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HomeMy WebLinkAboutGood Year/Tires for Buses 710-1 (11/86) lm/4/24-1 MEMORANDUM OF AGREEMENT 1 MEMORANDUM OF AGREEMENT made and entered into at Akron, Ohio this 74 day of "! 1/ 1988, by and between CITY OF OSHKOSH, A MUNICIPAL CORPORATION (WINNEBAGO COUNTY, WISCONSIN) , of Oshkosh, Wisconsin ("Operator,") and THE GOODYEAR TIRE & RUBBER COMPANY, a corporation of Akron, Ohio, ("Goodyear") . 1. Goodyear will furnish Operator tires for use on buses for the remuneration and under the terms and conditions set forth below; except • that Operator may use separate and apart from this agreement, until unfit for further service, tires in Operator's possession when this agreement becomes effective and not furnished by Goodyear under any similar mileage contract previously in effect between these parties. It is understood that a tire means a casing, tube and flap for a tube type tire, and a casing only for a tubeless tire; and a bus means any vehicle of seven or more passenger carrying capacity, designed for operation on pneumatic tires and used publicly for the transportation of passengers. The number of tires to be furnished pursuant to this Agreement shall be sufficient to keep all buses fully equipped and to provide a reserve supply to be mounted on rims and kept in Operator's garage for use in case of emergency. Buses operating under this agreement shall be equipped with the sizes and types of rims of sufficient strength to permit inflation necessary for the load carrying capacity required and spaced to conform to the approved standards of The Tire & Rim Association of America, Inc. Operator agrees to use exclusively tires furnished by Goodyear on buses operated by Operator in Oshkosh, Wisconsin, and the vicinity; except that Operator may utilize up to 5% of its fleet, for test purposes, on tires of other manufacturers. Operator will not transfer, sublet, or lend the tires furnished by Goodyear, or permit the tires to be used by anyone other than Operator, without the prior written consent of Goodyear. 2. BUS MILEAGE REPORTS AND TIRE RECORDS Operator shall keep an accurate record of the number of miles run by each bus during the term of this agreement and render to Goodyear a report of such mileage on each bus prior to the 15th day of the month following the month the miles were run. -1- 710-1 (11/86) Lm/4/24-2 The number of miles run by each bus shall be determined either by means of an instrument which will accurately record mileage being run on each bus, or by multiplying the number of trips of each bus by the number of miles over the route it is driven and adding all miscellaneous mileage that may be run to and from the routes, such as in testing buses and instructing drivers. If the latter method is used, Operator shall furnish Goodyear a schedule of the established routes covered by its buses and shall advise Goodyear of any changes in such routes or any additional routes covered. The recording instruments and/or mileage records referred to shall be open at all times for inspection by Goodyear's representatives. Operator agrees to supply Goodyear on a weekly basis all information on tire changes and vehicle and/or spare stock tire inventory requested to enable Goodyear to maintain any record of individual tire mileage and tire location kept by Goodyear. 3. PAYMENT Operator shall pay Goodyear on or before the twenty-fifth of each month for the mileage run on the tires furnished during the month immediately preceding, or for tires invoiced in accordance with Articles 11 and 16, at the effective rate per tire mile for vehicles as shown in the schedule attached to this agreement, marked Exhibit "A". A separate rate and bonus point shall apply to any other make/model buses not shown on Exhibit "A" placed in operation by Operator during the term of this agreement or one requiring a different size and/or construction type of tire. Operator is required to supply a financial statement to Goodyear on an annual basis at Operator's fiscal year end. 4. ADDITIONAL BUSES If Operator shall acquire by purchase or otherwise additional buses, Operator agrees to acquire such buses less tires giving Goodyear ample notice of such acquisition, and further agrees to arrange to have such buses equipped with Goodyear tires of sufficient carrying capacity to conform to the approved standards of The Tire & Rim Association of America, Inc. Upon delivery of the tires by Goodyear to the OE Manufacturer, refurbisher, or other outside source designated by Operator, the Operator agrees to assume responsibility for such consigned tires in accordance with all terms of this agreement. If such buses equipped with tires furnished by Goodyear shall be driven overland during delivery, Goodyear shall receive payment at the rate specified for use of the tires in accordance with Articles 3, 11 and 12. 5. TITLE TO TIRES AND LIENS ON BUSES Title to all tires furnished shall remain at all times in Goodyear or its assignees, and upon purchase by Operator in accordance with Article 16 shall continue to remain in Goodyear until it shall have received full payment of all sums owing to it by Operator under the terms of this Agreement. Operator will hold Goodyear harmless against any claim on Goodyear's tires made by any holder of a lien on any buses on which Operator uses such tires. Operator agrees to keep Goodyear advised concerning any of such liens and will give Goodyear any and all information which Goodyear may request. -2- 710-1 (11/86) lm/4/24-3 6. POSSESSION AND CANCELLATION Should Operator breach the terms of this Agreement through non-payment, non-payment on total amount due at termination, impaired credit standing, assignment for the benefit of creditors, non or erroneous reporting of miles run, or is placed in receivership or adjudicated bankrupt, then, under each or all of the above conditions, Goodyear shall have the right, at its option, without prejudice to any other rights and remedies, to stop shipping tires, take possession of inventory, whether or not they are applied on vehicles, without being deemed guilty of trespass, and bill Operator for all costs of removing tires and/or terminate this Agreement in accordance with Article 16. Should Goodyear exercise any of the above options, Goodyear shall be relieved from any further obligation under this Agreement. However, the above shall not relieve Operator from his obligation to pay for the use of the tires furnished or from his liability for all damages caused by such breach. Operator specifically agrees that it shall be responsible for and pay any and all attorney fees, court costs and other expenses incurred by Goodyear in collecting amounts owed by Operator or in enforcing any other right under this Agreement. Failure on the part of Goodyear to exercise any or all of the above options upon default by Operator as herein provided shall not constitute a waiver by Goodyear of its right to exercise any or all of the above options upon any subsequent default by Operator. 7. TAXES In addition to the effective mileage rate the Operator, from time to time or at Goodyear's option by way of increase of the effective mileage rate, shall pay Goodyear an amount to compensate for the current Manufacturers' Excise Tax under the U.S. Revenue Act of 1932, as amended, and for any business, sales, excise, use, processing or similar tax imposed upon the goods sold or service rendered, or upon the manufacture, sale or delivery or whenever any tax, excise, levy, law, or governmental regulation shall have the effect directly or indirectly of increasing the cost of manufacture, sale or delivery of such goods or service. Operator is to furnish tax exemption certificates and will be exempt from all taxes covered. The Operator will be responsible for all property taxes on the tires, making any required listing for taxation in its own name as Bailee. 8. DAMAGE TO PERSONS OR PROPERTY Operator will indemnify and hold Goodyear harmless against all claims, action or causes of action for damage or injury arising out of the use of or possession of any tires furnished hereunder, except for any claims, action, or causes of action arising solely out of a defect in material or workmanship of any tire manufactured and furnished by Goodyear under this Agreement. In no event shall Goodyear be liable to Operator for any incidental or consequential damages. Operator will hold Goodyear harmless and indemnify Goodyear from lawsuits, claims, or damages by Operator, its employees or third parties arising out of the use by Operator or its employees of service equipment supplied by Goodyear. -3- 710-1 (9/87) lm/4/24-4 9. CONTINGENCIES Goodyear shall be excused from deliveries or delay in deliveries if such failure to deliver or delay shall be caused by war, strikes, lockouts, fires, interruptions of transportation facilities, accidents, inability to obtain merchandise, shortage of energy source or raw material, or other similar causes beyond Goodyear's control. This agreement is expressly subject to applicable restrictions imposed by any Federal agency or by any other governmental authority. 10. SERVICE Operator agrees to apply to, remove from, and remount on rims or wheels tires furnished and to perform all other tire service, including regrooving and repair of flat tires, as required by Goodyear to keep them in proper operating condition. Goodyear will provide necessary repair materials and valve hardware. Operator will install and maintain in its garage suitable facilities for the inflation of tires and will keep said tires inflated to conform to the approved standards of the The Tire & Rim Association of America, Inc. Operator will determine at all times when tires are to be removed from vehicles. Goodyear shall have the right to make the determination as to the fitness for return to service of a particular tire or tires provided, however, Operator shall not be obliged to use tires which, because of their condition, interfere unreasonably with the use and operation of buses. All tires determined by Goodyear to be permanently unfit for further service shall be returned to Goodyear promptly by the Operator. 11. USE, CARE AND STORAGE OF TIRES Operator agrees to provide a safe and suitable place in an enclosed building for the storage of spare tires and tires unfit for further service so that such tires shall not be subject to damage by the elements; to either keep each bus equipped with at least one properly inflated spare tire or provide adequate road service for its fleet; and to pay Goodyear the amount of any damage or loss resulting from accident, fire, adverse mechanical conditions, improper or negligent use, loss, theft, or fraudulent conversion of said tires, or from the operation of a bus with an underinflated or flat tire. The value of tires for the purpose of determining the amount of any damage or loss under this Article 11 shall be determined by subtracting from the higher amount of either (a) net average mileage secured from similar tires (nonretreaded or retreaded, as the case may be) normally and permanently removed from service during the past twelve months or (b) the applicable current minimum mileage for bonus qualification for nonretreaded or retreaded tires, the mileage run by the particular tire prior to such damage or loss and multiplying the difference, representing unused mileage on the tire by the tire rate in effect. Payment for extra tubes and flaps shall be made at Goodyear's current printed list price, less 50%. -4- 710-1 (11/86) lm/4/24-5 12. SALE OR DISPOSITION OF BUSES If Operator sells or in any manner disposes of any buses, which shall have been equipped with tires supplied under this agreement, or if for any reason Operator shall discontinue its business, or discontinue the use of any such buses, Operator shall purchase the unused mileage in each tire (including spares) at prices to be computed as set forth in Article 11, plus the amount of any tax or excise applicable to such sale. 13. LEASED BUSES Operator represents and warrants that it owns outright or has legal possession of all buses comprising the fleet operated by it. If during the term of this Agreement, including any amendments and extensions, Operator acquires the right to operate any buses not owned by it, pursuant to a rental or other arrangement with the owner of such buses (called "Leased Buses") , Operator agrees (a) to notify Goodyear of the existence and details of such arrangement, (b) that all Leased Buses will be furnished to Operator by the owner without tires so that they may be operated by Operator equipped with tires furnished by Goodyear to be supplied under this Agreement, and (c) to obtain from the owner an agreement acceptable to and for the benefit of Goodyear, whereby the owner acknowledges Goodyear's ownership and right to possession of all tires supplied by it and waives any and all rights by virtue of their use on Leased Buses or otherwise. Contingent upon obtaining such agreement from the owner of Leased Buses, they shall be subject to all the terms and conditions of this Agreement to the same extent as buses owned by Operator. In case Operator surrenders or otherwise loses possession of any of the Leased Buses equipped with tires supplied by Goodyear, Operator shall purchase each tire (including spares) as provided with respect to buses sold by Operator. The term "Leased Buses" shall not apply to any bus rented or borrowed for temporary use for a period not to exceed 120 days. 14. RATES AND ESCALATION On all mileage run on and after May 1, 1988, and prior to May 1, 1989, the rate(s) per tire mile shall be as follows: $.003906-A (11.50-20 Non-ADB) $.004817-B (11.50-20 Advance Design Bus) Such tire rate(s) shall be referred to as Basic Rate(s) . On November 1, 1988, the mileage rate shall be reviewed, and should a decrease result from the following computation, the rate shall be decreased accordingly. On May 1, 1989, and on the first day of each May and November thereafter during the term of this agreement, the mileage rate effective during the next ensuing six-month period shall be determined by the following computation: -5- 710-1 (11/87) 1m/4/24-6 a. The average daily closing spot market price per pound for #1 smoked ribbed rubber sheets, on the Commodity Exchange, Inc. , New York City, shall be determined for the six calendar months immediately preceding the computation date. To determine the percentage of increase or decrease to the Basic Rate(s) , compute the difference between such average and $.54 per pound, then multiply this difference by a factor of .35. b. The average market price per pound of high tenacity nylon tire yarn • shall be determined for the six calendar months immediately preceding the computation date. To determine the percentage of increase or decrease to the Basic Rate(s) , compute the difference between such average and $1.72 per pound, then multiply this difference by a factor of .06. c. With respect to any period during which the price for such rubber or nylon tire yarn shall be fixed under order of any governmental agency, such fixed price shall be substituted in the computation or computations for the above prices. d. If the average hourly wage rate at time of adjustment shall be more or less than $18.599 per hour, the Basic Rate(s) shall be increased or decreased by adding to or subtracting from the Basic Rate(s) the per tire mile factor, multiplied by the change in the average hourly wage rate. The per tire mile factor shall be determined by dividing the following by the preceding six-month average mileage of tires permanently removed from service from those vehicles. 15.50-A 15.50-B In the event insufficient tires are permanently removed from service to establish such actual average, the per tire mile factor shall be determined by dividing by the following: 70,000-A 55,000-B The average hourly wage rate shall be the annual average hourly rate of factory employees in the Tire & Tube Division of Goodyear's factories, including all applicable public or private employee benefits. 15. BONUS ACCOUNTINGS On November 1, 1988, and at the end of each succeeding six-month period, provided Operator is not in breach of this Agreement, bonus accountings on Goodyear tires shall be made as follows: -6- 710-1 (11/86) lm/4/24-7 Should the average mileage delivered by all other tires furnished, which have been permanently removed from service during the six-month period immediately preceding accounting date, exceed 70,000 miles Group A (Non-ADB) or 55,000 miles Group B (ADB) for nonrecapped tires or 35,000 miles Group A or 28,000 miles Group B for recapped tires, then, with respect to any tires permanently removed from service, Goodyear shall issue a credit memorandum to Operator in an amount equal to 50% of the current rate per tire mile, less service (on a per wheel basis) , for all miles run in excess of the above mileage requirements. Tires removed from service under Articles 6, 11, or 12 shall not be included in such accountings or computations. 16. TERM OF AGREEMENT AND DISPOSITION OF TIRES AT TERMINATION This Agreement shall become effective on the 1 day of May, 1988, and terminate on the 30 day of April, 1989; subject, however, to automatic renewal for four (4) additional one (1) -year periods, unless thirty (30) days prior to commencement of either such one (1) -year renewal period either party notifies the other by mail of their intention to terminate this agreement. At such termination date, unless the parties enter into a new mileage Agreement to become immediately effective, Operator will, within 30 days after submission of statement by Goodyear, pay for the unused mileage in each remaining tire and tube furnished for service at prices to be computed as set forth in Article 11 plus the amount of any tax or excise applicable to such sale. Title to all tires and tubes shall remain with Goodyear until all such statements and billings have been paid in full, at which time Operator will acquire each such used tire as is, and Goodyear makes no warranties as to the condition or fitness for continued use of such tires. 17. MODIFICATION OF AGREEMENT This Agreement cannot be altered or modified in any respect unless by written consent of duly authorized representatives of both parties or by special written document signed in like manner. 18. UNIFORM COMMERCIAL CODE FINANCING STATEMENTS Operator will, upon request, sign such financing statements or continuation statements as may be necessary or desirable to protect Goodyear's interest in the tires leased under this Agreement. The undersigned parties have caused this Agreement to be signed in duplicate. WITNESS: CITY OF 5SHROSH A MUNI PAL CO' ORATION M k 'gar' k ' *'. l BY /`� � /' / I 0 * om'' y 'anage Clerk J(l 4 THE GOODYEAR TIRE & RUBBER COMPANY OSHKOSH WISCONSIN ;..• BY • 2 7I : --- - e Pr-si ent ATTEST / ^ ' l• - istant e• etary s r 710-1 , (11/86) lm/4/24-8 Exhibit "A" To Agreement dated / 4 / / 7, ' d'.e between CITY OF OSHKOSH, A MUNICIPAL CORPORATION, of Oshkosh, Wisconsin, and THE GOODYEAR TIRE & RUBBER COMPANY, of Akron, Ohio. SCHEDULE OF BUSES Number Makes Number of of Tire Size of Buses Buses Model Front Rear Wheels Rate Group A 11 GMC Non-ADB 11.50-20 11.50-20 Six A Group B 14 GMC RTS II 11.50-20 11.50-20 Six B 710-1 (11/86) 1m/4/24-9 • OPTION This Option shall constitute and become a part of the Memorandum of Agreement dated 10e,/ 7, i 9a7e' , by and between CITY OF OSHKOSH, A MUNICIPAL CORPORATION, of Oshkosh, Wisconsin ("Operator") and THE GOODYEAR TIRE & RUBBER COMPANY ("Goodyear") , as such Memorandum of Agreement may have been further amended or extended from time to time. 1. Notwithstanding any provision to the contrary set forth in said Memorandum of Agreement, as extended and amended, Goodyear hereby grants to Operator the following option. (a) Upon the expiration of the term of the Memorandum of Agreement, as extended and amended, and only in the event Operator wishes to change supplier, Operator has the right to further extend said Memorandum of Agreement and continue to use all tires furnished by Goodyear under such Agreements in Operator's possession on the expiration date for a period of 36 months from said expiration date. (b) All terms, conditions and provisions of said Memorandum of Agreement, as previously amended and extended, shall remain in full force and effect during said 36-month period, except that Goodyear shall be relieved of any requirement to furnish Operator with tires, tubes, flaps, or repair material during said 36-month period unless requested by Operator and agreed to by Goodyear. (c) The rate or rates per tire mile in effect during such 36-month period shall be the rate or rates in effect for the six-month period immediately preceding the commencement date of such 36-month period. (d) It is understood that Operator shall continuously use such tires insofar as practicable on its highest mileage runs until such tires are rendered permanently unfit for service during said 36-month period. (e) Upon the expiration of said 36-month period, Operator shall pay for any then unused mileage remaining in such tires (tires supplied by Goodyear pursuant to the Memorandum of Agreement) at the rate set forth in Paragraph 1 (c) above. Operator will acquire each such used tire as is, and Goodyear makes no warranties as to the condition or fitness for continued use of such tires. The amount of the unused mileage shall be determined by subtracting from the average mileage secured from similar tires (nonrecapped or recapped, as the case may be) normally and permanently removed from service during the six-month period immediately preceding the expiration of the 36-month period, the mileage run by the particular tire prior to the expiration date of the 36-month period. 710-1 (11/87) lm/4/24-10 2. The option granted herein is exercisable by Operator upon thirty (30) days' notice prior to the expiration date of the term of the Memorandum of Agreement, as extended and amended. The Option does not apply if termination occurs prior to date(s) set forth in Article 16 of this Memorandum of Agreement. Such notice of Operator's exercise of this option must be in writing and sent, certified mail, to: The Goodyear Tire & Rubber Company 1144 East Market Street Akron, Ohio 44316-0001 Attn: Manager, Mileage Sales IN WITNESS WHEREOF, Goodyear has caused these presents to be signed by its duly authorized representatives on the ;3 day of 19 gY although it is mutually agreed that this option shall be of ctive as of the effective date of any current supplement, amendment, or extension between these parties. THE GOODYEAR TIRE & RUBBER COMPANY '.� BY . '2/� 7_ V '°!'Pres dent ATTEST ' "`!��..��►► s istant Se.r ary 710-i (11/86) lm/4/24-1 y -- f MEMORANDUM OF AGREEMENT MEMORANDUM OF AGREEMENT made and entered into at Akron, Ohio this day of ,-; / 1988, by and between CITY OF OSHKOSH, A MUNICIPAL CORPORATI N (WINNEBAGO COUNTY, WISCONSIN) , of Oshkosh, Wisconsin ("Operator,") and THE GOODYEAR TIRE & RUBBER COMPANY, a corporation of Akron, Ohio, ("Goodyear") . 1. Goodyear will furnish Operator tires for use on buses for the remuneration and under the terms and conditions set forth below; except that Operator may use separate and apart from this agreement, until unfit for further service, tires in Operator's possession when this agreement becomes effective and not furnished by Goodyear under any similar mileage contract previously in effect between these parties. It is understood that a tire means a casing, tube and flap for a tube type tire, and a casing only for a tubeless tire; and a bus means any vehicle of seven or more passenger carrying capacity, designed for operation on pneumatic tires and used publicly for the transportation of passengers. The number of tires to be furnished pursuant to this Agreement shall be sufficient to keep all buses fully equipped and to provide a reserve supply to be mounted on rims and kept in Operator's garage for use in case of emergency. Buses operating under this agreement shall be equipped with the sizes and types of rims of sufficient strength to permit inflation necessary for the load carrying capacity required and spaced to conform to the approved standards of The Tire & Rim Association of America, Inc. Operator agrees to use exclusively tires furnished by Goodyear on buses operated by Operator in Oshkosh, Wisconsin, and the vicinity; except that Operator may utilize up to 5% of its fleet, for test purposes, on tires of other manufacturers. Operator will not transfer, sublet, or lend the tires furnished by Goodyear, or permit the tires to be used by anyone other than Operator, without the prior written consent of Goodyear. 2. BUS MILEAGE REPORTS AND TIRE RECORDS Operator shall keep an accurate record of the number of miles run by each bus during the term of this agreement and render to Goodyear a report of such mileage on each bus prior to the 15th day of the month following the month the miles were run. -1- 710-1 (11/86) lm/4/24-2 The number of miles run by each bus shall be determined either by means of an instrument which will accurately record mileage being run on each bus, or by multiplying the number of trips of each bus by the number of miles over the route it is driven and adding all miscellaneous mileage that may be run to and from the routes, such as in testing buses and instructing drivers. If the latter method is used, Operator shall furnish Goodyear a schedule of the established routes covered by its buses and shall advise Goodyear of any changes in such routes or any additional routes covered. The recording instruments and/or mileage records referred to shall be open at all times for inspection by Goodyear's representatives. Operator agrees to supply Goodyear on a weekly basis all information on tire changes and vehicle and/or spare stock tire inventory requested to enable Goodyear to maintain any record of individual tire mileage and tire location kept by Goodyear. 3. PAYMENT Operator shall pay Goodyear on or before the twenty-fifth of each month for the mileage run on the tires furnished during the month immediately preceding, or for tires invoiced in accordance with Articles 11 and 16, at the effective rate per tire mile for vehicles as shown in the schedule attached to this agreement, marked Exhibit "A". A separate rate and bonus point shall apply to any other make/model buses not shown on Exhibit "A" placed in operation by Operator during the term of this agreement or one requiring a different size and/or construction type of tire. Operator is required to supply a financial statement to Goodyear on an annual basis at Operator's fiscal year end. 4. ADDITIONAL BUSES If Operator shall acquire by purchase or otherwise additional buses, Operator agrees to acquire such buses less tires giving Goodyear ample notice of such acquisition, and further agrees to arrange to have such buses equipped with Goodyear tires of sufficient carrying capacity to conform to the approved standards of The Tire & Rim Association of America, Inc. Upon delivery of the tires by Goodyear to the OE Manufacturer, refurbisher, or other outside source designated by Operator, the Operator agrees to assume responsibility for such consigned tires in accordance with all terms of this agreement. If such buses equipped with tires furnished by Goodyear shall be driven overland during delivery, Goodyear shall receive payment at the rate specified for use of the tires in accordance with Articles 3, 11 and 12. 5. TITLE TO TIRES AND LIENS ON BUSES Title to all tires furnished shall remain at all times in Goodyear or its assignees, and upon purchase by Operator in accordance with Article 16 shall continue to remain in Goodyear until it shall have received full payment of all sums owing to it by Operator under the terms of this Agreement. Operator will hold Goodyear harmless against any claim on Goodyear's tires made by any holder of a lien on any buses on which Operator uses such tires. Operator agrees to keep Goodyear advised concerning any of such liens and will give Goodyear any and all information which Goodyear may request. -2- 710-1 (11/86) lm/4/24-3 6. POSSESSION AND CANCELLATION p ANCELLATION Operator breach the terms non-payment of this Agreement through non-payment,for the benefit at termination Payment, miles run, of creditors impaired credit standing, ' °r is placed in receivership non or erroneous miles each or all if the above reporting th of under er option, conditions, adjudicated bankrupt, then,Goodyear shall are shipping tires, take possession to any other rights have the right, breapplied on Possession of g and remedies, to d Operator les, without inventory, whether of trespass,or they perator for being deemed not the Agreement in accordance with Article removing tires and/or to trespass, and Article 16, terminate this Should Goodyear exercise Should Goodyear any any of the above op relieved shall not y further obligation Goodyear relieve Operator under this Agreement.Y shall be above the shall furnished or Operator from his obligation pay Hor ,the of breach, from his gation to the Operator specifically for all pay f°r the use for and pay any Pecifically a rees damages caused by incurred by y and all attorney fees, that is and other responsible e y Goodyear in collecting fees, court owed and athrr enforcing any other right g amounts expenses ght under this °Wed by Operator or Failure Agreement, in on the part of Goodyear Failure upon default of Operator to exercise a waiver Goodyear by 0 erator any or all of the above a upon Good ear f its right a toh exercise oan o shall not an subsequent default by y or all of the above Y Operator, above 7. TAXES I ran dition to the effective or at Goodyear's option by mileage rate the p g Operator, or at pay Goodyear y way of increase of the effective mileage ilea to time Y an amount to compensate for the miles e Excise Tax under the U.S. urrent Manufacturers' Excise business, S Revenue Act of 1932,excise, use, processing as amended goods sold or service i rendered, g or similar tax and for any or whenever any , or upon the manufacture, upon the have the effect directly ecise, levy, law, sale tj or governmental regulation manufacture, or indirectly of increasing gst of on shall munufa ure,exele or delivery of such g the cost to exemption certificates and will be r exempt e Opal taxes is to covered. The Operator will be responsible lfor all cover, . The Ope aeon wel lbsten from all taxes Bailee, g for taxation in Property taxes on the its own name as 8. DAMAGE TO PERSONS OR PROPERTY Operator will indemnify and hold Goodyear Operator or causes of action for Y harmless against action possession of any damage or injury all claims, action, y tires furnished hereunder, except out any claims, use of or causes of action arising hereunder, except for an workmanship of any g solely out of Y claima, workmanship y tire manufactured and furnished a in material this In no event shall Goodyear be by Goodyear incidental or consequential damages. to Operator under this harmless and indemnify amp es• P hold Goodyear any Operator, Goodyear from Operator clad hold Goodyear its employees or third lawsuits, claims Operator or its employees employees third parties arising or damages by service equipment supplied°ut of the use by q pment supplied by Goodyear. -3- 710-1 (9/87) lm/4/24-4 9. CONTINGENCIES Goodyear shall be excused from deliveries or delay in deliveries if such failure to deliver or delay shall be caused by war, strikes, lockouts, fires, interruptions of transportation facilities, accidents, inability to obtain merchandise, shortage of energy source or raw material, or other similar causes beyond Goodyear's control. This agreement is expressly subject to applicable restrictions imposed by any Federal agency or by any other governmental authority. 10. SERVICE Operator agrees to apply to, remove from, and remount on rims or wheels tires furnished and to perform all other tire service, including regrooving and repair of flat tires, as required by Goodyear to keep them in proper operating condition. Goodyear will provide necessary repair materials and valve hardware. Operator will install and maintain in its garage suitable facilities for the inflation of tires and will keep said tires inflated to conform to the approved standards of the The Tire & Rim Association of America, Inc. Operator will determine at all times when tires are to be removed from vehicles. Goodyear shall have the right to make the determination as to the fitness for return to service of a particular tire or tires provided, however, Operator shall not be obliged to use tires which, because of their condition, interfere unreasonably with the use and operation of buses. All tires determined by Goodyear to be permanently unfit for further service shall be returned to Goodyear promptly by the Operator. 11. USE, CARE AND STORAGE OF TIRES Operator agrees to provide a safe and suitable place in an enclosed building for the storage of spare tires and tires unfit for further service so that such tires shall not be subject to damage by the elements; to either keep each bus equipped with at least one properly inflated spare tire or provide adequate road service for its fleet; and to pay Goodyear the amount of any damage or loss resulting from accident, fire, adverse mechanical conditions, improper or negligent use, loss, theft, or fraudulent conversion of said tires, or from the operation of a bus with an underinflated or flat tire. The value of tires for the purpose of determining the amount of any damage or loss under this Article 11 shall be determined by subtracting from the higher amount of either (a) net average mileage secured from similar tires (nonretreaded or retreaded, as the case may be) normally and permanently removed from service during the past twelve months or (b) the applicable current minimum mileage for bonus qualification for nonretreaded or retreaded tires, the mileage run by the particular tire prior to such damage or loss and multiplying the difference, representing unused mileage on the tire by the tire rate in effect. Payment for extra tubes and flaps shall be made at Goodyear's current printed list price, less 50%. -4- 710-1 (11/86) lm/4/24-5 12. SALE OR DISPOSITION OF BUSES If Operator sells or in any manner disposes of any buses, which shall have been equipped with tires supplied under this agreement, or if for any reason Operator shall discontinue its business, or discontinue the use of any such buses, Operator shall purchase the unused mileage in each tire (including spares) at prices to be computed as set forth in Article 11, plus the amount of any tax or excise applicable to such sale. 13. LEASED BUSES Operator represents and warrants that it owns outright or has legal possession of all buses comprising the fleet operated by it. If during the term of this Agreement, including any amendments and extensions, Operator acquires the right to operate any buses not owned by it, pursuant to a rental or other arrangement with the owner of such buses (called "Leased Buses") , Operator agrees (a) to notify Goodyear of the existence and details of such arrangement, (b) that all Leased Buses will be furnished to Operator by the owner without tires so that they may be operated by Operator equipped with tires furnished by Goodyear to be supplied under this Agreement, and (c) to obtain from the owner an agreement acceptable to and for the benefit of Goodyear, whereby the owner acknowledges Goodyear's ownership and right to possession of all tires supplied by it and waives any and all rights by virtue of their use on Leased Buses or otherwise. Contingent upon obtaining such agreement from the owner of Leased Buses, they shall be subject to all the terms and conditions of this Agreement to the same extent as buses owned by Operator. In case Operator surrenders or otherwise loses possession of any of the Leased Buses equipped with tires supplied by Goodyear, Operator shall purchase each tire (including spares) as provided with respect to buses sold by Operator. The term "Leased Buses" shall not apply to any bus rented or borrowed for temporary use for a period not to exceed 120 days. 14. RATES AND ESCALATION On all mileage run on and after May 1, 1988, and prior to May 1, 1989, the rate(s) per tire mile shall be as follows: $.003906-A (11.50-20 Non-ADB) $.004817-B (11.50-20 Advance Design Bus) Such tire rate(s) shall be referred to as Basic Rate(s) . On November 1, 1988, the mileage rate shall be reviewed, and should a decrease result from the following computation, the rate shall be decreased accordingly. On May 1, 1989, and on the first day of each May and November thereafter during the term of this agreement, the mileage rate effective during the next ensuing six-month period shall be determined by the following computation: -5- 710-1 (11/87) lm/4/24-6 a. The average daily closing spot market price per pound for #1 smoked ribbed rubber sheets, on the Commodity Exchange, Inc. , New York City, shall be determined for the six calendar months immediately preceding the computation date. To determine the percentage of increase or decrease to the Basic Rate(s) , compute the difference between such average and $.54 per pound, then multiply this difference by a factor of .35. b. The average market price per pound of high tenacity nylon tire yarn shall be determined for the six calendar months immediately preceding the computation date. To determine the percentage of increase or decrease to the Basic Rate(s) , compute the difference between such average and $1.72 per pound, then multiply this difference by a factor of .06. c. With respect to any period during which the price for such rubber or nylon tire yarn shall be fixed under order of any governmental agency, such fixed price shall be substituted in the computation or computations for the above prices. d. If the average hourly wage rate at time of adjustment shall be more or less than $18.599 per hour, the Basic Rate(s) shall be increased or decreased by adding to or subtracting from the Basic Rate(s) the per tire mile factor, multiplied by the change in the average hourly wage rate. The per tire mile factor shall be determined by dividing the following by the preceding six-month average mileage of tires permanently removed from service from those vehicles. 15.50-A 15.50-B In the event insufficient tires are permanently removed from service to establish such actual average, the per tire mile factor shall be determined by dividing by the following: 70,000-A 55,000-B The average hourly wage rate shall be the annual average hourly rate of factory employees in the Tire & Tube Division of Goodyear's factories, including all applicable public or private employee benefits. 15. BONUS ACCOUNTINGS On November 1, 1988, and at the end of each succeeding six-month period, provided Operator is not in breach of this Agreement, bonus accountings on Goodyear tires shall be made as follows: -6- • 710-1 (11/86) lm/4/24-7 Should the average mileage delivered by all other tires furnished, which have been permanently removed from service during the six-month period immediately preceding accounting date, exceed 70,000 miles Group A (Non-ADB) or 55,000 miles Group B (ADB) for nonrecapped tires or 35,000 miles Group A or 28,000 miles Group B for recapped tires, then, with respect to any tires permanently removed from service, Goodyear shall issue a credit memorandum to Operator in an amount equal to 50% of the current rate per tire mile, less service (on a per wheel basis) , for all miles run in excess of the above mileage requirements. Tires removed from service under Articles 6, 11, or 12 shall not be included in such accountings or computations. 16. TERM OF AGREEMENT AND DISPOSITION OF TIRES AT TERMINATION This Agreement shall become effective on the 1 day of May, 1988, and terminate on the 30 day of April, 1989; subject, however, to automatic renewal for four (4) additional one (1) -year periods, unless thirty (30) days prior to commencement of either such one (1) -year renewal period either party notifies the other by mail of their intention to terminate this agreement. At such termination date, unless the parties enter into a new mileage Agreement to become immediately effective, Operator will, within 30 days after submission of statement by Goodyear, pay for the unused mileage in each remaining tire and tube furnished for service at prices to be computed as set forth in Article 11 plus the amount of any tax or excise applicable to such sale. Title to all tires and tubes shall remain with Goodyear until all such statements and billings have been paid in full, at which time Operator will acquire each such used tire as is, and Goodyear makes no warranties as to the condition or fitness for continued use of such tires. 17. MODIFICATION OF AGREEMENT This Agreement cannot be altered or modified in any respect unless by written consent of duly authorized representatives of both parties or by special written document signed in like manner. 18. UNIFORM COMMERCIAL CODE FINANCING STATEMENTS Operator will, upon request, sign such financing statements or continuation statements as may be necessary or desirable to protect Goodyear's interest in the tires leased under this Agreement. The undersigned parties have caused this Agreement to be signed in duplicate. WITNESS: CITY 0 OSHKOSH u:. ,.■ A NUN IPAL CORP i TION "47//Zag BY 1 -y i Cler 11111 _111.11MIN i t�'•� 1 THE GOODYEAR TIRE &- UBBER COMPANY r414 1 ITV ATTORN frSHIkOSH,WISCONSIN BY .t }, r....-� t 't`.i 1. �� r���,tt �:-:c ice 'r"si. fez �t;.;� ent ? ! ATTEST (Jr- istant• .r. •ecretary City " 710-1 (11/86) lm/4/24-8 Exhibit "A" To Agreement dated *&,/ 7 /��f between CITY OF OSHKOSH, A MUNICIPAL CORPORATION, of Oshkosh, Wisconsin, and THE GOODYEAR TIRE & RUBBER COMPANY, of Akron, Ohio. SCHEDULE OF BUSES Number Makes Number of of Tire Size of Buses Buses Model Front Rear Wheels Rate Group A 11 GMC Non-ADB 11.50-20 11.50-20 Six A Group B 14 GMC RTS II 11.50-20 11.50-20 Six B 710-1 (11/86) lm/4/24-9 OPTION This Option shall constitute and become a part of the Memorandum of Agreement dated / ,e,/ 7, /913e' , by and between CITY OF OSHKOSH, A MUNICIPAL CORPORATION, of Oshkosh, Wisconsin ("Operator") and THE GOODYEAR TIRE & RUBBER COMPANY ("Goodyear") , as such Memorandum of Agreement may have been further amended or extended from time to time. 1. Notwithstanding any provision to the contrary set forth in said Memorandum of Agreement, as extended and amended, Goodyear hereby grants to Operator the following option. (a) Upon the expiration of the term of the Memorandum of Agreement, as extended and amended, and only in the event Operator wishes to change supplier, Operator has the right to further extend said Memorandum of Agreement and continue to use all tires furnished by Goodyear under such Agreements in Operator's possession on the expiration date for a period of 36 months from said expiration date. (b) All terms, conditions and provisions of said Memorandum of Agreement, as previously amended and extended, shall remain in full force and effect during said 36-month period, except that Goodyear shall be relieved of any requirement to furnish Operator with tires, tubes, flaps, or repair material during said 36-month period unless requested by Operator and agreed to by Goodyear. (c) The rate or rates per tire mile in effect during such 36-month period shall be the rate or rates in effect for the six-month period immediately preceding the commencement date of such 36-month period. (d) It is understood that Operator shall continuously use such tires insofar as practicable on its highest mileage runs until such tires are rendered permanently unfit for service during said 36-month period. (e) Upon the expiration of said 36-month period, Operator shall pay for any then unused mileage remaining in such tires (tires supplied by Goodyear pursuant to the Memorandum of Agreement) at the rate set forth in Paragraph 1 (c) above. Operator will acquire each such used tire as is, and Goodyear makes no warranties as to the condition or fitness for continued use of such tires. The amount of the unused mileage shall be determined by subtracting from the average mileage secured from similar tires (nonrecapped or recapped, as the case may be) normally and permanently removed from service during the six-month period immediately preceding the expiration of the 36-month period, the mileage run by the particular tire prior to the expiration date of the 36-month period. 710-1 (11/87) lm/4/24-10 2. The option granted herein is exercisable by Operator upon thirty (30) days' notice prior to the expiration date of the term of the Memorandum of Agreement, as extended and amended. The Option does not apply if termination occurs prior to date(s) set forth in Article 16 of this Memorandum of Agreement. Such notice of Operator's exercise of this option must be in writing and sent, certified mail, to: The Goodyear Tire & Rubber Company 1144 East Market Street Akron, Ohio 44316-0001 Attn: Manager, Mileage Sales IN WITNESS WHEREOF, Goodyear has caused 9iese presents to be signed by its duly authorized representatives on the' --day of o " , 19 'g, although it is mutually agreed that this option shall be eff&tive as of the effective date of any current supplement, amendment, or extension between these parties. THE GOODYEAR TIRE & RUBBER COMPANY BY /, ,29 (� V e Pre-"den ATTEST - �a� A•.`-�stant e r .ry