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HomeMy WebLinkAboutOrdinance 4326 ORDINANCE NO. 4326 AN ORDINANCE WAIVING THE REQUIREMENTS OF FORMAL COMPETITIVE BIDDING AND APPROVING A BRANDED AVIATION DEALER SALES CONTRACT BETWEEN THE CITY OF FAYETTEVILLE, ARKANSAS AND PHILLIPS 66 COMPANY TO SUPPLY AVIATION GAS AND JET FUEL TO THE FAYETTEVILLE MUNICIPAL AIRPORT (DRAKE FIELD) WITH COSTS TO BE BASED ON ACTUAL FUEL SALES FOR THE NINETY (90) DAY TERM OF THE CONTRACT; AUTHORIZING THE MAYOR TO SIGN SAID CONTRACT; AND DECLARING AN EMERGENCY. WHEREAS, the City of Fayetteville, as owner of the Fayetteville Municipal Airport, owes a duty to ensure the continuous and efficient operation of the airport facilities, and; WHEREAS, on July 23, 2001 the current Fixed Base Operator notified the City that it would cease operations at the airport at midnight July 31, 2001, and; WHEREAS, the Phillips 66 Company was found to be the only fuel provider able to meet the needs of the City upon such short notice, and; WHEREAS, the City Council finds that such circumstances constitute an exceptional situation where competitive bidding is not feasible or practical, and; WHEREAS, the City Council further finds that an emergency exists due to the imminent interruption of fuel sales, and the consequent disruption of general aviation at the Fayetteville Municipal Airport, if said contract were not immediately approved. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1 . That the City Council hereby waives the requirements of formal competitive bidding and approves a Branded Aviation Dealer Sales contract between the City Of Fayetteville, Arkansas and Phillips 66 Company to supply aviation gas and jet fuel to the Fayetteville Municipal Airport (Drake Field) with costs to be based on actual fuel sales for the ninety (90) day term of the contract. Section 2. That the City Council hereby authorizes the Mayor to sign said contract with the Phillips 66 Company. Section 3. Emergency Clause. That the City Council, having found that operations at the Fayetteville Municipal Airport would otherwise be unnecessarily disrupted, hereby Ord . 4326 declares this ordinance to be necessary to preserve the public peace, health, safety and welfare, and because of such, an emergency is hereby declared to exist and this ordinance shall be in full force and effect from the date of its passage and approval. PASSED AND APPROVED this 31st day of July 2001 APPROVED: By: Pam t � i �t o *`� D GOODY, Mayor 4 ' fi S a, WOODRUFF, eifVClerk . , v I NAME OF FILE: Ordinance No. 4326 CROSS REFERENCE: 07/31 /01 Ordinance No. 4326 07/31 /01 Copy of the Budget Adjustment Form Staff Review Form 07/27/01 Memo to Gary Dumas, Utilities Service Director, from Kit Williams, City Attorney, regarding Branded Aviation Dealer Sales/Phillips 66 Contract Copy of Branded Aviation Dealer Sales Contract Staff Review Form 08/01/01 Aviation Refueler Lease Agreement (Phillips 66 Company) 07/24/01 Addendum to Aviation Refueler Lease Agreement NOTES : City of Fayetteville, Arkansas • Budget Adjustment Form . t Budget Year Department: Utilities Services Date Requested Adjustment # 2001 Division: Airport 07/31/2001 Program: FBO Project or Item Requested: Project or Item Deleted: Approval of a budget adjustment establishing a FBO program, None. Additional revenue to offset expenses is being authorizing two FTE positions and recognizing additional recognized for this adjustment. expenses and an associated revenue for the FBO program. Justification of this Increase: Justification of this Decrease: The Current FBO is operated by a private company and they have notified the City of their intent to discontinue FBO operations as of close of business July 31 , 2001 . The City must step in to continue to offer fuel and other FBO services for the airfield tenants. Increase Expense (Decrease Revenue) Account Name Amount Account Number Project Number Salaries & Wages 13 , 273 5550 3955 5100 00 Jet Fuel 45 , 000 5550 3955 5213 02 Avgas Fuel 39 , 525 5550 3955 5213 03 Insurance 101500 5550 3955 5311 00 Equipment Rental 5 , 400 5550 3955 5308 03 Decrease Expense (Increase Revenue) Account Name Amount Account Number Project Number Jet Fuel Revenue 59 , 567 5550 0955 4456 02 Avgas Revenue 54 , 112 5550 0955 4456 01 Approval Signatures Budget Office Use Only Re nested By Date Type: A B C OD E B ge Manager Date � Date of Approval CZ rri De ment D' ector Date Posted to General Ledger 7& i o i Want"24- Services Director ate Posted to Project Accounting Date Entered in Category Log Blue Copy: B: g Research / Yellow Copy: Requester H:IBUDGE7IPROJECTSIOTHERIFBO BA. WK4 Contract 03200 • BRANDED AVIATION DEALER SALES CONTRACT This contract is by and between PHILLIPS 66 COMPANY, a division of Phillips Petroleum Company ("Phillips") and CITY OF FAYETTEVILLE ARKANSAS ("Buyer"). WHEREAS, Phillips refines and markets aviation fuels; and WHEREAS, Phillips is willing to sell to Buyer and Buyer is willing to buy such products for resale, subject to the terms hereof; NOW THEREFORE, in consideration of the mutual promises set out below, Phillips , and Buyer agree as follows: 1 . DEFINITIONS. a. "brand" means any and all trademarks, servicemarks, logotypes, emblems and other commercial symbols. A product is "branded" if a brand is on it or its container or is displayed in association with it. b. "contract year" means a period of 12 months beginning on an anniversary date of this contract. C. "estimated maximum quantities" or "EMQ" means quantities of Products which Buyer and Phillips have initially agreed upon, based on their estimates of anticipated availability of Products from Phillips and upon their estimates of anticipated need for Products by Buyer. The parties stipulate that these estimates are necessary and reasonable in order for Phillips to plan supply operations. d. "imprinter" means a Phillips 66 issued seven monetary digit credit card imprinter together with its numbered imprinter plate. e. "Phillips' sign' means any sign, emblem, decal, graphic representation or other rendition of any Phillips brand. I. "Phillips products" means any petroleum products sold under a Phillips brand. The term includes, without limitation, Products as defined in g. below. g. "Products" means those petroleum products sold by Phillips to Buyer under this contract. 2. TERM. to /31 / Zo0k `C , The term of this contract shall begin on 08/01 /2001 and shall end on A7f3H2992, unless otherwise cancelled by either party giving ninety (90) days advance written notice to the other party. 3. SALE AND PURCHASE. a. Subject to other pertinent provisions of this contract, Phillips shall sell, and Buyer shall purchase, .for each contract year of this contract, the Products and estimated quantities identified on Attachment I, attached hereto and incorporated herein by this reference. Upon thirty days written notice, Buyer shall have the right to request a change in the quantities listed on Attachment I to reflect projected actual requirements. If Buyer requests a change for any month which is greater than 15%, the requested change shall be subject to Phillips' consent. Otherwise, such requested changes shall become effective on the date designated by the Buyer. b. Phillips is obligated, subject to availability of fuels and to the terms, provisions and limitations contained in this contract, to supply Products up to but not in excess of, the estimated maximum quantities specified in Subparagraph 3a. above during the respective month(s) of the term; however, the parties recognize that from time to time Buyer may desire to purchase quantities of Products during a given month in excess of or less than the specified quantities. Buyer shall place orders for Products so as to permit deliveries in substantially equal increments through each month. Should Phillips agree to sell Buyer Products during any particular month in excess of the specified quantities for that month, Phillips may at its discretion reduce the specified or permitted quantities in the ensuing month(s) by an amount equal to the excess sold to Buyer. 4. DELIVERIES AND SHIPMENTS. a. Phillips shall deliver Products to Buyer in no less than transport truck lots at or from supply sources designated by Phillips. Deliveries shall be made during the normal operating hours for each such supply source. Delivery shall be on a point of origin or destination basis at Phillips' option. From time to time Phillips may designate for Buyer: (i) different or additional supply sources; (ii) the types or grades of Products available from each supply source; and (iii) the volume of Products to be supplied from each supply source. b. If deliveries are made at supply sources, Buyer shall be responsible for transportation. All transportation equipment that enters any supply source must meet all standards applicable at that supply source. There shall be no split-loading of Products. Only one grade of Product shall be loaded or transported in any transport truck at any one time. C. If Phillips experiences a reduction or unavailability of any grade or type of Products for any reason not limited to causes beyond Phillips' control, Phillips may, but is not obliged to, designate a temporary alternate source of supply and/or offer Buyer temporary substitute Products. Phillips also may reduce the quantity to be delivered to Buyer to the extent necessary for Phillips to allocate equitably its available Products to Phillips' branded customers (including Buyer) and to locations owned by Phillips, directly or indirectly affected by such reduction or unavailability. If this Paragraph is invoked, this contract shall not be extended, but quantities specified herein shall be adjusted accordingly. No notice is necessary to invoke this Paragraph. d. Buyer elects to determine the quantities of Products delivered by the method checked: _(i) Volumetric measurements of Products as actually loaded and measured at the supply source; or 100 Volumetric measurements as determined immediately above but corrected in volume for temperature to a 60F. basis or such other temperature or temperature-compensated basis as may be established under applicable law, in accordance with applicable ASTM-IP Petroleum Measurement Tables. After the first contract year, the Buyer may upon 30 days written notice to Phillips change the method of measurement once each contract year. 5. CLAIMS. a. Buyer shall give Phillips notice of any claims for defect in quality or shortage in quantity within 24 hours after the relevant Product is delivered. Buyer shall inspect delivered Products and, whenever possible, any equipment used to make the delivery in order to determine the cause of any defects or shortage in time to notify Phillips within the time specified above. Buyer's failure to comply with these requirements shall waive any claims by Buyer against Phillips for defect or shortage. b. If Buyer gives notice of defect in quality, Buyer shall give Phillips the opportunity to test the Product in question. If the Product is found to have been contaminated while in Phillips' custody, Phillips shall pay for such test. If the Product is found to have been contaminated after it has left Phillips' custody, Buyer shall pay for such test. 6. PRICE. a. Buyer shall pay Phillips for Products delivered hereunder at Phillips' established price to branded aviation dealers for the particular Products, effective on the date of shipment. b. If Phillips incurs, pays or collects and remits to any taxing authority any tax (other than a tax on overall net income or on capital employed), license fee, inspection fee, or other charge imposed on or measured by gross receipts from Products sold, or on the production, manufacture, transportation, storage, sale, use, or other handling of Products or any component thereof or on this contract, Phillips shall add such tax, fee or charge to the price paid by Buyer. Phillips' failure to add any such tax, fee or charge to the invoice shall not relieve Buyer of liability therefore. Buyer shall reimburse Phillips for any interest or penalty resulting from incorrect or delinquent certification or reporting made by the Buyer. 7. PAYMENT. a. Buyer shall pay Phillips sums due under this contract in the manner and at the location specified by Phillips. sh w . � b. Phillips mayy exte d credit to Buyer on such terms as Phillips shell specify from time to time, and Buyer shall pay Phillips for Products in accordance with such terms and any other payment terms applicable at the time of delivery. Phillips reserves the right to modify or withdraw such credit terms at any time upon notice to Buyer. — it C. Phillips may assess a delinquency charge on all overdue sums owing to Phillips. Such delinquency charge shall be determined in accordance with applicable law and Phillips' established delinquency charge policy in effect on the date of delivery. If Buyer fails to comply with payment requirements, Phillips may suspend deliveries until Buyer pays all sums due hereunder. 8. STANDARDS. a. In addition to compliance with all safety, environmental, and other pertinent laws and regulations, Buyer shall comply with Phillips' standards at all times. Phillips retains the right to revise such standards at any time and from time to time. Buyer shall have a reasonable time after notice thereof to comply with any such revisions. b. Phillips may enter upon Buyer's premises at any time and from time to time during normal business hours for the purpose of inspecting to verify Buyer's compliance with this Paragraph B. 9. CREDIT CARD CHARGES. . a. Phillips is not obligated to continue in effect any credit card program, but while it does Phillips will accept credit card charges made in accordance with the terms of the Phillips 66 Aviation Credit Card Directory by authorized holders of credit cards approved by Phillips at locations authorized to accept such charges. Phillips may revise any part of its Aviation Credit Card Directory from time to time. The Phillips 66 Aviation Credit Card Directory is incorporated herein by reference, and Buyer's violation of its terms is a breach of this contract which entitles Phillips to charge the invoices involved back to Buyer's account. b. If Buyer's credit card transactions are to be processed electronically in conjuction with the Phillips 66 Credit Card Center in Bartlesville, then Attachment II, providing the terms and conditions pertaining to such electronic processing, is attached hereto and incorporated herein by reference. 10. TRADEMARKS AND BRANDS. a. Phillips hereby permits Buyer to use and display Phillips' brands, in accordance with the terms of this contract. Phillips retains all right, title and interest in Phillips' brands, and in any goodwill associated therewith. Buyer acknowledges that Phillips' brand rights are valuable assets. Buyer shall use and display Phillips' brands solely in the manner which Phillips prescribes or approves. b. Upon termination or non-renewal of this contract, Buyer shall immediately stop using in any manner any Phillips signs or brands. Nothing herein shall be deemed a lease or license by Phillips of its brands. C. Buyer shall protect Phillips' brand rights. (i) Buyer shall not allow at any of its Phillips branded locations any activities or merchandise which are illegal or morally offensive or which otherwise bring Phillips' brand into disrepute. Buyer shall not engage in any other activities, whether similar or dissimilar to those described in the previous sentence, which impair or violate Phillips' brand rights. Iii) Buyer shall not sell or offer for sale any petroleum products which are not Phillips products ("other product") under any Phillips brand or any brand confusingly similar to a Phillips brand or under circumstances which would lead the public to believe such products are Phillips products. Buyer shall not (1 ) mix, blend, or dilute any Phillips product with any other product or with any other Phillips product without Phillips' prior consent, (2) sell or offer any other product as being a Phillips product, or (3) alter, contaminate, adulterate or mislabel any Phillips product in any manner. If Buyer violates any pan of this Paragraph, Phillips may terminate Buyer's right to use or display Phillips' signs or brands and may remove any Phillips signs and imprinters which may be in place. d. If Buyer purchases any petroleum products other than Phillips products, Buyer shall keep such products segregated from Phillips products. Buyer shall transport, store, distribute and sell such other products in such manner as to avoid any misunderstanding by the public that such products might be Phillips products. e. Phillips may at any time alter any Phillips brands. If Phillips discontinues marketing any brands of Products in any area where Buyer markets, Phillips shall be relieved of all obligation to sell or deliver such discontinued brands of Products to Buyer; however, any other brands of Products which replace discontinued brands shall be covered by this contract. I. Phillips, its agents and contractors may enter any location of Buyer in order to interview employees, to inspect, test, sample or do other things permitted under this contract, and to remove Phillips signs and imprinters under Paragraphs 11 and 12, respectively. 11 . SIGNS AND EMBLEMS. a. Subject to Paragraph 10, Buyer may inform the public that Buyer has Phillips branded products for sale. For such purpose, Phillips provides to Buyer Phillips' internally lighted plastic Phillips 66 shield sign(s) . b. Phillips shall, at its expense, furnish, install and remove all signs. Buyer shall, at its expense, provide utilities to the base of each sign and maintain and repair such signs as required by Phillips. In the event maintenance and/or repairs to a sign become necessary, Buyer shall perform or cause to be performed such maintenance/repairs within 30 days of the occurrence of the need therefore. C. Buyer shall use such signs solely for the purpose of informing the public that Phillips products are for sale. Buyer shall not sell, encumber, damage or dispose of any Phillips sign. Buyer shall be responsible for . loss or damage to Phillips' signs, normal weer and tear excepted. d. Either party may terminate this contract with respect to Phillips' signs either totally or partially, at any time without cause by giving the other perry at least 30 days prior written notice, and Phillips may remove any signs. e. Buyer may not place any Phillips sign at any location without Phillips' prior consent. 12. IMPRINTERS. a. Phillips shall at its expense provide imprinter(s) to Buyer for the purpose of accepting credit card purchases on credit cards approved for such use by Phillips in accordance with the provisions of Paragraph 9 above. b. Buyer shall not sell, encumber, damage or dispose of any Phillips imprinter. Buyer shall be responsible for loss or damage to Phillips' imprinter(s), normal wear and tear excepted. C. Phillips may replace imprinter(s) fromtimeto time with equipment of like quality. d. Either party may terminate this contract with respect to Phillips' imprinter(s), either totally or partially, at any time without cause by giving the other party at least 30 days prior written notice. Upon termination, Buyer shall return imprinterls) to the location designated by Phillips. e. Buyer shall not place any Phillips imprinter at any location without Phillips' prior consent. 13. QUALITY ASSURANCE OBLIGATIONS. a. Buyer. shall maintain the quality and purity of ail Products sold to it hereunder. Without limiting the generality of the foregoing, Buyer shall check petroleum product tanks for water contamination daily. If Buyer finds any contamination, water or otherwise, Buyer shall immediately take corrective action and shall notify Phillips. b. All motor fuel sold hereunder to Buyer is for use by Buyer in its own vehicles and not for resale. Buyer is placed on notice that Phillips does not market a motor fuel suitable for aviation use. 14. STORAGE TANKS, PIPES AND DISPENSERS. a. Buyer acknowledges that spills, overfills, release or escape of any Products from storage tanks, pipes or dispensers can constitute a serious environmental and safety hazard. Buyer shall observe all laws and regulations pertaining to handling, storage and distribution of Products and to the release or escape thereof. Without limiting the generality of the preceding sentence, Buyer shall observe the laws and regulations pertaining to inventory control, to leak testing and detection, to inspection, certification, and notification of compliance with applicable local, state, and federal laws, regulations, and standards for underground storage tanks, pipes and appurtenances, to construction, installation, operation, maintenance, repair, replacement and closure of tanks, pipes and dispensers, to actions correcting and remediating the escape of Products, and to financial responsibility. b. Buyer shall defend, Indemnify and save Phillips harmless from and against any and all taxes, fees. fines, penalties, liabilities, claims, judgments, costs and expenses (including, without limitation, court costs and attorneys' fees) for any escape of Products purchased by Buyer, unless such escape is proximately caused in part by the negligence of Phillips, or arising out of any violation of the applicable local, state, and federal laws, regulations, and standards for construction, installation, Inspection, certification, and notification of compliance with respect to underground storage tanks, pipes, and appurtenances. 15. FORCE MAJEURE. a. If either party is prevented from performing any of its obligations under this contract by Force Majeure, such obligations shall be suspended during the period of Force Majeure, and such party shall incur iv no liability for not performing such obligations. Force Majeure does not extend the term of this contract. b. 'Force Majeure' shall include all causes beyond the control of the prevented party, including, without limitation, acts of God, war, orders or requests of government, strike, lockout, labor disputes or shortages, failures, delays or unavailability of transportation, or reduction or unavailability of Products at Buyer's designated supply source or at Phillips' supply source, or reduction or unavailability of any product or material necessary to make Products. 16. RELATIONSHIP OF PARTIES. This is a sales contract. Neither Buyer nor Buyer's employees are joint venturers, partners, agents or employees of Phillips. Neither Phillips nor Buyer is authorized to represent, obligate or bind the other. Nothing in this contract shall be construed as giving Phillips any right to exercise any control over Buyer's operations or over the manner and method by which Buyer conducts its operations. 17. INDEMNIFICATION. Phillips shall not be liable for any acts or omissions of Buyer, its employees or agents. Buyer shall defend, indemnify and save Phillips, Its affiliated companies and their agents and employees harmless from and against any and all liabilities, claims, judgments, costs and expenses (including, without limitation, court costs and attorneys' fees) for Injury to or death of any person (including, without limitation, Buyer or Buyer's employees, agents, or customers), or for damage to or destruction of any property, where such injury, death, damage or destruction directly or indirectly arises out of this contract, Buyer's business, the storage, handling, transportation, sale or use of any Products purchased hereunder, or the use of signs furnished hereunder. The foregoing obligation to defend, indemnify and save Phillips. Its affiliated companies and their employees and agents harmless shall not apply to incidents proximately caused by the sole negligence of Phillips, its affiliated companies, their employees or agents, nor to Incidents proximately caused in part by the negligence of Phillips, its affiliated companies, their agents or employees. 1B. COMPLIANCE WITH LAW. Buyer shall observe all applicable laws, regulations and orders and shell Indemnify Phillips for any fine, penalty or liabilities, and for any costs related thereto, including, without limitation, court costs and attorneys' fees, arising out of any failure by Buyer to observe any law, regulation or order. 19. APPLICABLE LAW AND CONFLICT RESOLUTION. �' r KQhs4 sl . C a. THE INTERPRETATION AND PERFORMANCE OF THIS NTRACT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWSOF EXCEPT FOR ANY RULE OF elk A6P9MON. LAW WHICH WOULD MAKE THE LAW OF ANY OTHER JURISDICTION APPLICABLE. A r-%'at\scl s o , me u � on • �D C . 20. ASSIGNMENTS. This contract shall inure to the benefit of and shall bind the parties and their respective successors and assigns. Phillips has contracted with Buyer in reliance on the personal skills and qualifications of Buyer or of Buyer's principal owners or officers. Because of the personal nature of this contract, e. if Buyer is a sole proprietor, Buyer shall not assign this contract in whole or in part; b. if Buyer is a partnership, no sale or other transfer of any partner's interest shall be made; or C. if Buyer is a corporation or joint stock company, no sale or other transfer of more than 40% of any class of shares shall be made, without the prior consent of Phillips. Any assignment, sale or transfer without such consent is a breech of this contract. 21 . RECORDS AND AUDIT. Both parties hereto shall maintain a true and correct set of records pertaining to all activities relating to their performance of this contract and all transactions related thereto. The parties further agree to retain all such records for a period of not less than two years after completion of performance hereunder. Any representative(s) authorized by a party may audit any and all such records of the other party at any time(s) during the term of this contract and during the two-year period after completion of performance of this contract. 22. MISCELLANEOUS. a. No waiver by either party of any default by the other party shall be construed as a waiver of any future defaults. b. The headings used in this contract are for convenience only and shall not be used for the purpose of construction or interpretation. When the context so requires, the singular shall include the plural and vice versa. C. This contract contains the entire agreement between the parties and terminates and supersedes all previous communications, representations and contracts (including any prior Branded Aviation oealer Sales Contract) between the parties with respect to the subject matter hereof. This contract does not extinguish any accrued rights under prior contracts. No change in or addition to this contract shall be effective unless in writing and signed by both parties. d. This contract shall not be binding on Phillips until Phillips signs it, and prior sales shall not be construed as a waiver by Phillips of this requirement. After Phillips has signed this contract, any prior sales not otherwise covered by contract shall be deemed to have been made under this contract. e. Wherever this contract grants either party a specific right or remedy with respect to a breach of contract or wrong of the other party, such right or remedy is in addition to any other legal or contractual rights or remedies of the party enjoying the right or remedy. I. Whenever this contract provides that a party shall or may do anything, it shall be at the party's own expense unless otherwise provided. g. If any provision of this contract is contrary to law, such provision shall be deemed either to be severable and stricken from the contract or modified so as to conform to law. If any law requires that this contract include any specific provisions, this contract shall be deemed to include such provisions. Other provisions of this contract shall be given effect to the extent possible. Any provision stricken, modified or added under this Paragraph shall remain stricken or added only so long as the law requiring it remains effective. 23. NOTICES. All notices, consents and other communications (collectively called "notices") provided for in this contract shall be in writing, except, that. notices given under Paragraphs 5, 11 and 12 shall, where practicable, be given orally and confirmed in writing. Written notices shall be properly given if delivered personally, or sent by commercial courier or United States mail, charges and postage prepaid, properly addressed to the appropriate party at the respective address listed below. The date of service of a notice served by mail shall . be deemed to be the date on which the notice is deposited in the United States mail. Phillips: Address: 607 Adams Building - - Bartlesville, OK 74004 Phone No.: 918-661 -6423 Fax No.: 918-661 -1114 Buyer: Address: 4500 S SCHOOL AVE STE F FAYETTEVILLE, AR 72701 Phone No.: 501 -718-7640 Fax No.: 1 Executed this o day of V ` IA oin / PHILLIPS 66 COMPANY, CITY OF FAYETTEVILLE ARKANSAS a division of Phillips Petroleum Company By BY Witness: Witness: A • BRANDED AVIATION DEALER SALES CONTRACT ATTACHMENT II Phillips and Buyer agree that for any of the Buyer's Phillips branded locations, Buyer may secure certain transaction processing services provided pursuant to an agreement ("Agreement") between Phillips and Sears Payment Systems, Inc. ("SPS') or SPS's assignees or successors. The Agreement is subject to cancellation or amendment by the parties to it. The services available to Buyer under the Agreement and Buyer's obligations with respect to transaction processing are set out in the Transaction Processing Policy ('Policy"), which is incorporated herein by reference. Phillips may revise any part of the Policy from time to time. In order to secure transaction processing services for a particular Phillips branded location, Buyer shall send Phillips a completed Request for Automation Services or successor form identifying such location. If such location is owned by a reseller, Buyer shall by contract make such reseller subject to the Policy and to the terms and provisions of this Attachment II with respect to breach of Policy and termination of services. If Buyer violates any terms of the Policy, such violation shall constitute a breach of the contract to which this exhibit is attached. Such breach shall entitle Phillips to charge any invoices involved back to Buyer's account. Phillips is not obligated to continue in effect the Agreement or Policy or any services thereunder. When possible, however, Phillips shall give Buyer at least 30 days prior notice before terminating the Agreement or Policy or services. Buyer may terminate such services by giving Phillips at least 30 days notice. Unless earlier terminated by either Phillips or Buyer, services hereunder shall in any event terminate when the contract to which this Attachment 11 is attached is terminated or not renewed. If any particular location receiving transaction processing services ceases to be a Phillips branded location, such services shall also cease with respect thereto. Buyer shall defend, indemnify, and save Phillips, its affiliated companies and their agents and employees - harmless from and against any and all liabilities, claims, judgments, costs and expenses (including, without limitation, court costs and attorneys' fees) arising out of Buyer's failure to make available a receipt for the final amount of any transaction to any customer of Buyer or of any of Buyer's resellers, or arising out of approvals or denials of credit to the customers of Buyer or any of Buyer's resellers, sten-if-saelttihbigdgs, e O .0 r FAYETTEVI ELE • THE CITY OF FAYETTEVILLE. ARKANSAS DEPARTMENTAL CORRESPONDENCE (, DAVID WHITAKER, ASST. CITY ATTORNEY LEGAL DEPARTMENT TO: Gary Dumas, Utilities Service Director FROM: Kit Williams, City Attorney 6 -'qt� DATE: July 27, 2001 RE: Branded Aviation Dealer Sales/Phillips 66 Contract There appears to be many problems with the Aviation Dealer Sales Contract. Of particular concern to the legal department is: A. #17 Indemnification. I cannot agree to anything after the first sentence. B. #19. I do not know Oklahoma law nor am I licensed to practice in Oklahoma. This is Arkansas and our law should control this contract. C. Attachment II. We cannot be liable for or indemnify Phillips for its own negligence. D. Transaction Processing Policy. It looks like an expensive and bad idea. E. Letter of Understanding. We may not want to carry the liability insurance coverage required by this. What are the costs?