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3. GENERAL REQUIREMENTS <br />3.1 Governing Requirements. Grantee shall comply with the <br />requirements of this Agreement and Ordinance No. 1224 , <br />3.2 Franchise Fee. The Grantee shall pay to the Grantor an <br />annual franchise fee of five percent (58) of Gross Annual <br />Receipts. <br />3.3 Recovery of Franchise Costs. <br />(a) As provided for in Ordinance No. 1224 Grantee, <br />within sixty (60) days after receipt from Grantor of a written <br />itemization, shall reimburse Grantor for its reasonable costs <br />incurred during the franchise renewal process, not to exceed <br />$22,000. <br />(b) As necessary to aid in the analysis of all future <br />disputed matters relative to the franchise, the Grantor or the <br />Grantee in cooperation with the other, shall be entitled to employ <br />the services of technical, financial, or legal consultants. All <br />reasonable fees of the consultants incurred by the Grantor or the <br />Grantee in this regard shall be equally borne by the Grantee and <br />the Grantor, regardless of the outcome of any specific dispute <br />under consideration. An uppor cost limit will be established by <br />the Grantor and Grantee prior to retaining any consultant under <br />this subsection. <br />3.4 Payment to Grantor. No acceptance of any payment shall <br />be construed as an accor t at the amount paid is in fact the <br />correct amount, nor shall such acceptance of payment be construed <br />as a release of any claim that Grantor may have for further or <br />additional sums payable under the provisions of this Agreement. <br />All amounts paid shall be subject to audit and recomputation by the <br />Grantor. The Grantor shall notify the Grantee, in writing, at <br />least thirty (30) days in advance of any intent to audit and <br />recompute. <br />3.5 Liability Insurance and Indemnification. Upon the <br />effective date of the franchise, Grantee shall furnish proof that <br />satisfactory liability insurance policies are in force, in the <br />minimum amounts of: <br />° Worker's Compensation -- as required by the <br />State of California. <br />° Comprehensive General Liability -- <br />$1,000, 0 per occurrence. <br />° Comprehensive Automobile Liability -- <br />$1,000,000 per occurrence. <br />The liability insurance policies shall be maintained <br />throughout the duration of this franchise, with a copy filed with <br />5 <br />