Code Sections 25100 et seq.), the California PorterCologne Act (California Water Code Section 13000 et seq.), and all amendments thereto and regulations thereunder, and any other federal, state, regional, or local environmental statutory or regulatory provisions.

2. Any Claims based on or arising out of, or alleged to be arising out of, the ownership, use, lease, sale, design, construction, maintenance or operation by Company of any Facility.

3. Any Claims based on or arising out of, or alleged to be arising out of, the marketing, sale, distribution, storage, transportation, Disposal, processing or use of any materials recovered by Company.

4. Any Claims based on or arising out of, or alleged to be arising out of, the breach of any express or implied warranty, representation or covenant arising out of or in connection with this Agreement.

C. The foregoing indemnity and defense obligations apply irrespective of the negligence or willful misconduct of Company or any Affiliate or subsidiary of Company.

D. For purposes of this section, the term "hazardous contaminant" means any "hazardous material," as that term is defined under California Health & Safety Code Section 25501(1); any "Hazardous Substance," as that term is defined in this Agreement or under California Health & Safety Code Sections 25281(t), 2550l(e), 25501.1 and under Title 42, Section 9601(14) of the United States Code; any "Hazardous Waste," as that term is defined under Title 42, Section 6093(5) of the United States Code and under California Health & Safety Code Section 25550(m); any chemical that the Governor has identified as a chemical known to the state to cause cancer or reproductive toxicity pursuant to California Health & Safety Code Section 25249.8; any crude oil or refined or unrefined petroleum product or any fraction or derivative thereof; and any asbestos or asbestos-containing material. The term "hazardous contaminant" will be deemed to include any additional substances that are identified in amendments to the aboveNovember 12, 2019 -69- City of Beverly Hills referenced statutory and regulatory provisions, whether adopted before or after the date of execution of this Agreement.

E. The provisions of this section will be given the broadest possible interpretation and will survive the expiration or earlier termination of this Agreement.

8.3 Diversion Goal Indemnification and Guarantee
A. To the extent authorized by law, Company agrees to protect and defend Indemnitees with counsel selected by Company and approved by City, to pay all costs and fees (including, without limitation, fees and charges of engineers, architects, attorneys and other professionals, and costs of exhibits, reports and other similar defense expenses) and to indemnify and hold harmless City from and against all fines or penalties imposed by CalRecycle if the source reduction and Recycling goals, or any other requirements of the Act, are not met by City with respect to the waste stream Collected under this Agreement and agrees to protect and defend Indemnitees with counsel selected by Company and approved by City, to pay all costs and fees (including, without limitation, fees and charges of engineers, architects, attorneys and other professionals, and costs of exhibits, reports and other similar defense expenses) and to.

B. Company warrants and represents that it is familiar with City's waste characterization study set forth in City's Source Reduction and Recycling Element ("SRRE"), and that it has the ability to and will provide sufficient programs and services to ensure that City will meet or exceed the diversion requirements (including, without limitation, amounts of Solid Waste to be diverted, time frames for diversion, and any other requirements) set forth in the Act, with respect to that portion of the Solid Waste generated in the City that is the subject of this Agreement.

C. The provisions of this section will be given the broadest possible interpretation and will survive the expiration or earlier termination of this Agreement.

8.4 Insurance
Company shall maintain in effect the insurance required by this Section 8.4 throughout the term of this Agreement. City does not waive any rights against Company that it may have under the above-referenced hold harmless agreements because of acceptance by City, or the deposit with City by Company, of the insurance policies described below in November 12, 2019 -70- City of Beverly Hills
this section. The insurance required is in addition to and separate from all other obligations of Company contained in this Agreement.

A. Minimum Scope oflnsurance. Coverage must be at least as broad as:

1. The most recent editions of Insurance Services Office Commercial General Liability coverage ("Occurrence" form CG 1996 or later).

2. The most recent editions of Insurance Services Office form number CA 00 01 covering Automobile Liability, Code 1 "any auto," and endorsement CA 00 25.

3. Workers' Compensation insurance as required by the California Labor Code and Employers' Liability insurance.

B. Minimum Limits of Insurance. Company must maintain in force for the term of this Agreement limits no less than:

I. General Liability: Ten Million Dollars ($10,000,000) limit aggregate, and Five Million Dollars ($5,000,000) limit per occurrence, for bodily injury, personal injury, and property damage per year. If Commercial General Liability insurance or other form with a general aggregate limit is used, either the general aggregate limit will apply separately to this project location, or the general aggregate limit will be twice the required occurrence limit. Such limits can be achieved through a combination of primary and excess liability policies.

2. Automobile Liability: Five Million Dollars ($5,000,000) per accident for bodily injury and property damage. Such limits can be achieved through a combination of primary and excess liability policies.

3. Workers' Compensation and Employers' Liability: Workers' compensation limits as required by the Labor Code of the State of California and Employers' Liability limits of One Million Dollars ($1,000,000) per accident.

C. Deductibles and Self-Insured Retentions. All deductibles or selfinsured retentions must be declared to and approved by City. At the option of City, Company may either: ( l) cause the insurer to reduce or eliminate such deductibles or self-insured retentions as respects the lndemnitees; or (2) procure a bond guaranteeing November 12, 2019 -71- City of Beverly Hills
payment of all losses and expenses of related investigations, claim administration, and defense in the amount of those deductibles or self-insured retentions.

D. Other Insurance Provisions. The policies must contain, or be endorsed to contain, the following provisions:

1. General Liability and Automobile Liability Coverages. a) City and its officers and employees must be named as additional insureds by policy endorsement as respects: liability arising out of activities performed by or on behalf of Company; premises owned, leased or used by Company; and vehicles owned, leased, hired or borrowed by Company. The coverage must contain no limitations on the scope of protection afforded to City, its elective and appointive boards, commissions, officials, employees, agents or volunteers, unless specifically agreed to in writing by City.
b) Company's insurance coverage must be primary insurance with respect to the Indemnitees. Any insurance or self-insurance maintained by City, its officials, elective and appointive boards, commissions, employees, agents or volunteers will be excess of Company's insurance and will not contribute with it. c) Any failure to comply with reporting provisions of the policies will not affect coverage provided to the Indemnitees. d) Coverage must state that Company's insurance will apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.

2. Workers' Compensation and Employers' Liability Coverage. The insurer must agree to waive all rights of subrogation against the lndemnitees for losses arising from work performed by Company for City.

3. All Coverages. Each insurance policy required by this section must be endorsed to state that coverage will not be suspended, voided, canceled by either party, or reduced in coverage or in limits unless 30 days' prior written notice by certified mail, return receipt requested, has been given to City.

E. Acceptability oflnsurers. The insurance policies required by this section must be issued by an insurance company or companies authorized to do business in the November 12, 2019 -72- City of Beverly Hills
State of California and with a rating in the most recent edition of Best's Insurance Guide of size category VII or larger, and a rating classification of A or better.

F. Verification of Coverage. Prior to the performance of any work under this Agreement, and at all times during its term, Company must maintain on file with the City Clerk a certificate or certificates of insurance, evidencing that the above-referenced policies are in effect and in the required amounts. These policies must contain an endorsement naming City, its appointed and elected officials, officers, employees and agents, as additional insureds. The policies must also state that the insurance coverage will not be canceled or reduced except on 30 days' prior written notice to City, and must specifically state that the coverage contained in the policies affords insurance as required by the terms of this Agreement. Company agrees that it will not cancel or reduce that insurance coverage.

Company must furnish City with certificates of insurance and with original endorsements effecting the coverage required by this section. The certificates and endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements must be on forms provided by or acceptable to City and must be received and approved by City before work commences. City reserves the right at any time to require complete, certified copies of all required insurance policies.

Renewal certificates will be furnished periodically to City to demonstrate maintenance of the required insurance coverage throughout the term of this Agreement.

G. Companies and Subcontractors. Company must include all other companies and subcontractors as insureds under its policies or furnish separate certificates and endorsements for each other company and subcontractor. All coverages for companies and subcontractors will be subject to all of the requirements stated in this section.

H. Required Endorsements
l. The Workers' Compensation policy must contain an endorsement in substantially the following form:

November 12, 2019 -73- City of Beverly Hills
"Thirty (30) days prior written notice by certified mail, return receipt requested, must be given to the City in the event of cancellation, reduction in coverage, or non-renewal of this policy. Such notice shall be sent to:

Director of Public Works
Department of Public Works
City of Beverly Hills
345 Foothill Road.

Beverly Hills, CA 90210-3808

2. The General Liability policy must contain endorsements in substantially the following form:
a) "Thirty (30) days prior written notice must be given to the City in the event of cancellation, reduction in coverage, or non-renewal of this policy. Such notice shall be sent to:

Director of Public Works
Department of Public Works
City of Beverly Hills
345 Foothill Road
Beverly Hills, CA 90210-3808
b) "The City, its officers, elective and appointive boards, commissions, employees, and agents ;ire additional
insureds on this policy."
c) 'This policy shall be considered primary insurance as respects any other valid and collectible insurance
maintained by the City, including any self-insured retention or program of self-insurance, and any other insurance will be considered excess insurance only."
d) "Inclusion of the City as an insured will not affect the City's rights as respects any claim, demand, suit or
judgment brought or recovered against Company. This
policy will protect Company and the City in the same
manner as though a separate policy had been issued to
each, but this will not operate to increase Company's
liability as set forth in the policy beyond the amount shown or to which Company would have been liable if only one
party had been named as an insured."
November 12, 2019 -74- City of Beverly Hills
I. Other Insurance Requirements

1. Company will establish an insurance policy repository and maintain copies of insurance policies required under this Agreement for 100 years after the end of the term during which Collection services are to be provided. Company must notify City's Risk Manager and City Attorney before destroying copies of these policies.

This provision will survive the expiration of the period during which Collection services are to be provided under this Agreement.

2. If any services are delegated to another company or subcontractor, Company must require that company or subcontractor to provide statutory workers' compensation insurance and employers' liability insurance for all of the other company's or subcontractor's employees engaged in the work in accordance with this section. The liability insurance required by this section must cover each company or subcontractor, or the company or subcontractor must furnish evidence of liability insurance that meets all of the requirements of this section.

3. Company must comply with all requirements of the insurers issuing policies. The carrying of insurance will not relieve Company from any obligation under this Agreement. If any claim exceeding the amount of any deductibles or selfinsured reserves is made by any third party against Company, or any subsidiary, Affiliate, or subcontractor, on account of any occurrence related to this Agreement, Company must promptly report the facts in writing to the insurance carrier and to City.

4. If Company fails to procure and maintain any insurance required by this Agreement, City may take out and maintain, at Company's expense, such insurance as it may deem proper and deduct its cost from any moneys due Company.

8.5 Performance Bond
Concurrently with the execution of this Agreement, Company must deliver to City a performance bond issued by an admitted surety insurer with a Best's Insurance Guide Rating of not less than A-VII. The performance bond must be in the amount of Eight Hundred Thousand Dollars ($800,000), similar to the form provided in Exhibit 4, and must secure the faithful performance of this Agreement, including, without limitation, payment of any penalty and the funding of any work to cure a breach of this Agreement.

The performance bond must contain the original notarized signature of an authorized officer of the surety and be accompanied by a certified and current copy of that officer's November 12, 2019 -75- City of Beverly Hills
power of attorney. The performance bond must be unconditional and remain in force (through annual renewals) during the term of the Agreement. The performance bond will be null and void at the expiration of the term of this Agreement only if Company faithfully performs all terms and conditions of this Agreement.

8.6 Forfeiture of Performance Bond
If Company for any reason becomes unable, or fails in any way, to perform as required by this Agreement, City may declare a forfeiture of all or a portion of the performance bond that is necessary to compensate and make City whole. Upon full or partial forfeiture of the performance bond, Company must restore the performance bond to its face amount within 30 days of City's declaration. Failure to restore the performance bond to its full amount within 30 days will be a material breach of contract.

8.7 Performance Security Beyond Service Term
Some Agreement requirements extend beyond the term of this Agreement and other requirements, such as minimum diversion rates, will not be substantiated until after the final service date. Therefore, Company shall not terminate the performance bond and will renew it to ensure continuous availability to City, until receiving a written release from City. Permission from City to discontinue holding this performance security does not relieve Company of payments to City or other contractual obligations that may be due, or may become due.

8.8 Property Damage
Company is responsible for any damage resulting from or directly attributable to any of its operations, and which it causes to: City's driving surfaces, whether or not paved; associated curbs, gutters and traffic control devices; other public improvements; and private roads and alleys.

Any physical damage to public or private property caused by Company's employees, or resulting from or directly attributable to any of its operations, must be expeditiously repaired, or caused to be repaired, by Company at Company's sole expense. If the damage is to public property, and City determines that it (City) should cause the repairs to be completed, Company shall pay to City all costs incurred by City in completing the repairs, within ten ( 10) days of demand for payment from City.

November 12, 2019 -76- City of Beverly Hills

8.9 Pavement Damage
Company is responsible for damage to City's driving surfaces, whether paved or not paved, beyond normal wear and tear. Company understands that performance under this Agreement may involve the operation of its Collection vehicles over private roads and streets. Disputes between Company and its Customers over damage to private pavement are civil matters, and complaints of damage will be referred to Company as matters within the scope of Section 8.1.

November 12, 2019 -77- City of Beverly Hills
ARTICLE 9

CITY'S RIGHT TO PERFORM SERVICE

9.1 General
A. In addition to all other rights and remedies of City under this Agreement, at law or in equity, if Company, for any reason, fails, refuses, or is unable to Collect, Recycle, process, transport, or Dispose of any Solid Waste as required by this Agreement, at the time and in the manner provided, for a period of more than 72 hours, and if, as a result, Solid Waste accumulates in City in a manner that endangers the public health, safety, or welfare, then City has the right, but not the obligation, upon notice to Company and during the period of such emergency as determined by City, (1) to perform, or cause to be performed, any of those services with its own or other personnel, without liability to Company; and (2) to take possession of any or all of Company's land, equipment, and other property that is used or useful in the Collection and transportation of Solid Waste, and to use that property to Collect and transport any Solid Waste generated within City that Company would otherwise be obligated to Collect, transport, and properly Dispose of or process.

B. Notice of Company's failure, refusal or neglect to Collect, transport and properly Dispose of or process Solid Waste may be given verbally by telephone to Company at its principal office and will be effective immediately. Written confirmation of that verbal notification must be sent to Company within 24 hours.

C. Company agrees that in such event:

1. It will take direction from City to effect the transfer of possession of equipment and property to City for City's use.

2. It will, if City so requests, keep in good repair and condition all of such equipment and property, provide all motor vehicles with fuel, oil and other service, and provide such other services as may be necessary to maintain that property in operational condition.

3. City may immediately engage any personnel necessary or useful for the Collection and transportation of Solid Waste, including, if City so desires, employees previously or then employed by Company. Company will, if City so requests, November 12, 2019 -78- City of Beverly Hills
furnish to City the services of any management or office personnel employed by Company whose services are necessary or useful for Solid Waste Collection, transportation, processing, and Disposal operations and for the Billing and Collection of fees for these services.

4. City will assume complete responsibility for the proper and normal use of Company's equipment and facilities while in its possession.

D. If the interruption or discontinuance in service is caused by any of the events listed in Section 10.4, City will pay to Company the reasonable rental value of the equipment and facilities, possession of which is taken by City, for the period of City's possession, if any, which extends beyond the period of time for which Company has rendered bills in advance of service for the category of service involved.

9.2 Billing and Compensation to City During City's Possession During such time that City is providing Solid Waste services, as provided above, City will bill and Collect payment from all users of the above-mentioned services, as described in Section 4.1, and Company shall not be entitled to any compensation.

Further, Company will reimburse City for all costs and expenses incurred by City beyond the amount billed and received by City after taking possession of the above-mentioned equipment and property for Solid Waste service. This reimbursement will be made from time to time after submission by City to Company of a statement listing those costs and expenses, but in no event later than five working days after each submission.

9.3 City's Right to Relinquish Possession
City may at any time in its discretion relinquish possession of any of the abovereferenced property to Company and demand that Company resume the Solid Waste services authorized by this Agreement, and Company will be obligated to resume the same.

9.4 City's Possession Not A Taking
City's exercise of its rights under this article: ( 1) does not constitute a taking of private property for which compensation must be paid; (2) will not create any liability on the part of City to Company; and (3) does not exempt Company from the indemnity provisions of Article 8, which are intended to extend to circumstances arising under this article; November 12, 2019 -79- City of Beverly Hills
provided that Company is not required to indemnify City against claims and damages arising from the sole negligence of City, its elective and appointive boards, commissions, officers, employees and agents in the operation of Company's Collection vehicles during the time that City has taken possession of those vehicles.

9.5 Duration of City's Possession
City's right under this article to take temporary possession of Company's facilities and equipment, and to provide Collection services, will terminate when City determines that those services can be resumed by Company, or when City no longer reasonably requires the use of those facilities and equipment.

November 12, 2019 -80- City of Beverly Hills
ARTICLE 10

DEFAULT, REMEDIES AND LIQUIDATED DAMAGES

10.1 Events of Default
Where Company's violation is determined to involve any of the following, each of which is deemed to constitute a material provision of this Agreement, City may invoke the remedies authorized by this Agreement:

A. Fraud, Deceit or Misrepresentation. Company engages in, or attempts to practice, any fraud or deceit upon City, or makes a misrepresentation to City regarding material information.

B. Insolvency or Bankruptcy. Company becomes insolvent, is unable or unwilling to pay its debts, files a bankruptcy petition, or takes steps to liquidate its assets.

C. Failure to Maintain Coverage. Company fails to provide or to maintain the Workers' Compensation, liability, or indemnification coverage required by this Agreement.

D. Violations of Regulations. Company violates any orders of any regulatory body having jurisdiction over Company relating to this Agreement; provided that Company may contest any such orders by appropriate proceedings conducted in good faith, in which case no breach of this Agreement will be deemed to have occurred until a final decision adverse to Company is entered.

E. Failure to Perform. Company ceases to provide all or a portion of the Collection, processing, or Recycling services, or any other Solid Waste handling services required under this Agreement for a period of two consecutive days or more, except to the extent excused under Section 10.4.

F. Failure to Pay. Company fails to make any payments required under this Agreement or refuses to provide City, within 10 days of a demand, with required information, reports or records in a timely manner as provided for in this Agreement.

G. Failure to Cooperate with Audits. Company fails to complete, perform, or cooperate with any audit that is required or authorized by this Agreement; provided November 12, 2019 -81- City of Beverly Hills
that City must provide Company with written notice of that failure, and Company will have 30 days to cure any deficiency.

H. Failure to Submit Reports or Documentation. Company fails to complete or to provide reports or documents to City as required by this Agreement within 60 days of their due date and 30 days after receipt of written notice from City that such reports or documents have not been submitted.

I. Acts or Omissions.

1. Any other act or omission by Company relative to the services provided under this Agreement that violates the material terms, conditions or requirements of this Agreement, the Act, or any law, statute, ordinance, order, directive, rule, or regulation issued thereunder, or Company's failure to remedy any such violation within the time specified in City's written notice of the violation or, if Company cannot reasonably remedy the breach within the time specified in that notice, then Company's failure to commence to remedy such breach within the time set forth and to thereafter diligently effect such remedy.

2. Any situation in which Company, or any of its officers, directors or employees, is found guilty of any crime related to the performance of this Agreement, anti-trust violations, illegal transport or Disposal of hazardous or toxic materials, or bribery of public officials. The term "found guilty" is deemed to include any judicial determination that Company, or any of its officers, directors or employees, is guilty, as well as any admission of guilt by Company or any of its officers, directors or employees including, but not limited to, the plea of"guilty", "nolo contendere", "no contest", and "guilty to a lesser charge."
J. False or Misleading Statements. Any representation made to City by Company in connection with or as an inducement to entering into this Agreement, or any future amendment to this Agreement, that proves to be false or misleading in any material respect as of the time such representation is made, whether or not that representation is incorporated into this Agreement.

K. Attachment. The seizure of, attachment of, or levy on, Company's operating assets, including without limitation its equipment, maintenance or office facilities, or any part thereof.

November 12, 2019 -82- City of Beverly Hills
L. Failure to Provide Assurance of Performance. Company's failure to provide reasonable assurance of performance as required under Section 10.5.

M. Commingling of Recyclables With Refuse/Landfilling of Recyclables.

If Company empties Containers of properly set out Recyclable Materials into a Refuse load, or transports Recyclable Materials or Green Waste loads to a landfill or other location at which the material will not be diverted from landfilling.

N. Failure to Meet 53% Diversion Goal. Company fails to divert at least 53% of all Solid Waste it Collects, per Section 3.6 for two consecutive calendar years.

Company will have 48 hours from the time it is notified by City to cure any default arising under paragraphs C, E, F, G, H, K,L, and M above; provided, however, that City will not be obligated to provide Company with notice and an opportunity to cure, for other than paragraph M, if Company has committed the same or a similar breach within a 24-month period. Company is not entitled to receive notice of default, or an opportunity to cure a default, with respect to those matters listed above in paragraphs A, B, D, I, J, and N.

10.2 Right to Terminate Upon Default
If Company commits a material breach with regard to any of the matters listed above in paragraphs A through N of Section 10.1 (and, if permitted to cure, does not cure the breach within 48 hours), City will be entitled to unilaterally terminate this Agreement or to impose other sanctions, including financial sanctions, temporary suspensions, or any other conditions City deems appropriate short of termination. If City decides to terminate this Agreement upon a default by Company, City will have the right to do so upon giving 10 days' notice to Company, and City will not be required to take any further action, such as holding a public hearing or bringing suit.

City's right to terminate this Agreement and to take possession of Company's Facility are not exclusive, and City's termination of this Agreement will not constitute an election of remedies. Instead, these remedies are in addition to all other legal and equitable rights and remedies that City has.

In view of the nature of this Agreement, the need for timely, continuous, and high-quality service, the time required to effect alternative service, and the rights granted by City to Company, the remedy of monetary damages for a breach by Company is inadequate, and November 12, 2019 -83- City of Beverly Hills
City is entitled to seek injunctive relief and specific performance relating to any breach of this Agreement.

10.3 Liquidated Damages
A. General. The parties agree that, as of the date of execution of this Agreement, it is impractical, if not impossible, to reasonably ascertain the extent of damages that would be incurred by City as a result of a breach by Company of its obligations. The factors relating to the impracticability of ascertaining damages include, but are not limited to, the fact that: (i) substantial damage results to members of the public who are denied services or denied quality or reliable service; (ii) breaches cause inconvenience, anxiety, frustration, and deprivation of the benefits of the Agreement to individual members of the general public for whose benefit this Agreement exists, in subjective ways and in varying degrees of intensity that are incapable of measurement in precise monetary terms; (iii) the services provided under this Agreement might be available at substantially lower costs than alternative services, and the monetary loss resulting from denial of services or denial of quality or reliable services is impossible to calculate in precise monetary terms; and (iv) the termination of this Agreement for such breaches, and other remedies are, at best, a means of future correction and not remedies that make the public whole for past breaches.

B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The parties acknowledge that consistent, reliable Solid Waste Collection service is of utmost importance to City and that City has relied on Company's representations about its quality of service commitment in awarding the Franchise to it.

The parties further acknowledge that some quantified standards of performance are necessary and appropriate to ensure consistent and reliable service and performance. It is further acknowledged that if Company fails to achieve the performance standards, or fails to submit required documents in a timely manner, City and its residents will suffer damages, and that it is and will be impractical and extremely difficult to ascertain and determine the exact amount of those damages. Therefore, without prejudice to City's right to treat Company's non-performance as an event of default under this article, the parties agree that the following liquidated damage amounts represent a reasonable estimate, considering all of the circumstances existing on the date of this Agreement, including the relationship of the sums specified to the range of harm to City that reasonably could be anticipated and the expectation that proof of actual damages would be costly or impractical. In placing their initials in the blanks provided, each party November 12, 2019 -84- City of Beverly Hills
confirms the accuracy of the statements made above and the fact that each party has had ample opportunity to consult with legal counsel and to obtain an explanation of these liquidated damage provisions prior to execution of this Agreement.

Company
Initial Here _£/j_
City
Initial Here _
Company agrees to pay as liquidated damages, and not as a penalty, the amounts set forth below:

I. Collection Reliability
a) For each failure to commence service to a new Customer account within seven days after notice of order is provided to Company by City, which exceeds five such failures annually: $150.00
b) For each failure to deliver Containers on the day scheduled for delivery, which exceeds five such failures annually (for Rolloff Box and Temporary Service, see 2.f below): $ 50.00
c) For each failure to Collect Solid Waste, which has been properly set out for Collection, from an established Customer account or accounts, on the scheduled Collection day and not Collected by 5:00 P.M. the following day, and for each additional day in which the Collection is not made up, which exceeds 10 such failures annually: $150.00/day
d) For each failure to Collect Solid Waste, which has been properly set out for Collection, from the same Customer on two consecutive scheduled pickup days: $150.00

2. Collection Quality
a) For each occurrence of damage to private property, which exceeds five such occurrences annually: $250.00
b) For each failure to collect Container within one hour of staging prior to Collection, and to return empty Containers within one hour of Collection to avoid pedestrian or vehicular traffic impediments, which exceeds 5 such failures annually, in accordance with Section 3.1.5: $150.00
November 12, 2019 -85- City of Beverly Hills
c) For each failure to clean up Solid Waste spilled from Solid Waste Containers within 90 minutes, which exceeds 10 such failures annually:$150.00 d) For each occurrence of Collecting Solid Waste during unauthorized hours, which exceeds five such occurrences annually: $250.00 e) For each failure to clean or replace Containers in
accordance with Section 3.5.6 of this Agreement, which exceeds IO such failures annually: $150.00
f) For each failure to deliver a Rolloff Box or temporary Bin within one Business day of a Customer's request for orders placed before I :00 p.m., and within two Business days for orders placed on or after 1 :00 p.m.: $ 250.00 g) For each occurrence, in excess of one per month, of
disturbing the public peace or creating a public nuisance as prohibited by Section 3.7.5 (J) of this Agreement: $100.00
h) For each failure to properly mark a Container with
identification labels in accordance with Section 3.5.6.C of this Agreement, within five (5) Business Days of City notification of an improperly-marked container:
$25.00 per Container per day
i) For each occurrence Company Collects commingled or
source-separated Recyclables on a mixed waste or Refuse route rather than on a separate Recycling route per Section 3.2.1:
$250.00 per container per occurrence

3. Customer Responsiveness
a) For each failure to initially respond to a Customer
complaint within one Business Day, and for each additional day during which the complaint is not addressed: $250.00
required by Article 4:
b) For each failure to process Customer complaints to City as $250.00
c) For each failure to notify City within one hour from the time Company has remedied a complaint forwarded by City: $10.00 November 12, 2019 -86- City of Beverly Hills
d) For each failure to remove graffiti from Containers, or to replace with Containers bearing no graffiti, within three days of request from City or Customers: $150.00
e) For each failure to process a claim for damages within 30 days from the date submitted to Company: $100.00
f) For each additional 30-day increment of time in which Company has failed to resolve a claim for damages within 30 days from the claim date: $100.00

4. Diversion Program
For each ton below the minimum number of tons required to be diverted to reach the minimum diversion percentage for all tonnage Collected under this Agreement, as measured each calendar year (and for April 1, 2022 to December 31, 2022) (see Section 3.6):
$25.00 /ton

5. Timeliness of Submissions to City
Any report will be considered late until such time as a correct and complete report is received by City. For each calendar day a report is late, the daily liquidated damage amount will be:
a)
b)
c)
Monthly or Quarterly Reports:

Annual Reports:

Route Audit - Due March 31 of applicable years

6. Compliance with Computer Compatibility
$100 per day
$350 per day
$100 per day
For each day past six months after the City provides interface access to Customer Service and Work Order Management system (or subsequent date approved by City's Director of Public Works) that Company is not in compliance with Section 4.2.6, Computer Compatibility: $ I 00 per day

7. Cooperation with Service Provider Transition
November 12, 2019 -87- City of Beverly Hills
a) For each day routing information requested by City in accordance with Section 11.10 is received after City-established due dates, both for preparation of a request for proposals and for new service provider's implementation of service :
b)
$1,000/day
For each day delivery of keys, access codes, remote
controls, or other means of access to Solid Waste and/or Recyclable Materials Containers is delayed beyond one (I) day prior to new service provider servicing Customers with access issues, as described in Section 11.10: $1,000/day c) For delay in not meeting the requirements contained in Sections 3.13 (route audit) and 11.10 in a timely manner, in addition to the daily liquidated damages for breach under 7(a) and 7(b) above, liquidated damages of:
$10,000 per occurrence

8. Vehicle Compliance
For each vehicle in each month that Company uses a solid waste collection vehicle that is not in compliance with the natural gas fuel requirements of Section 3.7.2.B:
$1,000 per month per vehicle

9. Retention of Records
For failure to retain records in accordance with Section 7.2, including failure to retain for five years after the term of the Agreement and failure to notify City 90 days before destroying records:
$25,000 or actual damages, whichever is higher

10. Residential Waste Processing
For each ton below the minimum number of tons required to achieve the diversion guaranty of at least 25% of residential mixed waste delivered by City to Company for processing under Exhibit 6 as measured each calendar year (and for April 1, 2022 to December 31, 2022), and for any partial calendar year in the final contract year:
$25 per ton
November 12, 2019 -88- City of Beverly Hills
City may determine the occurrence of events giving rise to liquidated damages through the observations of its own employees or representatives, or through the investigation of Customer complaints.

Prior to assessing liquidated damages, City must give Company notice of its intention to do so. The notice will include a brief description of the event of non-performance.

Company may review (and make copies at its own expense) all non-confidential information in City's possession relating to the event of non-performance. Company may, within 10 days after receiving the notice, request a meeting with the City Manager.

Company may present evidence in writing and through testimony of its employees and others relevant to the event of non-performance. The City Manager will provide Company with a written explanation of the determination on each event of nonperformance prior to authorizing the assessment of liquidated damages. The decision of the City Manager will be final.

C. Amount. City may assess liquidated damages for each calendar day or each event, as appropriate, concerning which Company is determined to be liable.

D. Timing of Payment. Company must pay any liquidated damages imposed by City within IO days after they are assessed. If assessed damages are not paid within the 10-day period, City may withhold any amount due from the next monthly payment to Company, proceed against the performance bond required by this Agreement, order the termination of the Franchise granted by this Agreement, or exercise any other right or remedy available to City under this Agreement or at law or in equity, or any combination of these remedies.

10.4 Excuse from Performance
A. The parties will be excused from performing their respective obligations under this Agreement if that performance is prevented by reason of floods, earthquakes, other natural disasters, war, civil insurrection, riots, acts of any government (including judicial action), and other catastrophic events that are beyond the control of and not the fault of the party claiming excuse from performance, provided that Company shall use all possible efforts to provide service during and after the event. If full service is not feasible, Company must provide service to Customers, or for waste streams, considered most urgent based on health and safety issues to the full extent possible. Company shall November 12, 2019 -89- City of Beverly Hills
provide alternative means of Disposal, such as drop-off sites, to the extent possible when regular Collection service is interrupted.

B. Labor unrest, including but not limited to strike, work stoppage or slowdown, sick-out, picketing, or other concerted job action conducted by Company's employees or directed at Company is an excuse from performance only to the extent that the following requirements are adhered to:

1. Company must provide a contingency plan to City prior to the start of services under this Agreement demonstrating how services will be provided during the period of labor unrest. The contingency plan is subject to City approval and Company shall amend the plan until it meets City requirements, including reasonably demonstrating how City's basic Collection and sanitary needs will be met to City's satisfaction.

11. Company must notify City: 1) thirty days before the expiration of the labor agreement under which drivers servicing City are covered; 2) immediately upon receiving any indication that labor unrest may occur; and 3) of the daily status of events during a strike.
iii. Company must provide all notifications and meet all requirements of this contingency plan or City shall have the option to revoke this excuse from performance offered under this Agreement and may choose to use enforcement provisions under this Agreement, in which case Company is not excused from performance and Company shall be obligated to continue to provide service notwithstanding the occurrence of any or all of such events.

C. The party claiming excuse from performance must, within two days after that party has notice of such cause, give the other party notice of the facts constituting such cause and assert its claim to excuse under this section.

D. The interruption or discontinuance of Company's services caused by one or more of the events listed above, provided all other Agreement requirements are met, will not constitute a default by Company. Notwithstanding the foregoing, however, if Company is excused from performing its obligations for a period of ninety days if Company is following the contingency plan for labor unrest, or for any of the other causes listed in this section for a period of thirty (30) days or more, City will nevertheless have the right, in its sole discretion, to terminate this Agreement by giving 10 days' November 12, 2019 -90- City of Beverly Hills
notice, in which case the provisions in Article 9 relative to taking possession of Company's land, equipment and other property, and engaging Company's personnel, will apply.

10.5 Assurance of Performance
City may, at its option and in addition to all other remedies it may have, demand from Company reasonable assurances of timely and proper performance of this Agreement, in such form as City may require. If Company fails or refuses to provide satisfactory assurances of timely and proper performance in the form and by the date required by City, that failure or refusal will constitute an event of default.

November 12, 2019 -91- City of Beverly Hills
ARTICLE 11

OTHER AGREEMENTS OF THE PARTIES

11.1 Relationship of Parties
The parties intend that Company will perform the services required by this Agreement as an independent contractor and not as an officer or employee of City, nor as a partner of or joint venture with City. No employee or agent of Company will be deemed to be an employee or agent of City. Except as expressly provided herein, Company will have the exclusive control over the manner and means of conducting the Solid Waste Collection services performed under this Agreement, and over all Persons performing those services.

Company is solely responsible for the acts and omissions of its officers, employees, subsidiaries, Affiliates, subcontractors, and agents. Neither Company nor its officers, employees, subsidiaries, Affiliates, subcontractors and agents will obtain any rights to retirement benefits, workers' compensation benefits, or any other benefits that accrue to City employees by virtue of their employment with City.

11.2 Compliance with Law
In providing the required services, Company must at all times, at its sole cost, comply with all applicable laws and regulations promulgated by federal, state, regional, or local administrative and regulatory agencies that are now in force and as they may be enacted or amended during the term of this Agreement.

11.3 Governing Law
This Agreement is governed by, and will be construed and enforced in accordance with, the laws of the State of California.

11.4 Jurisdiction
Any lawsuits between the parties arising out of this Agreement will be brought and concluded in the courts of the State of California, which shall have exclusive jurisdiction over such lawsuits. With respect to venue, the parties agree that this Agreement is made in and will be performed in Los Angeles County.

November 12, 2019 -92- City of Beverly Hills

11.5 Resolution of Disputes.

A. Disputes regarding the interpretation or application of any provisions of this Agreement will, to the extent reasonably feasible, be resolved through good faith negotiations between the parties. With the mutual consent of the parties, an arbitrator or a mediator may be engaged to conduct or to facilitate these negotiations and the resolution of disputes.

B. If any action at law or in equity is brought to enforce or interpret any provisions of this Agreement, the prevailing party in that action will be entitled to reasonable attorneys' fees, costs and necessary disbursements, in addition to such other relief as may be sought and awarded.

11.6 Assignment
A. Except as provided in Article 9 (City's Right to Perform Service), neither party may assign its rights, nor delegate, subcontract or otherwise transfer its obligations under this Agreement, to any other Person without the prior written consent of the other party. Any such assignment made without the consent of the other party is void, and the attempted assignment will constitute a material breach of this Agreement.

B. For purposes of this section when used in reference to Company, "assignment" includes, but is not limited to ( l) a sale, exchange, or other transfer to a third party (including any Affiliate) of substantially all of Company's assets dedicated to service under this Agreement; (2) a sale, exchange, or other transfer of outstanding common stock of Company to a third party (including any Affiliate), provided such sale, exchange, or transfer may result in a change of control of Company; (3) any dissolution, reorganization, consolidation, merger, re-capitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction that results in a change of ownership or control of Company; ( 4) any assignment by operation of law, including insolvency or bankruptcy, an assignment for the benefit of creditors, writ of attachment for an execution being levied against this Agreement, appointment of a receiver taking possession of Company's property, or transfer occurring in the event of a probate proceeding; and (5) any combination of the foregoing (whether or not in related or contemporaneous transactions) that has the effect of a transfer or change of ownership or control of Company.

November 12, 2019 -93- City of Beverly Hills
C. Company acknowledges that this Agreement involves rendering a vital service to Customers serviced under this Agreement within City, and that City has selected Company to perform the specified services based on (I) Company's experience, skill and reputation for conducting its operations in a safe, effective, and responsible fashion, at all times in keeping with applicable Environmental Laws, regulations and best Solid Waste management practices; and (2) Company's financial resources to maintain the required equipment and to support its indemnity obligations to City under this Agreement. City has relied on each of these factors, among others, in choosing Company to perform the services to be rendered under this Agreement.

D. If Company requests City's consideration of and consent to an assignment, City may deny or approve that request in its sole discretion. No request by Company for consent to an assignment need be considered by City unless and until Company has met the following requirements:
(I) Company shall pay City its reasonable expenses for attorney's fees and investigation costs necessary to investigate the suitability of any proposed assignee, and to review and finalize any documentation required as a condition for approving any such assignment. An advance payment of fifty thousand dollars ($50,000) towards expenses shall be paid to City prior to City consideration of any assignment request and Company shall be responsible to pay all costs incurred by City in considering a request for assignment, including those in excess of this deposit amount, regardless of whether City consents to the assignment. Company must also pay a transfer fee to City equal to I% of the annual revenue for the most recent 12 months prior to the effective date of the proposed change of ownership, multiplied by the number of remaining years, or fraction thereof.
(2) Company must furnish City with audited financial statements covering the proposed assignee's operations for the immediately preceding three operating years.
(3) Company must furnish City with satisfactory proof: (a) that the proposed assignee has at least 10 years of Solid Waste management experience on a scale equal to or exceeding the scale of operations conducted by Company under this Agreement; (b) that in the last five years the proposed assignee has not received any significant citations from any federal, state, or local agency having jurisdiction over its Solid Waste management operations due to any material failure to comply with state, November 12, 2019 -94- City of Beverly Hills
federal or local Environmental Laws and that the assignee has provided City with a complete list of such citations; (c) that the proposed assignee has at all times conducted its operations in an environmentally safe and conscientious fashion; (d) that the proposed assignee conducts its Solid Waste management practices in full compliance with all federal, state and local laws regulating the Collection and Disposal of Solid Waste, including the handling of Hazardous Substances; and ( e) any other information required by City to ensure that the proposed assignee can fulfill the terms of this Agreement in a timely, safe, and effective manner.
(4) Under no circumstances will City be obligated to consider any proposed assignment if Company is in default at any time during the period of consideration.

E. Notwithstanding the forgoing, City hereby consents to an assignment of this Agreement by Company to Guarantor, Arakelian Enterprises, Inc. Any such assignment shall not require compliance with paragraph D of this Section. This consent by City shall be effective only if (i) Company notifies City of the proposed assignment to Arakelian Enterprises, Inc. at least 30 days prior to the effective date thereof; (ii) Arakelian Enterprises, Inc. assumes all rights and obligations of Company under this Agreement, as evidenced by a document in form reasonably acceptable to City, and (iii) there is no outstanding uncured default or event of default.

11.7 Affiliated Companies
A. Company represents to City that its accounting records will be maintained on a basis that shows the results of Company's operations under this Agreement separately from operations in other geographic locations, as if Company were an independent entity providing service only to City. The costs and revenues associated with providing service to City will not be combined, consolidated, or in any other way incorporated with those of other operations conducted by Company in other geographic locations, or with those operations of an Affiliate.

B. If Company enters into any financial transactions with a related entity for the provision of labor, equipment, supplies, services, capital, etc., related to the furnishing of service under this Agreement, that relationship must be disclosed to City, and in the financial reports submitted to City. In such event, City's rights to inspect records, and to obtain financial data, will extend to that related entity.

November 12, 2019 -95- City of Beverly Hills

11.8 Contracting or Subcontracting
Company must not engage any subcontractors for the Collection, transfer, processing, Recycling, or Disposal of Solid Waste without the prior written consent of City.

Transport from the transfer station to processing or Disposal Facilities is excluded from this prohibition.

11.9 Binding on Assigns
The provisions of this Agreement will inure to the benefit of and be binding on the permitted assigns of the parties.

11.10 Cooperation in Preparation for Termination or Expiration of Contract If the transition of services to another entity occurs by reason of the expiration of the term, default, termination, or otherwise, Company will cooperate with City and any subsequent Solid Waste enterprise to assist in an orderly transition that will include, but not be limited to, Company providing route lists, Billing and service-level information, and other operating records needed to service all properties covered by this Agreement.

Company's failure to cooperate with City following termination will be conclusively presumed to be grounds for specific performance and any other equitable relief necessary to enforce this covenant.

Company shall provide a new service provider with all keys, security codes and remote controls used to access garages and Bin enclosures. Company shall be responsible for coordinating transfer immediately after Company's final pickups, so as not to disrupt service. Company shall provide City with detailed route sheets containing service names and addresses, Billing names and addresses, monthly rate and service levels (number and size of Containers and pickup days) at least 90 days prior to the transition date, and provide an updated list two weeks before the transition and a final list of changes the day before the transition. Company shall provide means of access to the new service provider at least one full working day prior to the first day of Collection by another party, and always within sufficient time so as not to impede in any way the new service provider from easily servicing all Containers.

Company shall cooperate in good faith with City and new service provider in scheduling exchanges of Company Containers with Containers provided by the new service provider November 12, 2019 -96- City of Beverly Hills
so as to assure that Customers neither need to find storage for two sets of Containers nor go without a container for an inconvenient length of time.

11.11 Parties in Interest
Nothing in this Agreement, whether express or implied, is intended to confer any rights on any Persons other than the parties to it and their authorized representatives, successors, and assigns.

11.12 Waiver
The waiver by either party of any breach or violation of any provisions of this Agreement will not be deemed to be a waiver of any breach or violation of any other provision nor of any subsequent breach or violation of the same or any other provision. The subsequent acceptance by either party of any moneys that become due hereunder will not be deemed to be a waiver of any pre-existing or concurrent breach or violation by the other party of any provision of this Agreement.

11.13 Company's Investigation
Company has made an independent investigation, satisfactory to it, of the conditions and circumstances relating to this Agreement and the work to be performed.

11.14 Condemnation
City reserves its rights to acquire Company's property used in the performance of this Agreement by purchase or through the exercise of the right of eminent domain. This provision is in addition to, and is not intended to alter, the rights of the parties set forth in Article 9.

11.15 Notice
A. The representations of the parties who are primarily responsible for the administration of this Agreement and to whom notices, requests, demands, and other communications must be given, are as follows:

If to City:

November 12, 2019
City Manager
Beverly Hills City Hall
455 North Rexford Drive
Beverly Hills, CA 90210-3713
-97- City of Beverly Hills
Copy to:

And to:

Director of Public Works
Department of Public Works
City of Beverly Hills
345 Foothill Road
Beverly Hills, CA 90210
City Attorney
Beverly Hills City Hall
455 North Rexford Drive
Beverly Hills, CA 90210
If to Company: Araco Enterprises LLC
14048 Valley Blvd.

City ofindustry, CA 91746
Attn: Legal Department
B. Notices, requests, demands, and other communications to be given by either party must be in writing and may be effected by personal delivery, by overnight courier, by facsimile transmission, by first class mail, or by certified mail, return receipt requested.

C. Notices, requests, demands, and other communications delivered or transmitted under paragraph (B) above will be deemed to have been duly received on the date of receipt by the recipient thereof if received prior to 5 :00 p.m. on a Business Day.

Otherwise, any such notice, request, demand, or communication will be deemed not to have been received until the next succeeding Business Day; provided, however, that notices given by first class mail will be deemed to have been received five Business Days after having been posted in the regular mail.

D. If the name of the principal representative or other recipients designated to receive the notices, requests, demands, and other communications, or the address or facsimile number of those persons, is changed, written notice must be given at least five working days before the effective date of that change. Notices given before actual receipt of a notice of change will not be invalidated by the change.

11.16 Representatives of the Parties
A. References in this Agreement to the "City" mean the City Council, and all actions to be taken by City must be taken by the City Council except as provided below.

The administration of this Agreement by City will be under the supervision and direction of City's Department of Public Works. The City Council has initially delegated authority November 12, 2019 -98- City of Beverly Hills
to the Director of Public Works designee to take all actions specified in this Agreement, unless otherwise stated. At any time in the future, the City Council may delegate, in writing, authority to other City employees, and may authorize those employees, in turn, to delegate in writing to subordinate employees some or all of that authority. Company may rely upon actions taken by those delegates if they are within the scope of the authority properly delegated to them.

B. Company will, by the Operative Date, designate in writing a responsible officer who will serve as the representative of Company in all matters related to this Agreement and will inform City in writing of that designation and of any limitations upon his or her authority to bind Company. City may rely upon actions taken by that designated representative as actions of Company unless they are outside the scope of the authority delegated by Company, as communicated to City.

11.17 City Free to Negotiate with Third Parties
Notwithstanding the exclusive nature of this Agreement, City may investigate all options for the Collection, transporting, Recycling, processing, and Disposal of Solid Waste at any time prior to the expiration of the term. Without limiting the generality of the foregoing, City may solicit proposals from Company and from third parties for the provision of Collection services, Disposal services, Recycling services, Food Waste or Green Waste services and processing, and any combination thereof, and may negotiate and execute agreements for such services that will take effect upon the expiration or earlier termination of this Agreement.

11.18 Compliance with Municipal Code
Company must comply with all applicable provisions of the City's Municipal Code and with all amendments to those provisions during the term of this Agreement.

11.19 Privacy
Company must strictly observe and protect the rights of privacy of Customers.

Information identifying individual Customers, or the contents of a Customer's waste stream, must not be revealed to any Person, governmental unit, or private entity, unless directed by a court oflaw, by statute, or upon authorization of the Customer. This provision will not be construed to preclude Company from preparing, participating in, or assisting in the preparation of waste characterization studies or waste stream analyses that November 12, 2019 -99- City of Beverly Hills
may be required by the Act. This provision does not apply to reports or records provided to City under this Agreement so long as City maintains reports or records with Customer identification as confidential information in accordance with this section.

11.20 Compliance with Immigration Laws.

In the performance of this Agreement, Company will comply with all applicable immigration laws.

11.21 Proprietary Information, Public Records
City acknowledges that certain records and reports of Company are proprietary and confidential. Company is obligated to permit City to inspect its records on demand and to provide copies to City when requested. City will endeavor to maintain the confidentiality of all proprietary information provided by Company. Notwithstanding the foregoing, and notwithstanding Section 11.19 (as it applies to City), any documents provided by Company to City that are public records may be disclosed in accordance with a proper public records request.

11.22 Guarantee of Company's Performance
Under a guarantee in substantially the form attached as Exhibit 3, Arakelian Enterprises, Inc., has agreed to guarantee Company's performance of this Agreement. The guarantee will be provided concurrently with Company's execution of this Agreement.

11.23 Attorneys' Fees
In any action or proceeding to enforce or interpret any of the terms of this Agreement, the prevailing party is entitled to an award to attorneys' fees in the amount reasonably incurred in the prosecution or defense of that action. The term "prevailing party" means the party entitled to recover costs of suit, upon the conclusion of the matter, in accordance with the laws of the State of California.

November 12, 2019 -100- City of Beverly Hills
ARTICLE 12

MISCELLANEOUS PROVISIONS

12.1 Entire Agreement
This Agreement, including the exhibits, constitutes the entire agreement between the parties with respect to the matters covered. No verbal agreement or understanding with any officer, agent, or employee of City, either before, during, or after the execution of this Agreement, will affect or modify any of the obligations herein contained, nor will any such verbal agreement or understanding entitle Company to any additional payment under the terms of this Agreement.

12.2 Section Headings
The article headings and section headings in this Agreement are for the convenience of reference only and are not intended to be used in construing this Agreement, nor are they intended to alter or affect any of its provisions.

12.3 References to Laws and Other Agreements
All references in this Agreement to laws will be understood to include existing laws as they may be subsequently amended or recodified, unless otherwise specifically provided.

This Agreement supersedes all agreements previously entered into by the parties.

12.4 Conflicts
If there is any conflict between the provisions of this Agreement and the provisions of the City's Municipal Code, the provisions of this Agreement will control.

12.5 Interpretation
This Agreement, including the attached exhibits, will be interpreted and construed reasonably, and neither for nor against either party, regardless of the degree to which either party participated in its drafting.

12.6 Amendment to Agreement
This Agreement may not be amended in any respect except by a writing signed by the parties.

November 12, 2019 -101- City of Beverly Hills

12. 7 Severability
If any non-material provision of this Agreement is for any reason deemed to be invalid or unenforceable, the invalidity or unenforceability of that provision will not affect any of the remaining provisions of this Agreement, which provisions will be enforced as if such invalid or unenforceable provision had not been included.

12.8 Exhibits
Each of the exhibits identified in this Agreement is attached and is incorporated by this reference.

12.9 Non-Waiver Provision
Failure of either party to exercise any of the remedies set forth in this Agreement within the time periods specified will not constitute a waiver of any rights of that party with regard to an event of nonperformance, whether determined to be a breach, excused performance, or unexcused default by the other party.

12.10 Rights Reserved to City.

A. In addition to all rights specifically reserved to City by this Agreement, City reserves every other right and power required to be reserved under the City's Municipal Code, and all other applicable laws or regulations, and Company, by its acceptance of this Agreement, agrees to comply with any action or requirement of City in its exercise of any such right or power.

B. City has the right to waive any provisions of this Agreement relating to Company's obligations, except those required by federal or state laws or regulations, if City determines ( 1) that it is in the public interest to do so; or (2) that the enforcement of such provision will impose an undue hardship on Company or its Customers. To be effective, such waiver must be in writing and signed by a duly authorized representative of City.

C. City has the right to intervene in any suit or proceeding concerning this Agreement to which Company is a party, and Company will not oppose such intervention by City.

November 12, 2019 -102- City of Beverly Hills

12.11 Reasonable Determinations
Where any provision of this Agreement requires the consent or approval of either party, such consent or approval will not be unreasonably or arbitrarily withheld.

12.12 Conflict oflnterest
The parties agree that, to their knowledge, no member of the City Council, nor any other officer or employee of City, has any interest in this Agreement or the Solid Waste Franchise, whether contractual, financial or otherwise, which has not been disclosed as required by applicable law. In addition, if any contractual, financial, or other interest within the purview of applicable law comes to the knowledge of either party at any time, a full and complete disclosure of that information will be made in writing to the other party, even if that interest would not be considered a prohibited conflict of interest under applicable law.

12.13 Counterpart Execution
This Agreement may be executed in multiple counterparts, each of which will be deemed an original and all of which will constitute one and the same instrument.

12.14 Authority and Effective Date
A. Authority. The parties signing below represent and warrant that they have the requisite authority to bind the entities on whose behalf they are signing.

B. Effective Date. This Agreement will become effective on the date this Agreement is approved by the Beverly Hills City Council, or on the date specified by the City Council in its order or action approving this Agreement, whichever last occurs, and satisfaction of the conditions in Section 2.6 (the "Effective Date"). It is the intention of the parties that Company will first execute this Agreement and then submit it to City.

The City Clerk will insert the effective date in all counterparts of this Agreement, attest to their execution by a duly authorized officer of City, and transmit one or more fully executed counterparts to Company.

November 12, 2019 -103- City of Beverly Hills
TO EFFECTUATE THIS AGREEMENT, each of the parties has caused this Agreement to be executed by its authorized representative as of the date set forth below the authorized signature.

CITY:

ATTEST: CITY OF BEYERL Y HILLS
a municipal corporation
City Clerk
By: _
Mayor of the
City of Beverly Hills, California
Date: _
co�_
.,;;:-
By:�--
Nan{e: �aft .:r, .4ra.."--'I·'�"- za:

Title: �11� J'4j /Vf'2Nk. /,..,,.,-
Date: I/ /JJ/UJt't I ;
By: �----
Name:

Title:

November 12, 2019 -104- City of Beverly Hills
APPROVED AS TO FORM:

A,�[�11B)
LAURENCE s. WIENER
City Attorney
APPROVED AS TO CONTENT:

GEORGE CHAVEZ
(
RBOA,JR.
ssistant Director of Public Works
�SSEL
Risk Manager
November 12, 2019 -105- City of Beverly Hills
EXHIBIT 1

ADJUSTED RATE SCHEDULE OF

INITIAL MAXIMUM CONTRACTOR RA TES
[INITIAL RATES TO BE UPDATED, EFFECTIVE APRIL 1, 2022, USING RATE ADJUSTMENT METHODOLOGY PER SECTION 5.3.]
(April 1, 2022 -June 30, 2023)
Cart & Bin Rates
Container Size
Number of pickups per week
1 2 3 4 5 6 7

1.5-yard - Refuse
2-yard - Refuse
3-yard - Refuse
4-yard - Refuse
3-yard w / compactor

1.5-yard - Recycling
2-yard - Recycling
3-yard - Recycling
4-yard - Recycling
96-Gal - Recycling
65-Gal - Organics (1)
Restaurant Bin Rates
Container Size
Number of pickups per week
1 2 3 4 5 6 7

1.5-yard
2-yard
3-yard
4-yard
3-yard w / compactor

1.5-yard - Recycling
2-yard - Recycling
3-yard - Recycling
4-yard - Recycling
96-Gal - Recycling
(1) Not subject to the initial 61 % rate adjustment per Section 5.3.

November 12, 2019 1-1 City of Beverly Hills
EXHIBIT 1 (continued)

ADJUSTED RA TE SCHEDULE OF

INITIAL MAXIMUM CONTRACTOR RA TES
[INITIAL RA TES TO BE UPDATED, EFFECTIVE APRIL 1, 2022, USING RA TE ADJUSTMENT METHODOLOGY PER SECTION 5.3.J
(April I, 2022 - June 30, 2023)
Scout Service Rates (additional charge per container)
Number of pickups per week
1 2 3 4 5 6 7
Charge Per Container (1)
Other Services
Service Rate
Temporary Bins - Per Pickup, disposal included:
. 3 Cubic Yard Bin. per pull $
. 6 Cubic Yard Bin. per pull NIA
Temporary Bin Dry Run Fee (after 30 minutes) $
Bin cleanings above once per year $
Commerci?.!!l.!:1!1.y Item l'i.:.!-u.P!'.C.r .Item: ... .. ... , . . ·�·· .... --.-- .. --,-·--· .. •• - > • ·-· -· ••• ,,_.,,_,, ___ ., __
.. -·· ·----· - --···-···----·-·-"-"" ---------·----··-·- ..,,, _______ ,,_,,,,_,,_,_ . First Item On Each Service Call
.... --- - ---· ---·-·- ---···-··--·-------- -- $ . _per item·--····-··-····-· ·--·-·-····-··-------·-·-·-·- -- - -·-·-·-····--···-···-··-·-·<->-•--------· ·-·---·- _______ ,_, u-•--,--,--•·-··-·•-•H•-••--•--·-·•"-·- ·-•-··--.-----··--• ---- . Each Additional ltem Per Same Service Call $ per item $_ per month, per bin (not based on
Hasp and Lock Services ( 1) service frequency)
Extra Empty Charge for Regular Bin Service $__per bin per pickup Extra Empty Charge for Compactor Bin Service $__per bin per pickup $ __ per hour, for one collection vehicle
Emergency Collection and Disposal and one crew
Sidewalk Receptacle Cleaning/Powerwash $ __ per receptacle Sunday Service Surcharge (refuse containers with less than 7x week service) $ ___ per month per container Sunday Service Surcharge (recycling containers with less than 7x week service) -50% of refuse rate $ ___ per month per container Commercial Container Reactivation Fee (2) $ 25.00 (3)
Contamination Fee (per Section 3.4) $50.00 per occurrence (3) (I) Applies to mixed waste, recycling, and/or organics containers. (2) Only if containers were removed for nonpayment. Company can charge fee if Company performs customer billing. (3) New rates effective April I, 2022. Not subject to 61 % initial rate increase.

November 12, 2019 1-2 City of Beverly Hills
EXHIBIT 1 ( continued)

INITIAL MAXIMUM CONTRACTOR RATES
[INITIAL RATES TO BE UPDATED, EFFECTIVE APRIL 1, 2022, USING RATE ADJUSTMENT METHODOLOGY PER SECTION 5.3.]
(April 1, 2022 - June 30, 2023)
Rolloff Service
Service Tvne Rate
Pull Charge (per pull)
• Standard Rolloff Box $
• Compactor Rollo ff Box $
Dump/Processing Charge (per ton)
• Dump Fee per ton (refuse transfer and disposal w/o processing) $ • Commingled Recyclables Processing Fee per ton (excluding material $ --
revenues credited to City)
• Mixed Waste Processing Fee per ton, including residue disposal $ • Inert Materials (asphalt, concrete, dirt, etc.) $
• Wood Waste $
• Green Waste $
IO-Yard Concrete Wash-Out Bin (low-boy pumping fee) $
95% C&D Roll-Off Box Diversion - Additional Fee for 95% diversion Extra$ --
/load
of construction and demolition debris roll-off box loads Rolloff box dry run fee (after 30 minutes) $
Rolloff box cleanings above once per year (includes compactors) $ After-Hours Surcharge - Monday through Saturday between 5:00 pm $ --
to 5:00 a.m., and all day Sunday- Customer requests delivery and/or pull*
* After-hour surcharge does not apply to morning deliveries or pulls. If both delivery and pull are requested after hours, only one after-hours surcharge applies.

November 12, 2019 1-3 City of Beverly Hills
EXHIBIT 1 (continued)

INITIAL MAXIMUM RESIDENTIAL PROCESSING RA TES
[INITIAL RATES TO BE UPDATED, EFFECTIVE APRIL 1, 2022, USING RATE ADJUSTMENT METHODOLOGY PER SECTION 5.3.]
(April 1, 2022 - June 30, 2023)
Residential Processing Rates
Service Type Per Ton Rate
Residential Processing (per ton)
• Mixed Residential Refuse and Recyclables Processing $ • Residential Organics Waste (including green waste and food waste) $ • Inerts Diversion $
• Street Sweeping $
• C&D $
November 12, 2019 1-4 City of Beverly Hills
EXHIBIT 2

RATE ADJUSTMENT FORMULA

FOR COMMERCIAL AND ROLL-OFF CONTRACTOR RATES AND

RESIDENTIAL PROCESSING RATES
November 12, 2019 2-1 City of Beverly Hills
EXHIBIT2A

RA TE ADJUSTMENT FOR COMMERCIAL AND ROLL-OFF CONTRACTOR RA TES AND RESIDENTIAL PROCESSING RA TES (Example Calculation)
Step One: Calculate percentage change in indices
A B c D
Percent Change Column D
Row Adjustment Factor Index Old Index Value New Index Value In Index Percentage or ((Column B/ 5%, whichever
Column A) -1) is lower
I CPI: Water, Sewer, & Trash Collection (I) 221.659 229.106 3.4% 3.4% Step Two: Apply percentage change to rates

E F G H
Current Net Percentage
Rate Increase or Adjusted Net
Row Rate Category Contractor Rate Change (from
Decrease Contractor Rate
(2) Column D) (Column Ex (Column E+
Column F) Column G)
2 3-yd bin. 1 x week Commercial /month $ 74.38 3.4% $ 2.53 $ 76.91 3 3-yd bin, 2x week Commercial /month s 122.72 3.4% $ 4.17 s 126.89 4 3-yd bin, 3x week Commercial /month $ 168.85 3.4% s 5.74 $ 174.59 5 3-yd bin, Ix week Restaurant /month $ 115.29 3.4% $ 3.92 $ 119.21 6 3-yd bin. 2x week Restaurant /month s 166.62 3.4% $ 5.67 $ 172.29 7 3-yd bin, 3x week Restaurant /month $ 217.94 3.4% s 7.41 s 225.35 8 Organics cart, Ix week s 45 00 3.4% s 1.53 s 46.53
9 Organics cart, 2x week $ 90.00 3.4% $ 3.06 $ 93.06
IO Locking Lid /month s 7.23 3.4% $ 0.25 s 7.48
II Temp 3-yd bm per service s 95.71 3.4% s 3.25 s 98.96 12 Std Roll-off Box Pull Fee $ 151.49 3.4% s 5.15 s 156.64 13 Compactor Roll-off Box Pull Fee s 199.58 34% s 6.79 $ 206.37 14 Roll-off Disposal Fee /ton s 37.29 3.4% $ 1.27 $ 38.56 15 Roll-off Commingled Recyclables Fee /ton $ 18.81 3.4% $ 0.64 s 19.45 16 Roll-off Mixed Waste Processing Fee /ton $ 37.29 3.4% s 1.27 $ 38.56 17 Roll-off Inert Materials /ton $ 23.20 3.4% $ 0.79 $ 23.99 18 Resid. Processing: Mixed refuse/recyclables per ton $ 24.20 3.4% s 0.82 $ 25.02 19 Res id. Processing: Organics processing per ton s 25.20 3.4% $ 0 86 $ 26.06 20 Resid. Processing: Inerts per ton s 26.20 3.4% s 0.89 s 27.09 21 Resid. Processing Street sweeping debris per ton $ 27.20 3.4% $ 0.92 $ 28 12 22 Resid. Processing: C&D per ton $ 28.20 3.4% $ / 0.96 s 29.16 (1) Consumer Price Index Consumer Price Index (CUUROOOOSEHG) for All Urban Consumers, water and sewer and trash collection - U.S. city average, not seasonally adjusted, as published by the United States Department of Labor, Bureau of Labor Statistics, subject to a 5% cap, as shown in Column D above. Average annual change per Section 5.5 of agreement. (2) Example rates listed. Adjustment applies to all rates.

November 12, 2019 2-2 City of Beverly Hills
EXHIBIT 2B

EXAMPLE CALCULATION FOR

AVERAGE ANNUAL CHANGE IN PUBLISHED PRICE INDICES
The rate adjustment index is calculated using the "average annual change" as demonstrated in the example below, measured for the calendar year ended in the December before each rate adjustment, as compared to the calendar year ended the prior December. The Bureau of Labor Statistics publishes the Consumer Price Index for Garbage and Trash Collection (CUUROOOSEHG02), U.S. city average, subject to a 5% cap per Section S.S.

If a rate adjustment based on this CPI index were to be implemented as of July 1, 2018, the 2017 average annual index of 229.106 would have been the "New Index Value" to be used in Column B of the example rate adjustment formulas in Exhibit 2A, and the 2016 average annual index of 221.659 would have been the "Old Index Value" in Column A.

This would have resulted in a 3.4 % increase to the rates as calculated in Column C of Exhibit 2A.

Garbage and Trash Collection Services, CUUROOOOSEHG02
Year Jan Feb March April May June July August Sept Oct Nov Dec Average 2016 437.205 438.296 437.699 437.676 438.317 437.858 438.607 439.358 439.707 440.311 443.343 444.745 439.427 2017 446.266 447.699 446.987 447.129 447.272 448.046 448.328 448.717 449.008 452.196 453.820 453.596 449.089 Average Annual Change: 2.2%
November 12, 2019 2-3 City of Beverly Hills
EXHIBIT 3

CORPORATE GUARANTY
Guaranty
THIS GUARANTY ("Guaranty) is given as of the __ day of __ , 2019, and is made with reference to the following facts and circumstances:

A. Araco Enterprises LLC, ("Owner") is a corporation organized under the laws of the State of California. Arakelian Enterprises, Inc., ("Guarantor") is a corporation organized under the laws of the State of California. Owner is an affiliate of Guarantor.

B. Owner and the City of Beverly Hills ("City") have negotiated a Franchise Agreement for Commercial Solid Waste Collection Services dated as of _ ("Agreement"). A copy of this Agreement is attached.

C. It is a requirement of the Agreement, and a condition to City entering into the Agreement, that Guarantor guarantee Owner's performance of the Agreement.

D. Guarantor is providing this Guaranty to induce City to enter into the Agreement.

NOW, THEREFORE, in consideration of the foregoing, Guarantor agrees as follows:

1. Guaranty of the Agreement. Guarantor irrevocably and unconditionally guarantees to City the complete and timely performance by Owner of each and every term of the Agreement that Owner is required to perform. If Owner fails to perform any term of the Agreement, Guarantor will promptly and fully perform it in the place of the Owner, or cause it to be performed. Guarantor also guarantees payment to City of any damages, costs, or expenses that might become recoverable by City from Owner due to its breach of the Agreement.

2. Guarantor's Obligations Are Absolute. The obligations of Guarantor under this Guaranty are continuing, unconditional, and unlimited, and, with respect to any payment obligation of Owner under the Agreement, constitute a guarantee of payment and not of collection, and are not conditional upon the validity or enforceability of the Agreement. In any action brought against Guarantor to enforce, or for damages for breach of, its obligations under this Guaranty, Guarantor will be entitled to all defenses, if any, that would be available to the Owner in an action to enforce, or for damages for breach of, the Agreement (other than discharge of, or stay of proceedings to enforce, obligations under the Agreement under bankruptcy law).

November 12, 2019 3-1 City of Beverly Hills

3. Waivers. Guarantor has no right to terminate this Guaranty, or to be released, relieved, exonerated or discharged from its obligations under this Guaranty for any reason, including, without limitation: (a) the insolvency, bankruptcy, reorganization or cessation of existence of the Owner; (b) the actual or purported rejection by a trustee in bankruptcy of the Agreement, or any limitation on any claim in bankruptcy resulting from the actual or purported termination of the Agreement; (c) any waiver with respect to any of the obligations of the Agreement guaranteed hereunder, or the impairment or suspension of any of City's rights or remedies against the Owner; or (d) any merger or consolidation of the Owner with any other entity, or any sale, lease, or transfer of any or all the assets of the Owner. Without limiting the generality of the foregoing, Guarantor waives the rights and benefits under California Civil Code Section 2819.

Guarantor waives all benefits and defenses under California Civil Code Sections 2846, 2849, and 2850, including without limitation, the right to require City to (a) proceed against Owner; (b) proceed against or exhaust any security or collateral City may now or later hold; or (c) pursue any other right or remedy for Guarantor's benefit. Guarantor agrees that City may proceed against Guarantor for the obligations guaranteed herein without taking any action against Owner, or any other guarantor or pledgor, and without proceeding against or exhausting any security or collateral City may now or later hold. City may, in its sole discretion, exercise all rights and remedies available to it against Owner, or any other guarantor or pledgor, without impairing City's rights and remedies in enforcing this Guaranty.

Guarantor now waives, and agrees to waive at any future time, at the request of City to the extent now or then permitted by applicable law, all rights that Guarantor may have, or which at any later time may be conferred upon it, by statute, regulation or otherwise, to avoid any of its obligations under, or to terminate, cancel, or surrender this Guaranty. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following will not affect the liability of Guarantor: (a) at any time or from time to time, without notice to Guarantor, performance or compliance with the Agreement is waived; (b) any indemnification with respect to Owner's obligations under the Agreement, or any security therefore, is released or exchanged in whole or in part; or (c) any assignment of the Agreement is effected that does not require City's approval.

Guarantor expressly waives, diligence, presentment, demand for payment or performance, protest and all notices whatsoever, including, but not limited to, notices of nonpayment or non-performance, notices of protest, notices of any breach or default, and notices of acceptance of this Guaranty. If all or any portion of the obligations guaranteed under this November 12, 2019 3-2 City of Beverly Hills
Guaranty are paid or performed, Guarantor's obligations will continue and remain in full force and effect in the event that all or any part of such payment or performance is avoided or recovered directly or indirectly from City as a preference, fraudulent transfer, or otherwise, irrespective of (a) any notice of revocation given by Guarantor or Owner prior to such avoidance or recovery; and (b) payment in full of any obligations then outstanding.

4. Term. This Guaranty is not limited to any period of time, but will continue in full force and effect until all of the terms of the Agreement have been fully performed or otherwise discharged. Guarantor will remain fully responsible under this Guaranty without regard to the acceptance by City of any performance bond or other collateral to assure the performance of Owner's obligations under the Agreement. Guarantor will not be released from its obligations under this Guaranty so long as there is any claim by City against Owner arising out of the Agreement based on Owner's failure to perform, which failure has not been settled or discharged.

5. No Waivers. No delay by City in exercising any rights under this Guaranty, nor City's failure to exercise those rights, will operate as a waiver of those rights. No notice to or demand on Guarantor will be a waiver of any obligation of Guarantor, or right of City, to take other or further action without notice or demand. No modification or waiver of any provisions of this Guaranty will be effective unless it is in writing and signed by City and by Guarantor, nor will any waiver be effective except in the specific instance or matter for which it is given.

6. Attorneys' Fees. If Guarantor breaches its obligations under this Guaranty Guarantor will pay reasonable attorneys' fees, and all other reasonable costs and expenses that are incurred by City in enforcing this Guaranty, or that are incurred in any action or proceeding arising out of or relating to this Guaranty, including any action instituted to determine the respective rights and obligations of the parties under this Guaranty.

7. Governing Law: Jurisdiction. This Guaranty is and will be deemed to be a contract entered into under the laws of the State of California and will be governed and construed in accordance with the laws of California without regard to its conflicts of laws rules for all purposes including, but not limited to, matters of construction, validity, and performance.

Guarantor agrees that any action brought by City to enforce this Guaranty may be brought in any court of the State of California, and Guarantor consents to personal jurisdiction over it by those courts. Guarantor appoints the following person as its agent for service of process in California:

Attention Legal Department
November 12, 2019 3-3 City of Beverly Hills
Arakelian Enterprises, Inc.
14048 Valley Blvd.

City of Industry, CA 91746

8. Severability. If any portion of this Guaranty is held to be invalid or unenforceable, such invalidity will not affect the remaining portions of this Guaranty, which portions are severable and will continue in full force and effect.

9. Binding On Successors. This Guaranty inures to the benefit of City and its successors and shall be binding upon Guarantor and its successors, including any transferee of substantially all of Guarantor's assets, and its shareholders in the event of Guarantor's dissolution or insolvency.

10. Authority. Guarantor represents and warrants that it has the corporate power and authority to give this Guaranty, that the execution of this Guaranty has been authorized by all necessary action under its articles of incorporation and by-laws, and that the person signing this Guaranty on its behalf has the authority to do so.

11. Notices. Notice shall be given in writing, deposited in the U.S. mail, registered or certified, first class postage prepaid, addressed as follows:

To City: City Manager
Beverly Hills City Hall
455 North Rexford Drive
Beverly Hills, CA 90210
with a copy to the City Attorney at the same address.

To the Guarantor: Attention Legal Department
Arakelian Enterprises, Inc.
14048 Valley Blvd.

City of Industry, CA 91746
[NAME OF GUARANTOR]
By:

Authorized Representative
Title:

November 12, 2019 3-4 City of Beverly Hills
Date:

By:

Authorized Representative
Title:

Date:

November 12, 2019 3-5 City of Beverly Hills
EXHIBIT4

FAITHFUL PERFORMANCE BOND
KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the City of Beverly Hills, California, a municipal corporation ("City") has awarded to Araco Enterprises LLC, ("Principal"), an exclusive franchise for the collection, processing, and disposal of commercial solid waste generated within the City; and WHEREAS, the exclusive franchise, identified as "Franchise Agreement for Commercial Solid Waste Collection Services" is incorporated by this reference; and WHEREAS, the Principal is required under the terms of the exclusive franchise to furnish a bond for its faithful performance;
NOW, THEREFORE, we, Principal and The Hanover Insurance Company, as Surety, are held and firmly bound unto City in the penal sum of Eight Hundred Thousand Dollars ($800,000), lawful money of the United States, for the payment of which we bind ourselves, our heirs, successors, executors, administrators, jointly and severally, firmly by these presents.

The condition of this obligation is such that the obligation will become null and void if the above-bounded Principal, his or its heirs, executors, administrators, successors, or assigns, will in all things stand to, abide by, well and truly keep and perform the covenants, conditions, and provisions in said exclusive franchise and any alteration thereof made as therein provided, on his or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and will indemnify and save harmless City, its officers, agents, and employees, as therein stipulated; otherwise, this obligation will be and remain in full force and effect.

As part of the obligation secured hereby, and in addition to the face amount specified, costs and reasonable expenses and fees will be included, including reasonable attorneys' fees incurred by City in successfully enforcing the obligation, all to be taxed as costs and included in any judgment rendered.

The Surety hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the exclusive franchise, the work to be performed thereunder, or the specifications accompanying the exclusive franchise will in any manner affect its obligations on this bond. The Surety hereby waives notice of any such change, extension of November 12, 2019 4-1 City of Beverly Hills
time, alteration, or addition to the terms of the exclusive franchise, the work, or the specifications.

IN WITNESS WHEREOF, this instrument has been duly executed by the abovenamed Principal and Surety on , 2019.

Note: All signatures must be acknowledged before a notary public. Attach appropriate acknowledgment.

ARACO ENTERPRISES LLC
(Type name of Principal)
14048 Valley Blvd
City of Industry. CA 91746
(Type address of Principal)
(Signature of authorized officer)
(Title of officer)

THE HANOVER INSURANCE COMPANY
(Type name of Surety)
(Type address of Surety)
(Signature of authorized officer)
(Title of officer)
APPROVED AS TO FORM:

CITY ATTORNEY
November 12, 2019 4-2 City of Beverly Hills
EXHIBIT 5

NOTARY CERTIFICATION

ST A TE OF CALIFORNIA)
COUNTY OF ) ss:

On , __ , before me, the undersigned, a Notary Public in and for the State of California, personally appeared-------------------- ____________________ _, known to me to be the _
------------- of the Company that executed the within instrument on behalf of the Company therein named, and acknowledged to me that the Company executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal in the County of this day of , __ .

Notary Public
My Commission Expires:

November 12, 2019 5 - 1 City of Beverly Hills
EXHIBIT6

RESIDENTIAL SOLID WASTE

PROCESSING AND DISPOSAL AGREEMENT
Araco Enterprises LLC (Company) warrants that it has made arrangements with Athens Material Recovery Facility located at 11211 Pendleton Street in Sun Valley and Crown Recycling Services located at 9147 De Garmo Avenue in Sun Valley to reserve capacity for and accept all solid waste generated by the City of Beverly Hills' (City's) residential customers at prices listed below throughout the term, including extensions, of the Franchise Agreement between the City of Beverly Hills and Company for Commercial Solid Waste Collection Services (Commercial Agreement). City will deliver the majority of the residential solid waste it collects to the Processing Facility. City may also deliver Inert materials generated from City projects for processing at Crown Recycling Services located at 9147 De Garmo Avenue in Sun Valley.

Processing Facility must accept waste delivered from City Monday through Sunday, observing only New Year's Day, Thanksgiving Day and Christmas Day as holidays. City can terminate this processing agreement upon 90-days' written notice to Company.

Initial Rates
The maximum processing rates for the partial Rate Year April 1, 2022 through June 30, 2022, and the Rate Year July l, 2022 through June 30, 2023, shall be the contractor processing rates effective as of March 31, 2022, under the Prior Agreement, increased by 61 %, less any extraordinary rate adjustments to the processing rates granted by City Council from the approval of this Agreement to March 31, 2022. For example, if City Council approved a 5% extraordinary rate increase after the approval of this Agreement and before the Operative Date of April l , 2022, the rate increase on April 1, 2022 would be 61 % - 5% = 56%.

Mixed residential refuse and recyclables processing (without separate commingled Recycling Cart program)
Effective April l, 2022, Company will accept any and all mixed residential refuse and recyclables from this program at the gate rate calculated as described above. Company will process all mixed Solid Waste to maximize recovery of Recyclables commodities, and dispose of residual waste. The guaranteed minimum recovery rate from this processing is 25% of the waste delivered by City.

November 12, 2019 6 - 1 City of Beverly Hills
Residential Organics Waste processing
Company will accept any and all of City's residential Organics Waste (including Green Waste and Food Waste) at the gate rate calculated as described above.

Inerts Diversion
Company will accept any and all Inerts collected by City crews from water, streets and other public works projects at a gate rate calculated as described above, and will divert 100% of Inerts from landfilling.

Street Sweeping
Company will accept any and all Sweet Sweeping debris collected by City crews from City streets and direct-hauled to Company's facility at a gate rate calculated as described above, and will divert I 00% of Street Sweeping from landfilling.

Company will accept any and all construction and demolition (C&D) debris collected by City crews at a gate rate calculated as described above, and will maximize diversion of C&D debris from landfilling.

November 12, 2019 6-2 City of Beverly Hills
Rate Adjustments
Rate adjustments are effective as of July I, with the first permissible rate adjustment on July l, 2023, and shall follow the rate adjustment procedures per Section 5.4 and 5.5 of the Agreement.

This agreement will remain in effect for the duration of the term of the Commercial Agreement between Company and City, including contract extensions.

This disposal/processing capacity and rate guarantee is in addition to, and does not affect, the capacity guaranteed by Company for commercial waste (including multi-family Bin waste) generated in the City under the Commercial Agreement.

As Company has warranted to City that it has secured the above agreement on behalf of City, failure of Company to make these terms available to City will be considered a material breach by Company of the Commercial Agreement, putting Company in default and permitting City to terminate the Commercial Agreement.

Acknowledged By:

November 12, 2019
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6-3 City of Beverly Hills