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ARTICLE 5 TERM OF CONTRACT Section 5.1 Contract Term 5.1.I Tile term of this Contract will begin on July 1, 2003, and will eud on June 30, 2008. Tile Contractor will begin collection of residentiaI solid waste and recyclable materials fi'om residential units as of July 1, 2003. 5.1.2 The contract term may be extended for two additional five-year periods, provided all terms and conditions remain in full force and effect except roi' tbe Coutract being extended, and a modification to rates as specified iu Section 3.3 of this Contract. Each of these options, if exercised, is to be executed in the form ora letter agreemeut Ilo sooner than 180 days prior to expiration of the Contract, nor later than the final day of the contract period. These options require tile mutuaI agreement of the City and the Contractor. Refusal by either party to exercise an option to renew will cause the Contract to expire on the origiual or mutually agreed upon date. The total period of the Contract, including the extension as a result of exercising these options, will not exceed a maximum combined period of 15 years. Section 5.2 Breach/Default Failure by either party to this Contract to perform any of its provisions will constitute a breach of Contract, in which case, either party may require corrective action within ten days from date of receipt of written notice citing the exact nature of such breach. Failum to take corrective action or failure to provide a satisfactory written reply excusing such failure within the prescribed ten days will constitute a default of Contract. The defaulting party will be giveo a 20 day period within which to show cause why the Contract should not be terminated for default. The City CounciI may take whatever action as its interest may appear, resulting from such notice. The City reserves the right to enforce the performance of the Contract ill any manuer prescribed by law in the event of breach or default of the Cootract, and may contract with another party with or without solicitation of proposals or fi~rtber notificatiou to the Contractor. At a minimum, the Contractor will be required to pay any difference in the cost of securing the services covered by this Contract, or compensate for any loss or damage to the City derived hereunder should it become necessary to contract with anotber source because of this defanlt, plus reasonable administrative costs and attorney's fees. In the event of termination, tile City, its agents or representatives, will uot be liable for loss of any profits anticipated to be made tinder this Contract. Section 5.3 Termination By City The City reserves the right to terminate tiffs Contract upou 30 days written notice for any reason deemed by City Council to serve tile public interest, or resulting fi'om any governmental law, ordinance, regulations, or court order. No terminatioo for coovenience will be taken with the intention of awarding the same or a similar Contract to another source, lu the event of such termination the City wilI pay the Coutractor those costs directly attributable to work done or supplies obtained in preparation for completion or compliance with tbis Contract prior to termination. Provided, however, that ilo costs will be paid which are recoverable in the normal course of doing business in wbicb the Contractor is engaged, or costs which can be mitigated through the sale of supplies or inventories. In the event City pays for the cost of sopplies or materials obtaioed for use under this Contract, these supplies or materials will become tile property of City and will be delivered to tile City at the place designated by the Director. The City will not be liable for loss of any profits anticipated to be made under this Contract. 15