10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004

Commission File Number: 1-1927

THE GOODYEAR TIRE & RUBBER COMPANY

(Exact name of Registrant as specified in its charter)

Ohio (State or other jurisdiction of incorporation or organization)	34-0253240 (I.R.S. Employer Identification No.)
1144 East Market Street, Akron, Ohio (Address of principal executive offices)	44316-0001 (Zip Code)

Registrant’s telephone number, including area code: (330) 796-2121

Securities registered pursuant to Section 12(b) of the Act:

Title Of Each Class	Name Of Each Exchange On Which Registered
Common Stock, Without Par Value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

      Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes þ                         No o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein or in the definitive proxy statement incorporated by reference in Part III of this Form 10-K. þ

      Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes þ                         No o

      The aggregate market value of the voting stock held by nonaffiliates of the Registrant, computed by reference to the last sales price of such stock as of the closing of trading on June 30, 2004, was approximately $1,592,356,000.

Shares of Common Stock, Without Par Value, outstanding at March 4, 2005:

175,780,313

DOCUMENTS INCORPORATED BY REFERENCE:

      Portions of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held on April 26, 2005 are incorporated by reference in Part III.

THE GOODYEAR TIRE & RUBBER COMPANY

Annual Report on Form 10-K

For the Fiscal Year Ended December 31, 2004

Table of Contents

Item			Page
Number			Number
PART I
	1	Business		1
	2	Properties		14
	3	Legal Proceedings		15
	4	Submission of Matters to a Vote of Security Holders		19
PART II
	5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		23
	6	Selected Financial Data		25
	7	Management’s Discussion and Analysis of Financial Condition and Results of Operations		30
	7A	Quantitative and Qualitative Disclosures About Market Risk		66
	8	Financial Statements and Supplementary Data		69
	9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		155
	9A	Controls and Procedures		155
	9B	Other Information		160
PART III
	10	Directors and Executive Officers of the Registrant		161
	11	Executive Compensation		161
	12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		161
	13	Certain Relationships and Related Transactions		161
	14	Principal Accountant Fees and Services		161
PART IV
	15	Exhibits and Financial Statement Schedules		162
Signatures				163
Index to Financial Statement Schedules				FS-1
Index of Exhibits				X-1
EX-4.1 General Master Purchase Agreement
EX-4.2 Master Subordinated Deposit Agreement
EX-4.3 Master Complementary Deposit Agreement
EX-10.1 Amendment #2 to Umbrella Agreement
EX-10.2 Amend #1 to Shareholders Agreement for Europe
EX-10.3 Restricted Stock Purchase Agreement
EX-10.4 Schedule of Outside Directors' Annual Compensation
EX-10.5 Schedule of Salary and Bonus for Named Executive Officers
EX-12 Computation of Ratio of Earnings to Fixed Charges
EX-21.1 List of Subsidiaries
EX-23.1 Consent of PriceWaterhouseCoopers LLP
EX-23.2 Consent of KPMG LLP
EX-24.1 Powers of Attorney
EX-31.1 302 Certification of CEO
EX-31.2 302 Certification of CFO
EX-32.1 906 Certification

PART I.

ITEM 1.  BUSINESS.

BUSINESS OF GOODYEAR

The Goodyear Tire & Rubber Company (the “Company”) is an Ohio corporation organized in 1898. Its principal offices are located at 1144 East Market Street, Akron, Ohio 44316-0001. Its telephone number is (330) 796-2121. The terms “Goodyear” and “we,” “us” or “our” wherever used herein refer to the Company together with all of its consolidated domestic and foreign subsidiary companies, unless the context indicates to the contrary.

      We are one of the world’s leading manufacturers of tires and rubber products, engaging in operations in most regions of the world. Our 2004 net sales were $18.4 billion and our net income for 2004 was $114.8 million. Together with our U.S. and international subsidiaries and joint ventures, we develop, manufacture, market and distribute tires for most applications. We also manufacture and market several lines of power transmission belts, hoses and other rubber products for the transportation industry and various industrial and chemical markets, as well as synthetic rubber and rubber-related chemicals for various applications. We are one of the world’s largest operators of commercial truck service and tire retreading centers. In addition, we operate more than 1,700 tire and auto service center outlets where we offer our products for retail sale and provide automotive repair and other services. We manufacture our products in more than 90 facilities in 28 countries, and we have marketing operations in almost every country around the world. We employ over 80,000 associates worldwide.

AVAILABLE INFORMATION

We make available free of charge on our website, http://www.goodyear.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we file or furnish such reports to the Securities and Exchange Commission (the “SEC”). The information on our website is not a part of this Annual Report on Form 10-K.

RECENT DEVELOPMENTS

Refinancing Plans in 2005. On February 23, 2005 we announced that we intend to refinance approximately $3.3 billion of our credit facilities, including:

•  our $1.3 billion asset-based credit facility, due March 31, 2006,

•  our $650 million asset-based term loan, due March 31, 2006,

•  our $680 million deposit funded credit facility, due September 30, 2007, and

•  $650 million in credit facilities for our Goodyear Dunlop Tires Europe B.V. affiliate, due April 30, 2005.

      We expect to replace these facilities with $3.35 billion in new five-year facilities that will be due in 2010 and include:

•  a $1.5 billion asset-based credit facility,

•  a $1.2 billion second lien term loan, and

•  the Euro equivalent of $650 million in credit facilities for Goodyear Dunlop Tires Europe B.V.

      The refinancings are subject to market conditions and the execution of definitive documentation and is expected to close in early April 2005.

Restatement of Financial Statements. On November 5, 2004, we announced that we would file an amended 2003 Form 10-K to include summarized financial information related to certain investments in affiliates. We

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also announced a restatement of our previously reported financial statements to reflect adjustments that reduced net income through all periods up to and including the year ended December 31, 2003 by $7.6 million. The restatement also includes an adjustment to correct a misclassification of approximately $360 million of deferred income tax assets and liabilities in our consolidated balance sheet at December 31, 2003. This adjustment had no effect on net income. These adjustments were identified prior to the filing of, and included in, our Form 10-Q for the quarter ending September 30, 2004, and are included in this 2004 Form 10-K. We intend to file an amended Form 10-K for the year ended December 31, 2003 as expeditiously as possible.

      Subsequent to the filing of the Form 10-Q for the quarter ended September 30, 2004 on November 9, 2004, we identified additional adjustments that resulted in the further restatement of prior-period financial statements. These additional adjustments reduced net income for all periods up to and including the year ended December 31, 2003 by $17.7 million and have been reflected in this 2004 Form 10-K.

      Certain 2004 and 2003 quarterly financial information has also been restated in this Form 10-K to reflect adjustments to our previously reported financial information included in our Form 10-Q filings for the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004. These adjustments included a benefit of $3.0 million to 2004 year-to-date net income included in the Form 10-Q for the quarter ended September 30, 2004. An additional benefit of $2.5 million to 2004 year-to-date net income was identified subsequent to the filing of the third quarter Form 10-Q and is included in this 2004 Form 10-K. We intend to file amended Form 10-Qs for these quarterly periods of 2004 as expeditiously as possible.

      In total, the adjustments included in the Form 10-Q for the quarter ended September 30, 2004 reduced previously-reported net income for all periods through the quarter ended June 30, 2004 by a net amount of $4.6 million. Of this amount, $3.0 million of income related to 2004 and $7.6 million of expense related to prior years. Adjustments first reported in this 2004 Form 10-K resulted in a further reduction of net income for all periods through the quarter ended September 30, 2004 totaling $15.2 million. Of this amount, $2.5 million of income related to 2004 and $17.7 million of expense related to prior years. These adjustments reflected the resolution of the SPT accounting matters we announced on December 30, 2004 and other adjustments that were identified through the implementation of our previously announced measures to improve account reconciliation procedures. For further information, refer to the Note to the Financial Statements No. 2, Restatement, and Supplementary Data (Unaudited).

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New Product Introductions. During 2004, we introduced several new products in our regional tire business units. In North America, the Goodyear Assurance® line of passenger tires was introduced in February. The Assurance® featuring ComforTred Technology^tm is a premium auto tire that promises low-noise and high-comfort. The Assurance® featuring TripleTred Technology^tm features all weather performance through three unique tread zones — Water Zone, Ice Zone and Dry Zone and is intended for broad market appeal. We also launched the Goodyear Fortera SL^tm Edition tire for luxury SUVs. During the year, we introduced three new Dunlop-brand products, the SP Sport Maxx^tm high performance tire, the Direzza DZ101^tm performance tire and the Grandtrek AT20^tm tire for SUVs. We launched two new lines of high performance summer auto tires in Europe: the Goodyear HydraGrip®, developed for rainy and wet weather conditions but also offering excellent dry weather performance, and the Dunlop Sport Maxx^tm, a tire with outstanding dry handling capabilities. Also introduced in Europe were additional sizes of the Goodyear Marathon LHS^tm commercial truck tire, which offers improved payload, fuel consumption, mileage, handling and stability, as well as Fulda Carat Exelero^tm high performance tire. In the Asia/Pacific region, we introduced the Goodyear Eagle F1 GSD3^tm ultra high performance tire in May. The tire offers excellent handling characteristics with low noise. In January 2005, our North American Tire business introduced two new Goodyear tires for SUVs and light trucks: the Fortera® with SilentArmor Technology^tm and the Wrangler® with SilentArmor Technology^tm. Both of these tires offer durability combined with a smooth, quiet ride. Also launched in North America were the Kelly Safari Trex^tm with VersaTred^tm tire for SUVs, the Kelly EVO-Z^tm ultra high performance tire, the Dunlop SP60^tm all-season tire for passenger cars and the Dunlop Grandtrek PT9000^tm for luxury sport trucks and SUVs.

Sale of Assets of North American Farm Tire Business. As part of our continuing effort to divest non-core businesses, on February 28, 2005 we announced that we had entered into an agreement to sell the assets of our North American farm tire business to Titan International, Inc., for approximately $100 million, pending government, regulatory and union approvals. In connection with the transaction, we expect to record approximately $35 to $65 million of non-cash pension and retiree medical costs in the quarter in which the transaction closes. Additional charges also may be incurred in connection with the closing of the transaction. The assets to be sold include inventories and our manufacturing plant, property and equipment in Freeport, Illinois.

Sale of Indonesia Rubber Plantations. In another action as part of our continuing effort to divest non-core businesses, in November 2004 we entered into an agreement to sell our natural rubber plantations in Indonesia for approximately $65 million, pending government approvals. We recorded an after-tax loss of $15.6 million in the fourth quarter of 2004 for the write-down of assets, due primarily to the devaluation of the Indonesian rupiah versus the U.S. dollar over the years we held the investment.

Integration of North American Tire and Chemical Products Business Segments. Although we had previously announced our intention to explore the possible sale of our Chemical Products business segment, on July 21, 2004 we announced our intention to retain this business. Effective January 1, 2005, we integrated Chemical Products into our North American Tire business segment. For further information, refer to the Note to the Financial Statements No. 24, Subsequent Events.

FORWARD-LOOKING INFORMATION — SAFE HARBOR STATEMENT

Certain information set forth herein (other than historical data and information) may constitute forward-looking statements regarding events and trends that may affect our future operating results and financial position. The words “estimate,” “expect,” “intend” and “project,” as well as other words or expressions of similar meaning, are intended to identify forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Annual Report. Such statements are based on current expectations and assumptions, are inherently uncertain, are subject to risks and should be viewed with caution. Actual results and experience may differ materially from the forward-looking statements as a result of many factors, including:

•  we have not yet completed the implementation of our plan to improve our internal controls and, as described in Item 9A of this report, as of December 31, 2004, we had two material weaknesses in our

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	internal controls. If these material weaknesses are not remediated or otherwise mitigated they could result in material misstatements in our financial statements in the future, which would result in additional restatements or impact our ability to timely file our financial statements in the future;
•	pending litigation relating to our restatement could have a material adverse effect on our financial condition;
•	an ongoing SEC investigation regarding our accounting restatement could materially adversely affect us;
•	we have experienced significant losses in 2001, 2002 and 2003. Although we recorded net income in 2004, we cannot provide assurance that we will be able to achieve or sustain future profitability. Our future profitability is dependent upon our ability to continue to successfully implement our turnaround strategy for our North American Tire segment;
•	we face significant global competition, increasingly from lower cost manufacturers, and our market share could decline;
•	our secured credit facilities limit the amount of capital expenditures that we may make;
•	higher raw material and energy costs may materially adversely affect our operating results and financial condition;
•	continued pricing pressures from vehicle manufacturers may materially adversely affect our business;
•	our financial position, results of operations and liquidity could be materially adversely affected if we experience a labor strike, work stoppage or other similar difficulty;
•	a decline in the value of the securities held by our employee benefit plans or a decline in interest rates would increase our pension expense and the underfunded levels of our plans. Termination by the Pension Benefit Guaranty Corporation of any of our U.S. pension plans would further increase our pension expense and could result in additional liens on material amounts of our assets;
•	our long-term ability to meet current obligations and to repay maturing indebtedness, including long-term debt maturing in 2005 and 2006 of approximately $1.01 billion and $1.92 billion, respectively, is dependent on our ability to access capital markets in the future and to improve our operating results;
•	we have a substantial amount of debt, which could restrict our growth, place us at a competitive disadvantage or otherwise materially adversely affect our financial health;
•	any failure to be in compliance with any material provision or covenant of our secured credit facilities and the indenture governing our senior secured notes could have a material adverse effect on our liquidity and our operations;
•	our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly;
•	if healthcare costs continue to escalate, our financial results may be materially adversely affected;
•	we may incur significant costs in connection with product liability and other tort claims;
•	our reserves for product liability and other tort claims and our recorded insurance assets are subject to various uncertainties, the outcome of which may result in our actual costs being significantly higher than the amounts recorded;
•	we may be required to deposit cash collateral to support an appeal bond if we are subject to a significant adverse judgment, which may have a material adverse effect on our liquidity;
•	we are subject to extensive government regulations that may materially adversely affect our ongoing operating results;

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•  potential changes in foreign laws and regulations could prevent repatriation of future earnings to our parent Company;

•  our international operations have certain risks that may materially adversely affect our operating results;

•  the terms and conditions of our global alliance with Sumitomo Rubber Industries, Ltd. (SRI) provide for certain exit rights available to SRI in 2009 or thereafter, upon the occurrence of certain events, which could require us to make a substantial payment to acquire SRI’s interest in certain of our joint venture alliances (which include much of our operations in Europe);

•  we have foreign currency translation and transaction risks that may materially adversely affect our operating results; and

•  if we are unable to attract and retain key personnel, our business could be materially adversely affected.

      It is not possible to foresee or identify all such factors. We will not revise or update any forward-looking statement or disclose any facts, events or circumstances that occur after the date hereof that may affect the accuracy of any forward-looking statement.

DESCRIPTION OF GOODYEAR’S BUSINESS

General Segment Information

Our operating segments are North American Tire; European Union Tire; Eastern Europe, Middle East and Africa Tire (“Eastern Europe Tire”) (formerly known as “Eastern Europe, Africa and Middle East Tire”); Latin American Tire; Asia/ Pacific Tire (formerly known as “Asia Tire”) (collectively, the “Tire Segments”); Engineered Products and Chemical Products.

Financial Information About Our Segments

Financial information related to our operating segments for the three year period ended December 31, 2004 appears in the Note to the Financial Statements No. 18, Business Segments, and is incorporated herein by reference.

General Information Regarding Tire Segments

Our principal business is the development, manufacture, distribution and sale of tires and related products and services worldwide. We manufacture and market numerous lines of rubber tires for:

•  automobiles

•  trucks

•  buses

•  aircraft

•  motorcycles

•  farm implements

•  earthmoving equipment

•  industrial equipment

•  various other applications.

In each case our tires are offered for sale to vehicle manufacturers for mounting as original equipment (“OE”) and in replacement markets worldwide. We manufacture and sell tires under the Goodyear-brand, the Dunlop-brand, the Kelly-brand, the Fulda-brand, the Debica-brand, the Sava-brand and various other Goodyear owned “house” brands, and the private-label brands of certain customers. In certain markets we also:

•  retread truck, aircraft and heavy equipment tires,

•  manufacture and sell tread rubber and other tire retreading materials,

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•  provide automotive repair services and miscellaneous other products and services, and

•  manufacture and sell flaps for truck tires and other types of tires.

The principal products of the Tire Segments are new tires for most applications. Approximately 77.6% of our consolidated sales in 2004 were of new tires, compared to 78.3% in 2003 and 77.5% in 2002. The percentages of each Tire Segment’s sales attributable to new tires during the periods indicated were:

	Year Ended December 31,
Sales of New Tires By	2004			2003			2002
North American Tire		87.9	%		86.3	%		86.2	%
European Union Tire		87.4			89.2			85.6
Eastern Europe Tire		94.6			94.1			91.8
Latin American Tire		92.5			91.1			90.6
Asia/ Pacific Tire		82.2			97.7			97.2

Each Tire Segment exports tires to other Tire Segments. The financial results of each Tire Segment exclude sales of tires exported to other Tire Segments, but include operating income derived from such transactions. In addition, each Tire Segment imports tires from other Tire Segments. The financial results of each Tire Segment include sales and operating income derived from the sale of tires imported from other Tire Segments. Sales to unaffiliated customers are attributed to the Tire Segment that makes the sale to the unaffiliated customer.

      Tire unit sales for each Tire Segment and for Goodyear worldwide during the periods indicated were:

GOODYEAR’S ANNUAL TIRE UNIT SALES

		Year Ended December 31,
		2004		2003		2002
(In millions of tires)
North American Tire			102.5		101.2		103.8
European Union Tire			62.8		62.3		61.5
Eastern Europe Tire			18.9		17.9		16.1
Latin American Tire			19.6		18.7		19.9
Asia/ Pacific Tire			19.5		13.4		13.0
	Goodyear worldwide		223.3		213.5		214.3

Our worldwide tire unit sales in the replacement and OE markets during the periods indicated were:

GOODYEAR WORLDWIDE ANNUAL TIRE UNIT SALES — REPLACEMENT AND OE

		Year Ended December 31,
		2004		2003		2002
(In millions of tires)
Replacement tire units			159.6		150.6		147.6
OE tire units			63.7		62.9		66.7
	Goodyear worldwide tire units		223.3		213.5		214.3

Tire unit information in 2002 and 2003 does not include the operations of South Pacific Tyres (SPT). Unit sales in 2004 increased by 5.5 million replacement units and 0.8 million OE units due to the consolidation of SPT. For further information, refer to the Note to the Financial Statements No. 8, Investments.

      New tires are sold under highly competitive conditions throughout the world. On a worldwide basis, we have two major competitors: Bridgestone (based in Japan) and Michelin (based in France). Other significant competitors include Continental, Cooper, Pirelli, Toyo, Yokohama, Kumho, Hankook and various regional tire manufacturers.

      We compete with other tire manufacturers on the basis of product design, performance, price and reputation, warranty terms, customer service and consumer convenience. Goodyear-brand and Dunlop-brand

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tires enjoy a high recognition factor and have a reputation for performance, quality and value. Kelly-brand, Debica-brand, Sava-brand and various other house brand tire lines offered by us, and tires manufactured and sold by us to private brand customers, compete primarily on the basis of value and price.

      We do not consider our tire businesses to be seasonal to any significant degree. A significant inventory of new tires is maintained in order to optimize production schedules consistent with anticipated demand and assure prompt delivery to customers, especially “just in time” deliveries of tires or tire and wheel assemblies to OE manufacturers. Notwithstanding, tire inventory levels are designed to minimize working capital requirements.

North American Tire

Our largest segment, the North American tire business (North American Tire), develops, manufactures, distributes and sells tires and related products and services in the United States and Canada. North American Tire manufactures tires in nine plants in the United States and three plants in Canada. Certain Dunlop-brand related businesses of North American Tire are conducted by Goodyear Dunlop Tires North America, Ltd., which is 75% owned by Goodyear and 25% owned by Sumitomo Rubber Industries, Ltd.

Tires. North American Tire manufactures and sells tires for automobiles, trucks, motorcycles, buses, farm implements, earthmoving equipment, commercial and military aircraft and industrial equipment and for various other applications.

      Goodyear-brand radial passenger tire lines sold in North America include Assurance® with ComforTred Technology^tm for the luxury market, Assurance® with TripleTred Technology^tm with broad market appeal, Eagle® high performance and run-flat extended mobility technology (EMT) tires. Dunlop-brand radial passenger tire lines sold in North America include SP Sport® performance tires. The major lines of Goodyear-brand radial tires offered in the United States and Canada for sport utility vehicles and light trucks are Wrangler® and Fortera®. Goodyear also offers Dunlop-brand radials for light trucks such as the Rover^tm and Grandtrek® lines. North American Tire also manufactures and sells several lines of Kelly-brand, other house brands and several lines of private brand radial passenger tires in the United States and Canada.

      A full line of Goodyear-brand all-steel cord and belt construction medium radial truck tires, the Unisteel® series, is manufactured and sold for various applications, including line haul highway use and off-road service. In addition, various lines of Dunlop-brand, Kelly-brand, other house and private brand radial truck tires are sold in the United States and Canadian replacement markets.

Related Products and Services. North American Tire also:

•  retreads truck, aircraft and heavy equipment tires, primarily as a service to its commercial customers,

•  manufactures tread rubber and other tire retreading materials for trucks, heavy equipment and aircraft,

•  manufactures rubber track for agricultural and construction equipment,

•  provides automotive maintenance and repair services at approximately 805 retail outlets,

•  sells automotive repair and maintenance items, automotive equipment and accessories and other items to dealers and consumers, and

•  provides miscellaneous other products and services.

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Markets and Other Information

North American Tire distributes and sells tires throughout the United States and Canada. Tire unit sales to OE customers and in the replacement markets served by North American Tire during the periods indicated were:

NORTH AMERICAN TIRE UNIT SALES — REPLACEMENT AND OE

		Year Ended December 31,
		2004		2003		2002
(In millions of tires)
Replacement tire units			70.8		68.6		69.7
OE tire units			31.7		32.6		34.1
	Total tire units		102.5		101.2		103.8

North American Tire is a major supplier of tires to most manufacturers of automobiles, motorcycles, trucks, farm and construction equipment and aircraft that have production facilities located in North America. Our 2004 unit sales in the North American original equipment market channel decreased compared to 2003 and 2002 due to our selective fitment strategy in the consumer original equipment business.

      Goodyear-brand, Dunlop-brand and Kelly-brand tires are sold in the United States and Canadian replacement markets through several channels of distribution. The principal channel for Goodyear-brand tires is a large network of independent dealers. Goodyear-brand, Dunlop-brand and Kelly-brand tires are also sold to numerous national and regional retail marketing firms in the United States. North American Tire also operates approximately 917 retail outlets (including auto service centers, commercial tire and service centers and leased space in department stores) under the Goodyear name or under the Wingfoot Commercial Tire Systems, Allied or Just Tires trade styles. Several lines of house brand tires and private and associate brand tires are sold to independent dealers, national and regional wholesale marketing organizations and various other retail marketers.

      Automotive parts, automotive maintenance and repair services and associated merchandise are sold under highly competitive conditions in the United States and Canada through retail outlets operated by North American Tire.

      North American Tire periodically offers various financing and extended payment programs to certain of its tire customers in the replacement market. We do not believe these programs, when considered in the aggregate, require an unusual amount of working capital relative to the volume of sales involved, and they are consistent with prevailing tire industry practices.

      We are subject to regulation by the National Highway Traffic Safety Administration (“NHTSA”), which has established various standards and regulations applicable to tires sold in the United States for highway use. NHTSA has the authority to order the recall of automotive products, including tires, having safety defects related to motor vehicle safety. In addition, the Transportation Recall Enhancement, Accountability, and Documentation Act (the “TREAD Act”) imposes numerous requirements with respect to tire recalls. The TREAD Act also requires tire manufacturers to, among other things, remedy tire safety defects without charge for five years and conform with revised and more rigorous tire standards, once the revised standards are implemented.

European Union Tire

Our second largest segment, European Union Tire, develops, manufactures, distributes and sells tires for automobiles, motorcycles, trucks, farm implements and construction equipment in Western Europe, exports tires to other regions of the world and provides related products and services. European Union Tire manufactures tires in 13 plants in England, France, Germany and Luxembourg. Substantially all of the

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operations and assets of European Union Tire are owned and operated by Goodyear Dunlop Tires Europe B.V., a 75% owned subsidiary of Goodyear. European Union Tire:

•  manufactures and sells Goodyear-brand, Dunlop-brand and Fulda-brand and other house brand passenger, truck, motorcycle, farm and heavy equipment tires,

•  sells Debica-brand and Sava-brand passenger, truck and farm tires manufactured by the Eastern Europe Tire Segment,

•  sells new, and manufactures and sells retreaded, aircraft tires,

•  provides various retreading and related services for truck and heavy equipment tires, primarily for its commercial truck tire customers,

•  offers automotive repair services at retail outlets in which it owns a controlling interest, and

•  provides miscellaneous related products and services.

Markets and Other Information

European Union Tire distributes and sells tires throughout Western Europe. Tire unit sales to OE customers and in the replacement markets served by European Union Tire during the periods indicated were:

EUROPEAN UNION TIRE UNIT SALES — REPLACEMENT AND OE

		Year Ended December 31,
		2004		2003		2002
(In millions of tires)
Replacement tire units			43.9		43.9		41.3
OE tire units			18.9		18.4		20.2
	Total tire units		62.8		62.3		61.5

European Union Tire is a significant supplier of tires to most manufacturers of automobiles, trucks and farm and construction equipment located in Western Europe.

      European Union Tire’s primary competitor in Western Europe is Michelin. Other significant competitors include Continental, Bridgestone, Pirelli, several regional tire producers and imports from other regions, primarily Eastern Europe and Asia.

      Goodyear-brand and Dunlop-brand tires are sold in the several replacement markets served by European Union Tire through various channels of distribution, principally independent multi-brand tire dealers. In some markets, Goodyear-brand tires, as well as Dunlop-brand, Fulda-brand, Debica-brand and Sava-brand tires, are distributed through independent dealers, regional distributors and retail outlets, of which approximately 337 are owned by Goodyear.

Eastern Europe, Middle East and Africa Tire

Our Eastern Europe, Middle East and Africa Tire segment (“Eastern Europe Tire”) manufactures and sells passenger, truck, farm, bicycle and construction equipment tires in Eastern Europe, the Middle East and Africa. Eastern Europe Tire manufactures tires in six plants in Poland, Slovenia, Turkey, Morocco and South Africa. Eastern Europe Tire:

•  maintains sales operations in most countries in Eastern Europe (including Russia), the Middle East and Africa,

•  exports tires for sale in Western Europe, North America and other regions of the world,

•  provides related products and services in certain markets,

•  manufactures and sells Goodyear-brand, Kelly-brand, Debica-brand, Sava-brand and Fulda-brand tires and sells Dunlop-brand tires manufactured by European Union Tire,

•  sells new and retreaded aircraft tires,

•  provides various retreading and related services for truck and heavy equipment tires,

•  sells automotive parts and accessories, and

•  provides automotive repair services.

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Markets and Other Information

Eastern Europe Tire distributes and sells tires in most countries in eastern Europe, the Middle East and Africa. Tire unit sales to OE customers and in the replacement markets served by Eastern Europe Tire during the periods indicated were:

EASTERN EUROPE TIRE UNIT SALES — REPLACEMENT AND OE

		Year Ended December 31,
		2004		2003		2002
(In millions of tires)
Replacement tire units			15.4		14.8		13.3
OE tire units			3.5		3.1		2.8
	Total tire units		18.9		17.9		16.1

Eastern Europe Tire has a significant share of each of the markets it serves and is a significant supplier of tires to manufacturers of automobiles, trucks, and farm and construction equipment in Morocco, Poland, South Africa and Turkey. Its major competitors are Michelin, Bridgestone, Continental and Pirelli. Other competition includes regional and local tire producers and imports from other regions, primarily Asia.

      Goodyear-brand tires are sold by Eastern Europe Tire in the various replacement markets primarily through independent tire dealers and wholesalers who sell several brands of tires. In some countries, Goodyear-brand, Dunlop-brand, Kelly-brand, Fulda-brand, Debica-brand and Sava-brand tires are sold through regional distributors and multi-brand dealers. In the Middle East and most of Africa, tires are sold primarily to regional distributors for resale to independent dealers. In South Africa and sub-Saharan Africa, tires are also sold through a retail chain of approximately 168 retail stores operated by Goodyear under the trade name Trentyre.

Latin American Tire

Our Latin American Tire segment manufactures and sells automobile, truck and farm tires throughout Central and South America and in Mexico (“Latin America”), sells tires to various export markets, retreads and sells commercial truck, aircraft and heavy equipment tires, and provides other products and services. Latin American Tire manufactures tires in six facilities in Brazil, Chile, Colombia, Peru and Venezuela.

      Latin American Tire manufactures and sells several lines of passenger, light and medium truck and farm tires. Latin American Tire also:

•  manufactures and sells pre-cured treads for truck and heavy equipment tires,

•  retreads, and provides various materials and related services for retreading, truck, aircraft and heavy equipment tires,

•  manufactures other products, including batteries for motor vehicles,

•  manufactures and sells new aircraft tires, and

•  provides miscellaneous other products and services.

Markets and Other Information

Latin American Tire distributes and sells tires in most countries in Latin America. Tire sales to OE customers and in the replacement markets served by Latin American Tire during the periods indicated were:

LATIN AMERICAN TIRE UNIT SALES — REPLACEMENT AND OE

		Year Ended December 31,
		2004		2003		2002
(In millions of tires)
Replacement tire units			15.0		14.2		14.2
OE tire units			4.6		4.5		5.7
	Total tire units		19.6		18.7		19.9

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Asia/ Pacific Tire

Our Asia/ Pacific Tire segment manufactures and sells tires for automobiles, light and medium trucks, farm and construction equipment and aircraft throughout the Asia/ Pacific markets. Asia/ Pacific Tire manufactures tires in China, India, Indonesia, Japan, Malaysia, the Philippines, Taiwan and Thailand. In addition, beginning in 2004, Asia/ Pacific Tire information included the manufacturing operations of affiliates in Australia and New Zealand. Asia/ Pacific Tire also retreads aircraft tires and provides miscellaneous other products and services.

      Effective January 1, 2004, Asia/ Pacific Tire includes the operations of South Pacific Tyres, an Australian Partnership, and South Pacific Tyres N.Z. Limited, a New Zealand company (together, “SPT”), joint ventures 50% owned by Goodyear and 50% owned by Ansell Ltd. SPT is the largest tire manufacturer in Australia and New Zealand, with two tire manufacturing plants and 17 retread plants. SPT sells Goodyear-brand, Dunlop-brand and other house and private brand tires through its chain of 417 retail stores, commercial tire centers and independent dealers. For further information about SPT, refer to the Notes to the Financial Statements No. 8, Investments and No. 18, Business Segments.

Markets and Other Information

Asia/ Pacific Tire distributes and sells tires in most countries in the Asia/ Pacific region. Tire sales to OE customers and in the replacement markets served by Asia/ Pacific Tire during the periods indicated were:

ASIA/ PACIFIC TIRE UNIT SALES — REPLACEMENT AND OE

		Year Ended December 31,
		2004		2003		2002
(In millions of tires)
Replacement tire units			14.5		9.1		9.1
OE tire units			5.0		4.3		3.9
	Total tire units		19.5		13.4		13.0

Asia/ Pacific Tire information in 2002 and 2003 does not include the operations of SPT. Unit sales in 2004 increased by 5.5 million replacement units and 0.8 million OE units due to the consolidation of SPT.

Engineered Products

Our Engineered Products segment develops, manufactures, distributes and sells numerous rubber and thermoplastic products worldwide. The products and services offered by Engineered Products include:

•  belts and hoses for motor vehicles,

•  conveyor and power transmission belts,

•  air, water, steam, hydraulic, petroleum, fuel, chemical and materials handling hose for industrial applications,

•  anti-vibration products,

•  tank tracks, and

•  miscellaneous products and services.

      Engineered Products manufactures products at 8 plants in the United States and 19 plants in Australia, Brazil, Canada, Chile, China, France, Mexico, Slovenia, South Africa and Venezuela.

Markets and Other Information

Engineered Products sells its products to manufacturers of vehicles and various industrial products and to independent wholesale distributors. Numerous major firms participate in the various markets served by Engineered Products. There are several suppliers of automotive belts and hose products, air springs, engine mounts and other rubber components for motor vehicles. Engineered Products is a significant supplier of these products, and is also a leading supplier of conveyor and power transmission belts and industrial hose products.

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The principal competitors of Engineered Products include Dana, Mark IV, Gates, Bridgestone, Conti-Tech, Trelleborg, Tokai/ DTR, Unipoly and Habasit.

      These markets are highly competitive, with quality, service and price all being significant factors to most customers. EPD believes its products are considered to be of high quality and are competitive in price and performance.

Chemical Products

Our Chemical Products segment develops, manufactures, distributes and sells synthetic rubber and rubber latices, various resins and organic chemicals used in rubber and plastic processing, and other chemical products. Chemical Products sells to Goodyear’s other business segments and to unaffiliated customers. Chemical Products owns 4 manufacturing facilities and conducts natural rubber purchasing operations. In November 2004, we entered into an agreement to sell our natural rubber plantations in Indonesia for approximately $65 million, pending government approvals. Effective January 1, 2005, we integrated Chemical Products into North American Tire. For further information on the integration, refer to the Note to the Financial Statements No. 24, Subsequent Events.

      Approximately 65% of the total pounds of synthetic materials sold by Chemical Products in 2004 was to Goodyear’s other business segments. All production is at 4 plants in the United States.

Markets and Other Information

Most external sales of chemical products and natural rubber are made directly to manufacturers of various products.

      Several major firms are significant suppliers of one or more chemical products similar to those manufactured by Chemical Products. The principal competitors of Chemical Products include Bayer and Dow. The markets are highly competitive, with product quality and price being the most significant factors to most customers. Chemical Products believes its products are generally considered to be of high quality and are competitive in price.

GENERAL BUSINESS INFORMATION

Sources and Availability of Raw Materials

The principal raw materials used by Goodyear are synthetic and natural rubber. We purchase substantially all of our requirements for natural rubber in the world market. Synthetic rubber typically accounts for slightly more than half of all rubber consumed by us on an annual basis. Our plants located in Beaumont, and Houston, Texas, supply the major portion of our synthetic rubber requirements in North America. We purchase a significant amount of our synthetic rubber requirements outside North America from third parties.

      We use nylon and polyester yarns, substantial quantities of which are processed in our textile mills. Significant quantities of steel wire are used for radial tires, a portion of which we produce. Other important raw materials we use are carbon black, pigments, chemicals and bead wire. Substantially all of these raw materials are purchased from independent suppliers, except for certain chemicals we manufacture. We purchase most raw materials in significant quantities from several suppliers, except in those instances where only one or a few qualified sources are available. As in 2004, we anticipate the continued availability of all raw materials we will require during 2005, subject to spot shortages.

      Substantial quantities of hydrocarbon-based chemicals and fuels are used in the production of tires and other rubber products, synthetic rubber, latex and other products. Supplies of chemicals and fuels have been and are expected to continue to be available to us in quantities sufficient to satisfy our anticipated requirements, subject to spot shortages.

      In 2004, raw materials costs increased approximately $280 million from 2003 levels due to inflation. Raw materials costs are expected to increase by 6% to 8% during 2005, driven by increases in the cost of oil, steel,

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petrochemicals and natural rubber. Continued volatility in the commodity markets could result in further increases in prices.

Patents and Trademarks

We own approximately 2,550 product, process and equipment patents issued by the United States Patent Office and approximately 5,900 patents issued or granted in other countries around the world. We also have licenses under numerous patents of others. We have approximately 580 applications for United States patents pending and approximately 3,900 patent applications on file in other countries around the world. While such patents, patent applications and licenses as a group are important, we do not consider any patent, patent application or license, or any related group of them, to be of such importance that the loss or expiration thereof would materially affect Goodyear or any business segment.

      We own or control and use approximately 1,570 different trademarks, including several using the word “Goodyear” or the word “Dunlop.” Approximately 9,400 registrations and 900 pending applications worldwide protect these trademarks. While such trademarks as a group are important, the only trademarks we consider material to our business, or to the business of any of our segments, are those using the word “Goodyear”. We believe our trademarks are valid and most are of unlimited duration as long as they are adequately protected and appropriately used.

Backlog

Our backlog of orders is not considered material to, or a significant factor in, evaluating and understanding any of our business segments or our businesses considered as a whole.

Research and Development

Our direct and indirect expenditures on research, development and certain engineering activities relating to the design, development and significant modification of new and existing products and services and the formulation and design of new, and significant improvements to existing, manufacturing processes and equipment during the periods indicated were:

	Year Ended December 31,
			Restated
	2004		2003		2002
(In millions)
Research and development expenditures	$	378.2	$	351.0	$	386.5

These amounts were expensed as incurred.

Employees

At December 31, 2004, we employed over 84,000 people throughout the world, including approximately 33,000 persons in the United States. Approximately 13,750 of our employees in the United States were covered by a master collective bargaining agreement, dated August 20, 2003, with the United Steelworkers of America, A.F.L.-C.I.O.-C.L.C. (“USWA”), which expires on July 22, 2006. In addition, approximately 1,100 of our employees in the United States were covered by other contracts with the USWA and various other unions. Unions represent the major portion of our employees in Europe, Latin America and Asia.

Compliance with Environmental Regulations

We are subject to extensive regulation under environmental and occupational health and safety laws and regulations. These laws and regulations relate to, among other things, air emissions, discharges to surface and underground waters and the generation, handling, storage, transportation and disposal of waste materials and hazardous substances. We have several continuing programs designed to ensure compliance with federal, state and local environmental and occupational safety and health laws and regulations. We expect capital expenditures for pollution control facilities and occupational safety and health projects will be approximately $24 million during 2005 and approximately $28 million during 2006.

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      We expended approximately $65 million during 2004, and expect to expend approximately $62 million during 2005 and $60 million during 2006, to maintain and operate our pollution control facilities and conduct our other environmental activities, including the control and disposal of hazardous substances. These expenditures are expected to be sufficient to comply with existing environmental laws and regulations and are not expected to have a material adverse effect on our competitive position.

      In the future we may incur increased costs and additional charges associated with environmental compliance and cleanup projects necessitated by the identification of new waste sites, the impact of new environmental laws and regulatory standards, or the availability of new technologies. Compliance with federal, state and local environmental laws and regulations in the future may require a material increase in our capital expenditures and could adversely affect our earnings and competitive position.

INFORMATION ABOUT INTERNATIONAL OPERATIONS

We engage in manufacturing and/or sales operations in most countries in the world, often through subsidiary companies. We have manufacturing operations in the United States and 27 other countries. Most of our international manufacturing operations are engaged in the production of tires. Several engineered rubber products and certain other products are also manufactured in plants located outside the United States. Financial information related to our geographic areas for the three year period ended December 31, 2004 appears in the Note to the Financial Statements No. 18, Business Segments, and is incorporated herein by reference.

      In addition to the ordinary risks of the marketplace, in some countries our operations are affected by price controls, import controls, labor regulations, tariffs, extreme inflation and/or fluctuations in currency values. Furthermore, in certain countries where we operate, transfers of funds into or out of such countries are generally or periodically subject to various restrictive governmental regulations.

ITEM 2.  PROPERTIES.

We manufacture our products in 99 manufacturing facilities located around the world. There are 30 plants in the United States and 69 plants in 27 other countries.

North American Tire Manufacturing Facilities. North American Tire owns (or leases with the right to purchase at a nominal price) and operates 21 manufacturing facilities in the United States and Canada, including:

•  12 tire plants (9 in the United States and 3 in Canada),

•  1 steel tire wire cord plant,

•  1 tire mold plant,

•  2 textile mills,

•  3 tread rubber plants, and

•  2 aero retread plants.

      These facilities have floor space aggregating approximately 23.1 million square feet. North American Tire also owns a tire plant in Huntsville, Alabama that was closed during 2003 and has floor space aggregating approximately 1.3 million square feet.

European Union Tire Manufacturing Facilities. European Union Tire owns and operates 19 manufacturing facilities in 5 countries, including:

•  13 tire plants,

•  1 tire fabric processing facility,

•  1 steel tire wire cord plant,

•  1 tire mold and tire manufacturing machines facility, and

•  3 tire retread plants.

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      These facilities have floor space aggregating approximately 13.5 million square feet.

Eastern Europe, Middle East and Africa Tire Manufacturing Facilities. Eastern Europe Tire owns and operates 6 tire plants in 5 countries. These facilities have floor space aggregating approximately 7.4 million square feet.

Latin American Tire Manufacturing Facilities. Latin American Tire owns and operates 6 tire plants in 5 countries. Latin American Tire also manufactures tread rubber and tire molds and operates a fabric processing facility in Brazil. These facilities have floor space aggregating approximately 5.7 million square feet.

Asia/ Pacific Tire Manufacturing Facilities. Asia/ Pacific Tire owns and operates 11 tire plants in 10 countries, manufactures tread rubber and operates 2 aero-retread plants. These facilities have floor space aggregating approximately 6.3 million square feet.

Engineered Products Manufacturing Facilities. Engineered Products owns (or leases with the right to purchase at a nominal price) 27 facilities at 8 locations in the United States and 19 international locations in 10 countries. These facilities have floor space aggregating approximately 6.0 million square feet. Certain facilities manufacture more than one group of products. The facilities include:

In the United States and Canada —

• 7 hose products plants

• 2 conveyor belting plants

• 2 molded rubber products plants

• 2 power transmission products plants

• 5 mix centers

In Latin America —

• 2 air springs plants

• 5 hose products plants

• 3 power transmission products plants

• 2 conveyor belting plants

In Europe —

• 2 air springs plants

• 1 power transmission products plant

• 1 hose products plant

In Asia —

• 1 conveyor belting plant

• 1 hose products plant

In Africa —

• one conveyor belting and power transmission products plant

Chemical Products Manufacturing Facilities. Chemical Products owns and operates 4 manufacturing facilities. The facilities are located in the United States and produce synthetic rubber and rubber latices, synthetic resins, and other organic chemical products. These facilities have floor space aggregating approximately 1.7 million square feet.

Plant Utilization. Our worldwide tire capacity utilization rate was approximately 88% during 2004, compared to approximately 88% during 2003 and 86% during 2002. We expect to have production capacity sufficient to satisfy presently anticipated demand for our tires and other products for the foreseeable future.

Other Facilities. We also own and operate a natural rubber plantation and rubber processing facility in Indonesia, four research and development facilities and technical centers, and six tire proving grounds. In November 2004, we entered into an agreement to sell our natural rubber plantation in Indonesia. We also operate approximately 1,839 retail outlets for the sale of our tires to consumers, approximately 62 tire retreading facilities and approximately 254 warehouse distribution facilities. Substantially all of these facilities are leased. We do not consider any one of these leased properties to be material to our operations. For additional information regarding leased properties, refer to the Notes to the Financial Statements No. 9, Properties and Plants and No. 10, Leased Assets.

ITEM 3.  LEGAL PROCEEDINGS.

Heatway Litigation and Settlement

On June 4, 2004, the Company entered into an amended settlement agreement in Galanti et al. v. Goodyear (Case No. 03-209, United States District Court, District of New Jersey) that was intended to address the

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claims arising out of a number of Federal, state and Canadian actions filed against the Company involving a rubber hose product, Entran II, that the Company supplied from 1989 to 1993 to Chiles Power Supply, Inc. (d/b/a Heatway Systems), a designer and seller of hydronic radiant heating systems in the United States. Heating systems using Entran II are typically attached or embedded in either indoor flooring or outdoor pavement, and use Entran II hose as a conduit to circulate warm fluid as a source of heat.

      On October 19, 2004, the Galanti court conducted a fairness hearing on, and gave final approval to, the amended settlement. As a result, Goodyear will make annual cash contributions to a settlement fund of $60 million, $40 million, $15 million, $15 million and $20 million in 2004, 2005, 2006, 2007 and 2008, respectively. In addition to these annual payments, Goodyear contributed approximately $170 million received from insurance contributions to a settlement fund pursuant to the terms of the settlement agreement. The Company does not expect to receive any additional insurance reimbursements for Entran II related matters. In November 2004, the Company made its first annual cash contribution, approximately $60 million, to the settlement fund.

      Approximately 62 sites were opted out of the amended settlement, five of which have rejoined the class. Of the 57 remaining opt outs, approximately 14 are homesites in Davis et al. v. Goodyear (Case No. 99CV594, District Court, Eagle County, Colorado). In addition, one additional opt out is a plaintiff in Cross Mountain Ranch, LP v. Goodyear (Case No. 04CV105, District Court, Routt County, Colorado), which was filed in September 2004. Two additional opt outs are plaintiffs in Albers Revocable Trust, et al. v. Goodyear (Case No. 04CV2100, District Court, Arapahoe County, Colorado). Goodyear has been informed that 3 to 4 additional opt outs may file actions against the Company in the future. Any liability resulting from the following actions also will not be covered by the amended settlement:

•  Malek, et al. v. Goodyear (Case No. 02-B-1172, United States District Court for the District of Colorado), a case involving 25 homesites, in which a federal jury awarded the plaintiffs aggregate damages of $8.1 million of which 40% was allocated to Goodyear. On July 12, 2004, judgment was entered in Malek and an additional $4.8 million in prejudgment interest was awarded to the plaintiffs, all of which was allocated to Goodyear; and

•  Holmes v. Goodyear (Case No. 98CV268-A, District Court, Pitkin County, Colorado), a case involving one site in which the jury awarded the plaintiff $632,937 in damages, of which the jury allocated 20% to Goodyear, resulting in a net award against Goodyear of $126,587. The plaintiff was also awarded $367,860 in prejudgement interest and costs, all of which was allocated to Goodyear.

      Although liability resulting from the opt outs, Malek and Holmes will not be covered by the amended settlement, the Company will be entitled to assert a proxy claim against the settlement fund for the payment such claimant would have been entitled to under the amended settlement.

      In addition, any liability of the Company arising out of the actions listed below will not be covered by the amended settlement nor will the Company be entitled to assert a proxy claim against the settlement fund for amounts (if any) paid to plaintiffs in these actions:

•  Goodyear v. Vista Resorts, Inc. (Case No. 02CA1690, Colorado Court of Appeals), an action involving five homesites, in which a jury rendered a verdict in favor of the plaintiff real estate developer in the aggregate amount of approximately $5.9 million, which damages were trebled under the Colorado Consumer Protection Act. The total damages awarded were approximately $22.7 million, including interest, attorney’s fees and costs. This verdict was upheld by the Court of Appeals in 2004 and Goodyear is petitioning the Supreme Court of Colorado to review the case;

•  Sumerel et al. v. Goodyear et al (Case No. 02CA1997, Colorado Court of Appeals), a case involving six sites in which a judgment was entered against Goodyear in the amount of $1.3 million plus interest and costs; and

•  Loughridge v. Goodyear and Chiles Power Supply, Inc. (Case No. 98-B-1302, United States District Court for the District of Colorado), a case consolidating claims involving 36 Entran II sites, in which a federal jury awarded 34 homeowners aggregate damages of $8.2 million, 50% of which was allocated to

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Goodyear. On September 8, 2003, an additional $5.7 million in prejudgment interest was awarded to the plaintiffs, all of which was allocated to Goodyear.

      Goodyear is pursuing appeals of Holmes, Loughridge, Malek, Sumerel and Vista and expects that except for liabilities associated with these cases, and the sites that opt out of the amended settlement, its liability with respect to Entran II matters will be addressed by the amended settlement.

      The ultimate cost of disposing of Entran II claims is dependent upon a number of factors, including the Company’s ability to resolve claims not subject to the amended settlement (including the cases in which the Company has received adverse judgments) and whether or not claimants opting out of the amended settlement pursue claims against Goodyear in the future.

Japan Investigation

On June 17, 2004, the Company became aware that the Japan Fair Trade Commission had commenced an investigation into alleged unfair business practices by several tire manufacturers and distributors in Japan that supply tires to the Japan National Defense Agency. One of the companies being investigated is Goodyear Wingfoot KK, a subsidiary of Goodyear. Depending upon the results of its investigation, the Japan Fair Trade Commission may pursue sanctions against the tire manufacturers and distributors.

SEC Investigation

On October 22, 2003, Goodyear announced that it would restate its financial results for the years ended 1998 through 2002 and for the first and second quarters of 2003. Following this announcement, the SEC advised the Company that they had initiated an informal inquiry into the facts and circumstances related to the restatement. On February 5, 2004, the SEC advised Goodyear that it had approved the issuance of a formal order of investigation. The order authorizes an investigation into possible violations of the securities laws related to the restatement and previous public filings. Goodyear is cooperating fully with the SEC and has provided requested information as expeditiously as possible. Because the SEC investigation is currently ongoing, the outcome cannot be predicted at this time.

Securities Litigation

On October 23, 2003, following the announcement of the restatement, a purported class action lawsuit was filed against the Company in the United States District Court for the Northern District of Ohio on behalf of purchasers of Goodyear common stock alleging violations of the federal securities laws. After that date, a total of 20 of these purported class actions were filed against Goodyear in that court. These lawsuits name as defendants several of the Company’s present or former officers and directors, including Goodyear’s current chief executive officer, Robert J. Keegan, Goodyear’s current chief financial officer, Richard J. Kramer, and Goodyear’s former chief financial officer, Robert W. Tieken, and allege, among other things, that Goodyear and the other named defendants violated federal securities laws by artificially inflating and maintaining the market price of Goodyear’s securities. Five derivative lawsuits were also filed by purported shareholders on behalf of Goodyear in the United States District Court for the Northern District of Ohio and two similar derivative lawsuits originally filed in the Court of Common Pleas for Summit County, Ohio were removed to federal court. The derivative actions are against present and former directors, Goodyear’s present and former chief executive officers and Goodyear’s former chief financial officer and allege, among other things, breach of fiduciary duty and corporate waste arising out of the same events and circumstances upon which the securities class actions are based. The plaintiffs in the federal derivative actions also allege violations of Section 304 of the Sarbanes-Oxley Act of 2002, by certain of the named defendants. Finally, at least 11 lawsuits have been filed in the United States District Court for the Northern District of Ohio against Goodyear, The Northern Trust Company, and current and/or former officers of Goodyear asserting breach of fiduciary claims under the Employee Retirement Income Security Act (ERISA) on behalf of a putative class of participants in Goodyear’s Employee Savings Plan for Bargaining Unit Employees and Goodyear’s Savings Plan for Salaried Employees. The plaintiffs’ claims in these actions arise out of the same events and circumstances upon which the securities class actions and derivative actions are based. All of these actions have been consolidated into

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three separate actions before the Honorable Judge John Adams in the United States District Court for the Northern District of Ohio. On June 28 and July 16, 2004, amended complaints were filed in each of the three consolidated actions. The amended complaint in the purported ERISA class action added certain current and former directors and associates of Goodyear as additional defendants and the Northern Trust Company was subsequently dismissed without prejudice from this action. On November 15, 2004, the defendants filed motions to dismiss all three consolidated cases and the Court is considering these motions. While Goodyear believes these claims are without merit and intends to vigorously defend them, it is unable to predict their outcome.

Asbestos Litigation

Goodyear is currently one of several (typically 50 to 80) defendants in civil actions involving approximately 127,300 claimants (as of December 31, 2004) relating to their alleged exposure to materials containing asbestos in products manufactured by Goodyear or asbestos materials at Goodyear facilities. These cases are pending in various state courts, including primarily courts in California, Florida, Illinois, Maryland, Michigan, Mississippi, New York, Ohio, Pennsylvania, Texas and West Virginia, and in certain federal courts relating to the plaintiffs’ alleged exposure to materials containing asbestos. Goodyear manufactured, among other things, rubber coated asbestos sheet gasket materials from 1914 through 1973 and aircraft brake assemblies containing asbestos materials prior to 1987. Some of the claimants are independent contractors or their employees who allege exposure to asbestos while working at certain Goodyear facilities. It is expected that in a substantial portion of these cases there will be no evidence of exposure to a Goodyear manufactured product containing asbestos or asbestos in Goodyear facilities. The amount expended by Goodyear and its insurers on defense and claim resolution during 2004 was approximately $29.9 million. The plaintiffs in the pending cases allege that they were exposed to asbestos and, as a result of such exposure suffer from various respiratory diseases, including in some cases mesothelioma and lung cancer. The plaintiffs are seeking unspecified actual and punitive damages and other relief.

Engineered Products Antitrust Investigation

The Antitrust Division of the United States Department of Justice is conducting a grand jury investigation concerning the closure of a portion of the Company’s Bowmanville, Ontario conveyor belting plant announced in October 2003. In that connection, the Division has sought documents and other information from the Company and several associates. The plant was part of the Company’s Engineered Products division and originally employed approximately 120 people. Engineered Products had approximately $1.2 billion in sales in 2003, including approximately $200 million of sales related to conveyor belting. Although the Company does not believe that it has violated the antitrust laws, it is cooperating with the Department of Justice.

DOE Facility Litigation

On June 7, 1990, a civil action, Teresa Boggs, et al. v. Divested Atomic Corporation, et al. (Case No. C-1-90-450), was filed in the United States District Court for the Southern District of Ohio by Teresa Boggs and certain other named plaintiffs on behalf of themselves and a putative class comprised of certain other persons who resided near the Portsmouth Uranium Enrichment Complex, a facility owned by the United States Department of Energy located in Pike County, Ohio (the “DOE Plant”), against Divested Atomic Corporation (“DAC”), the successor by merger of Goodyear Atomic Corporation (“GAC”), the Company, and Lockheed Martin Energy Systems (“LMES”). GAC operated the DOE Plant for several years pursuant to a series of contracts with the DOE until LMES assumed operation of the DOE Plant on November 16, 1986. The plaintiffs allege that the operators of the DOE Plant contaminated certain areas near the DOE Plant with radioactive and/or other hazardous materials causing property damage and emotional distress. Plaintiffs claim $300 million in compensatory damages, $300 million in punitive damages and unspecified amounts for medical monitoring and cleanup costs. This civil action is no longer a class action as a result of rulings of the District Court decertifying the class. On June 8, 1998, a civil action, Adkins, et al. v. Divested Atomic Corporation, et al. (Case No. C2 98-595), was filed in the United States District Court for the Southern District of Ohio, Eastern Division, against DAC, the Company and LMES on behalf of

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approximately 276 persons who currently reside, or in the past resided, near the DOE Plant. The plaintiffs allege, on behalf of themselves and a putative class of all persons who were residents, property owners or lessees of property subject to alleged windborne particulates and water run off from the DOE Plant, that DAC (and, therefore, the Company) and LMES in their operation of the Portsmouth DOE Plant (i) negligently contaminated, and are strictly liable for contaminating, the plaintiffs and their property with allegedly toxic substances, (ii) have in the past maintained, and are continuing to maintain, a private nuisance, (iii) have committed, and continue to commit, trespass, and (iv) violated the Comprehensive Environmental Response, Compensation and Liability Act of 1980. The plaintiffs are seeking $30 million in actual damages, $300 million in punitive damages, other unspecified legal and equitable remedies, costs, expenses and attorney’s fees.

Notice of Violation

In February 2005, the United States Environmental Protection Agency (“US EPA”) issued a notice of violation to Goodyear alleging violations of the Clean Air Act and related state and local requirements at its Lincoln, Nebraska Engineered Products facility. The Notice of Violation alleges two violations: (i) the construction of a boiler in 1988 without an appropriate permit, and (ii) the failure to apply the “best available control technology” for emissions from the boiler. Each violation is subject to potential civil penalties of up to $32,500 per day. Other enforcement alternatives include a temporary or permanent injunction and a referral to the Department of Justice. The Company is currently reviewing this matter and has not yet determined what, if any, losses may arise from the matter.

Other Matters

In addition to the legal proceedings described above, various other legal actions, claims and governmental investigations and proceedings covering a wide range of matters were pending against Goodyear at December 31, 2004, including claims and proceedings relating to several waste disposal sites that have been identified by the United States Environmental Protection Agency and similar agencies of various States for remedial investigation and cleanup, which sites were allegedly used by Goodyear in the past for the disposal of industrial waste materials. Based on available information, we do not consider any such action, claim, investigation or proceeding to be material, within the meaning of that term as used in Item 103 of Regulation S-K and the instructions thereto. For additional information regarding the Company’s legal proceedings, refer to the Note to the Financial Statements No. 20, Commitments and Contingent Liabilities.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matter was submitted to a vote of the security holders of the Company during the quarter ended December 31, 2004.

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EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth below are: (1) the names and ages of all executive officers of the Company at March 15, 2005, (2) all positions with the Company presently held by each such person and (3) the positions held by, and principal areas of responsibility of, each such person during the last five years.

Name	Position(s) Held	Age
Robert J. Keegan	Chairman of the Board, Chief Executive Officer and President	57
Mr. Keegan joined Goodyear on October 1, 2000. He was elected President and Chief Operating Officer and a Director of the Company on October 3, 2000, and President and Chief Executive Officer of the Company effective January 1, 2003. Effective June 30, 2003, he became Chairman. He is the principal executive officer of the Company. Prior to joining Goodyear, Mr. Keegan held various marketing, finance and managerial positions at Eastman Kodak Company from 1972 through September 2000, including Vice President from July 1997 to October 1998, Senior Vice President from October 1998 to July 2000 and Executive Vice President from July 2000 to September 2000. Mr. Keegan is a Class II director.
Jonathan D. Rich	President, North American Tire	49
Mr. Rich joined Goodyear in September 2000 and was elected President, Chemical Division on August 7, 2001, serving as the executive officer responsible for Goodyear’s chemical products operations worldwide. Effective December 1, 2002, Mr. Rich was appointed, and on December 3, 2002 he was elected President, North American Tire and is the executive officer responsible for Goodyear’s tire operations in the United States and Canada. Prior to joining Goodyear, Mr. Rich was technical director of GE Bayer Silicones in Leverkusen, Germany. He also served in various managerial posts with GE Corporate R&D and GE Silicones, units of the General Electric Company from 1986 to 1998.
Michael J. Roney	President, European Union Tire	50
Mr. Roney served in various international financial, sales and managerial posts until September 1, 1998, when he was appointed Vice President for Asia/ Pacific Tire, in which capacity he was responsible for Goodyear’s tire operations in the Asia, Australia and Western Pacific region. On December 1, 1998, Mr. Roney was appointed President and Managing Director of Compania Hulera Goodyear-Oxo, S.A. de C.V., a wholly owned subsidiary operating in Mexico. Effective July 1, 1999, Mr. Roney was appointed, and on August 3, 1999 he was elected, President, Eastern Europe, Middle East and Africa Tire, serving as the executive officer responsible for Goodyear’s tire operations in Eastern Europe, Middle East and Africa. Mr. Roney was elected President, European Union Tire on May 7, 2001. Mr. Roney is the executive officer responsible for Goodyear’s tire operations in Western Europe. Goodyear employee since 1981.
Jarro F. Kaplan	President, Eastern Europe, Middle East and Africa Tire	57
Mr. Kaplan served in various development and sales and marketing managerial posts until he was appointed Managing Director of Goodyear Turkey in 1993 and thereafter Managing Director of Goodyear Great Britain Limited in 1996. He was appointed Managing Director of Deutsche Goodyear in 1999. On May 7, 2001, Mr. Kaplan was elected President, Eastern Europe, Middle East and Africa Tire and is the executive officer responsible for Goodyear’s tire operations in Eastern Europe, the Middle East and Africa. Goodyear employee since 1969.
Eduardo A. Fortunato	President, Latin American Tire	51
Mr. Fortunato served in various international managerial, sales and marketing posts with Goodyear until he was elected President and Managing Director of Goodyear Brazil in 2000. On November 4, 2003, Mr. Fortunato was elected President, Latin American Tire. Mr. Fortunato is the executive officer responsible for Goodyear’s tire operations in Mexico, Central America and South America. Goodyear employee since 1975.

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Name	Position(s) Held	Age
Pierre Cohade	President, Asia/Pacific Tire	43
Mr. Cohade joined Goodyear in October, 2004 and was elected President Asia/ Pacific Tire on October 5, 2004. Mr. Cohade is the executive officer responsible for Goodyear’s tire operations in Asia, Australia and the Western Pacific. Prior to joining Goodyear, Mr. Cohade served in various finance and managerial posts with the Eastman Kodak Company from 1985 to 2001, including chairman of Eastman Kodak’s Europe, Africa, Middle East and Russian Region from 2001 to 2003. From February 2003 to April 2004, Mr. Cohade served as the Executive Vice President of Groupe Danone’s beverage division.
Timothy R. Toppen	President, Engineered Products	49
Mr. Toppen served in various research, technology and marketing posts until April 1, 1997 when he was appointed Director of Research and Development for Engineered Products. Mr. Toppen was elected President, Chemical Division, on August 1, 2000, serving in that office until he was elected President, Engineered Products on August 7, 2001. Mr. Toppen is the executive officer responsible for Goodyear’s Engineered Products operations worldwide. Goodyear employee since 1978.
Lawrence D. Mason	President, North American Tire Consumer Business	44
Mr. Mason joined Goodyear on October 7, 2003 and was elected President, North American Tire Consumer Business effective October 13, 2003. Mr. Mason is the executive officer responsible for the business activities of Goodyear’s consumer tire business in North America. Prior to joining Goodyear, Mr. Mason was employed by Huhtamaki — Americas as Division President of North American Foodservice and Retail Consumer Products from 2002 to 2003. From 1983 to 2001, Mr. Mason served in various sales and managerial posts with The Procter & Gamble Company.
Richard J. Kramer	Executive Vice President and Chief Financial Officer	41
Mr. Kramer joined Goodyear on March 6, 2000, when he was appointed a Vice President for corporate finance. On April 10, 2000, Mr. Kramer was elected Vice President-Corporate Finance, serving in that capacity as the Company’s principal accounting officer until August 6, 2002, when he was elected Vice President, Finance — North American Tire. Effective August 28, 2003 he was appointed and on October 7, 2003 he was elected Senior Vice President, Strategic Planning and Restructuring. He was elected Executive Vice President and Chief Financial Officer on June 1, 2004. Mr. Kramer is the principal financial officer of the Company. Prior to joining Goodyear, Mr. Kramer was an associate of PricewaterhouseCoopers LLP for 13 years, including two years as a partner.
Joseph M. Gingo	Executive Vice President, Quality Systems and Chief Technical Officer	60
Mr. Gingo served in various research and development and managerial posts until November 5, 1996, when he was elected a Vice President, responsible for Goodyear’s operations in Asia, Australia and the Western Pacific. On September 1, 1998, Mr. Gingo was placed on special assignment with the office of the Chairman of the Board. From December 1, 1998 to June 30, 1999, Mr. Gingo served as the Vice President responsible for Goodyear’s worldwide Engineered Products operations. Effective July 1, 1999 to June 1, 2003, Mr. Gingo served as Senior Vice President, Technology and Global Products Planning. On June 2, 2003, Mr. Gingo was elected Executive Vice President, Quality Systems and Chief Technical Officer. Mr. Gingo is the executive officer responsible for Goodyear’s research and tire technology development and product planning operations worldwide. Goodyear employee since 1966.

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Name	Position(s) Held	Age
Marland J. Copeland	Senior Vice President, Business Development, Strategy and Restructuring	43
Mr. Copeland joined Goodyear in August 2000 and served in various financial and managerial posts through November 2002. Effective December 1, 2002, Mr. Copeland was appointed, and on December 3, 2002 he was elected President of the Chemical Division. Mr. Copeland was elected Senior Vice President, Business Development, Strategy and Restructuring on December 9, 2004. Mr. Copeland is the executive officer responsible for Goodyear’s worldwide business development activities and restructuring efforts. Prior to joining Goodyear, Mr. Copeland served as Finance Manager of Internet Marketing and E-commerce at Intel Corporation from 1997 to 2000.
C. Thomas Harvie	Senior Vice President, General Counsel and Secretary	61
Mr. Harvie joined Goodyear on July 1, 1995, when he was elected a Vice President and the General Counsel. Effective July 1, 1999, Mr. Harvie was appointed, and on August 3, 1999 he was elected, Senior Vice President and General Counsel. He was elected Senior Vice President, General Counsel and Secretary effective June 16, 2000. Mr. Harvie is the chief legal officer and is the executive officer responsible for the government relations and real estate activities of Goodyear.
Charles L. Sinclair	Senior Vice President, Global Communications	53
Mr. Sinclair served in various public relations and communications positions until 2002, when he was named Vice President, Public Relations and Communications for North American Tire. Effective June 16, 2003, he was appointed, and on August 5, 2003, he was elected Senior Vice President, Global Communications. Mr. Sinclair is the executive officer responsible for Goodyear’s worldwide communications activities. Goodyear employee since 1984.
Christopher W. Clark	Senior Vice President, Global Sourcing	53
Mr. Clark served in various managerial and financial posts until October 1, 1996, when he was appointed managing director of P.T. Goodyear Indonesia Tbk, a subsidiary of Goodyear. On September 1, 1998, he was appointed managing director of Goodyear do Brasil Productos de Borracha Ltda, a subsidiary of Goodyear. On August 1, 2000, he was elected President, Latin America Tire. On November 4, 2003, Mr. Clark was named Senior Vice President, Global Sourcing. Mr. Clark is the executive officer responsible for coordinating Goodyear’s supply activities worldwide. Goodyear employee since 1973.
Kathleen T. Geier	Senior Vice President, Human Resources	48
Ms. Geier served in various managerial and human resources posts until July 1, 2002 when she was appointed and later elected, Senior Vice President, Human Resources. Ms. Geier is the executive officer responsible for Goodyear’s human resources activities worldwide. Goodyear employee since 1978.
Thomas A. Connell	Vice President and Controller	56
Mr. Connell joined Goodyear on September 1, 2003 and was elected Vice President and Controller on October 7, 2003. Mr. Connell serves as Goodyear’s principal accounting officer. Prior to joining Goodyear, Mr. Connell served in various financial positions with TRW Inc. from 1979 to June 2003, most recently as its Vice President and Corporate Controller. From 1970 to 1979, Mr. Connell was an audit supervisor with the accounting firm of Ernst & Whinney.
Donald D. Harper	Vice President	58
Mr. Harper served in various organizational effectiveness and human resources posts until June 1996, when he was appointed Vice President of Human Resources Planning, Development and Change. Effective December 1, 2003, Mr. Harper has served as the Vice President, Human Resources, North America Shared Services. Mr. Harper was elected a Vice President effective December 1, 1998 and is the executive officer responsible for corporate human resources activities in North America. Goodyear employee since 1968.

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Name	Position(s) Held	Age
William M. Hopkins	Vice President	60
Mr. Hopkins served in various tire technology and managerial posts until appointed Director of Tire Technology for North American Tire effective June 1, 1996. He was elected a Vice President effective May 19, 1998. He served as the executive officer responsible for Goodyear’s worldwide tire technology activities until August 1, 1999. Since August 1, 1999, Mr. Hopkins has served as the executive officer responsible for Goodyear’s worldwide product marketing and technology planning activities. Goodyear employee since 1967.
Isabel H. Jasinowski	Vice President	56
Ms. Jasinowski served in various government relations posts until she was appointed Vice President of Government Relations in 1995. On April 2, 2001, Ms. Jasinowski was elected Vice President, Government Relations, serving as the executive officer primarily responsible for Goodyear’s governmental relations and public policy activities. Goodyear employee since 1981.
Gary A. Miller	Vice President	58
Mr. Miller served in various management and research and development posts until he was elected a Vice President effective November 1, 1992. Mr. Miller was elected Vice President and Chief Procurement Officer in May 2003. He is the executive officer primarily responsible for Goodyear’s purchasing operations worldwide. Goodyear employee since 1967.
Darren R. Wells	Vice President and Treasurer	39
Mr. Wells joined Goodyear on August 1, 2002 and was elected Vice President and Treasurer on August 6, 2002. Mr. Wells is the executive officer responsible for Goodyear’s treasury operations and risk management and pension asset management activities. Prior to joining Goodyear, Mr. Wells served in various financial posts with Ford Motor Company units from 1989 to 2000 and was the Assistant Treasurer of Visteon Corporation from 2000 to July 2002.

No family relationship exists between any of the above named executive officers or between said executive officers and any director or nominee for director of the Company.

      Each executive officer is elected by the Board of Directors of the Company at its annual meeting to a term of one year or until his or her successor is duly elected. In those instances where the person is elected at other than an annual meeting, such person’s term will expire at the next annual meeting.

PART II.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The principal market for Goodyear’s common stock is the New York Stock Exchange (Stock Exchange Symbol GT).

      Information relating to the high and low sale prices of shares of Goodyear’s common stock appears under the caption “Quarterly Data and Market Price Information” in Item 8 of this Annual Report at page 149, and is incorporated herein by reference. Certain of our credit agreements prohibit us from paying dividends on our common stock. At December 31, 2004, there were 25,591 record holders of the 175,619,639 shares of Goodyear’s common stock then outstanding.

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      The following table presents information with respect to repurchases of common stock made by the Company during the three months ended December 31, 2004. These shares were delivered to the Company by employees as payment for the exercise price of stock options as well as the withholding taxes due upon the exercise of the stock options.

					Total Number of		Maximum Number
					Shares Purchased as		of Shares that May
	Total Number		Average Price		Part of Publicly		Yet Be Purchased
	of Shares		Paid		Announced Plans		Under the Plans
Period	Purchased		Per Share		or Programs		or Programs
10/1/04-10/31/04		698	$	9.375		—		—
11/1/04-11/30/04		8,948		12.247		—		—
12/1/04-12/31/04		—		—		—		—
Total		9,646		12.039		—		—

4% Convertible Senior Notes due 2034

      On July 2, 2004, the Company completed a private placement of $350 million aggregate principal amount of 4% Convertible Senior Notes due 2034 (the “Convertible Notes due 2034”). The initial purchasers of the Convertible Notes due 2034 were Goldman, Sachs & Co., Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc. (the “Initial Purchasers”). The offering price of the Convertible Notes due 2034 was 100% of the principal amount of the Convertible Notes due 2034, less an aggregate underwriting discount of $9.6 million. Each sale of the Convertible Notes due 2034 to the Initial Purchasers was exempt from registration in reliance on Section 4(2) and Regulation D under the Securities Act of 1933, as amended, as a transaction not involving a public offering. The Convertible Notes due 2034 were re-offered by the Initial Purchasers to qualified institutional buyers in reliance on Rule 144A under the Securities Act. The Convertible Notes due 2034 are convertible into shares initially of the Company’s common stock at a conversion rate of 83.07 shares of common stock per $1,000 principal amount of notes, which is equal to an initial conversion price of $12.04 per share. The conversion rate is subject to adjustment in certain events.

      The Convertible Notes due 2034 are convertible at the option of the holder, prior to the close of business on the maturity date, under any of the following circumstances: (i) on any business day in any fiscal quarter commencing prior to the maturity date, if the last reported sale price of the Company’s common stock for at least 20 trading days in the 30 consecutive trading-day period ending on the 11th trading day of such fiscal quarter is greater than 120% of the applicable conversion price per share of the Company’s common stock on such 11th trading day; (ii) on any business day after June 15, 2029 and through the business day immediately preceding the maturity date, if the last reported sale price of the Company’s common stock on any trading date after June 15, 2029 is greater than 120% of the applicable conversion price per share of the Company’s common stock on such trading date; (iii) at any time prior to June 15, 2029, during the five consecutive business day period following any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each day of that trading period was less than 98% of the product of the last reported sale price of the Company’s common stock on such corresponding trading day and the applicable conversion rate; (iv) if the Company has called the notes for redemption; or (v) upon the occurrence of certain specified corporate events or transactions. Upon conversion, the Company has the right to deliver, in lieu of shares of common stock, cash or a combination of cash and shares of common stock.

      Holders of the Convertible Notes due 2034 have the right to require the Company to purchase all or a portion of their notes on June 15 of each of 2011, 2014, 2019, 2024 and 2029 or upon the occurrence of certain designated events. In each case, the Company will pay a purchase price equal to 100% of the principal amount of the notes to be purchased, plus any accrued and unpaid interest to, but excluding the purchase date, plus, in the case of certain designated events, a make-whole premium.

Goodyear Dunlop Tires North America, Ltd. Employee Savings Plan for Bargaining Unit Employees

      Since January 1, 2003 the Goodyear Dunlop Tires North America, Ltd. Employee Savings Plan for Bargaining Unit Employees (the “Plan”) has offered Goodyear common stock as an investment option

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through the Goodyear Common Stock Fund. The Goodyear common stock offered to plan participants was not registered with the Securities and Exchange Commission as required by the securities laws. Goodyear intends to register the Goodyear common stock promptly. Plan participants who purchase shares in the Goodyear Common Stock Fund prior to the registration of these shares have the right to rescind the purchase of the shares for one year following the purchase. As of December 31, 2004, there were 195,583 shares of Goodyear common stock held by participants in the Plan.

ITEM 6. SELECTED FINANCIAL DATA.

	Year Ended December 31,
			Restated
	2004		2003			2002			2001			2000
(In millions, except per share amounts)
Net Sales	$	18,370.4	$	15,122.1		$	13,856.0		$	14,162.3		$	14,439.0
Net Income (Loss)	$	114.8	$	(807.4	)	$	(1,246.9	)	$	(254.7	)	$	50.0
Net Income (Loss) Per Share — Basic	$	0.65	$	(4.61	)	$	(7.47	)	$	(1.59	)	$	0.32
Net Income (Loss) Per Share — Diluted	$	0.63	$	(4.61	)	$	(7.47	)	$	(1.59	)	$	0.31
Dividends Per Share	$	—	$	—		$	0.48		$	1.02		$	1.20
Total Assets		16,533.3		14,701.1			13,013.1			13,719.7			13,539.6
Long Term Debt and Capital Leases due Within One Year		1,009.9		113.5			369.8			109.7			159.2
Long Term Debt and Capital Leases		4,449.1		4,825.8			2,989.5			3,203.3			2,349.4
Shareholders’ Equity (Deficit)		72.8		(32.2	)		221.1			2,596.8			3,429.3

Notes:

The information contained in the selected financial data has been restated. For further information, refer to the Note to the Financial Statements No. 2, Restatement.

      (1) Information on the impact of the restatement follows:

	Year Ended
	December 31,
	2003			2003
	As Previously			As
	Reported(B)			Restated
(In millions, except per share amounts)
Net Sales	$	15,119.0		$	15,122.1
Net Loss	$	(802.1	)	$	(807.4	)
Net Loss Per Share — Basic	$	(4.58	)	$	(4.61	)
Net Loss Per Share — Diluted	$	(4.58	)	$	(4.61	)
Dividends Per Share	$	—		$	—
Total Assets		15,005.5			14,701.1
Long Term Debt and Capital Leases due Within One Year		113.5			113.5
Long Term Debt and Capital Leases		4,826.2			4,825.8
Shareholders’ Equity (Deficit)		(13.1	)		(32.2	)

(B)  As reported in 2003 Form 10-K filed on May 19, 2004.

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	Year Ended December 31,
	2002			2002			2002
	As Originally			As Previously			As
	Reported(A)			Reported(B)			Restated
(In millions, except per share amounts)
Net Sales	$	13,850.0		$	13,856.2		$	13,856.0
Net Loss	$	(1,105.8	)	$	(1,227.0	)	$	(1,246.9	)
Net Loss Per Share — Basic	$	(6.62	)	$	(7.35	)	$	(7.47	)
Net Loss Per Share — Diluted	$	(6.62	)	$	(7.35	)	$	(7.47	)
Dividends Per Share	$	0.48		$	0.48		$	0.48
Total Assets		13,146.6			13,038.7			13,013.1
Long Term Debt and Capital Leases due Within One Year		369.8			369.8			369.8
Long Term Debt and Capital Leases		2,989.0			2,989.8			2,989.5
Shareholders’ Equity		650.6			255.4			221.1

	Year Ended December 31,
	2001			2001			2001
	As Originally			As Previously			As
	Reported(A)			Reported(B)			Restated
(In millions, except per share amounts)
Net Sales	$	14,147.2		$	14,162.5		$	14,162.3
Net Loss	$	(203.6	)	$	(254.1	)	$	(254.7	)
Net Loss Per Share — Basic	$	(1.27	)	$	(1.59	)	$	(1.59	)
Net Loss Per Share — Diluted	$	(1.27	)	$	(1.59	)	$	(1.59	)
Dividends Per Share	$	1.02		$	1.02		$	1.02
Total Assets		13,783.4			13,768.6			13,719.7
Long Term Debt and Capital Leases due Within One Year		109.7			109.7			109.7
Long Term Debt and Capital Leases		3,203.6			3,203.6			3,203.3
Shareholders’ Equity		2,864.0			2,627.8			2,596.8

(A)  As reported in 2002 Form 10-K filed on April 3, 2003.

(B) As reported in 2003 Form 10-K filed on May 19, 2004.

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	Year Ended December 31,
	2000		2000		2000
	As Originally		As Previously		As
	Reported(A)		Reported(B)		Restated
(In millions, except per share amounts)
Net Sales	$	14,417.1	$	14,459.9	$	14,439.0
Net Income	$	40.3	$	51.3	$	50.0
Net Income Per Share — Basic	$	0.26	$	0.33	$	0.32
Net Income Per Share — Diluted	$	0.25	$	0.32	$	0.31
Dividends Per Share	$	1.20	$	1.20	$	1.20
Total Assets		13,568.0		13,576.7		13,539.6
Long Term Debt and Capital Leases due Within One Year		159.2		159.2		159.2
Long Term Debt and Capital Leases		2,349.6		2,349.6		2,349.4
Shareholders’ Equity		3,503.0		3,454.3		3,429.3

(A)  As reported in 2002 Form 10-K filed on April 3, 2003.

(B) As reported in 2003 Form 10-K filed on May 19, 2004.

As discussed in the Note to the Financial Statements No. 2, Restatement, restatement adjustments included in the 2003 Form 10-K were classified as “Accounting Irregularities,” “Account Reconciliations,” “Out-of-Period,” “Discount Rate,” “Chemical Products Segment” and “Tax Adjustments.” Restatement adjustments included in the 2004 Form 10-K were classified as “SPT”, “General and Product Liability”, “Account Reconciliations” and “Tax Adjustments”.

      The increase in net loss in 2003 of $5.3 million was due primarily to tax adjustments. Charges for the write-off of goodwill related to sold assets, adjustments to leased tire assets and changes to the timing of rationalization charges at SPT were substantially offset by the benefit of a change in our estimated liability for general and product liability — discontinued products.

      For the restatement of 2003, pretax loss was increased by charges of $5.4 million due to the impact of Account Reconciliations and $2.3 million due to SPT. Pretax loss in 2003 was reduced by benefits of $7.3 million due to General and Product Liability. The net loss in 2003 was increased by $4.8 million due to the impact of Tax Adjustments.

      Net loss as previously reported in 2002 increased by $121.2 million due primarily to an additional Federal and state deferred tax asset valuation allowance of $121.6 million.

      For the restatement of 2002, pretax loss as previously reported was increased by charges of $14.9 million due to the impact of Discount Rate, $6.8 million due to Account Reconciliations and $3.5 million due to Accounting Irregularities. Pretax loss as previously reported was reduced by a benefit of $15.2 million due to the impact of Out-of-Period and $14.2 million due to Chemical Products Segment. Net loss as previously reported was increased by $122.5 million for Tax Adjustments.

      Net loss as restated in 2002 increased by $19.9 million due primarily to charges for tax adjustments, an additional Federal and state deferred tax asset valuation allowance and changes to the timing of rationalization charges at SPT.

      For the restatement of 2002, pretax loss as restated was increased by charges of $3.5 million due to the impact of SPT and $1.8 million due to Account Reconciliations. The net loss in 2002 was increased by a charge of $7.2 million due to Tax Adjustments.

      Net loss as previously reported in 2001 increased by $50.5 million due primarily to the timing of the recognition of manufacturing variances to reflect the actual cost of inventories of the Chemical Products Segment, the erroneous recording of cost of goods sold for the sale of inventory at Wingfoot Commercial Tire

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Systems, LLC, Accounting Irregularities adjustments and other Account Reconciliation adjustments. On November 1, 2000, Goodyear made a contribution, which included inventory, to Wingfoot Commercial Tire Systems, LLC, a consolidated subsidiary. On a consolidated basis, the inventory was valued at Goodyear’s historical cost. Upon the sale of the inventory, consolidated cost of goods sold was understated by $11 million. Additionally, inventory and fixed asset losses totaling $4.2 million were not expensed as incurred and were written off. Chemical Products Segment adjustments were the result of a stand-alone audit conducted in 2003 of a portion of the Chemical Products business segment.

      For the restatement of 2001, pretax loss as previously reported was increased by charges of $18.9 million due to the impact of Chemical Products Segment, $14.5 million due to Out-of-Period, $13.2 million due to Accounting Irregularities, $12.8 million due to Account Reconciliations and $5.5 million due to Discount Rate. The tax effect of restatement adjustments reduced the net loss by $17.9 million.

      Net loss as restated in 2001 increased by $0.6 million due primarily to charges for changes in the timing of rationalization charges at SPT, an asset impairment charge at SPT, interest expense related to a long term contractual obligation with SPT and a benefit from the reduction in goodwill amortization expense due to impact of changing exchange rates.

      For the restatement of 2001, pretax loss as restated was reduced by a benefit of $0.6 million due to the impact of SPT, but was increased by charges of $1.7 million due to Account Reconciliations.

      Net income as previously reported in 2000 increased by $11.0 due primarily to Chemical Products Segment adjustments and the Account Reconciliation adjustments, primarily Interplant and Wingfoot Commercial Tire Systems, LLC.

      For the restatement of 2000, pretax income as previously reported was reduced by charges of $21.7 million due to the impact of Account Reconciliations. Pretax income increased by benefits of $19.1 million due to the impact of Chemical Products Segment, $14.5 million due to Discount Rate, $5.8 million due to Out-of-Period and $0.6 million due to Accounting Irregularities. The tax effect of restatement adjustments was an expense of $7.3 million.

      Net income as restated in 2000 decreased by $1.3 million due primarily to a charge to recognize certain payments we made pursuant to a long term supply agreement with SPT as a capital contribution, 50% of which was attributed to our joint venture partner pursuant to the provisions of Emerging Issues Task Force Issue 00-12, “Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee”, and benefits from the tax effect of the SPT capital contribution charge, a reduction in goodwill amortization expense due to impact of changing exchange rates and corrections to intercompany accounts at a subsidiary in Europe.

      For the restatement of 2000, pretax income as restated was reduced by $7.5 million due to SPT and increased $0.3 million due to Account Reconciliations.

      (2) Refer to “Principles of Consolidation” in the Note to the Financial Statements No. 1, Accounting Policies.

      (3) Net sales in 2004 increased $1.2 billion resulting from the consolidation of two businesses in accordance with FIN 46. Net Income in 2004 included net after-tax charges of $133.3 million, or $0.70 per share-diluted, for rationalizations and related accelerated depreciation, general and product liability-discontinued products, insurance fire loss deductibles and asset sales. Net income in 2004 also included net after-tax benefits of $236.0 million, or $1.23 per share-diluted, from an environmental insurance settlement, net favorable tax adjustments and a favorable lawsuit settlement.

      (4) Net Loss in 2003 included net after-tax charges of $515.1 million (as restated), or $2.93 per share-diluted (as restated), for rationalizations, general and product liability-discontinued products, accelerated depreciation and asset write-offs, net favorable tax adjustments, an unfavorable settlement of a lawsuit against Goodyear in Europe, and rationalization costs at Goodyear’s SPT equity affiliate. In addition, Engineered Products recorded account reconciliation adjustments in the restatements totaling $18.9 million or $0.11 per share in 2003.

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      (5) Net Loss in 2002 included net after-tax charges of $22.0 million (as restated), or $0.13 per share-diluted (as restated), for general and product liability — discontinued products, asset sales, rationalizations, write-off of a miscellaneous investment and a net rationalization reversal at Goodyear’s SPT equity affiliate. Net loss in 2002 also included a non-cash charge of $1.22 billion (as restated), or $6.95 per share-diluted (as restated), to establish a valuation allowance against net federal and state deferred tax assets.

      (6) Net Loss in 2001 included net after-tax charges of $187.4 million (as restated), or $1.18 per share-diluted (as restated), for rationalizations, asset sales, general and product liability — discontinued products, rationalization costs at Goodyear’s SPT equity affiliate and costs related to a tire replacement program.

      (7) Net Income in 2000 included net after-tax charges of $71.9 million (as restated), or $0.45 per share-diluted (as restated), for rationalizations, a change in Goodyear’s domestic inventory costing method from LIFO to FIFO, rationalization costs at Goodyear’s SPT equity affiliate, general and product liability — discontinued products and asset sales.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

The Goodyear Tire & Rubber Company is one of the world’s leading manufacturers of tires and rubber products with one of the most recognized brand names in the world. We have a broad global footprint with 99 manufacturing facilities in 28 countries. Through December 31, 2004, our business was run through seven operating segments: North American Tire; European Union Tire; Eastern Europe, Middle East and Africa Tire (“Eastern Europe Tire”) (formerly known as “Eastern Europe, Africa and Middle East Tire”), Latin American Tire; Asia/ Pacific Tire (formerly known as “Asia Tire”); Engineered Products; and Chemical Products.

      In 2004, we had net income of $114.8 million, compared to significant net losses for 2003 and 2002 of $807.4 million (as restated) and $1,246.9 million (as restated), respectively. The net loss in 2002 included a non-cash charge of $1.22 billion (as restated) to establish a valuation allowance against our net deferred tax assets. The improvement in 2004 compared to 2003 is due in part to:

•  a decrease in net after-tax rationalization charges of $215.1 million,

•  an after-tax gain from a settlement with certain insurance companies related to coverage for environmental matters of $156.6 million,

•  a decrease in net after-tax charges for accelerated depreciation and asset writeoffs of $122.0 million,

•  a decrease in net after-tax charges for general and product liability — discontinued products of $85.4 million (as restated), and

•  an increase in net favorable tax adjustments of $10.5 million.

      Earnings in 2004 also benefited from an increase in segment operating income in each of our operating segments, as set forth below:

		Year Ended December 31,
				Restated
		2004		2003			2002
(In millions)
Segment Operating Income
	North American Tire	$	31.5	$	(130.9	)	$	(58.1	)
	European Union Tire		252.7		129.8			101.1
	Eastern Europe, Middle East and Africa Tire		193.8		146.6			93.2
	Latin American Tire		251.2		148.6			107.6
	Asia/ Pacific Tire		61.1		49.9			43.7
	Engineered Products		113.2		46.8			39.0
	Chemical Products		177.0		120.2			88.2

In particular, our results are highly dependent upon the results of our North American Tire segment, which accounted for approximately 43% of our consolidated net sales in 2004. In recent years, North American Tire results have been negatively impacted by several factors, including over-capacity which limits pricing leverage, weakness in the replacement tire market, increased competition from low cost manufacturers, a decline in market share and increases in medical and pension costs. In 2004, North American Tire’s segment operating income improved to $31.5 million on sales of approximately $7.9 billion. The improvement was due primarily to sustained improvement in pricing and a shift in product mix toward more profitable Goodyear brand tires. Additional improvement was a result of savings from rationalization programs, lower benefit costs and increased sales in the consumer replacement market and commercial markets. In addition, our second largest segment, European Union Tire, which accounted for approximately 24% of our consolidated net sales in 2004, had its segment operating income improve to $252.7 million on sales of approximately $4.5 billion. Approximately 11% of the increase in segment operating income from 2003 to 2004 was attributable to

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currency translation, primarily the Euro. The improvement in European Union Tire also reflected improved pricing and product mix.

      Although our North American segment’s performance improved in 2004, it contributed just 2.9% of our total segment operating income on 41.0% of total segment sales, due primarily to legacy costs for North American retirees such as pension and other postretirement benefit expenses. In contrast, our Latin American and Eastern Europe Tire segments represented only 13.2% of our total segment sales in 2004, while approximately 41.2% of our total segment operating income came from these segments. As a result, increasing competition and unexpected changes in government policies or currency values in these regions could have a disproportionate impact on our ability to sustain profitability.

      Effective January 1, 2005, Chemical Products was integrated into North American Tire. The integration will not change how we report net income. During 2004, $818.6 million, or 53.4%, of Chemical Products’ sales and 75.2% of its segment operating income resulted from intercompany transactions. Beginning with the first quarter of 2005, our total segment sales will no longer reflect these intercompany sales. In addition, the segment operating income previously attributable to Chemical Products’ intercompany transactions will no longer be included in the total segment operating income that we report.

      Higher raw material costs, particularly for natural rubber, continue to negatively impact our results. Raw material costs in our Cost of Goods Sold in 2004 increased by approximately $280 million from 2003. We expect that raw material costs will increase between 6% and 8% in 2005 compared to 2004.

      A key indicator of our operating performance is share of sales, especially in our two largest regions, North America and Western Europe. Listed below is our estimated share of sales in each of these two regions for our two primary tire markets: Original Equipment and Replacement.

	North America				Western Europe
	Estimated Share				Estimated Share
	of Sales				of Sales
	2004		2003		2004		2003
Original Equipment		39.8%		41.3%		23.7%		23.4%
Replacement		25.4%		25.4%		23.4%		23.8%

The above percentages are estimates only and are based on a combination of industry publications and surveys and internal company surveys. In North America, our 2004 share of sales in the replacement segment was comparable to our share in 2003. Our share of sales in the replacement market increased for the Goodyear brand while share of sales for the Dunlop brand decreased. Our 2004 share of sales in the North American original equipment market channel declined compared to 2003 due to our selective fitment strategy in the consumer original equipment business. In Western Europe, our 2004 share of replacement market sales decreased in all segments compared to 2003. OE market share increased in Western Europe due primarily to gains in the commercial market.

      We continue to have a significant amount of debt. On December 31, 2004, our debt (including capital leases) on a consolidated basis was $5.68 billion, compared to $5.08 billion at December 31, 2003. As a result of our increased debt level and higher average interest rates, our interest expense has continued to increase, reaching $368.8 million in 2004, compared to $296.3 million in 2003 and $242.7 million (as restated) in 2002. We anticipate undertaking refinancing activities in order to address $1.01 billion and $1.92 billion of long-term debt maturing in 2005 and 2006, respectively. In addition, refinancing activities will address expected minimum required contributions to our domestic pension plans of approximately $400 million to $425 million in 2005 and $600 million to $775 million in 2006, and the need to enhance our financial flexibility and ensure adequate liquidity. In particular, our $650 million European credit facilities mature on April 30, 2005 and must be either extended or refinanced. As part of our refinancing efforts, we may seek to access the capital markets, although our current credit ratings may restrict our ability to do so. Failure to obtain new financing could have a material adverse effect on our liquidity. In addition, we continue to review potential asset sales.

      We remain subject to a Securities and Exchange Commission (“SEC”) investigation into the facts and circumstances surrounding the restatement of our historical financial statements. We are cooperating fully

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with the SEC and have provided requested information as expeditiously as possible. Because the SEC investigation is currently ongoing, the outcome cannot be predicted at this time. In May 2004, following the conclusion of certain internal investigations initiated by our Audit Committee, our external auditors advised us that the circumstances they previously identified to us as collectively resulting in a material weakness in October 2003 had each individually become a material weakness. Our external auditors further identified an additional material weakness resulting from intentional overrides of internal controls by middle managerial personnel, particularly related to European Union Tire and workers’ compensation liability in the United States, which our internal investigation had identified and brought to the auditor’s attention. Item 9A of this Form 10-K provides a discussion of remediation activities undertaken relative to these previously-identified material weaknesses and management’s conclusions as to their status of December 31, 2004. In addition, Item 9A of this report discusses management’s assessment of the effectiveness of internal controls over financial reporting under the Sarbanes-Oxley Act of 2002. That report concludes that our internal controls over financial reporting were ineffective as of December 31, 2004, and cites two material weaknesses in our internal controls. Management’s assessment of the effectiveness of internal controls has been audited by our independent registered public accounting firm. We are currently implementing a remediation plan to address these matters.

      Our results of operations, financial position and liquidity could be adversely affected in future periods by loss of market share or lower demand in the replacement market or from the original equipment industry, which would result in lower levels of plant utilization that would increase unit costs. Also, we could experience higher raw material and energy costs in future periods. These costs, if incurred, may not be recoverable due to pricing pressures present in today’s highly competitive market. Our future results of operations are also dependent on our ability to (i) successfully implement cost reduction programs to address, among other things, higher wage and benefit costs, and (ii) where necessary, reduce excess manufacturing capacity. We are unable to predict future currency fluctuations. Sales and earnings in future periods would be unfavorably impacted if the U.S. dollar strengthens against various foreign currencies, or if economic conditions deteriorate in the United States or Europe. Continued volatile economic conditions or changes in government policies in emerging markets could adversely affect sales and earnings in future periods. We may also be impacted by economic disruptions associated with global events including war, acts of terror and civil obstructions.

RESULTS OF OPERATIONS — CONSOLIDATED

(All per share amounts are diluted)

Net sales in 2004 were $18.37 billion, compared to $15.12 billion (as restated) in 2003 and $13.86 billion (as restated) in 2002.

      Net income of $114.8 million, $0.63 per share, was recorded in 2004. A net loss of $807.4 million (as restated), $4.61 per share (as restated), was recorded in 2003. A net loss of $1.25 billion (as restated), $7.47 per share (as restated), was recorded in 2002, primarily resulting from a non-cash charge of $1.22 billion (as restated), $6.95 per share (as restated) to establish a valuation allowance against our net Federal and state deferred tax assets.

Net Sales

Net sales in 2004 increased approximately $3.2 billion from 2003. The increase was due primarily to the consolidation of two affiliates deemed to be variable interest entities, South Pacific Tyres (SPT) and Tire & Wheels Assemblies (T&WA), in January 2004. The consolidation of these businesses increased net sales in 2004 by approximately $1.2 billion. Additionally, improved pricing and product mix improvements in all SBUs, primarily in North American Tire, increased 2004 net sales by approximately $799 million. Higher unit volume in North American Tire, Latin American Tire, Eastern Europe Tire and European Union Tire, as well as higher volume in Engineered Products and Chemical Products, had a favorable impact on 2004 net sales of approximately $606 million. Currency translation, mainly in Europe, favorably affected 2004 net sales by approximately $542 million.

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The following table presents our tire unit sales for the periods indicated:

			Year Ended December 31,
			2004		2003		2002
(In millions of tires)
North American Tire (U.S. and Canada)				70.8		68.6		69.7
International				88.8		82.0		77.9
		Replacement tire units		159.6		150.6		147.6
North American Tire (U.S. and Canada)				31.7		32.6		34.1
International				32.0		30.3		32.6
		OE tire units		63.7		62.9		66.7
	Goodyear worldwide tire units			223.3		213.5		214.3

Our worldwide tire unit sales in 2004 increased 4.6% from 2003. North American Tire volume in 2004 increased 1.3% from 2003, while international unit sales increased 7.5%. Worldwide replacement unit sales in 2004 increased 6.0% from 2003, due primarily to the consolidation of SPT and improvement in North American Tire, Latin American Tire and Eastern Europe Tire. Original equipment unit sales in 2004 increased 1.2% from 2003, due primarily to the consolidation of SPT and improvement in Eastern Europe Tire, Latin American Tire and European Union Tire. Original equipment and replacement tire unit sales in 2004 increased by approximately 0.8 million and 5.5 million units, respectively, as a result of the consolidation of SPT.

      Net sales (as restated) in 2003 increased $1.2 billion from 2002 (as restated) due primarily to favorable currency translation of approximately $737 million, mainly in Europe. Favorable pricing and product mix in all business units, primarily Latin American Tire, Chemical Products and North American Tire, accounted for approximately $418 million of the increase in revenues. In Europe, strong replacement sales also had a favorable impact on 2003 net sales of approximately $104 million.

      Our worldwide tire unit sales in 2003 decreased 0.3% from 2002. North American Tire volume decreased 2.5% in 2003, while international unit sales increased 1.7%. Worldwide replacement unit sales in 2003 increased 2.0% from 2002, due to increases in all regions except North American Tire and Asia/ Pacific Tire. Original equipment unit sales decreased 5.6% in 2003, due primarily to a decrease in North American Tire.

Cost of Goods Sold

Cost of goods sold (CGS) was $14.71 billion in 2004, compared to $12.50 billion in 2003 and $11.31 billion in 2002. CGS was 80.1% of sales in 2004, compared to 82.7% in 2003 and 81.6% in 2002. CGS in 2004 increased by approximately $1.0 billion due to the previously mentioned consolidation of SPT and T&WA in accordance with FIN 46, by approximately $429 million in 2004 due to higher volume and approximately $409 million due to currency translation, primarily in Europe. Manufacturing costs related to changes in product mix increased 2004 CGS by approximately $210 million. In addition, 2004 raw material costs increased by approximately $280 million, although conversion costs were flat. Savings from rationalization programs totaling approximately $127 million favorably affected CGS in 2004. CGS in 2004 also includes a fourth quarter benefit of approximately $23.4 million ($19.3 million after tax or $0.09 per share) resulting from a settlement with certain suppliers of various raw materials.

      CGS (as restated) in 2003 increased by approximately $554 million from 2002 due to currency movements, primarily in Europe. In addition, raw material costs in 2003, largely for natural and synthetic rubber, rose by approximately $335 million. CGS in 2003 also increased by approximately $133 million due to accelerated depreciation charges, asset impairment charges and write-offs related to 2003 rationalization actions. Manufacturing costs related to improvements in product mix, primarily in North American Tire, increased 2003 CGS by approximately $184 million. In addition, costs increased in Latin American Tire due to inflation. Savings from rationalization programs of approximately $61 million, mainly in European Union Tire and North American Tire, and the change in vacation policy described below of approximately

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$33 million favorably affected 2003 CGS. CGS in 2003 included $16.8 million of net charges related to Engineered Products account reconciliations that were recorded in conjunction with the restatement.

      Research and development expenditures are expensed in CGS as incurred and were $378.2 million in 2004, compared to $351.0 million (as restated) in 2003 and $386.5 million (as restated) in 2002. Research and development expenditures in 2005 are expected to be approximately $380 to $390 million.

Selling, Administrative and General Expense

Selling, administrative and general expense (SAG) was $2.83 billion in 2004, compared to $2.37 billion in 2003 and $2.20 billion in 2002. SAG in 2004 was 15.4% of sales, compared to 15.7% in 2003 and 15.9% in 2002. SAG increased by approximately $200 million in 2004 due to the previously mentioned consolidation of SPT and T&WA in accordance with FIN 46. SAG in 2004 included expenses of approximately $30 million for professional fees associated with the restatement and SEC investigation, and approximately $25 million for Sarbanes-Oxley compliance. We estimate that external costs for Sarbanes-Oxley compliance will be approximately $10 million to $15 million in 2005. Currency translation, primarily in Europe, increased SAG in 2004 by approximately $101 million. Advertising expenses were approximately $46 million higher due in part to the launch of the Assurance tire in North America, and wage and benefit costs rose by approximately $46 million. SAG in 2004 benefited from approximately $28 million in savings from rationalization programs.

      SAG (as restated) increased in 2003 due primarily to currency translation, mainly in Europe, of approximately $132 million and higher wages and benefits of approximately $72 million. SAG also reflected increased advertising expense, largely in European Union Tire and North American Tire, of approximately $29 million and increased corporate consulting fees of approximately $23 million. SAG was favorably affected by savings from rationalization programs of approximately $74 million and by the change in vacation policy described below of approximately $34 million.

Other Cost Reduction Measures

During 2002, we announced the suspension of the matching contribution portion of our savings plans for all salaried associates, effective January 1, 2003. Effective April 20, 2003, we suspended the matching contribution portion of the savings plan for bargaining unit associates, including those covered by our master contract with the USWA. We contributed approximately $38 million to the savings plans in 2002. In addition, we changed our vacation policy for domestic salaried associates in 2002. As a result of the changes to the policy, we did not incur vacation expense for domestic salaried associates in 2003. Vacation expense was approximately $67 million lower in 2003 compared to 2002 due to the impact of this change in vacation policy.

Interest Expense

Interest expense in 2004 was $368.8 million, compared to $296.3 million in 2003 and $242.7 million (as restated) in 2002. Interest expense increased in 2004 from 2003 due to higher average debt levels, higher average interest rates and the April 1, 2003 restructuring and refinancing of our credit facilities. Interest expense increased in 2003 from 2002 (as restated) due to higher average debt levels. While we expect interest expense to increase in 2005 due to higher interest rates and higher average debt levels, we expect that the $3.35 billion refinancing we announced in February 2005 will partially offset this increase by reducing the amount over LIBOR we pay to borrow under the refinanced facilities.

Other (Income) and Expense

Other (income) and expense was $8.2 million in 2004, compared to $263.4 million (as restated) in 2003 and $56.8 million in 2002. Other (income) and expense included accounts receivable sales fees, debt refinancing fees and commitment fees totaling $116.5 million, $99.4 million and $48.4 million in 2004, 2003 and 2002, respectively. The higher level of financing fees and financial instruments in 2003 and 2004 was due to costs resulting from refinancing activities in those years. Amounts in 2004 included $20.5 million of deferred costs written-off in connection with refinancing activities in 2004. Financing fees and financial instruments included $45.6 million in 2003 related to new facilities in that year. Refer to the Note to the Financial Statements

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No. 11, Financing Arrangements and Derivative Financial Instruments, for further information about refinancing activities. We expect to incur additional financing fees in the future related to refinancings and capital market transactions.

      Other (income) and expense included net charges for general and product liability-discontinued products totaling $52.7 million, $138.1 million (as restated) and $33.8 million in 2004, 2003 and 2002, respectively. These net charges related to asbestos personal injury claims and for liabilities related to Entran II claims, net of insurance recoveries. Of the $52.7 million of net expense recorded in 2004, $41.4 million related to Entran II claims ($141.4 million of expense and $100.0 million of insurance recoveries) and $11.3 million related to asbestos claims ($13.0 million of expense and $1.7 million of probable insurance recoveries). Of the $138.1 million (as restated) of net expense recorded in 2003, $180.4 million related to Entran II claims ($255.4 million of expense and $75.0 million of insurance recoveries) and $(42.3) million (as restated) related to asbestos claims ($24.3 million of expense and $66.6 of probable insurance recoveries). Of the $33.8 million of net expense recorded in 2002, $9.8 million related to Entran II claims and $24.0 million related to asbestos claims. We did not record any probable insurance recoveries in 2002. Refer to the Note to the Financial Statements No. 20, Commitments and Contingent Liabilities, for further information about general and product liabilities.

      Other (income) and expense in 2004 included a gain of $13.3 million ($10.3 million after tax or $0.05 per share) on the sale of assets in North American Tire, European Union Tire and Engineered Products. In addition, a loss of $17.5 million ($17.8 million after tax or $0.09 per share) was recorded in 2004 on the sale of corporate assets and assets in North American Tire, European Union Tire and Chemical Products, including a loss of $14.5 million ($15.6 million after tax or $0.08 per share) on the write-down of the assets of our natural rubber plantations in Indonesia. Other (income) and expense in 2004 also included a charge of $11.7 million ($11.6 million after tax or $0.07 per share) for insurance fire loss deductibles related to fires at our facilities in Germany, France and Thailand. During 2004, approximately $36 million in insurance recoveries were received related to these fire losses.

      Other (income) and expense in the 2004 fourth quarter included a benefit of $156.6 million ($156.6 million after tax or $0.75 per share) resulting from a settlement with certain insurance companies. We will receive $159.4 million ($156.6 million plus imputed interest of $2.8 million) in installments in 2005 and 2006 in exchange for releasing the insurers from certain past, present and future environmental claims. A significant portion of the costs incurred by us related to these claims had been recorded over the prior years.

      Other (income) and expense in 2003 included a loss of $17.6 million ($8.9 million after tax or $0.05 per share) on the sale of 20,833,000 shares of common stock of Sumitomo Rubber Industries, Ltd. in the second quarter. A loss of $14.4 million ($13.2 million after tax or $0.08 per share) was recorded in 2003 on the sale of assets in Engineered Products, North American Tire and European Union Tire. A gain of $6.9 million ($5.8 million after tax or $0.04 per share) was recorded in 2003 resulting from the sale of assets in Asia/ Pacific Tire, Latin American Tire and European Union Tire.

      Other (income) and expense in 2002 included gains of $28.0 million ($23.7 million after tax or $0.14 per share) resulting from the sale of assets in Latin American Tire, Engineered Products and European Union Tire. The write-off of a miscellaneous investment of $4.1 million ($4.1 million after tax or $0.02 per share) was also included in Other (income) and expense in 2002.

      For further information, refer to the Note to the Financial Statements No. 4, Other (Income) and Expense.

Foreign Currency Exchange

Net foreign currency exchange loss was $23.4 million in 2004, compared to a net loss of $40.7 million (as restated) in 2003 and a net gain of $8.7 million (as restated) in 2002. Foreign currency exchange loss in 2004 was lower than in 2003 (as restated), as 2003 (as restated) reflected the weakening of the Brazilian Real versus the U.S. dollar. The loss in 2003 (as restated) included approximately $48 million of increased losses versus 2002 due to currency movements on U.S. dollar-denominated monetary items in Brazil and Chile. Net

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foreign currency exchange gain in 2002 (as restated) benefited by approximately $16 million from currency movements on U.S. dollar-denominated monetary items in Brazil. A loss of approximately $8 million resulting from currency movements on U.S. dollar-denominated monetary items in Argentina was also recorded in 2002.

Equity in (Earnings) Losses of Affiliates

Equity in earnings of affiliates in 2004 was income of $8.4 million, compared to a loss of $14.5 million (as restated) in 2003 and a loss of $13.8 million (as restated) in 2002. The improvement in 2004 was due primarily to improved results at Rubbernetwork.com and the consolidation of South Pacific Tyres (SPT). Our share of losses at SPT was included in 2003 and 2002. SPT was consolidated effective January 1, 2004, pursuant to the provisions of FIN 46.

Income Taxes

For 2004, we recorded tax expense of $207.9 million on income before income taxes and minority interest in net income of subsidiaries of $380.5 million. For 2003, we recorded tax expense of $117.1 million (as restated) on a loss before income taxes and minority interest in net income of subsidiaries of $657.5 million (as restated). For 2002, we recorded tax expense of $1.23 billion (as restated) on income before income taxes and minority interest in net income of subsidiaries of $36.6 million (as restated).

      The difference between our effective tax rate and the U.S. statutory rate was due primarily to our continuing to maintain a full valuation allowance against our net Federal and state deferred tax assets. In 2002 we recorded a non-cash charge of $1.22 billion (as restated) ($6.95 per share (as restated)) to establish this valuation allowance.

      Income tax expense in 2004 includes net favorable tax adjustments totaling $60.1 million. These adjustments related primarily to the settlement of prior years’ tax liabilities.

      In 2002, we determined that earnings of certain international subsidiaries would no longer be permanently reinvested in working capital. Accordingly, we recorded a provision of $50.2 million for the incremental taxes incurred or to be incurred upon inclusion of such earnings in Federal taxable income.

      The American Job Creation Act of 2004 (the Act) was signed into law in October 2004 and replaces an export incentive with a deduction from domestic manufacturing income. As we are both an exporter and a domestic manufacturer and in a U.S. tax loss position, this change should have no material impact on our income tax provision. The Act also provides for a special one-time tax deduction of 85% of certain foreign earnings that are repatriated no later than 2005. We have started an evaluation of the effects of the repatriation provision. We do not anticipate that the repatriation of foreign earnings under the Act would provide an overall tax benefit to us. However, we do not expect to be able to complete this evaluation until our 2005 tax position has been more precisely determined and the U.S. Congress or the U.S. Treasury Department provide additional guidance on certain of the Act’s provisions. Any repatriation of earnings under the Act is not expected to have a material impact on our results of operations, financial position or liquidity.

      The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We also recognize tax benefits to the extent that it is probable that our positions will be sustained when challenged by the taxing authorities. As of December 31, 2004, we had not recognized tax benefits of approximately $180 million relating to the reorganization of legal entities in 2001. Pursuant to the reorganization, our tax payments have been reduced by approximately $67 million through December 31, 2004. Should the ultimate outcome be unfavorable, we would be required to make a cash payment for all tax reductions claimed as of that date.

      For further information, refer to the Note to the Financial Statements No. 14, Income Taxes.

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Rationalization Activity

To maintain global competitiveness, we have implemented rationalization actions over the past several years for the purpose of reducing excess capacity, eliminating redundancies and reducing costs. We recorded net rationalization costs of $55.6 million in 2004, $291.5 million in 2003 and $5.5 million in 2002. As of December 31, 2004, we had reduced employment levels by approximately 6,800 from January 1, 2002 and approximately 18,000 since January 1, 2000, primarily as a result of rationalization activities.

2004

In 2004, net charges were recorded totaling $55.6 million ($52.0 million after-tax or $0.27 per share). The net charges included reversals of $39.2 million ($32.2 million after tax or $0.17 per share) related to reserves from rationalization actions no longer needed for their originally intended purpose, and new charges of $94.8 million ($84.2 million after tax or $0.44 per share). Included in the $94.8 million of new charges are $77.4 million for plans initiated in 2004. These plans consisted of warehouse, manufacturing and sales and marketing associate reductions in Engineered Products, a farm tire manufacturing consolidation in European Union Tire, administrative associate reductions in North American Tire, European Union Tire and corporate functional groups, and manufacturing, sales and research and development associate reductions in Chemical Products. Approximately 1,400 associates will be released under programs initiated in 2004, of which approximately 640 were released by December 31, 2004. The costs of the 2004 actions consisted of $40.1 million related to future cash outflows, primarily for associate severance costs, $31.9 million in non-cash pension curtailments and postretirement benefit costs, and $5.4 million of noncancelable lease costs and other exit costs. Costs in 2004 also included $16.3 million related to plans initiated in 2003, consisting of $13.7 million for noncancelable lease costs and other exit costs and $2.6 million of associate-related costs. The reversals are primarily the result of lower than initially estimated associate severance costs of $34.9 million and lower leasehold and other exit costs of $4.3 million. Of the $34.9 million of associate severance cost reversals, $12.0 million related to previously-approved plans in Engineered Products that were reorganized into the 2004 warehouse, manufacturing, and sales and marketing associate reductions.

      In 2004, $75.0 million was incurred primarily for associate severance payments, $34.6 million for non-cash pension curtailments and postretirement benefit costs, and $22.9 million was incurred for noncancelable lease costs and other costs. The remaining accrual balance for all programs was $67.6 million at December 31, 2004, substantially all of which is expected to be utilized within the next 12 months. In addition, accelerated depreciation charges totaling $10.4 million were recorded in 2004 for fixed assets that will be taken out of service in connection with certain rationalization plans initiated in 2004 and 2003 in European Union Tire, Latin American Tire and Engineered Products. During 2004, $7.7 million was recorded as CGS and $2.7 million was recorded as SAG.

2003

In 2003, net charges were recorded totaling $291.5 million ($267.1 million after tax or $1.52 per share). The net charges included reversals of $15.7 million ($14.3 million after tax or $0.08 per share) related to reserves from rationalization actions no longer needed for their originally intended purpose, and new charges of $307.2 million ($281.4 million after tax or $1.60 per share). The 2003 rationalization actions consisted of manufacturing, research and development, administrative and retail consolidations in North America, Europe and Latin America. Of the $307.2 million of new charges, $174.8 million related to future cash outflows, primarily associate severance costs, and $132.4 million related primarily to non-cash special termination benefits and pension and retiree benefit curtailments. Approximately 4,400 associates will be released under the programs initiated in 2003, of which approximately 2,700 were exited in 2003 and approximately 1,500 were exited during 2004. The reversals are primarily the result of lower than initially estimated associate-related payments of approximately $12 million, favorable sublease contract signings in the European Union of approximately $3 million and lower contract termination costs in the United States of approximately $1 million. These reversals do not represent changes in the plans as originally approved by management.

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      As part of the 2003 rationalization program, we closed our Huntsville, Alabama tire facility in the fourth quarter of 2003. Of the $307.2 million of new rationalization charges in 2003, approximately $138 million related to the Huntsville closure and were primarily for associate-related costs, including severance, special termination benefits and pension and retiree benefit curtailments. The Huntsville closure also resulted in charges to CGS of approximately $35 million for asset impairments and $85 million for accelerated depreciation and the write-off of spare parts. In addition, 2003 CGS included charges totaling approximately $8 million to write-off construction in progress related to the research and development rationalization plan, and approximately $5 million for accelerated depreciation on equipment taken out of service at European Union Tire’s facility in Wolverhampton, England.

2002

In 2002, net charges were recorded totaling $5.5 million ($6.4 million after tax or $0.03 per share). The net charges included reversals of $18.0 million ($14.3 million after tax or $0.09 per share) for reserves from rationalization actions no longer needed for their originally intended purpose. In addition, new charges were recorded totaling $26.5 million ($23.0 million after tax or $0.14 per share) and other credits were recorded totaling $3.0 million ($2.3 million after tax or $0.02 per share). The 2002 rationalization actions consisted of a manufacturing facility consolidation in Europe, the closure of a mold manufacturing facility and a plant consolidation in the United States, and administrative consolidations. Of the $26.5 million charge, $24.2 million related to future cash outflows, primarily associate severance costs, and $2.3 million related to non-cash write-offs of equipment taken out of service in the Engineered Products and North American Tire Segments.

General

Upon completion of the 2004 plans, we estimate that annual operating costs will be reduced by approximately $110 million (approximately $50 million CGS and approximately $60 million SAG), of which $9 million was realized during 2004. We estimate that CGS and SAG were reduced in 2004 by approximately $120 million and $64 million, respectively, as a result of the implementation of the 2003 plans. Plan savings have been substantially offset by higher SAG and conversion costs including increased compensation and benefit costs.

      The remaining reserve for costs related to the completion of our rationalization actions was $67.6 million and $143.0 million at December 31, 2004 and 2003, respectively.

      For further information, refer to the Note to the Financial Statements No. 3, Costs Associated with Rationalization Programs.

RECENTLY ISSUED ACCOUNTING STANDARDS

We have adopted the provisions of Emerging Issues Task Force (EITF) Issue No. 04-08, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share” (EITF 04-08). This pronouncement requires shares issuable under contingent conversion provisions in debt agreements to be included in the calculation of diluted earnings per share, if the impact is dilutive, regardless of whether the provisions of the contingent features had been met. The provisions of EITF 04-08 are effective for reporting periods ending after December 15, 2004. Retroactive restatement of diluted earnings per share is required.

      There are contingent conversion features included in our $350 million 4% Convertible Senior Notes due 2034, issued on July 2, 2004. Accordingly, average shares outstanding — diluted in 2004 included approximately 29.1 million contingently issuable shares in each of the third and fourth quarters and 14.5 million shares in the full year. Net income per share — diluted in 2004 included an earnings adjustment representing avoided after-tax interest expense of $3.5 million in each of the third and fourth quarters, reflecting the assumed conversion. Diluted earnings per share in 2004 were reduced by approximately $0.02 in the third quarter, $0.08 in the fourth quarter and $0.01 in the full year as a result of the adoption of this standard.

      The Financial Accounting Standards Board (FASB) issued Staff Position No. 129-1, “Disclosure Requirements under FASB Statement No. 129, Disclosure of Information about Capital Structure, Relating to Contingently Convertible Securities” (FSP 129-1). FSP 129-1 clarified certain disclosure requirements of

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the contingent conversion features of convertible securities. FSP 129-1 was effective immediately upon its release. Our disclosures related to our $350 million 4% Convertible Senior Notes due 2034 are in compliance with the disclosure requirements of FSP 129-1.

      The FASB issued, on May 19, 2004, FASB Staff Position No. FAS 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (FSP 106-2). FSP 106-2 provides guidance on accounting for the effects of the new Medicare prescription drug legislation by employers whose prescription drug benefits are actuarially equivalent to the drug benefit under Medicare Part D. It also contains basic guidance on related income tax accounting, and complex rules for transition that permit various alternative prospective and retroactive transition approaches. Based on the proposed regulations, during 2004 we determined that the overall impact of the adoption of FSP 106-2 was a reduction of expense in 2004 and in future annual periods of approximately $2 million on an annual basis. The adoption of FSP 106-2 also reduced our accumulated postretirement benefit obligation by approximately $19.7 million during 2004. On January 21, 2005 final regulations were issued. Based on the clarifications provided in the final regulations, our net periodic postretirement cost is expected to be lower by approximately $50 million in 2005, and the accumulated postretirement benefit obligation is expected to be reduced by approximately $475 million to $525 million during 2005.

      The FASB has issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123R). Under the provisions of SFAS 123R, companies are required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award, usually the vesting period. We must adopt the provisions of SFAS 123R as of the beginning of the first interim reporting period that begins after June 15, 2005 (i.e. the third quarter of 2005), with early adoption encouraged. SFAS 123R applies to all awards granted, modified, repurchased or cancelled by us after June 30, 2005.

      SFAS 123R allowed companies various transition approaches. We are currently assessing the timing and the transition method that we will use for the adoption of SFAS 123R. We expect to recognize additional compensation cost of approximately $3 million to $4 million per quarter that was not previously required to be recognized, beginning in the quarter in which we first implement the provisions of SFAS 123R. We do not expect the adoption of SFAS 123R to have a material impact on our results of operations, financial position or liquidity.

      On October 22, 2004, the American Jobs Creation Act of 2004 (the Act) was signed into law. The Act, when fully phased-in, includes a tax deduction of up to 9 percent of the lesser of (a) qualified production activities income or (b) taxable income, both as defined in the Act. In addition, the Act includes a special one-time tax deduction of 85 percent of certain foreign earnings that are repatriated no later than in the 2005 tax year. The FASB issued two staff positions to address the accounting for income taxes in conjunction with the Act. FASB Staff Position No. 109-1, “Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities provided by the American Jobs Creation Act of 2004” (FSP 109-1), was effective upon its release on December 22, 2004. FSP 109-1 requires us to treat the tax deduction as a special deduction instead of a change in tax rate that would have impacted our existing deferred tax balances. Based on current earnings levels, this provision should not have a material impact on our income tax provision.

      FASB Staff Position No. 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004” (FSP 109-2), established accounting and disclosure requirements for enterprises in the process of evaluating, or completing the evaluation of, the repatriation provision of the Act. We have started an evaluation of the effects of the repatriation provision. We do not anticipate repatriating foreign earnings under the Act, as it may not provide an overall tax benefit. However, we do not expect to be able to complete this evaluation until our 2005 tax position has been more precisely determined and U.S. Congress or the U.S. Treasury Department provide additional clarifying language on key elements of the provision. If we ultimately determine to elect to repatriate earnings under the Act, it would not have a material impact on our results of operations, financial position or liquidity.

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      The FASB has issued Statement of Financial Accounting Standards No. 151, “Inventory Costs — an amendment of ARB No. 43, Chapter 4” (SFAS 151). The provisions of SFAS 151 are intended to eliminate narrow differences between the existing accounting standards of the FASB and the International Accounting Standards Board (IASB) related to inventory costs, in particular, abnormal amounts of idle facility expense, freight, handling costs and spoilage. SFAS 151 requires that these costs be recognized as current period charges regardless of the extent to which they are considered abnormal. The provisions of SFAS 151 are effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of SFAS 151 is not expected to have a material impact on our results of operations, financial position or liquidity.

      The FASB has issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — an amendment of APB Opinion No. 29” (SFAS 153). The provisions of SFAS 153 are intended to eliminate narrow differences between the existing accounting standards of the FASB and the IASB related to the value on which the measurement of nonmonetary exchanges should be based. APB Opinion No. 29 (APB 29) provides that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. An exception was provided in APB 29 to measure exchanges of similar productive assets based on book values. SFAS 153 eliminates the exception in APB 29 for similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of SFAS 153 are effective for nonmonetary exchanges occurring in periods beginning after June 15, 2005. The adoption of SFAS 153 is not expected to have a material impact on our results of operations, financial position or liquidity.

      The EITF issued Topic 03-06, “Participating Securities and the Two — Class Method under FASB Statement No. 128”, (EITF 03-06). EITF 03-06 requires the use of the two-class method of computing EPS for enterprises with participating securities or multiple classes of common stock. The provisions of EITF 03-06 are effective for fiscal periods beginning after March 31, 2004. The adoption of EITF 03-06 did not have an impact on our EPS.

UNION AGREEMENT

Our master contract with the USWA committed us to consummate the issuance or placement of at least $250 million of debt securities and at least $75 million of equity or equity-linked securities by December 31, 2003 or the USWA would have the right to file a grievance and strike. On March 12, 2004, we completed a private offering of $650 million in senior secured notes due 2011, consisting of $450 million of 11% senior secured notes and $200 million of floating rate notes at LIBOR plus 8%. On July 2, 2004, we completed a private offering of $350 million in 4% convertible senior notes due 2034 (an equity-linked security). Under the master contract we also committed to launch, by December  1, 2004, a refinancing of our U.S. term loan and revolving credit facilities due in April 2005, with loans or securities having a term of at least three years. We completed the refinancing of the U.S. term loan in March 2004 and refinanced the U.S. revolving credit facility in August 2004. In the event of a strike by the USWA, our operations and liquidity could be materially adversely affected.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes to the financial statements. Actual results could differ from those estimates. Significant estimates include:

•  general and product liability and other litigation

•  environmental liabilities

•  workers’ compensation

•  recoverability of goodwill and other intangible assets

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•  deferred tax asset valuation allowance

•  pension and other postretirement benefits

•  allowance for doubtful accounts

      On an ongoing basis, management reviews its estimates, based on currently available information. Changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods.

General and Product Liability and Other Litigation. General and product liability and other recorded litigation liabilities are recorded based on management’s analysis that a loss arising from these matters is probable. If the loss can be reasonably estimated, we record the amount of the estimated loss. If the loss is estimated using a range and no point within the range is more probable than another, we record the minimum amount in the range. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Loss ranges are based upon the specific facts of each claim or class of claim and were determined after review by our in-house counsel, external counsel or a combination thereof. Court rulings on our cases or similar cases could impact our assessment of the probability and estimate of our loss, which could have an impact on our reported results of operations, financial position and liquidity. We record insurance recovery receivables related to our litigation claims when it is probable we will receive reimbursement from the insurer. Specifically, we are a defendant in numerous lawsuits alleging various asbestos-related personal injuries purported to result from alleged exposure to asbestos 1) in certain rubber encapsulated products or aircraft braking systems manufactured by us in the past, or 2) in certain of our facilities. Typically, these lawsuits have been brought against multiple defendants in state and Federal courts.

      Due to the potential exposure that the asbestos claims represent, we began using an independent asbestos valuation firm in connection with the preparation of our 2003 financial statements. The firm was engaged to review our existing reserves for pending claims, determine whether or not we could make a reasonable estimate of the liability associated with unasserted asbestos claims, and review our method of determining our receivables from probable insurance recoveries.

      Prior to the fourth quarter of 2003, our estimate for asbestos liability was based upon a review of the various characteristics of the pending claims by an experienced asbestos counsel. In addition, at that time we did not have an accrual for unasserted claims, as sufficient information was deemed to be not available to reliably estimate such an obligation prior to the fourth quarter of 2003.

      After reviewing our recent settlement history by jurisdiction, law firm, disease type and alleged date of first exposure, the valuation firm cited two primary reasons for us to refine our valuation assumptions. First, in calculating our estimated liability, the valuation firm determined that we had previously assumed that we would resolve more claims in the foreseeable future than is likely based on our historical record and nationwide trends. As a result, we now assume that a smaller percentage of pending claims will be resolved within the predictable future. Second, the valuation firm determined that it was not possible to estimate a liability for as many non-malignancy claims as we had done in the past. As a result, our current estimated liability includes fewer liabilities associated with non-malignancy claims than were included prior to December 2003.

      A significant assumption in our estimated liability is that it represents our estimated liability through 2008, which represents the period over which the liability can be reasonably estimated. Due to the difficulties in making these estimates, analysis based on new data and/or changed circumstances arising in the future could result in an increase in the recorded obligation in an amount that cannot be reasonably estimated, and that increase could be significant. We had recorded liabilities for both asserted and unasserted claims, inclusive of defense costs, totaling $119.3 million at December 31, 2004 and $134.7 million (as restated) at December 31, 2003. The portion of the liability associated with unasserted asbestos claims was $37.9 million at December 31, 2004 and $54.4 million (as restated) at December 31, 2003. At December 31, 2004, our liability with respect to asserted claims and related defense costs was $81.4 million, compared to $80.3 million (as restated) at December 31, 2003.

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      We maintain primary insurance coverage under coverage-in-place agreements as well as excess liability insurance with respect to asbestos liabilities. We record a receivable with respect to such policies when we determine that recovery is probable and we can reasonably estimate the amount of a particular recovery.

      Prior to 2003, we did not record a receivable for expected recoveries from excess carriers in respect of asbestos-related matters. We have instituted coverage actions against certain of these excess carriers. After consultation with our outside legal counsel and giving consideration to relevant factors, including the ongoing legal proceedings with certain of our excess coverage insurance carriers, their financial viability, their legal obligations and other pertinent facts, we determined an amount we expect is probable of recovery from such carriers. Accordingly, we recorded a receivable during 2003, which represents an estimate of recovery from our excess coverage insurance carriers relating to potential asbestos-related liabilities.

      The valuation firm also reviewed our method of valuing receivables recorded for probable insurance recoveries. Based upon the model employed by the valuation firm, as of December 31, 2004, (i) we had recorded a receivable related to asbestos claims of $107.8 million, compared to $121.3 million (as restated) at December 31, 2003, and (ii) we expect that approximately 90% of asbestos claim related losses would be recoverable up to our accessible policy limits through the period covered by the estimated liability. The receivable recorded consists of an amount we expect to collect under coverage-in-place agreements with certain primary carriers as well as an amount we believe is probable of recovery from certain of our excess coverage insurance carriers. Of this amount, $9.4 million and $11.8 million (as restated) was included in Current assets as part of Accounts and notes receivable at December 31, 2004 and 2003, respectively.

      In addition to our asbestos claims, we are a defendant in various lawsuits related to our Entran II rubber hose product. During 2004, we entered into a settlement agreement to address a substantial portion of our Entran II liabilities. The claims associated with the plaintiffs that opted not to participate in the settlement will be evaluated in a manner consistent with our other litigation claims. We had recorded liabilities related to Entran II claims totaling $307.2 million at December 31, 2004 and $246.1 million at December 31, 2003.

Environmental Matters. We had recorded liabilities totaling $39.5 million at December 31, 2004 and $32.6 million (as restated) at December 31, 2003 for anticipated costs related to various environmental matters, primarily the remediation of numerous waste disposal sites and certain properties sold by us. Our environmental liabilities are based upon our best estimate of the cost to remediate the identified locations. Our process for estimating the costs entails management selecting the best remediation alternative based upon either an internal analysis or third party studies and proposals. Our estimates are based upon the current law and approved remediation technology. The actual cost that will be incurred may differ from these estimates based upon changes in environmental laws and standards, approval of new environmental remediation technology, and the extent to which other responsible parties ultimately contribute to the remediation efforts.

Workers’ Compensation. We had recorded liabilities, on a discounted basis, totaling $230.7 million and $195.7 million (as restated) for anticipated costs related to workers’ compensation at December 31, 2004 and December 31, 2003, respectively. The costs include an estimate of expected settlements on pending claims, defense costs and a provision for claims incurred but not reported. These estimates are based on our assessment of potential liability using an analysis of available information with respect to pending claims, historical experience, and current cost trends. The amount of our ultimate liability in respect of these matters may differ from these estimates. We periodically update our loss development factors based on actuarial analyses. The increase in the liability from 2003 to 2004 was due primarily to an increase in reserves for existing claims, reflecting revised estimates of our ultimate liability in these cases, and updated actuarial assumptions related to unasserted claims. At December 31, 2004, the liability was discounted using the risk-free rate of return.

      For further information on general and product liability and other litigation, environmental matters and workers’ compensation, refer to the Note to the Financial Statements No. 20, Commitments and Contingencies.

Goodwill and Other Intangible Assets. Generally accepted accounting principles do not permit goodwill or other intangible assets with indefinite lives to be amortized. Rather, these assets must be tested annually for

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impairment. The impairment testing would have to be performed more frequently than on an annual basis as a result of the occurrence of a potential indicator of impairment.

      For purposes of our annual impairment testing, we determine the estimated fair values of our reporting units using a valuation methodology based upon an EBITDA multiple using comparable companies in the global automotive industry sector and a discounted cash flow approach. The EBITDA multiple is adjusted if necessary to reflect local market conditions and recent transactions. The EBITDA of the reporting units are adjusted to exclude certain non-recurring or unusual items and corporate charges. EBITDA is based upon a combination of historical and forecasted results. Significant decreases in EBITDA in future periods could be an indication of a potential impairment. Additionally, valuation multiples in the global automotive industry sector would have to decline in excess of 25% to indicate a potential goodwill impairment.

      Goodwill totaled $720.3 million and other intangible assets totaled $162.6 million at December 31, 2004. We completed our 2004 annual valuation during the third quarter of 2004. The valuation indicated that there was no impairment of goodwill or other intangible assets with indefinite lives.

Deferred Tax Asset Valuation Allowance. At December 31, 2004, we had valuation allowances aggregating $2.1 billion against all of our net Federal and state and some of our foreign net deferred tax assets.

      The valuation allowance was calculated in accordance with the provisions of SFAS 109 which requires an assessment of both negative and positive evidence when measuring the need for a valuation allowance. In accordance with SFAS 109, evidence, such as operating results during the most recent three-year period, is given more weight than our expectations of future profitability, which are inherently uncertain. Our U.S. losses in recent periods represented sufficient negative evidence to require a full valuation allowance against our net Federal and state deferred tax assets under SFAS 109. We intend to maintain a valuation allowance against our net deferred tax assets until sufficient positive evidence exists to support realization of such assets.

Pensions and Other Postretirement Benefits. Our recorded liability for pensions and postretirement benefits other than pensions is based on a number of assumptions, including:

•  future health care costs,

•  maximum company-covered benefit costs,

•  life expectancies,

•  retirement rates,

•  discount rates,

•  long term rates of return on plan assets, and

•  future compensation levels.

      Certain of these assumptions are determined with the assistance of outside actuaries. Assumptions about future health care costs, life expectancies, retirement rates and future compensation levels are based on past experience and anticipated future trends, including an assumption about inflation. The discount rate for our U.S. plans is derived from a portfolio of corporate bonds from issuers rated AA- or higher by S&P. The total cash flows provided by the portfolio are similar to the timing of our expected benefit payment cash flows. The long term rate of return on plan assets is based on the compound annualized return of our U.S. pension fund over periods of 15 years or more, asset class return expectations and long-term inflation. These assumptions are regularly reviewed and revised when appropriate, and changes in one or more of them could affect the amount of our recorded net expenses for these benefits. If the actual experience differs from expectations, our financial position, results of operations and liquidity in future periods could be affected.

      The discount rate used in determining the recorded liability for our U.S. pension and postretirement plans was 5.75% for 2004, compared to 6.25% for 2003 and 6.75% for 2002. The decrease in the rate was due primarily to lower interest rates on long-term highly rated corporate bonds. As a result, interest cost included in our net periodic pension cost increased to $421.0 million in 2004, compared to $399.8 million in 2003 and $385.0 million in 2002. Interest cost included in our net periodic postretirement cost was $188.1 million in

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2004, compared to $174.0 million in 2003 and $186.9 million in 2002. Actual return on plan assets was 12.1% in 2004, compared to expected returns of 8.5%.

      The following table presents the sensitivity of our projected pension benefit obligation, accumulated other postretirement obligation, shareholders’ equity, and 2005 expense to the indicated increase/decrease in key assumptions:

		+/- Change at December 31, 2004
(Dollars in millions)
Pensions:	Change	PBO/ABO		Equity		2005 Expense
Assumption:
Discount rate	+/-0.5%	$	260	$	260	$	14
Actual return on assets	+/-1.0%		N/A		30		32
Estimated return on assets	+/-1.0%		N/A		N/A		30
Postretirement Benefits:
Assumption:
Discount rate	+/-0.5%	$	148		N/A	$	4
Health care cost trends — total cost	+/-1.0%		14		N/A		2

For further information on pensions, refer to the Note to the Financial Statements No. 13, Pensions, Other Postretirement Benefits and Savings Plans.

Allowance for Doubtful Accounts. The allowance for doubtful accounts represents an estimate of the losses expected from our accounts and notes receivable portfolio. The level of the allowance is based on many quantitative and qualitative factors, including historical loss experience by region, portfolio duration, economic conditions and credit risk quality. The adequacy of the allowance is assessed quarterly.

      Different assumptions or changes in economic conditions would result in changes to the allowance for doubtful accounts. The allowance for doubtful accounts totaled $144.4 million and $128.9 million (as restated) at December 31, 2004 and 2003, respectively.

RESULTS OF OPERATIONS — SEGMENT INFORMATION

Segment information reflects our strategic business units (SBUs), which are organized to meet customer requirements and global competition. The Tire business is managed on a regional basis. Engineered Products and Chemical Products are managed on a global basis.

      Results of operations in the Tire and Engineered Products segments were measured based on net sales to unaffiliated customers and segment operating income. Results of operations of Chemical Products were measured based on net sales (including sales to other SBUs) and segment operating income. Segment operating income included transfers to other SBUs. Segment operating income was computed as follows: Net Sales less CGS (excluding accelerated depreciation charges, asset impairment charges and asset write-offs) and SAG (including certain allocated corporate administrative expenses). Segment operating income also included equity in (earnings) losses of most unconsolidated affiliates. Equity in (earnings) losses of certain unconsolidated affiliates, including SPT (in 2003 and 2002) and Rubbernetwork.com, was not included in segment operating income. Segment operating income did not include the previously discussed segment rationalization charges, asset sales and certain asset impairments and write-offs.

      Total segment operating income was $1.08 billion in 2004, $511.0 million (as restated) in 2003 and $414.7 million (as restated) in 2002. Total segment operating margin (segment operating income divided by segment sales) in 2004 was 5.6%, compared to 3.2% (as restated) in 2003 and 2.9% in 2002.

      Effective January 1, 2004, we consolidated our investments in T&WA and SPT pursuant to the provisions of FIN 46R. In 2003 and 2002, results of operations of T&WA and SPT were reflected in our Consolidated Statement of Operations using the equity method. Equity in earnings (loss) of T&WA was included in North American Tire segment operating income in those years.

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      Management believes that total segment operating income is useful because it represents the aggregate value of income created by our SBUs and excludes items not directly related to the SBUs for performance evaluation purposes. Total segment operating income is the sum of the individual SBUs’ segment operating income, as determined in accordance with Statement of Financial Accounting Standard No. 131, “Disclosures about Segments of an Enterprise and Related Information”. Refer to the Note to the Financial Statements No. 18, Business Segments, for further information and for a reconciliation of total segment operating income to Income (Loss) before Income Taxes.

North American Tire

	Year Ended December 31,
				Restated
	2004			2003			2002
(In millions)
Tire Units		102.5			101.2			103.8
Net Sales	$	7,854.6		$	6,745.6		$	6,703.0
Operating Income (Loss)		31.5			(130.9	)		(58.1	)
Operating Margin		0.4	%		(1.9	)%		(0.9	)%

North American Tire unit sales in 2004 increased 1.3 million units or 1.3% from 2003 but decreased 1.3 million units or 1.3% from 2002. Replacement unit sales in 2004 increased 2.2 million units or 3.2% from 2003 and 1.1 million units or 1.6% from 2002. Original equipment volume in 2004 decreased 0.9 million units or 2.6% from 2003 and 2.4 million units or 7.1% from 2002. Replacement unit volume in 2004 increased from 2003 due primarily to higher sales of Goodyear brand tires. OE unit sales in 2004 decreased from 2003 due primarily to a slowdown in the automotive industry that resulted in lower levels of vehicle production and our selective fitment strategy in the consumer original equipment business.

      Net sales in 2004 increased 16.4% from 2003 and 17.2% from 2002. Net sales in 2004 increased $523.8 million from 2003 due to the consolidation of T&WA in January 2004 in accordance with FIN 46. Sales were also favorably affected by approximately $312 million resulting from favorable pricing and product mix, due primarily to strong sales of Goodyear brand consumer tires and commercial tires. In addition, net sales benefited by approximately $271 million due to increased volume, mainly in the commercial OE and consumer replacement and retail markets.

      Net sales in 2003 increased 0.6% from 2002. Net sales increased in 2003 due to improved pricing and product mix of approximately $118 million, primarily in the consumer replacement and original equipment markets, and lower product related adjustments of approximately $10 million. The production slowdown by automakers and a decrease in the consumer replacement custom brand channel contributed to lower volume of approximately $86 million in 2003.

      During 2002, we supplied approximately 500 thousand tire units with an operating income benefit of approximately $10 million in connection with the Ford tire replacement program. Ford ended the replacement program on March 31, 2002.

      Operating income in 2004 increased significantly from 2003 and 2002. Operating income in 2004 rose from 2003 (as restated) due primarily to improvements in pricing and product mix of approximately $201 million, primarily in the consumer and commercial replacement markets. In addition, operating income benefited by approximately $65 million from increased volume, primarily in the consumer replacement, commercial OE and retail markets. Operating income was favorably affected by savings from rationalization programs totaling approximately $78 million. Operating income in 2004 was unfavorably impacted by increased raw material costs of approximately $99 million and higher transportation costs of $32 million. SAG in 2004 was approximately $58 million higher than in 2003, due in part to increased advertising costs of approximately $25 million and increased compensation and benefits costs of approximately $12 million.

      Operating income in 2003 (as restated) decreased significantly from 2002 (as restated). Higher raw materials costs of approximately $151 million, higher manufacturing conversion costs of approximately $86 million, primarily related to contractual increases, and lower consumer volume of approximately

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$12 million adversely impacted 2003 operating income. Operating income benefited by approximately $66 million from savings related to rationalization programs and by approximately $37 million due to lower research and development expenditures. Operating income in 2003 (as restated) included a benefit of approximately $51 million from the previously mentioned change in the domestic salaried associates’ vacation policy, and $20 million of insurance recoveries related to general and product liabilities.

      Operating income did not include net rationalization charges (credits) totaling $3.5 million in 2004, $191.9 million in 2003 and $(1.9) million in 2002. In addition, operating income did not include (gains) losses on asset sales of $(1.3) million in 2004 and $3.8 million in 2003, and the write-off of a miscellaneous investment totaling $4.1 million in 2002.

European Union Tire

	Year Ended December 31,
				Restated
	2004			2003			2002
(In millions)
Tire Units		62.8			62.3			61.5
Net Sales	$	4,476.2		$	3,921.5		$	3,319.4
Operating Income		252.7			129.8			101.1
Operating Margin		5.6	%		3.3	%		3.0	%

European Union Tire unit sales in 2004 increased 0.5 million units or 0.8% from 2003 and 1.3 million units or 2.0% from 2002. Replacement unit sales in 2004 approximated 2003 levels but increased 2.6 million units or 6.4% from 2002. Original equipment volume in 2004 increased 0.5 million units or 2.4% from 2003 but decreased 1.3 million units or 7.0% from 2002. Replacement unit sales in 2004 were flat, reflecting product shortages, especially in the first half of 2004. OE unit sales in 2004 increased from 2003 due primarily to increased sales of consumer tires and improved conditions in the commercial market.

      Net sales in 2004 increased 14.1% from 2003 and 34.8% from 2002. Net sales in 2004 increased from 2003 due primarily to a benefit of approximately $382 million from currency translation, mainly from the Euro. Net sales rose by approximately $130 million due to improved pricing and product mix, due primarily to price increases and a shift in mix towards higher priced premium brands. Additionally, higher OE volume increased 2004 net sales by approximately $41 million.

      Net sales in 2003 (as restated) increased 18.1% from 2002. Net sales increased in 2003 compared to 2002 due primarily to a benefit of approximately $587 million from currency translation, mainly from the Euro. In addition, net sales rose by approximately $42 million due to higher volume in the consumer replacement market. Negative pricing and product mix in retail operations adversely impacted net sales in 2003 by approximately $30 million.

      Operating income in 2004 increased 94.7% from 2003 and 150.0% from 2002. Operating income in 2004 rose from 2003 due primarily to improvements in pricing and product mix of approximately $135 million. In addition, higher sales volume benefited operating income by approximately $9 million. In addition, to higher production and productivity improvements increased 2004 operating income by approximately $4 million. Savings from rationalization actions benefited operating income by approximately $47 million. Operating income rose by approximately $13 million from currency translation. Operating income was adversely impacted by higher raw material costs totaling approximately $42 million. SAG rose by approximately $39 million, due primarily to higher selling and advertising expenses related to premium brand tires.

      Operating income in 2003 (as restated) increased 28.4% from 2002. Operating income in 2003 increased due primarily to savings from rationalization programs of approximately $57 million, and the benefit of higher production tonnage and increased productivity totaling approximately $17 million. Operating income rose by approximately $26 million due to the favorable impact of currency translation and by approximately $10 million from improved volume, particularly in the replacement market. Improved pricing and product mix, mainly in the consumer replacement and original equipment markets, benefited operating income in 2003 by approximately $5 million. Operating income was adversely impacted by higher raw material costs of

46

approximately $50 million, higher pension costs of approximately $18 million and higher SAG costs due to increased advertising of approximately $14 million. In addition, operating income in 2003 included a charge of approximately $13 million for an unfavorable court settlement.

      Operating income did not include net rationalization charges (credits) totaling $23.1 million in 2004, $54.3 million in 2003 and $(0.4) million in 2002. In addition, operating income did not include (gains) losses on asset sales of $(6.2) million in 2004, $1.5 million (as restated) in 2003 and $(13.7) million (as restated) in 2002.

      European Union Tire’s results are highly dependent upon the German market, which accounted for 37% of European Union Tire’s net sales in 2004. Accordingly, results of operations in Germany will have a significant impact on European Union Tire’s future performance and could also have an impact on our other segments.

Eastern Europe, Middle East and Africa Tire

	Year Ended December 31,
	2004			2003			2002
(In millions)
Tire Units		18.9			17.9			16.1
Net Sales	$	1,279.0		$	1,073.4		$	807.1
Operating Income		193.8			146.6			93.2
Operating Margin		15.2	%		13.7	%		11.5	%

Eastern Europe, Middle East and Africa Tire (“Eastern Europe Tire”) unit sales in 2004 increased 1.0 million units or 5.2% from 2003 and 2.8 million units or 16.8% from 2002. Replacement unit sales in 2004 increased 0.6 million units or 4.0% from 2003 and 2.1 million units or 15.6% from 2002. Original equipment volume in 2004 increased 0.4 million units or 10.7% from 2003 and 0.7 million units or 22.3% from 2002. Replacement unit sales in 2004 increased from 2003 due primarily to growth in emerging markets. OE unit sales in 2004 increased from 2003 due primarily to growth in the automotive industry in Turkey and South Africa.

      Net sales in 2004 increased 19.2% from 2003 and 58.5% from 2002. Net sales in 2004 increased from 2003 due primarily to a benefit of approximately $102 million from currency translation, primarily in South Africa, Poland and Slovenia. In addition, net sales rose by approximately $97 million on improved pricing and mix. Higher overall volume, mainly due to improved economic conditions, increased net sales by $41 million. Negative results in our South African retail business adversely impacted net sales by approximately $32 million, which reflected the net impact of volume, pricing, product mix and currency translation.

      Net sales in 2003 increased 33.0% from 2002. Net sales in 2003 increased from 2002 due primarily to a benefit of approximately $156 million from currency translation, primarily in South Africa and Slovenia. Net sales rose by approximately $62 million on higher volume in both the consumer replacement and original equipment markets. In addition, improved pricing, due primarily to a shift in mix toward higher-priced winter and high performance tires, benefited net sales by approximately $48 million.

      Operating income in 2004 increased 32.2% from 2003 and 107.9% from 2002. Operating income in 2004 rose from 2003 due primarily to a benefit of approximately $62 million resulting from price increases and a shift in mix toward high performance tires. Operating income increased by approximately $16 million on higher volume, primarily in Turkey, Russia, South Africa and Central Eastern Europe, and by approximately $11 million from the favorable effect of currency translation. Operating income was adversely impacted by higher raw material and conversion costs totaling approximately $28 million. In addition, SAG expense was approximately $16 million higher resulting primarily from increased selling activity in growing and emerging markets.

      Operating income in 2003 increased 57.3% from 2002. Operating income increased in 2003 due primarily to a benefit of approximately $33 million from price increases and a shift in mix toward winter and high performance tires. Operating income also benefited by approximately $24 million from higher volume and approximately $15 million from currency translation, mainly in South Africa and Slovenia, and improved

47

conversion costs of approximately $13 million. Operating income was adversely impacted by higher raw material costs of approximately $12 million and higher SAG expense of approximately $12 million, primarily for wages, benefits and advertising.

      Operating income did not include net rationalization charges (credits) totaling $3.6 million in 2004, $(0.1) million in 2003 and $(0.4) million in 2002. In addition, operating income did not include losses on asset sales of $0.1 million in 2004.

Latin American Tire

	Year Ended December 31,
				Restated
	2004			2003			2002
(In millions)
Tire Units		19.6			18.7			19.9
Net Sales	$	1,245.4		$	1,041.0		$	947.7
Operating Income		251.2			148.6			107.6
Operating Margin		20.2	%		14.3	%		11.4	%

Latin American Tire unit sales in 2004 increased 0.9 million units or 5.0% from 2003 but decreased 0.3 million units or 1.6% from 2002. Replacement unit sales in 2004 increased 0.8 million units or 5.3% from 2003 and 0.8 million units or 5.8% from 2002. Original equipment volume in 2004 increased 0.1 million units or 3.9% from 2003 but decreased 1.1 million units or 20.1% from 2002. Replacement unit sales in 2004 increased from 2003 due primarily to improved commercial and consumer demand. OE unit sales in 2004 increased slightly from 2003, reflecting improved commercial volume.

      Net sales in 2004 increased 19.6% from 2003 and 31.4% from 2002. Net sales in 2004 increased from 2003 due primarily to a benefit of approximately $134 million from price increases and improved product mix in the replacement market. Net sales rose by approximately $60 million on higher volume and approximately $7 million from currency translation.

      Net sales in 2003 increased 9.8% from 2002. Net sales increased in 2003 due primarily to a benefit of approximately $212 million from improved pricing and product mix. Currency translation, mainly in Brazil and Venezuela, adversely impacted net sales by approximately $79 million, and lower volume, primarily in the consumer and commercial original equipment markets, adversely impacted net sales by approximately $38 million.

      Operating income in 2004 increased 69.0% from 2003 and 133.5% from 2002. Operating income in 2004 increased from 2003 due primarily to a benefit of approximately $126 million from improved pricing and product mix in the replacement market. Operating income benefited by approximately $13 million from higher volume and $5 million from savings from rationalization programs. Operating income was adversely impacted by higher raw material and conversion costs totaling approximately $41 million and approximately $2 million from currency translation. In addition, SAG expense rose by approximately $11 million, due primarily to increased wages and benefits and advertising expenses.

      Operating income in 2003 (as restated) increased 38.1% from 2002. Operating income in 2003 rose due primarily to a benefit of approximately $134 million from improved pricing and product mix, and a benefit of approximately $3 million from higher volume. Operating income was adversely impacted by higher raw material costs of approximately $50 million and by approximately $20 million from currency translation, primarily in Brazil and Venezuela. In addition, conversion costs related to utilities rose by approximately $12 million and SAG expense was higher by approximately $11 million, due primarily to expenses related to airships, doubtful accounts and wages and benefits.

      Operating income did not include net rationalization charges (credits) totaling $(1.7) million in 2004 and $10.0 million in 2003. In addition, operating income did not include (gains) losses on asset sales of $(2.0) million in 2003 and $(13.7) million in 2002.

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Asia/ Pacific Tire

	Year Ended December 31,
				Restated
	2004			2003			2002
(In millions)
Tire Units		19.5			13.4			13.0
Net Sales	$	1,312.0		$	581.8		$	531.3
Operating Income		61.1			49.9			43.7
Operating Margin		4.7	%		8.6	%		8.2	%

Asia/ Pacific Tire unit sales in 2004 increased 6.1 million units or 45.5% from 2003 and 6.5 million units or 52.4% from 2002. Replacement unit sales in 2004 increased 5.4 million units or 60.0% from 2003 and 5.4 million units or 58.4% from 2002. Original equipment volume in 2004 increased 0.7 million units or 15.6% from 2003 and 1.1 million units or 37.4% from 2002. Unit sales in 2004 increased by 5.5 million replacement units and 0.8 million OE units due to the consolidation of South Pacific Tyres, as discussed below. Excluding the impact of SPT, replacement unit volume increased slightly, and OE volume decreased due primarily to lower consumer volume.

      Effective January 1, 2004, Asia/ Pacific Tire includes the operations of South Pacific Tyres, an Australian Partnership, and South Pacific Tyres N.Z. Limited, a New Zealand company (together, “SPT”), joint ventures 50% owned by Goodyear and 50% owned by Ansell Ltd. SPT is the largest tire manufacturer in Australia and New Zealand, with two tire manufacturing plants and 14 retread plants. SPT sells Goodyear-brand, Dunlop-brand and other house and private brand tires through its chain of 417 retail stores, commercial tire centers and independent dealers.

      Net sales in 2004 increased 125.5% from 2003 and 146.9% from 2002. Net sales in 2004 increased from 2003 due primarily to the consolidation of SPT, which benefited 2004 sales by $707.4 million. Net sales also rose by approximately $32 million due to improved pricing and product mix, but were adversely impacted by lower volume excluding SPT of $18 million.

      Net sales in 2003 increased 9.5% from 2002. Net sales increased in 2003 due primarily to a benefit of approximately $29 million from increased volume, largely a result of strong original equipment demand. Net sales also increased by approximately $16 million due to currency translation, primarily in India and Australia.

      Operating income in 2004 increased 22.6% from 2003 and 40.0% from 2002. Operating income in 2004 increased from 2003 due primarily to a benefit of approximately $25 million from price increases and improved product mix, and a reduction in conversion costs of approximately $4 million. Operating income was adversely impacted by higher raw material costs totaling approximately $22 million and approximately $3 million from lower volume. In addition, SAG expenses rose by approximately $6 million. The consolidation of SPT increased Asia/ Pacific Tire operating income by approximately $11.7 million in 2004; however, it reduced operating margin to 4.7% in 2004 from 8.6% in 2003.

      Operating income in 2003 (as restated) increased 14.2% from 2002. Operating income in 2003 increased due primarily to a benefit of approximately $14 million from improved consumer and farm product mix and higher selling prices in both replacement and original equipment markets. In addition, operating income increased by approximately $8 million due to currency translation and approximately $7 million due to increased volume in the original equipment market. Operating income was favorably affected in 2003 by approximately $3 million due to increased sales of miscellaneous products and improved equity income. Operating income was adversely impacted by higher raw material costs of approximately $27 million.

      Operating income did not include net rationalization charges (credits) totaling $(1.7) million in 2002. In addition, operating income did not include (gains) losses on asset sales of $(2.1) million in 2003.

      Prior to 2004, results of operations of SPT were not included in Asia/ Pacific Tire, and were included in the Consolidated Statement of Operations using the equity method.

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      SPT operating income in 2003 increased substantially from 2002 due primarily to the benefits of the rationalization programs in the prior years. SPT operating income did not include net rationalization charges (credits) totaling $8.7 million in 2003 and $3.2 million in 2002. SPT debt totaled $255.2 million at December 31, 2003 of which $72.0 million was payable to Goodyear.

Engineered Products

	Year Ended December 31,
				Restated
	2004			2003			2002
(In millions)
Net Sales	$	1,470.3		$	1,203.7		$	1,126.3
Operating Income		113.2			46.8			39.0
Operating Margin		7.7	%		3.9	%		3.5	%

Engineered Products sales in 2004 increased 22.1% from 2003 and 30.4% from 2002. Net sales in 2004 increased from 2003 due primarily to a benefit of approximately $194 million resulting from increased volume and approximately $37 million from improved pricing and product mix, each largely as a result of strong sales to military and OE industrial and heavy duty customers. Net sales also rose by approximately $35 million from currency translation. We expect military sales to remain strong in 2005, but anticipate a reduction in such sales in 2006.

      Net sales in 2003 increased 6.9% from 2002. Net sales increased in 2003 due primarily to a benefit of approximately $39 million from currency translation. Net sales rose by approximately $30 million on increased military sales and approximately $8 million on improved pricing and mix.

      Operating income in 2004 increased 141.9% from 2003 and 190.3% from 2002. Operating income in 2004 increased from 2003 due primarily to a benefit of approximately $75 million from increased volume, largely in military and industrial products. Operating income also reflected savings from rationalization programs of approximately $24 million. SAG was approximately $18 million higher and conversion costs rose approximately $10 million. Operating income in 2003 (as restated) was adversely impacted by charges totaling approximately $19 million related to account reconciliation adjustments in the restatement reported in our 2003 Form 10-K.

      Operating income in 2003 (as restated) increased 20.0% from 2002. Operating income in 2003 increased due primarily to benefits of approximately $8 million from increased military sales, lower raw material costs of approximately $5 million, and currency translation of approximately $5 million. The previously mentioned change in the domestic salaried vacation policy also favorably affected 2003 operating income by approximately $8 million. Operating income in 2003 was adversely impacted by unfavorable price/mix of approximately $11 million due to increased sales of original equipment and heavy duty product, and higher SAG costs (excluding the impact of the vacation policy change) of approximately $9 million, primarily related to increased sales efforts. As previously mentioned, operating income in 2003 included charges totaling approximately $19 million related to account reconciliation adjustments in previously-mentioned restatement reported in our 2003 Form 10-K.

      Operating income did not include net rationalization charges totaling $22.8 million in 2004, $29.4 million in 2003 and $4.6 million in 2002. In addition, operating income did not include (gains) losses on asset sales of $(2.5) million in 2004, $6.3 million in 2003 and $(0.6) million in 2002.

Chemical Products

	Year Ended December 31,
				Restated
	2004			2003			2002
(In millions)
Net Sales	$	1,532.6		$	1,220.8		$	940.2
Operating Income		177.0			120.2			88.2
Operating Margin		11.5	%		9.8	%		9.4	%

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Chemical Products sales in 2004 increased 25.5% from 2003 and 63.0% from 2002. Approximately 65% of the total pounds of synthetic materials sold by Chemical Products in 2004 were to our other segments, compared to 63% in 2003 and 65% in 2002. Natural rubber plantation operations and a rubber processing facility are included in Chemical Products. In November 2004, we entered into an agreement to sell our natural rubber plantations in Indonesia for approximately $65 million, pending government approvals.

      Net sales in 2004 increased from 2003 due primarily to a benefit of approximately $145 million from increased net selling prices resulting from increased base prices and the pass through of rising raw material costs. In addition, net sales rose by approximately $86 million on higher volume and approximately $11 million due to currency translation. Natural rubber operations contributed approximately $70 million to the revenue increase in 2004.

      Net sales in 2003 increased from 2002 due primarily to a benefit of approximately $145 million from higher net selling prices resulting from the pass through of increased raw material and energy costs. Net sales also increased by approximately $42 million from increased synthetic rubber volume, approximately $76 million from higher pricing and volume from the natural rubber operations and approximately $18 million from currency translation, primarily the euro.

      Operating income in 2004 increased 47.3% from 2003 and 100.7% from 2002. Operating income in 2004 increased from 2003 due primarily to benefits of approximately $75 million from higher net selling prices and improved product mix, approximately $15 million from higher volume, approximately $7 million from improved conversion costs and approximately $11 million from currency translation. The natural rubber operations contributed approximately $7 million of the improvement through pricing and volume. Operating income was adversely impacted by higher raw material costs totaling approximately $61 million.

      Operating income in 2003 (as restated) increased 36.3% from 2002. Operating income in 2003 increased from 2002 due primarily to benefits of approximately $145 million from higher net selling prices, approximately $18 million from currency translation and approximately $16 million from improved pricing and volume for natural rubber operations. Increased raw material costs of approximately $127 million and increased conversion costs of approximately $22 million adversely impacted 2003 operating income.

      Operating income did not include net rationalization charges totaling $4.9 million in 2004. In addition, operating income did not include a loss of $14.5 million on the write-down of the assets of our natural rubber plantations in Indonesia in 2004.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2004, we had $1.97 billion in cash and cash equivalents as well as $1.12 billion of unused availability under our various credit agreements, compared to $1.55 billion and $335.0 million, respectively, at December 31, 2003. Cash and cash equivalents do not include restricted cash. Restricted cash included the settlement fund balance related to Entran II litigation as well as cash deposited in support of trade agreements and performance bonds, and historically has included cash deposited in support of borrowings incurred by subsidiaries. At December 31, 2004, cash balances totaling $152.4 million were subject to such restrictions, compared to $23.9 million at December 31, 2003.

      Our ability to service our debt depends in part on the results of operations of our subsidiaries and upon the ability of our subsidiaries to make distributions of cash to various other entities in our consolidated group, whether in the form of dividends, loans or otherwise. In recent years, our foreign subsidiaries have been a significant source of cash flow. In certain countries where we operate, transfers of funds into or out of such countries by way of dividends, loans or advances are generally or periodically subject to various restrictive governmental regulations and there may be adverse tax consequences to such transfers. In addition, certain of our credit agreements and other debt instruments restrict the ability of foreign subsidiaries to make distributions of cash. At December 31, 2004, approximately $221 million of net assets were subject to such restrictions, compared to approximately $259 million at December 31, 2003.

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Operating Activities

Net cash provided by (used in) operating activities was $719.8 million in 2004, compared to $(288.8) million (as restated) in 2003 and $686.0 million (as restated) in 2002. Cash flows from operating activities in 2004 were favorably affected by higher segment operating margin, reflecting improved results in North American Tire and savings from rationalization programs. Cash flows from operating activities in 2003 included a net outflow of $839.6 million from the sale of accounts receivable, due primarily to the termination of our domestic accounts receivable securitization program.

      Net income from the sale of goods and services is the principal component of our cash flows from operating activities. Net income included charges and credits related to cash flows that occurred in prior years (for example, depreciation charges for prior year capital expenditures), and cash flows that are anticipated to occur in future years (for example, expenses recorded in the current period for future pension payments). The reconciliation of net income to cash flows from operating activities included the following adjustments for non-cash items, as presented on the Consolidated Statement of Cash Flows:

	Year Ended December 31,
				Restated
	2004			2003			2002
(In millions)
Depreciation and amortization	$	628.7		$	691.6		$	605.3
Amortization of debt issuance costs		86.1			50.3			17.9
Deferred tax provision		(4.5	)		(9.9	)		1,131.2
Non-cash rationalization charges		32.4			132.4			2.4
(Gain) loss on asset sales		7.5			16.4			(23.6	)
Fire loss deductible expense		11.6			—			—
Insurance settlement		(156.6	)		—			—
Minority interest and equity earnings		47.5			39.3			71.4

Depreciation in 2004 included approximately $10.4 million of accelerated depreciation charges related to assets taken out of service pursuant to certain rationalization plans. Depreciation in 2003 included approximately $78 million of accelerated depreciation charges related to the 2003 Huntsville and Wolverhampton restructuring plans. Amortization totaled $4.5 million, $4.8 million and $4.3 million in 2004, 2003 and 2002, respectively.

      Amortization of debt issuance costs increased due primarily to costs incurred related to our debt restructuring and refinancing activities.

      The deferred tax provision in 2002 included a non-cash charge of $1.22 billion (as restated) to establish a tax valuation allowance against our net Federal and state deferred tax assets.

      In the fourth quarter of 2004 we recorded a benefit of $156.6 million resulting from a settlement with certain insurance companies. We will receive $159.4 million ($156.6 million plus imputed interest of $2.8 million) in installments in 2005 and 2006 in exchange for releasing the insurers from certain past, present and future environmental claims. A significant portion of the costs incurred by us related to these claims has been recorded in prior years.

      Cash flows from operating activities also included the impact of activities related to certain of our accounts receivable securitization and factoring programs and to our contributions to our pension plans.

	Year Ended December 31,
	2004			2003			2002
(In millions)
Net cash flows from the sale of accounts receivable	$	(117.7	)	$	(839.6	)	$	34.8

The net cash outflow from the sale of accounts receivable in 2004 was due primarily to the termination of certain of our off-balance-sheet accounts receivable securitization programs in Europe. As previously

52

mentioned, the net cash outflow from the sale of accounts receivable in 2003 was due primarily to the termination of our domestic off-balance-sheet accounts receivable securitization program.

	Year Ended December 31,
	2004			2003			2002
(In millions)
Pension contributions	$	(264.6	)	$	(115.7	)	$	(226.9	)

We expect our minimum pension contribution requirements to increase in future periods. For further information, refer to the discussion under the caption “Commitments and Contingencies”.

      The reconciliation of net income to cash flows from operating activities also included adjustments for changes in operating assets and liabilities. Significant adjustments in 2004 included:

•  a negative adjustment for Accounts receivable, reflecting increased levels of customer financing due in part to higher tire unit sales, pricing improvements and a shift in mix toward replacement tires (which generally have longer terms than OE tires).

•  a positive adjustment for Accounts payable, reflecting increased levels of financing by our suppliers due in part to increased raw material costs,

•  a positive adjustment for long term Compensation and benefits, due in part to non-cash charges for an increase in anticipated benefit payments in future periods resulting primarily from changes in actuarial assumptions, and

•  a positive adjustment for Other long term liabilities, due primarily to non-cash charges for anticipated payments in future periods related to general and product liabilities.

      Cash payments for operating activities included the following:

	Year Ended December 31,
			Restated
	2004		2003		2002
(In millions)
Interest	$	356.5	$	282.5	$	259.7
Taxes		201.3		73.0		125.9
Rationalizations		132.5		214.8		61.2

Cash payments for interest increased due primarily to higher average debt levels, increased interest rates and the April 1, 2003 restructuring and refinancing of our credit facilities.

Investing Activities

Net cash used in investing activities was $525.2 million during 2004, compared to $236.0 million in 2003 and $540.3 million in 2002. Capital expenditures were as follows:

	Year Ended December 31,
	2004		2003		2002
(In millions)
Capital expenditures	$	518.6	$	375.4	$	458.1

Capital expenditures in 2004 were $518.6 million, of which $294.0 million was used on projects to increase capacity and improve productivity and quality, and $224.6 million was used for tire molds and various other projects. Capital expenditures were reduced in 2003 in response to business conditions and limitations prescribed by certain of our borrowing arrangements. Capital expenditures are expected to approximate $640 million in 2005, including approximately $350 million for manufacturing improvements and approximately $290 million for molds and various other projects.

      At December 31, 2004, we had binding commitments for raw materials and investments in land, buildings and equipment of $755.9 million, and off-balance-sheet financial guarantees written and other commitments totaling $18.2 million.

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      Cash used for asset acquisitions was $61.8 million in 2004. In June 2004, we exercised our call option and a subsidiary in Luxembourg purchased the remaining 20% of outstanding shares that it did not already own of Sava Tires d.o.o. (Sava Tires), a joint venture tire manufacturing company in Kranj, Slovenia, for $51.4 million. On July 13, 2004, we purchased the remaining 50% ownership interest that we did not already own of Däckia, a major tire retail group in Sweden, for $10.4 million.

      Cash provided by asset dispositions in 2003 was $104.4 million, and included net proceeds from the sale of assets in the United States of $85.8 million, in Europe of $14.5 million, in Latin America of $2.0 million and in Asia of $2.1 million. Included in the United States total of $85.8 million is $82.9 million for the sale of 20.8 million shares of SRI. Cash used for asset acquisitions in 2003 included the purchase of Arkansas Best Corporation’s 19% ownership interest in Wingfoot Commercial Tire Systems, LLC (“Wingfoot”) for $71.2 million. Wingfoot was a joint venture company formed by Goodyear and Arkansas Best Corporation to sell and service commercial truck tires, provide retread services and conduct related business.

      Cash provided by asset dispositions in 2002 was $55.6 million, and included net proceeds from the sale of assets in the United States of $1.3 million, in Europe of $28.7 million and in Latin America of $23.3 million. Cash used for asset acquisitions in 2002 was $54.8 million. We acquired additional shares of our tire manufacturing subsidiary in Slovenia at a cost of $38.9 million. We also acquired additional shares of our tire manufacturing subsidiary in Turkey at a cost of $15.9 million.

      For further information on investing activities, refer to the Note to the Financial Statements No. 8, Investments.

Financing Activities

Net cash provided by (used in) financing activities was $189.1 million in 2004, compared to $1,087.1 million in 2003 and $(167.5) million in 2002. Consolidated debt and our ratio of debt to debt and equity follows:

	December 31,
				Restated
	2004			2003			2002
(In millions)
Consolidated debt	$	5,679.6		$	5,086.0		$	3,642.7
Debt to debt and equity		98.7	%		100.6	%		94.3	%

Consolidated debt increased in 2004 from 2003 primarily due to certain financing actions in 2004 including the completion of a $350 million convertible senior notes offering as well as the termination of off-balance-sheet account receivable securitization programs in Europe and the consolidation of VIEs as defined by FIN 46. Consolidated debt increased in 2003 from 2002 due primarily to the April 1, 2003 restructuring and refinancing of our credit facilities, including the termination of our domestic off-balance-sheet accounts receivable securitization program.

Credit Sources

We had available committed and uncommitted credit facilities totaling $7.30 billion at December 31, 2004, of which $1.12 billion were unused, compared to $5.90 billion and $335.0 million, respectively, at December 31, 2003.

U.S. Deposit-Funded Credit Facility

On August 18, 2004, we refinanced our then-existing $680 million U.S. revolving credit facility with a U.S. deposit-funded credit facility, which is a synthetic revolving credit and letter of credit facility. Pursuant to the refinancing, the lenders deposited the entire $680 million of the facility in an account held by the administrative agent, and those funds are used to support letters of credit or borrowings on a revolving basis, in each case subject to customary conditions. The lenders under the new facility will receive annual compensation on the amount of the facility equivalent to 450 basis points over LIBOR, which includes commitment fees on the entire amount of the commitment (whether drawn or undrawn) and a usage fee on the amounts drawn.

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The full amount of the facility is available for the issuance of letters of credit or for revolving loans. The $500.7 million of letters of credit that were outstanding under the U.S. revolving credit facility as of June 30, 2004 were transferred to the deposit-funded credit facility. As of December 31, 2004, there were no borrowings under the facility and $509.9 million of letters of credit issued under the facility. The facility matures on September 30, 2007.

      Our obligations under the deposit-funded credit facility are guaranteed by most of our wholly-owned U.S. subsidiaries and by our wholly-owned Canadian subsidiary, Goodyear Canada Inc. Our obligations under this facility and our subsidiaries’ obligations under the related guarantees are secured by collateral that includes:

•  subject to certain exceptions, perfected first-priority security interests in the equity interests in our U.S. subsidiaries and 65% of the equity interests in our non-European foreign subsidiaries;

•  a perfected second-priority security interest in 65% of the capital stock of Goodyear Finance Holding S.A., a Luxembourg company;

•  perfected first-priority security interests in and mortgages on our U.S. corporate headquarters and certain of our U.S. manufacturing facilities;

•  perfected third-priority security interests in all accounts receivable, inventory, cash and cash accounts pledged as security under our asset-based facilities; and

•  perfected first-priority security interests in substantially all other tangible and intangible assets, including equipment, contract rights and intellectual property.

      The bond agreement for our Swiss franc bonds due 2006 limits our ability to use our U.S. tire and automotive parts manufacturing facilities as collateral for secured debt without triggering a requirement that holders of the bonds be secured on an equal and ratable basis. The manufacturing facilities indicated above were pledged to ratably secure the bonds to the extent required by the bond agreement. However, the aggregate amount of our debt secured by these manufacturing facilities is limited to 15% of our positive consolidated shareholders’ equity. Consequently, the security interests granted to the lenders under the U.S. senior secured funded credit facility are not required to be shared with the holders of debt outstanding under our other existing unsecured bond indentures.

      The deposit-funded credit facility contains certain covenants that, among other things, limit our ability to incur additional unsecured and secured indebtedness (including a limit, subject to certain exceptions, of €275 million in accounts receivable transactions), make investments and sell assets beyond specified limits. The facility prohibits us from paying dividends on our common stock. We must also maintain a minimum consolidated net worth (as such term is defined in the deposit-funded credit facility) of at least $2.0 billion for quarters ending in 2005 and the first quarter of 2006, and $1.75 billion for each quarter thereafter through September 30, 2007. We are not permitted to allow the ratio of Consolidated EBITDA to consolidated interest expense to fall below a ratio of 2.00 to 1.00 for any period of four consecutive fiscal quarters. In addition, our ratio of consolidated senior secured indebtedness to Consolidated EBITDA is not permitted to be greater than 4.00 to 1.00 at any time.

      The deposit-funded credit facility also limits the amount of capital expenditures we may make to $500 million in 2004, 2005 and 2006, and $375 million in 2007 (through September 30, 2007). The amounts of permitted capital expenditures may be increased by the amount of net proceeds retained by us from permitted asset sales and equity and debt issuances. In addition, unused capital expenditures may be carried over into the next year. As a result of certain activities, the capital expenditure limit for 2004 was increased from $500 million to approximately $1.10 billion. Our capital expenditures for 2004 totaled $518.6 million. The capital expenditure carryover from 2004 was $603.0 million, and in the absence of any other transactions, the limit for 2005 will be $1.10 billion.

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$1.95 Billion Senior Secured Asset-Based Credit Facilities

In April 2003, we entered into senior secured asset-based credit facilities in an aggregate principal amount of $1.30 billion, consisting of a $500 million revolving credit facility and an $800 million term loan facility. At December 31, 2004, we had no borrowings outstanding under the revolving credit facility and $800 million drawn against the term loan asset-based facility, compared to $389.0 million and $800.0 million, respectively, at December 31, 2003. The facilities mature on March 31, 2006. On February 20, 2004, we added a $650 million term loan tranche to the existing $1.30 billion facility, which was fully drawn as of December 31, 2004. The $650 million tranche was used partially to prepay our U.S. term loan facility, to repay other indebtedness, and for general corporate purposes. The facilities mature on March 31, 2006.

      We pay an annual commitment fee of 75 basis points on the undrawn portion of the commitments under the revolving facility. Loans under the facilities (other than the $650 million term loan tranche) bear interest at LIBOR plus 400 basis points or an alternative base rate (the higher of JPMorgan’s prime rate or the federal funds rate plus 50 basis points) plus 300 basis points. The $650 million term loan tranche bears interest at LIBOR plus 450 basis points or an alternative base rate plus 350 basis points. The basis points on the $650 million term loan tranche decrease to 425 and 325 points, respectively, if the ratings of the tranche improve to at least B1 or better from Moody’s and B+ or better from Standard & Poors.

      A borrowing base (equal to the sum of a percentage of certain accounts receivable and inventory) limits availability under the facilities (other than the $650 million term loan tranche). The calculation of the borrowing base and reserves against inventory and accounts receivable included in the borrowing base are subject to adjustment from time to time by the administrative agent and the majority lenders in their discretion (not to be exercised unreasonably). Adjustments would be based on the results of ongoing collateral and borrowing base evaluations and appraisals. A $50 million availability block further limits availability under the facilities. If at any time the amount of outstanding borrowings under the facilities (other than $650 million term loan tranche) exceeds the borrowing base, we are required to prepay borrowings sufficient to eliminate the excess or maintain compensating deposits with the agent bank.

      The facilities are collateralized by first and second priority security interests in all accounts receivable and inventory of Goodyear and its domestic and Canadian subsidiaries (excluding accounts receivable and inventory related to our North American joint venture with SRI). In addition, effective as of February 20, 2004, collateral included second and third priority security interests on the other assets securing the U.S. facilities. The facilities contain certain representations, warranties and covenants which are materially the same as those in the U.S. facilities, with capital expenditures of $500 million and $150 million permitted in 2005 and 2006 (through March 31), respectively. In addition, we must maintain a minimum consolidated net worth of at least $2.0 billion for quarters ending in 2005 and 2006 (through March 31, 2006).

Consolidated EBITDA

Under our primary credit facilities, we are not permitted to allow the ratio of Consolidated EBITDA to consolidated interest expense to fall below 2.00 to 1.00 (as such terms are defined in each of the primary credit facilities) for any period of four consecutive fiscal quarters. In addition, our ratio of consolidated senior secured indebtedness to Consolidated EBITDA (as such terms are defined in each of the restructured credit facilities) is not permitted to be greater than 4.00 to 1.00 at any time.

      Consolidated EBITDA is a non-GAAP financial measure that is presented not as a measure of operating results, but rather as a measure of our ability to service debt. It should not be construed as an alternative to either (i) income before income taxes, or (ii) cash flows from operating activities. Our failure to comply with the financial covenants in the primary credit facilities could have a material adverse effect on our liquidity and operations. Accordingly, management believes that the presentation of Consolidated EBITDA will provide investors with information needed to assess our ability to continue to comply with these covenants. The following table presents the calculation of EBITDA and Consolidated EBITDA for the periods indicated. Other companies may calculate similarly titled measures differently than we do. Certain line items are presented as defined in the primary credit facilities, and do not reflect amounts as presented in the Consolidated Statement of Income.

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	Year Ended December 31,
				Restated
	2004			2003			2002
(In millions)
Net Income (Loss)	$	114.8		$	(807.4	)	$	(1,246.9	)
Consolidated Interest Expense		378.8			314.6			270.8
U.S. and Foreign Taxes on Income		207.9			117.1			1,227.9
Depreciation and Amortization Expense		628.7			691.6			605.3
EBITDA		1,330.2			315.9			857.1
Credit Agreement Adjustments:
Other (Income) and Expense		(13.1	)		287.4			4.7
Foreign Currency Exchange		23.4			40.7			(8.7	)
Equity in (Earnings) Losses of Affiliates		(8.4	)		14.5			13.8
Minority Interest in Net Income (Loss) of Subsidiaries		57.8			32.8			55.6
Non-cash Extraordinary Gains		—			—			—
Non-cash Non-recurring Items		—			54.7			—
Rationalizations		55.6			291.5			5.5
Less Excess Cash Rationalization Charges (1)		—			(12.9	)		—
Consolidated EBITDA	$	1,445.5		$	1,024.6		$	928.0

(1)  “Excess Cash Rationalization Charges” is defined in our April 1, 2003 credit facilities and only contemplates cash expenditures with respect to rationalization charges recorded on the Consolidated Statement of Income after April 1, 2003. Amounts incurred prior to April 1, 2003 were not included.

$650 Million Senior Secured European Facilities

Our joint venture in Europe, Goodyear Dunlop Tires Europe B.V. and subsidiaries (GDTE) is party to a $250 million senior secured revolving credit facility and a $400 million senior secured term loan facility. These facilities mature on April 30, 2005. At December 31, 2004, there were no borrowings outstanding under the senior secured revolving credit facility and the secured term loan facility was fully drawn. Each of these facilities was fully drawn at December 31, 2003.

      GDTE pays an annual commitment fee of 75 basis points on the undrawn portion of the commitments under the European revolving facility. GDTE may obtain loans under the European facilities bearing interest at LIBOR plus 400 basis points or an alternative base rate (the higher of JPMorgan’s prime rate or the federal funds rate plus 50 basis points) plus 300 basis points.

      The collateral pledged under the European facilities includes:

•  all of the capital stock of Goodyear Finance Holding S.A. and certain subsidiaries of GDTE,

•  a perfected first-priority interest in and mortgages on substantially all the tangible and intangible assets of GDTE in the United Kingdom, Luxembourg, France and Germany, including certain accounts receivable, inventory, real property, equipment, contract rights and cash and cash accounts, but excluding certain accounts receivable used in securitization programs, and

•  with respect to the European revolving credit facility, a perfected fourth priority interest in and mortgages on the collateral pledged under the deposit-funded credit facility and the asset-based facilities, except for real estate other than our U.S. corporate headquarters.

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      Consistent with the covenants applicable to Goodyear in the U.S. facilities, the European facilities contain certain representations, warranties and covenants applicable to GDTE and its subsidiaries which, among other things, limit GDTE’s ability to:

•  incur additional indebtedness (including a limit of €275 million in accounts receivable transactions),

•  make investments,

•  sell assets beyond specified limits,

•  pay dividends, and

•  make loans or advances to Goodyear companies that are not subsidiaries of GDTE.

      The European facilities also contain certain additional covenants identical to those in the U.S. facilities. The European facilities also limit the amount of capital expenditures that GDTE may make to $250 million in 2004 and $100 million in 2005 (through April 30, 2005).

      Subject to the provisions in the European facilities and agreements with our joint venture partner, Sumitomo Rubber Industries, Ltd. (SRI), GDTE is permitted to transfer funds to Goodyear. These provisions and agreements include limitations on loans and advances from GDTE to Goodyear and a requirement that transactions with affiliates be consistent with past practices or on arms-length terms.

      Any amount outstanding under the term facility is required to be prepaid with:

•  75% of the net cash proceeds of all sales and dispositions of assets by GDTE and its subsidiaries greater than $5 million, and

•  50% of the net cash proceeds of debt and equity issuances by GDTE and its subsidiaries.

      The U.S. and European facilities can be used, if necessary, to fund ordinary course of business needs, to repay maturing debt, and for other needs as they arise.

Other Foreign Credit Facilities

At December 31, 2004, we had short-term committed and uncommitted bank credit arrangements totaling $338.9 million, of which $181.5 million were unused, compared to $347.0 million and $209.4 million at December 31, 2003. The continued availability of these arrangements is at the discretion of the relevant lender, and a portion of these arrangements may be terminated at any time.

International Accounts Receivable Securitization Facilities — On-Balance-Sheet Financing

On December 10, 2004, GDTE and certain of its subsidiaries entered into a new five-year pan-European accounts receivable securitization facility. The facility initially provides €165 million of funding, but has the ability to be expanded to €275 million, and will be subject to customary annual renewal of back-up liquidity lines. The new facility replaces an €82.5 million facility in a subsidiary in France.

      The new facility involves the twice-monthly sale of substantially all of the trade accounts receivable of certain GDTE subsidiaries to a bankruptcy-remote French company controlled by one of the liquidity banks in the facility. These subsidiaries retained servicing responsibilities. It is an event of default under the facility if:

•  the ratio of our Consolidated EBITDA to our consolidated interest expense falls below 2.00 to 1.00,

•  the ratio of our consolidated senior secured indebtedness to our Consolidated EBITDA is greater than 4.00 to 1.00,

•  the ratio of GDTE’s third party indebtedness (net of cash held by GDTE and its consolidated subsidiaries in excess of $100 million) to its Consolidated EBITDA is greater than 3.00 to 1.00, or

•  for so long as such a provision is in our European credit facilities, our consolidated net worth is less than $2 billion on or prior to March 31, 2006, or is less than $1.75 billion after March 31, 2006, in each case subject to a 60 day grace period.

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      The financial covenants listed above will be automatically amended to conform to the European Credit Facilities upon the refinancing of the European Credit Facilities. The defined terms used in the events of default tests are similar to those in the European Credit Facilities. As of December 31, 2004, net cash inflows of $224.7 million were recorded, representing the amount outstanding and fully utilized under this program. The program did not qualify for sale accounting and accordingly, this amount is included in consolidated long term debt on the Consolidated Balance Sheet. Net cash outflows of $113.1 million were recorded in 2004 related to the termination of the replaced European accounts receivable securitization programs.

      In addition to the pan-European accounts receivable securitization facility discussed above, SPT and other subsidiaries in Australia had transferred accounts receivable under other programs totaling $63.2 million and $7.7 million at December 31, 2004 and 2003, respectively.

International Accounts Receivable Securitization Facilities — Off-Balance-Sheet Financing

Various other international subsidiaries have also established accounts receivable continuous sales programs. At December 31, 2004, proceeds available to these subsidiaries from the sale of certain of their receivables totaled $4.7 million. These subsidiaries retain servicing responsibilities.

$650 Million Senior Secured Notes

On March 12, 2004, we completed a private offering of $650 million of senior secured notes, consisting of $450 million of 11% senior secured notes due 2011 and $200 million of floating rate notes due 2011, which accrue interest at LIBOR plus 8%. The proceeds of the notes were used to prepay the remaining outstanding amount under the then-existing U.S. term loan facility, permanently reduce commitments under the then-existing revolving credit facility by $70 million, and for general corporate purposes. The U.S. term facility had been scheduled to mature in April 2005. Loans under the retired term facility and the revolving credit facility each bore interest at LIBOR plus 4%. The notes are guaranteed by the same subsidiaries that guarantee the U.S. deposit-funded credit facility and asset-based credit facilities. The notes are secured by perfected fourth-priority liens on the same collateral securing those facilities (pari-passu with the liens on that domestic collateral securing the parent guarantees of the European revolving credit facility).

      We have the right to redeem the fixed rate notes in whole or in part from time to time on and after March 1, 2008. The redemption price, plus accrued and unpaid interest to the redemption date, would be 105.5%, 102.75%, and 100.0% on and after March 1, 2008, 2009 and 2010, respectively. We may also redeem the fixed rate notes prior to March 1, 2008 at a redemption price equal to 100% of the principal amount plus a make-whole premium. We have the right to redeem the floating rate notes in whole or in part from time to time on and after March 1, 2008. The redemption price, plus accrued and unpaid interest to the redemption date, would be 104.0%, 102.0%, and 100.0% on and after March 1, 2008, 2009 and 2010, respectively. In addition, prior to March 1, 2007, we have the right to redeem up to 35% of the fixed and floating rate notes with net cash proceeds from one or more public equity offerings. The redemption price would be 111% for the fixed rate notes and 100% plus the then applicable floating rate for the floating rate notes, plus accrued and unpaid interest to the redemption date.

      The indenture for the senior secured notes contains restrictions on our operations, including limitations on:

•  incurring additional indebtedness or liens,

•  paying dividends, making distributions and stock repurchases,

•  making investments,

•  selling assets, and

•  merging and consolidating.

      The deposit-funded credit facility also limits the amount of capital expenditures we may make to $500 million in 2004, 2005 and 2006, and $375 million in 2007 (through September 30, 2007). The amounts

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of permitted capital expenditures may be increased by the amount of net proceeds retained by us from permitted asset sales and equity and debt issuances. In addition, unused capital expenditures may be carried over into the next year. As a result of certain activities, the capital expenditure limit for 2004 was increased from $500 million to approximately $1.10 billion. Our capital expenditures for 2004 totaled $518.6 million. The capital expenditure carryover from 2004 was $603.0 million, and in the absence of any other transactions, the limit for 2005 will be $1.10 billion.

      In the event that the senior secured notes have a rating equal to or greater than Baa3 from Moody’s and BBB- from Standard and Poor’s, a number of those restrictions will not apply, for so long as those credit ratings are maintained.

$350 Million Convertible Note Offering

On July 2, 2004, we completed an offering of $350 million of 4.00% convertible senior notes due June 15, 2034. The notes are convertible into shares of our common stock initially at a conversion rate of 83.07 shares of common stock per $1,000 principal amount of notes, which is equal to an initial conversion price of $12.04 per share. The proceeds of the notes were used to repay temporarily a revolving credit facility and for working capital purposes.

$645 Million Senior Secured U.S. Term Facility

At March 12, 2004, all outstanding amounts under the facility were prepaid and the facility was retired. At December 31, 2003, the balance due on the U.S. term facility was $583.3 million, due to a partial pay down of the balance during the second quarter of 2003.

$680 Million Senior Secured U.S. Revolving Credit Facility

At August 18, 2004, all outstanding amounts under the facility were prepaid and the facility was retired. In addition, $500.7 million of letters of credit issued under the facility were transferred to our $680 million senior secured deposit funded credit facility.

Registration Obligations

We are a party to two registration rights agreements in connection with our private placement of $350 million of convertible notes in July 2004 and $650 million of senior secured notes in March 2004. The registration rights agreement for the convertible notes requires us to pay additional interest to investors if we do not file a registration statement to register the convertible notes by November 7, 2004, or if such registration statement is not declared effective by the SEC by December 31, 2004. The additional interest to investors is at a rate of 0.25% per year for the first 90 days and 0.50% per year thereafter. We failed to file a registration statement for the convertible notes by November 7, 2004, and as a result, will pay additional interest until such time as a registration statement is filed and declared effective. The registration rights agreement for the senior secured notes requires us to pay additional interest to investors if a registered exchange offer for the notes is not completed by December 7, 2004. The additional interest to investors is at a rate of 1.00% per year for the first 90 days, increasing in increments of 0.25% every 90 days thereafter, to a maximum of 2.00% per year. Because no such exchange offer was completed by December 7, 2004, we will pay additional interest until an exchange offer is completed. If the rate of additional interest payable reaches 2.00% per year then the interest rate for the secured notes will be permanently increased by 0.25% per annum after the exchange offer is completed.

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Credit Ratings

Our credit ratings as of the date of this report are presented below:

	S&P	Moody’s
Senior Secured Asset-Based Facilities	BB	B1
European Facilities	B+	B1
$650 Million Asset-Based Tranche	B	B2
$650 Million Senior Secured Notes due 2011	*	B3
Corporate Rating	B+	B1 (implied)
Senior Unsecured Debt	B-	B3

*  Private rating

Although we do not request ratings from Fitch, the rating agency rates our secured debt facilities “B” and our unsecured debt “CCC+.”

      As a result of these ratings and other related events, we believe that our access to capital markets may be limited. Unless our debt credit ratings and operating performance improve, our access to the credit markets in the future may be limited. Moreover, a further reduction in our credit ratings would further increase the cost of any financing initiatives we may pursue.

      A rating reflects only the view of a rating agency, and is not a recommendation to buy, sell or hold securities. Any rating can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances warrant such a change.

Turnaround Strategy

We are currently implementing a turnaround strategy for North American Tire that will require us to:

•  stabilize margins and market shares,

•  simplify the sales and supply chain process,

•  execute key cost-cutting strategies,

•  implement brand and distribution strategies, and

•  grow the business through new product introductions and new sales channels.

      Our ability to successfully implement the cost-cutting strategy is also dependent upon our ability to lower costs and increase productivity from levels achieved under the terms of our master contract with the USWA ratified in 2003. Based in part on success in implementing the turnaround strategy, North American Tire had stronger operating results in 2004 than in 2003. However, additional progress in implementing the turnaround strategy is needed to achieve a satisfactory level of profitability in North American Tire. If the goals of the turnaround strategy are not met, we will not be able to achieve or sustain future profitability, which would impair our ability to meet our debt service obligations and otherwise negatively affect our operations. There is no assurance that we will successfully implement this turnaround strategy. In particular, this strategy and our liquidity could be adversely affected by trends that affected the North American Tire segment negatively in prior years, including:

•  industry overcapacity which limits pricing leverage,

•  weakness in the replacement tire market,

•  increased competition from low cost manufacturers and a related decline in our market share,

•  weak U.S. economic conditions, and

•  increases in medical and pension costs.

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      In addition, the turnaround strategy has been, and may continue to be, impacted negatively by higher raw material and energy costs. During 2004, the market price of natural rubber, one of our most important raw materials, oil, an important feedstock for several other raw materials, increased significantly versus the prior year. Based on a combination of our inventory turns and raw material shipment lead times, market price fluctuations in raw materials typically impact our CGS three to six months subsequent to the raw material purchase date. Furthermore, market conditions may prevent us from passing these increases on to our customers through timely price increases. We retained The Blackstone Group L.P. and Bain & Company to provide consulting advice on the turnaround strategy and other possible strategic initiatives to maximize shareholder value.

Future Liquidity Requirements

At December 31, 2004, we had $1.97 billion in cash and cash equivalents, of which $1.02 billion was held in the United States and $415.6 million was in accounts of GDTE. The remaining amounts were held in our other non-U.S. operations. Our ability to move cash and cash equivalents among our various operating locations is subject to the operating needs of the operating locations as well as restrictions imposed by local laws and applicable credit facility agreements. At December 31, 2004, approximately $219.9 million of cash was held in locations where significant tax or legal impediments would make it difficult or costly to execute monetary transfers. Unused availability under our various credit agreements totaled approximately $1.12 billion at December 31, 2004. Based upon our projected operating results, we expect that cash flow from operations, together with amounts available under our primary credit facilities and other sources of liquidity, will be adequate to meet our anticipated liquidity requirements through December 31, 2005 (including working capital, debt service, pension funding and capital expenditures).

      The aggregate amount of long-term debt maturing in calendar years 2005 and 2006 is approximately $1.01 billion and $1.92 billion, respectively. Included in the amount for 2005 is $400.0 million related to our primary European credit facilities maturing on April 30, 2005 and our €400 million 6.375% Euro Notes due June 2005 (equivalent to approximately $542 million at December 31, 2004). In March 2006, $1.45 billion related to our asset-based facilities matures, and the $250 million 6⁵/8% Senior Notes are due in December 2006.

      On February 23, 2005 we announced that we intend to refinance approximately $3.3 billion of our credit facilities, including:

•  our $1.3 billion asset-based credit facility, due March 31, 2006,

•  our $650 million asset-based term loan, due March 31, 2006,

•  our $680 million deposit funded credit facility, due September 30, 2007, and

•  $650 million in credit facilities for our Goodyear Dunlop Tires Europe B.V. affiliate, due April 30, 2005.

      We expect to replace these facilities with $3.35 billion in new five-year facilities that will be due in 2010 and include:

•  a $1.5 billion asset-based credit facility,

•  a $1.2 billion second lien term loan, and

•  the Euro equivalent of $650 million in credit facilities for Goodyear Dunlop Tires Europe B.V.

      These transactions are subject to market conditions and the execution of definitive documentation and are expected to close in April 2005. We expect to record pretax charges of approximately $40 million for the write-off of unamortized costs related to the replaced facilities, and the costs of refinancing could be significant. Failure to refinance the European credit facilities or asset-based facilities before they mature could have a material adverse affect on our liquidity. In order to ensure that our future liquidity requirements are addressed, we plan to seek additional financing in the capital markets. Because of our debt ratings, operating performance over the past few years and other factors, access to the capital markets cannot be assured. Our

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ongoing ability to access the capital markets is also dependent on the degree of success we have implementing our North American Tire turnaround strategy. Successful implementation of the turnaround strategy is also crucial to ensuring that we have sufficient cash flow from operations to meet our obligations. While we made progress in implementing the turnaround strategy in 2004, there is no assurance that our progress will continue, or that we will be able to sustain any future progress to a degree sufficient to maintain access to capital markets and meet liquidity requirements. As a result, failure to complete the turnaround strategy successfully could have a material adverse effect on our financial position, results of operations and liquidity.

      Future liquidity requirements also may make it necessary for us to incur additional debt. However, a substantial portion of our assets is already subject to liens securing our indebtedness. As a result, we are limited in our ability to pledge our remaining assets as security for additional secured indebtedness. In addition, unless we sustain or improve our financial performance, our ability to raise unsecured debt may be limited.

      In addition to maturing debt, we are required to make contributions to our domestic defined benefit pension plans. These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act (“ERISA”). Although subject to change, we expect to be required by ERISA to make contributions to our domestic pension plans of approximately $400 million to $425 million in 2005. At the end of 2005, the current interest rate relief measures used for pension funding calculations expire. If current measures are extended, we estimate that required contributions in 2006 will be in the range of $600 million to $650 million. If new legislation is not enacted, the interest rate used for 2006 and beyond will be based upon a 30-year U.S. Treasury bond rate, as calculated and published by the U.S. government as a proxy for the rate that could be attained if 30-year Treasury bonds were currently being issued. Using an estimate of these rates would result in estimated required contributions during 2006 in the range of $725 million to $775 million. The assumptions used to develop these estimates are described in the Commitments and Contingencies table below. We are not able to reasonably estimate our future required contributions beyond 2006. Nevertheless, we expect that the amount of contributions required in years beyond 2006 will be substantial. In 2005, in addition to required domestic plan contributions, we expect to contribute approximately $70 million to our funded international pension plans.

      Our postretirement benefit plans will require amounts to cover benefit payments in the future. Benefit payments are expected to be approximately $304 million in 2005, $321 million in 2006 and $274 million in 2007. These estimates are based upon the plan provisions currently in effect. Total payments are estimated to be approximately $2.6 billion as calculated on December 31, 2004. The majority of these payments would be made more than five years hence. The estimated payments do not include an estimated reduction in our obligations totaling approximately $475 million to $525 million resulting from the provisions of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

      Pursuant to an agreement entered into in 2001, Ansell Ltd., our joint venture partner in South Pacific Tyres (SPT), has the right, subject to certain conditions, during the period beginning August 2005 and ending one year later, to require Goodyear to purchase Ansell’s 50% interest in SPT. The purchase price is a formula price based on the earnings of SPT, subject to various adjustments. If Ansell does not exercise its right, we may require Ansell to sell its interest to us during the 180 days following the expiration of Ansell’s right at a price established using the same formula.

      We are subject to various legal proceedings, including those described in the Note to the Financial Statements No. 20, Commitments and Contingent Liabilities. In the event we wish to appeal any future adverse judgment in any proceeding, we would be required to post an appeal bond with the relevant court. If we do not have sufficient availability under our facilities to issue a letter of credit to support an appeal bond, we may be required to (i) pay down borrowings under the facility in order to increase the amount available for issuing letters of credit, or (ii) deposit cash collateral in order to stay the enforcement of the judgment pending an appeal. A significant deposit of cash collateral may have a material adverse effect on our liquidity.

      A substantial portion of our borrowings is at variable rates of interest and exposes us to interest rate risk. If interest rates rise, our debt service obligations would increase. A significant rise in interest rates could have a material adverse effect on our liquidity in future periods.

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Dividends

On February 4, 2003, we announced that we eliminated our quarterly cash dividend. The dividend reduction was decided on by the Board of Directors in order to conserve cash. Under our primary credit agreements, we are not permitted to pay dividends on our common stock.

COMMITMENTS AND CONTINGENCIES

Contractual Obligations

The following table presents our contractual obligations and commitments to make future payments as of December 31, 2004:

	Payment Due by Period as of December 31, 2004
													After
	Total		1st Year		2nd Year		3rd Year		4th Year		5th Year		5 Years
(In millions)
Long Term Debt (1)	$	5,619.2	$	1,225.2	$	1,920.6	$	300.8	$	104.0	$	227.4	$	1,841.2
Capital Lease Obligations (2)		91.1		10.4		9.5		9.0		8.9		8.5		44.8
Interest Payments (3)		1,761.4		348.1		229.8		160.1		150.3		162.6		710.5
Operating Leases (4)		1,519.3		320.3		262.6		203.1		146.8		110.5		476.0
Pension Benefits (5)		1,232.5		482.5		750.0		(5)		(5)		(5)		(5)
Other Post Retirement Benefits (6)		2,624.5		303.9		320.7		273.7		266.5		260.3		1,199.4
Workers Compensation (7)		285.9		66.0		42.4		29.3		20.3		25.4		102.5
Binding Commitments (8)		755.9		705.6		16.1		5.2		4.0		3.9		21.1
	$	13,889.8	$	3,462.0	$	3,551.7	$	981.2	$	700.8	$	798.6	$	4,395.5

(1)	Long term debt payments include notes payable and reflect long term debt maturities as of December 31, 2004.
(2)	The present value of capital lease obligations is $60.4 million.
(3)	These amounts represent future interest payments related to our existing debt obligations based on fixed and variable interest rates specified in the associated debt agreements. Payments related to variable debt are based on the six-month LIBOR rate at December 31, 2004 plus the specified margin in the associated debt agreements for each period presented. The amounts provided relate only to existing debt obligations and do not assume the refinancing or replacement of such debt.
(4)	Operating lease obligations have not been reduced by minimum sublease rentals of $52.2 million, $42.9 million, $34.2 million, $25.6 million, $17.0 million, and $32.0 million in each of the periods above, respectively, for a total of $203.9 million. Net operating lease payments total $1,315.4 million, with a present value of $946.0 million. The operating leases relate to, among other things, computers and office equipment, real estate and miscellaneous other assets. No asset is leased from any related party.
(5)	The obligation related to pension benefits is actuarially determined and is reflective of obligations as of December 31, 2004. The amounts set forth in the table represent our estimated minimum funding requirements in 2005 and 2006 for domestic defined pension plans under ERISA, and $70 million of expected contributions to our funded international pension plans in 2005. Although subject to change, we expect to be required by ERISA to make contributions to our domestic pension plans of approximately $400 to $425 million in 2005. The amount in the table for 2005 represents the midpoint of this range plus expected contributions to our funded international plans. The expected contributions are based upon a number of assumptions, including:

•  an ERISA liability interest rate of 6.10% for 2005, and

•  plan asset returns of 8.5% in 2005.

At the end of 2005, the current interest relief rate measures used for pension funding calculations expire. If current measures are extended, we estimate that required contributions in 2006 will be in the range of $600 million to $650 million. If new legislation is not enacted, the interest rate used for 2006 and beyond

64

will be based upon a 30-year U.S. Treasury bond rate, as calculated and published by the U.S. government as a proxy for the rate that could be attained if 30-year Treasury bonds were currently being issued. Using an estimate of these rates would result in estimated required contributions during 2006 in the range of $725 million to $775 million. The estimated amount set forth in the table for 2006 represents the mid-point of this range. We likely will be subject to additional statutory minimum funding requirements after 2006. We are not able to reasonably estimate our future required contributions beyond 2006 due to uncertainties regarding significant assumptions involved in estimating future required contributions to our defined benefit pension plans, including:

•  interest rate levels,

•  the amount and timing of asset returns,

•  what, if any, changes may occur in legislation, and

•  how contributions in excess of the minimum requirements could impact the amounts and timing of future contributions.

We expect the amount of contributions required in years beyond 2006 will be substantial.

(6)	The payments for other postretirement benefits reflect the estimated benefit payments of the plans using the provisions currently in effect. We reserve the right to modify or terminate the plans at any time. The obligation related to other postretirement benefits is actuarially determined on an annual basis. The estimated payments do not include an estimated reduction in our obligations totaling approximately $475 million to $525 million resulting from the provisions of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
(7)	The payments for workers’ compensation are based upon recent historical payment patterns. The present value of anticipated payments for workers’ compensation is $230.7 million.
(8)	Binding commitments are for our normal operations and are related primarily to obligations to acquire land, buildings and equipment. In addition, binding commitments includes obligations to purchase raw materials through short term supply contracts at fixed prices or at formula prices related to market prices or negotiated prices.

      We have recorded long term liabilities for other items including income taxes, general and product liabilities, environmental liabilities and miscellaneous other long term liabilities. These other liabilities are not contractual obligations by nature. We cannot, with any degree of reliability, determine the years in which these liabilities might ultimately be settled. Accordingly, they are not included in the above table. In addition, the following contingent contractual obligations, the amounts of which can not be estimated, are not included in the above table:

•  The terms and conditions of our global alliance with SRI as set forth in the Umbrella Agreement between Goodyear and SRI provide for certain minority exit rights available to SRI commencing in 2009. In addition, the occurrence of certain other events enumerated in the Umbrella Agreement, including certain bankruptcy events or changes in control of Goodyear, could trigger a right of SRI to require us to purchase these interests immediately. SRI’s exit rights, in the unlikely event of exercise, could require us to make a substantial payment to acquire Sumitomo’s interest in the alliance.

•  Pursuant to an agreement entered into in 2001, Ansell Ltd., our joint venture partner in South Pacific Tyres (SPT), has the right, subject to certain conditions, during the period beginning August 2005 and ending one year later, to require us to purchase Ansell’s 50% interest in SPT. The purchase price is a formula price based on the earnings of SPT, subject to various adjustments. If Ansell does not exercise its right, we may require Ansell to sell its interest to us during the 180 days following the expiration of Ansell’s right at a price established using the same formula.

•  Pursuant to an agreement entered into in 2001, we are required to purchase minimum amounts of carbon black from a certain supplier from January 1, 2003 through December 31, 2006, at agreed upon

65

base prices. The base prices are subject to quarterly adjustments for changes in raw material costs and natural gas costs and a one-time adjustment for other manufacturing costs.

      We do not engage in the trading of commodity contracts or any related derivative contracts. We generally purchase raw materials and energy through short term, intermediate and long term supply contracts at fixed prices or at formula prices related to market prices or negotiated prices. We will, however, from time to time, enter into contracts to hedge our energy costs.

Off-Balance Sheet Arrangements

An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has:

•  made guarantees,

•  retained or held a contingent interest in transferred assets,

•  undertaken an obligation under certain derivative instruments, or

•  undertaken any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the company, or that engages in leasing, hedging or research and development arrangements with the company.

      We have entered into certain arrangements under which we have provided guarantees, as follows:

	Amount of Commitment Expiration per Period
	Total		1st Year		2nd Year		3rd Year		4th Year		5th Year		Thereafter
(In millions)
Customer Financing Guarantees	$	7.5	$	2.4	$	1.4	$	1.1	$	0.5	$	1.0	$	1.1
Affiliate Financing Guarantees		9.8		—		4.9		4.9		—		—		—
Other Guarantees		0.9		—		—		—		0.1		0.6		0.2
Off-Balance Sheet Arrangements	$	18.2	$	2.4	$	6.3	$	6.0	$	0.6	$	1.6	$	1.3

For further information about guarantees, refer to the Note to the Financial Statements No. 20, Commitments and Contingencies.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

We continuously monitor our fixed and floating rate debt mix. Within defined limitations, we manage the mix using refinancing and unleveraged interest rate swaps. We will enter into fixed and floating interest rate swaps to alter our exposure to the impact of changing interest rates on consolidated results of operations and future cash outflows for interest. Fixed rate swaps are used to reduce our risk of increased interest costs during periods of rising interest rates, and are normally designated as cash flow hedges. Floating rate swaps are used to convert the fixed rates of long-term borrowings into short-term variable rates, and are normally designated as fair value hedges. Interest rate swap contracts are thus used to separate interest rate risk management from debt funding decisions. At December 31, 2004, the interest rates on 50% of our debt were fixed by either the nature of the obligation or through the interest rate swap contracts, compared to 47% at December 31, 2003. We also have from time to time entered into interest rate lock contracts to hedge the risk-free component of anticipated debt issuances. As a result of credit ratings actions and other related events, our access to these instruments may be limited.

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      The following table presents information on interest rate swap contracts at December 31:

		2004			2003
(Dollars in millions)
Fixed Rate Contracts:
	Notional principal amount	$	—		$	325.0
	Pay fixed rate		—			5.00	%
	Receive variable LIBOR		—			1.17
	Average years to maturity		—			0.25
	Fair value — liability	$	—		$	(3.1	)
	Pro forma fair value — liability		—			(3.1	)
	Floating Rate Contracts:
	Notional principal amount	$	200.0		$	200.0
	Pay variable LIBOR		4.31	%		2.96	%
	Receive fixed rate		6.63			6.63
	Average years to maturity		1.95			2.95
	Fair value — asset	$	6.0		$	13.0
	Pro forma fair value — asset		5.3			12.3

The pro forma fair value assumes a 10% increase in variable market interest rates at December 31 of each year, and reflects the estimated fair value of contracts outstanding at that date under that assumption.

      Weighted average interest rate swap contract information follows:

		2004			2003			2002
(Dollars in millions)
Fixed Rate Contracts:
	Notional principal amount	$	81.0		$	325.0		$	325.0
	Pay fixed rate		5.00	%		5.00	%		5.00	%
	Receive variable LIBOR		1.18			1.24			1.91
Floating Rate Contracts:
	Notional principal amount	$	200.0		$	207.0		$	210.0
	Pay variable LIBOR		3.27	%		3.03	%		3.68	%
	Receive fixed rate		6.63			6.63			6.63

The following table presents fixed rate debt information at December 31:

	2004		2003
(In billions)
Carrying amount — liability	$	3.05	$	2.23
Fair value — liability		3.22		2.11
Pro forma fair value — liability		3.30		2.18

The pro forma information assumes a 100 basis point decrease in market interest rates at December 31 of each year, and reflects the estimated fair value of fixed rate debt outstanding at that date under that assumption. The sensitivity of our interest rate contracts and fixed rate debt to changes in interest rates was determined with a valuation model based upon net modified duration analysis. The model assumes a parallel shift in the yield curve. The precision of the model decreases as the assumed change in interest rates increases.

Foreign Currency Exchange Risk

We enter into foreign currency contracts in order to reduce the impact of changes in foreign exchange rates on consolidated results of operations and future foreign currency-denominated cash flows. These contracts reduce exposure to currency movements affecting existing foreign currency-denominated assets, liabilities, firm commitments and forecasted transactions resulting primarily from trade receivables and payables, equipment

67

acquisitions, intercompany loans and royalty agreements and forecasted purchases and sales. In addition, the principal and interest on our Swiss franc bonds due 2006 and €100 million of the Euro Notes due 2005 are hedged by currency swap agreements.

      Contracts hedging the Swiss franc bonds and the Euro Notes are designated as cash flow hedges. Contracts hedging short-term trade receivables and payables normally have no hedging designation.

      The following table presents foreign currency contract information at December 31:

	2004			2003
(In millions)
Fair value — asset (liability)		$102.0			$ 71.7
Pro forma change in fair value		(22.3	)		(22.0	)
Contract maturities		1/05-10/19			1/04-10/19

We were not a party to any foreign currency option contracts at December 31, 2004 or 2003.

      The pro forma change in fair value assumes a 10% change in foreign exchange rates at December 31 of each year, and reflects the estimated change in the fair value of contracts outstanding at that date under that assumption. The sensitivity of our foreign currency positions to changes in exchange rates was determined using current market pricing models.

      Fair values are recognized on the Consolidated Balance Sheet at December 31 as follows:

	2004			2003
(In millions)
Asset (liability):
Swiss franc swap — current	$	(0.3	)	$	(1.6	)
Swiss franc swap — long term		59.5			46.8
Euro swaps — current		46.4			20.5
Euro swaps — long term		—			13.2
Other — current asset		5.2			7.2
Other — current (liability)		(8.8	)		(14.4	)

For further information on interest rate contracts and foreign currency contracts, refer to the Note to the Financial Statements No. 11, Financing Arrangements and Derivative Financial Instruments.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Management’s Report on Internal Control over Financial Reporting			70
Report of Independent Registered Public Accounting Firm			71
Consolidated Financial Statements of The Goodyear Tire & Rubber Company:
	Consolidated Statement of Income for each of the three fiscal years in the period ended December 31, 2004		73
	Consolidated Balance Sheet at December 31, 2004 and December 31, 2003		74
	Consolidated Statement of Shareholders’ Equity for each of the three fiscal years in the period ended December 31, 2004		75
	Consolidated Statement of Cash Flows for each of the three fiscal years in the period ended December 31, 2004		76
	Notes to Financial Statements		77
Supplementary Data (unaudited)			149
Financial Statement Schedules:
	The following consolidated financial statement schedules of The Goodyear Tire & Rubber Company are filed as part of this Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements of The Goodyear Tire & Rubber Company:
	Schedule I — Condensed Financial Information of Registrant		FS-2
	Schedule II — Valuation and Qualifying Accounts		FS-8
Other Financial Statements:
	Financial Statements of South Pacific Tyres (SPT)		FS-9

Schedules not listed above have been omitted since they are not applicable or are not required, or the information required to be set forth therein is included in the Consolidated Financial Statements or Notes thereto.

69

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined under Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

      In order to evaluate the effectiveness of the Company’s internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act, management conducted an assessment, including testing, using the criteria in the Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.

      A material weakness is a control deficiency or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected. As of December 31, 2004, the Company did not maintain effective controls over certain account reconciliations and did not maintain adequate segregation of duties at the application control level in certain information technology environments. A description of the material weaknesses that existed as of December 31, 2004, as well as their actual and potential effect on the presentation of the Company’s consolidated financial statements issued during their existence, is discussed below.

Account Reconciliations. At December 31, 2004, the Company did not maintain effective control over the preparation and review of account reconciliations of certain general ledger accounts. This control deficiency primarily related to account reconciliations of goodwill, deferred charges, fixed assets, compensation and benefits, accounts payable-trade and the accounts of a retail subsidiary in France. This control deficiency resulted in misstatements that were part of the restatement of the Company’s consolidated financial statements for 2003, 2002 and 2001, for each of the quarters for the year ended December 31, 2003 and for the first, second and third quarters for the year ended December 31, 2004. Additionally, this control deficiency could result in a material misstatement to annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness.

Segregation of Duties. At December 31, 2004, the Company did not maintain effective controls over the segregation of duties at the application control level in certain information technology environments as a result of not restricting the access of certain individuals in both information technology and finance. These deficiencies existed in varying degrees in certain business segments within the revenue and purchasing processes. This control deficiency did not result in any adjustments to the annual or interim consolidated financial statements; however, this control deficiency could result in a material misstatement to annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness.

      Because of the material weaknesses described above, management has concluded that, as of December 31, 2004, the Company did not maintain effective internal controls over financial reporting, based on criteria established in Internal Control — Integrated Framework.

      Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

70

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

of The Goodyear Tire & Rubber Company

      We have completed an integrated audit of The Goodyear Tire & Rubber Company’s 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2004 and audits of its 2003 and 2002 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

  Consolidated financial statements and financial statement schedules

      In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of The Goodyear Tire & Rubber Company and its subsidiaries at December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      As discussed in Note 8 to the consolidated financial statements, the Company adopted the provisions of FASB Interpretation No. 46R (revised December 2003), “Consolidation of Variable Interest Entities,” as of January 1, 2004.

      As described in Note 2, “Restatement,” the Company has restated its previously issued consolidated financial statements.

  Internal control over financial reporting

      Also, we have audited management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 8, that The Goodyear Tire & Rubber Company did not maintain effective internal control over financial reporting as of December 31, 2004, because of the effects of not maintaining effective controls over certain account reconciliations and not maintaining adequate segregation of duties at the application control level in certain information technology environments, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit.

      We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal

71

control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

      Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

      A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The following material weaknesses have been identified and included in management’s assessment.

      Account Reconciliations. At December 31, 2004, the Company did not maintain effective control over the preparation and review of account reconciliations of certain general ledger accounts. This control deficiency primarily related to account reconciliations of goodwill, deferred charges, fixed assets, compensation and benefits, accounts payable-trade and the accounts of a retail subsidiary in France. This control deficiency resulted in misstatements that were part of the restatement of the Company’s consolidated financial statements for 2003, 2002 and 2001, for each of the quarters for the year ended December 31, 2003 and for the first, second and third quarters for the year ended December 31, 2004. Additionally, this control deficiency could result in a material misstatement to annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness.

      Segregation of Duties. At December 31, 2004, the Company did not maintain effective controls over the segregation of duties at the application control level in certain information technology environments as a result of not restricting the access of certain individuals in both information technology and finance. These deficiencies existed in varying degrees in certain business segments within the revenue and purchasing processes. This control deficiency did not result in any adjustments to the annual or interim consolidated financial statements however, this control deficiency could result in a material misstatement to annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness.

      These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2004 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

      In our opinion, management’s assessment that The Goodyear Tire & Rubber Company did not maintain effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on criteria established in Internal Control — Integrated Framework issued by the COSO. Also, in our opinion, because of the effects of the material weaknesses described above on the achievement of the objectives of the control criteria, The Goodyear Tire & Rubber Company has not maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the COSO.

/s/ PricewaterhouseCoopers LLP

PRICEWATERHOUSECOOPERS LLP

Cleveland, Ohio

March 16, 2005

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Consolidated Statement of Income

	Year Ended December 31,
				Restated
	2004			2003			2002
(Dollars in millions, except per share amounts)
Net Sales	$	18,370.4		$	15,122.1		$	13,856.0
Cost of Goods Sold		14,709.2			12,499.0			11,306.9
Selling, Administrative and General Expense		2,833.1			2,374.2			2,202.4
Rationalizations (Note 3)		55.6			291.5			5.5
Interest Expense (Note 15)		368.8			296.3			242.7
Other (Income) and Expense (Note 4)		8.2			263.4			56.8
Foreign Currency Exchange (Gain) Loss		23.4			40.7			(8.7	)
Equity in (Earnings) Losses of Affiliates		(8.4	)		14.5			13.8
Minority Interest in Net Income of Subsidiaries		57.8			32.8			55.6
Income (Loss) before Income Taxes		322.7			(690.3	)		(19.0	)
United States and Foreign Taxes on Income (Loss) (Note 14)		207.9			117.1			1,227.9
Net Income (Loss)	$	114.8		$	(807.4	)	$	(1,246.9	)
Net Income (Loss) Per Share — Basic	$	0.65		$	(4.61	)	$	(7.47	)
Average Shares Outstanding (Note 12)		175.4			175.3			167.0
Net Income (Loss) Per Share — Diluted	$	0.63		$	(4.61	)	$	(7.47	)
Average Shares Outstanding (Note 12)		192.3			175.3			167.0

The accompanying notes are an integral part of these financial statements.

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Consolidated Balance Sheet

			December 31,
						Restated
			2004			2003
(Dollars in millions)
Assets
Current Assets:
	Cash and cash equivalents (Note 1)		$	1,967.9		$	1,546.3
	Restricted cash (Note 1)			152.4			23.9
	Accounts and notes receivable (Note 5)			3,427.4			2,616.3
	Inventories (Note 6)			2,784.8			2,467.7
	Prepaid expenses and other current assets			299.2			305.4
		Total Current Assets		8,631.7			6,959.6
Long Term Accounts and Notes Receivable				288.9			275.7
Investments in and Advances to Affiliates				34.9			184.2
Other Assets (Note 8)				78.3			71.5
Goodwill (Note 7)				720.3			658.2
Other Intangible Assets (Note 7)				162.6			150.4
Deferred Income Tax (Note 14)				83.4			70.5
Prepaid and Deferred Pension Costs (Note 13)				829.9			869.9
Deferred Charges				248.1			255.9
Properties and Plants (Note 9)				5,455.2			5,205.2
		Total Assets	$	16,533.3		$	14,701.1
Liabilities
Current Liabilities:
	Accounts payable-trade		$	1,979.0		$	1,562.8
	Compensation and benefits (Note 13)			1,042.0			987.6
	Other current liabilities			590.3			585.2
	United States and foreign taxes			271.3			270.7
	Notes payable (Note 11)			220.6			146.7
	Long term debt and capital leases due within one year (Note 11)			1,009.9			113.5
		Total Current Liabilities		5,113.1			3,666.5
Long Term Debt and Capital Leases (Note 11)				4,449.1			4,825.8
Compensation and Benefits (Note 13)				5,063.8			4,541.7
Deferred and Other Noncurrent Income Taxes (Note 14)				405.8			380.6
Other Long Term Liabilities				582.6			464.7
Minority Equity in Subsidiaries				846.1			854.0
		Total Liabilities		16,460.5			14,733.3
Commitments and Contingent Liabilities (Note 20)
Shareholders’ Equity (Deficit)
Preferred Stock, no par value:
	Authorized, 50,000,000 shares, unissued			—			—
Common Stock, no par value:
	Authorized, 300,000,000 shares Outstanding shares, 175,619,639 (175,326,429 in 2003)			175.6			175.3
Capital Surplus				1,391.8			1,390.2
Retained Earnings				1,069.9			955.1
Accumulated Other Comprehensive Income (Loss) (Note 19)				(2,564.5	)		(2,552.8	)
		Total Shareholders’ Equity (Deficit)		72.8			(32.2	)
		Total Liabilities and Shareholders’ Equity	$	16,533.3		$	14,701.1

The accompanying notes are an integral part of these financial statements.

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Consolidated Statement of Shareholders’ Equity (Deficit)

													Accumulated
													Other
				Common Stock									Comprehensive			Total
								Capital		Retained			Income			Shareholders’
				Shares		Amount		Surplus		Earnings			(Loss)			Equity
(Dollars in millions, except per share)
Balance at December 31, 2001 as originally restated (A) (after deducting 32,512,970 treasury shares)					163,165,698	$	163.2	$	1,245.4	$	3,089.3		$	(1,870.1	)	$	2,627.8
Effect of restatement on periods ending on or before December 31, 2001											(0.1	)		(30.9	)		(31.0	)
Balance at December 31, 2001 (as restated)					163,165,698	$	163.2	$	1,245.4	$	3,089.2		$	(1,901.0	)	$	2,596.8
	Comprehensive income (loss):
		Net loss									(1,246.9	)
		Foreign currency translation (net of tax benefit of $0)												74.4
		Minimum pension liability (net of tax of $42.4)												(1,283.6	)
		Unrealized investment gain (net of tax of $0)												7.3
		Deferred derivative gain (net of tax of $0)												60.6
			Reclassification adjustment for amounts recognized in income (net of tax of $0)											(64.5	)
			Total comprehensive loss														(2,452.7	)
		Cash dividends — $0.48 per share									(79.8	)					(79.8	)
		Common stock issued from treasury:
			Domestic pension funding		11,300,000		11.3		126.6								137.9
			Common stock issued for acquisitions		693,740		0.7		15.2								15.9
			Stock compensation plans		147,995		0.1		2.9								3.0
Balance at December 31, 2002 (as restated) (after deducting 20,371,235 treasury shares)					175,307,433		175.3		1,390.1		1,762.5			(3,106.8	)		221.1
	Comprehensive income (loss):
		Net loss									(807.4	)
		Foreign currency translation (net of tax benefit of $0)												393.7
		Minimum pension liability (net of tax of $2.2)												128.3
		Unrealized investment gain (net of tax of $0)												4.1
			Reclassification adjustment for amounts recognized in income (net of tax of $8.7)											8.8
		Deferred derivative gain (net of tax of $0)												46.3
			Reclassification adjustment for amounts recognized in income (net of tax of $1.9)											(27.2	)
			Total comprehensive loss														(253.4	)
		Common stock issued from treasury:
			Stock compensation plans		18,996				0.1								0.1
Balance at December 31, 2003 (as restated) (after deducting 20,352,239 treasury shares)					175,326,429		175.3		1,390.2		955.1			(2,552.8	)		(32.2	)
	Comprehensive income (loss):
		Net income									114.8
		Foreign currency translation (net of tax benefit of $0)												253.2
		Minimum pension liability (net of tax of $34.2)												(283.8	)
		Unrealized investment gain (net of tax of $0)												13.4
		Deferred derivative gain (net of tax of $0)												29.6
			Reclassification adjustment for amounts recognized in income (net of tax of $(3.5))											(24.1	)
			Total comprehensive income														103.1
		Common stock issued from treasury:
			Stock compensation plans		293,210		0.3		1.6								1.9
Balance at December 31, 2004 (after deducting 20,059,029 treasury shares)					175,619,639	$	175.6	$	1,391.8	$	1,069.9		$	(2,564.5	)	$	72.8

(A) As reported in Form 10-K filed on May 19, 2004.

The accompanying notes are an integral part of these financial statements.

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Consolidated Statement of Cash Flows

					Year Ended December 31,
								Restated
					2004			2003			2002
(In millions)
Cash Flows from Operating Activities:
	Net Income (Loss)				$	114.8		$	(807.4	)	$	(1,246.9	)
		Adjustments to reconcile net income (loss) to cash flows from operating activities:
			Depreciation and amortization			628.7			691.6			605.3
			Amortization of debt issuance costs			86.1			50.3			17.9
			Deferred tax provision (Note 14)			(4.5	)		(9.9	)		1,131.2
			Rationalizations (Note 3)			32.4			132.4			2.4
			(Gain) loss on asset sales (Note 4)			7.5			16.4			(23.6	)
			Fire loss deductible expense (Note 4)			11.6			—			—
			Insurance settlement gain (Note 4)			(156.6	)		—			—
			Minority interest and equity earnings			47.5			39.3			71.4
			Net cash flows from sale of accounts receivable (Note 5)			(117.7	)		(839.6	)		34.8
			Pension contributions			(264.6	)		(115.7	)		(226.9	)
			Changes in operating assets and liabilities, net of asset acquisitions and dispositions:
				Accounts and notes receivable		(310.3	)		(108.1	)		47.6
				Inventories		(53.9	)		38.2			60.4
				Accounts payable-trade		151.1			(102.7	)		94.1
				Prepaid expenses and other current assets		64.1			202.1			(131.4	)
				Deferred charges		(19.6	)		1.9			(9.7	)
				Long term compensation and benefits		687.7			(3.5	)		1,512.2
				Accumulated other comprehensive income (loss) — deferred pension gain (loss)		(244.2	)		191.1			(1,265.8	)
				Other long term liabilities		90.9			201.3			(85.6	)
				Other assets and liabilities		(31.2	)		133.5			98.6
				Total adjustments		605.0			518.6			1,932.9
			Total cash flows from operating activities			719.8			(288.8	)		686.0
Cash Flows from Investing Activities:
		Capital expenditures				(518.6	)		(375.4	)		(458.1	)
		Short term securities acquired				—			—			(64.7	)
		Short term securities redeemed				—			26.6			38.5
		Asset dispositions				19.3			104.4			55.6
		Asset acquisitions				(61.8	)		(71.2	)		(54.8	)
		Other transactions				35.9			79.6			(56.8	)
			Total cash flows from investing activities			(525.2	)		(236.0	)		(540.3	)
Cash Flows from Financing Activities:
		Short term debt incurred				162.5			323.1			84.1
		Short term debt paid				(139.2	)		(469.2	)		(87.5	)
		Long term debt incurred				2,066.7			2,983.8			38.4
		Long term debt paid				(1,693.9	)		(1,612.1	)		(125.2	)
		Common stock issued (Notes 8, 12)				1.8			0.2			18.7
		Dividends paid to minority interests in subsidiaries				(28.9	)		(38.6	)		(16.2	)
		Dividends paid to Goodyear shareholders				—			—			(79.8	)
		Debt issuance costs				(51.4	)		(104.1	)		—
		Increase in restricted cash				(128.5	)		(23.9	)		—
		Other transactions				—			27.9			—
			Total cash flows from financing activities			189.1			1,087.1			(167.5	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents						37.9			64.2			(13.7	)
Net Change in Cash and Cash Equivalents						421.6			626.5			(35.5	)
Cash and Cash Equivalents at Beginning of the Period						1,546.3			919.8			955.3
Cash and Cash equivalents at End of the Period					$	1,967.9		$	1,546.3		$	919.8

The accompanying notes are an integral part of these financial statements.

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

Note 1. Accounting Policies

A summary of the significant accounting policies used in the preparation of the accompanying financial statements follows:

Principles of Consolidation

The consolidated financial statements include the accounts of all majority-owned subsidiaries in which no substantive participating rights are held by minority shareholders. All intercompany transactions have been eliminated. Our investments in companies in which we have the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. Accordingly, our share of the earnings of these companies is included in consolidated net income (loss). Investments in other companies are carried at cost.

      The consolidated financial statements also include the accounts of entities consolidated pursuant to the provisions of Interpretation No. 46 of the Financial Accounting Standards Board, “Consolidation of Variable Interest Entities — an Interpretation of ARB No. 51,” as amended by FASB Interpretation No. 46 (revised December 2003) (collectively, “FIN 46”). FIN 46 requires companies to consolidate, at fair value, the assets, liabilities and results of operations of variable interest entities (VIEs) in which the equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties. In addition, FIN 46 requires consolidation of VIEs in which a company holds a controlling financial interest through means other than the majority ownership of voting equity.

      We applied the provisions of FIN 46, effective July 1, 2003, to VIEs representing lease-financing arrangements with special purpose entities (SPEs). Effective January 1, 2004, we applied the provisions of FIN 46 to entities that are not SPEs. This resulted in the consolidation of South Pacific Tyres (SPT), a tire manufacturer, marketer and exporter of tires in Australia and New Zealand, and T&WA, a wheel mounting operation in the United States which sells to original equipment manufacturers.

      Refer to Note 8 and Note 10.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes to financial statements. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates, including those related to:

•  allowance for doubtful accounts,

•  recoverability of intangibles and other long-lived assets,

•  deferred tax asset valuation allowances,

•  workers’ compensation,

•  litigation,

•  general and product liabilities,

•  environmental liabilities,

•  pension and other postretirement benefits, and

•  various other operating allowances and accruals, based on currently available information.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 1. Accounting Policies (continued)

      Changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods.

Revenue Recognition

Revenues are recognized when finished products are shipped to unaffiliated customers, both title and the risks and rewards of ownership are transferred or services have been rendered and accepted, and collectibility is reasonably assured. A provision for sales returns and allowances is recorded at the time of sale. Appropriate provision is made for uncollectible accounts based on historical experience and specific circumstances, as appropriate.

Shipping and Handling Fees and Costs

Expenses for transportation of products to customers are recorded as a component of cost of goods sold.

Research and Development Costs

Research and development costs include, among other things, materials, equipment, compensation and contract services. These costs are expensed as incurred and included as a component of cost of goods sold. Refer to Note 16.

Warranty

We offer warranties on the sale of certain of our products and services and record an accrual for estimated future claims at the time revenue is recognized. Tire replacement under most of the warranties we offer is on a prorated basis. Warranty reserves are based on past claims experience, sales history and other considerations. Refer to Note 20.

Environmental Cleanup Matters

We expense environmental expenditures related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Expenditures that extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. We determine our liability on a site by site basis and record a liability at the time when it is probable and can be reasonably estimated. Our estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. Our estimated liability is not discounted or reduced for possible recoveries from insurance carriers. Refer to Note 20.

Legal Expenses

We record a liability for estimated legal and defense costs related to pending general and product liability claims, environmental matters and workers’ compensation claims. Refer to Note 20.

Advertising Costs

Costs incurred for producing and communicating advertising are generally expensed when incurred. Costs incurred under our cooperative advertising program with dealers and franchisees are recorded as reductions of sales as related revenues are recognized. Refer to Note 17.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 1. Accounting Policies (continued)

Rationalizations

We adopted Statement of Financial Accounting Standards No. 146 (SFAS 146), “Accounting for Costs Associated with Exit or Disposal Activities,” effective for all exit or disposal activities initiated after December 31, 2002. SFAS 146 requires, among other things, that liabilities for costs associated with exit or disposal activities be recognized when the liabilities are incurred, rather than when an entity commits to an exit plan. SFAS 146 changes the timing of liability and expense recognition related to exit or disposal activities, but not the ultimate amount of such expenses. Refer to Note 3.

Income Taxes

Income taxes are recognized during the year in which transactions enter into the determination of financial statement income, with deferred taxes being provided for temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. Refer to Note 14.

Cash and Cash Equivalents/ Consolidated Statement of Cash Flows

Cash and cash equivalents include cash on hand and in the bank as well as all short term securities held for the primary purpose of general liquidity. Such securities normally mature within three months from the date of acquisition. Cash flows associated with items intended as hedges of identifiable transactions or events are classified in the same category as the cash flows from the items being hedged. Unpresented checks are recorded within accounts payable-trade and totaled $180.5 million and $139.6 million at December 31, 2004 and 2003, respectively. Cash flows associated with unpresented checks are classified as financing activities.

Restricted Cash and Restricted Net Assets

Restricted cash includes the settlement fund balance related to Entran II litigation as well as cash deposited in support of trade agreements and performance bonds, and historically has included cash deposited in support of borrowings incurred by subsidiaries. At December 31, 2004, cash balances totaling $152.4 million were subject to such restrictions, compared to $23.9 million at December 31, 2003.

      In certain countries where we operate, transfers of funds into or out of such countries by way of dividends, loans or advances are generally or periodically subject to various restrictive governmental regulations and there may be adverse tax consequences to such transfers. In addition, certain of our credit agreements and other debt instruments restrict the ability of foreign subsidiaries to make distributions of cash. At December 31, 2004, approximately $220.6 million of net assets were subject to such restrictions, compared to approximately $259 million at December 31, 2003.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined using FIFO or the average cost method. Costs include direct material, direct labor and applicable manufacturing and engineering overhead. Refer to Note 6.

Goodwill and Other Intangible Assets

Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually or when events or circumstances indicate that impairment may have occurred, as provided in Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”. We elected to perform the goodwill impairment test annually as of July 31. The carrying amount of goodwill

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 1. Accounting Policies (continued)

and intangible assets with indefinite useful lives is reviewed whenever events or circumstances indicated that revisions might have been warranted. Goodwill and intangible assets with indefinite useful lives would be written down to fair value if considered impaired. Intangible assets with finite useful lives are amortized to their estimated residual values over such finite lives, and reviewed for impairment in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. Refer to Note 7.

Investments

Investments in marketable equity securities are stated at fair value. Fair value is determined using quoted market prices at the end of the reporting period and, when appropriate, exchange rates at that date. Unrealized gains and losses on marketable equity securities classified as available-for-sale are recorded in Accumulated Other Comprehensive Income (Loss), net of tax. Refer to Notes 8 and 19.

Properties and Plants

Properties and plants are stated at cost. Depreciation is computed using the straight-line method. Additions and improvements that substantially extend the useful life of properties and plants, and interest costs incurred during the construction period of major projects, are capitalized. Repair and maintenance costs are charged to income in the period incurred. Properties and plants are depreciated to their estimated residual values over their estimated useful lives, and reviewed for impairment in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. Refer to Notes 9 and 15.

Foreign Currency Translation

Financial statements of international subsidiaries are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted-average exchange rate for each period for revenues, expenses, gains and losses. Where the local currency is the functional currency, translation adjustments are recorded as Accumulated Other Comprehensive Income (Loss). Where the U.S. dollar is the functional currency, translation adjustments are recorded in income.

Derivative Financial Instruments and Hedging Activities

To qualify for hedge accounting, hedging instruments must be designated as hedges and meet defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/ or financial statement effects of the hedging instrument substantially offset those of the position being hedged.

      Derivative contracts are reported at fair value on the Consolidated Balance Sheet as both current and long term Accounts Receivable or Other Liabilities. Deferred gains and losses on contracts designated as cash flow hedges are recorded in Accumulated Other Comprehensive Income (Loss) (OCI). Ineffectiveness in hedging relationships is recorded as Other (Income) and Expense in the current period.

Interest Rate Contracts — Gains and losses on contracts designated as cash flow hedges are initially deferred and recorded in OCI. Amounts are transferred from OCI and recognized in income as Interest Expense in the same period that the hedged item is recognized in income. Gains and losses on contracts designated as fair value hedges are recognized in income in the current period as Interest Expense. Gains and losses on contracts with no hedging designation are recorded in income in the current period as Other (Income) and Expense.

Foreign Currency Contracts — Gains and losses on contracts designated as cash flow hedges are initially deferred and recorded in OCI. Amounts are transferred from OCI and recognized in income in the same

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 1. Accounting Policies (continued)

period and on the same line that the hedged item is recognized in income. Gains and losses on contracts with no hedging designation are recorded in income currently as Foreign Currency Exchange.

      We do not include premiums paid on forward currency contracts in our assessment of hedge effectiveness. Premiums on contracts designated as hedges are recognized in income as Foreign Currency Exchange over the life of the contract.

Net Investment Hedging — Nonderivative instruments denominated in foreign currencies are used to hedge net investments in foreign subsidiaries. Gains and losses on these instruments are deferred and recorded in OCI as Foreign Currency Translation Adjustment. These gains and losses are only recognized in income upon the complete or partial sale of the related investment or the complete liquidation of the investment.

Termination of Contracts — Gains and losses (including deferred gains and losses in OCI) are recognized in income as Other (Income) and Expense when contracts are terminated concurrently with the termination of the hedged position. To the extent that such position remains outstanding, gains and losses are amortized to Interest Expense or Foreign Currency Exchange over the remaining life of that position. Gains and losses on contracts that we temporarily continue to hold after the early termination of a hedged position, or that otherwise no longer qualify for hedge accounting, are recognized in income as Other (Income) and Expense.

      Refer to Note 11.

Stock-Based Compensation

We used the intrinsic value method to measure compensation cost for stock-based compensation. Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of our common stock at the date of the grant over the amount an employee must pay to acquire the stock. Compensation cost for stock appreciation rights and performance units is recorded based on the quoted market price of our common stock at the end of the reporting period. Refer to Note 12.

      The following table presents the pro forma effect of using the fair value method to measure compensation cost:

		Year Ended December 31,
					Restated
		2004			2003			2002
(In millions, except per share)
Net income (loss) as reported		$	114.8		$	(807.4	)	$	(1,246.9	)
Add: Stock-based compensation expense (income) included in net income (loss) (net of tax)			6.4			1.3			(5.6	)
Deduct: Stock-based compensation expense calculated using the fair value method (net of tax)			(20.2	)		(28.0	)		(28.7	)
Net income (loss) as adjusted		$	101.0		$	(834.1	)	$	(1,281.2	)
Net income (loss) per share:
	Basic   — as reported	$	0.65		$	(4.61	)	$	(7.47	)
	— as adjusted		0.58			(4.76	)		(7.67	)
	Diluted — as reported	$	0.63		$	(4.61	)	$	(7.47	)
	— as adjusted		0.56			(4.76	)		(7.67	)

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 1. Accounting Policies (continued)

Earnings Per Share of Common Stock

Basic earnings per share were computed based on the average number of common shares outstanding. Diluted earnings per share reflects the dilutive impact of outstanding stock options (computed using the treasury stock method) and in 2004, contingently convertible debt.

      We have adopted the provisions of Emerging Issues Task Force Issue No. 04-08, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share”. This pronouncement requires shares, issuable under contingent conversion provisions in debt agreements, to be included in the calculation of diluted earnings per share regardless of whether the provisions of the contingent features had been met. The provisions of Issue No. 04-08 are effective for reporting periods ending after December 15, 2004. Retroactive restatement of diluted earnings per share is required. Refer to Note 12.

      All earnings per share amounts in these notes to financial statements are diluted, unless otherwise noted. Refer to Note 12.

Reclassification

Certain items previously reported in specific financial statement captions have been reclassified to conform to the 2004 presentation.

Recently Issued Accounting Standards

      The Financial Accounting Standards Board (FASB) issued Staff Position No. 129-1, “Disclosure Requirements under FASB Statement No. 129, Disclosure of Information about Capital Structure, Relating to Contingently Convertible Securities” (FSP 129-1). FSP 129-1 clarified certain disclosure requirements of the contingent conversion features of convertible securities. FSP 129-1 was effective immediately upon its release. Our disclosures related to our $350 million 4% Convertible Senior Notes due 2034 are in compliance with the disclosure requirements of FSP 129-1.

      The FASB issued, on May 19, 2004, FASB Staff Position No. FAS 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (FSP 106-2). FSP 106-2 provides guidance on accounting for the effects of the new Medicare prescription drug legislation by employers whose prescription drug benefits are actuarially equivalent to the drug benefit under Medicare Part D. It also contains basic guidance on related income tax accounting, and complex rules for transition that permit various alternative prospective and retroactive transition approaches. Based on the proposed regulations, during 2004 we determined that the overall impact of the adoption of FSP 106-2 was a reduction of expense in 2004 and in future annual periods of approximately $2 million on an annual basis. The adoption of FSP 106-2 also reduced our accumulated postretirement benefit obligation by approximately $19.7 million during 2004. On January 21, 2005 final regulations were issued. Based on the clarifications provided in the final regulations, our net periodic postretirement cost is expected to be lower by approximately $50 million in 2005, and the accumulated postretirement benefit obligation is expected to be reduced by approximately $475 million to $525 million during 2005.

      The FASB has issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123R). Under the provisions of SFAS 123R, companies are required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award, usually the vesting period. We must adopt the provisions of SFAS 123R as of the beginning of the first interim reporting period that begins after June 15,

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 1. Accounting Policies (continued)

2005 (i.e. the third quarter of 2005), with early adoption encouraged. SFAS 123R applies to all awards granted, modified, repurchased or cancelled by us after June 30, 2005.

      SFAS 123R allowed companies various transition approaches. We are currently assessing the timing and the transition method that we will use for the adoption of SFAS 123R. We expect to recognize additional compensation cost of approximately $3 million to $4 million per quarter that was not previously required to be recognized, beginning in the quarter in which we first implement the provisions of SFAS 123R. We do not expect the adoption of SFAS 123R to have a material impact on our results of operations, financial position or liquidity.

      On October 22, 2004, the American Jobs Creation Act of 2004 (the Act) was signed into law. The Act, when fully phased-in, includes a tax deduction of up to 9 percent of the lesser of (a) qualified production activities income or (b) taxable income, both as defined in the Act. In addition the Act includes a special one-time tax deduction of 85 percent of certain foreign earnings that are repatriated no later than in the 2005 tax year. The FASB issued two staff positions to address the accounting for income taxes in conjunction with the Act. FASB Staff Position No. 109-1, “Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities provided by the American Jobs Creation Act of 2004” (FSP 109-1), was effective upon its release on December 22, 2004. FSP 109-1 requires us to treat the tax deduction as a special deduction instead of a change in tax rate that would have impacted our existing deferred tax balances. Based on current earnings levels, this provision should not have a material impact on our income tax provision.

      FASB Staff Position No. 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004” (FSP 109-2), established accounting and disclosure requirements for enterprises in the process of evaluating, or completing the evaluation of, the repatriation provision of the Act. We have started an evaluation of the effects of the repatriation provision. We do not anticipate repatriating foreign earnings under the Act, as it may not provide an overall tax benefit. However, we do not expect to be able to complete this evaluation until our 2005 tax position has been more precisely determined and Congress or the Treasury Department provide additional clarifying language on key elements of the provision. If we ultimately determine to elect to repatriate earnings under the Act, it would not have a material impact on our results of operations, financial position or liquidity.

      The FASB has issued Statement of Financial Accounting Standards No. 151, “Inventory Costs — an amendment of ARB No. 43, Chapter 4” (SFAS 151). The provisions of SFAS 151 are intended to eliminate narrow differences between the existing accounting standards of the FASB and the International Accounting Standards Board (IASB) related to inventory costs, in particular, abnormal amounts of idle facility expense, freight, handling costs and spoilage. SFAS 151 requires that these costs be recognized as current period charges regardless of the extent to which they are considered abnormal. The provisions of SFAS 151 are effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of SFAS 151 is not expected to have a material impact on our results of operations, financial position or liquidity.

      The FASB has issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — an amendment of APB Opinion No. 29” (SFAS 153). The provisions of SFAS 153 are intended to eliminate narrow differences between the existing accounting standards of the FASB and the IASB related to the value on which the measurement of nonmonetary exchanges should be based. APB Opinion No. 29 (APB 29) provides that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. An exception was provided in APB 29 to measure exchanges of similar productive assets based on book values. SFAS 153 eliminates the exception in APB 29 for similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 1. Accounting Policies (continued)

entity are expected to change significantly as a result of the exchange. The provisions of SFAS 153 are effective for nonmonetary exchanges occurring in periods beginning after June 15, 2005. The adoption of SFAS 153 is not expected to have a material impact on our results of operations, financial position or liquidity.

      The EITF issued Topic 03-06, “Participating Securities and the Two-Class Method under FASB Statement No. 128”, (EITF 03-06). EITF 03-06 requires the use of the two-class method of computing EPS for enterprises with participating securities or multiple classes of common stock. The provisions of EITF 03-06 are effective for fiscal periods beginning after March 31, 2004. The adoption of EITF 03-06 did not have an impact on our EPS.

Note 2. Restatement

The financial statements included in this 2004 Form 10-K have been restated to reflect adjustments to our previously reported quarterly financial data and annual financial statements included in our Form 10-K for the year ended December 31, 2003, as filed on May 19, 2004, and our previously-filed quarterly reports on Form 10-Q for the quarters ended March 31, 2004, June 30, 2004, and September 30, 2004. The restatement also affected periods prior to 2003. References to quarterly amounts are unaudited. All amounts are before tax unless otherwise noted. Refer to Note 24 for the effect of the restatement on quarterly periods of 2004 and 2003. We intend to file an amended Form 10-K for the year ended December 31, 2003 as expeditiously as possible.

Restatements Included in 2003 Form 10-K

      Our 2003 Form 10-K, filed on May 19, 2004, contained a restatement of our previously-issued quarterly financial data and annual financial statements. We identified adjustments through May 19, 2004 which reduced previously reported net income in 2003 and prior years by a total of $280.8 million. Of this amount, $56.2 million was included in 2003 net income and $224.6 million was included in net income in prior years. The impact on net income for the years ended December 31, 2002 and 2001 was $121.2 million and $50.5 million, respectively. The impact related to years prior to 2001 was a decrease in retained earnings of $52.9 million at January 1, 2001. Total shareholders’ equity at September 30, 2003 was reduced by adjustments to Accumulated Other Comprehensive Income (Loss) (OCI) of $183.9 million.

      The total reductions in net income of $280.8 million include $31.3 million recorded in the quarter ended June 30, 2003; $84.7 million in additional items previously reflected in the restated financial results included in the Form 8-K filed on November 20, 2003 and the Form 10-Q for the quarter ended September 30, 2003 filed on November 19, 2003; and $164.8 million in additional items reflected in the financial statements included in the Form 10-K for the year ended December 31, 2003 filed on May 19, 2004.

      The restatements initially arose out of an intensified effort to reconcile certain general ledger accounts in the second and third quarters of 2003. As a result of our efforts to reconcile these accounts, we identified various adjustments that were recorded in the second quarter of 2003 and subsequently identified additional adjustments that needed to be recorded. Based on an assessment of the impact of the adjustments, management and the Audit Committee decided to restate our previously issued financial statements on Form 10-Q for the quarter ended September 30, 2003 and for prior periods. Following the identification of these adjustments, PricewaterhouseCoopers LLP (PwC) advised us in October 2003 that the failure to identify certain issues that had affected several years financial statements related to the monitoring and review of general ledger accounts collectively resulted in a material weakness in internal controls that required strengthening of procedures for account reconciliations.

      In December 2003, we discovered accounting irregularities in our European Union Tire business segment. The Audit Committee initiated a special investigation of these irregularities, and this investigation

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2.         Restatement (continued)

was subsequently expanded to other overseas locations. The investigations identified accounting irregularities primarily related to earnings management whereby accrual accounts were improperly adjusted between periods or expenses were improperly deferred. In the first and second quarters of 2004, we identified other adjustments. Some of these adjustments resulted from accounting irregularities including the understatement of workers’ compensation liability and the valuation of real estate received in payment of trade accounts receivable in Chile. The Audit Committee also initiated an investigation into these adjustments. As a result of these investigations, management and the Audit Committee decided that a further restatement of our financial statements for 2003 and prior years was necessary.

      In May 2004, PwC advised us that the circumstances it previously identified to us as collectively resulting in a material weakness had each individually become a material weakness. PwC advised us that this determination was due to the number of previously undetected errors that were attributable to the material weakness previously identified. A significant portion of these errors were detected by us. PwC further identified an additional material weakness resulting from intentional overrides of internal controls by those in authority, particularly related to the European Union Tire segment and workers’ compensation liability in the United States. These material weaknesses, if unaddressed, could result in material errors in our financial statements. In addition, PwC advised us that it had identified as reportable conditions our need to enhance certain finance personnel’s knowledge of U.S. GAAP and internal controls and the need to enhance controls related to the establishment of bank accounts.

      The restatement also included changes to the timing of certain previously recognized adjustments not arising from account reconciliations as well as other adjustments identified during the restatement process.

      The adjustments resulting from our initial restatement efforts, the special overseas accounting and workers’ compensation investigations and the 2003 year-end closing process are described as follows:

Accounting Irregularities. This category includes adjustments reducing income by a total of $29.0 million related to periods ending September 30, 2003 and earlier. Of this amount, $0.4 million of income was included in income in 2003 and $29.4 million of expense was included in income in prior years. These adjustments resulted from the overseas special accounting investigation, the understatement of our liability for workers’ compensation payments, the improper deferral of manufacturing variances in 1998, and certain adjustments in Chile, including the correction of the valuation of real estate received in payment for trade accounts receivable.

      Adjustments reducing income by a total of $9.2 million were included in the restatement as a result of the special accounting investigation in Europe and Asia. The majority of the adjustments addressed accrual accounts that were improperly adjusted between periods or expenses that were improperly deferred beyond the third quarter of 2003. These adjustments primarily related to accounts receivable, fixed assets, accounts payable-trade and other long-term liability accounts that were improperly adjusted. As part of this investigation, an adjustment was made to defer a gain on a sale-leaseback transaction of $3.9 million beyond the third quarter of 2003 that was improperly recognized in prior periods.

      The workers’ compensation adjustments totaled $17.7 million related to periods ending on September 30, 2003 and earlier. These adjustments resulted from an understatement of our potential liability for estimated payments relating to workers’ compensation claims by employees. In the first quarter of 2004, it was noted that claims arising from one of our United States tire manufacturing plants were under-reserved. As a result, with the assistance of the outside administrator we reviewed approximately 85% of the open claims handled by this administrator at this plant as well as other facilities and determined that reserves needed to be increased to accurately value the claims. The under-reserving resulted in part from improper efforts to reduce, or restrict the amount of increase in, the reserves for certain workers’ compensation claims leading to claims data in our workers’ compensation claims database that did not reflect our probable ultimate exposure. Of the $17.7 mil-

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2.         Restatement (continued)

lion adjustment, $4.1 million affected income for the nine months ended 2003, $5.6 million and $2.3 million affected income for the years ended December 31, 2002 and 2001, respectively, and $5.7 million affected pre-2001 income. In addition, in the fourth quarter of 2003, $6.2 million was recorded relating to the understatement.

      In the second quarter of 1999, we discovered that $18.1 million of manufacturing variances at one of our United States tire manufacturing plants had been improperly deferred from 1998 to 1999. When the matter was discovered in the second quarter of 1999, we recorded the remaining costs that had not previously been recorded. As part of this restatement, we reduced income in 1998 by $18.1 million and increased income in 1999 by the same amount.

      In 2000, our subsidiary in Chile received approximately 13 acres of land in Santiago, Chile, in payment for trade accounts receivable from one of its Chilean customers. At the time, the subsidiary recorded the land based upon an inappropriate appraisal. In the first quarter of 2004, we had an additional appraisal performed that appropriately valued the land at a much lower value. The Audit Committee requested an investigation into the matter, and as a result, we recorded an adjustment to reduce the valuation of the land. The adjustment reduced income by $1.5 million in 2000. We also identified other adjustments in Chile whereby accrual accounts were improperly adjusted between periods or expenses were improperly deferred. Adjustments of $0.6 million were recorded related to these accounts.

      A summary of the accounting irregularities adjustments and the time periods affected follows:

				Year Ended
	Nine Months			December 31,
	Ended
	September 30, 2003			2002			2001			Pre-2001			Total
(In millions)	(Unaudited)
Income (Expense)
Accruals and deferred expenses — Europe and Asia	$	4.5		$	0.5		$	(8.3	)	$	(2.0	)	$	(5.3	)
Deferred income — Europe		—			(2.9	)		(1.0	)		—			(3.9	)
Workers’ compensation		(4.1	)		(5.6	)		(2.3	)		(5.7	)		(17.7	)
Accruals and deferred expenses — Chile		—			4.5			(1.6	)		(3.5	)		(0.6	)
Land valuation — Chile		—			—			—			(1.5	)		(1.5	)
	$	0.4		$	(3.5	)	$	(13.2	)	$	(12.7	)	$	(29.0	)

Account Reconciliations. This category includes adjustments totaling $144.9 million resulting from the failure to either reconcile accounts or resolve certain reconciliation issues in a timely manner. Of this amount, $42.8 million was included in income in 2003 and $102.1 million was included in income in prior years. The most significant adjustments in this category relate to certain reconciliations for accounts receivable, inventories, fixed assets, intercompany accounts, prepaid expenses and accounts payable-trade. Certain of these adjustments were associated with the integration of a new enterprise resource planning system (ERP) into our accounting processes beginning in 1999.

      The following categories represent a majority of the account reconciliation adjustments included in the restatement:

A. Interplant. We use an internal system, the Interplant System, to track the procurement and transfer of fixed assets, raw materials and spare parts acquired or manufactured by Goodyear units in the United States for our foreign manufacturing locations. The $28.8 million Interplant charge corrects an

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2. Restatement (continued)

overstatement of income and assets. The most significant items in this category are 1) fixed assets and inventory of $26.0 million which were not properly relieved from the Interplant System when they were billed to the foreign manufacturing locations and accordingly now have to be expensed and 2) the correction of a failure to depreciate $2.8 million of fixed assets.

B.	North American Tire (NAT) Receivables. The adjustment to accounts receivable of $25.0 million is attributable to amounts erroneously recorded in our general ledger during the period April 1999 to November 2000. During this period, we implemented certain modules of an ERP accounting system. These modules were not properly integrated with existing systems resulting in an overstatement of sales and accounts receivable in the general ledger. This overstatement had to be reversed. Billings to customers and cash collections were appropriate during this period.
C.	Engineered Products (EPD). It was not possible to allocate the amount of this adjustment to specific periods and accordingly, we recorded substantially all of this adjustment in the first quarter of 2003. This adjustment includes the write-off of $21.3 million consisting of $3.7 million in intercompany accounts and $17.6 million related to payables and other accounts. Several factors relating to our ERP systems implementation resulted in EPD’s inability to locate or recreate account reconciliations for prior periods.
D.	Wingfoot Commercial Tire Systems, LLC. On November 1, 2000, we made a contribution, which included inventory, to Wingfoot Commercial Tire Systems, LLC, a consolidated subsidiary. On a consolidated basis, the inventory was valued at our historical cost. Upon the sale of the inventory, consolidated cost of goods sold was understated by $11.0 million. Additionally, inventory and fixed asset losses totaling $4.2 million were not expensed as incurred and were written off in connection with the restatement.
E.	Fixed Assets. The adjustments to other fixed assets totaled $13.1 million and related primarily to the understatement of depreciation expenses and the write-off of assets previously disposed.
F.	General and Product Liability. The expense for general and product claims increased $11.6 million for the third quarter and nine months ended September 30, 2003, and related to the timing of the recognition of certain liabilities for Entran II claims. We reached final agreement with one of our insurers in November 2003, prior to filing the third quarter 10-Q, and recorded both a receivable and separately a corresponding liability related to Entran II matters. This amount was reflected in our amended quarterly report on Form 10-Q/A for the period ended September 30, 2003 filed on August 3, 2004, which has subsequently been restated, as discussed below in “Restatements Included in 2004 Form 10-K”.

      Adjustments totaling $23.0 million were recorded in OCI in the 2003 Form  10-K filed on May 19, 2004. An adjustment was made to record an $18.0 million charge to deferred derivative losses, with an offsetting credit to liabilities. This adjustment was associated with three interest rate swaps and a cross-currency contract for the period March 2001 through March 2003. An adjustment was also made to record a $6.8 million charge to currency translation, with an offsetting credit to long-term assets. The adjustment affected the period from January 1, 2003 to September 30, 2003. These adjustments were identified in conjunction with the completion of account reconciliations.

Out-of-Period Adjustments. This category includes adjustments previously identified but deemed to be immaterial and recorded in the period we identified the error or in a subsequent period. Adjustments in this category change the timing of income and expense items that were previously recognized. The cumulative amount of out-of-period adjustments was a decrease to income of $0.6 million. Of this amount,

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2. Restatement (continued)

$0.8 million of income was included in income in 2003 and $1.4 million of expense was included in income in prior years.

      The most significant item in this category relates to the timing of the recognition of certain SAG expenses. As a result of the integration of the new enterprise resource planning system into our accounting processes beginning in 1999, certain expenses were incorrectly capitalized in inventory during 2001, 2000 and 1999. In the 2003 Form 10-K, we recorded an adjustment totaling $16.8 million during 2002 to correct the impact on prior years. Of this amount, $13.9 million applied to 2001.

Discount Rate Adjustments. In preparing our 2003 Form 10-K, we reassessed the estimate of the discount rate used in determining the net periodic benefit cost and benefit obligations for a majority of its domestic pension, workers’ compensation and other postretirement benefit plans. Consistent with that effort and the restatement process, we determined that it would be appropriate to make similar reassessments for discount rates for all periods presented. As a result, the discount rate was revised to 6.75%, 7.25% and 7.50% from 7.25%, 7.75% and 8.00% for 2003, 2002 and 2001, respectively. Total reductions to income for 2000-2003 were $18.9 million, of which $13.0 million decreased income for the nine months ended September 30, 2003, and $14.9 million and $5.5 million decreased income for the years ended December 31, 2002 and 2001, respectively. Pre-2001 income was increased by $14.5 million as a result of these adjustments. This change also resulted in a charge to deferred pension costs in accumulated other comprehensive income (loss) (OCI) totaling $150.1 million for the years ended December 31, 2002 and 2001. Additionally, in 2002, we had established a valuation allowance against our net Federal and state deferred tax assets. Accordingly, this restatement includes a charge to income tax expense of $81.2 million to provide a valuation allowance against the tax benefit included in the adjustment to OCI in 2001, and a charge to OCI of $10.8 million to provide a valuation allowance against the tax benefit included in the adjustment to OCI in 2002.

Chemical Products Segment. This category primarily includes adjustments identified as a result of a stand-alone audit conducted in 2003 of a portion of our Chemical Products business segment. The most significant adjustments in this category relate to the timing of the recognition of manufacturing variances to reflect the actual cost of inventories, the fair value adjustment of a hedge for natural gas, and the correction of intercompany profit elimination in inventory to eliminate selling and administrative expenses in inventory. The cumulative effect of Chemical Product segment adjustments at September 30, 2003 was a decrease to income of $7.7 million. Of this amount, $(0.6) million was included in income in 2003 and $8.3 million was included in income in prior years.

Tax Adjustments. As a result of the restatement adjustments included in the 2003 Form 10-K, an additional Federal and state valuation allowance of $121.6 million (including the $81.2 million charge for discount rate adjustments discussed above) was required to be recognized in 2002, the period in which we previously provided for our valuation allowance. The remaining amounts related to the correction of errors in the computation of deferred tax assets and liabilities.

Restatements Included in 2004 Form 10-K

      On November 5, 2004, we announced that we would file an amended 2003 Form  10-K to include summarized financial information related to certain investments in affiliates. We also announced a restatement of our previously reported financial statements. On December 30, 2004, we announced that we were working to resolve an accounting issue concerning an Australian affiliate, South Pacific Tyres (“SPT”), and that the resolution of this matter could have an impact on our previously reported financial results. Although the primary focus of this effort was to resolve the accounting treatment for a 10-year supply agreement between the Company and SPT, we also noted the possibility that other items having an impact on SPT’s prior period

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2.         Restatement (continued)

financial statements could arise in the course of the review. On February 25, 2005, we announced that we would restate our 2004 third quarter Form 10-Q for additional adjustments identified subsequent to its filing on November 9, 2004. This Form 10-K reflects the resolution of the SPT accounting matters. The restatements of our previously issued quarterly and annual financial statements reflected adjustments that reduced previously reported net income by $19.8 million, of which $12.9 million related to SPT, as discussed below. Of this amount, $5.5 million of income was included in 2004 net income and $25.3 million of expense was included in net income in prior years. The impact on net income for the years ended December 31, 2003 and 2002 was $5.3 million and $19.9 million, respectively. The impact on years prior to 2002 was $0.1 million.

      The total reduction in net income of $19.8 million included $4.6 million of expense for additional items previously reflected in the restated financial results included in the Form 10-Q filed on November 9, 2004. Of this amount, $2.7 million of income was recorded in the quarter ended March 31, 2004; $0.3 million of income was recorded in the quarter ended June 30, 2004; and $7.6 million of expense was recorded in the quarter ended September 30, 2004. Additional items totaling $15.2 million of expense are reflected in the financial statements included in this Form 10-K for the year ended December 31, 2004.

      The adjustments included in the restatements are described as follows:

SPT. These adjustments reduced income by $12.9 million and resulted primarily from the recognition of a contractual obligation related to a supply agreement that was entered into in 2000 with our 50% owned affiliate in Australia, South Pacific Tyres, an impairment of certain property, plant and equipment, the timing of the recognition of certain rationalization charges and other adjustments identified in conjunction with a restatement of SPT’s historical U.S. GAAP financial results. Of this amount, a benefit of $0.6 million was included in income in 2004 and charges of $13.5 million were included in income in prior years. The adjustments included a charge that reduced income by $6.9 million to recognize payments we made pursuant to a long term supply agreement as a capital contribution. We made certain payments to SPT totaling $13.8 million under the terms of the supply agreement. As part of this restatement, we are recording 50% of those payments as capital contributions to SPT and 50% in expense, representing amounts contributed on behalf of our joint venture partner pursuant to the provisions of Emerging Issues Task Force Issue 00-12, “Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee”. We also recorded a charge that reduced income by $4.3 million for the write-down of assets at a closed manufacturing facility.

General and Product Liability. We identified adjustments related to general and product liability — discontinued products which increased income by $9.5 million. Of this amount, $2.2 million was included in income in 2004 and $7.3 million was included in income in 2003. These adjustments were the result of the valuation firm’s review of additional historical defense costs data.

Account Reconciliations. We identified adjustments related to account reconciliation items in 2004 which reduced cumulative income by $4.0 million. Of this amount, a benefit of $2.5 million was included in income in 2004 and charges of $6.5 million were included in income in prior years. These adjustments were primarily comprised of $4.1 million in net expense related to the write-off of goodwill associated with certain retail stores previously sold in France, $2.9 million in expense related to the write-off of certain deferred charges, $1.8 million in expense related to a clerical error in recording adjustments to our workers’ compensation reserve as part of our restatement as of December 31, 2003, and $1.5 million in expense related to the reconciliation of an intra-company account, partially offset by favorable adjustments related to an overaccrual for payroll deductions of approximately $3.3 million, and additional equity in earnings of affiliates of approximately $1.0 million. Also included in the adjustments were an offsetting charge and credit of $2.7 million identified in 2004 that related to a leased tire asset account. Since it was not possible to allocate these offsetting $2.7 million adjustments to the applicable periods, we recorded both adjustments in

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2. Restatement (continued)

the first quarter of 2004. We also reassessed our estimate of the discount rate used in determining net periodic pension cost and benefit obligations for two minor pension plans, and recorded a $1.3 million expense related to these two plans.

      Other restatement adjustments included $3.2 million in expense resulting from the incorrect calculation of depreciation on certain fixed assets, $2.6 million in expense related to account reconciliations at a subsidiary in Europe, $2.0 million in expense resulting from the failure to record expenses related to bank credit facilities and $1.8 million in expense from a physical inventory of fixed assets at a manufacturing facility. Adjustments were also identified that increased income by $4.8 million related to the reduction of previously recorded amortization expense resulting primarily from the revaluation of foreign currency-denominated goodwill related to a subsidiary in Europe from 1996 to 2001, $3.8 million for an overstatement of accounts payable, $2.6 million to reverse a loss on an asset write-off recorded in the third quarter of 2004 and $1.3 million related to asset sales at a retail chain in Europe. Other less significant adjustments reflected in the restatement amounted to an increase in cumulative income of $0.4 million.

      Additionally, we identified an error related to intercompany transactions arising from a programming and systems interface change with a computer program. This error caused sales and cost of goods sold in North American Tire to be understated by equal amounts. The restatement reflects an increase in sales and costs of goods sold during the first quarter of 2004 of $10.4 million each, and an increase in sales and cost of goods sold during the second quarter of 2004 of $10.8 million each to correct this. There was no effect on net income in any period.

      We also identified a misclassification of deferred income tax assets and liabilities on our Consolidated Balance Sheet at December 31, 2003. We had recorded certain deferred tax assets and liabilities on a gross basis rather than netting short-term deferred tax assets with short-term deferred tax liabilities and long-term deferred tax assets with long-term deferred tax liabilities. The misclassification overstated total assets and total liabilities by $356.7 million beginning at December 31, 2003. This had no impact on shareholders’ equity, net income, or cash flows.

      We also identified an adjustment to OCI totaling $5.8 million, primarily related to the revaluation of various foreign currency-denominated goodwill accounts and certain other accounts. This revaluation error resulted in goodwill and minority equity being understated and shareholders’ equity (deficit) being overstated by approximately $40 million, $31 million and $9 million, respectively, at December 31, 2003. The U.S. dollar value of these accounts increased since the time the goodwill was initially recorded, due primarily to the recent strengthening of the euro.

Tax Adjustments. We identified an additional adjustment to our net deferred tax valuation allowance that reduced net income by $11.5 million. The remaining tax adjustments relate to the correction of errors in the computation of deferred tax assets and liabilities.

      Certain 2004 quarterly financial information has also been restated in this Form 10-K to reflect adjustments to our previously reported financial information on Form 10-Q for the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004. Refer to Supplementary Data on page 149 for further information. We intend to file amended Form 10-Qs for these quarterly periods of 2004 as expeditiously as possible.

      The following table sets forth the effects of the restatement adjustments for both “Restatement Included in 2003 Form 10-K” and “Restatement Included in 2004 Form 10-K”, as discussed above, on the

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2.         Restatement (continued)

Consolidated Statement of Operations for the years ended December 31, 2003, 2002, and 2001, as well as the cumulative effect on periods ending prior to January 1, 2001.

Effect of restatement adjustments on Goodyear’s previously issued financial statements

Increase (decrease) in Income (loss)

		Year Ended December 31,
		Restated
		2003			2002			2001			Pre-2001			Total
(In millions, except per share amounts)
Net loss as originally reported(A)					$	(1,105.8	)	$	(203.6	)
Adjustments (pretax):
	Accounting Irregularities					(3.5	)		(13.2	)	$	(12.7	)	$	(29.4	)
	Account Reconciliations					(6.8	)		(12.8	)		(82.5	)		(102.1	)
	Out-of-Period					15.2			(14.5	)		(2.1	)		(1.4	)
	Discount Rate Adjustments					(14.9	)		(5.5	)		14.5			(5.9	)
	Chemical Products Segment					14.2			(18.9	)		(3.6	)		(8.3	)
Total adjustments (pretax)						4.2			(64.9	)		(86.4	)		(147.1	)
	Tax effect of restatement adjustments					(2.9	)		17.9			32.3			47.3
	Tax adjustments					(122.5	)		(3.5	)		1.2			(124.8	)
Total taxes						(125.4	)		14.4			33.5			(77.5	)
Total net adjustments						(121.2	)		(50.5	)	$	(52.9	)	$	(224.6	)
Net loss as previously reported(B)		$	(802.1	)	$	(1,227.0	)	$	(254.1	)
	SPT		(2.3	)		(3.5	)		0.6			(8.3	)		(13.5	)
	General and Product Liability		7.3			—			—			—			7.3
	Account Reconciliations		(5.4	)		(1.8	)		(1.7	)		2.4			(6.5	)
Total adjustments (pretax)			(0.4	)		(5.3	)		(1.1	)		(5.9	)		(12.7	)
	Tax effect of restatement adjustments		(0.1	)		(7.4	)		0.5			6.4			(0.6	)
	Tax adjustments		(4.8	)		(7.2	)		—			—			(12.0	)
Total taxes			(4.9	)		(14.6	)		0.5			6.4			(12.6	)
Total net adjustments			(5.3	)		(19.9	)		(0.6	)	$	0.5		$	(25.3	)
Net loss as restated		$	(807.4	)	$	(1,246.9	)	$	(254.7	)
Net Income (Loss) Per Share:
Basic as originally reported(A)					$	(6.62	)	$	(1.27	)
Effect of net adjustments						(0.73	)		(0.32	)
Basic as previously reported(B)		$	(4.58	)	$	(7.35	)	$	(1.59	)
Effect of net adjustments			(0.03	)		(0.12	)		—
Basic as restated		$	(4.61	)	$	(7.47	)	$	(1.59	)
Diluted as originally reported(A)					$	(6.62	)	$	(1.27	)
Effect of net adjustments						(0.73	)		(0.32	)
Diluted as previously reported(B)		$	(4.58	)	$	(7.35	)	$	(1.59	)
Effect of net adjustments			(0.03	)		(0.12	)		—
Diluted as restated		$	(4.61	)	$	(7.47	)	$	(1.59	)

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2. Restatement (continued)

(A)	As reported in 2002 Form 10-K filed on April 3, 2003.
(B)	As reported in 2003 Form 10-K filed on May 19, 2004.

      The following table sets forth the effects of the restatement adjustments discussed above on the Consolidated Statement of Operations for the year ended December 31, 2003.

	Year Ended
	December 31, 2003
	As Originally
	Reported(A)			Restated
(In millions, except per share amounts)
Net Sales	$	15,119.0		$	15,122.1
Cost of Goods Sold		12,495.3			12,499.0
Selling, Administrative and General Expense		2,371.2			2,374.2
Rationalizations		291.5			291.5
Interest Expense		296.3			296.3
Other (Income) and Expense		267.3			263.4
Foreign Currency Exchange		40.2			40.7
Equity in Earnings of Affiliates		12.1			14.5
Minority Interest		35.0			32.8
Loss Before Income Taxes		(689.9	)		(690.3	)
U.S. and Foreign Taxes on Income (Loss)		112.2			117.1
Net Loss	$	(802.1	)	$	(807.4	)
Net Loss Per Share — Basic	$	(4.58	)	$	(4.61	)
Average Shares Outstanding		175.3			175.3
Net Loss Per Share — Diluted	$	(4.58	)	$	(4.61	)
Average Shares Outstanding		175.3			175.3

(A)  As reported in 2003 Form 10-K filed on May 19, 2004.

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2. Restatement (continued)

      The following table sets forth the effects of the restatement adjustments discussed above on the Consolidated Statement of Operations for the years ended December 31, 2002 and 2001.

	Year Ended December 31, 2002
	As Originally			As Previously
	Reported(A)			Reported(B)			Restated
(In millions, except per share amounts)
Net Sales	$	13,850.0		$	13,856.2		$	13,856.0
Cost of Goods Sold		11,313.9			11,303.9			11,306.9
Selling, Administrative and General Expense		2,223.9			2,203.2			2,202.4
Rationalizations		8.6			5.5			5.5
Interest Expense		241.3			241.7			242.7
Other (Income) and Expense		25.8			56.8			56.8
Foreign Currency Exchange		(10.2	)		(9.7	)		(8.7	)
Equity in Earnings of Affiliates		8.8			13.2			13.8
Minority Interest		55.8			55.3			55.6
Loss Before Income Taxes		(17.9	)		(13.7	)		(19.0	)
U.S. and Foreign Taxes on Income (Loss)		1,087.9			1,213.3			1,227.9
Net Loss	$	(1,105.8	)	$	(1,227.0	)	$	(1246.9	)
Net Loss Per Share — Basic	$	(6.62	)	$	(7.35	)	$	(7.47	)
Average Shares Outstanding		167.0			167.0			167.0
Net Loss Per Share — Diluted	$	(6.62	)	$	(7.35	)	$	(7.47	)
Average Shares Outstanding		167.0			167.0			167.0

(A)	As reported in 2002 Form 10-K filed on April 3, 2003.
(B)	As reported in 2003 Form 10-K filed on May 19, 2004.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2. Restatement (continued)

	Year Ended December 31, 2001
	As Originally			As Previously
	Reported(A)			Reported(B)			Restated
(In millions, except per share amounts)
Net Sales	$	14,147.2		$	14,162.5		$	14,162.3
Cost of Goods Sold		11,619.5			11,685.3			11,687.8
Selling, Administrative and General Expense		2,248.8			2,220.5			2,219.1
Rationalizations		206.8			210.3			210.3
Interest Expense		292.4			297.1			298.0
Other (Income) and Expense		11.8			40.8			40.8
Foreign Currency Exchange		0.1			10.0			8.8
Equity in Earnings of Affiliates		40.6			39.7			39.5
Minority Interest		0.2			(3.3	)		(3.0	)
Loss Before Income Taxes		(273.0	)		(337.9	)		(339.0	)
U.S. and Foreign Taxes on Income (Loss)		(69.4	)		(83.8	)		(84.3	)
Net Loss	$	(203.6	)	$	(254.1	)	$	(254.7	)
Net Loss Per Share — Basic	$	(1.27	)	$	(1.59	)	$	(1.59	)
Average Shares Outstanding		160.0			160.0			160.0
Net Loss Per Share — Diluted	$	(1.27	)	$	(1.59	)	$	(1.59	)
Average Shares Outstanding		160.0			160.0			160.0

(A)	As reported in 2002 Form 10-K filed on April 3, 2003.
(B)	As reported in 2003 Form 10-K filed on May 19, 2004.

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2. Restatement (continued)

      The following table sets forth the effects of the restatement adjustments discussed above on the Consolidated Balance Sheet at December 31, 2003.

			December 31, 2003
			As Originally		As Previously
			Reported(A)		Reported(B)		Restated
(Dollars in millions)
Assets
Current Assets:
	Cash and cash equivalents		$	1,541.0	$	1,544.2	$	1,546.3
	Short term securities			23.9		23.9		23.9
	Accounts and notes receivable			2,621.5		2,622.7		2,616.3
	Inventories			2,465.0		2,464.6		2,467.7
	Prepaid expenses and other current assets			336.7		305.7		305.4
		Total Current Assets		6,988.1		6,961.1		6,959.6
Long Term Accounts and Notes Receivable				255.0		255.0		275.7
Investments in and Advances to Affiliates				177.5		178.9		184.2
Other Assets				74.9		71.5		71.5
Goodwill				622.5		618.6		658.2
Other Intangible Assets				161.8		161.9		150.4
Deferred Income Tax				397.5		70.5		70.5
Prepaid and Deferred Pension Costs				868.3		869.9		869.9
Deferred Charges				252.7		246.7		255.9
Properties and Plants				5,207.2		5,208.9		5,205.2
		Total Assets	$	15,005.5	$	14,643.0	$	14,701.1
Liabilities
Current Liabilities:
	Accounts payable-trade		$	1,572.9	$	1,574.9	$	1,562.8
	Compensation and benefits			983.1		982.7		987.6
	Other current liabilities			572.2		571.5		585.2
	United States and foreign taxes			306.1		268.7		270.7
	Notes payable			137.7		137.7		146.7
	Long term debt and capital leases due within one year			113.5		113.5		113.5
		Total Current Liabilities		3,685.5		3,649.0		3,666.5
Long Term Debt and Capital Leases				4,826.2		4,825.8		4,825.8
Compensation and Benefits				4,540.4		4,542.6		4,541.7
Deferred and Other Noncurrent Income Taxes				689.4		370.1		380.6
Other Long Term Liabilities				451.4		451.4		464.7
Minority Equity in Subsidiaries				825.7		825.0		854.0
		Total Liabilities		15,018.6		14,663.9		14,733.3

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2. Restatement (continued)

			December 31, 2003
			As Originally			As Previously
			Reported(A)			Reported(B)			Restated
(Dollars in millions)
Commitments and Contingent Liabilities
Shareholders’ Equity
Preferred Stock, no par value:
	Authorized, 50,000,000 shares, unissued			—			—			—
Common Stock, no par value:
	Authorized, 300,000,000 shares Outstanding shares, 175,309,002		$	175.3		$	175.3		$	175.3
Capital Surplus				1,390.2			1,390.2			1,390.2
Retained Earnings				980.4			972.8			955.1
Accumulated Other Comprehensive Income (Loss)				(2,559.0	)		(2,559.2	)		(2,552.8	)
		Total Shareholders’ Equity		(13.1	)		(20.9	)		(32.2	)
		Total Liabilities and Shareholders’ Equity	$	15,005.5		$	14,643.0		$	14,701.1

(A)	As reported in 2003 Form 10-K filed on May 19, 2004.
(B)	As reported in 2004 Form 10-Q filed on November 9, 2004.

The following table sets forth the effects of the restatement adjustments discussed above on the Consolidated Balance Sheet at December 31, 2002.

			December 31, 2002
			As Originally		As Previously
			Reported(A)		Reported(B)		Restated
(Dollars in millions)
Assets
Current Assets:
	Cash and cash equivalents		$	923.0	$	918.1	$	919.8
	Short term securities			24.3		24.3		24.3
	Accounts and notes receivable			1,459.7		1,438.1		1,437.4
	Inventories			2,371.6		2,346.2		2,345.6
	Prepaid expenses and other current assets			448.1		453.7		453.1
		Total Current Assets		5,226.7		5,180.4		5,180.2
Long Term Accounts and Notes Receivable				236.3		242.8		242.8
Investments in and Advances to Affiliates				141.7		139.2		145.9
Other Assets				254.9		253.0		249.6
Goodwill				607.4		602.6		589.1
Other Intangible Assets				161.3		161.4		146.5
Deferred Income Tax				207.5		187.0		187.0
Prepaid and Deferred Pension Costs				913.4		913.4		912.5
Deferred Charges				205.1		202.7		203.9
Properties and Plants				5,192.3		5,156.2		5,155.6
		Total Assets	$	13,146.6	$	13,038.7	$	13,013.1

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 2. Restatement (continued)

			December 31, 2002
			As Originally			As Previously
			Reported(A)			Reported(B)			Restated
(Dollars in millions)
Liabilities
Current Liabilities:
	Accounts payable-trade		$	1,502.2		$	1,515.4		$	1,517.0
	Compensation and benefits			961.2			913.6			913.7
	Other current liabilities			481.6			512.3			511.9
	United States and foreign taxes			473.2			358.2			359.8
	Notes payable and capital leases			283.4			283.4			283.4
	Long term debt and capital leases due within one year			369.8			369.8			369.8
		Total Current Liabilities		4,071.4			3,952.7			3,955.6
Long Term Debt and Capital Leases				2,989.0			2,989.8			2,989.5
Compensation and Benefits				4,194.2			4,497.3			4,499.9
Deferred and Other Noncurrent Income Taxes				194.9			298.6			305.0
Other Long Term Liabilities				306.3			317.1			317.1
Minority Equity in Subsidiaries				740.2			727.8			724.9
		Total Liabilities		12,496.0			12,783.3			12,792.0
Commitments and Contingent Liabilities
Shareholders’ Equity
Preferred Stock, no par value:
	Authorized, 50,000,000 shares, unissued			—			—			—
Common Stock, no par value:
	Authorized, 300,000,000 shares Outstanding shares, 175,309,002			175.3			175.3			175.3
Capital Surplus				1,390.3			1,390.1			1,390.1
Retained Earnings				2,007.1			1,782.5			1,762.5
Accumulated Other Comprehensive Income (Loss)				(2,922.1	)		(3,092.5	)		(3,106.8	)
		Total Shareholders’ Equity		650.6			255.4			221.1
		Total Liabilities and Shareholders’ Equity	$	13,146.6		$	13,038.7		$	13,013.1

(A)	As reported in 2002 Form 10-K filed on April 3, 2003.
(B)	As reported in 2003 Form 10-K filed on May 19, 2004.

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 3. Costs Associated with Rationalization Programs

To maintain global competitiveness, we have implemented rationalization actions over the past several years for the purpose of reducing excess capacity, eliminating redundancies and reducing costs. The net amounts of rationalization charges to the Consolidated Statement of Income were as follows:

	2004			2003			2002
(In millions)
New charges	$	94.8		$	307.2		$	26.5
Reversals		(39.2	)		(15.7	)		(18.0	)
Other credits		—			—			(3.0	)
	$	55.6		$	291.5		$	5.5

The following table presents the reconciliation of the liability balance between periods:

	Associate-
	related			Other Than
	Costs			Associate-			Total
				related
	Restated			Costs			Restated
(In millions)
Accrual balance at December 31, 2001	$	69.1		$	53.3		$	122.4
2002 charges		19.5			7.0			26.5
Incurred		(49.5	)		(11.7	)		(61.2	)
Reversed to goodwill		(0.5	)		—			(0.5	)
Reversed to the income statement		(13.3	)		(4.7	)		(18.0	)
Accrual balance at December 31, 2002		25.3			43.9			69.2
2003 charges		295.3			11.9			307.2
Incurred		(199.3	)		(15.5	)		(214.8	)
Reversed to goodwill		—			(2.9	)		(2.9	)
Reversed to the income statement		(11.7	)		(4.0	)		(15.7	)
Accrual balance at December 31, 2003		109.6			33.4			143.0
2004 charges		75.7			19.1			94.8
Incurred		(109.6	)		(22.9	)		(132.5	)
FIN 46 adoption		—			1.5			1.5
Reversed to the income statement		(34.9	)		(4.3	)		(39.2	)
Accrual balance at December 31, 2004	$	40.8		$	26.8		$	67.6

2004 rationalizations consisted primarily of warehouse, manufacturing and sales and marketing associate reductions in Engineered Products, a farm tire manufacturing consolidation in European Union Tire, administrative associate reductions in North American Tire, European Union Tire and corporate functional groups, and manufacturing, sales and research and development associate reductions in Chemical Products.

      In 2004, net charges were recorded totaling $55.6 million ($52.0 million after tax or $0.27 per share). The net charges included reversals of $39.2 million ($32.2 million after tax or $0.17 per share) related to reserves from rationalization actions no longer needed for their originally intended purpose, and new charges of $94.8 million ($84.2 million after tax or $0.44 per share). Included in the $94.8 million of new charges are $77.4 million for plans initiated in 2004, as described above. Approximately 1,400 associates will be released under programs initiated in 2004, of which approximately 640 were released by December 31, 2004. The costs of the 2004 actions consisted of $40.1 million related to future cash outflows, primarily for associate severance

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 3.         Costs Associated with Rationalization Programs (continued)

costs, including $31.9 million in non-cash pension curtailments and postretirement benefit costs and $5.4 million for noncancelable lease costs and other exit costs. Costs in 2004 also included $16.3 million related to plans initiated in 2003, consisting of $13.7 million of noncancelable lease costs and other exit costs and $2.6 million of associate severance costs. The reversals are primarily the result of lower than initially estimated associate severance costs of $34.9 million and lower leasehold and other exit costs of $4.3 million. Of the $34.9 million of associate severance cost reversals, $12.0 million related to previously approved plans in Engineered Products that were reorganized into the 2004 warehouse, manufacturing, and sales and marketing associate reductions.

      In 2004, $75.0 million was incurred primarily for associate severance payments, $34.6 million for non-cash pension curtailments and postretirement benefit costs, and $22.9 million was incurred for noncancelable lease costs and other costs. The remaining accrual balance for all programs was $67.6 million at December 31, 2004, substantially all of which is expected to be utilized within the next 12 months.

      Accelerated depreciation charges totaling $10.4 million were recorded in 2004 for fixed assets that will be taken out of service in connection with certain rationalization plans initiated in 2003 and 2004 in European Union Tire, Latin American Tire and Engineered Products. During 2004, $7.7 million was recorded as CGS and $2.7 million was recorded as SAG.

      The following table summarizes, by segment, the total charges expected to be recorded and the total charges recorded in 2004, related to the new plans initiated in 2004:

			Charges		Charges
	Expected Total		Recorded in		Reversed in
	Charge		2004		2004
(In millions)
North American Tire	$	2.7	$	2.7	$	—
European Union Tire		31.7		29.3		3.5
Eastern Europe, Middle East and Africa Tire		3.7		3.7		—
Engineered Products		37.4		34.7		—
Chemical Products		4.9		4.9		—
Corporate		2.1		2.1		0.4
	$	82.5	$	77.4	$	3.9

A significant portion of the additional restructuring costs not yet recorded is expected to be recorded in the first quarter of 2005.

      In 2003, net charges were recorded totaling $291.5 million ($267.1 million after tax or $1.52 per share). The net charges included reversals of $15.7 million ($14.3 million after tax or $0.08 per share) related to reserves from rationalization actions no longer needed for their originally intended purpose, and new charges of $307.2 million ($281.4 million after tax or $1.60 per share). The 2003 rationalization actions consisted of manufacturing, research and development, administrative and retail consolidations in North America, Europe and Latin America. Of the $307.2 million of new charges, $174.8 million related to future cash outflows, primarily associate severance costs, and $132.4 million related primarily to non-cash special termination benefits and pension and retiree benefit curtailments. Approximately 4,400 associates will be released under the programs initiated in 2003, of which approximately 2,700 were exited in 2003 and approximately 1,500 were exited during 2004. The reversals are primarily the result of lower than initially estimated associate-related payments of approximately $12 million, favorable sublease contract signings in the European Union of approximately $3 million and lower contract termination costs in the United States of approximately $1 million. These reversals do not represent changes in the plans as originally approved by management.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 3. Costs Associated with Rationalization Programs (continued)

      As part of the 2003 rationalization program, we closed our Huntsville, Alabama tire facility in the fourth quarter of 2003. Of the $307.2 million of new rationalization charges in 2003, approximately $138 million related to the Huntsville closure and were primarily for associate-related costs, including severance, special termination benefits and pension and retiree benefit curtailments. The Huntsville closure also resulted in charges to CGS of approximately $35 million for asset impairments and $85 million for accelerated depreciation and the write-off of spare parts. In addition, 2003 CGS included charges totaling approximately $8 million to write-off construction in progress related to the research and development rationalization plan, and approximately $5 million for accelerated depreciation on equipment taken out of service at European Union Tire’s facility in Wolverhampton, England.

      The following table summarizes, by segment, the total charges expected to be recorded, the new charges recorded in 2004, the total charges recorded to-date and the total amounts reversed to-date, related to plans initiated in 2003:

	Expected		Charges		Charges		Charges
	Total		Recorded		Recorded		Reversed
	Charge		in 2004		to Date		to Date
(In millions)
North American Tire	$	216.4	$	10.3	$	211.0	$	15.2
European Union Tire		63.6		4.3		63.6		6.4
Latin American Tire		11.7		1.3		11.7		4.5
Engineered Products		29.8		0.4		29.8		12.2
Corporate		7.4		—		7.4		2.5
	$	328.9	$	16.3	$	323.5	$	40.8

A significant portion of the additional restructuring costs not yet recorded is expected to be recorded in the first quarter of 2005.

      In 2002, net charges were recorded totaling $5.5 million ($6.4 million after tax or $0.03 per share). The net charges included reversals of $18.0 million ($14.3 million after tax or $0.09 per share) for reserves from rationalization actions no longer needed for their originally intended purpose. In addition, new charges were recorded totaling $26.5 million ($23.0 million after tax or $0.14 per share) and other credits were recorded totaling $3.0 million ($2.3 million after tax or $0.02 per share). The 2002 rationalization actions consisted of a manufacturing facility consolidation in Europe, the closure of a mold manufacturing facility and a plant consolidation in the United States, and administrative consolidations. Of the $26.5 million charge, $24.2 million related to future cash outflows, primarily associate severance costs, and $2.3 million related to a non-cash write-off of equipment taken out of service in Engineered Products and North American Tire.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 4. Other (Income) and Expense

				Restated
	2004			2003			2002
(In millions)
Asset sales	$	4.2		$	25.1		$	(28.0	)
Interest income		(34.4	)		(25.9	)		(18.8	)
Financing fees and financial instruments		116.5			99.4			48.4
General and product liability — discontinued products		52.7			138.1			33.8
Insurance fire loss deductible		11.7			—			—
Environmental insurance settlement		(156.6	)		—			—
Miscellaneous		14.1			26.7			21.4
	$	8.2		$	263.4		$	56.8

Net losses on asset sales in 2004 were $4.2 million. Asset sales included a gain of $13.3 million ($10.3 million after tax or $0.05 per share) on the sale of assets in North American Tire, European Union Tire and Engineered Products. In addition, a loss of $17.5 million ($17.8 million after tax or $0.09 per share) was recorded on the sale of corporate assets and assets in North American Tire, European Union Tire and Chemical Products, including a loss of $14.5 million on the write-down of assets of our natural rubber plantations in Indonesia.

      Net losses on asset sales in 2003 were $25.1 million. Asset sales included a loss of $17.6 million ($8.9 million after tax or $0.05 per share) on the sale of 20,833,000 shares of common stock of Sumitomo Rubber Industries, Ltd. A loss of $14.4 million ($13.2 million after tax or $0.08 per share) was recorded in 2003 on the sale of assets in Engineered Products, North American Tire and European Union Tire. A gain of $6.9 million ($5.8 million after tax or $0.04 per share) was recorded in 2003 resulting from the sale of assets in Asia/ Pacific Tire, Latin American Tire and European Union Tire.

      Net gains on asset sales in 2002 were $28.0 million ($23.7 million after tax or $0.14 per share), and resulted from the sale of assets in Latin American Tire, Engineered Products and European Union Tire. The write-off of a miscellaneous investment of $4.1 million ($4.1 million after tax or $0.02 per share) was also included in Other (income) and expense in 2002.

      Interest income consisted primarily of amounts earned on cash deposits. The increase in 2004 and 2003 was due primarily to higher levels of cash deposits in the United States. At December 31, 2004, significant concentrations of cash, cash equivalents and restricted cash held by our international subsidiaries included the following amounts:

•  $590.3 million or 27.8% in Europe, primarily Western Europe, ($650.8 million (as restated) or 41.4% at December 31, 2003),

•  $197.8 million or 9.3% in Latin America, primarily Brazil, ($176.4 million or 11.2% at December 31, 2003), and

•  $140.1 million or 6.6% in Asia ($116.8 million or 7.4% at December 31, 2003).

      Financing fees and financial instruments included amortization of debt issuance costs and commitment fees, debt refinancing fees and accounts receivable sales fees totaling $116.5 million, $99.4 million and $48.4 million in 2004, 2003 and 2002, respectively. The increase in financing fees and financial instruments is due to the costs incurred in connection with the restructuring and refinancing of our bank credit and receivables securitization facilities, including $20.5 million of deferred costs written-off in 2004 in connection with our refinancing activities in 2004. Financing fees and financial instruments included $45.6 million in 2003 related to new facilities. Refer to Note 11.

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 4. Other (Income) and Expense (continued)

      General and product liability-discontinued products charges were $52.7 million, $138.1 million (as restated) and $33.8 million in 2004, 2003 and 2002, respectively. These charges related to asbestos personal injury claims and for liabilities related to Entran II claims, net of probable insurance recoveries. Of the $52.7 million of net expense recorded in 2004, $41.4 million related to Entran II claims ($141.4 million of expense and $100.0 million of insurance recoveries) and $11.3 million related to asbestos claims ($13.0 million of expense and $1.7 million of probable insurance recoveries). Of the $138.1 million (as restated) of net expense recorded in 2003, $180.4 million related to Entran II claims ($255.4 million of expense and $75.0 million of probable insurance recoveries) and $(42.3) million (as restated) related to asbestos claims ($24.3 million of expense and $66.6 million of probable insurance recoveries). Of the $33.8 million of net expense recorded in 2002, $9.8 million related to Entran II claims and $24.0 million related to asbestos claims. We did not record any probable insurance recoveries in 2002.

      Insurance fire loss deductible included a charge of $11.7 million ($11.6 million after tax or $0.07 per share) related to fires at our facilities in Germany, France and Thailand. During 2004, approximately $36 million in insurance recoveries were received related to these fire losses. At December 31, 2004 we had recorded an insurance receivable of approximately $16.2 million to recover additional expenses associated with the fire losses in Germany. We did not record any insurance recoveries in excess of the net book value of the assets destroyed (less the insurance deductible limits) and other costs incurred. Additional insurance recoveries in future periods will be accounted for pursuant to FASB Statement No. 5, “Accounting for Contingencies.”

      Environmental insurance settlement in 2004 included a benefit of $156.6 million resulting from a settlement with certain insurance companies. We will receive $159.4 million ($156.6 million plus imputed interest of $2.8 million) in installments in 2005 and 2006 in exchange for releasing the insurers from certain past, present and future environmental claims. A significant portion of the costs incurred by us related to these claims had been recorded in prior years.

      Miscellaneous items included financial transaction taxes in Latin America of $7.5 million, $12.6 million and $7.9 million in 2004, 2003 and 2002, respectively. Costs related to the exploration of a possible sale of Chemical Products totaling $3.5 million and $3.4 million were included in 2004 and 2003, respectively. A $6.1 million charge for the adoption of FIN 46 for lease-financing SPEs was recorded in 2003. Charges of $7.2 million for the write-off of miscellaneous investments were recorded in 2002.

Note 5. Accounts and Notes Receivable

				2003
	2004			Restated
(In millions)
Accounts and notes receivable	$	3,571.8		$	2,745.2
Allowance for doubtful accounts		(144.4	)		(128.9	)
	$	3,427.4		$	2,616.3

Accounts and Notes Receivable included non-trade receivables totaling $456.6 million and $354.6 million at December 31, 2004 and 2003, respectively. These amounts related to an environmental insurance settlement in 2004, derivative financial instruments, general and product liability insurance and various other items.

      The allowance for doubtful accounts represents an estimate of the losses expected from our accounts and notes receivable portfolio. The level of the allowance is based on many quantitative and qualitative factors including historical loss experience by region, portfolio duration, economic conditions and credit risk quality. The adequacy of the allowance is assessed quarterly.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 5. Accounts and Notes Receivable (continued)

      Prior to April 1, 2003, we maintained a program for the continuous sale of substantially all of our domestic trade accounts receivable to Wingfoot A/ R LLC, a wholly-owned limited liability subsidiary company that was a bankruptcy-remote special purpose entity. A similar program also was maintained for substantially all of the trade accounts receivable of our wholly-owned subsidiary in Canada. The results of operations and financial position of Wingfoot A/ R LLC were not included in our consolidated financial statements as provided by Statement of Financial Accounting Standards No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” This program was terminated on April 1, 2003. Accordingly, accounts receivable sold under this program are now recognized on our Consolidated Balance Sheet. Our consolidated debt increased by $577.5 million at April 1, 2003 in connection with the termination of this program.

      The following table presents certain cash flows related to this program:

	2003
(In millions)
Proceeds from collections reinvested in previous securitizations	$	1,089.1
Servicing fees received		1.2
Reimbursement for rebates and discounts issued		28.2
Cash used for termination of program		545.3

Certain of our international subsidiaries had established accounts receivable continuous sales programs whereunder these subsidiaries may receive proceeds from the sale of certain of their receivables to SPE affiliates of certain banks. These subsidiaries retained servicing responsibilities. At December 31, 2004, there were no amounts utilized under these programs. The value in U.S. dollars of which these international subsidiaries could borrow was $104.2 million at December 31, 2003. The following table presents certain cash flows related to these programs:

	2004		2003
(In millions)
Proceeds from collections reinvested in previous securitizations	$	632.7	$	1,440.3
Reimbursement for rebates and discounts issued		59.3		76.5

In addition, various other international subsidiaries sold certain of their trade receivables under off-balance sheet programs during 2004 and 2003. The receivable financing programs of these international subsidiaries did not utilize an SPE at December 31, 2004. At December 31, 2004, the value in U.S. dollars of which these international subsidiaries could borrow was $4.8 million, compared to $18.6 million at December 31, 2003.

The total amount of financing provided from all domestic and international agreements worldwide was $4.8 million at December 31, 2004, compared to $122.8 million at December 31, 2003.

Note 6. Inventories

			2003
	2004		Restated
(In millions)
Raw materials	$	543.0	$	458.8
Work in process		143.6		112.0
Finished products		2,098.2		1,896.9
	$	2,784.8	$	2,467.7

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 7. Goodwill and Other Intangible Assets

Goodwill and intangible assets with indefinite lives are tested for impairment annually or when events or circumstances indicate that impairment may have occurred. We elected to perform the annual impairment testing as of July 31. Based on the results of the testing, no impairment of goodwill or intangible assets with indefinite lives has been indicated.

      The following table presents information about goodwill and other intangible assets:

									2003
		2004							Restated
		Gross					Net		Gross					Net
		Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
		Amount		Amortization			Amount		Amount		Amortization			Amount
(In millions)
Goodwill		$	833.5	$	(113.2	)	$	720.3	$	764.8	$	(106.6	)	$	658.2
Intangible assets with indefinite lives		$	123.5	$	(7.3	)	$	116.2	$	117.3	$	(7.3	)	$	110.0
Trademarks and Patents			50.5		(21.0	)		29.5		44.6		(16.8	)		27.8
Other intangible assets			25.6		(8.7	)		16.9		19.9		(7.3	)		12.6
	Total Other intangible assets	$	199.6	$	(37.0	)	$	162.6	$	181.8	$	(31.4	)	$	150.4

The net carrying amount of goodwill increased by approximately $45 million during 2004 due to currency translation, approximately $5 million due to the consolidation of SPT and T&WA and approximately $12 million due to the net affect of acquisitions and divestitures. Refer to Notes 1, 8 and 10.

      The carrying amount of intangible assets with indefinite lives totaled $116.2 million and $110.0 million (as restated) at December 31, 2004 and 2003, respectively. This amount is comprised of the right to use certain brand names and trademarks on a non-competitive basis related to our global alliance with Sumitomo Rubber Industries, Ltd.

      Amortization expense for intangible assets totaled $4.5 million, $4.8 million and $4.3 million in 2004, 2003, and 2002, respectively. We estimate that annual amortization expense related to intangible assets will range from approximately $3 million to $4 million during each of the next five years and the weighted average remaining amortization period is approximately 18 years.

      The net carrying amount of goodwill allocated by reporting unit, and changes during 2004, follow:

	Restated						Translation &
	Balance at		Purchase Price		FIN 46		Other			Balance at
	December 31, 2003		Allocation		Impact		Adjustments			December 31, 2004
(In millions)
North American Tire	$	100.6	$	—	$	2.6	$	(1.5	)	$	101.7
European Union Tire		357.3		13.5		—		29.4			400.2
Eastern Europe, Middle East and Africa Tire		116.7		0.7		—		12.9			130.3
Latin American Tire		1.2		—		—		(0.1	)		1.1
Asia/ Pacific Tire		62.6		—		1.9		2.5			67.0
Engineered Products		19.8		—		—		0.2			20.0
	$	658.2	$	14.2	$	4.5	$	43.4		$	720.3

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 7. Goodwill and Other Intangible Assets (continued)

The net carrying amount of goodwill allocated by reporting unit, and changes during 2003, follow:

	Restated
			Purchase Price
	Balance at		Allocation			Translation &			Balance at
	December 31, 2002		Reversals			Other Adjustments			December 31, 2003
(In millions)
North American Tire	$	99.6	$	—		$	1.0		$	100.6
European Union Tire		305.9		(2.9	)		54.3			357.3
Eastern Europe, Middle East and Africa Tire		103.7		—			13.0			116.7
Latin American Tire		1.5		—			(0.3	)		1.2
Asia/ Pacific Tire		60.0		—			2.6			62.6
Engineered Products		18.4		—			1.4			19.8
	$	589.1	$	(2.9	)	$	72.0		$	658.2

Note 8. Investments

Consolidation of Variable Interest Entities

As discussed in Note 1, FIN 46 became effective immediately for all VIEs created after January 31, 2003, and required certain disclosures in financial statements issued after January 31, 2003, about the nature, purpose, size and activities of all VIEs covered by its provisions, and their maximum exposure to loss. FIN 46 also required companies to consolidate VIEs created before February 1, 2003, in financial statements for periods ending after June 15, 2003. During 2003, the FASB delayed the required implementation date of FIN 46 for entities that are not special purpose entities (SPEs) until the first reporting period ending after March 15, 2004.

      We applied the provisions of FIN 46, effective July 1, 2003, to VIEs representing lease-financing arrangements with SPEs. We were a party to lease agreements with several unrelated SPEs that are VIEs as defined by FIN 46. The agreements were related to certain North American distribution facilities and certain corporate aircraft. The assets, liabilities and results of operations of these SPEs were consolidated in the third quarter of 2003. Refer to Note 10.

      We had evaluated the impact of FIN 46 for entities that are not SPEs and deferred, until the first quarter of 2004, the application of FIN 46 to two previously unconsolidated investments. South Pacific Tyres (SPT), a tire manufacturer, marketer and exporter of tires in Australia and New Zealand, and T&WA, a wheel mounting operation in the United States which sells to original equipment manufacturers, were consolidated effective January 1, 2004. This consolidation was treated as a non-cash transaction on the Consolidated Statements of Cash Flows with the exception of approximately $24 million of cash and cash equivalents from SPT and T&WA, which was included in Other assets and liabilities in the Operating activities section of the statement. The consolidation of SPT and T&WA resulted in an increase in total assets of approximately $371 million and total liabilities of approximately $373 million. Net sales for SPT and T&WA in 2004 were $707.4 million and $523.8 million, respectively, and were included in our consolidated net sales for 2004. SPT recorded net income of $0.4 million in 2004 and T&WA recorded a net loss of $2.7 million in 2004. In connection with the consolidation of SPT and T&WA, we recorded approximately $5 million of goodwill.

      Our parent company (Goodyear) and certain of our subsidiaries have guaranteed certain debt obligations of SPT and T&WA. Goodyear, Goodyear Australia PTY Limited (a wholly-owned subsidiary of Goodyear) and certain subsidiaries of Goodyear Australia PTY Limited guarantee SPT’s obligations under credit

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 8. Investments (continued)

facilities in the amount of $74.2 million. The guarantees are unsecured. Assets of certain subsidiaries of SPT secure the SPT credit facilities. At December 31, 2004, the carrying amount of the secured assets of these subsidiaries was $224.4 million, consisting primarily of accounts receivable, inventory and fixed assets. Goodyear has guaranteed an industrial revenue bond obligation of T&WA in the amount of $5.4 million. The guarantee is unsecured.

Investments and Acquisitions

We owned 3,421,305 shares of Sumitomo Rubber Industries, Ltd. (“SRI”) at December 31, 2004 and 2003 (the “Sumitomo Investment”). The fair value of the Sumitomo Investment was $32.1 million and $18.6 million at December 31, 2004 and 2003, respectively, and was included in Other Assets on the Consolidated Balance Sheet. We have classified the Sumitomo Investment as available-for-sale, as provided in Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” Accordingly, gains and losses resulting from changes in the fair value of the Sumitomo Investment are deferred and reported on the Consolidated Balance Sheet as Accumulated Other Comprehensive Income (OCI). At December 31, 2004, OCI included a gross unrealized holding gain on the Sumitomo Investment of $15.6 million ($17.0 million after tax), compared to $2.1 million ($3.6 million after tax) at December 31, 2003.

      During 2003, we sold 20,833,000 shares of the Sumitomo Investment for approximately $83 million and recorded a loss of $17.6 million ($8.9 million after tax or $0.05 per share). We had acquired a 10% ownership of SRI as part of the 1999 global alliance between the two companies. We now hold approximately 1.3% of SRI’s outstanding shares.

      During 2002, we acquired additional shares of Sava Tires Joint Venture Holding d.o.o. (“Sava Tire”), a tire manufacturing subsidiary in Slovenia, at a cost of $38.9 million. Our ownership of this subsidiary increased from 60% to 80%. During 2003, we transferred our 80% ownership of Sava Tire to Goodyear Dunlop Tires Europe B.V. (“GDTE”), a 75% owned subsidiary, for $282.3 million. In June 2004, we exercised our call option, purchased the remaining outstanding 20% ownership interest of Sava Tires for approximately $52 million, and sold it to GDTE for approximately $85.2 million. As a result of these transactions, we now indirectly own 75% of Sava Tire, with GDTE’s joint venture partner, SRI, owning the remaining 25%. The acquisition was accounted for using the purchase method of accounting. Pursuant to these transactions, we recorded additions to goodwill of $0.7 million in 2004 and $6.8 million in 2002. The purchase price allocation has been completed at December 31, 2004.

      In July 2004, GDTE completed the acquisition of the remaining 50% outstanding ownership interest of Däckia, a major tire retail group in Sweden, for approximately $10 million. We originally acquired a 50% stake in 1995. As a result of this transaction, we now indirectly own 75% of Däckia, with SRI owning the remaining 25%. The acquisition was accounted for using the purchase method of accounting. The asset valuations have been completed and the purchase price has been allocated. Pursuant to the purchase and resulting consolidation, we recorded an addition to goodwill of $13.5 million. We also recorded intangible assets, including customer relationships, trademarks and partner relationships, totaling $8.2 million.

      In 2003, we purchased Arkansas Best Corporation’s remaining 19% ownership interest in Wingfoot Commercial Tire Systems, LLC, a joint venture company formed by Goodyear and Arkansas Best Corporation to sell and service commercial truck tires, provide retread services and conduct related business, for $71.2 million.

      Dividends received from our consolidated subsidiaries were $155.1 million, $219.0 million and $113.1 million in 2004, 2003 and 2002, respectively. Dividends received from our unconsolidated affiliates

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 8. Investments (continued)

accounted for using the equity method were $3.4 million, $2.8 million and $1.6 million in 2004, 2003 and 2002, respectively.

Non-cash Investing and Financing Activities

In 2002, we issued 11.3 million shares of our Common Stock from Treasury and recorded $137.9 million as a contribution to certain domestic pension plans.

Note 9. Properties and Plants

											2003
		2004									Restated
					Capital									Capital
		Owned			Leases			Total			Owned			Leases			Total
(In millions)
Properties and plants, at cost:
	Land and improvements	$	360.1		$	16.6		$	376.7		$	343.1		$	9.3		$	352.4
	Buildings and improvements		1,778.6			94.0			1,872.6			1,653.0			67.9			1,720.9
	Machinery and equipment		10,491.2			102.5			10,593.7			9,873.6			92.1			9,965.7
	Construction in progress		448.7			—			448.7			418.9			—			418.9
			13,078.6			213.1			13,291.7			12,288.6			169.3			12,457.9
Accumulated depreciation			(7,746.3	)		(90.2	)		(7,836.5	)		(7,168.8	)		(83.9	)		(7,252.7	)
		$	5,332.3		$	122.9		$	5,455.2		$	5,119.8		$	85.4		$	5,205.2

The useful lives of property used in arriving at the annual amount of depreciation provided are as follows: buildings and improvements, 40 years; machinery and equipment, 15 years.

Note 10. Leased Assets

Net rental expense charged to income follows:

	2004			2003			2002
(In millions)
Gross rental expense	$	349.4		$	330.5		$	298.8
Sublease rental income		(74.0	)		(64.9	)		(68.4	)
	$	275.4		$	265.6		$	230.4

We enter into leases primarily for vehicles, data processing equipment and our wholesale and retail distribution facilities under varying terms and conditions. A portion of our domestic retail distribution network is sublet to independent dealers. Many of the leases require us to pay taxes assessed against leased property and the cost of insurance and maintenance.

      While substantially all subleases and some operating leases are cancellable for periods beyond 2005, management expects that in the normal course of its business nearly all of its independent dealer distribution network will be actively operated. As leases and subleases for existing locations expire, we evaluate such leases and either renew the leases or substitute another more favorable retail location.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 10. Leased Assets (continued)

      The following table presents minimum future lease payments:

																	2010 and
		2005			2006			2007			2008			2009			Beyond			Total
(In millions)
Capital Leases
	Minimum lease payments	$	10.4		$	9.5		$	9.0		$	8.9		$	8.5		$	44.8		$	91.1
	Imputed interest																				(29.5	)
	Executory costs																				(1.2	)
	Present value																			$	60.4
Operating Leases
	Minimum lease payments	$	320.3		$	262.6		$	203.1		$	146.8		$	110.5		$	476.0		$	1,519.3
	Minimum sublease rentals		(52.2	)		(42.9	)		(34.2	)		(25.6	)		(17.0	)		(32.0	)		(203.9	)
		$	268.1		$	219.7		$	168.9		$	121.2		$	93.5		$	444.0			1,315.4
	Imputed interest																				(369.4	)
	Present value																			$	946.0

At December 31, 2004 and 2003, we were a party to lease agreements with certain unrelated SPEs that are VIEs as defined by FIN 46. The agreements were related to certain North American distribution facilities and, in 2003, certain corporate aircraft. The corporate aircraft agreements were terminated during 2004. At December 31, 2004, the carrying amount of these North American distribution facilities totaled $26.8 million. Refer to Note 11.

      The assets, liabilities and results of operations of these SPEs were consolidated effective July 1, 2003, pursuant to the provisions of FIN 46. This resulted in an increase in Total Liabilities of approximately $34 million and an increase in Properties and Plants of approximately $28 million. We also recorded a $6.1 million charge in Other (Income) and Expense due to the adoption of FIN 46 for these SPEs. Financing costs related to these SPEs were included in SAG prior to July 1, 2003. Subsequent to that date, the financing costs were recognized as Interest Expense. Refer to Notes 1 and 8.

Note 11. Financing Arrangements and Derivative Financial Instruments

At December 31, 2004, we had total credit arrangements totaling $7.30 billion, of which $1.12 billion were unused.

Notes Payable, Long Term Debt due Within One Year and Short Term Financing Arrangements

At December 31, 2004, we had short term committed and uncommitted credit arrangements totaling $413.1 million, of which $122.5 million related to consolidated VIEs. Of these amounts, $192.4 million and $31.1 million, respectively, were unused. These arrangements are available primarily to certain of our international subsidiaries through various banks at quoted market interest rates. There are no commitment fees associated with these arrangements.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 11. Financing Arrangements and Derivative Financial Instruments (continued)

      The following table presents information about amounts due within one year at December 31:

		2004			2003
(In millions)
Notes payable:
	Amounts related to VIEs	$	91.4		$	—
	Other international subsidiaries		129.2			146.7
		$	220.6		$	146.7
	Weighted-average interest rate		6.35	%		4.81	%
Long term debt due within one year:
	Amounts related to VIEs	$	24.4		$	—
	6.375% Euro Notes due 2005		542.0			—
	European credit facilities		400.0			—
	Other (including capital leases)		43.5			113.5
		$	1,009.9		$	113.5
	Weighted-average interest rate		6.78	%		5.25	%
Total obligations due within one year		$	1,230.5		$	260.2

Amounts related to VIEs in Notes payable represent short term debt of SPT. Amounts related to VIEs in Long term debt due within one year represented amounts owed by T&WA and under lease-financing arrangements with SPEs. At December 31, 2004, we were a party to lease agreements with certain SPEs that are VIEs as defined by FIN 46. The agreements were related to certain North American distribution facilities.

Long Term Debt and Financing Arrangements

At December 31, 2004, we had long term credit arrangements totaling $6.9 billion, of which $923.7 million were unused.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 11. Financing Arrangements and Derivative Financial Instruments (continued)

      The following table presents long term debt at December 31:

		2004			2003
(In millions)
6.375% Euro Notes due 2005		$	542.0		$	504.6
5.375% Swiss franc bonds due 2006			139.3			128.0
4.00% Convertible Senior Notes due 2034			350.0			—
Notes:
	65/8% due 2006		222.5			264.5
	81/2% due 2007		300.0			300.0
	63/8% due 2008		99.9			99.8
	76/7% due 2011		650.0			650.0
	Floating rate notes due 2011		200.0			—
	11% due 2011		447.7			—
	7% due 2028		149.1			149.1
Bank term loans:
	$645 million senior secured U.S. term facility due 2005		—			583.3
	$400 million senior secured term loan European facility due 2005		400.0			400.0
	$800 million senior secured asset-based term loan due 2006		800.0			800.0
	$650 million senior secured asset-based term loan due 2006		650.0			—
Revolving credit facilities due 2005 and 2006			—			839.0
Pan-European accounts receivable facility due 2009			224.7			—
Amounts related to VIEs			94.4			60.4
Other domestic and international debt			129.0			112.9
			5,398.6			4,891.6
Capital lease obligations			60.4			47.7
			5,459.0			4,939.3
Less portion due within one year			(1,009.9	)		(113.5	)
		$	4,449.1		$	4,825.8

The following table presents information about long term fixed rate debt at December 31:

	2004		2003
(In billions)
Carrying amount	$	3.05	$	2.23
Fair value		3.22		2.11

The fair value was estimated using quoted market prices or discounted future cash flows. The increase in the carrying amount and fair value from 2003 was due primarily to the issuance of the 11% Notes due 2011 and the 4% Convertible Senior Notes due 2034. The fair value exceeded the carrying amount at December 31, 2004 due primarily to an improvement in our credit spreads. The fair value of the 6⁵/8% Notes due 2006 was hedged by floating rate swap contracts with notional principal amounts totaling $200 million at December 31, 2004 and 2003.

      The fair value of our variable rate debt approximated its carrying amount at December 31, 2004 and 2003.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 11. Financing Arrangements and Derivative Financial Instruments (continued)

      The principal and interest of the Swiss franc bonds due 2006 were hedged by currency swap agreements at December 31, 2004 and 2003, as discussed below.

      The Euro Notes, Swiss franc bonds, Convertible Senior Notes and other Notes have an aggregate face amount of $3.10 billion and are reported net of unamortized discounts totaling $3.7 million ($1.96 billion and $1.7 million, respectively, at December 31, 2003).

      At December 31, 2004, the floating rate term loans due 2005 and 2006 and Notes due 2011 totaled $2.05 billion and were variable rate agreements based upon LIBOR plus a fixed spread. The weighted-average interest rate on amounts outstanding under these agreements was 6.87%. At December 31, 2003, $1.78 billion was outstanding at a weighted-average interest rate of 5.17%. The interest rate on $325 million principal amount of these borrowings was hedged by fixed rate swap contracts at December 31, 2003.

      At December 31, 2004, there were no borrowings outstanding under the revolving credit facilities due 2005 and 2006. At December 31, 2003, amounts outstanding were comprised of $839.0 million of variable rate agreements based upon LIBOR plus a fixed spread, with a weighted-average interest rate of 5.15%.

      The five-year pan-European accounts receivable facility due 2009 involves the twice-monthly sale of substantially all of the trade accounts receivable of certain subsidiaries of GDTE to a bankruptcy-remote French company controlled by one of the liquidity banks in the facility. At December 31, 2004, $224.7 million was outstanding with a weighted-average Euribor-based interest rate of 5.16%.

      At December 31, 2004, amounts related to VIEs represented long term debt of SPT and T&WA, and amounts owed under lease-financing arrangements with SPEs. At December 31, 2004, we were a party to lease agreements with certain SPEs that are VIEs as defined by FIN 46. The weighted-average rate in effect under the terms of these loans was 6.41%. The agreements were related to certain North American distribution facilities at December 31, 2004. At December 31, 2003, these amounts represented lease-financing arrangements with SPEs related to North American distribution facilities and corporate aircraft.

      Other domestic and international debt at December 31, 2004, consisted of fixed and floating rate loans denominated in U.S. dollars and other currencies that mature in 2005-2023. The weighted-average interest rate in effect under these loans was 6.15% at December 31, 2004, compared to 6.25% at December 31, 2003.

$350 Million Convertible Senior Note Offering

On July 2, 2004, we completed an offering of $350 million aggregate principal amount of 4.00% Convertible Senior Notes due June 15, 2034. The notes are convertible into shares of our common stock initially at a conversion rate of 83.07 shares of common stock per $1,000 principal amount of notes, which is equal to an initial conversion price of $12.04 per share. The proceeds from the notes were used to repay temporarily a revolving credit facility and for working capital purposes.

$650 Million Senior Secured Notes

On March 12, 2004, we completed a private offering of $650 million of senior secured notes, consisting of $450 million of 11% senior secured notes due 2011 and $200 million of floating rate notes due 2011, which accrue interest at LIBOR plus 8%. The proceeds of the notes were used to prepay the remaining outstanding amount under the then-existing U.S. term loan facility, permanently reduce commitments under the then-existing revolving credit facility by $70 million, and for general corporate purposes. The notes are guaranteed by the same subsidiaries that guarantee the U.S. deposit-funded credit facility and asset-based credit facilities. The notes are secured by perfected fourth-priority liens on the same collateral securing those facilities (pari-passu with the liens on that domestic collateral securing the parent guarantees of the European revolving credit facility).

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      We have the right to redeem the fixed rate notes in whole or in part from time to time on and after March 1, 2008. The redemption price, plus accrued and unpaid interest to the redemption date, would be 105.5%, 102.75%, and 100.0% on and after March 1, 2008, 2009 and 2010, respectively. We may also redeem the fixed rate notes prior to March 1, 2008 at a redemption price equal to 100% of the principal amount plus a make-whole premium. We have the right to redeem the floating rate notes in whole or in part from time to time on and after March 1, 2008. The redemption price, plus accrued and unpaid interest to the redemption date, would be 104.0%, 102.0%, and 100.0% on and after March 1, 2008, 2009 and 2010, respectively. In addition, prior to March 1, 2007, we have the right to redeem up to 35% of the fixed and floating rate notes with net cash proceeds from one or more public equity offerings. The redemption price would be 111% for the fixed rate notes and 100% plus the then applicable floating rate for the floating rate notes, plus accrued and unpaid interest to the redemption date.

      The indenture for the senior secured notes contains restrictions on our operations, including limitations on:

•  incurring additional indebtedness or liens,

•  paying dividends, making distributions and stock repurchases,

•  making investments,

•  selling assets, and

•  merging and consolidating

      The deposit-funded credit facility also limits the amount of capital expenditures we may make to $500 million in 2004, 2005 and 2006, and $375 million in 2007 (through September 30, 2007). The amounts of permitted capital expenditures may be increased by the amount of net proceeds retained by us from permitted asset sales and equity and debt issuances. In addition, unused capital expenditures may be carried over into the next year. As a result of certain activities, the capital expenditure limit for 2004 was increased from $500 million to approximately $1.10 billion. Our capital expenditures for 2004 totaled $518.6 million. The capital expenditure carryover from 2004 was $603.0 million, and in the absence of any other transactions, the limit for 2005 will be $1.10 billion.

      In the event that the senior secured notes have a rating equal to or greater than Baa3 from Moody’s and BBB- from Standard and Poor’s, a number of those restrictions will not apply, for so long as those credit ratings are maintained.

$645 Million Senior Secured U.S. Term Facility

At December 31, 2003, the balance due on the U.S. term facility was $583.3 million due to a partial pay-down of the balance during the second quarter of 2003. On March 12, 2004, all outstanding amounts under the facility were prepaid and the facility was retired. The U.S. term facility had a maturity date of April 30, 2005.

$650 Million Senior Secured European Facilities

Goodyear Dunlop Tires Europe B.V. and subsidiaries (“GDTE”) is party to a $250 million senior secured revolving credit facility and a $400 million senior secured term loan facility (collectively, the “European facilities”). These facilities mature on April 30, 2005. As of December 31, 2004, there were no borrowings outstanding under the revolving credit facility and $400 million outstanding under the term facility.

      GDTE pays an annual commitment fee of 75 basis points on the undrawn portion of the commitments under the European revolving facility. GDTE may obtain loans under the European facilities bearing interest

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Note 11. Financing Arrangements and Derivative Financial Instruments (continued)

at LIBOR plus 400 basis points or an alternative base rate (the higher of JPMorgan’s prime rate or the federal funds rate plus 50 basis points) plus 300 basis points.

      The collateral pledged under the European facilities includes:

•  all of the capital stock of Goodyear Finance Holding S.A. and certain subsidiaries of GDTE,

•  a perfected first-priority interest in and mortgages on substantially all the tangible and intangible assets of GDTE in the United Kingdom, Luxembourg, France and Germany, including certain accounts receivable, inventory, real property, equipment, contract rights and cash and cash accounts, but excluding certain accounts receivable used in securitization programs, and

•  with respect to the European revolving credit facility, a perfected fourth priority interest in and mortgages on the collateral pledged under the deposit-funded credit facility and the asset-based facilities, except for real estate other than our U.S. corporate headquarters.

      Consistent with the covenants applicable to Goodyear in the U.S. facilities, the European facilities contain certain representations, warranties and covenants applicable to GDTE and its subsidiaries which, among other things, limit GDTE’s ability to:

•  incur additional indebtedness (including a limit of €275 million in accounts receivable transactions),

•  make investments,

•  sell assets beyond specified limits,

•  pay dividends, and

•  make loans or advances to Goodyear companies that are not subsidiaries of GDTE.

      The European facilities also contain certain additional covenants identical to those in the U.S. facilities. The European facilities also limit the amount of capital expenditures that GDTE may make to $100 million in 2005 (through April 30).

      Subject to the provisions in the European facilities and agreements with our joint venture partner, Sumitomo Rubber Industries, Ltd. (SRI), GDTE is permitted to transfer funds to Goodyear. These provisions and agreements include limitations on loans and advances from GDTE to Goodyear and a requirement that transactions with affiliates be consistent with past practices or on arms-length terms.

      Any amount outstanding under the term facility is required to be prepaid with:

•  75% of the net cash proceeds of all sales and dispositions of assets by GDTE and its subsidiaries greater than $5 million, and

•  50% of the net cash proceeds of debt and equity issuances by GDTE and its subsidiaries.

      The U.S. and European facilities can be used, if necessary, to fund ordinary course of business needs, to repay maturing debt, and for other needs as they arise.

U.S. Deposit-Funded Credit Facility

On August 18, 2004, we refinanced our then existing $680 million senior secured U.S. revolving credit facility with a U.S. deposit-funded credit facility, which is a synthetic revolving credit and letter of credit facility. Pursuant to the refinancing, the lenders deposited the entire $680 million of the facility in an account held by the administrative agent, and those funds are used to support letters of credit or borrowings on a revolving basis, in each case subject to customary conditions. The lenders under the new facility will receive annual

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compensation on the amount of the facility equivalent to 450 basis points over LIBOR, which includes commitment fees on the entire amount of the commitment (whether drawn or undrawn) and a usage fee on the amounts drawn. The full amount of the facility is available for the issuance of letters of credit or for revolving loans. The $500.7 million of letters of credit that were outstanding under the U.S. revolving credit facility as of June 30, 2004 were transferred to the deposit-funded credit facility. As of December 31, 2004, there were $509.9 million of letters of credit issued under the facility. The facility matures on September 30, 2007.

      Our obligations under the deposit-funded credit facility are guaranteed by most of our wholly-owned U.S. subsidiaries and by our wholly-owned Canadian subsidiary, Goodyear Canada Inc. Our obligations under this facility and our subsidiaries’ obligations under the related guarantees are secured by collateral that includes:

•  subject to certain exceptions, perfected first-priority security interests in the equity interests in our U.S. subsidiaries and 65% of the equity interests in our non-European foreign subsidiaries,

•  a perfected second priority security interest in 65% of the capital stock of Goodyear Finance Holding S.A., a Luxembourg company,

•  perfected first-priority security interests in and mortgages on our U.S. corporate headquarters and certain of our U.S. manufacturing facilities,

•  perfected third-priority security interests in all accounts receivable, inventory, cash and cash accounts pledged as security under our asset-based facilities, and

•  perfected first-priority security interests in substantially all other tangible and intangible assets, including equipment, contract rights and intellectual property.

      The bond agreement for our Swiss franc bonds due 2006 limits our ability to use our U.S. tire and automotive parts manufacturing facilities as collateral for secured debt without triggering a requirement that holders of the bonds be secured on an equal and ratable basis. The manufacturing facilities indicated above were pledged to ratably secure the bonds to the extent required by the bond agreement. However, the aggregate amount of our debt secured by these manufacturing facilities is limited to 15% of our positive consolidated shareholders’ equity. Consequently, the security interests granted to the lenders under the U.S. senior secured funded credit facility are not required to be shared with the holders of debt outstanding under our other existing unsecured bond indentures.

      The deposit-funded credit facility contains certain covenants that, among other things, limit our ability to incur additional unsecured and secured indebtedness (including a limit, subject to certain exceptions, of 275 million euros in accounts receivable transactions), make investments and sell assets beyond specified limits. The facility prohibits us from paying dividends on our common stock. We must also maintain a minimum consolidated net worth (as such term is defined in the deposit-funded credit facility) of at least $2.0 billion for quarters ending in 2005 and the first quarter of 2006, and $1.75 billion for each quarter thereafter through September 30, 2007. We are not permitted to allow the ratio of Consolidated EBITDA to consolidated interest expense to fall below a ratio of 2.00 to 1.00 for any period of four consecutive fiscal quarters. In addition, our ratio of consolidated senior secured indebtedness to Consolidated EBITDA is not permitted to be greater than 4.00 to 1.00 at any time.

      The deposit-funded credit facility also limits the amount of capital expenditures we may make to $500 million in 2004, 2005 and 2006, and $375 million in 2007 (through September 30, 2007). The amounts of permitted capital expenditures may be increased by the amount of net proceeds retained by us from permitted asset sales and equity and debt issuances. In addition, unused capital expenditures may be carried

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Note 11. Financing Arrangements and Derivative Financial Instruments (continued)

over into the next year. As a result of certain activities, the capital expenditure limit for 2004 was increased from $500 million to approximately $1.10 billion. Our capital expenditures for 2004 totaled $518.6 million. The capital expenditure carryover from 2004 was $603.0 million, and in the absence of any other transactions, the limit for 2005 will be $1.10 billion.

$1.95 Billion Senior Secured Asset-Based Credit Facilities

In April 2003, we entered into senior secured asset-based credit facilities in an aggregate principal amount of $1.30 billion, consisting of a $500 million revolving credit facility and an $800 million term loan facility. At December 31, 2004, we had no borrowings outstanding under the revolving credit facility and $800 million drawn against the term loan asset-based facility, compared to $389 million and $800 million, respectively, at December 31, 2003. On February 20, 2004, we added a $650 million term loan tranche to the existing $1.30 billion facility, which was fully drawn as of December 31, 2004. The $650 million tranche is not subject to the borrowing base and provides for junior liens on the collateral securing the facility. The $650 million tranche was used partially to prepay our U.S. term loan facility, to repay other indebtedness, and for general corporate purposes. The facilities mature on March 31, 2006.

      Availability under the facilities, other than the $650 million term loan tranche, is limited by a borrowing base equal to the sum of (a) 85% of adjusted eligible accounts receivable and (b) (i) if the effective advance rate for inventory is equal to or greater than 85% of the recovery rate (as determined by a third party appraisal) of such inventory, 85% of the recovery rate multiplied by the inventory value, or (ii) if the effective advance rate for inventory is less than 85% of the recovery rate, (A) 35% of eligible raw materials, 65% of adjusted eligible finished goods relating to the North American Tire segment, and 60% of adjusted eligible finished goods relating to the retail division, Engineered Products segment, Chemical Products segment and Wingfoot Commercial Tire Systems minus (B) a rent reserve equal to three months’ rent and warehouse charges at facilities where inventory is stored and a priority payables reserve based on liabilities for certain taxes or certain obligations related to employees that have a senior or pari passu lien on the collateral.

      The calculation of the borrowing base and reserves against accounts receivable and inventory included in the borrowing base are subject to adjustment from time to time by the administrative agent and the majority lenders in their discretion (not to be exercised unreasonably). Adjustments would be based on the results of ongoing collateral and borrowing base evaluations and appraisals. A $50 million availability block further limits availability under the facilities. If at any time the amount of outstanding borrowings under the facilities subject to the borrowing base exceeds the borrowing base, we will be required to prepay borrowings sufficient to eliminate the excess or maintain compensating deposits with the agent bank.

      The facilities are collateralized by first and second priority security interests in all accounts receivable and inventory of Goodyear and its domestic and Canadian subsidiaries (excluding accounts receivable and inventory related to our North American joint venture with SRI). In addition, effective as of February 20, 2004, collateral included second and third priority security interests on the other assets securing the U.S. facilities. The facilities contain certain representations, warranties and covenants which are materially the same as those in the U.S. facilities, with capital expenditures of $500 million and $150 million permitted in 2005 and 2006 (through March 31), respectively. In addition, we must maintain a minimum consolidated net worth of at least $2.00 billion for quarters ending in 2005 and 2006 (through March 31, 2006).

International Accounts Receivable Securitization Facilities-On-Balance-Sheet Financials

      On December 10, 2004, GDTE and certain of its subsidiaries entered into a new five-year pan-European accounts receivable securitization facility. The facility initially provides €165 million of funding, but has the

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Note 11.           Financing Arrangements and Derivative Financial Instruments (continued)

ability to be expanded to €275 million, and will be subject to customary annual renewal of back-up liquidity lines. The new facility replaces an €82.5 million facility in a subsidiary in France.

      The new facility involves the twice-monthly sale of substantially all of the trade accounts receivable of certain GDTE subsidiaries to a bankruptcy-remote French company controlled by one of the liquidity banks in the facility. These subsidiaries retained servicing responsibilities. It is an event of default under the facility if:

•  the ratio of our consolidated EBITDA to our consolidated interest expense falls below 2.00 to 1.00,

•  the ratio of our consolidated senior secured indebtedness to our consolidated EBITDA is greater than 4.00 to 1.00,

•  the ratio of GDTE’s third party indebtedness (net of cash held by GDTE and its consolidated subsidiaries in excess of $100 million) to its consolidated EBITDA is greater than 3.00 to 1.00, or

•  for so long as such a provision is in our European credit facilities, our consolidated net worth is less than $2 billion on or prior to March 31, 2006, or is less than $1.75 billion after March 31, 2006, in each case subject to a 60 day grace period.

      The financial covenants listed above will be automatically amended to conform to the European Credit Facilities upon the refinancing of the European Credit Facilities. The defined terms used in the events of default tests are similar to those in the European Credit Facilities. As of December 31, 2004, the amount outstanding and fully-utilized under this program totaled $224.7 million. The program did not qualify for sale accounting pursuant to the provisions of Statement of Financial Accounting Standards No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, and accordingly, this amount is included in consolidated long term debt.

      In addition the to the pan-European accounts receivable securitization facility discussed above, SPT and other subsidiaries in Australia had transferred accounts receivable under other programs totaling $63.2 million and $7.7 million at December 31, 2004 and 2003, respectively.

Debt Maturities

The annual aggregate maturities of long term debt and capital leases for the five years subsequent to December 31, 2004 are presented below. Maturities of debt credit agreements have been reported on the basis that the commitments to lend under these agreements will be terminated effective at the end of their current terms.

	2005		2006		2007		2008		2009
(In millions)
Debt incurred under revolving credit agreements	$	—	$	—	$	—	$	—	$	—
Other — domestic		440.2		111.0		2.9		6.4		229.8
Other — international		569.7		1,814.1		302.4		102.4		2.5
	$	1,009.9	$	1,925.1	$	305.3	$	108.8	$	232.3

Derivative Financial Instruments

We utilize derivative financial instrument contracts and nonderivative instruments to manage interest rate, foreign exchange and commodity price risks. We have established a control environment that includes policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial

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Note 11. Financing Arrangements and Derivative Financial Instruments (continued)

instrument activities. Company policy prohibits holding or issuing derivative financial instruments for trading purposes.

Interest Rate Exchange Contracts

We manage our fixed and floating rate debt mix, within defined limitations, using refinancings and unleveraged interest rate swaps. We will enter into fixed and floating interest rate swaps to hedge against the effects of adverse changes in interest rates on consolidated results of operations and future cash outflows for interest. Fixed rate swaps are used to reduce our risk of increased interest costs during periods of rising interest rates, and are normally designated as cash flow hedges. Floating rate swaps are used to convert the fixed rates of long term borrowings into short term variable rates, and are normally designated as fair value hedges. We use interest rate swap contracts to separate interest rate risk management from the debt funding decision. At December 31, 2004, the interest rate on 50% of our debt was fixed by either the nature of the obligation or through the interest rate contracts, compared to 47% at December 31, 2003.

      The following tables present contract information and weighted average interest rates. Current market pricing models were used to estimate the fair values of interest rate exchange contracts.

			December 31, 2003			Settled			December 31, 2004
(Dollars in millions)
Fixed rate contracts:
	Notional principal amount		$	325.0		$	325.0		$	—
	Pay fixed rate			5.00	%		5.00	%		—
	Receive variable LIBOR			1.17			1.18			—
	Average years to maturity			0.25			—			—
	Fair value: asset (liability)		$	(3.1	)	$	—		$	—
	Carrying amount:
		Current liability		(3.1	)		—			—
		Long term liability		—			—			—
Floating rate contracts:
	Notional principal amount		$	200.0		$	—		$	200.0
	Pay variable LIBOR			2.96	%		—			4.31	%
	Receive fixed rate			6.63			—			6.63
	Average years to maturity			2.95			—			1.95
	Fair value: asset (liability)		$	13.0		$	—		$	6.0
	Carrying amount:
		Current asset		7.4			—			3.7
		Long term asset		5.6			—			2.3

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Note 11. Financing Arrangements and Derivative Financial Instruments (continued)

Weighted average interest rate swap contract information follows:

		Twelve Months Ended
		December 31,
		2004			2003			2002
(Dollars in millions)
Fixed rate contracts:
	Notional principal amount	$	81.0		$	325.0		$	325.0
	Pay fixed rate		5.00	%		5.00	%		5.00	%
	Receive variable LIBOR		1.18			1.24			1.91
Floating rate contracts:
	Notional principal amount	$	200.0		$	207.0		$	210.0
	Pay variable LIBOR		3.27	%		3.03	%		3.68	%
	Receive fixed rate		6.63			6.63			6.63

Interest Rate Lock Contracts

We will use, when appropriate, interest rate lock contracts to hedge the risk-free rate component of anticipated long term debt issuances. These contracts are designated as cash flow hedges of forecasted transactions. Gains and losses on these contracts are amortized to income over the life of the debt. No contracts were outstanding at December 31, 2004 or 2003.

Foreign Currency Contracts

We will enter into foreign currency contracts in order to reduce the impact of changes in foreign exchange rates on consolidated results of operations and future foreign currency-denominated cash flows. These contracts reduce exposure to currency movements affecting existing foreign currency-denominated assets, liabilities, firm commitments and forecasted transactions resulting primarily from trade receivables and payables, equipment acquisitions, intercompany loans, royalty agreements and forecasted purchases and sales. In addition, the principal and interest on our Swiss franc bonds due 2006 and €100 million of Euro Notes due 2005 are hedged by currency swap agreements.

      Contracts hedging the Swiss franc bonds and the Euro Notes are designated as cash flow hedges. Contracts hedging short term trade receivables and payables normally have no hedging designation.

      Amounts are reclassified from OCI into earnings each period to offset the effects of exchange rate movements on the hedged amounts of principal and interest of the Swiss franc bonds and the Euro Notes. Amounts are also reclassified concurrently with the recognition of intercompany royalty expense and sales of intercompany purchases to third parties.

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Note 11. Financing Arrangements and Derivative Financial Instruments (continued)

      The following table presents foreign currency contract information at December 31:

			2004				2003
			Fair		Contract		Fair		Contract
			Value		Amount		Value		Amount
(In millions)
Buy currency:
	Euro		$	159.2	$	115.9	$	145.7	$	111.3
	Swiss franc			139.7		80.6		125.8		80.6
	Japanese yen			22.6		22.7		13.0		16.7
	U.S. dollar			144.4		144.9		137.3		136.3
	All other			13.0		12.6		—		—
			$	478.9	$	376.7	$	421.8	$	344.9
	Contract maturity:
		Swiss franc swap	3/06				3/06
		Euro swap	6/05				6/05
		All other	1/05 - 10/19				1/04 - 10/19

		2004				2003
		Fair		Contract		Fair		Contract
		Value		Amount		Value		Amount
(In millions)
Sell currency:
	British pound	$	217.4	$	218.8	$	157.9	$	155.2
	Swedish krona		34.1		34.2		44.2		44.3
	Canadian dollar		62.4		63.4		93.0		91.7
	Euro		77.0		74.3		71.3		70.0
	All other		23.0		23.1		19.8		19.8
		$	413.9	$	413.8	$	386.2	$	381.0
	Contract maturity	1/05 - 12/05				1/04

The following table presents foreign currency contract carrying amounts at December 31:

		2004			2003
Carrying amount — asset (liability):
	Swiss franc swap — current	$	(0.3	)	$	(1.6	)
	Swiss franc swap — long term		59.5			46.8
	Euro swaps — current		46.4			20.5
	Euro swaps — long term		—			13.2
	Other — current asset		5.2			7.2
	Other — current (liability)		(8.8	)		(14.4	)

We were not a party to any foreign currency option contracts at December 31, 2004 or 2003.

      The counterparties to our interest rate and foreign exchange contracts were substantial and creditworthy multinational commercial banks or other financial institutions that are recognized market makers. Due to the creditworthiness of the counterparties, we consider the risk of counterparty nonperformance associated with these contracts to be remote. However, the inability of a counterparty to fulfill its obligations when due could

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Note 11. Financing Arrangements and Derivative Financial Instruments (continued)

have a material effect on our consolidated financial position, results of operations or liquidity in the period in which it occurs.

Hedges of Net Investment in Foreign Operations

In order to reduce the impact of changes in foreign exchange rates on consolidated shareholders’ equity, we will from time to time designate certain foreign currency-denominated non-derivative instruments as hedges of our net investment in various foreign operations. There were no such designations at December 31, 2004 or 2003.

Results of Hedging Activities

Charges for ineffectiveness and premium amortization totaled $0.2 million and $1.0 million during the twelve months ended December 31, 2004 and 2003, respectively. At December 31, 2004, there were no deferred net pretax gains or losses on hedges of forecasted transactions expected to be recognized in income during the twelve months ending December 31, 2005. It is not practicable to estimate the amount of deferred gains and losses that will be recognized in income resulting from the remeasurement of certain long term currency exchange agreements.

      Deferred losses totaling $4.2 million were recorded as Foreign Currency Translation Adjustment during the twelve months ended December 31, 2003 as a result of the designation of nonderivative instruments as net investment hedges. These gains and losses are only recognized in earnings upon the complete or partial sale of the related investment or the complete liquidation of the investment.

Note 12. Stock Compensation Plans and Dilutive Securities

Our 1989 Goodyear Performance and Equity Incentive Plan, the 1997 Performance Incentive Plan of The Goodyear Tire & Rubber Company and the 2002 Performance Plan of The Goodyear Tire & Rubber Company provide for the granting of stock options and stock appreciation rights (SARs), restricted stock, performance grants and other stock-based awards. For options granted in tandem with SARs, the exercise of a SAR cancels the stock option; conversely, the exercise of the stock option cancels the SAR. The 1989 Plan expired on April 14, 1997, and the 1997 Plan expired on December 31, 2001, except, in each case, with respect to grants and awards outstanding. The 2002 Plan will expire by its terms on April  15, 2005, except with respect to grants and awards then outstanding. A maximum of 12,000,000 shares of our Common Stock are available for issuance pursuant to grants and awards made under the 2002 Plan through April 15, 2005. Stock options and related SARs granted under the above plans generally have a maximum term of ten years and vest pro rata over four years.

      Performance units granted during 2002 and 2001 are earned based on Return on Invested Capital and Total Shareholder Return relative to the S&P Auto Parts & Equipment Companies (each weighted at 50%) over a three year performance period beginning January 1 of the year subsequent to the year of grant. To the extent earned, a portion of the performance units will generally be paid 50% in cash and 50% in stock (subject to deferral under certain circumstances). A portion may be automatically deferred in the form of units until the participant is no longer an employee of the Company. Each unit is equivalent to a share of our Common Stock and payable in cash, shares of our Common Stock or a combination thereof at the election of the participant.

      On December 4, 2000, we adopted The Goodyear Tire & Rubber Company Stock Option Plan for Hourly Bargaining Unit Employees, under which options in respect of up to 3,500,000 shares of our Common Stock may be granted. We also adopted on that date the Hourly and Salaried Employee Stock Option Plan, under which options in respect of up to 600,000 shares of our Common Stock may be granted. Stock options granted

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Note 12. Stock Compensation Plans and Dilutive Securities (continued)

under these plans generally have a maximum term of ten years and vest over one to three years. The Hourly Bargaining Unit Plan expired on September 30, 2001, and the Hourly and Salaried Plan expired on December 31, 2002, except, in each case, with respect to options then outstanding.

      Stock-based compensation activity for the years 2004, 2003 and 2002 follows:

		2004						2003						2002
		Shares			SARs			Shares			SARs			Shares			SARs
Outstanding at January 1			26,999,985			4,965,789			24,476,229			4,110,830			21,841,798			3,398,781
	Options granted		4,149,660			1,103,052			3,907,552			1,009,588			3,454,724			863,372
	Options without SARs exercised		(293,795	)		—			—			—			(110,642	)		—
	Options with SARs exercised		(16,300	)		(16,300	)		—			—			(6,439	)		(6,439	)
	SARs exercised		(360	)		(360	)		—			—			(400	)		(400	)
	Options without SARs expired		(1,105,084	)		—			(1,011,943	)		—			(509,313	)		—
	Options with SARs expired		(188,931	)		(188,931	)		(154,629	)		(154,629	)		(144,484	)		(144,484	)
	Performance units granted		—			—			8,500			—			227,100			—
	Performance unit shares issued		—			—			—			—			(28,196	)		—
	Performance units cancelled		(222,143	)		—			(225,724	)		—			(247,919	)		—
Outstanding at December 31			29,323,032			5,863,250			26,999,985			4,965,789			24,476,229			4,110,830
Exercisable at December 31			20,362,573			3,517,595			18,697,146			2,899,381			15,205,724			2,314,354
Available for grant at December 31			965,138						4,846,238						8,497,830

Significant option groups outstanding at December 31, 2004 and related weighted average price and remaining life information follows:

Grant	Options		Options		Exercisable		Remaining
Date	Outstanding		Exercisable		Price		Life (Years)
12/09/04		4,031,135		—	$	12.54		10
12/03/03		3,597,453		890,136		6.81		9
12/03/02		2,554,120		1,376,049		7.94		8
12/03/01		2,795,299		2,303,256		22.05		7
12/04/00		5,290,258		5,290,258		17.68		6
12/06/99		2,956,808		2,956,808		32.00		5
11/30/98		1,946,282		1,946,282		57.25		4
12/02/97		1,708,037		1,708,037		63.50		3
12/03/96		1,452,268		1,452,268		50.00		2
01/09/96		1,077,217		1,077,217		44.00		1
All other		1,562,163		1,362,262		26.23		4.7

The 1,562,163 options in the “All other” category were outstanding at exercise prices ranging from $5.52 to $74.25, with a weighted average exercise price of $24.44. All options, SARs and performance units were granted at an exercise price equal to the fair market value of our Common Stock at the date of grant.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 12. Stock Compensation Plans and Dilutive Securities (continued)

      Weighted average option exercise price information follows:

	2004		2003		2002
Outstanding at January 1	$	26.90	$	30.28	$	33.87
Granted during the year		12.54		6.81		7.94
Exercised during the year		7.61		—		17.78
Outstanding at December 31		24.96		26.90		30.28
Exercisable at December 31		31.02		33.80		38.13

Forfeitures and cancellations were insignificant.

      Weighted average fair values at date of grant for grants in 2004, 2003 and 2002 follow:

	2004		2003		2002
Options	$	6.36	$	3.41	$	3.59
Performance units		12.54		6.81		7.94

The above fair value of options at date of grant was estimated using the Black-Scholes model with the following weighted average assumptions:

	2004			2003			2002
Expected life (years)		5			5			5
Interest rate		3.55	%		3.41	%		3.18	%
Volatility		54.7			54.0			47.5
Dividend yield		—			—			—

Earnings Per Share Information

Basic earnings per share have been computed based on the average number of common shares outstanding.

      We have adopted the provisions of Emerging Issues Task Force Issue No. 04-08, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share”. Refer to Note 1.

      There are contingent conversion features included in our $350 million 4% Convertible Senior Notes due 2034, issued on July 2, 2004. Accordingly, average shares outstanding — diluted in 2004 included approximately 29.1 million contingently issuable shares in each of the third and fourth quarters and 14.5 million shares in the full year. Net income per share — diluted in 2004 included an earnings adjustment representing avoided after-tax interest expense of $3.5 million in each of the third and fourth quarters resulting from the assumed conversion of the Notes. Diluted earnings per share in 2004 was reduced by approximately $0.02 in the third quarter, $0.08 in the fourth quarter and $0.01 in the full year as a result of the adoption of this standard.

      The following table presents the number of incremental weighted-average shares used in computing diluted per share amounts:

	2004		2003		2002
Average shares outstanding — basic		175,377,316		175,314,449		167,020,375
4% Convertible Senior Notes due 2034		14,534,884		—		—
Stock options		2,346,070		—		—
Average shares outstanding — diluted		192,258,270		175,314,449		167,020,375

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 12. Stock Compensation Plans and Dilutive Securities (continued)

In 2004, 2003 and 2002, approximately 23.1 million, 21.4 million and 21.1 million, respectively, equivalent shares related to stock options, restricted stock and performance grants with exercise prices that were greater than the average market price of our common shares were excluded from average shares outstanding-diluted, as inclusion would have been anti-dilutive. In addition, in 2003 and 2002, approximately 1.0 million and 2.6 million, respectively, equivalent shares of stock options, restricted stock and performance grants with exercise prices that were less than the average market price of our common shares were excluded from average shares outstanding - -diluted as we were in a net loss position and inclusion would also have been anti-dilutive.

      The following table presents the computation of adjusted net income used in computing net income (loss) per share — diluted. The computation assumes that after-tax interest costs incurred on the 4% Convertible Senior Notes due 2034 would have been avoided had the Notes been converted when issued on July 2, 2004:

	2004		2003			2002
(In millions)
Net Income (Loss)	$	114.8	$	(807.4	)	$	(1,246.9	)
After-tax impact of 4% Convertible Senior Notes due 2034		7.0		—			—
Adjusted Net Income (Loss)	$	121.8	$	(807.4	)	$	(1,246.9	)

Note 13. Pension, Other Postretirement Benefit and Savings Plans

We provide substantially all employees with pension benefits. The principal domestic hourly plan provides benefits based on length of service. The principal domestic plans covering salaried employees provide benefits based on final five-year average earnings formulas. Salaried employees making voluntary contributions to these plans receive higher benefits. Effective January 1, 2005, the U.S. salaried pension plan was frozen to new participants. Other pension plans provide benefits similar to the principal domestic plans as well as termination indemnity plans at certain international subsidiaries. At the end of 2004 and 2003, assets exceeded accumulated benefits in certain plans and accumulated benefits exceeded assets in others.

      We also provide substantially all domestic employees and employees at certain international subsidiaries with health care and life insurance benefits upon retirement. Insurance companies provide life insurance and certain health care benefits through premiums based on expected benefits to be paid during the year. Substantial portions of the health care benefits for domestic retirees are not insured and are paid by us. Benefit payments are funded from operations. At December 31, 2004, our benefit obligation for other postretirement benefits includes $15.2 million for the increase in our contribution requirements based upon the anticipated attainment of certain profit levels by certain businesses in 2004, 2005 and 2006.

      On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act (the “Act”) was signed into law. The Act will provide plan sponsors a federal subsidy for certain qualifying prescription drug benefits covered under the sponsor’s postretirement health care plans. FASB Staff Position No. FAS 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (the FSP), was issued on May 19, 2004. The FSP provides guidance on accounting for the effects of the new Medicare prescription drug legislation by employers whose prescription drug benefits are actuarially equivalent to the drug benefit under Medicare Part D. It also contains basic guidance on related income tax accounting, and complex rules for transition that permit various alternative prospective and retroactive transition approaches. Based on the proposed regulations, during 2004 we determined that the overall impact of the adoption of FSP 106-2 was a reduction of expense in 2004 of approximately $2 million on an annual basis. The adoption of FSP 106-2 also reduced our accumulated postretirement benefit obligation by approximately $19.7 million during 2004. On January 21, 2005 final regulations were issued. Based on the clarifications provided in the final regulations, our net periodic

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 13. Pension, Other Postretirement Benefit and Savings Plans (continued)

postretirement cost is expected to be lower by approximately $50 million in 2005, and the accumulated postretirement benefit obligation is expected to be reduced by approximately $475 million to $525 million during 2005.

      We use a December 31 measurement date for the majority of our plans.

      Pension cost follows:

		2004			2003			2002
(In millions)
Service cost — benefits earned during the period		$	85.8		$	122.6		$	116.7
Interest cost on projected benefit obligation			421.0			399.8			385.0
Expected return on plan assets			(350.3	)		(310.6	)		(391.1	)
Amortization of unrecognized: — prior service cost			75.2			74.2			81.6
— net (gains) losses			118.0			125.9			36.7
— transition amount			1.3			1.1			0.6
	Net periodic pension cost		351.0			413.0			229.5
Curtailments/settlements			6.8			45.2			0.3
Special termination benefits			4.2			43.0			0.8
	Total pension cost	$	362.0		$	501.2		$	230.6

Postretirement benefit cost follows:

		2004		2003		2002
(In millions)
Service cost — benefits earned during the period		$	24.7	$	24.1	$	19.5
Interest cost on accumulated benefit obligation			188.1		174.0		186.9
Amortization of unrecognized: — net losses			35.2		32.0		26.2
— prior service cost			44.5		17.0		19.4
	Net periodic postretirement cost		292.5		247.1		252.0
Curtailments/settlements			12.5		23.6		—
Special termination benefits			0.3		20.0		—
	Total postretirement cost	$	305.3	$	290.7	$	252.0

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 13. Pension, Other Postretirement Benefit and Savings Plans (continued)

The change in benefit obligation and plan assets for 2004 and 2003 and the amounts recognized in our Consolidated Balance Sheet at December 31, 2004 and 2003 are as follows:

			Pension Plans						Other Benefits
			2004			2003			2004			2003
(In millions)
Change in benefit obligation:
	Beginning balance		$	(6,883.5	)	$	(6,070.2	)	$	(3,078.6	)	$	(2,723.1	)
		Newly adopted plans		(87.0	)		—			(0.5	)		—
		Service cost — benefits earned		(85.8	)		(122.6	)		(24.7	)		(24.1	)
		Interest cost		(421.0	)		(399.8	)		(188.1	)		(174.0	)
		Plan amendments		1.1			(112.4	)		4.0			(275.8	)
		Actuarial loss		(532.2	)		(348.9	)		(165.4	)		(88.9	)
		Employee contributions		(19.2	)		(18.8	)		(8.8	)		(6.6	)
		Curtailments/settlements		(1.6	)		16.3			0.5			(15.0	)
		Special termination benefits		(4.3	)		(42.9	)		(0.3	)		(21.3	)
		Foreign currency translation		(171.7	)		(257.6	)		(14.0	)		(22.9	)
		Benefit payments		484.9			473.4			257.6			273.1
	Ending balance			(7,720.3	)		(6,883.5	)		(3,218.3	)		(3,078.6	)
Change in plan assets:
	Beginning balance		$	4,129.1		$	3,602.4		$	—		$	—
		Newly adopted plans		84.4			—			—			—
		Actual return on plan assets		478.7			707.4			—			—
		Company contributions		264.6			115.7			—			—
		Employee contributions		19.2			18.8			—			—
		Foreign currency translation		107.2			158.2			—			—
		Benefit payments		(484.9	)		(473.4	)		—			—
	Ending balance		$	4,598.3		$	4,129.1		$	—		$	—
Funded status				(3,122.0	)		(2,754.4	)		(3,218.3	)		(3,078.6	)
	Unrecognized prior service cost			418.1			503.4			420.1			480.9
	Unrecognized net loss			2,548.5			2,194.1			895.4			763.1
	Unrecognized net obligation at transition			2.8			3.9			—			—
Net amount recognized			$	(152.6	)	$	(53.0	)	$	(1,902.8	)	$	(1,834.6	)

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 13. Pension, Other Postretirement Benefit and Savings Plans (continued)

Amounts recognized in the Consolidated Balance Sheet consist of:

		Pension Plans						Other Benefits
		2004			2003			2004			2003
(In millions)
Prepaid benefit cost  — current		$	41.0		$	86.4		$	—		$	—
— long term			374.2			345.1			—			—
Accrued benefit cost — current			(85.2	)		(110.8	)		(303.1	)		(287.4	)
— long term			(3,219.6	)		(2,830.8	)		(1,599.7	)		(1,547.2	)
Intangible asset			429.7			512.4			—			—
Deferred income taxes			305.0			273.0			—			—
Minority shareholders’ equity			173.3			126.5			—			—
Accumulated other comprehensive income (OCI)			1,829.0			1,545.2			—			—
	Net amount recognized	$	(152.6	)	$	(53.0	)	$	(1,902.8	)	$	(1,834.6	)

The increase (decrease) in minimum pension liability adjustment (net of tax) included in OCI follows:

	Pension Plans							Other Benefits
			Restated
	2004		2003			2002		2004		2003		2002
(In millions)
Increase (decrease) in minimum pension liability adjustment included in OCI	$	283.8	$	(128.3	)	$	1,283.6		N/A		N/A		N/A

The following table presents significant weighted-average assumptions used to determine benefit obligations at December 31:

	Pension Plans						Other Benefits
	2004			2003			2004			2003
Discount rate: — U.S.		5.75	%		6.25	%		5.75	%		6.25	%
— International		5.41			5.93			6.91			7.22
Rate of compensation increase: — U.S.		4.04			4.00			4.00			4.00
— International		3.48			3.43			4.67			4.47

The following table presents significant weighted-average assumptions used to determine net periodic pension/benefit cost for the years ended December 31:

	Pension Plans									Other Benefits
	2004			2003			2002			2004			2003			2002
Discount rate: — U.S.		6.25	%		6.75	%		7.25	%		6.25	%		6.75	%		7.25	%
— International		5.93			6.20			6.50			7.22			7.48			7.50
Expected long term return on plan assets: — U.S.		8.50			8.50			9.50			—			—			—
— International		8.03			8.03			8.50			—			—			—
Rate of compensation increase: — U.S.		4.00			4.00			4.00			4.00			4.00			4.00
— International		3.43			3.50			3.50			4.47			4.80			4.50

For 2004, an assumed long-term rate of return of 8.5% was used for the U.S. pension plans. In developing this rate, we evaluated the compound annualized returns of our U.S. pension fund over periods of 15 years or more (through December 31, 2003). In addition, we evaluated input from our pension fund consultant on asset class return expectations and long-term inflation. For our international locations, a weighted-average assumed long-

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 13. Pension, Other Postretirement Benefit and Savings Plans (continued)

term rate of return of 7.95% was used. Input from local pension fund consultants concerning asset class return expectations and long-term inflation form the basis of this assumption.

      The following table presents estimated future benefit payments from the plans as of December 31, 2004:

	Pension Plans		Other Benefits
(In millions)
2005	$	419.3	$	303.9
2006		437.5		320.7
2007		455.0		273.7
2008		469.9		266.5
2009		496.3		260.3
2010-2014		2,789.2		1,199.4

The payments shown above for other benefits are gross of expected subsidy reimbursements under the Medicare Act. The subsidy is expected to be approximately $14 million in 2006 and approximately $1 million annually thereafter.

      The accumulated benefit obligation for all defined benefit pension plans was $7,448 million and $6,606 million at December 31, 2004 and 2003, respectively.

      For pension plans that are not fully-funded:

	2004		2003
(In millions)
Projected benefit obligation	$	7,559.2	$	6,768.7
Accumulated benefit obligation		7,303.2		6,507.6
Fair value of plan assets		4,431.6		4,020.5

Certain international subsidiaries maintain unfunded pension plans consistent with local practices and requirements. At December 31, 2004, these plans accounted for $232.7 million of our accumulated pension benefit obligation, $247.4 million of our projected pension benefit obligation and $42.5 million of our minimum pension liability adjustment ($208.3 million, $215.9 million and $22.0 million, respectively, at December 31, 2003).

      Our pension plan weighted-average asset allocation at December 31, by asset category, follows:

		2004			2003
Equity securities			64	%		69	%
Debt securities			34			30
Cash and short term securities			2			1
	Total		100	%		100	%

At December 31, 2004, we did not directly hold any of our Common Stock. At December 31, 2003, equity securities included $35.6 million (0.9% of total plan assets) of our Common Stock.

      Our pension investment policy recognizes the long-term nature of pension liabilities, the benefits of diversification across asset classes and the effects of inflation. The diversified portfolio is designed to maximize returns consistent with levels of liquidity and investment risk that are prudent and reasonable. All assets are managed externally according to guidelines we have established individually with investment managers. The manager guidelines prohibit the use of any type of investment derivative without our prior approval. Portfolio risk is controlled by having managers comply with guidelines, establishing the maximum size of any single holding in their portfolios and by using managers with different investment styles. We periodically undertake

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 13.           Pension, Other Postretirement Benefit and Savings Plans (continued)

asset and liability modeling studies to determine the appropriateness of the investments. The portfolio includes holdings of domestic, international, and private equities, global high quality and high yield fixed income securities, and short-term interest bearing deposits. The target asset allocation of the U.S. pension fund is 70% equities and 30% fixed income.

      We expect to contribute approximately $470 million to $505 million to our funded major U.S. and international pension plans in 2005.

      Assumed health care cost trend rates at December 31 follow:

	2004			2003
Health care cost trend rate assumed for the next year		12.0	%		12.5	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.0			5.0
Year that the rate reaches the ultimate trend rate		2013			2013

A 1% change in the assumed health care cost trend would have increased (decreased) the accumulated postretirement benefit obligation at December 31, 2004 and the aggregate service and interest cost for the year then ended as follows:

	1% Increase		1% Decrease
(In millions)
Accumulated postretirement benefit obligation	$	35.9	$	(31.0	)
Aggregate service and interest cost		2.8		(2.4	)

Savings Plans

Substantially all domestic employees are eligible to participate in a savings plan. The main Hourly Bargaining Plans provided for matching contributions, through April 20, 2003, (up to a maximum of 6% of the employee’s annual pay or, if less, $12,000) at the rate of 50%. We suspended the matching contributions for all participants in the main Salaried Plan effective January 1, 2003. Effective January 1, 2005, all salaried new hires in the U.S. will be eligible for a company-funded contribution into the Salaried Plan. This contribution will be 5% of their compensation up to an IRS determined compensation limit. Expenses recognized for Goodyear domestic contributions were $4.1 million, $9.8 million and $41.9 million for 2004, 2003 and 2002, respectively.

      In addition, defined contribution pension plans are available for certain foreign employees. Expenses recognized for our contributions to these plans were $13.7 million, $5.2 million and $3.8 million in 2004, 2003 and 2002, respectively. Expenses in 2004 increased from 2003 due primarily to the consolidation of SPT. Refer to Note 8.

Note 14. Income Taxes

      The components of Income (Loss) before Income Taxes, adjusted for Minority Interest in Net Income (Loss) of Subsidiaries, follow:

	2004			2003			2002
(In millions)
U.S.	$	(328.8	)	$	(1,047.8	)	$	(426.0	)
Foreign		651.5			357.5			407.0
		322.7			(690.3	)		(19.0	)
Minority Interest in Net Income (Loss) of Subsidiaries		57.8			32.8			55.6
	$	380.5		$	(657.5	)	$	36.6

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 14. Income Taxes (continued)

      A reconciliation of income taxes at the U.S. statutory rate to income taxes provided follows:

	2004			2003			2002
(In millions)
U.S. Federal income tax at the statutory rate of 35%	$	133.2		$	(230.1	)	$	12.8
Adjustment for foreign income taxed at different rates		(12.1	)		(0.3	)		(18.7	)
Valuation allowance for U.S. tax assets		—			—			1,217.7
U.S. loss with no tax benefit		97.6			358.9			—
State income taxes, net of Federal benefit		(1.2	)		(4.2	)		(4.4	)
Foreign operating loss with no tax benefit provided		45.3			35.9			5.5
Settlement of prior years’ liabilities		(46.3	)		(44.2	)		(36.4	)
Provision for repatriation of foreign earnings		(4.9	)		7.7			50.2
Other		(3.7	)		(6.6	)		1.2
United States and Foreign Taxes on Income (Loss)	$	207.9		$	117.1		$	1,227.9

The components of the provision (benefit) for income taxes by taxing jurisdiction follow:

		2004			2003			2002
(In millions)
Current:
	Federal	$	(59.7	)	$	(49.2	)	$	(46.6	)
	Foreign income and withholding taxes		273.3			180.4			150.9
	State		(1.2	)		(4.2	)		(7.6	)
			212.4			127.0			96.7
Deferred:
	Federal		(1.0	)		(7.5	)		1,027.2
	Foreign		(3.5	)		(2.4	)		(14.4	)
	State		—			—			118.4
			(4.5	)		(9.9	)		1,131.2
United States and Foreign Taxes on Income (Loss)		$	207.9		$	117.1		$	1,227.9

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 14. Income Taxes (continued)

Temporary differences and carryforwards giving rise to deferred tax assets and liabilities at December 31 follow:

		2004			2003
(In millions)
Postretirement benefits and pensions		$	1,234.8		$	1,163.9
Tax credit and operating loss carryforwards			457.3			448.9
Capitalized expenditures for tax reporting			258.5			324.7
Accrued expenses deductible as paid			276.7			250.7
Alternative minimum tax credit carryforwards			62.0			68.2
Vacation and sick pay			52.1			39.0
Rationalizations and other provisions			16.8			25.9
Other			105.0			51.1
			2,463.2			2,372.4
Valuation allowance			(2,072.0	)		(2,041.9	)
Total deferred tax assets			391.2			330.5
Tax on undistributed subsidiary earnings			(18.4	)		(22.9	)
Total deferred tax liabilities:
	— property basis differences		(481.8	)		(446.4	)
Total deferred tax assets (liabilities)		$	(109.0	)	$	(138.8	)

In the fourth quarter of 2002, we recorded a non-cash charge of $1.22 billion (as restated), ($6.95 per share (as restated) in the fourth quarter or $7.29 per share (as restated) on a year-to-date basis), to establish a valuation allowance against net Federal and state deferred tax assets. In addition, a valuation allowance of $352.9 million was established against tax benefits related to our minimum pension liability adjustment that were recorded in OCI in 2002. We intend to maintain a valuation allowance until sufficient positive evidence exists to support realization of the Federal and state deferred tax assets.

      At December 31, 2004, we had $325.6 million of tax assets for net operating loss and tax credit carryforwards related to certain international subsidiaries, some of which are subject to expiration beginning in 2005. A valuation allowance totaling $287.6 million has been recorded against these and other deferred tax assets where recovery of the asset or carryforward is uncertain. In addition, we had $131.7 million of Federal and state tax assets for net operating loss and tax credit carryforwards, some of which are subject to expiration beginning in 2005. A full valuation allowance has also been recorded against these deferred tax assets as recovery is uncertain.

      We determined in 2002 that earnings of certain international subsidiaries would no longer be permanently reinvested in working capital. Accordingly, we recorded a provision of $50.2 million in 2002 for the incremental taxes incurred or to be incurred upon inclusion of such earnings in Federal taxable income. No provision for Federal income tax or foreign withholding tax on undistributed earnings of international subsidiaries of $1.70 billion is required because the amount has been or will be reinvested in properties and plants and working capital. It is not practicable to calculate the deferred taxes associated with the remittance of these investments.

      The American Job Creation Act of 2004 was signed into law in October 2004 and replaces an export incentive with a deduction from domestic manufacturing income. As we are both an exporter and a domestic manufacturer and in a U.S. tax loss position, this change should not have a material impact on our income tax

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Note 14. Income Taxes (continued)

provision. It also provides for a special one-time tax deduction of 85% of certain foreign earnings that are repatriated no later than 2005. We have started an evaluation of the effects of the repatriation provision. We do not anticipate that the repatriation of foreign earnings under the Act would provide an overall tax benefit to us. However, we do not expect to be able to complete this evaluation until our 2005 tax position has been more precisely determined and the U.S. Congress or the U.S. Treasury Department provide additional guidance on certain of the Act’s provisions. Any repatriation of earnings under the Act is not expected to have a material impact on our results of operations, financial position or liquidity.

      Net cash payments for income taxes were $201.3 million, $73.0 million and $125.9 million in 2004, 2003 and 2002, respectively.

Note 15. Interest Expense

Interest expense includes interest and amortization of debt discounts, less amounts capitalized as follows:

							Restated
	2004			2003			2002
(In millions)
Interest expense before capitalization	$	375.5		$	304.3		$	249.9
Capitalized interest		(6.7	)		(8.0	)		(7.2	)
	$	368.8		$	296.3		$	242.7

Cash payments for interest were $356.5 million, $282.5 million (as restated) and $259.7 million (as restated) in 2004, 2003 and 2002, respectively.

Note 16. Research and Development

Research and development expenditures were $378.2 million, $351.0 million (as restated) and $386.5 million (as restated) in 2004, 2003 and 2002, respectively, and were expensed as incurred.

Note 17. Advertising Costs

Advertising costs, including costs for our cooperative advertising programs with dealers and franchisees, were $383.5 million, $331.3 million and $281.4 million in 2004, 2003 and 2002, respectively.

Note 18. Business Segments

Segment information reflects our strategic business units (SBUs), which are organized to meet customer requirements and global competition.

      The Tire business is comprised of five regional SBUs. Engineered Products and Chemical Products are each managed on a global basis. Segment information is reported on the basis used for reporting to our Chairman of the Board, Chief Executive Officer and President.

      Each of the five regional tire business segments is involved in the development, manufacture, distribution and sale of tires. Certain of the tire business segments also provide related products and services, which include retreads, automotive repair services and merchandise purchased for resale.

      North American Tire provides original equipment and replacement tires for autos, motorcycles, trucks, farm, aircraft and construction applications in the United States, Canada and export markets. North American Tire also provides related products and services including tread rubber, tubes, retreaded tires, automotive repair services and merchandise purchased for resale. North American Tire information in 2004 includes T&WA, which was consolidated effective January 1, 2004 pursuant to FIN 46. Refer to Note 8.

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Note 18. Business Segments (continued)

      European Union Tire provides original equipment and replacement tires for autos, motorcycles, trucks, farm and construction applications in Western Europe and export markets. European Union Tire also retreads truck and aircraft tires.

      Eastern Europe, Middle East and Africa Tire provides original equipment and replacement tires for autos, trucks, farm, bicycle, construction and mining applications in Eastern Europe, the Middle East, Africa and export markets.

      Latin American Tire provides original equipment and replacement tires for autos, trucks, tractors, aircraft and construction applications in Central and South America, Mexico and export markets. Latin American Tire also manufactures materials for tire retreading.

      Asia/ Pacific Tire provides original equipment and replacement tires for autos, trucks, farm, aircraft and construction applications in Asia, the Pacific and export markets. Asia/ Pacific Tire also retreads aircraft tires. Asia/ Pacific Tire information in 2004 includes SPT, which was consolidated effective January 1, 2004 pursuant to FIN 46. Refer to Note 8.

      Engineered Products develops, manufactures and sells belts, hoses, molded products, airsprings, tank tracks and other products for original equipment and replacement transportation applications and industrial markets worldwide.

      Chemical Products develops, manufactures and sells synthetic rubber and rubber latices, synthetic resins, and other organic chemical products for internal and external customers worldwide. Chemical Products also engages in natural rubber purchasing operations and, through 2004, plantation operations.

      As part of our continuing effort to divest non-core businesses, in November 2004 we entered into an agreement to sell our natural rubber plantations in Indonesia for approximately $65 million, pending government approvals. Other (Income) and Expense in 2004 included a loss of $14.5 million ($15.6 million after tax) on the write-down of these assets, due primarily to the devaluation of the Indonesian rupiah versus the U.S. dollar over the years we held the investment. At December 31, 2004, the plantations were classified as held for sale and accordingly, the assets and liabilities were reclassified on the Consolidated Balance Sheet. Assets held for sale were included in Prepaid expenses and other current assets and totaled $33.6 million. Liabilities held for sale were included in Other current liabilities and totaled $16.3 million.

      Effective January 1, 2005, we integrated our Chemical Products business segment into our North American Tire business segment. The integration will not affect net income. During 2004, $818.6 million, or 53.4%, of Chemical Products’ sales and 75.2% of its segment operating income resulted from intercompany transactions. Beginning with the first quarter of 2005, our total segment sales will no longer reflect these intercompany sales. In addition, the segment operating income previously attributable to Chemical Products’ intercompany transactions will no longer be included in the total segment operating income that we report.

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Note 18. Business Segments (continued)

The following table presents segment sales and operating income, and the reconciliation of segment operating income to Income (Loss) before Income Taxes:

						Restated
			2004			2003			2002
(In millions)
Net Sales
	North American Tire		$	7,854.6		$	6,745.6		$	6,703.0
	European Union Tire			4,476.2			3,921.5			3,319.4
	Eastern Europe, Middle East and Africa Tire			1,279.0			1,073.4			807.1
	Latin American Tire			1,245.4			1,041.0			947.7
	Asia/ Pacific Tire			1,312.0			581.8			531.3
		Total Tires		16,167.2			13,363.3			12,308.5
	Engineered Products			1,470.3			1,203.7			1,126.3
	Chemical Products			1,532.6			1,220.8			940.2
		Total Segment Sales		19,170.1			15,787.8			14,375.0
	Inter-SBU Sales			(818.6	)		(687.2	)		(545.5	)
	Other			18.9			21.5			26.5
			$	18,370.4		$	15,122.1		$	13,856.0

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Note 18. Business Segments (continued)

						Restated
			2004			2003			2002
(In millions)
Segment Operating Income
	North American Tire		$	31.5		$	(130.9	)	$	(58.1	)
	European Union Tire			252.7			129.8			101.1
	Eastern Europe, Middle East and Africa Tire			193.8			146.6			93.2
	Latin American Tire			251.2			148.6			107.6
	Asia/ Pacific Tire			61.1			49.9			43.7
		Total Tires		790.3			344.0			287.5
	Engineered Products			113.2			46.8			39.0
	Chemical Products			177.0			120.2			88.2
		Total Segment Operating Income		1,080.5			511.0			414.7
	Rationalizations and asset sales			(59.8	)		(316.6	)		22.5
	Accelerated depreciation, asset impairment and asset write-offs			(10.4	)		(132.8	)		—
	Interest expense			(368.8	)		(296.3	)		(242.7	)
	Foreign currency exchange			(23.4	)		(40.7	)		8.7
	Minority interest in net (income) loss of subsidiaries			(57.8	)		(32.8	)		(55.6	)
	Inter-SBU income			(132.8	)		(87.7	)		(54.7	)
	Financing fees and financial instruments			(116.5	)		(99.4	)		(48.4	)
	Equity in earnings (losses) of corporate affiliates			1.0			(18.3	)		(15.7	)
	General and product liability — discontinued products			(52.7	)		(138.1	)		(33.8	)
	Expenses for fire loss deductibles			(11.7	)		—			—
	Professional fees associated with the restatement			(30.2	)		(6.3	)		—
	Professional fees associated with Sarbanes-Oxley			(18.2	)		(0.1	)		—
	Expenses for environmental remediation at non-operating sites			(11.7	)		—			(8.3	)
	Environmental insurance settlement			156.6			—			—
	Other			(21.4	)		(32.2	)		(5.7	)
		Income (Loss) before Income Taxes	$	322.7		$	(690.3	)	$	(19.0	)

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Note 18. Business Segments (continued)

The following table presents segment assets at December 31:

					Restated
			2004		2003
(In millions)
Assets
	North American Tire		$	5,091.4	$	5,939.3
	European Union Tire			4,264.0		4,001.9
	Eastern Europe, Middle East and Africa Tire			1,315.1		1,102.7
	Latin American Tire			845.6		710.0
	Asia/ Pacific Tire			1,153.8		669.5
		Total Tires		12,669.9		12,423.4
	Engineered Products			764.7		680.5
	Chemical Products			650.3		632.4
		Total Segment Assets		14,084.9		13,736.3
	Corporate			2,448.4		964.8
			$	16,533.3	$	14,701.1

Results of operations in the Tire and Engineered Products segments were measured based on net sales to unaffiliated customers and segment operating income. Results of operations of Chemical Products were measured based on net sales (including sales to other SBUs) and segment operating income. Segment operating income included transfers to other SBUs. Segment operating income was computed as follows: Net Sales less CGS (excluding accelerated depreciation charges, asset impairment charges and asset writeoffs) and SAG (including certain allocated corporate administrative expenses). Segment operating income also included equity in (earnings) losses of most unconsolidated affiliates. Equity in (earnings) loss of certain unconsolidated affiliates, including SPT (in 2003 and 2002) and Rubbernetwork.com, was not included in segment operating income. Segment operating income did not include rationalization charges (credits) and certain other items. Inter-SBU sales by Chemical Products were at a formulated price or market. Purchases from Chemical Products were included in the purchasing SBU’s segment operating income at Chemical Products cost. Segment assets included those assets under the management of the SBU.

      Effective January 1, 2004, we consolidated our investment in South Pacific Tyres into Asia/ Pacific Tire and our investment in Tire & Wheels Assemblies into North American Tire pursuant to the provisions of FIN 46. For 2003, results of operations of SPT and T&WA were not reported in segment results, but were reflected in our Consolidated Statement of Income using the equity method.

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Note 18. Business Segments (continued)

      The following table presents segment investments in and advances to affiliates at December 31:

					Restated
			2004		2003
(In millions)
Investments in and Advances to Affiliates
	North American Tire		$	13.8	$	57.8
	European Union Tire			2.3		13.2
	Eastern Europe, Middle East and Africa			3.1		2.3
	Asia/ Pacific Tire			15.3		11.2
		Total Segment Investments in and Advances to Affiliates		34.5		84.5
	Corporate			0.4		99.7
			$	34.9	$	184.2

The following table presents 100% of the sales and operating income (loss) of SPT for 2003 and 2002:

	2003		2002
(In millions)
Net Sales	$	640.3	$	523.4
Operating Income (Loss)		8.4		(0.5	)

SPT operating income (loss) did not include net rationalization charges (credits) of approximately $8.7 million in 2003 and $3.2 million in 2002. SPT debt totaled $255.2 million at December 31, 2003, of which $72.0 million was payable to Goodyear. Refer to Note 23.

      The following table presents geographic information. Net sales by country were determined based on the location of the selling subsidiary. Long-lived assets consisted primarily of properties and plants, deferred charges and other miscellaneous assets. Management did not consider the net sales or long-lived assets of individual countries outside the United States to be significant to the consolidated financial statements.

				Restated
		2004		2003		2002
(In millions)
Net Sales
	United States	$	8,477.0	$	7,212.3	$	7,144.3
	International		9,893.4		7,909.8		6,711.7
		$	18,370.4	$	15,122.1	$	13,856.0
Long-Lived Assets
	United States	$	3,046.5	$	3,148.2
	International		3,524.5		3,225.7
		$	6,571.0	$	6,373.9

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Note 18. Business Segments (continued)

Portions of the items described in Note 3, Rationalizations, and Note 4, Other (Income) and Expense, were not charged (credited) to the SBUs for performance evaluation purposes but were attributable to the SBUs as follows:

						Restated
			2004			2003			2002
(In millions)
Rationalizations
	North American Tire		$	3.5		$	191.9		$	(1.9	)
	European Union Tire			23.1			54.3			(0.4	)
	Eastern Europe, Middle East and Africa Tire			3.6			(0.1	)		(0.4	)
	Latin American Tire			(1.7	)		10.0			—
	Asia/ Pacific Tire			—			—			(1.7	)
		Total Tires		28.5			256.1			(4.4	)
	Engineered Products			22.8			29.4			4.6
	Chemical Products			4.9			—			—
		Total Segment Rationalizations		56.2			285.5			0.2
	Corporate			(0.6	)		6.0			5.3
			$	55.6		$	291.5		$	5.5

Other (Income) and Expense
	North American Tire		$	(1.3	)	$	3.8		$	4.1
	European Union Tire			(6.2	)		1.5			(13.7	)
	Eastern Europe, Middle East and Africa Tire			0.1			—			—
	Latin American Tire			—			(2.0	)		(13.7	)
	Asia/ Pacific Tire			—			(2.1	)		—
		Total Tires		(7.4	)		1.2			(23.3	)
	Engineered Products			(2.5	)		6.3			(0.6	)
	Chemical Products			14.5			—			—
		Total Segment Other (Income) and Expense		4.6			7.5			(23.9	)
	Corporate			3.6			255.9			80.7
			$	8.2		$	263.4		$	56.8

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 18. Business Segments (continued)

The following table presents segment capital expenditures, depreciation and amortization:

					Restated
			2004		2003		2003
(In millions)
Capital Expenditures
	North American Tire		$	156.0	$	131.0	$	229.2
	European Union Tire			111.6		84.5		84.8
	Eastern Europe, Middle East and Africa Tire			56.4		31.7		20.2
	Latin American Tire			64.6		35.3		19.3
	Asia/ Pacific Tire			66.6		48.7		30.2
		Total Tires		455.2		331.2		383.7
	Engineered Products			28.1		16.8		21.3
	Chemical Products			15.2		13.0		21.3
		Total Segment Capital Expenditures		498.5		361.0		426.3
	Corporate			20.1		14.4		31.8
			$	518.6	$	375.4	$	458.1

					Restated
Depreciation and Amortization
	North American Tire		$	272.0	$	279.9	$	275.0
	European Union Tire			129.7		120.4		119.6
	Eastern Europe, Middle East and Africa Tire			45.8		44.1		44.2
	Latin American Tire			24.3		19.6		23.4
	Asia/ Pacific Tire			51.6		30.9		29.5
		Total Tires		523.4		494.9		491.7
	Engineered Products			32.9		39.1		33.1
	Chemical Products			31.3		33.8		35.0
		Total Segment Depreciation and Amortization		587.6		567.8		559.8
	Corporate			41.1		123.8		45.5
			$	628.7	$	691.6	$	605.3

Note 19. Accumulated Other Comprehensive Income (Loss)

The components of Accumulated Other Comprehensive Income (Loss) follow:

				Restated
	2004			2003
(In millions)
Foreign currency translation adjustment	$	(758.3	)	$	(1,011.5	)
Minimum pension liability adjustment		(1,829.0	)		(1,545.2	)
Unrealized investment gain (loss)		17.0			3.6
Deferred derivative gain (loss)		5.8			0.3
	$	(2,564.5	)	$	(2,552.8	)

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Note 20. Commitments and Contingent Liabilities

At December 31, 2004, we had binding commitments for raw materials and investments in land, buildings and equipment of $755.9 million and off-balance-sheet financial guarantees written and other commitments totaling $18.2 million.

Warranty

At December 31, 2004 and 2003, we had recorded, in Other current liabilities, $15.6 million and $12.4 million, respectively, for potential claims under warranties offered by us. Tire replacement under most of the warranties we offer is on a prorated basis. Warranty reserves are based on past claims experience, sales history and other considerations. The amount of our ultimate liability in respect of these matters may differ from these estimates.

      The following table presents changes in the warranty reserve during 2004 and 2003:

		2004			2003
(In millions)
Balance at January 1		$	12.4		$	11.0
	Payments made during the period		(20.6	)		(17.0	)
	Expense recorded during the period		23.8			18.4
Balance at December 31		$	15.6		$	12.4

Environmental Matters

We had recorded liabilities totaling $39.5 million at December 31, 2004 and $32.6 million (as restated) at December 31, 2003 for anticipated costs related to various environmental matters, primarily the remediation of numerous waste disposal sites and certain properties sold by us. Of these amounts, $8.5 million and $7.5 million (as restated) were included in Other current liabilities at December 31, 2004 and December 31, 2003, respectively. The costs include:

•  legal and consulting fees,

•  site studies,

•  the design and implementation of remediation plans, and

•  post-remediation monitoring and related activities.

      These costs will be paid over several years. The amount of our ultimate liability in respect of these matters may be affected by several uncertainties, primarily the ultimate cost of required remediation and the extent to which other responsible parties contribute. During 2004, we reached a settlement with certain insurance companies under which we will receive approximately $159 million in installments during 2005 and 2006 in exchange for our releasing the insurers from certain past, present and future environmental claims. A significant portion of the costs incurred by us related to these claims had been recorded in prior years.

Workers’ Compensation

      We had recorded liabilities, on a discounted basis, totaling $230.7 million and $195.7 million (as restated) for anticipated costs related to workers’ compensation at December 31, 2004 and December 31, 2003, respectively. Of these amounts, $99.3 million and $112.6 million (as restated) were included in Current Liabilities as part of Compensation and benefits at December 31, 2004 and December 31, 2003, respectively. The costs include an estimate of expected settlements on pending claims, defense costs and a provision for claims incurred but not reported. These estimates are based on our assessment of potential liability using an

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Note 20. Commitments and Contingent Liabilities (continued)

analysis of available information with respect to pending claims, historical experience, and current cost trends. The amount of our ultimate liability in respect of these matters may differ from these estimates. We periodically update our loss development factors based on actuarial analyses. The increase in the liability from 2003 to 2004 was due primarily to an increase in reserves for existing claims, reflecting revised estimates of our ultimate liability in these cases, and updated actuarial assumptions related to unasserted claims. At December 31, 2004, the liability was discounted using the risk-free rate of return.

General and Product Liability and Other Litigation

We had recorded liabilities totaling $549.4 million at December 31, 2004 and $495.3 million (as restated) at December 31, 2003 for potential product liability and other tort claims, including related legal fees expected to be incurred. Of these amounts, $114.5 million and $147.4 million (as restated) were included in Other current liabilities at December 31, 2004 and 2003, respectively. The amounts recorded were estimated based on an assessment of potential liability using an analysis of available information with respect to pending claims, historical experience and, where available, recent and current trends. We had recorded insurance receivables for potential product liability and other tort claims of $116.9 million at December 31, 2004 and $210.2 million (as restated) at December 31, 2003. Of these amounts, $14.2 million and $91.5 million (as restated) were included in Current Assets as part of Accounts and notes receivable at December 31, 2004 and December 31, 2003, respectively.

Asbestos. We are a defendant in numerous lawsuits alleging various asbestos-related personal injuries purported to result from alleged exposure to asbestos in certain rubber encapsulated products or aircraft braking systems manufactured by us in the past, or to asbestos in certain of our facilities. Typically, these lawsuits have been brought against multiple defendants in state and Federal courts. To date, we have disposed of approximately 26,600 cases by defending and obtaining the dismissal thereof or by entering into a settlement. The sum of our accrued asbestos-related liability and gross payments to date, including legal costs, totaled $226.3 million through December 31, 2004, compared to $211.7 million (as restated) at December 31, 2003.

      A summary of approximate asbestos claims activity in recent years follows. Because claims are often filed and disposed of by dismissal or settlement in large numbers, the amount and timing of settlements and the number of open claims during a particular period can fluctuate significantly from period to period.

	2004			2003			2002
(Dollars in millions)
Pending claims, beginning of year		118,000			99,700			64,200
New claims filed during the year		12,700			26,700			38,900
Claims settled/dismissed during the year		(3,400	)		(8,400	)		(3,400	)
Pending claims, end of year		127,300			118,000			99,700
Payments (1)	$	29.9		$	29.6		$	18.8

(1)  Represents amount spent by Goodyear and its insurers on asbestos litigation defense and claim resolution.

Beginning with the preparation of our 2003 financial statements, we engaged an independent asbestos valuation firm to:

•  review our existing reserves for pending claims,

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Note 20. Commitments and Contingent Liabilities (continued)

•  determine whether or not we could make a reasonable estimate of the liability associated with unasserted asbestos claims, and

•  review our method of determining our receivables from probable insurance recoveries.

      Prior to the fourth quarter of 2003, our estimate for asbestos liability was based upon a review of the various characteristics of the pending claims by an experienced asbestos counsel. In addition, at that time we did not have an accrual for unasserted claims, as sufficient information was deemed to be not available to reliably estimate such an obligation prior to the fourth quarter of 2003. The valuation firm further confirmed this conclusion. The available information was deemed to be sufficient to begin reliably estimating an accrual for unasserted claims as of December 31, 2003.

      After reviewing our recent settlement history by jurisdiction, law firm, disease type and alleged date of first exposure, the valuation firm cited two primary reasons for us to refine our valuation assumptions. First, in calculating our estimated liability, the valuation firm determined that we had previously assumed that we would resolve more claims in the foreseeable future than is likely based on our historical record and nationwide trends. As a result, we now assume that a smaller percentage of pending claims will be resolved within the predictable future. Second, the valuation firm determined that it was not possible to estimate a liability for as many non-malignancy claims as we had done in the past. As a result, our current estimated liability includes fewer liabilities associated with non-malignancy claims than were included prior to December 2003.

      We had recorded liabilities for both asserted and unasserted claims, inclusive of defense costs, totaling $119.3 million at December 31, 2004 and $134.7 million (as restated) at December 31, 2003. The recorded liability represents our estimated liability through 2008, which represents the period over which the liability can be reasonably estimated. Due to the difficulties in making these estimates, analysis based on new data and/or changed circumstances arising in the future could result in an increase in the recorded obligation in an amount that cannot be reasonably estimated, and that increase could be significant. The portion of the liability associated with unasserted asbestos claims was $37.9 million at December 31, 2004 and $54.4 million (as restated) at December 31, 2003. At December 31, 2004, our liability with respect to asserted claims and related defense costs was $81.4 million, compared to $80.3 million (as restated) at December 31, 2003.

      We maintain primary insurance coverage under coverage-in-place agreements as well as excess liability insurance with respect to asbestos liabilities. We record a receivable with respect to such policies when we determine that recovery is probable and we can reasonably estimate the amount of a particular recovery.

      Prior to 2003, we did not record a receivable for expected recoveries from excess carriers in respect of asbestos related matters. We have instituted coverage actions against certain of these excess carriers. After consultation with our outside legal counsel and giving consideration to relevant factors including the ongoing legal proceedings with certain of our excess coverage insurance carriers, their financial viability, their legal obligations and other pertinent facts, we determined an amount we expect is probable of recovery from such carriers. Accordingly, we recorded a receivable during 2003, which represents an estimate of recovery from our excess coverage insurance carriers relating to potential asbestos related liabilities.

      The valuation firm also reviewed our method of valuing receivables recorded for probable insurance recoveries. Based upon the model employed by the valuation firm, as of December 31, 2004, (i) we had recorded a receivable related to asbestos claims of $107.8 million, compared to $121.3 million (as restated) at December 31, 2003, and (ii) we expect that approximately 90% of asbestos claim related losses would be recoverable up to our accessible policy limits through the period covered by the estimated liability. The receivable recorded consists of an amount we expect to collect under coverage-in-place agreements with certain primary carriers as well as an amount we believe is probable of recovery from certain of our excess

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 20.           Commitments and Contingent Liabilities (continued)

coverage insurance carriers. Of this amount, $9.4 million and $11.8 million (as restated) was included in Current Assets as part of Accounts and notes receivable at December 31, 2004 and 2003, respectively.

      We believe that at December 31, 2004, we had at least $260 million in aggregate limits of excess level policies potentially applicable to indemnity payments for asbestos products claims in addition to limits of available primary insurance policies. Some of these excess policies provide for payment of defense costs in addition to indemnity limits. A portion of the availability of the excess level policies is included in the $107.8 million insurance receivable recorded at December 31, 2004. We also had approximately $23 million in aggregate limits for products claims as well as coverage for premise claims on a per occurrence basis and defense costs available with its primary insurance carriers through coverage-in-place agreements at December 31, 2004.

      We believe that our reserve for asbestos claims, and the insurance asset recorded in respect of these claims, reflects reasonable and probable estimates of these amounts, subject to the exclusion of claims for which it is not feasible to make reasonable estimates. The estimate of the assets and liabilities related to pending and expected future asbestos claims and insurance recoveries is subject to numerous uncertainties, including, but not limited to, changes in:

•  the litigation environment,

•  federal and state law governing the compensation of asbestos claimants,

•  our approach to defending and resolving claims, and

•  the level of payments made to claimants from other sources, including other defendants.

      As a result, with respect to both asserted and unasserted claims, it is reasonably possible that we may incur a material amount of cost in excess of the current reserve, however such amount cannot be reasonably estimated. Coverage under insurance policies is subject to varying characteristics of asbestos claims including, but not limited to, the type of claim (premise vs. product exposure), alleged date of first exposure to our products or premises and disease alleged. Depending upon the nature of these characteristics, as well as the resolution of certain legal issues, some portion of the insurance may not be accessible by us.

Heatway (Entran II). On June 4, 2004, we entered into an amended settlement agreement that was intended to address the claims arising out of a number of Federal, state and Canadian actions filed against us involving a rubber hose product, Entran II. We supplied Entran II from 1989 to 1993 to Chiles Power Supply, Inc. (d/b/a Heatway Systems), a designer and seller of hydronic radiant heating systems in the United States. Heating systems using Entran II are typically attached or embedded in either indoor flooring or outdoor pavement, and use Entran II hose as a conduit to circulate warm fluid as a source of heat. We had recorded liabilities related to Entran II claims totaling $307.2 million at December 31, 2004 and $246.1 million at December 31, 2003.

      On October 19, 2004, the amended settlement received court approval. As a result, we will make annual cash contributions to a settlement fund of $60 million, $40 million, $15 million, $15 million and $20 million in 2004, 2005, 2006, 2007 and 2008, respectively. In addition to these annual payments, we contributed approximately $170 million received from insurance contributions to a settlement fund pursuant to the terms of the settlement agreement. We do not expect to receive any additional insurance reimbursements for Entran II related matters. In November 2004, we made our first annual cash contribution, approximately $60 million, to the settlement fund.

      Approximately 57 sites have been opted out of the amended settlement. There are three state court actions filed against us involving approximately 17 of these sites and additional actions may be filed against us in the future. Although any liability resulting from the opt outs will not be covered by the amended settlement,

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 20. Commitments and Contingent Liabilities (continued)

we will be entitled to assert a proxy claim against the settlement fund for the payment such claimant would have been entitled to under the amended settlement.

      In addition to the sites that have been opted out of the amended settlement, any liability related to five actions in which we have received adverse judgments also will not be covered by the amended settlement. With respect to two of these matters, however, we will be entitled to assert a proxy claim against the settlement fund for amounts (if any) paid to plaintiffs in these actions. Our recorded liabilities related to these five claims totaled $48.5 million at December 31, 2004.

      The ultimate cost of disposing of Entran II claims is dependent upon a number of factors, including our ability to resolve claims not subject to the amended settlement (including the cases in which we have received adverse judgments) and whether or not claimants opting out of the amendment settlement pursue claims against us in the future.

Other Actions. We are currently a party to various claims and legal proceedings in addition to those noted above. If management believes that a loss arising from these matters is probable and can reasonably be estimated, we record the amount of the loss, or the minimum estimated liability when the loss is estimated using a range and when no point within the range is more probable than another. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Based on currently available information, management believes that the ultimate outcome of these matters, individually and in the aggregate, will not have a material adverse effect on our financial position or overall trends in results of operations. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages or an injunction prohibiting us from selling one or more products. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which the ruling occurs, or future periods.

Tax Matters

      The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We also recognize tax benefits to the extent that it is probable that our positions will be sustained when challenged by the taxing authorities. As of December 31, 2004 we had not recognized tax benefits of approximately $180 million relating to the reorganization of legal entities in 2001. Pursuant to the reorganization, our tax payments have been reduced by approximately $67 million through December 31, 2004. Should the ultimate outcome be unfavorable, we would be required to make a cash payment for all tax reductions claimed as of that date.

Guarantees

We are a party to various agreements under which we have undertaken obligations resulting from the issuance of certain guarantees. Guarantees have been issued on behalf of our affiliates or our customers. Normally there is no separate premium received by us as consideration for the issuance of guarantees. Our performance under these guarantees would normally be triggered by the occurrence of one or more events as provided in the specific agreements. Collateral and recourse provisions available to us under these agreements were not significant.

Customer Financing. In the normal course of business, we will from time to time issue guarantees to financial institutions on behalf of our customers. We normally issue these guarantees in connection with the

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 20. Commitments and Contingent Liabilities (continued)

arrangement of financing by the customer. We generally do not require collateral in connection with the issuance of these guarantees. In the event of non-payment by a customer, we would be obligated to make payment to the financial institution, and would typically have recourse to the assets of that customer. At December 31, 2004, we had guarantees outstanding under which the maximum potential amount of payments totaled $7.5 million, and which expire at various times through 2012. We cannot estimate the extent to which the customers’ assets, in the aggregate, would be adequate to recover the maximum amount of potential payments. There were no recorded liabilities associated with these guarantees on the Consolidated Balance Sheet at December 31, 2004 or 2003.

Affiliate Financing. We will from time to time issue guarantees to financial institutions on behalf of certain of our affiliates, which are accounted for using the equity method. The financing arrangements of the affiliates may be for either working capital or capital expenditures. We generally do not require collateral in connection with the issuance of these guarantees. In the event of non-payment by an affiliate, we are obligated to make payment to the financial institution, and will typically have recourse to the assets of that affiliate. At December 31, 2004, we had guarantees outstanding under which the maximum potential amount of payments totaled $9.8 million, and which expire at various times through 2007. We are unable to estimate the extent to which the affiliates’ assets would be adequate to recover the maximum amount of potential payments with that affiliate.

Employee Guarantees. We will from time to time issue guarantees to financial institutions or other companies on behalf of certain employees or associates that are relocated to international operations. At December 31, 2004, we had guarantees outstanding under which the maximum potential amount of payments totaled $0.9 million.

Indemnifications. At December 31, 2004, we were a party to various agreements under which we had assumed obligations to indemnify the counterparties from certain potential claims and losses. These agreements typically involve standard commercial activities undertaken by us in the normal course of business; the sale of our assets; the formation of joint venture businesses to which we have contributed assets in exchange for ownership interests; and other financial transactions. Indemnifications provided by us pursuant to these agreements relate to various matters including, among other things, environmental, tax and shareholder matters; intellectual property rights; government regulations and employment-related matters; and dealer, supplier and other commercial matters.

      Certain indemnifications expire from time to time, and certain other indemnifications are not subject to an expiration date. In addition, our potential liability under certain indemnifications is subject to maximum caps, while other indemnifications are not subject to caps. Although we have been subject to indemnification claims in the past, we cannot reasonably estimate the number, type and size of indemnification claims that may arise in the future. Due to these and other uncertainties associated with the indemnifications, our maximum exposure to loss under these agreements cannot be estimated.

      We have determined that there are no guarantees other than liabilities for which amounts are already recorded or reserved in our financial statements under which it is probable that we have incurred a liability.

Note 21. Preferred Stock Purchase Rights Plan

On February 3, 2004, the Company’s Board of Directors approved an amendment to the Rights Agreement to change the final expiration date of the Rights Agreement from July 26, 2006 to June 1, 2004. As a result, the preferred stock purchase rights granted under the Rights Agreement expired at the close of business on June 1, 2004.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 22. Future Liquidity Requirements

At December 31, 2004, we had $1.97 billion in cash and cash equivalents, of which $1.02 billion was held in the United States and $415.6 million was in accounts of GDTE. The remaining amounts were held in our other non-U.S. operations. Our ability to move cash and cash equivalents among our various operating locations is subject to the operating needs of the operating locations as well as restrictions imposed by local laws and applicable credit facility agreements. At December 31, 2004, approximately $219.9 million of cash was held in locations where significant tax or legal impediments would make it difficult or costly to execute monetary transfers. Unused availability under our various credit agreements totaled approximately $1.12 billion at December 31, 2004. Based upon our projected operating results, we expect that cash flow from operations, together with amounts available under our primary credit facilities and other sources of liquidity, will be adequate to meet our anticipated liquidity requirements through December 31, 2005 (including working capital, debt service, pension funding and capital expenditures).

      The aggregate amount of long-term debt maturing in calendar years 2005 and 2006 is approximately $1.01 billion and $1.92 billion, respectively. Included in the amount for 2005 is $400.0 million related to our primary European credit facilities maturing on April 30, 2005 and our €400 million 6.375% Euro Notes due June 2005 (equivalent to approximately $542 million at December 31, 2004). In March 2006, $1.45 billion related to our asset-based facilities matures, and the $250 million 6⁵/8% Senior Notes are due in December 2006. On February 23, 2005 we announced that we intend to refinance approximately $3.3 billion of our credit facilities. These include:

•  a $1.3 billion asset-based credit facility, due March 31, 2006,

•  a $650 million asset-based term loan, due March 31, 2006,

•  a $680 million deposit funded credit facility, due September 30, 2007, and

•  $650 million in credit facilities for our Goodyear Dunlop Tires Europe B.V. affiliate, due April 30, 2005.

      We expect to replace these facilities with $3.35 billion in new five-year facilities that will be due in 2010 and include:

•  a $1.5 billion asset-based credit facility,

•  a $1.2 billion second lien term loan, and

•  the Euro equivalent of $650 million in credit facilities for Goodyear Dunlop Tires Europe B.V.

      These transactions are subject to market conditions and the execution of definitive documentation and are expected to close in April 2005. We expect to record pretax charges of approximately $40 million for the write-off of unamortized costs related to the replaced facilities, and the costs of refinancing could be significant. Failure to refinance the European credit facilities or asset-based facilities before they mature could have a material adverse affect on our liquidity. In order to ensure that our future liquidity requirements are addressed, we plan to seek additional financing in the capital markets. Because of our debt ratings, operating performance over the past few years and other factors, access to the capital markets cannot be assured.

      Our ongoing ability to access the capital markets is also dependent on the degree of success we have implementing our North American Tire turnaround strategy. Successful implementation of the turnaround strategy is also crucial to ensuring that we have sufficient cash flow from operations to meet our obligations. While we made progress in implementing the turnaround strategy in 2004, there is no assurance that our progress will continue, or that we will be able to sustain any future progress to a degree sufficient to maintain access to capital markets and meet liquidity requirements. As a result, failure to complete the turnaround

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 22. Future Liquidity Requirements (continued)

strategy successfully could have a material adverse effect on our financial position, results of operations and liquidity.

      Future liquidity requirements also may make it necessary for us to incur additional debt. However, a substantial portion of our assets is already subject to liens securing our indebtedness. As a result, we are limited in our ability to pledge our remaining assets as security for additional secured indebtedness. In addition, unless we sustain or improve our financial performance, our ability to raise unsecured debt may be limited.

      In addition to maturing debt, we are required to make contributions to our domestic defined benefit pension plans. These contributions are required under the minimum funding requirements of the Employee Retirement Income Security Act (“ERISA”). Although subject to change, we expect to be required by ERISA to make contributions to our domestic pension plans of approximately $400 million to $425 million in 2005. At the end of 2005, the current interest rate relief measures used for pension funding calculations expire. If current measures are extended, we estimate that required contributions in 2006 will be in the range of $600 million to $650 million. If new legislation is not enacted, the interest rate used for 2006 and beyond will be based upon a 30-year U.S. Treasury bond rate, as calculated and published by the U.S. government as a proxy for the rate that could be attained if 30-year Treasury bonds were currently being issued. Using an estimate of these rates would result in estimated required contributions during 2006 in the range of $725 million to $775 million. The assumptions used to develop these estimates are described in the Commitments and Contingencies in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Form 10-K for the year ended December 31, 2004. We are not able to reasonably estimate our future required contributions beyond 2006. Nevertheless, we expect that the amount of contributions required in years beyond 2006 will be substantial. In 2005, in addition to required domestic plan contributions, we expect to contribute approximately $70 million to our funded international pension plans.

      Our postretirement benefit plans will require amounts to cover benefit payments in the future. Benefit payments are expected to be approximately $304 million in 2005, $321 million in 2006 and $274 million in 2007. These estimates are based upon the plan provisions currently in effect. Ultimate payments are expected to be $2.6 billion as calculated on December 31, 2004. The majority of these payments would be made more than five years hence. The estimated payments do not include an estimated reduction in our obligations totaling approximately $475 million to $525 million resulting from the provisions of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

      Pursuant to an agreement entered into in 2001, Ansell Ltd. (Ansell), our joint venture partner in South Pacific Tyres (SPT), has the right, during the period beginning August 2005 and ending one year later, to require Goodyear to purchase Ansell’s 50% interest in SPT. The purchase price is a formula price based on the earnings of SPT, subject to various adjustments. If Ansell does not exercise its right, we may require Ansell to sell its interest to us during the 180 days following the expiration of Ansell’s right at a price established using the same formula.

      We are subject to various legal proceedings, including those described in Note 20. In the event we wish to appeal any future adverse judgment in any proceeding, we would be required to post an appeal bond with the relevant court. If we do not have sufficient availability under our U.S. deposit-funded credit facility to issue a letter of credit to support an appeal bond, we may be required to (i) pay down borrowings under the facility in order to increase the amount available for issuing letters of credit, or (ii) deposit cash collateral in order to stay the enforcement of the judgment pending an appeal. A significant deposit of cash collateral may have a material adverse effect on our liquidity.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 22. Future Liquidity Requirements (continued)

      A substantial portion of our borrowings is at variable rates of interest and exposes us to interest rate risk. If interest rates rise, our debt service obligations would increase. An unanticipated significant rise in interest rates could have a material adverse effect on our liquidity in future periods.

Note 23. Investments in Unconsolidated Affiliates

At December 31, 2004, we had a number of investments in entities that engaged in the manufacture, distribution and sale of tires and tire related products and services. In addition, we had an investment in a rubber purchasing consortium, Rubbernetwork.com (RNC). Effective January 1, 2004, South Pacific Tyres (SPT) and Tire & Wheels Assemblies, Inc. (T&WA) were consolidated pursuant to FIN 46. Refer to Note 8. The other investments continued to be accounted for under the equity method.

      Investments in and Advances to Affiliates at December 31, 2004 and 2003 included balances related to the affiliates in the following table, among others. Balances related to SPT and T&WA were included only at December 31, 2003.

      Our percentage ownership of the investees indicated below follows:

Investment	Ownership
Dunlop Goodyear Kabushiki Kaisha		25.0%
Nippon Goodyear Kabushiki Kaisha		25.0
AOT, Inc.		50.0
Coast Tire & Auto Service (2002) Ltd		49.0
Fountain Tire Limited		49.0
RNC		27.8
SPT		50.0
T&WA		40.0

Investments in and advances to the unconsolidated affiliates presented above totaled $28.9 million and $167.9 million (as restated) at December 31, 2004 and 2003, respectively. Our aggregate investments in and advances to unconsolidated affiliates were $34.9 million and $184.2 million (as restated) at December 31, 2004 and 2003, respectively. The balances at December 31, 2003 included SPT and T&WA.

      Summarized financial information related to the unconsolidated affiliates in the table above is presented below.

					All
		RNC			Other		Total
(In millions)
2004
Statement of Income Information:
	Net sales	$	13.7		$	981.6	$	995.3
	Gross profit		0.7			235.6		236.3
	Net income (loss)		(1.0	)		27.8		26.8
Financial Position Information:
	Current assets		7.1			357.4		364.5
	Noncurrent assets		0.5			37.6		38.1
	Current liabilities		3.2			283.3		286.5
	Noncurrent liabilities		12.1			25.3		37.4

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 23. Investments in Unconsolidated Affiliates (continued)

								All
		SPT			RNC			Other		Total
2003
Statement of Income Information:
	Net sales	$	640.3		$	9.0		$	1,302.4	$	1,951.7
	Gross profit (loss)		183.6			(6.5	)		267.4		444.5
	Net income (loss)		(19.5	)		(29.7	)		12.9		(36.3	)
Financial Position Information:
	Current assets		287.8			10.1			354.3		652.2
	Noncurrent assets		194.9			0.8			111.7		307.4
	Current liabilities		321.5			12.8			314.7		649.0
	Noncurrent liabilities		97.6			10.5			88.9		197.0
2002
Statement of Income Information:
	Net sales	$	523.4		$	9.0		$	1,056.1	$	1,588.5
	Gross profit (loss)		137.2			(6.9	)		208.0		338.3
	Net income (loss)		(14.5	)		(15.3	)		6.8		(23.0	)

Note 24. Subsequent Events

On February 28, 2005, we announced that we had entered into an agreement to sell the assets of our North American farm tire business to Titan International, Inc., for approximately $100 million, pending government, regulatory and union approvals. In connection with the transaction, we expect to record approximately $35 to $65 million of non-cash pension and retiree medical costs in the quarter in which the transaction closes. Additional charges also may be incurred in connection with the closing of the transaction. The assets to be sold include inventories and our manufacturing plant, property and equipment in Freeport, Illinois.

      Effective January 1, 2005, we integrated our Chemical Products business segment into our North American Tire business segment. The integration will not affect net income. During 2004, $818.6 million, or 53.4%, of Chemical Products’ sales and 75.2% of its segment operating income resulted from intercompany transactions. Beginning with the first quarter of 2005, our total segment sales will no longer reflect these intercompany sales. In addition, the segment operating income previously attributable to Chemical Products’ intercompany transactions will no longer be included in the total segment operating income that we report.

      On January 21, 2005, final regulations were issued under the Medicare Prescription Drug, Improvement and Modernization Act. Based on the clarifications provided in the final regulations, our net periodic postretirement cost is expected to be lower by approximately $50 million in 2005, and the accumulated postretirement benefit obligation is expected to be reduced by approximately $475 million to $525 million during 2005. Refer to Note 13.

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THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Supplementary Data

(Unaudited)

Quarterly Data and Market Price Information

		Quarter
		Restated
(In millions, except per share amounts)		First			Second			Third			Fourth		Year
2004
Net Sales		$	4,301.9		$	4,519.4		$	4,714.2		$	4,834.9	$	18,370.4
Gross Profit			825.1			927.6			946.9			961.6		3,661.2
Net Income (Loss)		$	(78.1	)	$	29.8		$	38.5		$	124.6	$	114.8
Net Income (Loss) Per Share — Basic		$	(0.45	)	$	0.17		$	0.22		$	0.71	$	0.65
— Diluted		$	(0.45	)	$	0.17		$	0.20		$	0.62	$	0.63
Average Shares Outstanding   — Basic			175.3			175.3			175.4			175.5		175.4
— Diluted			175.3			176.8			206.9			207.8		192.3
Price Range of Common Stock:* High		$	11.97		$	10.45		$	12.00		$	15.01	$	15.01
Low			7.06			7.66			8.70			9.15		7.06
Selected Balance Sheet Items at Quarter-End:
	Total Assets	$	15,167.6		$	15,000.4		$	15,777.5		$	16,533.3
	Total Debt		5,401.4			5,316.8			5,660.5			5,679.6
	Shareholders’ Equity (Deficit)		(144.2	)		(167.3	)		(47.8	)		72.8

		Quarter As Originally Reported
		First			Second			Third
(In millions, except per share amounts)		(A)			(B)			(C)
2004
Net Sales		$	4,290.9		$	4,508.9		$	4,713.7
Gross Profit			825.2			926.1			947.1
Net Income (Loss)		$	(76.9	)	$	25.1		$	36.5
Net Income (Loss) Per Share — Basic		$	(0.44	)	$	0.14		$	0.21
— Diluted		$	(0.44	)	$	0.14		$	0.21
Average Shares Outstanding   — Basic			175.3			175.3			175.4
— Diluted			175.3			176.8			177.9
Price Range of Common Stock:* High		$	11.97		$	10.45		$	12.00
Low			7.06			7.66			9.09
Selected Balance Sheet Items at Quarter-End:
	Total Assets	$	15,421.3		$	15,261.8		$	15,675.0
	Total Debt		5,341.4			5,257.1			5,603.8
	Shareholders’ Equity (Deficit)		(121.5	)		(147.5	)		(38.4	)

(A)  As reported in 2004 Form 10-Q filed on June 18, 2004.

(B)	As reported in 2004 Form 10-Q filed on August 5, 2004.
(C)	As reported in 2004 Form 10-Q filed on November 9, 2004.

* New York Stock Exchange — Composite Transactions

149

Effect of restatement adjustments on Goodyear’s previously issued financial statements

		(Unaudited)
		2004 Quarter Ended
(In millions, except per share amounts)		March 31			June 30			September 30			Total
Net income (loss) as originally reported(A)		$	(76.9	)	$	25.1		$	36.5		$	(15.3	)
Adjustments (pretax):
	SPT		0.6			(1.2	)		1.2			0.6
	General and Product Liability		(1.5	)		4.1			(0.4	)		2.2
	Account Reconciliations		0.8			1.1			0.6			2.5
Total adjustments (pretax)			(0.1	)		4.0			1.4			5.3
	Tax effect of restatement adjustments		(0.5	)		1.4			(0.4	)		0.5
	Tax adjustments		(0.6	)		(0.7	)		1.0			(0.3	)
Total taxes			(1.1	)		0.7			0.6			0.2
Total net adjustments			(1.2	)		4.7			2.0			5.5
Net income (loss) as restated		$	(78.1	)	$	29.8		$	38.5		$	(9.8	)
Per Share of Common Stock:
Net income (loss) — Basic as originally reported		$	(0.44	)	$	0.14		$	0.21
Effect of net adjustments			(0.01	)		0.03			0.01
Net income (loss) — Basic as restated		$	(0.45	)	$	0.17		$	0.22
Net income (loss) — Diluted as originally reported		$	(0.44	)	$	0.14		$	0.21
Effect of net adjustments			(0.01	)		0.03			0.01
Effect of Convertible Senior Notes			—			—			(0.02	)
Net income (loss) — Diluted as restated		$	(0.45	)	$	0.17		$	0.20

(A)  As reported in 2004 Forms 10-Q filed on June 18, August 5 and November 9, 2004, respectively.

Net income per share — diluted as restated in the third and fourth quarters of 2004 reflected the dilutive impact of the assumed conversion of our $350 million Convertible Senior Notes into shares of our Common Stock. The Notes were issued on July 2, 2004. Net income per share — diluted in 2004 included a pro forma earnings adjustment representing avoided after-tax interest expense of $3.5 million in each of the third and fourth quarters. Average shares outstanding — diluted included 29.1 million shares in each of the third and fourth quarters, and 14.5 million shares in the full year, resulting from the assumed conversion. Refer to Note 12.

      The first quarter of 2004 included net after-tax gains of $2.1 million from asset sales and net favorable tax adjustments of $1.9 million. The first quarter also included net after-tax charges of $20.5 million for rationalizations, $11.6 million for insurance fire loss deductibles, $9.2 million for general and product liability-discontinued products and $4.1 million for accelerated depreciation.

      The second quarter of 2004 included net favorable tax adjustments of $4.9 million and net after-tax gains $1.1 million from asset sales. The second quarter also included net after-tax charges of $8.5 million for rationalizations, $8.1 million for general and product liability-discontinued products and $0.5 million for accelerated depreciation.

      The third quarter of 2004 included net favorable tax adjustments of $43.6 million and net after-tax gains of $1.1 million from asset sales. The third quarter also included net after-tax charges of $30.3 million for rationalizations, $8.1 million for general and product liability-discontinued products and $1.9 million for accelerated depreciation.

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      The fourth quarter of 2004 included net favorable tax adjustments of $9.7 million and net after-tax gains of $156.6 million from an environmental insurance settlement, $19.3 million from a favorable lawsuit settlement with certain suppliers and $7.3 million from net reversals of rationalization charges. The fourth quarter also included net after-tax charges of $27.4 million for general and product liability-discontinued products, $11.8 million from asset sales (including a loss on the write-down of the assets of our natural rubber plantations in Indonesia) and $2.9 million for accelerated depreciation.

Quarterly Data and Market Price Information

		Quarter
		Restated
(In millions, except per share amounts)		First			Second			Third			Fourth			Year
2003
Net Sales		$	3,546.5		$	3,754.1		$	3,906.7		$	3,914.8		$	15,122.1
Gross Profit			583.4			712.5			711.1			616.1			2,623.1
Net Loss		$	(200.5	)	$	(59.6	)	$	(120.3	)	$	(427.0	)	$	(807.4	)
Net Loss Per Share         — Basic		$	(1.14	)	$	(0.34	)	$	(0.69	)	$	(2.44	)	$	(4.61	)
— Diluted		$	(1.14	)	$	(0.34	)	$	(0.69	)	$	(2.44	)	$	(4.61	)
Average Shares Outstanding — Basic			175.3			175.3			175.3			175.3			175.3
— Diluted			175.3			175.3			175.3			175.3			175.3
Price Range of Common Stock:* High		$	7.33		$	7.35		$	8.19		$	7.94		$	8.19
Low			3.35			4.55			4.49			5.55			3.35
Selected Balance Sheet Items at Quarter-End:
	Total Assets	$	13,227.8		$	14,639.0		$	14,586.0		$	14,701.1
	Total Debt		3,830.1			5,026.1			4,944.8			5,086.0
	Shareholders’ Equity (Deficit)		90.1			171.8			63.5			(32.2	)

		Quarter
		As Previously Reported (A)
(In millions, except per share amounts)		First			Second			Third			Fourth			Year
2003
Net Sales		$	3,545.8		$	3,753.3		$	3,906.1		$	3,913.8		$	15,119.0
Gross Profit			583.0			714.5			711.7			614.5			2,623.7
Net Income (Loss)		$	(196.5	)	$	(53.0	)	$	(118.2	)	$	(434.4	)	$	(802.1	)
Net Income (Loss) Per Share — Basic		$	(1.12	)	$	(0.30	)	$	(0.67	)	$	(2.49	)	$	(4.58	)
— Diluted		$	(1.12	)	$	(0.30	)	$	(0.67	)	$	(2.49	)	$	(4.58	)
Average Shares Outstanding   — Basic			175.3			175.3			175.3			175.3			175.3
— Diluted			175.3			175.3			175.3			175.3			175.3
Price Range of Common Stock:* High		$	7.33		$	7.35		$	8.19		$	7.94		$	8.19
Low			3.35			4.55			4.49			5.55			3.35
Selected Balance Sheet Items at Quarter-End:
	Total Assets	$	13,246.5		$	14,636.0		$	14,575.9		$	15,005.5
	Total Debt		3,829.1			5,025.1			4,943.8			5,077.4
	Shareholders’ Equity (Deficit)		126.1			207.9			96.0			(13.1	)

(A)  As reported in 2004 Form 10-K filed on May 19, 2004.

* New York Stock Exchange — Composite Transactions

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Quarterly Data and Market Price Information

		Quarter As Originally Reported
(In millions, except per share amounts)		First (A)			Second (B)			Third (C)
2003
Net Sales		$	3,545.5		$	3,758.2		$	3,906.0
Gross Profit			621.1			707.2			719.4
Net Loss		$	(163.3	)	$	(73.6	)	$	(105.9	)
Net Loss Per Share         — Basic		$	(0.93	)	$	(0.42	)	$	(0.60	)
— Diluted		$	(0.93	)	$	(0.42	)	$	(0.60	)
Average Shares Outstanding — Basic			175.3			175.3			175.3
— Diluted			175.3			175.3			175.3
Price Range of Common Stock:* High		$	7.33		$	7.35		$	8.19
Low			3.35			4.55			4.49
Selected Balance Sheet Items at Quarter-End:
	Total Assets	$	13,367.9		$	14,740.7		$	14,597.6
	Total Debt		3,826.7			5,022.7			4,941.5
	Shareholders’ Equity		562.0			611.2			429.3

(A)  As reported in 2003 Form 10-Q filed on April 30, 2003.

(B)	As reported in 2003 Form 10-Q filed on July 30, 2003.
(C)	As reported in 2003 Form 10-Q filed on November 19, 2003.

* New York Stock Exchange — Composite Transactions

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Effect of restatement adjustments on Goodyear’s previously issued 2003 quarterly financial statements

Increase (decrease) in Income (loss)

		Quarter Ended
(In millions, except per share amounts)		March 31			June 30			September 30			December 31			Total
Net loss as originally reported(A)		$	(163.3	)	$	(73.6	)	$	(105.9	)	$	(434.4	)(B)	$	(777.2	)
Adjustments (pretax):
	Accounting Irregularities		(1.6	)		(2.9	)		4.9			—		$	0.4
	Account Reconciliations		(27.7	)		20.9			(10.5	)		—			(17.3	)
	Out-of-Period		0.7			(0.2	)		0.4			—			0.9
	Discount Rate Adjustments		(4.3	)		(4.4	)		(4.3	)		—			(13.0	)
	Chemical Products Segment		2.4			(0.7	)		(1.1	)		—			0.6
Total adjustments (pretax)			(30.5	)		12.7			(10.6	)		—			(28.4	)
	Tax effect of restatement adjustments		(2.7	)		3.7			(1.7	)		—			(0.7	)
	Tax adjustments		—			4.2			—			—			4.2
Total taxes			(2.7	)		7.9			(1.7	)		—			3.5
Total net adjustments			(33.2	)		20.6			(12.3	)		—			(24.9	)
Net loss as previously reported(B)		$	(196.5	)	$	(53.0	)	$	(118.2	)	$	(434.4	)	$	(802.1	)
	SPT		(0.4	)		(2.0	)		(0.4	)		0.5			(2.3	)
	General and Product Liability		—			—			—			7.3			7.3
	Account Reconciliations		(2.9	)		(2.0	)		(1.0	)		0.5			(5.4	)
Total adjustments (pretax)			(3.3	)		(4.0	)		(1.4	)		8.3			(0.4	)
	Tax effect of restatement adjustments		(0.1	)		0.4			(0.1	)		(0.3	)		(0.1	)
	Tax adjustments		(0.6	)		(3.0	)		(0.6	)		(0.6	)		(4.8	)
Total taxes			(0.7	)		(2.6	)		(0.7	)		(0.9	)		(4.9	)
Total net adjustments			(4.0	)		(6.6	)		(2.1	)		7.4			(5.3	)
Net loss as restated		$	(200.5	)	$	(59.6	)	$	(120.3	)	$	(427.0	)	$	(807.4	)
Per Share of Common Stock:
Net loss — Basic as originally reported(A)		$	(0.93	)	$	(0.42	)	$	(0.60	)	$	(2.49	)(B)	$	(4.44	)
Effect of net adjustments			(0.19	)		0.12			(0.07	)		—			(0.14	)
Net loss — Basic as previously reported(B)		$	(1.12	)	$	(0.30	)	$	(0.67	)	$	(2.49	)	$	(4.58	)
Effect of net adjustments			(0.02	)		(0.04	)		(0.02	)		0.05			(0.03	)
Net loss — Basic as restated		$	(1.14	)	$	(0.34	)	$	(0.69	)	$	(2.44	)	$	(4.61	)
Net loss — Diluted as originally reported(A)		$	(0.93	)	$	(0.42	)	$	(0.60	)	$	(2.49	)(B)	$	(4.44	)
Effect of net adjustments			(0.19	)		0.12			(0.07	)		—			(0.14	)
Net loss — Diluted as previously reported(B)		$	(1.12	)	$	(0.30	)	$	(0.67	)	$	(2.49	)	$	(4.58	)
Effect of net adjustments			(0.02	)		(0.04	)		(0.02	)		0.05			(0.03	)
Net loss — Diluted as restated		$	(1.14	)	$	(0.34	)	$	(0.69	)	$	(2.44	)	$	(4.61	)

(A)  As reported in 2003 Forms 10-Q filed on April 30, July 30 and November 19, 2003, respectively.

(B) As reported in 2003 Form 10-K filed on May 19, 2004.

The first quarter of 2003 included net after-tax charges of $57.9 million for rationalizations, $19.1 million for general and product liability-discontinued products and $7.5 million for accelerated depreciation. The first quarter also included net favorable tax adjustments of $1.2 million and a net after-tax gain of $0.2 million from asset sales.

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      The second quarter of 2003 (as previously reported) included net charges for restatement adjustments totaling $25.6 million before tax ($31.3 million after tax). These adjustments related primarily to Interplant, Engineered Products and Tax adjustments, and have been restated to prior periods. Several factors relating to Goodyear’s enterprise resource planning systems implementation resulted in Engineered Products’ inability to locate or recreate account reconciliations for prior periods in the amount of $19.0 million before tax ($18.6 million after tax). As a result, Engineered Products was unable to allocate the amount to applicable periods and accordingly, recorded this adjustment in the first quarter of 2003.

      The second quarter of 2003 included net favorable tax adjustments of $12.8 million and a net after-tax gain of $9.1 million resulting from general and product liability-discontinued products. The second quarter also included net after-tax charges of $13.0 million for rationalizations, $6.4 million from asset sales and $0.5 million for accelerated depreciation.

      The third quarter of 2003 included net after-tax charges of $62.5 million for general and product liability-discontinued products, $46.3 million for rationalizations (including $1.5 million at SPT), $5.9 million from asset sales and $0.5 million for accelerated depreciation. The third quarter also included net favorable tax adjustments of $35.8 million.

      The fourth quarter of 2003 included net after-tax charges of $154.2 million for rationalizations (including $1.1 million at SPT), $122.9 million for accelerated depreciation, asset write-offs and impairments, $63.6 million (as restated) for general and product liability-discontinued products, $9.5 million related to a labor litigation judgment against Goodyear in Europe and $4.2 million (as restated) from asset sales. The fourth quarter also included net unfavorable tax adjustments of $0.2 million.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Overview

This Annual Report on Form 10-K reflects adjustments made pursuant to the restatements included in the 2003 Form 10-K as well as the restatements announced in November 2004 and February 2005. Please refer to the Note to the Financial Statements No. 2, Restatement, in this Form 10-K for a detailed description of these restatements as well as their impact on the Company’s prior period financial statements.

Restatements Included in 2003 Form 10-K

These restatements arose initially out of an intensified effort to reconcile certain general ledger accounts, which were out-of-balance largely as a result of problems associated with the implementation of enterprise resource planning software, and following the receipt of a management letter dated March 11, 2003, from the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), in which PwC noted the need for increased attention to the account reconciliation process.

      As a result of Goodyear’s efforts to reconcile these accounts, the Company initially recorded adjustments that reduced net income for the quarter ended June 30, 2003 by $31.3 million. The Company subsequently determined in the third quarter of 2003 that it needed to make additional adjustments arising out of account reconciliations. Based on an assessment of the impact of the adjustments to the expected 2003 results, management and the Audit Committee decided to restate the Company’s previously issued financial statements. PwC, in October 2003, advised the Company that the failure to identify certain issues that had affected several years financial statements related to the monitoring and review of general ledger accounts collectively resulted in a material weakness in internal controls that required strengthening of procedures for account reconciliation, and internal reporting and monitoring of these matters. The restatement, which was contained in the Company’s Report on Form 8-K filed concurrently with its Form 10-Q for the quarter ended September 30, 2003, resulted in a decrease in cumulative net income through June 30, 2003 of $84.7 million. The restatement also included changes to the timing of certain previously recognized adjustments not arising from account reconciliations as well as other adjustments identified during the restatement process.

      On December 10, 2003, the Company announced that it was delaying the filing of its 2002 Form 10-K/ A containing restated financial statements in order to permit the Audit Committee to conduct an internal investigation into potential improper accounting issues in its European Union business segment. The investigation subsequently expanded to other locations of the Company’s overseas operations. The investigation identified accounting irregularities primarily related to earnings management whereby accrual accounts were adjusted or expenses were improperly deferred in order to increase the segments’ operating income.

      Additionally, in the first and second quarters of 2004, the Company identified other matters requiring adjustment. Some of these adjustments resulted from an improper understatement of workers’ compensation liability and improper accounting related to the valuation of real estate received in payment of trade accounts receivable. The Audit Committee also initiated an investigation into these adjustments. As a result of these investigations, management and the Audit Committee decided that a further restatement of the financial information contained in the Form 8-K discussed above was necessary. This further restatement was reflected in the 2003 Form 10-K filed on May 19, 2004. The adjustments identified through May 19, 2004 reduced previously reported net income through September 30, 2003 by a total of $280.8 million, including the effect of the adjustments described above.

May 2004 Material Weaknesses

In May 2004, PwC advised the Company that the circumstances it previously identified to the Company as collectively resulting in a material weakness had each individually become a material weakness. PwC advised

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the Company that this determination was due to the number of previously undetected errors that were attributable to the material weakness previously identified. A significant portion of these errors were detected by the Company. PwC further identified an additional material weakness resulting from intentional overrides of internal controls by those in authority, particularly related to the European Union Tire segment and workers’ compensation liability in the United States. These material weaknesses, if unaddressed, could result in material errors in the Company’s financial statements. In addition, PwC advised the Company that it had identified as reportable conditions the Company’s need to enhance certain finance personnel’s knowledge of U.S. GAAP and internal controls and the need to enhance controls related to the establishment of bank accounts. PwC also identified a number of other internal control weaknesses/business recommendations.

Restatements Included in this 2004 Form 10-K

On November 5, 2004, the Company announced that it would file an amendment to its 2003 Form 10-K which would include financial information related to certain of the Company’s investments in affiliates, and a restatement of the Company’s prior period financial statements to record certain additional out-of-period adjustments identified and recorded in the first and second quarters of 2004.

      The Company also identified a misclassification of balance sheet deferred tax accounts in the course of preparing its third quarter Form 10-Q. The Company recorded certain deferred tax assets and liabilities on a gross basis beginning in the December 31, 2003 balance sheet, rather than netting short-term deferred tax assets with short-term deferred tax liabilities and long-term deferred tax assets with long-term deferred tax liabilities. This misclassification resulted in an overstatement of total assets and total liabilities by approximately $357 million. There was no effect on shareholders equity, net income or cash flow previously reported by the Company.

      Following the filing of its third quarter Form 10-Q on November 9, 2004, which reflected a restatement for all known adjustments up to that point in time, Goodyear identified additional out-of-period adjustments affecting the third quarter of 2004 and earlier periods. In addition, on December 30, 2004, the Company announced that it was working to resolve an accounting issue concerning its Australian affiliate, South Pacific Tyres (“SPT”), and that the resolution of the matter could have an impact on the Company’s previously reported financial results. Although the primary focus of this effort was to resolve the accounting treatment of a 10-year supply agreement between the Company and SPT, the Company also noted the possibility that other items having an impact on SPT’s prior period financial statements could arise in the course of the review. This Form 10-K reflects a resolution of the SPT accounting issues.

      For a description of the impact of these restatement adjustments on prior periods please refer to “Restatements Included in 2004 Form 10-K” in the Note to the Financial Statements No. 2, Restatement, in this Form 10-K.

Compliance with Sarbanes-Oxley Section 404

Beginning with the year ended December 31, 2004, Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) requires the Company’s senior management to provide an annual report on internal controls over financial reporting. This report must contain (i) a statement of management’s responsibility for establishing and maintaining adequate internal controls over financial reporting for the company, (ii) a statement identifying the framework used by management to conduct the required evaluation of the effectiveness of internal controls over financial reporting, (iii) management’s assessment of the effectiveness of internal controls over financial reporting as of the end of the most recent fiscal year, including a statement as to whether or not the Company’s internal controls over financial reporting are effective, and (iv) a statement that the Company’s independent auditors have issued an attestation report on management’s assessment of internal controls over financial reporting. In seeking to achieve compliance with Section 404 within the prescribed period, management formed an internal control steering committee, engaged outside consultants and adopted a detailed program to assess the adequacy of internal controls over financial reporting, create or supplement documentation of controls over financial reporting, remediate control weaknesses that may be

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identified, validate through testing that the controls are functioning as documented and implement a continuous reporting and improvement process for internal controls over financial reporting.

      Management’s report on internal controls over financial reporting as of December 31, 2004, pursuant to Section 404, is included in this Form 10-K. In our report, management concludes that the previously identified material weakness relating to account reconciliations remains and identifies an additional material weakness relating to segregation of duties at the application control level in enterprise resource planning systems. Remedial efforts related to these material weaknesses, as well as the material weaknesses and reportable conditions identified in May 2004 are described in detail below.

Remediation of Internal Control Weaknesses

The Company has dedicated substantial resources to the review of its internal control processes and procedures. As a result of that review, the Company has determined that it would strengthen its internal controls by (i) making personnel and organizational changes, (ii) improving communications and reporting, (iii) improving monitoring controls, (iv) increasing oversight to reduce opportunities for intentional overrides of control procedures, and (v) simplifying and improving financial processes and procedures. Certain measures to strengthen internal controls were implemented prior to January 1, 2004. During that time period the Company:

•  Established a requirement at the corporate level that each manager responsible for an account certify, on a monthly basis, that such account has been accurately reconciled;

•  Directed its Internal Audit Department to commence targeted reviews of selected account reconciliations;

•  Established a requirement that the finance director of each operating unit that maintains a general ledger or sub-ledger confirm on a quarterly basis that all balance sheet accounts for which he or she has responsibility have been reconciled accurately and on a timely basis;

•  Restructured reporting relationships within the finance function such that the finance directors of all seven strategic business units report directly to the Chief Financial Officer and the controllers of these business units report to the Corporate Controller; and

•  Changed compensation structures for business unit finance directors so that compensation is no longer directly tied to financial performance of the business unit.

      The implementation of other remedial measures was completed between January 1, 2004 and May 19, 2004, the date on which the Company’s 2003 Form 10-K was filed. During the January 1 — May 19, 2004 time period the Company:

•  Took disciplinary actions (ranging from reprimand to termination) against numerous employees;

•  Increased staffing (including the use of temporary personnel) in various aspects of the Company’s finance and internal audit functions;

•  Increased management oversight by creating a new Disclosure Committee comprised of senior managers with responsibility for responding to issues raised during the financial reporting process;

•  Addressed the intentional overrides of internal controls in the European Union Tire business unit by streamlining that organization to eliminate a level of management and financial reporting;

•  Conducted enhanced training on the certification process whereby senior finance management explained each matter to be certified with each of the seven strategic business units and their local management teams;

•  Visited various overseas locations and reviewed and confirmed the accuracy of selected account reconciliations, analyzed reported results, reviewed items identified by prior audits to ensure corrective actions were in place and reviewed the certification process with local management;

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•  Commissioned a review of a significant portion of open workers’ compensation claims, including a certification by the outside administrator to ensure that such claims were being properly valued; and

•  Revised procedures with respect to opening bank accounts to ensure appropriate oversight by the Treasury Department.

      A number of other initiatives to strengthen the Company’s internal controls were initiated in 2004 and have continued since then. These include:

•  Expanding the personnel, upgrading the talent, and increasing the responsibilities of the Internal Audit Department;

•  Increasing finance staff and upgrading the technical capabilities of individuals within the finance function through the hiring of credentialed accountants from outside of the Company;

•  Developing new and enhanced monitoring controls, including monthly reports to the corporate assistant controller on the status of account reconciliations with explanations for any unreconciled accounts, reporting tools for identified post-closing adjustments, out-of-period adjustments and significant legal contingencies, and a global accounting issues database for the real-time reporting of significant accounting issues;

•  Creating a Remediation Project Management Office responsible for the design and implementation of the Company’s long-term remediation plan;

•  Establishing a communications program to improve inter-department and cross-functional communications, maintain awareness of the financial statement certification process, accounting and finance issues in general and to encourage associates to raise issues for review and/or resolution;

•  Reviewing accounting policies and procedures, and where appropriate making modifications;

•  Adopting an account reconciliation policy that includes assignment of all accounts to specific associates, monthly deadlines for completing reconciliation, and review of the reconciliation of each account by management on a monthly or quarterly basis depending on the nature of the account;

•  Conducting training sessions on the account reconciliation policy and procedures for personnel based in Akron and other locations;

•  Holding of conferences for finance personnel at various locations around the world. Subjects covered included remediation of identified internal control issues including account reconciliations, Sarbanes-Oxley compliance, application of U.S. GAAP and Company accounting policies, establishment of a proper “tone at the top” and the importance of inter-departmental dialogue; and

•  Improving communication of Company ethical policies through discussion at conferences and meetings, communication on the Company intranet, wider dissemination of the Company’s business conduct manual and recertification and acknowledgment of the business conduct manual by non-union associates. In addition, General Managers worldwide discussed the Business Conduct program with their employees in the third quarter of 2004.

Remediation of May 2004 Material Weaknesses and Reportable Conditions

Considering the remedial actions described in detail above and the results of the Company’s testing of our internal controls over financial reporting as of December 31, 2004, management has made the following conclusions with respect to the four material weaknesses and two reportable conditions identified in May 2004:

•  As indicated in management’s report on internal control over financial reporting included in this Form 10-K, we have concluded that account reconciliations continue to represent a material weakness;

•  Although monitoring controls were considered to represent a material weakness in our internal control structure in 2003, as of December 31, 2004, management has concluded that remedial actions have

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	been implemented and are operating effectively to reduce the significance of this matter to a significant deficiency;
•	Communication and reporting was the third material weakness cited by our auditors in May 2004. Management has now concluded that appropriate remedial actions have been instituted to reduce the significance of this matter to an internal control deficiency; and
•	With respect to the fourth material weakness, management’s oversight to reduce opportunities for intentional overrides of internal controls, management has concluded that this material weakness has been fully remediated and no longer is considered to represent an internal control deficiency.

      The level of our finance team’s knowledge of U.S. GAAP and internal controls was cited as a reportable condition in May 2004. Due to remedial actions taken in 2004, as of December 31, 2004, management has concluded that this matter now represents a significant deficiency. The second reportable condition related to our internal controls surrounding the establishment of bank accounts. As a result of control procedures implemented, management has concluded that this reportable condition has been fully remediated and no longer represents an internal control deficiency.

Current Material Weaknesses

Despite the significant progress that has been achieved in remediating previously-identified material weaknesses, reportable conditions and other internal control deficiencies, management is committed to continue to implement the remedial actions discussed above, as appropriate, as well as undertake additional actions in 2005 to remediate its two current material weaknesses.

      Although management has determined that account reconciliations continue to be a material weakness, it believes that it has made significant progress in addressing this matter. Management believes that the number of out-of-period adjustments arising from account reconciliations in 2004 was due in part to its efforts to improve controls in this area, including enhanced monitoring controls, training in account reconciliation procedures and new personnel performing and/or reviewing account reconciliations.

      Subsequent to December 31, 2004, in order to address the segregation of duties material weakness described in Management’s Report on Internal Control Over Financial Reporting, the Company has implemented mitigating controls with regard to specifically-identified conflicts within order-to-cash and purchase-to-pay business processes until the application systems can be modified to prevent this risk. The Company’s review of the transactions in 2004 that could have been affected by this deficiency in our Segregation of Duties did not identify any fraudulent transactions. In addition to this specific action, the Company is in the process of remediating certain application-specific access control issues that inherently create Segregation of Duties issues as well as ensuring that appropriate management performs a quarterly review and approval of potential segregation of duties conflicts. Finally, we plan on conducting quarterly testing of mitigating controls where conflicts are not able to be eliminated and implementing better Segregation of Duties analysis tools.

      Other significant remedial actions underway or planned to commence in 2005 not specifically related to the two remaining material weaknesses include:

•  Development of formalized procedures to be implemented in 2005 for conducting monthly financial statement variance analyses by location and establishing tolerance limits for such variances;

•  Changing the compensation structure for regional, country-level and plant-level controllers to reduce the weight given to business unit performance and increase the weight given to qualitative factors such as Section 404 compliance, financial statement integrity and maintaining appropriate monitoring controls;

•  Continuing to upgrade the talent of our finance staff by implementing an on-going U.S. GAAP training program, consisting of providing appropriate technical resources to our global team and training on the use of such resources, conducting a series of training sessions for our finance associates, and distribution of a quarterly publication highlighting changes in accounting and reporting standards,

159

	Company accounting policies and relevant current topics of interest. In addition, we will also continue to hire qualified external candidates to supplement the technical knowledge of our existing staff; and
•	Continuing efforts to simplify financial processes and information technology systems.

The Company will continue to evaluate the effectiveness of its controls and procedures on an ongoing basis and will implement further action as it deems necessary in its continuing efforts to strengthen the control process. While the Company believes that its remedial measures have substantially improved the Company’s control processes and procedures, there is no assurance that the continuing implementation of these measures will succeed in making the Company’s internal control over financial reporting effective. One factor that may affect management’s assessment of the effectiveness of the Company’s internal control over financial reporting is the level of the Company’s net income or loss in future periods. To the extent the Company has near break-even net income, there may be a greater likelihood that a control deficiency would result in a material misstatement of the annual or interim financial statements.

Disclosure Controls and Procedures

In connection with the preparation of this Form 10-K, the Company’s senior management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2004. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls were ineffective, as of December 31, 2004 to provide reasonable assurance that information the Company must disclose in reports with the SEC is properly recorded, processed and summarized and then reported as required. This conclusion is based primarily on the fact that the Company’s internal control over financial reporting was ineffective as of such date. Through the date of the filing of this Form 10-K, the Company has adopted additional remedial measures described above to address the deficiencies in its disclosure controls that existed on December 31, 2004 and has taken additional measures to verify the information in its financial statements. The Company believes that, as a result of these remedial and other measures, this Form 10-K properly reports all information required to be included in such report. It should be noted that no system of controls can provide complete assurance of achieving its objectives, and future events may impact the effectiveness of a system of controls.

Changes in Internal Control over Financial Reporting

Other than as described above, there have been no changes in the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B.     OTHER INFORMATION.

None.

160

PART III.

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information under the headings “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance,” and the information under the subheading “Corporate Governance Principles and Board Matters — The Audit Committee,” in the Company’s 2005 Proxy Statement is incorporated herein by reference. For information regarding Goodyear’s executive officers, reference is made to Part I, at pages 20 through 23, inclusive, of this Annual Report.

  Code of Business Conduct and Code of Ethics

Goodyear has adopted a code of business conduct and ethics for directors, officers and employees, known as the Business Conduct Manual. Goodyear also has adopted a conflict of interest policy applicable to directors and executive officers. Both of these documents are available on Goodyear’s website at http://www.goodyear.com/investor/governance.html. Shareholders may request a free copy of these documents from:

      The Goodyear Tire & Rubber Company

      Attention: Investor Relations

      1144 East Market Street

      Akron, Ohio 44316-0001 (330) 796-3751

      Goodyear’s Code of Ethics for its Chief Executive Officer and its Senior Financial Officers (the “Code of Ethics”) is also posted on Goodyear’s website. Amendments to and waivers from the Code of Ethics will be disclosed on the website.

  Corporate Governance Guidelines – Certain Committee Charters

Goodyear has adopted Corporate Governance Guidelines as well as charters for each of its Audit, Compensation and Nominating and Board Governance Committees. These documents are available on Goodyear’s website at http://www.goodyear.com/investor/governance.html. Shareholders may request a free copy of any of these documents from the address and phone numbers set forth above under “Code of Business Conduct and Code of Ethics.”

ITEM 11.     EXECUTIVE COMPENSATION.

The information under the heading “Executive Officer Compensation” and under the heading “Directors’ Compensation” in the Company’s 2005 Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information under the headings “Equity Compensation Plan Information,” “Beneficial Ownership of Common Stock” and “Beneficial Ownership of Directors and Management” in the Company’s 2005 Proxy Statement is incorporated herein by reference.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information under the heading “Executive Officer Compensation” in the Company’s 2005 Proxy Statement is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information under the heading “Principal Accountant Fees and Services” in the Company’s 2005 Proxy Statement is incorporated herein by reference.

161

      The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), has recently advised the Audit Committee of the Company’s Board of Directors that certain expatriate cash handling services related to tax withholding performed for a Company subsidiary by a PwC affiliate in China have raised questions regarding PwC’s independence with respect to its performance of audit services. These services are not permitted under the auditor independence rules. The services were provided in 2002, 2003 and 2004 and the fees were insignificant. PwC has informed the Company and the Audit Committee that it has concluded that its impartiality and objectivity were unaffected by the provision of the services and that the services performed have not impaired PwC’s independence with respect to performance of its audit services. The Company and the Audit Committee will continue to monitor and assess the independence of PwC on an ongoing basis.

PART IV.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

LIST OF DOCUMENTS FILED AS PART OF THIS REPORT:

1.	Financial Statements: See the Index to Consolidated Financial Statements on page 69 of this Annual Report.
2.	Financial Statement Schedules: See the Index to Financial Statement Schedules attached to this Annual Report at page FS-1. The Financial Statement Schedules at pages FS-2 through FS-67, inclusive, are incorporated into and made a part of this Annual Report.
3.	Exhibits required to be filed by Item 601 of Regulation S-K: See the Index of Exhibits attached to this Annual Report at pages X-1 through X-6, which is incorporated into and made a part of this Annual Report.

162

SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE GOODYEAR TIRE & RUBBER COMPANY

(Registrant)

Date: March 16, 2005 By /s/ Robert J. Keegan
  Robert J. Keegan, Chairman of the Board,
Chief Executive Officer and President

      Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: March 16, 2005	/s/ Robert J. Keegan Robert J. Keegan, Chairman of the Board, Chief Executive Officer, President and Director (Principal Executive Officer)
Date: March 16, 2005	/s/ Richard J. Kramer Richard J. Kramer, Executive Vice President (Principal Financial Officer)
Date: March 16, 2005	/s/ Thomas A. Connell Thomas A. Connell, Vice President and Controller (Principal Accounting Officer)

Date: March 16, 2005 Susan E. Arnold, Director
James C. Boland, Director
John G. Breen, Director
Gary D. Forsee, Director
William J. Hudson Jr., Director
Steven A. Minter, Director
Denise M. Morrison, Director
Rodney O’Neal, Director
Shirley D. Peterson, Director
Thomas H. Weidemeyer, Director By /s/ Richard J. Kramer
  Richard J. Kramer, Signing as
Attorney-in-Fact for the Directors
whose names appear opposite

163

FINANCIAL STATEMENT SCHEDULES

ITEMS 8 AND 15(a)(2) OF FORM 10-K

FOR CORPORATIONS

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2004

INDEX TO FINANCIAL STATEMENT SCHEDULES

Financial Statement Schedules:

	Schedule No.		Page Number
Condensed Financial Information of Registrant		I		FS-2
Valuation and Qualifying Accounts		II		FS-8
Other Financial Statements:
Financial Statements of South Pacific Tyres (SPT)				FS-10

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

      Financial statements relating to 50 percent or less owned companies other than SPT, the investments in which are accounted for by the equity method, have been omitted as permitted because these companies would not constitute a significant subsidiary.

FS-1

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

THE GOODYEAR TIRE & RUBBER COMPANY

PARENT COMPANY STATEMENT OF INCOME

		Year Ended December 31,
					Restated
(In millions, except per share amounts)		2004			2003			2002
Net Sales		$	8,746.1		$	7,816.2		$	7,613.1
Cost of Goods Sold			7,758.3			7,225.4			6,726.4
Selling, Administrative and General Expense			1,165.4			1,071.4			1,077.8
Rationalizations			40.6			74.7			10.4
Interest Expense			326.4			252.3			210.3
Other (Income) and Expense			(200.9	)		(17.4	)		71.4
Foreign Currency Exchange			2.3			14.7			(1.2	)
Equity in (Earnings) Losses of Affiliates			(2.0	)		8.2			10.1
Loss before Income Taxes and Equity in (Earnings) Losses of Subsidiaries			(344.0	)		(813.1	)		(492.1	)
United States and Foreign Taxes on Income (Loss)			(53.3	)		(38.2	)		1,108.6
Equity in (Earnings) Losses of Subsidiaries			(405.5	)		32.5			(353.8	)
Net Income (Loss)		$	114.8		$	(807.4	)	$	(1,246.9	)
Net Income (Loss) Per Share — Basic		$	0.65		$	(4.61	)	$	(7.47	)
	Average Shares Outstanding		175.4			175.3			167.0
Net Income (Loss) Per Share — Diluted		$	0.63		$	(4.61	)	$	(7.47	)
	Average Shares Outstanding		192.3			175.3			167.0

The accompanying notes are an integral part of these financial statements.

FS-2

THE GOODYEAR TIRE & RUBBER COMPANY

PARENT COMPANY BALANCE SHEET

				December 31,
							Restated
				2004			2003
(In millions)
Assets
Current Assets:
	Cash and cash equivalents			$	1,004.2		$	584.7
	Restricted cash				137.0			17.7
	Accounts and notes receivable, less allowance — $32.0 ($36.8 in 2003)				1,209.1			941.3
	Inventories:
		Raw materials			220.8			187.5
		Work in process			64.2			47.8
		Finished products			877.4			941.5
					1,162.4			1,176.8
	Prepaid expenses and other current assets				89.6			134.7
			Total Current Assets		3,602.3			2,855.2
Long Term Accounts and Notes Receivable					240.7			271.3
Investments in and Advances to Affiliates					4.2			57.9
Other Assets					61.9			49.6
Intangible Assets					100.7			102.3
Prepaid and Deferred Pension Costs					432.1			506.1
Deferred Charges					159.9			160.4
Investments in Subsidiaries					3,944.3			3,644.0
Properties and Plants, less accumulated depreciation — $4,445.6 ($4,311.0 in 2003)					2,088.8			2,201.7
			Total Assets	$	10,634.9		$	9,848.5
Liabilities
Current Liabilities:
	Accounts payable-trade			$	529.1		$	426.4
	Intercompany current accounts				501.9			679.5
	Compensation and benefits				647.8			641.6
	Other current liabilities				276.6			340.0
	United States and foreign taxes				62.7			96.5
	Long term debt and capital leases due within one year				562.5			70.2
			Total Current Liabilities		2,580.6			2,254.2
Long Term Debt and Capital Leases					4,009.8			4,060.3
Compensation and Benefits					3,336.3			3,116.7
Deferred and Other Noncurrent Income Taxes					65.8			42.8
Other Long Term Liabilities					569.6			406.7
			Total Liabilities		10,562.1			9,880.7
Commitments and Contingent Liabilities
Shareholders’ Equity (Deficit)
	Preferred Stock, no par value: Authorized, 50.0 shares, unissued				—			—
Common Stock, no par value:
	Authorized, 300.0 shares; Outstanding shares, 175.6 (175.3 in 2003)				175.6			175.3
Capital Surplus					1,391.8			1,390.2
Retained Earnings					1,069.9			955.1
Accumulated Other Comprehensive Income (Loss)					(2,564.5	)		(2,552.8	)
			Total Shareholders’ Equity (Deficit)		72.8			(32.2	)
			Total Liabilities and Shareholders’ Equity	$	10,634.9		$	9,848.5

The accompanying notes are an integral part of these financial statements.

FS-3

THE GOODYEAR TIRE & RUBBER COMPANY

PARENT COMPANY STATEMENT OF SHAREHOLDERS’ EQUITY (DEFICIT)

													Accumulated
													Other
				Common Stock									Comprehensive			Total
								Capital		Retained			Income			Shareholders’
				Shares		Amount		Surplus		Earnings			(Loss)			Equity
(Dollars in millions, except per share)
Balance at December 31, 2001 as originally restated(A)					163,165,698	$	163.2	$	1,245.4	$	3,089.3		$	(1,870.1	)	$	2,627.8
	(after deducting 32,512,970 treasury shares)
Effect of restatement on periods ending on or before December 31, 2001											(0.1	)		(30.9	)		(31.0	)
Balance at December 31, 2001 (as restated)					163,165,698		163.2		1,245.4		3,089.2			(1,901.0	)		2,596.8
	Comprehensive income (loss):
		Net loss									(1,246.9	)
		Foreign currency translation (net of tax benefit of $0)												74.4
		Minimum pension liability (net of tax of $42.4)												(1,283.6	)
		Unrealized investment gain (net of tax of $0)												7.3
		Deferred derivative gain (net of tax of $0)												60.6
			Reclassification adjustment for amounts recognized in income (net of tax of $0)											(64.5	)
			Total comprehensive loss														(2,452.7	)
		Cash dividends — $0.48 per share									(79.8	)					(79.8	)
		Common stock issued from treasury:
			Domestic pension funding		11,300,000		11.3		126.6								137.9
			Common stock issued for acquisitions		693,740		0.7		15.2								15.9
			Stock compensation plans		147,995		0.1		2.9								3.0
Balance at December 31, 2002 (as restated)					175,307,433		175.3		1,390.1		1,762.5			(3,106.8	)		221.1
	(after deducting 20,371,235 treasury shares) Comprehensive income (loss):
		Net loss									(807.4	)
		Foreign currency translation (net of tax benefit of $0)												393.7
		Minimum pension liability (net of tax of $2.2)												128.3
		Unrealized investment gain (net of tax of $0)												4.1
			Reclassification adjustment for amounts recognized in income (net of tax of $8.7)											8.8
		Deferred derivative gain (net of tax of $0)												46.3
			Reclassification adjustment for amounts recognized in income (net of tax of $1.9)											(27.2	)
			Total comprehensive loss														(253.4	)
		Common stock issued from treasury:
			Stock compensation plans		18,996				0.1								0.1
Balance at December 31, 2003 (as restated)					175,326,429		175.3		1,390.2		955.1			(2,552.8	)		(32.2	)
	(after deducting 20,352,239 treasury shares)
	Comprehensive income (loss):
		Net income									114.8
		Foreign currency translation (net of tax benefit of $0)												253.2
		Minimum pension liability (net of tax of $34.2)												(283.8	)
		Unrealized investment gain (net of tax of $0)												13.4
		Deferred derivative gain (net of tax of $0)												29.6
			Reclassification adjustment for amounts recognized in income (net of tax of $(3.5))											(24.1	)
			Total comprehensive income														103.1
		Common stock issued from treasury:
			Stock compensation plans		293,210		0.3		1.6								1.9
Balance at December 31, 2004					175,619,639	$	175.6	$	1,391.8	$	1,069.9		$	(2,564.5	)	$	72.8
	(after deducting 20,059,029 treasury shares)

(A) As reported in Form 10-K filed on May 19, 2004.

The accompanying notes are an integral part of these financial statements.

FS-4

THE GOODYEAR TIRE & RUBBER COMPANY

PARENT COMPANY STATEMENT OF CASH FLOWS

						Year Ended December 31,
						2004			2003			2002
(Dollars in millions)
Cash Flows from Operating Activities:
	Net Income (Loss)					$	114.8		$	(807.4	)	$	(1,246.9	)
		Adjustments to reconcile net loss to cash flows from operating activities:
			Depreciation and amortization				291.1			372.2			289.0
			Amortization of debt issue costs				86.1			50.3			17.9
			Deferred tax provision				(7.6	)		(1.7	)		1,160.7
			Rationalizations				31.4			29.2			2.4
			Asset sales				(30.4	)		(104.5	)		68.5
			Insurance settlement gain				(156.6	)		—			—
			Minority interest and equity earnings				(6.1	)		—			10.6
			Net cash flows from sale of accounts receivable				—			(826.2	)		55.9
			Pension contributions				(124.9	)		(26.8	)		(150.6	)
			Changes in operating assets and liabilities, net of asset acquisitions and dispositions:
				Accounts and notes receivable			(171.7	)		10.0			(73.6	)
				Inventories			14.4			27.6			13.8
				Accounts payable-trade			(118.6	)		89.6			(118.1	)
				Prepaid expenses and other current assets			73.5			208.8			(129.9	)
				Deferred charges			(34.2	)		2.1			114.8
				Long term compensation and benefits			344.5			(106.3	)		903.2
				Accumulated other comprehensive income — deferred pension gain (loss)			(283.9	)		191.0			(1,265.9	)
				Other long term liabilities			151.5			216.6			(82.9	)
				Other assets and liabilities			(55.3	)		(42.7	)		259.5
				Total adjustments			3.2			89.2			1,075.3
					Total cash flows from operating activities		118.0			(718.2	)		(171.6	)
Cash Flows from Investing Activities:
		Capital expenditures					(153.2	)		(158.9	)		(247.1	)
		Asset dispositions					105.9			367.8			104.4
		Asset acquisitions					(51.4	)		(71.2	)		(15.9	)
		Capital contributions to subsidiaries					(9.4	)		(30.7	)		(43.1	)
		Capital redemptions from subsidiaries					5.8			43.6			280.4
		Other transactions					35.9			(0.5	)		(31.5	)
					Total cash flows from investing activities		(66.4	)		150.1			47.2
Cash Flows from Financing Activities:
		Short term debt incurred					43.7			8.3			—
		Short term debt paid					—			—			(3.6	)
		Long term debt incurred					1,675.3			2,379.7			0.5
		Long term debt paid					(1,247.0	)		(1,510.2	)		(45.8	)
		Common stock issued					1.8			0.2			18.7
		Debt issuance costs					(51.4	)		(104.1	)		—
		Increase in restricted cash					(54.5	)		(17.7	)		—
		Dividends paid to Goodyear shareholders					—			—			(79.8	)
		Other transactions					—			27.9			—
					Total cash flows from financing activities		367.9			784.1			(110.0	)
Net Change in Cash and Cash Equivalents							419.5			216.0			(234.4	)
Cash and Cash Equivalents at Beginning of the Period							584.7			368.7			603.1
Cash and Cash Equivalents at End of the Period						$	1,004.2		$	584.7		$	368.7

The accompanying notes are an integral part of these financial statements.

FS-5

THE GOODYEAR TIRE & RUBBER COMPANY

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

LONG TERM DEBT AND FINANCING ARRANGEMENTS

At December 31, 2004, the Parent Company was a party to various long-term financing facilities. Under the terms of these facilities, the Parent Company pledged a significant portion of its assets as collateral. The collateral included the capital stock of certain subsidiaries, first-priority security interests in certain property, plant and equipment and other tangible and intangible assets, and second-priority security interests in accounts receivable, inventory and cash. In addition, the facilities contain certain covenants that, among other things, limit the Parent Company’s ability to secure additional indebtedness, make investments, and sell assets beyond specified limits. The facilities prohibit the Parent Company from paying dividends on its common stock and limit the amount of capital expenditures the Parent Company, together with its consolidated subsidiaries, may make. The facilities also contain certain financial covenants including the maintenance of a minimum consolidated net worth, a ratio of consolidated EBITDA to consolidated interest expense, and a ratio of consolidated senior secured indebtedness to consolidated EBITDA (as such terms are defined in the respective facility agreements). Repayment of the facilities is required with a defined percentage of the proceeds from certain asset sales and debt or equity issuances. For further information, refer to the Note to the Consolidated Financial Statements No. 11, Financing Arrangements and Derivative Financial Instruments.

      The annual aggregate maturities of long-term debt and capital leases for the five years subsequent to 2004 are presented below. Maturities of debt supported by the availability of revolving credit agreements have been reported on the basis that the commitments to lend under these agreements will be terminated effective at the end of their current terms.

	2005		2006		2007		2008		2009
(In millions)
Debt incurred under or supported by revolving credit agreements	$	—	$	—	$	—	$	—	$	—
Other		0.6		1,812.0		0.3		0.1		—
	$	0.6	$	1,812.0	$	0.3	$	0.1	$	—

COMMITMENTS AND CONTINGENT LIABILITIES

At December 31, 2004, the Parent Company had off-balance-sheet financial guarantees written and other commitments totaling $9.8 million.

      At December 31, 2004, the Parent Company had recorded costs related to a wide variety of contingencies. These contingencies included, among other things, environmental matters, workers’ compensation, general and product liability and other matters. For further information, refer to the Note to the Consolidated Financial Statements No. 20, Commitments and Contingent Liabilities.

DIVIDENDS

The Parent Company used the equity method of accounting for investments in consolidated subsidiaries during 2004, 2003 and 2002.

      The following table presents dividends received during 2004, 2003 and 2002:

	2004		2003		2002
(In millions)
Consolidated subsidiaries	$	155.1	$	219.0	$	113.1
50% or less-owned persons		0.5		2.5		1.8
	$	155.6	$	221.5	$	114.9

FS-6

THE GOODYEAR TIRE & RUBBER COMPANY

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS — Continued

Dividends received from consolidated subsidiaries included stock dividends of $14.7 million, $152.1 million and $31.9 million in 2004, 2003 and 2002, respectively.

SUPPLEMENTAL CASH FLOW INFORMATION

The Parent Company made cash payments for interest in 2004, 2002 and 2001 of $308.1 million, $234.8 million and $221.2 million, respectively. The Parent Company made net cash payments (receipts) for income taxes in 2004, 2003 and 2002 of $(10.0) million, $(43.9) million and $16.7 million, respectively.

INTERCOMPANY TRANSACTIONS

The following amounts included in the Parent Company Statement of Income have been eliminated in the preparation of the consolidated financial statements:

	2004			2003			2002
(In millions)
Sales	$	1,506.2		$	1,307.3		$	1,255.1
Cost of goods sold		1,501.4			1,304.1			1,251.8
Interest expense		15.2			10.6			5.2
Other (income) and expense		(386.3	)		(440.8	)		(190.0	)
Loss before income taxes	$	375.9		$	433.4		$	188.1

FS-7

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

Year Ended December 31,

			Additions
(In millions)	Balance													Translation
	at		Charged			Charged			Acquired		Deductions			adjustment		Balance
	beginning		(credited)			(credited)			by		from			during		at end of
Description	of period		to income			to OCI			purchase		reserves			period		period
2004
Allowance for doubtful accounts	$	128.9	$	50.1		$	—		$	—	$	(42.0	)(a)	$	7.4	$	144.4
Valuation allowance – deferred tax assets		2,041.9		(41.1	)		57.3			—		—			13.9		2,072.0
2003
Allowance for doubtful accounts	$	102.1	$	55.1		$	—		$	—	$	(39.9	)(a)	$	11.6	$	128.9
Valuation allowance – deferred tax assets		1,811.7		307.9			(66.6	)		—		(11.1	)		—		2,041.9
2002
Allowance for doubtful accounts	$	88.1	$	39.1		$	—		$	—	$	(29.1	)(a)	$	4.0	$	102.1
Valuation allowance – deferred tax assets		258.4		1,245.1			352.9			—		(44.7	)		—		1,811.7

Note:(a) Accounts and notes receivable charged off.

FS-8

Report of Independent Registered Public Accounting Firm

The Partners

South Pacific Tyres:

      We have audited the accompanying consolidated statement of financial position of South Pacific Tyres (the Partnership) as of June 30, 2004, 2003 and 2002 and the related consolidated statements of financial performance, partners’ equity and cash flows for each of the years in the three-year-period ended June 30, 2004. These consolidated financial statements are the responsibility of the Partnerships’ management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

      We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of June 30, 2004, 2003 and 2002, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2004 in conformity with generally accepted accounting principles in Australia.

      Accounting principles generally accepted in Australia vary in certain significant respects from accounting principles generally accepted in the United States. Information relating to the nature and effect of such differences as it relates to Partnership is presented in Notes 31 to 33 to the consolidated financial statements. The application of accounting principles generally accepted in the United States would have affected consolidated financial performance for each of the years in the three-year period ended June 30, 2004 and the determination of partners’ equity as of June 30, 2004, 2003 and 2002, to the extent summarized in Notes 31 to 33 to the consolidated financial statements.

      As discussed in Note 31 to the consolidated financial statements, the Partnership has restated its description of significant differences between generally accepted accounting principles in Australia and generally accepted accounting principles in the United States and their effects on financial performance and partners’ equity for each of the years in the two-year period ended June 30, 2003.

/s/ KPMG

Dated in Melbourne, Australia

October 13, 2004,

except for notes 31, 32 and 33

which are as of March 16, 2005

FS-9

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

Statement of Financial Performance

For the Year Ended 30th June 2004

			2004			2003			2002
	Notes		$			$			$
Revenue from sale of goods		3		763,609,409			737,027,575			769,790,943
Revenue from rendering services		3		55,127,229			56,569,421			59,595,043
Other revenues from ordinary activities		3		6,503,245			6,407,910			7,615,697
Total revenue from ordinary activities				825,239,883			800,004,906			837,001,683
Cost of goods sold				591,739,184			587,501,675			647,665,319
Selling, Administrative and General Expenses				218,086,061			219,985,037			225,688,548
Significant items		4(a)		11,790,923			9,752,650			93,108,359
Borrowing costs		4(b)		21,937,942			17,834,103			13,660,548
Other expenses from ordinary activities				297,389			287,389			485,062
Expenses from ordinary activities				843,851,499			835,360,854			980,607,836
Loss from ordinary activities before related income tax expense				(18,611,616	)		(35,355,948	)		(143,606,153	)
Income tax expense/(benefit) relating to ordinary activities		6(a)		3,869,684			4,207,837			(13,579,453	)
Loss from ordinary activities after related income tax expense				(22,481,300	)		(39,563,785	)		(130,026,700	)
Net loss attributable to outside equity interests		21		—			—			(470	)
Net Loss after income tax attributable to the consolidated entity				(22,481,300	)		(39,563,785	)		(130,027,170	)

See accompanying notes to financial statements.

FS-10

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

Statement of Financial Position

As at 30th June 2004

				2004			2003			2002
		Notes		$			$			$
CURRENT ASSETS
Cash assets			7		56,435,875			15,229,939			37,100,672
Receivables			8		130,174,880			137,441,630			141,657,657
Inventories			9		147,411,193			162,032,137			160,741,965
Prepayments			10		3,219,753			3,323,269			2,258,575
	TOTAL CURRENT ASSETS				337,241,701			318,026,975			341,758,869
NON-CURRENT ASSETS
Receivables			8		1,651,270			9,546,303			30,384,952
Property, plant and equipment			12		197,823,676			218,425,028			202,827,093
Intangible assets			13		4,498,952			4,916,874			5,204,262
Deferred tax assets			6(c)		14,516,753			18,231,572			22,441,327
	TOTAL NON-CURRENT ASSETS				218,490,651			251,119,777			260,857,634
	TOTAL ASSETS				555,732,352			569,146,752			602,616,503
CURRENT LIABILITIES
Payables			14		144,028,406			159,953,830			161,782,718
Interest bearing liabilities			15		188,484,663			171,413,834			142,395,212
Current tax liabilities			6(b)		290,809			135,944			58,887
Provisions			16		54,318,272			53,365,690			102,837,858
	TOTAL CURRENT LIABILITIES				387,122,150			384,869,298			407,074,675
NON-CURRENT LIABILITIES
Payables			14		704,179			7,986,959			28,491,815
Interest bearing liabilities			15		125,707,508			111,097,444			61,095,014
Provisions			16		6,357,177			6,883,413			7,978,203
	TOTAL NON-CURRENT LIABILITIES				132,768,864			125,967,816			97,565,032
	TOTAL LIABILITIES				519,891,014			510,837,114			504,639,707
PARTNERS’ EQUITY
Contributed equity			18		317,688,138			317,675,138			317,675,138
Reserves			19		12,374,551			12,570,229			12,570,229
Accumulated losses			20		(294,221,351	)		(271,935,729	)		(232,268,571	)
	TOTAL PARTNERS’ EQUITY				35,841,338			58,309,638			97,976,796
Outside equity interest			21		—			—			—
	TOTAL PARTNERS’ EQUITY				35,841,338			58,309,638			97,976,796
	TOTAL LIABILITIES AND PARTNERS’ EQUITY				555,732,352			569,146,752			602,616,503

See accompanying notes to financial statements.

FS-11

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

Statement of Partners’ Equity

					Outside									Total
			Contributed		Equity			Accumulated						Partners’
			Equity		Interest			Losses			Reserves			Equity
Balance at June 30, 2001				317,675,137		485,688			(98,587,215	)		9,220,023			228,793,633
	Net loss								(130,027,170	)					(130,027,170	)
	Foreign currency translation											(303,980	)		(303,980	)
	Foreign Currency Translation Reserve — disposal								(3,645,848	)		3,645,848
	Asset Revaluation Reserve — disposal								(8,338	)		8,338
	Outside equity interest reduction					(485,688	)								(485,688	)
	Additional contributed equity			1											1
Balance at June 30, 2002				317,675,138		—			(232,268,571	)		12,570,229			97,976,796
	Net loss								(39,563,785	)					(39,563,785	)
	Initial adoption of AASB1028								(103,373	)					(103,373	)
Balance at June 30, 2003				317,675,138		—			(271,935,729	)		12,570,229			58,309,638
	Net loss								(22,481,300	)					(22,481,300	)
	Asset Revaluation Reserve — disposal								195,678			(195,678	)
		Additional contributed equity		13,000											13,000
Balance at June 30, 2004				317,688,138		—			(294,221,351	)		12,374,551			35,841,338

See accompanying notes to financial statements.

FS-12

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

Statement of Cash Flows

For the Year Ended 30th June 2004

				2004			2003			2002
				$			$			$
				Inflows			Inflows			Inflows
		Notes		(Outflows)			(Outflows)			(Outflows)
Cash flows from operating activities
	Cash receipts in the course of operations				941,655,101			836,176,622			856,792,111
	Cash payments in the course of operations				(908,776,962	)		(882,305,840	)		(870,905,731	)
	Interest received				1,160,246			1,935,297			3,689,606
	Borrowing costs paid				(13,589,472	)		(12,737,555	)		(13,368,875	)
	Income taxes (paid)/refunded		6(b)		—			79,774			(112,184	)
Net cash provided by/(used in) operating activities			30(c)		20,448,913			(56,851,702	)		(23,905,073	)
Cash flows from investing activities
	Proceeds on disposal of controlled entities				—			—			1,983,805
	Proceeds on disposal of property, plant and equipment				5,342,999			4,472,613			2,919,839
	Payments for businesses, (net of cash acquired)		30(b)		—			—			(1,246,831	)
	Payments for property, plant and equipment				(16,279,869	)		(48,512,695	)		(14,750,236	)
Net cash used in investing activities					(10,936,870	)		(44,040,082	)		(11,093,423	)
Cash flows from financing activities
	Proceeds from partner contributions				13,000			—			—
	Proceeds from borrowings				49,782,954			79,333,371			136,589,773
	Repayment of borrowings				(18,195,000	)		—			(79,935,051	)
	Dividends paid				—			—			(2,146	)
Net cash provided by financing activities					31,600,954			79,333,371			56,652,576
Net increase/(decrease) in cash held					41,112,997			(21,558,413	)		21,654,080
Cash at the beginning of the financial year					14,539,451			36,097,864			14,170,702
Effects of exchange rate fluctuations on the balances of cash held in foreign currencies					—			—			273,082
Cash at the end of the financial year			30(a)		55,652,448			14,539,451			36,097,864

See accompanying notes to financial statements.

FS-13

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS

For the Year Ended 30th June 2004

Note 1. Statement of Significant Accounting Policies

General

      The principal activities of the consolidated entity during the period were:

•  Manufacture of tyres for vehicles

•  Wholesaling and retailing of vehicle and aircraft tyres in Australia

      There were no significant changes in the nature of the principal activities of the consolidated entity during the year.

      The significant policies which have been adopted in the preparation of this financial report are:

(a)  Basis of Preparation

      In accordance with Section 11 of the Partnership Agreement, South Pacific Tyres (“the consolidated entity”) is required to prepare a financial report as if it were a public company under the provisions of the Corporations Act 2001.

      In the opinion of the directors, the consolidated entity is not a reporting entity. The financial report of the consolidated entity has been drawn up as a special purpose financial report for distribution to the partners and for the purpose of fulfilling the requirements of the Corporations Act 2001.

      The financial reports has been prepared in accordance with the Corporations Act 2001, the recognition and measurements aspects of all applicable accounting standards and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) that have a material effect.

      The financial report has been prepared on the accrual basis of accounting as defined in AASB1001, Accounting Policies, using historical cost convention and going concern assumption. Except where stated, it does not take into account changing money values or current valuations of non-current assets.

      These accounting policies have been consistently applied by each entity in the consolidated entity and, except where there is a change in accounting policy, are consistent with those of the previous year.

(b)  Principles of Consolidation

Controlled Entities

      The financial statements of controlled entities are included from the date control commences until the date control ceases.

      Outside interests in the equity and results of the entities that are controlled by the consolidated entity are shown as a separate item in the consolidated financial statements.

Transactions Eliminated on Consolidation

      Unrealised gains and losses and inter-entity balances resulting from transactions with or between controlled entities are eliminated in full on consolidation.

(c)  Revenue Recognition — Note 3

      Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST) payable to the taxation authority.

FS-14

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 1. Statement of Significant Accounting Policies (Continued)

Sale of Goods

      Revenue from the sale of goods is recognised (net of returns, discounts and allowances) when control of the goods passes to the customer.

Rendering of Services

      Revenue from rendering services is recognised when the service has been completed.

Interest Revenue

      Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.

Sale of Non-Current Assets

      The gross proceeds of non-current asset sales are included as revenue at the date control of the asset passes to the buyer, usually when an unconditional contract of sale is signed.

      The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal (including incidental costs).

(d)  Goods and Services Tax

      Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

      Receivables and payables are stated with the amount of GST included.

      The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or current liability in the statement of financial position.

      Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(e)  Foreign Currency

Transactions

      Foreign currency transactions are translated to Australian currency at the rates of exchange ruling at the dates of the transactions. Amounts receivable and payable in foreign currencies at reporting date are translated at the rates of exchange ruling on that date.

      Exchange differences relating to amounts payable and receivable in foreign currencies are brought to account as exchange gains or losses in the statement of financial performance in the financial year in which the exchange rates change.

Translation of Controlled Foreign Entities

      The assets and liabilities of foreign operations that are self-sustaining are translated at the rates of exchange ruling at reporting date. Equity items are translated at historical rates. The statements of financial performance are translated at a weighted average rate for the year. Exchange differences arising on translation

FS-15

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 1. Statement of Significant Accounting Policies (Continued)

are taken directly to the foreign currency translation reserve until the disposal, or partial disposal, of the operations.

      The balance of the foreign currency translation reserve relating to a foreign operation that is disposed of, or partially disposed of, is transferred to retained profits in the year of disposal.

(f)  Derivatives

      The consolidated entity is exposed to changes in interest rates, foreign exchange rates and commodity prices from its activities. The consolidated entity uses the following derivative financial instruments to hedge these risks: interest rate swaps and forward foreign exchange contracts. Derivative financial instruments are not held for speculative purposes.

Hedges

Anticipated Transactions

      Transactions are designated as a hedge of the anticipated specific purchase or sale of goods or services, purchase of qualifying assets, or an anticipated interest transaction, only when they are expected to reduce exposure to the risks being hedged, are designated prospectively so that it is clear when an anticipated transaction has or has not occurred and it is probable the anticipated transaction will occur as designated. Gains or losses on the hedge arising up to the date of the anticipated transaction, together with any costs or gains arising at the time of entering into the hedge, are deferred and included in the measurement of the anticipated transaction when the transaction has occurred as designated. Any gains or losses on the hedge transaction after that date are included in the statement of financial performance.

      The net amounts receivable or payable under open swaps and forward rate agreements and the associated deferred gains or losses are not recorded in the statement of financial position until the hedge transaction occurs. When recognised the net receivables or payables are then revalued using the foreign currency and interest rates current at reporting date. Refer to Note 22.

      When the anticipated transaction is no longer expected to occur as designated, the deferred gains or losses relating to the hedged transaction are recognised immediately in the statement of financial performance.

      Where a hedge transaction is terminated early and the anticipated transaction is still expected to occur as designated, the deferred gains or losses that arose on the hedge prior to its termination continue to be deferred and are included in the measurement of the purchase or sale or interest transaction when it occurs. Where a hedge transaction is terminated early because the anticipated transaction is no longer expected to occur as designated, deferred gains or losses that arose on the hedge prior to its termination are included in the statement of financial performance for the period.

      Where a hedge is redesignated as a hedge of another transaction, gains or losses arising on the hedge prior to its redesignation are only deferred where the original anticipated transaction is still expected to occur as designated. When the original anticipated transaction is no longer expected to occur as designated, any gains or losses relating to the hedge instrument are included in the statement of financial performance for the period.

      Gains or losses that arise prior to and upon the maturity of transactions entered into under hedge rollover strategies are deferred and included in the measurement of the hedged anticipated transaction if the transaction is still expected to occur as designated. If the anticipated transaction is no longer expected to occur as designated, the gains or losses are recognised immediately in the statement of financial performance.

FS-16

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 1. Statement of Significant Accounting Policies (Continued)

Other Hedges

      All other hedge transactions are initially recorded at the relevant rate at the date of the transaction. Hedges outstanding at reporting date are valued at the rates ruling on that date and any gains or losses are brought to account in the statement of financial performance.

      Cost or gains arising at the time of entering into the hedge are deferred and amortised over the life of the hedge.

(g)  Borrowing Costs

      Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with arrangement of borrowings.

      Interest payments in respect of financial instruments classified as liabilities are included in borrowing costs.

      Where interest rates are hedged or swapped, the borrowing costs are recognised net of any effect of the hedge or the swap.

      Borrowing costs are expensed as incurred unless they relate to qualifying assets. Qualifying assets are assets which take more than 12 months to get ready for their intended use or sale. In these circumstances, borrowing costs are capitalised to the cost of the asset. Where funds are borrowed specifically for the acquisition, construction or production of a qualifying asset, the amount of borrowing costs capitalised is those incurred in relation to that borrowing, net of any interest earned on those borrowings. Where funds are borrowed generally, borrowing costs are capitalised using a weighted average capitalisation rate.

(h)  Taxation — Note 6

Consolidated Entity

      Income tax is only provided for in the financial statements in respect of the corporate entities forming part of the consolidated entity of South Pacific Tyres.

Controlled Entities

      The controlled entities adopt the income statement liability method of tax effect accounting.

      Income tax expense is calculated on operating profit adjusted for permanent differences between taxable and accounting income. The tax effect of timing differences, which arise from the items being brought to account in different periods for income tax and accounting purposes, is carried forward in the statement of financial position as a future income tax benefit or a provision for deferred income tax.

      Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits relating to tax losses are only brought to account when their realisation is virtually certain. The tax effects of capital losses are not recorded unless realisation is virtually certain.

(i)  Accounting for Acquisitions

      Acquired businesses are accounted for on the basis of the cost method. Fair values are assigned at the date of acquisition to all the identifiable underlying assets acquired and to the liabilities assumed. Specific assessment is undertaken at the date of acquisition of any additional costs to be incurred.

FS-17

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 1. Statement of Significant Accounting Policies (Continued)

      Goodwill, representing the excess of the purchase consideration plus incidental costs over the fair value of the identifiable net assets acquired on the acquisition of the business, is amortised to the statement of financial performance using the following criteria:

Goodwill Acquired	Write-Off Period
Up to $1.25m	Written off over 5 years in equal instalments, but at a rate of not less than $250,000 pa
Over $1.25m	Written off over 20 years on a straight line basis, but at a rate of not less than $250,000 pa

      The unamortised balance of goodwill is reviewed at least annually. Where the balance exceeds the value of expected future benefits, the difference is charged to the statement of financial performance.

      For the purposes of this review process, goodwill is allocated to cash generating units (which equates to the consolidated entity’s reportable business units) upon acquisition. Acquired businesses can readily be allocated to one of the business units on the basis of product manufactured and/or marketed.

Acquisitions of Assets

      All assets acquired, including property, plant and equipment and intangibles other than goodwill, are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition. Acquired in-process research and development is only recognised as a separate asset when future benefits are expected beyond any reasonable doubt to be recoverable.

      Where settlement of any part of cash consideration is deferred, the amounts payable are recorded at their present value, discounted at the rate applicable to the consolidated entity if a similar borrowing were obtained from an independent financier under comparable terms and conditions. The unwinding of the discount is treated as interest expense.

      The costs of assets constructed or internally generated by the consolidated entity, other than goodwill, include the cost of materials and direct labour. Directly attributable overheads and other incidental costs are also capitalised to the asset. Borrowing costs are capitalised to qualifying assets as set out in Note 1(g).

      Expenditure, including that on internally generated assets other than research and development costs, is only recognised as an assets when the entity controls future economic benefits as a result of the costs incurred that are probable and can be measured reliably. Costs attributable to feasibility and alternative approach assessments are expensed as incurred.

Subsequent Additional Costs

      Costs incurred on assets subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset will flow to the consolidated entity in future years, otherwise, expensed as incurred.

FS-18

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 1. Statement of Significant Accounting Policies (Continued)

Research and Development Costs

      Research and development expenditure is expensed as incurred.

(j)  Use and Revisions of Accounting Estimates

      The preparation of the financial report requires the making of estimates and assumptions that affect the recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

      The estimates and underlying assumptions are viewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

(k) Receivables — Note 8

      The collectibility of debts is assessed at reporting date and specific provision is made for any doubtful accounts.

Trade Debtors

      Trade debtors to be settled within agreed terms are carried at amounts due.

(l)  Inventories — Note 9

      Raw materials and stores, work in progress and finished goods are carried at the lower of cost allocated and net realisable value.

      Cost includes direct materials, direct labour, other direct variable costs and allocated production overheads necessary to bring inventories to their present location and condition, based on normal operating capacity of the production facilities.

Manufacturing Activities

      The cost of manufacturing inventories and work-in-progress are assigned on a first-in, first-out basis. Costs arising from exceptional wastage are expensed as incurred.

Net Realisable Value

      Net realisable value is determined on the basis of each inventory line’s normal selling pattern. Expenses of marketing, selling and distribution to customers are estimated and are deducted to establish net realisable value.

(m)  Investments — Note 11

      Investments in controlled entities are carried in the financial statements of the consolidated entity at the lower of cost and recoverable amount.

FS-19

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 1. Statement of Significant Accounting Policies (Continued)

(n)  Leased Assets

      Leases under which the company assumes substantially all the risks and benefits of ownership are classified as finance leases. Other leases are classified as operating leases.

Operating Leases

      Payments made under operating leases are expensed on a straight line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased property. Also refer to Note 23.

(o)  Recoverable Amount of Non-Current Assets Valued on Cost Basis

      The carrying amount of non-current assets valued on the cost basis are reviewed to determine whether they are in excess of their recoverable amount at reporting date. If the carrying amount of a non-current asset exceeds its recoverable amount, the asset is written down to the lower amount. The write-down is expensed in the reporting period in which it occurs.

      Where a group of assets working together supports the generation of cash inflows, recoverable amount is assessed in relation to that group of assets. In assessing recoverable amounts of non-current assets, the relevant cash flows have not been discounted to their present value.

(p)  Depreciation and Amortisation

Complex Assets

      The components of major assets that have materially different useful lives, are effectively accounted for as separate assets, and are separately depreciated.

Useful Lives

      All non-current assets have limited useful lives and are depreciated/ amortised using the straight line method over their estimated useful lives.

      Assets are depreciated or amortised from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and held ready for use.

      Depreciation and amortisation rates and methods are reviewed annually for appropriateness. When changes are made, adjustments are reflected prospectively in current and future periods only. Depreciation and amortisation are expensed, except to the extent that they are included in the carrying amount of another asset as an allocation of production overheads.

      The depreciation/ amortisation rates used for each class of asset are as follows:

	2004		2003		2002
Freehold buildings		2.50%		2.50%		2.50%
Leasehold buildings and improvements		2.5%-40%		2.5%-40%		2.5%-40%
Plant and equipment		6.7%-33.33%		6.7%-33.33%		6.7%-33.33%
Leased plant and equipment		10%-20%		10%-20%		10%-20%

FS-20

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 1. Statement of Significant Accounting Policies (Continued)

(q)  Payables — Note 14

      Liabilities are recognised for amounts to be paid in the future for goods or services received. Trade accounts payable are settled within agreed terms.

(r)  Interest Bearing Liabilities — Note 15

      Bank loans are recognised at their principal amount, subject to set-off arrangements. Interest expense is accrued at the contracted rate.

      Debentures, bills of exchange and notes payable are recognised when issued and the net proceeds received, with the premium or discount on issue amortised over the period of maturity. Interest expense is recognised on an effective yield basis.

(s)  Employee Benefits

Wages, Salaries, Annual Leave, Sick Leave and Non-Monetary Benefits

      Liabilities for employee benefits for wages, salaries, annual leave and sick leave expected to be settled within 12 months of the year-end represent present obligations resulting from employees’ services provided up to the reporting date, calculated at undiscounted amounts based on remuneration wage and salary rates that the consolidated entity expects to pay as at reporting date including related on-costs. Related on-costs have been included in trade creditors.

Long Service Leave

      The provision for employee benefits to long service leave represents the present value of the estimated future cash outflows to be made resulting from employees’ services provided to reporting date.

      The provision is calculated using the expected future increases in wage and salary rates including related on-costs and expected settlement dates based on turnover history and is discounted using the rates attaching to national government bonds at reporting date which most closely match the terms of maturity of the related liabilities. The unwinding of the discount is treated as long service leave expense.

Superannuation Plan

      The partnership and its controlled entities contribute to various defined benefit and accumulation superannuation plans. Contributions are recognised as an expense as they are made. Further information is set out in Note 26.

(t)  Provisions

      A provision is recognised when there is a legal, equitable or constructive obligation as a result of a past event and it is probable that a future sacrifice of economic benefits will be required to settle the obligation, the timing or amount of which is uncertain.

      If the effect is material, a provision is determined by discounting the expected future cash flows (adjusted for expected future risks) required to settle the obligation at a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is treated as part of the expense related to the particular provision.

FS-21

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 1. Statement of Significant Accounting Policies (Continued)

Restructuring and Rationalisation

      A provision for restructuring including termination benefits is only recognised when a detailed plan has been approved and the restructuring has either commenced or been publicly announced. Costs relating to ongoing activities are not provided for. The liability for termination benefits are included in the provision for Rationalisation and restructure (Note 16).

Surplus Leased Premises

      Provision is made for non-cancellable operating lease rentals payable on surplus leased premises when it is determined that no substantive future benefit will be obtained from its occupancy and sub-lease rentals are less.

      The estimate is calculated based of discounted net future cash flows, using the interest rate implicit in the lease or an estimate thereof.

(u)  Advertising

      Under AGAAP, Advertising is generally expensed as the service is performed. Costs incurred under the consolidated entity’s cooperative advertising program with dealers and franchisees are recorded as reductions of sales as related revenues are recognised.

(v)  Environmental Remediation

      The consolidated entity expenses environmental expenditures related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. South Pacific Tyres determines its liability on a site by site basis and records a liability at the time when it is probable and can be reasonably estimated.

Note 2. Change in Accounting Policy

Employee Benefits

      The consolidated entity have applied the revised AASB 1028 “Employee Benefits” for the first time from 1 July 2002.

      The liability for wages and salaries, annual leave and sick leave is now calculated using the remuneration rates the consolidated entity expects to pay as at each reporting date, not wage and salary rates current at reporting date.

      The initial adjustments to the consolidated financial report as at 1 July 2002 as a result of this change are:

•  $103,373 increase in provision for employee benefits

•  $103,373 decrease in opening retained profits

      As a result of this change in accounting policy, employee benefits expense increased by $139,957 and the income tax expense decreased by $2,222 for the year to 30 June 2003.

FS-22

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 3. Revenue from Ordinary Activities

		2004		2003		2002
		$		$		$
Sale of goods revenue from ordinary activities			763,609,409		737,027,575		769,790,943
Rendering of services revenue from ordinary activities			55,127,229		56,569,421		59,595,043
Other revenue from ordinary activities
Interest:
	Associated entities		27,693		814,052		1,828,580
	Other parties		1,132,553		1,121,245		1,861,026
Revenues from outside ordinary activities
	Gross proceeds from sale of non-current assets		5,342,999		4,472,613		3,926,091
Total other revenue			6,503,245		6,407,910		7,615,697
Total revenue from ordinary activities			825,239,883		800,004,906		837,001,683

Note 4. Profit from Ordinary Activities Before Income Tax Expense

      (a) Individually significant expenses/(revenues) included in profit from ordinary activities before income tax expense

	2004			2003			2002
	$			$			$
Closure of Footscray & Thomastown tyre factories		9,458,682			3,927,911			94,900,000
Closure of BA Hamill		—			(1,769,227	)		2,900,000
Retail store restructure programme		—			928,524			1,924,813
Reverse Radial truck factory plant & equipment storage and removal provision		(1,967,197	)		—			—
Closure of radial truck tyre factory		—			—			(3,516,017	)
Norhead dispute settlement		—			2,565,442			1,500,000
Retreading plant closures		513,743			—			—
Somerton factory plant & equipment stocktake loss		4,036,631			—			—
Write down of Thomastown/Footscray properties to recoverable amount		2,219,064			—			—
Activity alignment		—			—			(4,600,437	)
Superannuation shortfall defecit/(gain) accrual		(2,470,000	)		4,100,000			—
		11,790,923			9,752,650			93,108,359

      (b) Profit from ordinary activities before income tax expense has been arrived at after charging/ (crediting) the following items:

	2004		2003		2002
	$		$		$
Cost of goods sold		591,739,184		587,501,675		647,665,319
Write-down of Property, Plant & Equipment to recoverable amount		2,219,064		—		—

FS-23

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 4. Profit from Ordinary Activities Before Income Tax Expense (Continued)

      Relates to Footscray and Thomastown tyre plants. Fair value determined by registered valuer, Knight Frank, in 2004.

		2004		2003		2002
		$		$		$
Depreciation of:
	Buildings		251,849		175,527		104,319
	Plant and equipment		21,894,326		19,469,383		26,628,428
			22,146,175		19,644,910		26,732,747
Amortisation of:
	Leasehold land and buildings		1,158,908		1,076,008		1,315,525
	Goodwill		297,389		287,389		485,062
			1,456,297		1,363,397		1,800,587
Total depreciation and amortisation			23,602,472		21,008,307		28,533,334
Borrowing costs
	Associated entities		8,904,264		5,816,482		3,164,641
	Bank loans and overdrafts		13,033,678		12,017,621		10,495,907
Total borrowing costs			21,937,942		17,834,103		13,660,548

      (b) Profit from ordinary activities before income tax has been arrived at after charging/(crediting) the following items: (continued)

		2004		2003			2002
		$		$			$
Research and development expenditure
	Expensed as incurred		1,573,420		2,849,443			1,938,620
Net bad and doubtful debts expense including movements in provision for doubtful debts			624,867		619,922			1,487,774
Net expense for movements in provision for:
	Employee entitlements		23,330,487		18,361,047			83,347,032
	Rationalisation and restructuring costs		2,162,833		2,565,442			91,183,546
	Rebates and allowances		27,265,039		19,542,569			19,979,619
Net foreign exchange (gain)/loss:
	Borrowings		165,022		(8,205	)		(13,907	)
Net loss on disposal/writedown of non-current assets:
	Property, plant and equipment		6,134,607		7,721,228			13,327,002
	Investments		—		—			625,815
Operating lease rental expense
	Minimum lease payments		30,522,660		30,138,477			31,589,141

FS-24

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 5. Auditors’ Remuneration

		2004		2003		2002
		$		$		$
Audit services
	Auditors of the company — KPMG Australia		312,437		330,000		388,622
For other services
	Auditors of the company — KPMG Australia		3,901		—		2,550

Note 6. Taxation

(a)  Income Tax Expense

		2004			2003			2002
		$			$			$
Prima facie income tax expense/(benefit) calculated at 30% (2003: 30%) (2002: 30%) on the profit/(loss) from ordinary activities			(5,583,485	)		(10,606,784	)		(43,081,846	)
Increase in income tax expense due to:
	Depreciation on buildings		68,953			65,465			61,316
	Amortisation of goodwill		89,217			86,217			145,519
	Thin Capitalisation		1,033,514			401,549			—
	Entertainment		322,092			213,606			196,069
	Sundry items		412,945			84,401			219,335
Decrease in income tax expense due to:
	Effects of lower/ higher rates of tax on overseas income		—			—			157
	Tax at standard rate on consolidated entity profits attributed to partners		(7,679,125	)		(13,350,470	)		(29,039,039	)
Income tax expense/(benefit) on operating profit/(loss) before individually significant income tax items			4,022,361			3,594,924			(13,420,725	)
Add: Income tax under/(over) provided in prior year			(152,677	)		612,913			(158,728	)
Income tax expense/(benefit) attributable to operating profit			3,869,684			4,207,837			(13,579,453	)
Income tax expense/(benefit) attributable to operating profit is made up of:
Current income tax provision			4,633,950			2,057,845			(11,560,219	)
Under/(over) provision in prior year			(152,677	)		612,913			(158,728	)
Future income tax benefit			(611,589	)		1,537,079			(1,860,506	)
			3,869,684			4,207,837			(13,579,453	)

FS-25

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 6. Taxation (Continued)

(b)  Current Tax Liabilities

	2004			2003			2002
	$			$			$
Provision for current income tax
Movements during the year:
Balance at the beginning of year		135,944			58,887			167,096
Income tax (paid)/received		—			79,774			(112,184	)
Under/(over) provision in prior year		539			635,755			(72,516	)
Current year’s income tax expense/(benefit) on operating loss		4,633,949			2,057,845			(11,560,219	)
Disposal of controlled entity		—			—			78,048
Tax loss transferred to FITB		(4,479,623	)		(2,696,317	)		11,558,662
		290,809			135,944			58,887

(c)  Deferred Tax Assets

Future Income Tax Benefit

      Future income tax benefit comprises the estimated future benefit at the applicable rate of 30% (2003: 30%) (2002: 30%) on the following items:

	2004		2003		2002
	$		$		$
Accumulated non-allowable provisions		5,761,608		4,979,376		6,499,991
Accumulated tax losses		8,755,145		13,252,196		15,941,336
		14,516,753		18,231,572		22,441,327

      The tax effect of temporary differences that give rise to significant portions of the future income tax benefit are presented below:

Trading stock adjustments	166,306		36,887		30,409
Depreciation on property, plant and equipment	(1,586,941	)	(2,018,708	)	(2,132,392	)
Provisions	6,892,310		6,931,368		8,533,692
Accruals	237,699		160,408		251,990
Accumulated tax losses	8,755,145		13,252,196		15,941,336
Other	52,234		(130,579	)	(183,708	)
	14,516,753		18,231,572		22,441,327

      An amount of $48,389,177 of taxable income must be earned to allow for the realisation of the deferred tax assets in the foreseeable future. The combined taxable income of Tyre Marketers (Australia) Limited and SACRT Trading Pty Ltd in 2004 was $16,687,301 (2003 $6,919,370) and (2002 $36,556,061 loss). In the opinion of the directors of the consolidated entity, it is virtually certain that the results of future operations will generate sufficient taxable income to realise the deferred tax assets.

      The consolidated entity has unrecognised capital tax losses of $21,271,173 in 2004 (2003 $22,081,014) and (2002 $22,817,537).

FS-26

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 6. Taxation (Continued)

      As a consequence of the substantive enactment of the Tax Consolidation legislation and since the consolidated entity had not notified the Australian Tax Office at the date of signing this report of the implementation date for the tax consolidation, the consolidated entity has applied UIG39 “Effects of Proposed Tax Consolidation Legislation on Deferred Tax Balances”. There was no impact on the consolidated entity’s future income tax benefits, as at 30 June 2004.

Note 7. Cash Assets

	2004		2003		2002
	$		$		$
Cash		56,435,875		5,629,939		8,400,672
Bank short term deposits, maturing daily and paying interest at a weighted average interest rate of 4.7% (2003: 4.5%) (2002: 4.7%)		—		9,600,000		28,700,000
		56,435,875		15,229,939		37,100,672

Note 8. Receivables

	2004			2003			2002
	$			$			$
Current
Gross debtors		127,149,457			132,004,740			138,762,403
Less: Provision for doubtful trade debtors		(1,730,468	)		(2,655,040	)		(3,050,317	)
		125,418,989			129,349,700			135,712,086
Other debtors		4,755,891			8,091,930			5,945,571
		130,174,880			137,441,630			141,657,657
Non-current
Other debtors		1,651,270			9,546,303			30,384,952
		131,826,150			146,987,933			172,042,609

      Other debtor amounts generally arise from transactions outside the usual operating activity of the consolidated entity.

FS-27

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 9. Inventories

	2004			2003			2002
	$			$			$
Current
Raw materials and stores at cost		8,406,434			11,548,888			10,302,933
Less: Provision for stock obsolescence		(56,185	)		(462,697	)		(490,527	)
Raw materials and stores at net realisable value		8,350,249			11,086,191			9,812,406
Work in progress at cost		5,024,033			7,779,196			4,950,537
Less: Provision for stock obsolescence		—			—			(70,301	)
Work in progress at net realisable value		5,024,033			7,779,196			4,880,236
Finished goods at cost		132,113,591			138,819,804			142,658,001
Less: Provision for stock obsolescence		(853,652	)		(889,531	)		(1,816,842	)
Finished goods at net realisable value		131,259,939			137,930,273			140,841,159
Other stocks at cost		3,215,229			6,519,272			6,390,959
Less: Provision for stock obsolescence		(438,257	)		(1,282,795	)		(1,182,795	)
Other stocks at net realisable value		2,776,972			5,236,477			5,208,164
		147,411,193			162,032,137			160,741,965

Note 10. Other Current Assets

	2004		2003		2002
	$		$		$
Prepayments		3,219,753		3,323,269		2,258,575

Note 11. Other Financial Assets

	2004		2003		2002
	$		$		$
Non-current
Investments in controlled entities
Unlisted shares at cost		—		—		—
		—		—		—

FS-28

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 12. Property, Plant and Equipment

		2004			2003			2002
		$			$			$
Freehold land
	At cost		2,508,947			3,350,000			3,350,000
			2,508,947			3,350,000			3,350,000
Freehold buildings
	At cost		10,769,845			11,886,348			11,841,455
	Accumulated depreciation		(1,275,597	)		(1,184,367	)		(1,008,840	)
			9,494,248			10,701,981			10,832,615
Leasehold land and buildings
	At cost		34,438,146			57,165,525			57,096,991
	Accumulated amortisation		(6,779,839	)		(7,366,006	)		(6,667,761	)
			27,658,307			49,799,519			50,429,230
	Held for sale at recoverable amount		19,104,877			—			—
			46,763,184			49,799,519			50,429,230
Plant and equipment
	At cost		346,754,924			357,168,327			369,419,397
	Accumulated depreciation		(211,578,026	)		(227,312,706	)		(242,149,279	)
			135,176,898			129,855,621			127,270,118
	Held for sale at recoverable amount		145,123			—			—
			135,322,021			129,855,621			127,270,118
Buildings and plant under construction
	At cost		3,735,276			24,717,907			10,945,130
Total property, plant and equipment net book value			197,823,676			218,425,028			202,827,093

      Assets held for sale relate to Footscray tyre plant closed in December 2001 and Thomastown tyre plant closed in July 2002.

Reconciliations

      Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:

Freehold land

	2004			2003		2002
	$			$		$
Carrying amount at the beginning of year		3,350,000			3,350,000		3,350,000
Disposals		(841,053	)		—		—
Carrying amount at the end of year		2,508,947			3,350,000		3,350,000

FS-29

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 12. Property, Plant and Equipment (Continued)

	2004			2003			2002
	$			$			$
Buildings
Carrying amount at the beginning of year		10,701,981			10,832,615			11,539,044
Currency conversion		—			—			(101,481	)
Additions		—			—			11,706
Transfer from capital works in progress		12,543			44,893			30,818
Disposal of businesses/subsidiary (net)		—			—			(543,153	)
Disposals		(968,427	)		—			—
Depreciation		(251,849	)		(175,527	)		(104,319	)
Carrying amount at the end of year		9,494,248			10,701,981			10,832,615
Leasehold land and buildings
Carrying amount at the beginning of year		49,799,519			50,429,230			51,725,245
Transfer from capital works in progress		344,534			458,306			39,515
Disposals		(2,221,960	)		(12,009	)		(20,005	)
Depreciation		(1,158,909	)		(1,076,008	)		(1,315,525	)
Carrying amount at the end of year		46,763,184			49,799,519			50,429,230
Plant and equipment
Carrying amount at the beginning of year		129,855,621			127,270,118			151,296,771
Currency conversion		—			—			(31,013	)
Acquired businesses/ subsidiaries		—			—			458,033
Additions		189,115			11,306			188,971
Transfer from capital works in progress		36,562,647			34,225,413			15,784,417
Disposals		(9,391,035	)		(12,181,833	)		(13,639,725	)
Disposal of businesses/subsidiary (net)		—			—			(158,909	)
Depreciation		(21,894,327	)		(19,469,383	)		(26,628,427	)
Carrying amount at the end of year		135,322,021			129,855,621			127,270,118
Capital works in progress
Carrying amount at the beginning of year		24,717,907			10,945,130			14,837,434
Acquired businesses/ subsidiaries		—			—			458,033
Additions		16,090,754			48,501,389			14,549,558
Transfer to property, plant and equipment		(36,919,723	)		(34,728,612	)		(16,312,783	)
Other disposals		(153,662	)		—			(2,587,112	)
Carrying amount at the end of year		3,735,276			24,717,907			10,945,130

FS-30

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 13. Intangibles

	2004			2003			2002
	$			$			$
Goodwill — at cost		5,847,772			7,268,104			7,768,104
Accumulated amortisation		(1,348,820	)		(2,351,230	)		(2,563,842	)
		4,498,952			4,916,874			5,204,262

      The consolidated entity estimates that the annual amortisation expense related to intangible assets will be $287,388 during each of the next 5 years and the weighted average remaining amortisation period is approximately 14 years.

Note 14. Payables

		2004		2003		2002
		$		$		$
Current
Trade creditors			108,050,790		115,985,030		117,076,110
Accrued liabilities			35,797,893		41,841,676		43,903,827
Other creditors			179,723		2,127,124		802,781
	Total Current		144,028,406		159,953,830		161,782,718
Non-current
Trade creditors			704,179		752,291		871,199
Other creditors			—		7,234,668		27,620,616
	Total Non Current		704,179		7,986,959		28,491,815
	Total Payables		144,732,585		167,940,789		190,274,533

Note 15.     Interest Bearing Liabilities

		2004		2003		2002
		$		$		$
Current
Bank overdrafts — secured			783,427		—		—
Bank overdrafts — unsecured			—		690,488		1,002,808
Bank loans — secured			77,638,119		—		—
Bank loans — unsecured			—		95,833,119		65,897,645
Goodyear Australia Pty Ltd loans			35,033,668		—		—
Securitisation			75,029,449		74,890,227		75,494,759
	Total Current		188,484,663		171,413,834		142,395,212
Non-current
Partner Loan — Pacific Dunlop Tyres Pty Ltd			62,853,754		55,548,722		30,547,507
Partner Loan — Goodyear Tyres Pty Ltd			62,853,754		55,548,722		30,547,507
	Total Non Current		125,707,508		111,097,444		61,095,014
	Total Interest bearing liabilities		314,192,171		282,511,278		203,490,226

FS-31

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 15. Interest Bearing Liabilities (Continued)

Partner Loans — Pacific Dunlop Tyres Pty Ltd & Goodyear Tyres Pty Ltd

      On October 19, 2001, the partners in South Pacific Tyres (SPT) signed an agreement setting forth a plan to restructure certain operations of the consolidated entity, details of which are set forth in two agreements — the Australian Deed and the Co-ordination Deed (the “Agreements.”) The Agreements require the partners to advance (in one or more tranches) up to $56.3 million to the consolidated entity. As of June 30, 2003, the amounts due to each partner (including principal and interest) were $55.5 million compared to $30.5 million at June 30, 2003. Interest on the outstanding portion of the loan which is compounded and calculated at 90 day intervals based on the 90 day bank bill rate plus a margin of 0.6% per annum.

      Also included in the Agreements, is a put and call option giving the partners the right to acquire from the other partner, that partner’s interest in the partnership. The earliest date this provision can be exercised is August 15, 2005 (the “put option date”) by Pacific Dunlop Tyres Pty Ltd (“PDL.”) Beginning with the put option date, PDL has twelve months during which they may exercise their put option. At the end of this twelve month period, Goodyear Tyres Pty Ltd will have the right to exercise their call option during the subsequent twelve month period.

      The loans mature at the earlier of:

•  PDL exercising the put option (no earlier than August 2005);

•  the tenth anniversary of the Agreements (October 2011); and

•  the dissolution of the partnership (not expected.)

Bank Loans

      Pacific Dunlop Tyres Pty Ltd and Goodyear Tyres Pty Ltd (together comprising the SPT partnership in Australia) along with SPT’s Australian controlled entities, are borrowers under bank facilities (the “Facilities”) provided by a group of banks referred to as the “Lenders.”

      At June 30, 2004, the Facilities provided for borrowings of up to $79.7 million of which, $2.4 million was unused. In August 2003, the unsecured bank facilities were renewed for one year and restructured to reduce their size and to provide security to the Lenders by way of a fixed and floating charge over certain assets. Secured bank loans and overdrafts rank ahead in priority order of other interest bearing liabilities. Also in August 2004, a guarantee was provided by The Goodyear Tire & Rubber Company (U.S.).

      Interest on the facilities is calculated using the bank bill rate in effect at the time of borrowing plus a margin of up to 1.8% depending on the type of advance. The borrowers must also pay a fee equal to 3.00% per annum on the facility limit regardless of utilization.

      In addition to providing cash advances, the Facilities may be used for other purposes including borrowings relating to trade finance (such as bid/performance bonds and shipping guarantees), performance and financial guarantees, leasing, business credit cards, and payroll electronic payment requirements.

Accounts Receivable Financing

      During November 2001, the consolidated entity entered into an agreement with a major financial institution in relation to the securitisation of trade receivables. Under this arrangement, eligible receivables are transferred to a SPT Trust Special Purpose Vehicle (SPV) in return for cash and a “subordinated loan amount.” The SPV is managed by one of the bank facility lenders. Interest on the facility is calculated using the one month bank bill rate (determined each monthly settlement date) plus a margin. This facility must be renewed on November 2nd 2006.

FS-32

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 15. Interest Bearing Liabilities (Continued)

Financing arrangements

      The consolidated entity has access to the following lines of credit:

	2004		2003		2002
	$		$		$
Total facilities available:
Bank overdrafts		2,000,000		6,500,000		6,500,000
Bank loans		71,650,000		90,000,000		105,500,000
Trade bills		6,000,000		6,000,000		6,000,000
		79,650,000		102,500,000		118,000,000
Facilities utilised at balance date:
Bank overdrafts		743,773		574,845		1,012,585
Bank loans		71,650,000		90,000,000		63,500,000
Trade bills		4,859,813		5,589,308		2,247,952
		77,253,586		96,164,153		66,760,537
Facilities not utilised at balance date:
Bank overdrafts		1,256,227		5,925,155		5,487,415
Bank loans		—		—		42,000,000
Trade bills		1,140,187		410,692		3,752,048
		2,396,414		6,335,847		51,239,463

      Interest on bank overdrafts is charged at prevailing market rates. The effective interest rates for all overdrafts as at 30 June 2004 is 8.6% (2003: 8.6%) (2002: 8.6%).

      All bank loans are denominated in Australian dollars. The bank loans amount in current liabilities comprises the portion of the consolidated entity’s bank loan payable within one year. The effective interest rate on bank loans is 8.65% (2003: 8.34%) (2002: 6.56%).

      The effective interest rate on trade bills is 8.15% (2003: 5.66%) (2002: 5.32%).

      At 30 June 2002 the consolidated entity had committed lines of bank loans of $105,500,000 up to 1 December 2002.

      At 30 June 2002 $42,000,000 of the lines were undrawn. An annual commitment fee of 0.5% to 0.9% was paid.

FS-33

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 16. Provisions

	2004		2003		2002
	$		$		$
Current
Employee entitlements		33,143,515		30,803,805		35,447,716
Rationalisation and restructuring		13,995,281		16,981,066		60,411,626
Rebates		7,179,476		5,580,819		6,978,516
		54,318,272		53,365,690		102,837,858
Non-current
Employee entitlements		6,357,177		6,883,413		7,978,203
		6,357,177		6,883,413		7,978,203

Reconciliations

      Reconciliations of the carrying amounts of each class of provision, except for employee benefits are set out below.

      To maintain competitiveness, the consolidated entity has implemented rationalisation actions over the past several years for the purpose of reducing excess capacity, improving productivity and reducing costs. The net amounts of rationalisation charges to the Statement of Financial Performance were as follows:

Rationalisation and Restructuring

	2004			2003			2002
	$			$			$
Carrying amount at beginning of year		16,981,066			60,411,626			14,084,483
Provisions made during the year		2,162,833			2,565,442			91,183,546
Provision utilised by loss on disposal/scrappings of assets		—			(8,475,000	)		(13,100,000	)
Payments made during the period		(5,148,618	)		(37,521,002	)		(31,756,403	)
Carrying amount at end of year		13,995,281			16,981,066			60,411,626

      In fiscal year 2000 and 2001, a rationalisation program was undertaken by the consolidated entity to close the tyre plants in Thomastown and Footscray, the MRT plant in Somerton and the BA Hamill engineering workshop for the purpose of reducing excess capacity, improving productivity and reducing costs. Rationalisation expense for this plan was $50.6 million, $91.2 million, $2.6 million, and $2.2 million in 2001, 2002, 2003 and 2004 respectively and was charged to significant items in the statement of financial performance.

      The number of people planned to be terminated at the MRT site at Somerton was 525. The actual number of people terminated was 519, all of whom were manufacturing related employees. The number of people planned to be terminated at the Thomastown, Footscray and BA Hamill sites was 868. The actual number of people terminated was 871, 799 of whom were manufacturing and 72 of whom were administrative. At 30th June 2004 there was a plan to close two tyre retreading plants at North Albury and Tamworth in July 2004. The planned number of people terminating is 6 people.

      Net Charges in 2004 of $2.2 million consisted of $3.6 million for environmental remediation of the Thomastown and Footscray tyre plants, $0.5 million for retreading plant closures and $(1.9) million reversal of provision made for storage, dismantling and packaging of plant and equipment at the MRT Plant at

FS-34

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 16. Provisions (Continued)

Somerton. In 2004, $5.1 million was incurred which comprised $3.6 million for settlement of contractual dispute with customer (Norhead) and $1.5 million for environmental remediation at Thomastown & Footscray.

      Net Charges in 2003 of $2.6 million related to settlement of contractual dispute with customer (Norhead). In 2003, $37.5 million was incurred which comprised $35.4 million of associate redundancy payments for employees at the Thomastown, Footscray and BA Hamill sites, $0.5 million for environmental remediation at Thomastown and Footscray, $0.5 million for settlement of contractual dispute with customer (Norhead) and $1.1 million for storage, dismantling and packaging costs of equipment at the MRT Plant at Somerton.

      Net Charges in 2002 of $91.2 million consisted $66.3 million for associate redundancy payments for associates at the Thomastown, Footscray and BA Hamill sites, $9.9 million for environmental remediation at the Thomastown and Footscray tyre plants, $21.6 million for plant and equipment write off at the Thomastown, Footscray and BA Hamill sites, $1.5 million for settlement of contractual dispute with customer (Norhead), $(1.5) million reversal of provision made for preparation of the land and buildings at the MRT site at Somerton for sale, $(4.0) million reversal of provision made for activity alignment redundancy plan and $(2.6) million reversal of provision of redundancy for closure of the MRT Plant at Somerton.

      In 2002, $31.8 million was incurred which comprised $9.3 million of associate redundancy payments for employees at the Thomastown, Footscray and BA Hamill sites, $0.2 million for the activity alignment redundancy plan, $0.4 million for associate redundancy payments at the MRT Plant at Somerton, $1.6 million for business interruption expenditure and $0.3 million for storage, dismantling and packaging of plant and equipment at the MRT Plant at Somerton.

      The provision at 30th June 2004 was $13,995,281, which included $1,996,622 for the future costs of storage, dismantling and packaging of plant & equipment at the MRT plant in Somerton, $11,484,916 for environmental remediation and $513,743 for the closure of the North Albury and Tamworth Retreading plants.

	2004			2003			2002
	$			$			$
Rebates
Carrying amount at beginning of year		5,580,819			6,978,516			6,236,155
Provisions made during the year		27,265,039			19,542,569			19,979,619
Payments made during the period		(25,666,382	)		(20,940,266	)		(19,237,258	)
Carrying amount at end of year		7,179,476			5,580,819			6,978,516
Number of employees		3,063			3,133			3,730

FS-35

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 17. Amounts Payable/ Receivable in Foreign Currencies

      The Australian dollar equivalents of unhedged amounts payable or receivable in foreign currencies, calculated at year-end exchange rates, are as follows:

	2004		2003		2002
	$		$		$
United States dollars
Amounts payable:
Current		779,816		872,599		1,382,011
Japanese Yen
Amounts payable:
Current		—		—		1,432,379
Euro dollar
Amounts payable:
Current		764,127		435,439		195,889
Total		1,543,943		1,308,038		3,010,279

Note 18. Contributed Equity

	2004		2003		2002
	$		$		$
Goodyear Tyres Pty Ltd
Contributed equity at the beginning of year		158,837,569		158,837,569		158,837,569
Additional contributed equity		13,000		—		—
Contributed equity at the end of year		158,850,569		158,837,569		158,837,569
Pacific Dunlop Tyres Pty Ltd
Contributed equity at the beginning of year		158,837,569		158,837,569		158,837,569
Contributed equity at the end of year		158,837,569		158,837,569		158,837,569
		317,688,138		317,675,138		317,675,138

FS-36

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 19. Reserves

	2004			2003		2002
	$			$		$
Asset revaluation		12,374,551			12,570,229		12,570,229
		12,374,551			12,570,229		12,570,229
Movements during the year
Asset revaluation reserve
Balance at the beginning of year		12,570,229			12,570,229		12,561,891
Transferred to retained profits		(195,678	)		—		8,338
Balance at the end of year		12,374,551			12,570,229		12,570,229
Foreign currency translation reserve
Balance at the beginning of year		—			—		(3,341,868	)
Translation adjustment on assets and liabilities held in foreign currencies		—			—		(303,980	)
Transferred to retained profits		—			—		3,645,848
Balance at the end of year		—			—		—

Nature and Purpose of Reserves

Asset revaluation

      The asset revaluation reserve includes the net revaluation increments and decrements arising from the revaluation of non-current assets measured at fair value in accordance with AASB1041.

Foreign currency reserve

      The foreign currency translation reserve records the foreign currency differences arising from the translation of self-sustaining foreign operations, the translation of transactions that hedge the Entity’s net investment in a foreign operation or the translation of foreign currency monetary items forming part of the net investment in a self-sustaining operation. Refer to accounting policy Note 1(e).

FS-37

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 20. Accumulated Losses

	2004			2003			2002
	$			$			$
Goodyear Tyres Pty Ltd
Accumulated losses at the beginning of year		(136,469,457	)		(116,635,878	)		(49,795,200	)
Net loss attributable to partners		(11,240,650	)		(19,781,893	)		(65,013,585	)
Amounts transferred from reserves		97,839			—			(1,827,093	)
Net effect of initial adoption of Revised AASB 1028 “Employee Benefits”		—			(51,686	)		—
Accumulated losses at the end of year		(147,612,268	)		(136,469,457	)		(116,635,878	)
Pacific Dunlop Tyres Pty Ltd
Accumulated losses at the beginning of year		(135,466,272	)		(115,632,693	)		(48,792,015	)
Net loss attributable to partners		(11,240,650	)		(19,781,892	)		(65,013,585	)
Amounts transferred from reserves		97,839			—			(1,827,093	)
Net effect of initial adoption of Revised AASB 1028 “Employee Benefits”		—			(51,687	)		—
Accumulated losses at the end of year		(146,609,083	)		(135,466,272	)		(115,632,693	)
		(294,221,351	)		(271,935,729	)		(232,268,571	)

      The consolidated entity’s ability to pay dividends is restricted by credit facility agreements.

Note 21. Outside Equity Interest

	2004		2003		2002
	$		$		$
Outside equity interest in controlled entities comprise:
Interest in retained profits at the beginning of the financial year after adjusting for outside equity interests in entities		—		—		1,034,550
Interest in operating profit after income tax		—		—		470
Interest in dividends provided for or paid		—		—		(2,146	)
Disposal of Interest in Retained Profits		—		—		(1,032,874	)
Interest in retained profits at the end of the financial year		—		—		—
Interest in share capital		—		—		—
Interest in reserves		—		—		—
Total outside equity interest		—		—		—

Note 22. Additional Financial Instruments Disclosure

(a) Interest Rate Risk

      The consolidated entity enters into interest rate swaps to manage cash flow risks associated with the floating interest rates on borrowings.

FS-38

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 22. Additional Financial Instruments Disclosure (continued)

Interest rate swaps and forward rate agreements

      Interest rate swaps allow the consolidated entity to swap floating rate borrowings into fixed rates. Maturities of swap contracts are principally between one to five years.

      Each contract involves quarterly payment or receipt of the net amount of interest. At 30 June 2004 the fixed rates were 5.9% (2003: 5.7% to 5.9%) (2002: 5.5% to 5.9%) and floating rates were at bank bill rates plus the consolidated entity’s credit margin. The weighted average effective floating interest rate at 30 June 2004 was 5.9% (2003: 5.8%) (2002: 5.7%).

Interest rate risk exposures

      The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and financial liabilities is set out below:

			Fixed interest maturity in:
			Weighted
			average										More		Non-
			interest			Floating			1 year or		Over 1 year		than		interest
	Note		rate			interest rate			less		to 5 years		5 years		bearing		Total
2004
Financial assets
Cash		7		4.74	%		56,343,803									92,072		56,435,875
Receivables		8		—												131,826,150		131,826,150
							56,343,803									131,918,222		188,262,025
Financial liabilities
Bank overdrafts and loans		15		8.65	%		73,561,733											73,561,733
Securitisation		15		5.60	%		75,029,449											75,029,449
Partner Loans		15		6.31	%		160,741,176											160,741,176
Trade bills		15		8.15	%		4,859,813											4,859,813
Accounts payable		14														144,732,585		144,732,585
Employee entitlements		16		0.00	%					33,143,515		3,378,237		2,978,940				39,500,692
							314,192,171			33,143,515		3,378,237		2,978,940		144,732,585		498,425,448
Interest rate swaps							(20,000,000	)		20,000,000
2003
Financial assets
Cash		7		4.51	%		15,133,917									96,022		15,229,939
Receivables		8		—												146,987,933		146,987,933
							15,133,917									147,083,955		162,217,872
Financial liabilities
Bank overdrafts and loans		15		8.27	%		90,934,299											90,934,299
Securitisation		15		4.88	%		74,890,227											74,890,227
Partner Loans		15		5.35	%		111,097,444											111,097,444
Trade bills		15		5.66	%		5,589,308											5,589,308
Accounts payable		14														167,940,789		167,940,789
Employee entitlements		16		1.30	%					30,803,805		3,177,964		3,705,449				37,687,218
							282,511,278			30,803,805		3,177,964		3,705,449		167,940,789		488,139,285
Interest rate swaps							(50,000,000	)		30,000,000		20,000,000

FS-39

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 22. Additional Financial Instruments Disclosure (continued)

			Fixed interest maturity in:
			Weighted
			average										More		Non-
			interest			Floating			1 year or		Over 1 year		than		interest
	Note		rate			interest rate			less		to 5 years		5 years		bearing		Total
2002
Financial assets
Cash		7		4.70	%		37,092,372									8,300		37,100,672
Receivables		8		—												172,042,609		172,042,609
							37,092,372			—		—		—		172,050,909		209,143,281
Financial liabilities
Bank overdrafts and loans		15		6.59	%		64,652,501											64,652,501
Securitisation		15		5.06	%		75,494,759											75,494,759
Partner Loans		15		5.46	%		61,095,014											61,095,014
Trade bills		15		5.32	%		2,247,952											2,247,952
Accounts payable		14														190,274,533		190,274,533
Employee entitlements		16		2.00	%					35,447,716		4,278,361		3,699,842				43,425,919
							203,490,226			35,447,716		4,278,361		3,699,842		190,274,533		437,190,678
Interest rate swaps							(50,000,000	)		20,000,000		30,000,000

(b)  Foreign exchange risk

      The consolidated entity enters into forward foreign exchange contracts to hedge foreign currency purchases expected in each month within the following six months within Board approval limits. The amount of anticipated future purchases and sales are forecast in light of current conditions in foreign markets, commitments from customers and experience.

FS-40

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 22. Additional Financial Instruments Disclosure (continued)

      The following table sets out the gross value to be received under foreign currency contracts, the weighted average contracted exchange rates and the settlement periods of outstanding contracts for the consolidated entity.

	Average rate
							2004		2003		2002
	2004		2003		2002		$		$		$
Buy US Dollars
Not later than one year		0.7029		0.63		0.56		17,860,867		26,558,702		43,978
Later than one year but not later than two years								—		—		—
Later than two year but not later than three years								—		—		—
								17,860,867		26,558,702		43,978
Sell US Dollars
Not later than one year		0.7155		0.64		—		1,623,900		814,196		—
Later than one year but not later than two years								—		—		—
Later than two year but not later than three years								—		—		—
								1,623,900		814,196		—
Buy EURO dollars
Not later than one year		0.59		0.55		0.60		5,693,338		9,937,775		1,096,037
Later than one year but not later than two years								—		—		—
Later than two year but not later than three years								—		—		—
								5,693,338		9,937,775		1,096,037
Sell EURO dollars
Not later than one year		0.61		0.55		—		18,245		179,783		—
Later than one year but not later than two years								—		—		—
Later than two year but not later than three years								—		—		—
								18,245		179,783		—
Buy Japanese yen
Not later than one year		79.33		70.57		67.3		1,560,868		2,101,635		223,131
Later than one year but not later than two years								—		—		—
Later than two year but not later than three years								—		—		—
								1,560,868		2,101,635		223,131
Sell Japanese yen
Not later than one year		76.45		73.94		—		133,059		56,934		—
Later than one year but not later than two years								—		—		—
Later than two year but not later than three years								—		—		—
								133,059		56,934		—
Buy English pound
Not later than one year		—		0.39		0.37		—		77,119		71,779
Later than one year but not later than two years								—		—		—
Later than two year but not later than three years								—		—		—
								—		77,119		71,779

      As these contracts are hedging anticipated purchases, any unrealised gains and losses on the contracts, together with the costs of the contracts, will be deferred and then recognised in the financial statements at the time the underlying transaction occurs as designated. The gross deferred gains and losses on hedges of anticipated foreign current purchases are:

	2004				2003				2002
	Gains		Losses		Gains		Losses		Gains		Losses
	$		$		$		$		$		$
Not later than one year		778,676		80,710		44,231		2,021,565		54,818		—
Later than one year but not later than two years		—		—		—		—		—		—
Later than two year but not later than three years		—		—		—		—		—		—

FS-41

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 22. Additional Financial Instruments Disclosure (continued)

      When the underlying transaction has occurred as designated, the effect of the hedge has been recognised in the financial statements.

(c) Commodity Price Risk

      The consolidated entity does not enter into futures contracts to hedge (or hedge a proportion of) commodity purchase prices on anticipated specific purchase commitments of natural rubber.

(d) Credit Risk Exposures

      Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.

Recognised Financial Instruments

      The credit risk on financial assets, excluding investments, of the consolidated entity which have been recognised on the statement of financial position, is the carrying amount, net of any provision for doubtful debts.

      The consolidated entity minimises concentrations of credit risk by undertaking transactions with a large number of customers and counterparties in various countries.

      The consolidated entity is not materially exposed to any individual overseas country or individual customer. Concentrations of credit risk on trade debtors and term debtors due from customers are the motor vehicle and transport industries.

     Unrecognised Financial Instruments

      Credit risk on derivative contracts which have not been recognised on the statement of financial position is minimised as counterparties are recognised financial intermediaries with acceptable credit ratings determined by a recognised ratings agency.

      Interest rate swaps and foreign exchange contracts are subject to credit risk in relation to the relevant counterparties, which are principally large banks.

      As all futures contracts are transacted through a recognised futures exchange, credit risk associated with these contracts is minimal.

(e) Net Fair Values of Financial Assets and Liabilities

Valuation approach

      Net fair values of financial assets and liabilities are determined by the consolidated entity on the following basis:

     Recognised Financial Instruments

      The carrying amounts of bank term deposits, trade debtors, other debtors, bank overdrafts, accounts payable, bank loans and employee entitlements approximate net fair value.

     Unrecognised Financial Instruments

      The valuation of financial instruments not recognised on the statement of financial position detailed in this note reflects the estimated amounts which the consolidated entity expects to pay or receive to terminate

FS-42

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 22.           Additional Financial Instruments Disclosure (continued)

the contracts (net of transaction costs) or replace the contracts at their current market rates as at reporting date. This is based on independent market quotations and determined using standard valuation techniques.

     Net Fair Values

     Recognised Financial Instruments

      The carrying amounts and net fair values of financial assets and financial liabilities as at the reporting date are as follows:

	2004				2003				2002
	Carrying		Net fair		Carrying		Net fair		Carrying		Net fair
	amount		value		amount		value		amount		value
	$		$		$		$		$		$
Financial assets
Cash assets		56,435,875		56,435,875		15,229,939		15,229,939		37,100,672		37,100,672
Receivables		131,826,150		131,826,150		146,987,933		146,987,933		172,042,609		172,042,609
Financial liabilities
Payables		144,732,585		144,732,585		167,940,789		167,940,789		190,274,533		190,274,533
Bank overdrafts and loans		73,561,733		73,561,733		90,934,299		90,934,299		64,652,501		64,652,501
Securitisation		75,029,449		75,029,449		74,890,227		74,890,227		75,494,759		75,494,759
Partner Loans		160,741,176		160,741,176		111,097,444		111,097,444		61,095,014		61,095,014
Trade bills		4,859,813		4,859,813		5,589,308		5,589,308		2,247,952		2,247,952
Employee entitlements		39,572,002		39,572,002		37,687,218		37,687,218		43,425,919		43,425,919

     Unrecognised Financial Instruments

      The net fair values of the unmatured derivatives designated as hedges at balance date totalled:

	2004		2003			2002
	$		$			$
Forward foreign exchange contracts gains/(losses)		697,966		(1,977,334	)		54,818

FS-43

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 23. Commitments

		2004		2003		2002
		$		$		$
Capital expenditure commitments
Plant
	Contracted but not provided for and payable within one year		951,935		3,311,414		4,505,841
			951,935		3,311,414		4,505,841
Lease commitments
Operating lease expense commitments
	Future operating lease commitments not provided for in the financial statements and payable:
	Within one year		29,992,274		23,865,262		25,799,409
	One year or later and no later than five years		60,779,467		47,292,290		48,518,490
	Later than 5 years		6,720,240		15,992,314		10,596,215
			97,491,981		87,149,866		84,914,114

      The consolidated entity leases property under non-cancellable operating leases expiring from one to ten years.

      Leases generally provide the consolidated entity with a right of renewal at which time all terms are renegotiated.

Assets Pledged and Cash Restrictions

      Assets pledged to financial institutions as at 30 June 2004 ($175,571,699), 2003 ($nil) and 2002 ($nil). Agreements with financial institutions place certain restrictions on the use of cash balances. These restrictions do not affect the daily operations of the consolidated entity and will not have a material adverse affect on its operations.

Note 24. Contingent Liabilities

      There were no material contingent liabilities as at 30 June 2004, 30 June 2003 and 30 June 2002.

Note 25. Related Party Transactions

      The consolidated entity from time to time has dealings with Ansell Limited Group Companies and Goodyear Tire & Rubber Co. Group Companies.

      Under the partnership agreement, the consolidated entity leases certain properties from Ansell Limited and Goodyear Australia Limited (a wholly owned subsidiary of Goodyear Tire & Rubber Co.) on a basis of equitable rentals between the partners.

      The amounts of these transactions are detailed below:

	2004		2003		2002
Lease Payments	$		$		$
Ansell Limited Group Companies		217,885		217,885		217,885
Goodyear Tire & Rubber Co. Group Companies		75,273		75,273		75,273

FS-44

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 25. Related Party Transactions (Continued)

      During the financial year the consolidated entity received loans from the partners that are subject to interest at market rates compounding quarterly as detailed in Note 15.

      On 29/12/2000, the consolidated entity entered into supply agreements whereby Goodyear will be (subject to certain conditions) the supplier of certain tyres for a period of twelve years commencing 01/01/2001. The consolidated entity has received $25.0m plus interest in consideration for this supply.

      On 20/12/2000, the consolidated entity received a loan of $25.0m from Ansell Limited on which interest is charged quarterly in arrears.

      Interest brought to account by the consolidated entity in relation to these loans during the year:

	2004		2003		2002
	$		$		$
Interest expense		—		—		1,750,000
Interest revenue		—		—		1,750,000

      All other dealings with the above parties are on normal commercial terms and involve the purchase and/or supply of materials from/to both parties and the provision of forward exchange cover and commodity hedging by Ansell Limited Group Companies.

      The amounts of these transactions are detailed below:

	2004		2003		2002
	$		$		$
Sale of goods and services
Ansell Limited Group Companies		—		—		37,791
Goodyear Tire & Rubber Co. Group Companies		7,044,157		1,357,021		4,396,011
Purchase of goods and services
Ansell Limited Group Companies		—		4,092		1,252,256
Goodyear Tire & Rubber Co. Group Companies		115,062,875		118,165,909		107,439,259

      Details of interest received/paid to related parties are set out in Notes 3 & 4.

      The amounts included in receivables and payables in relation to the consolidated entity are set out in the notes to the financial statements and the amounts relating to the other parties are:

	2004		2003		2002
	$		$		$
Current receivables
Goodyear Tire & Rubber Co. Group Companies		588,874		182,079		526,745
Current payables
Ansell Limited Group Companies		—		—		81,767
Goodyear Tire & Rubber Co. Group Companies		20,921,867		21,072,760		23,663,413

      The consolidated entity has had since 1987 a significant Research and Development arrangement with Goodyear Tire and Rubber Limited. A fee is payable as a percentage of sales of locally produced tyres. The amount of costs incurred for this contract was, for the year ended 30 June 2004 $3,528,348 (June 2003 $4,928,422) and (June 2002 $10,856,910).

FS-45

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 25. Related Party Transactions (Continued)

      The names of each person holding the position of director of the consolidated entity during the year were:

Mr. Richard Kramer	Dr Edward Tweddell	Mr. Robert W. Tieken
Mr. Hugh D. Pace	Mr. Herbert J. Elliott	Mr. Clark E. Sprang
Ms. Janell Lopus	Mr. Douglas Tough	Mr. Harry Boon
Mr. Harold Smith	Mr. David Graham

Note 26. Superannuation Commitments

Employer plans

      Up until April 1st 2004 the consolidated entity participated in the Pacific Dunlop Superannuation Fund for employees.

      Effective 1 April 2004 members were transferred out of the Pacific Dunlop Superannuation Fund to Equipsuper (an independent superannuation fund). The transfer of assets from the Pacific Dunlop Superannuation Fund to Equipsuper has not yet been completed.

		2002
		$
Net Assets			148,178,000
Accrued benefits			148,802,000
Deficiency			(624,000	)
Vested benefits			146,578,000
Country	Australia
Benefit type	Defined benefit/Accumulation
Basis of contribution	Balance of cost/Defined contribution
Date of last actuarial valuation	6/30/2002
Actuary	Mercer Human Resource Consulting Pty Ltd

      Plan net assets, accrued benefits and vested benefits have been calculated at 30 June 2002, being the date of the most recent financial statements of the plan. Accrued benefits are based on an actuarial valuation undertaken at 30 June 2002.

      The consolidated entity has accrued a superannuation expense of $1,630,000 to meet expected fund deficiency as at 30 June 2004.

      The liabilities of the superannuation fund are covered by the assets in the fund or by specific provisions created by the consolidated entity.

      The consolidated entity is obliged to contribute to the superannuation fund as a consequence of Legislation or Trust Deed. Legal enforceability is dependent on the terms of the Legislation and the Trust Deed.

FS-46

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 26. Superannuation Commitments (Continued)

Definitions

Balance of cost	The consolidated entity’s contribution is assessed by the Actuary after taking into account the member’s contribution and the value of assets.
Defined contribution	The consolidated entity’s contribution is set out in the appropriate fund rules, usually as a fixed percentage of salary.

Industry/union plans

      The consolidated entity participates in industry and union plans on behalf of certain employees. These plans, which are reviewed periodically, operate on an accumulation basis and provide lump sum benefits for members on resignation, retirement or death.

      The consolidated entity has a legally enforceable obligation to contribute at varying rates to the plans.

Note 27. Segment Reporting

      The principal activity of the group during the year was the manufacture and sale of motor vehicle and aircraft tyres in Australia.

Note 28. Particulars Relating to Controlled Entities

      Details of controlled entities, including the extent that each contributed to the period’s result are given below:

														Contribution to the Consolidated
			Beneficial											Profit After Tax Inclusive of Abnormal
			Interest					Book Value of						Items and After Deducting the Amount
			Held by					Consolidated Entity’s Investment						Attributable to Outside Equity Interest
	Place of		Consolidated			Class of
Name of Company	Incorporation		Entity			Share		2004		2003		2002		2004			2003			2002
South Pacific Tyres															(28,982,129	)		(44,501,568	)		(96,796,795	)
Tyre Marketers (Australia) Limited		Vic		100	%		Ordinary		21,496,245		21,496,245		21,496,245		8,559,276			4,952,958			(33,840,907	)
Sacrt Trading Pty Ltd		Vic		100	%		Ordinary								491,696			158,826			365,417
South Pacific Tyres (PNG) Pty. Ltd.		PNG		80	%		Ordinary								—			—			27,119
Dunlop PNG Pty. Ltd.		PNG		80	%		Ordinary								—			—			(25,244	)
Consolidation adjustments															(2,550,143	)		(174,001	)		243,240
									21,496,245		21,496,245		21,496,245		(22,481,300	)		(39,563,785	)		(130,027,170	)

Note 29. Events Subsequent to Balance Date

      This financial report has been prepared in accordance with Australian accounting standards and other financial reporting requirements (Australian GAAP). The differences between Australian GAAP and IFRS identified to date as potentially having a significant effect on the consolidated entity’s financial performance and financial position are summarised below. The summary should not be taken as an exhaustive list of all the differences between Australian GAAP and IFRS. No attempt has been made to identify all disclosure, presentation or classification differences that would affect the manner in which transactions or events are presented.

FS-47

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 29. Events Subsequent to Balance Date (Continued)

      The consolidated entity has not quantified the effects of the differences discussed below. Accordingly there can be no assurances that the consolidated financial performance and financial position as disclosed in this financial report would not be significantly different if determined in accordance with IFRS.

      Regulatory bodies that promulgate Australian GAAP and IFRS have significant ongoing projects that could affect the differences between Australian GAAP and IFRS described below and the impact of these differences relative to the consolidated entity’s financial reports in the future. The potential impacts on the consolidated entity’s financial performance and financial position of the adoption of IFRS, including system upgrades and other implementation costs which may be incurred, have not been quantified as at the transition date of 1 July 2004 due to the short timeframe between finalisation of the IFRS standards and the date of preparing this report. The impact of future years will depend on the particular circumstances prevailing in those years.

      The board has established a formal project, monitored by a steering committee, to achieve transition to IFRS reporting. The company’s implementation project consists of three phases as described below.

•  Assessment and planning phase

•  Design phase

•  Implementation phase

      Except for certain training that has been given to operational staff, the company has not yet commenced the implementation phase. However, the company expects this phase to be substantially complete by 30 June 2005.

      The key potential implications of the conversion to IFRS on the consolidated entity are as follows:

•  financial instruments must be recognised in the statement of financial position and all derivatives and most financial assets must be carried at fair value

•  income tax will be calculated based on the “balance sheet” approach, which may result in more deferred tax assets and liabilities and, as tax effects follow the underlying transaction, some tax effects will be recognised in equity

•  surpluses and deficits in the defined benefit superannuation plans sponsored by the entities within the consolidated entity will be recognised in the statement of financial position and the statement of financial performance

•  revaluation increments and decrements relating to revalued property, plant and equipment and intangible assets will be recognised on an individual asset basis, not a class of asset basis

•  intangible assets:

—  internally generated intangible assets will not be recognised

—  intangible assets can only be revalued if there is an active market

•  goodwill and intangible assets with indefinite useful lives will be tested for impairment annually and will not be amortised

•  impairment of assets will be determined on a discounted basis, with strict tests for determining whether goodwill and cash generating operations have been impaired

•  changes in accounting policies will be recognised by restating comparatives rather than making current year adjustments with note disclosure of prior year effects.

FS-48

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 29. Events Subsequent to Balance Date (Continued)

      Other than as noted above, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material nature likely, in the opinion of the directors of the consolidated entity, to affect significantly the operations, or the state of affairs of the consolidated entity in subsequent financial years.

Note 30. Notes to the Statements of Cash Flows

(a)  Reconciliation of Cash

      For the purposes of the statement of cash flows, cash includes cash on hand and at bank and investments in money market instruments net of outstanding bank overdrafts. Cash as at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:

	2004			2003			2002
	$			$			$
Cash assets		56,435,875			5,629,939			8,400,672
Cash on deposit		—			9,600,000			28,700,000
Bank overdrafts		(783,427	)		(690,488	)		(1,002,808	)
		55,652,448			14,539,451			36,097,864

(b)  Acquisition/Disposal of Businesses and Entities

      During the 2004 and 2003 financial years the consolidated entity purchased no businesses.

      During the 2002 year the consolidated entity purchased 100% of businesses of which the details are as follows:

Acquisitions of Businesses

		2004		2003		2002
		$		$		$
Net assets acquired/disposed
	Property, plant and equipment		—		—		458,033
	Inventories		—		—		298,112
	Receivables		—		—		268,685
	Creditors		—		—		—
			—		—		1,024,830
Goodwill			—		—		222,001
Consideration
	Cash paid/(received)		—		—		1,246,831
Outflow/(inflow) of cash
	Cash consideration		—		—		1,246,831

FS-49

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 30. Notes to the Statements of Cash Flows (Continued)

Disposal of Entities

      During the 2002 year, the consolidated entity disposed of all of its 80% share of South Pacific Tyres PNG Ltd. Details of the disposal is as follows:

		2004		2003		2002
		$		$		$
Consideration (Cash)			—		—		1,983,805
Net assets of entity disposed of
	Property, plant and equipment		—		—		702,062
	Inventories		—		—		2,174,162
	Receivables		—		—		1,096,993
	Other assets		—		—		60,964
	Prepayments		—		—		82,822
	Creditors		—		—		(952,514	)
	Other liabilities and provisions		—		—		(146,852	)
	Outside equity		—		—		(408,017	)
			—		—		2,609,620
Profit/(loss) on disposal			—		—		(625,815	)

FS-50

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 30. Notes to the Statements of Cash Flows (Continued)

(c)  Reconciliation of Profit/(Loss) From Ordinary Activities After Income Tax to Net Cash Provided by Operating Activities

		2004			2003			2002
		$			$			$
Loss from ordinary activities after income tax			(22,481,300	)		(39,563,785	)		(130,026,700	)
Add /(less) items classified as investing/financing activities:
	(Profit)/loss on sale of non-current assets		6,134,607			7,721,228			13,327,002
	(Profit)/loss on sale of controlled entities		—			—			625,815
Add /(less) non-cash items:
	Amortisation		1,456,297			1,363,397			1,800,587
	Depreciation		22,146,175			19,644,910			26,732,747
	Write-down of Property, Plant & Equipment		2,219,064			—			—
	Amounts set aside to provisions		(924,572	)		40,073,781			134,902,663
	(Decrease)/increase in income taxes payable		154,865			77,057			(180,144	)
	Decrease/(increase) in future income tax benefit		3,714,819			4,209,755			(13,605,285	)
	Write-off bad trade debts		1,549,439			1,015,199			1,386,762
Net cash provided by operating activities before change in assets and liabilities			13,969,394			34,541,542			34,963,447
Change in assets and liabilities adjusted for effects of purchase and disposal of controlled entities during the financial year:
	(Increase)/decrease in receivables		14,536,916			3,494,488			(13,406,489	)
	(Increase)/decrease in inventories		14,620,947			(1,290,172	)		4,628,518
	(Increase)/decrease in prepayments		103,514			(1,064,694	)		180,180
	(Decrease)/increase in accounts payable		(23,186,218	)		(22,333,744	)		20,283,451
	(Decrease)/increase in provisions		404,360			(70,199,122	)		(70,029,855	)
	(Decrease)/increase in reserves		—			—			(524,325	)
			6,479,519			(91,393,244	)		(58,868,520	)
Net cash provided by/(used in) operating activities			20,448,913			(56,851,702	)		(23,905,073	)

Note 31. Summary of Significant Differences Between Generally Accepted Accounting Principles in Australia and Generally Accepted Accounting Principles in the United States — RESTATED

      The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Australia (AGAAP), which differ in certain significant respects with accounting principles generally accepted in the United States (US GAAP). Pursuant to certain rules and regulations of the US Securities and Exchange Commission (SEC), financial statements to be included in filings with the SEC that are prepared on a basis of accounting other than US GAAP are required to provide a description of the significant differences and their effects on net income and equity in arriving at such amounts in accordance with US GAAP.

      Subsequent to the issuance of the Company’s consolidated financial statements as of June 30, 2003 and 2002 and for each of the years in the three-year period ended June 30, 2003, it was determined that

FS-51

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 31. Summary of Significant Differences Between Generally Accepted Accounting Principles in Australia and Generally Accepted Accounting Principles in the United States — RESTATED (Continued)

information previously provided with respect to material differences and the effects of such differences on the determination of net loss and partners’ equity in accordance with US GAAP was inaccurate and incomplete. Those previously issued consolidated financial statements indicated (i) a reduction of $10.6 million and $10.7 million as of June 30, 2003 and 2002, respectively, in arriving at partners’ equity pursuant to US GAAP would be required to eliminate the effects of an asset revaluation reserve recognized in partners’ equity under AGAAP; (ii) a decrease in depreciation expense of $125,000 would be required in arriving at net loss pursuant to US GAAP for each of the years in the three-year period ended June 30, 2003 to reflect the elimination of the asset revaluation reserve described above and; (iii) that there were no further adjustments of a material nature that would be required to be included in the determination of net loss and partners’ equity pursuant to US GAAP.

      Accordingly, the information set out in notes 32 and 33 provides, as at June 30th 2004, 2003 and 2002 and for each of the years in the three-year period ended June 30, 2004 a description of the material differences and their effects in reconciling net loss and partners’ equity as reported under AGAAP in the accompanying consolidated financial statements to such amounts pursuant to US GAAP. As indicated above, information as of, and for each of the years in the two-year period ended June 30th 2003 have been presented on a restated basis substantially in their entirety. In addition, the Company has supplementally included disclosures required pursuant to US GAAP that have not otherwise been provided in the consolidated financial statements prepared under AGAAP.

Note 32. Major Differences Between Australian GAAP and US GAAP

(a) Property, Plant and Equipment

      As permitted by AGAAP, certain property, plant and equipment has been revalued by South Pacific Tyres at various times in prior financial periods. Revaluation increments have increased the carrying value of the assets and accordingly the depreciation charges are different from those which would be required on a historical cost basis pursuant to US GAAP. As a result, a reconciliation adjustment is required to eliminate this effect for US GAAP.

      Additionally, US GAAP has specific criteria in regard to assets designated as ‘held for sale’ versus ‘ held for use’. Accordingly, certain impairment charges taken under AGAAP may result in reversal under US GAAP, but with ongoing accelerated depreciation charges. Furthermore, certain assets written down to ‘fair value’ under AGAAP may continue to be further depreciated under US GAAP requirements if the ‘held for sale’ classification criteria are not fully satisfied.

      The annual depreciation and impairment charges under US GAAP are lower than the amounts reflected in the AGAAP consolidated financial statements for the years ended 2002 and 2004 for certain assets. This results in a higher net income for US GAAP purposes of $430,414 for the year ended June 2002 and $128,000 for the year ended June 2004. For the year ended June 2003, and having regard to certain accelerated depreciation charges under US GAAP, depreciation expense would be higher than the amount reflected in the AGAAP consolidated financial statements. Consequently, US GAAP net income for the year ended June 2003 would be lower by $157,714. The above policy also causes differences in reported gains and losses on the sale of property, plant and equipment. Gains and losses for AGAAP are based on consideration less revalued amounts net of accumulated depreciation and amortisation. For US GAAP purposes gains and losses are determined having regard to depreciated historical cost, and net revaluation reserves applicable to assets sold are reported in Income. The effect of this is to decrease US GAAP net income by $8,338 in the year ended 30 June 2002.

FS-52

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 32. Major Differences Between Australian GAAP and US GAAP (Continued)

      In the year ended 30 June 2004 the effect is to increase net income by $195,678.

      For US GAAP purposes the Company follows the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standard (SFAS) No. 144 “Accounting for the Impairment or Disposal of Long-lived Assets”. SFAS No. 144 superseded SFAS No. 121 “Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of” and was adopted by the Company effective 1 July 2002. SFAS No. 144 retains the requirements of SFAS No. 121 to (a) recognise an impairment loss if the carrying amount of a long-lived asset is not recoverable from its undiscounted cash flows and (b) measure an impairment loss as the difference between the carrying amount and fair value of the asset less estimated costs to sell and expands specific criteria relative to the classification and accounting for such assets.

      SFAS No. 144 also requires that long lived assets to be abandoned, exchanged for a similar productive asset, or distributed to owners in a spin-off be considered held and used until the asset is disposed of, exchanged or distributed.

(b)     Minority Interests

      Outside Equity interests are included as part of total Equity under AGAAP. The reconciliation to US GAAP in Note 33 has excluded these from Partners’ Equity in 2002 consistent with US GAAP treatment. The entity in which the outside equity interest existed was sold in the year ended 30 June 2002.

(c)     Provisions

      The term “provisions” is used in AGAAP to designate accrued expenses with no definitive payment date. Classification between current and non-current is generally based on management assessments, as subject to audit.

(d)     Pension Plans

      The consolidated entity sponsors contributory and non-contributory accumulation and defined benefit pension plans covering substantially all employees. The defined benefit plans generally provide benefits based on salary in the period prior to retirement. All defined benefit plans are funded based on actuarial determination, and contribution levels are revised, on a regular basis so as to ensure that the plans are fundamentally maintained on a fully funded basis. Actuarial calculations have been carried out for the defined benefit funds and the material provisions of the plans are as detailed in Note 26. The majority of assets of the funds are invested in pooled superannuation trusts in the case of the Australian funds and equity securities for other major funds. Limited disclosure in respect of pension plans is presently required by AGAAP. Under AGAAP the actual contributions to the various pension plans are recorded as an expense in the Statement of Financial Performance in the period they are paid or accrued. The disclosure requirements of Statement of Financial Accounting Standards No. 87 (SFAS No. 87) and No. 132 (SFAS No. 132 as revised) have been included in Note 33 to these consolidated financial statements. The consolidated entity reports pension plans aggregated where allowed by SFAS No. 87. Additionally, an adjustment is made to recognise the measurement principles of SFAS No. 87 and related standards in determining net income and shareholders’ equity under US GAAP.

(e)     Statement of Cash Flows

      Net profit (loss) determined under AGAAP differs in certain respects from the amount determined in accordance with US GAAP.

FS-53

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 32. Major Differences Between Australian GAAP and US GAAP (Continued)

      A reconciliation of net profit (loss) according to US GAAP to Cash Flows From Operating Activities under US GAAP is provided.

      There are no material differences between net cash provided by (used in) financing and investing activities determined in accordance with AGAAP and such amounts determined in accordance with US GAAP.

      Under AGAAP, cash is defined as cash on hand and deposits repayable on demand, less overdrafts repayable on demand.

      Under US GAAP, cash and cash equivalents are defined as cash and investments with original maturities of three months or less, and do not include bank overdrafts or restricted deposits. Cash and cash equivalents as of June 30, 2004, 2003 and 2002 would have been $56,435,875, $15,229,939 and $37,100,672 respectively, under US GAAP.

(f)     Income Taxes

      Under AGAAP, deferred tax assets (future income tax benefits) attributable to temporary differences are only brought to account when their realisation is assured beyond reasonable doubt. Future income tax benefits related to tax losses are only brought to account when their realisation is virtually certain. At each respective reporting date the value of gross tax losses for which future tax benefits have been brought to account under AGAAP totalled $29,183,817 in June 2004, (2003 $44,173,986) and (2002 $53,137,787). These losses have no expiry date. Refer Note 6(c). According to US GAAP deferred tax assets are only brought to account when their realisation is more likely that not. As US GAAP represents a lower threshold for assessing the realizability of deferred tax assets as compared to AGAAP, there is no material effect in arriving at net profit (loss) under US GAAP.

      The SPT operations are conducted through the Partnership (non taxable entity), and by its subsidiary — TMA. As TMA is a stand-alone taxable entity certain US GAAP adjustments related to TMA are subject to tax effects. The majority of the US GAAP adjustments are in respect of the Partnership, the results of which are taxed in the hands of the Partners. Accordingly, a substantial number of the adjustments have no tax effect in the SPT consolidated financial statement reconciliation.

      The consolidated entity has (gross) capital tax losses of $21,271,173 in 2004 (2003 $22,081,014) and (2002 $22,817,537). These losses have no expiry date. Total capital losses are offset by a valuation allowance. The adequacy of the valuation allowance is regularly assessed. The valuation allowance in respect of the capital losses decreased by $242,952 and $220,957 for the years ended 30 June 2004 and 2003, respectively.

      Analysis of Pre tax profit/ (loss):

				Restated
	2004			2003			2002
Australian operations		(18,611,616	)		(35,355,948	)		(143,606,153	)
Foreign operations		—			—			—
Total		(18,611,616	)		(35,355,948	)		(143,606,153	)

FS-54

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 32. Major Differences Between Australian GAAP and US GAAP (Continued)

                Temporary differences and carryforwards giving rise to deferred tax assets and liabilities at 30 June, follows:

				Restated
	2004			2003			2002
Trading stock adjustments		166,306			36,887			30,409
Provisions		6,892,310			6,931,368			8,533,692
Accruals		237,699			160,408			251,990
Accumulated tax losses		8,755,145			13,252,196			15,941,336
Accumulated capital losses		6,381,352			6,624,304			6,845,261
Other		52,234			—			—
		22,485,046			27,005,163			31,602,688
Less Valuation allowance		(6,381,352	)		(6,624,304	)		(6,845,261	)
Total deferred assets		16,103,694			20,380,859			24,757,427
Total deferred liabilities
Property, plant and equipment		(1,586,941	)		(2,018,708	)		(2,132,392	)
Other		—			(130,579	)		(183,708	)
Total deferred liabilities		(1,586,941	)		(2,149,287	)		(2,316,100	)
Total net deferred tax assets		14,516,753			18,231,572			22,441,327

      As the amount of current deferred tax items are not material in nature, all deferred tax assets have been presented as non current in the Statement of Financial Position.

(g) Accounting for Goodwill

      Shares in controlled entities are valued on acquisition at the holding company’s cost. Any difference between the fair value of net assets acquired and cost is recognised as goodwill. Under AGAAP, goodwill is amortised on a straight line basis over varying periods not exceeding 20 years.

      In accounting for business combinations, the Company follows SFAS No. 141, “Business Combinations”, and SFAS No. 142, “Goodwill and Intangible Assets”. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations completed after 30 June 2002 which is consistent with AGAAP. SFAS No. 141 also specifies the types of acquired intangible assets that are required to be recognised and reported separately from goodwill and those acquired intangible assets that are required to be included in goodwill.

      SFAS No. 142 requires that goodwill no longer be amortised, but instead tested for impairment at least annually. This requirement creates a difference between the amortisation required under AGAAP and US GAAP. SFAS No. 142 also requires recognised intangible assets to be amortised over their respective estimated useful lives and reviewed for impairment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets”. SFAS No. 142 also permits indefinite useful lives to be assigned to recognised intangibles. Any recognised intangible assets determined to have an indefinite useful life will not be amortised, but instead tested for impairment in accordance with the SFAS No. 142 until its life is determined to no longer be indefinite.

      The Company has determined it has one reporting unit consistent with its single operating segment.

FS-55

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 32. Major Differences Between Australian GAAP and US GAAP (Continued)

      SFAS No. 142 requires goodwill and other intangible assets to be tested for impairment at the reporting unit level. A reporting unit is the same as, or one level below, an operating segment as defined by SFAS No. 131 “Disclosure about Segments of an Enterprise and Related Information”. Accordingly, goodwill and intangible assets with indefinite useful lives are tested for impairment annually or when events or circumstances indicate that impairment may have occurred. Any material diminution in value is charged to the Statement of Financial Performance for US GAAP purposes. For US GAAP purposes no goodwill amortisation has been charged against income since 1 July 2002, the effective date of SFAS No. 142. Goodwill amortisation of $287,389 under AGAAP in 2004 and 2003 has been added back to income in the Statement of Financial Performance for US GAAP purposes.

      Goodwill attributable to sold businesses is brought to account in determining the gain or loss on sale.

(h) Derivatives Not Designated as Hedges

      Derivatives not designated as hedges primarily consist of interest rate swaps and forward exchange contracts which, while mitigating economic risks to which the economic entity is exposed , do not qualify for hedge accounting under US GAAP pursuant to SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” as they relate to hedging of anticipated transactions. These amounts are adjusted in determining net profit (loss) according to US GAAP.

      The fair value of the interest rate swaps as at June 2003 was an unrealized loss of $517,350. The fair value at June 2004 was an unrealized loss of $62,176. The effect of the necessary reconciling adjustment is an increase in the US GAAP loss for June 2003 of $517,350 and a decrease in the loss of $455,174 for the year ended June 2004.

(i)  Derivative Instruments and Hedging Activities

      The nature of South Pacific Tyres’ business activities necessarily involves the management of various financial and market risks, including those related to changes in interest rates, currency exchange rates and commodity prices. South Pacific Tyres uses derivative financial instruments to mitigate or eliminate certain of those risks, as a component of its risk management strategy. The Company does not use derivative instruments for trading purposes.

      Under AGAAP, derivative financial instruments may have hedge accounting treatment applied if the hedging derivatives are effective in reducing the exposure being hedged and are designated as a hedge at the inception of the contract. Hedging derivatives are accounted for in a manner consistent with the accounting treatment of the hedged items.

      For US GAAP purposes, the Company follows SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended, which became effective for South Pacific Tyres on 1 July 2000. Under SFAS No. 133, as amended, all derivative instruments are recognised in the Statement of Financial Position at their fair values and changes in fair value are recognised immediately in earnings, unless the derivatives qualify as hedges of future cash flows or of investments in foreign operations. For derivatives qualifying as hedges of future cash flows, the effective portion of changes in fair value is recorded temporarily in equity, then recognised in earnings along with the related effects of the hedged items. Any ineffective portion of hedges is reported in net profit (loss) as it occurs.

      Under US GAAP, all derivatives are recognised on the Statement of Financial Position at their fair value. On the date the derivative is entered into South Pacific Tyres designates the derivative as either a hedge of the fair value of a recognised asset or liability or firm commitment (fair value hedge) or of the variability of cash flows to be paid or received related to a recognised asset, liability or forecasted transaction (cash flow hedge).

FS-56

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 32. Major Differences Between Australian GAAP and US GAAP (Continued)

There is no material impact on net profit/(loss) as a result of these differences as the fair value of the derivative instruments at the balance sheet date is offset by the foreign currency translation of the hedged receivables and payables recorded at the forward rate for AGAAP to the spot rate at balance date. Any net difference arising relates to the forward points spread between the spot rate and the forward rate at the balance sheet date which is not material. No US GAAP adjustment has been recognized as a consequence.

(j)  Supply Agreement

      In December 2000, Goodyear contracted to pay SPT an amount of $28,500,000 in relation to a 10-year supply agreement commencing in 2003. The amount was to be paid on 1 January 2003. As there were no onerous conditions upon SPT as a result of the contract, and because the receipt of the contribution did not result in a change in the relative interests of the partners in the partnership, the present value of the sum was recognised as revenue under AGAAP in December 2000. SPT further recognised interest income on the determined present value on an accrual basis. Under US GAAP, SPT has recognised the amount of $25,000,000 not as revenue, but as a capital contribution. The capital contribution has been recognised in the period ended 30 June 2002, being the period in which the cash was actually received from Goodyear.

(k)  Provision for Environmental Remediation/ Impairment

(i) Remediation

      In December 2001, SPT recognized a liability to remediate its Footscray and Thomastown idled manufacturing facilities to prepare them for sale. The expenditure of $9,900,000 was authorized by the SPT Board of Directors and, under AGAAP, was recorded based on that approval. As a result of further development of the disposal plan, and not withstanding that the plan would not be completed within twelve months, $3,600,000 of additional expenditure was authorised in April 2004 and an additional liability was recorded under AGAAP.

      The expenditure is to cover environmental remediation, demolition and project management. This liability is included in the provision for Rationalisation and Restructure in the AGAAP consolidated balance sheet. Refer Note 16. In addition to the actual cash outlays of $508,113 charged against the provision in the year ended 30th June 2003 a further $1,506,970 was expended and charged against this provision in the year ended 30th June 2004.

      Under US GAAP, environmental liabilities are not recognised until a company has a legal or constructive obligation to remediate. Accordingly, because there is no such obligation to remediate, for US GAAP purposes only the actual cash outlays described above are recognised as expense when they were incurred.

      Accordingly, the net loss determined under US GAAP was decreased by $2,093,000 as a result of the reversal of the provision increase of $3,600,000 and the expensing of the actual cash outlays charged against the provision in 2004 of $1,506,970.

(ii) Asset Impairment

      In December 2001 and as referred to in (i) above, South Pacific Tyres committed to the closedown of its Footscray and Thomastown manufacturing facilities and to prepare them for sale. Because, as a result of this decision, the plants were no longer to generate operating cash flows, the asset carrying values at the time were considered for impairment.

      Under US GAAP, in accordance with the provisions of SFAS 121 and SFAS 144, a one time impairment charge of $7,800,000 was taken against property, plant and equipment in 2002 to write down the net book value of these facilities to the estimated fair values attributable to the unremediated sites. In 2004 following

FS-57

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 32. Major Differences Between Australian GAAP and US GAAP (Continued)

the further development of the plans for remediation and sale of the plants, and due to the plants not qualifying for “held for sale” classification under US GAAP, a further evaluation of impairment of the sites was undertaken. Based on the valuations obtained, a further impairment charge of $2,034,000 was required due to the reduction in the values of the unremediated sites.

      The further impairment charge of $2,034,000 significantly offsets the reversal of the excess Environmental remediation charge of $2,093,000 set out in (i) above. The net impact of these items is to decrease the 2004 loss determined in accordance with US GAAP by $59,030. Accordingly, the cumulative net increase in US GAAP equity at June 2004 for these items is $1,650,917.

(l)  Activity Alignment

      In December 2000 South Pacific Tyres recognized under AGAAP, a $6 million provision for redundancy costs for headcount reduction. The provision was based on an external consultant’s assessment of the required headcount reduction to achieve certain identified overhead efficiencies. The project was called “Activity Alignment”. The plan was not completed and $4,046,953 was reversed in the year ended 30 June 2002 under AGAAP. The $6 million provision at June 2001 did not meet US GAAP recognition criteria and as a result, US GAAP net income in that period is higher by the unspent amount of $4,046,953. In the year ended 30 June 2002 when the unspent amount was reversed for AGAAP, the net income for US GAAP is $4,046,953 less.

(m)  Manufacturing Plant — Accelerated Depreciation

      In September 2001 the SPT Board of Directors authorized the closure of operations at its Footscray and Thomastown manufacturing facilities. A provision was recognized in December 2001 under AGAAP for the eventual write-off of plant and equipment. The Thomastown facility was to remain partly in operation until July 2002. Under US GAAP the plant and equipment relating to this partial operation was subject to accelerated depreciation for seven months in accordance with SFAS 121, rather than immediate write off. At June 2002 one month’s depreciation in the amount of $285,714 was still to be brought to account having the effect of decreasing US GAAP losses in the year ended June 2002 and increasing US GAAP losses in the year ended June 2003.

(n)  Tyre Marketers Tax Adjustment

      The Retail/Corporate restructuring provisions (see Note 4) arose in a tax paying entity, Tyre Marketers (Australia) Ltd (TMA). The provision was therefore tax effected at TMA’s effective rate of 30%. Accordingly, US GAAP adjustments relating to TMA have been tax effected.

(o)  Business Interruption

      In June 2002 South Pacific Tyres released $1,577,315 of the rationalisation provision to net profit (loss) on the basis that production levels and operating capacity of the tyre plant were significantly reduced as a consequence of the restructuring activities at Somerton. While AGAAP allows for costs associated with effecting restructuring activities to be charged as a component of a restructuring provision, it was not considered appropriate under US GAAP. The specific cost cannot be provided for under US GAAP as they are considered future operating costs. This has the effect of increasing the net loss according to US GAAP in the year ended June 2002 by $1,577,316 and decreasing net loss according to US GAAP by the same amount in the year ended June 2003.

FS-58

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 32. Major Differences Between Australian GAAP and US GAAP (Continued)

(p)  Advertising

      Under AGAAP, advertising is generally expensed as the service is performed. Under US GAAP, advertising is expensed as incurred although there are exceptions to this, related to co-operative advertising programs and advertising related materials. Costs incurred under South Pacific Tyres’ co-operative advertising program with dealers and franchisees are initially deferred and then recorded as reductions of sales as related revenues are recognized under AGAAP. No direct response advertising is reported as an asset. The effect of this difference is that under US GAAP, Partners’ equity is lower by $840,000 after tax compared to that under AGAAP as such amounts are expensed as incurred under US GAAP. This difference relates to all periods presented as the Yellow Pages advertising cost has remained consistent.

(q)  Foreign Currency Translation Reserve

      In June 2002 South Pacific Tyres sold its interest in South Pacific Tyres PNG Pty Ltd. Under AGAAP the accumulated foreign currency translation reserve of $3,645,848 was transferred to retained earnings. Under US GAAP the accumulated foreign currency translation reserve included as a component of accumulated other comprehensive income for US GAAP, is reported as part of the gain or loss on sale for the period during which the sale occurs. Consequently the net loss according to US GAAP for the year ended June 2002 is greater than the loss according to AGAAP purposes by $3,645,848. However, there is no effect on partners’ equity under US GAAP.

(r)  Securitisation

      From November 2001 South Pacific Tyres has maintained a program for the continuous sale of substantially all its domestic trade accounts receivable to the South Pacific Tyres Trust, a bankruptcy remote qualifying special purpose vehicle (QSPV). The QSPV is consolidated for AGAAP, as well as US GAAP, because the program did not meet all the criteria for off balance sheet treatment in accordance with SFAS 140 “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”. Accordingly there is no difference between AGAAP and US GAAP treatment of the Securitisation Program.

      The amount of the receivables securitised at June 2004 was $115,149,129 (June 2003 $112,899,035) and (June 2002 $114,957,253).

      The amount of interest paid by South Pacific Tyres to the QSPV for the year ended June 2004 was $3,941,622 (June 2003 $3,543,248) and (June 2002 $2,068,668). South Pacific Tyres retains the responsibility for servicing the receivables. As receivables are collected the cash proceeds are used to purchase additional receivables. The amount of service fees paid by the QSPV to South Pacific Tyres was approximately $120,000 for the year ended June 2004, $120,000 for the year ended 2003 and $80,000 for the year ended 2002.

(s)  Warranties

      South Pacific Tyres and its controlled entities offer warranties on the sale of certain of its products as required under the Australian Trade Practices Act. For AGAAP, warranty expense is charged as incurred. For US GAAP, a provision for warranties has been recognised based on past claims experience, sales history and other considerations. The effect of this difference is that under US GAAP, Partners’ equity is lower by $3,204,000 as compared to such amount pursuant to AGAAP.

      Due to the consistency in the Company’s operations, sales generated, customer base, warranty offerings and historical cost experience there has not been a material change in amount of accrued obligation at the balance sheet date since 2000.

FS-59

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 32. Major Differences Between Australian GAAP and US GAAP (Continued)

(t)  MRT Factory — Costs to Sell Land and Buildings

      In fiscal 2001 South Pacific Tyres decided to close its medium truck radial tyre plant at Somerton. $1,500,000 was recorded as an accrued obligation under AGAAP for the costs associated with the separation and ultimate sale of the land and buildings. In October 2001 the South Pacific Tyres Board reconsidered its decision and changed the classification of the site to “held for use” and reversed the provision. Since the AGAAP provision represented “costs to sell” and the land and buildings were not considered to be impaired under the “held for use” criteria pursuant to SFAS 121, the provision was reversed for US GAAP purposes. As a result, net profit according to US GAAP was increased by $1,500,000 in the year ended 30 June 2001 and reduced by the same amount for US GAAP in the year ended 30 June 2002.

(u)  Change in Accounting Policy — Employee Benefits

      The consolidated entity has applied the revised AASB 1028 “Employee Benefits” for the first time from 1 July 2002. The liability for wages and salaries, annual leave and sick leave is now calculated using the remuneration rates the consolidated entity expects to pay as at each reporting date, not wage and salary rates current at reporting date.

      Under AGAAP the initial adjustment of $103,373 to the consolidated financial report as at 1 July 2002 as a result of this change was charged directly to retained earnings. Under US GAAP, this has been accounted for as a reduction of net income of $103,373 in the year ended 30 June 2003.

(v)  Revenue Recognition

      Under AGAAP, interest revenue and proceeds from the sale of non current assets are recorded as other revenues from ordinary activities and the book basis of the assets and businesses sold is included in expenses. Under US GAAP, interest revenue is classified as other income and the difference between the sale proceeds and the book basis of the assets and business sold would be presented as a gain or loss and included in the determination of net profit (loss). Accordingly, revenue for the years 2004, 2003 and 2002 under US GAAP would have been $818,736,638, $793,596,996 and $829,385,986, respectively.

Note 33. Reconciliation to United States Generally Accepted Accounting Principles (US GAAP)

Statement of Financial Performance

						Restated
			2004			2003			2002
			$			$			$
Net profit/(loss) of the consolidated entity per Australian GAAP				(22,481,300	)		(39,563,785	)		(130,026,700	)
Less interest of outside equity holders		32(b)		—			—			470
	Net profit/(loss) attributable to the consolidated entity			(22,481,300	)		(39,563,785	)		(130,027,170	)
Adjustments required to accord with US GAAP:
	Add/(deduct)			977,171			1,473,930			(5,123,240	)
Net profit/(loss) according to US GAAP				(21,504,129	)		(38,089,855	)		(135,150,410	)

FS-60

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 33. Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued)

Statement of Comprehensive Income/(Loss)

				Restated
	2004			2003			2002
	$			$			$
Net profit/(loss) according to US GAAP		(21,504,129	)		(38,089,855	)		(135,150,410	)
Foreign currency translation reserve (net of nil tax)		—			—			3,341,868
Comprehensive Income (Loss)		(21,504,129	)		(38,089,855	)		(131,808,542	)

Reconciliation of Net Profit and Loss According to US GAAP to Net Cash Provided by Operating Activities Determined Under US GAAP.

					Restated
		2004			2003			2002
		$			$			$
Net Cash Provided by Operating Activities according to US GAAP			20,448,913			(56,851,702	)		(23,905,073	)
Write-down of Property, Plant & Equipment			(4,253,064	)		—			(7,800,000	)
Depreciation			(22,018,175	)		(19,802,624	)		(26,302,333	)
Amortisation			(1,168,908	)		(1,076,008	)		(1,800,587	)
Amounts set aside to provisions			4,524,572			(38,496,466	)		(130,626,931	)
Write-off bad trade debts			(1,549,439	)		(1,015,199	)		(1,386,762	)
Gain/(loss) on sale of investments, properties, plant and equipment			(6,134,607	)		(7,721,228	)		(13,952,817	)
Outside equity interest in (profit)/loss for the year			—			—			(470	)
Change in assets and liabilities net of effects of purchase and disposal of controlled entities during the financial year:
	Increase/(decrease) in receivables		(14,536,916	)		(3,494,488	)		13,406,489
	Increase/(decrease) in inventories		(14,620,947	)		1,290,172			(4,628,518	)
	Increase/(decrease) in prepayments		(103,514	)		1,064,694			(180,180	)
	(Increase)/decrease in accounts payable		23,846,392			22,848,394			(16,683,451	)
	(Increase)/decrease in provisions		(1,911,330	)		69,587,636			68,529,855
	Increase/(decrease) in reserves		195,678			—			(3,129,861	)
	(Increase)/decrease in income taxes payable		(154,865	)		(77,057	)		180,144
	Increase/(decrease) in future income tax benefit		(4,067,919	)		(4,345,979	)		13,130,085
Net profit/(loss) according to US GAAP			(21,504,129	)		(38,089,855	)		(135,150,410	)

FS-61

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 33. Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued)

Adjustments to reflect US GAAP:

						Restated
			2004			2003			2002
			$			$			$
Add/(Deduct):
	Supply Agreement	32(j)		—			—			—
	Manufacturing plant accelerated depreciation	32(m)		—			(285,714	)		285,714
	Depreciation difference Thomastown /Footscray	32(a)		(170,000	)		(170,000	)		—
	Fixed Asset Revaluation depreciation difference	32(a)		298,000			298,000			144,700
	Fixed Asset Disposal Difference	32(a)		195,678			—			(8,338	)
	FAS87 Pension	32(d)		205,000			1,032,000			3,600,000
	Environmental remediation	32(k)		59,030			(508,113	)		9,900,000
	Impairment	32(k)		—			—			(7,800,000	)
	Advertising	32(p)		—			—			—
	Activity Alignment	32(l)		—			—			(4,046,953	)
	Business Interruption	32(o)		—			1,577,315			(1,577,315	)
	MRT Factory — Costs to Sell	32(t)		—			—			(1,500,000	)
	Goodwill Amortisation	32(g)		287,389			287,389			—
	Interest Rate Swaps	32(h)		455,174			(517,350	)		—
	Disposal of PNG — Translation Reserve	32(q)		—			—			(3,645,848	)
	Initial Adoption of Revised AASB1028	32(u)		—			(103,373	)		—
	Income tax (expense)/benefit	32(n)		(353,100	)		(136,224	)		(475,200	)
	Total Adjustments			977,171			1,473,930			(5,123,240	)
Partners’ equity according to AGAAP				35,841,338			58,309,638			97,976,796
Deduct outside equity interests		32(b)		—			—			—
Partners’ equity attributable to the Partners				35,841,338			58,309,638			97,976,796

FS-62

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 33. Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued)

Adjustments required to reflect US GAAP:

						Restated
			2004			2003			2002
			$			$			$
Add/(Deduct):
	Asset Revaluation Reserve	32(a)		(12,374,551	)		(12,570,229	)		(12,570,229	)
	Supply Agreement	32(j)		—			—			—
	Manufacturing plant accelerated depreciation	32(m)		—			—			285,714
	Depreciation difference Thomastown/Footscray	32(a)		(340,000	)		(170,000	)		—
	Fixed Asset Revaluation depreciation difference	32(a)		885,400			587,400			289,400
	FAS87 Pension	32(d)		(363,000	)		(568,000	)		(1,600,000	)
	Environmental remediation/ Impairment	32(k)		1,650,917			1,591,887			2,100,000
	Advertising	32(p)		(1,200,000	)		(1,200,000	)		(1,200,000	)
	Warranty	32(s)		(3,204,000	)		(3,204,000	)		(3,204,000	)
	Activity Alignment	32(l)		—			—			—
	Business Interruption	32(o)		—			—			(1,577,315	)
	MRT Factory — Costs to Sell	32(t)		—			—			—
	Goodwill Amortisation	32(g)		574,778			287,389			—
	Interest Rate Swaps	32(h)		(62,176	)		(517,350	)		—
	Income tax (expense)/benefit	32(n)		81,876			434,976			571,200
	Total Adjustments			(14,350,756	)		(15,327,927	)		(16,905,230	)
Partners’ equity according to US GAAP				21,490,582			42,981,711			81,071,566

FS-63

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 33. Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued)

	Australian Fund
	2004			2003			2002
	$			$			$
Pension Plan data supporting Note 26
Plan’s funded status at 30 June is summarised as follows:
Actuarial present value of accumulated obligations:
— Vested		135,209,000			120,700,000			141,100,000
— Non Vested		—			—			—
Total accumulated benefit obligation		135,209,000			120,700,000			141,100,000
Projected benefit obligation		135,957,000			121,887,000			142,532,000
Plan assets at fair value		138,236,000			121,360,000			152,709,000
Excess/(deficiency) of assets over benefit obligations		2,279,000			(527,000	)		10,177,000
Unrecognised net gain/(loss)		(11,588,000	)		(11,719,000	)		573,000
Net Pension (Liability)/Asset		13,867,000			11,192,000			9,604,000
NET PENSION COST
Defined Benefit Plans:
— Service cost-benefits earned during the year		10,240,000			13,914,000			10,311,000
— Interest cost on projected benefit obligation		7,313,000			7,131,000			10,072,000
— Expected return on plan assets		(8,495,000	)		(10,092,000	)		(13,084,000	)
— Net amortisation and settlement and curtailment (gain)/loss		—			—			—
Net Pension Cost of Defined Benefit Plans		9,058,000			10,953,000			7,299,000
ASSUMPTIONS (used to determine net pension cost)
Weighted average discount rate		6.00%			6.00%			6.00%
Rate of increase in compensation level		3.50%			3.50%			3.50%
Expected long term rate of return		7.00%			7.00%			7.00%

      The expected long term rate of return on pension assets is based on a strategic asset allocation. The real rate of return (net of inflation) is expected to average 4.5% over the long term and the long term average rate of inflation is expected to be 2.5%.

FS-64

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 33. Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued)

	30 June			30 June			30 June
MEASUREMENT DATE	2004			2003			2002
CHANGE IN BENEFIT OBLIGATION
Projected Benefit Obligation at beginning of year		121,887,000			142,532,000			179,926,000
Service cost		10,240,000			13,914,000			10,311,000
Interest cost		7,313,000			7,131,000			10,072,000
Member contributions		1,387,000			—			—
Actuarial (gain) /loss		8,511,000			(14,990,000	)		(19,177,000	)
Benefits, administrative expenses and tax paid		(13,381,000	)		(26,700,000	)		(38,600,000	)
Projected Benefit Obligation at end of year		135,957,000			121,887,000			142,532,000
ASSUMPTIONS (used to determine end of the year benefit obligations)
Weighted average discount rate		5.50	%		6.00	%		6.00	%
Rate of increase in compensation level		3.50	%		3.50	%		3.50	%
CHANGE IN PLAN ASSETS
Market value of assets at beginning of year		121,360,000			152,709,000			180,630,000
Member/Employer Contributions		13,120,000			12,541,000			10,467,000
Benefits, administrative expenses and tax paid		(13,381,000	)		(26,700,000	)		(38,600,000	)
Actual return on plan assets		17,137,000			(17,190,000	)		212,000
Market value of assets at end of year		138,236,000			121,360,000			152,709,000

CONTRIBUTIONS

      Employer contributions to the Australian fund during the year ending 30 June 2005 are expected to be $13,580,000.

ADDITIONAL INFORMATION

Estimated Future Benefit Payments

      The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

2005	14,936,000
2006	15,185,000
2007	18,597,000
2008	18,080,000
2009	18,739,000
2010-2014	82,616,000

FS-65

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 33. Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued)

Plan Assets

      The allocation of the Fund’s assets by asset category is as follows:

				Plan assets
	Target			June			June
	Allocation			2004			2003
Asset Category
Equity securities		64	%		64	%		73	%
Debt securities		22	%		21	%		15	%
Real estate		9	%		9	%		10	%
Other		5	%		6	%		2	%

      The primary investment objective of the South Pacific Tyres Fund within Equipsuper is to achieve a rate of return (after tax and investment expenses) that exceeds inflation (CPI) increases by at least 4.0% per annum over rolling three year periods.

      The South Pacific Tyres partnership (SPT) has maintained Pension Plan benefits for its Australian employees which has comprised both Accumulation and Defined Benefit Components. Both the Defined Benefit and Accumulation components of the Plan have legally existed within a plan sponsored by its Australian partner, Ansell Limited (Ansell).

      SPT has maintained notional separation of the plan assets and the benefit obligations for all periods presented. Accordingly the accompanying financial information is intended to provide relevant disclosures required pursuant to SFAS 87 and SFAS 132 (revised) with respect to the defined benefit and accumulation components of the SPT plan.

      Effective 1 April 2004 legal separation from Ansell was achieved and members were transferred out of the Pacific Dunlop Superannuation Fund to Equipsuper (an independent superannuation fund).

						Restated
			2004			2003			2002
			$			$			$
Partners’ equity in accordance with US GAAP-Rollforward
Opening Balance July 1				42,981,711			81,071,566			217,507,945
Cumulative effect of restatement adjustments at 1st July 2001				—			—			(29,627,838	)
Net Profit (loss)				(21,504,129	)		(38,089,855	)		(135,150,410	)
Additional contributed equity — Goodyear Tyres Pty Ltd				13,000			—			—
Movement in Other Comprehensive Income				—			—			3,341,869
Additional Equity Contribution — Supply Agreement	32(j	)		—			—			25,000,000
Closing Balance				21,490,582			42,981,711			81,071,566

FS-66

SOUTH PACIFIC TYRES AND CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS — (Continued)

Note 33. Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) (Continued)

Balance Sheet GAAP Adjustment Reconciliation

			2004							2003							2002
			$							$							$
	Notes		AGAAP		Adjustment			US GAAP		AGAAP		Adjustment			US GAAP		AGAAP		Adjustment			US GAAP
STATEMENT OF FINANCIAL POSITION
CURRENT ASSETS
Cash assets				56,435,875					56,435,875		15,229,939					15,229,939		37,100,672					37,100,672
Receivables				130,174,880					130,174,880		137,441,630					137,441,630		141,657,657					141,657,657
Inventories				147,411,193					147,411,193		162,032,137					162,032,137		160,741,965					160,741,965
Prepayments				3,219,753					3,219,753		3,323,269					3,323,269		2,258,575					2,258,575
TOTAL CURRENT ASSETS				337,241,701		0			337,241,701		318,026,975		0			318,026,975		341,758,869		0			341,758,869
NON-CURRENT ASSETS
Receivables				1,651,270					1,651,270		9,546,303					9,546,303		30,384,952					30,384,952
Property, plant and equipment		32(a), 32(m),
		32(k)		197,823,676		(21,663,151	)		176,160,525		218,425,028		(19,952,829	)		198,472,199		202,827,093		(19,795,115	)		183,031,978
Intangible assets		32(g)		4,498,952		574,778			5,073,730		4,916,874		287,389			5,204,263		5,204,262					5,204,262
Deferred tax assets		32(n)		14,516,753		81,876			14,598,629		18,231,572		434,976			18,666,548		22,441,327		571,200			23,012,527
TOTAL NON-CURRENT ASSETS				218,490,651		(21,006,497	)		197,484,154		251,119,777		(19,230,464	)		231,889,313		260,857,634		(19,223,915	)		241,633,719
TOTAL ASSETS				555,732,352		(21,006,497	)		534,725,855		569,146,752		(19,230,464	)		549,916,288		602,616,503		(19,223,915	)		583,392,588
CURRENT LIABILITIES
Payables		32(p), 32(d),
		32(h)		144,028,406		1,625,176			145,653,582		159,953,830		2,285,350			162,239,180		161,782,718		2,800,000			164,582,718
Interest bearing liabilities				188,484,663					188,484,663		171,413,834					171,413,834		142,395,212					142,395,212
Current tax liabilities				290,809					290,809		135,944					135,944		58,887					58,887
		32(k), 32(s),
		32(I),
Provisions		32(o), 32(t)		54,318,272		(8,280,917	)		46,037,355		53,365,690		(6,187,887	)		47,177,803		102,837,858		(5,118,685	)		97,719,173
TOTAL CURRENT LIABILITIES				387,122,150		(6,655,741	)		380,466,409		384,869,298		(3,902,537	)		380,966,761		407,074,675		(2,318,685	)		404,755,990
NON-CURRENT LIABILITIES
Payables				704,179					704,179		7,986,959					7,986,959		28,491,815					28,491,815
Interest bearing liabilities				125,707,508					125,707,508		111,097,444					111,097,444		61,095,014					61,095,014
Provisions				6,357,177					6,357,177		6,883,413					6,883,413		7,978,203					7,978,203
TOTAL NON-CURRENT LIABILITIES				132,768,864		0			132,768,864		125,967,816		0			125,967,816		97,565,032		0			97,565,032
TOTAL LIABILITIES				519,891,014		(6,655,741	)		513,235,273		510,837,114		(3,902,537	)		506,934,577		504,639,707		(2,318,685	)		502,321,022
PARTNERS’ EQUITY/ ACCUMULATED LOSSES				35,841,338		(14,350,756	)		21,490,582		58,309,638		(15,327,927	)		42,981,711		97,976,796		(16,905,230	)		81,071,566
TOTAL LIABILITIES AND PARTNERS’ EQUITY				555,732,352		(21,006,497	)		534,725,855		569,146,752		(19,230,464	)		549,916,288		602,616,503		(19,223,915	)		583,392,588

FS-67

THE GOODYEAR TIRE & RUBBER COMPANY

Annual Report on Form 10-K

For Year Ended December 31, 2004

INDEX OF EXHIBITS

Exhibit
Table
Item				Exhibit
No.			Description of Exhibit	Number
	3		Articles of Incorporation and By-Laws
		(a)	Certificate of Amended Articles of Incorporation of The Goodyear Tire & Rubber Company, dated December 20, 1954, and Certificate of Amendment to Amended Articles of Incorporation of The Goodyear Tire & Rubber Company, dated April 6, 1993, and Certificate of Amendment to Amended Articles of Incorporation of the Company dated June 4, 1996, three documents comprising the Company’s Articles of Incorporation, as amended through February 28, 2002 (incorporated by reference, filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-3, File No. 333-90786).
		(b)	Code of Regulations of The Goodyear Tire & Rubber Company, adopted November 22, 1955, and amended April 5, 1965, April 7, 1980, April 6, 1981, April 13, 1987 and May 7, 2003 (incorporated by reference, filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003, File No. 1-1927).
	4		Instruments Defining the Rights of Security Holders, Including Indentures
		(a)	Specimen nondenominational Certificate for shares of the Common Stock, Without Par Value, of the Company; EquiServe Trust Company, transfer agent and registrar (incorporated by reference, filed as Exhibit 4.4 to the Company’s Registration Statement on Form S-3, File No. 333-90786).
		(b)	Indenture, dated as of March 15, 1996, between the Company and JPMorgan Chase Bank, as Trustee, as supplemented on December 3, 1996, March 11, 1998, and March 17, 1998 (incorporated by reference, filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1998, File No. 1-1927).
		(c)	Indenture, dated as of March 1, 1999, between the Company and JPMorgan Chase Bank, as Trustee, as supplemented on March 14, 2000 in respect of $300,000,000 principal amount of the Company’s 8.50% Notes due 2007 (incorporated by reference, filed as Exhibit 4.1, to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, File No. 1-1927), and as further supplemented on August 15, 2001, in respect of the Company’s $650,000,000 principal amount of the Company’s 7.857% Notes due 2011 (incorporated by reference, filed as Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2001, File No. 1-1927).
		(d)	Term Loan and Revolving Credit Agreement dated as of March 31, 2003 among Goodyear, Goodyear Dunlop Tires Europe B.V., Goodyear Dunlop Tires Germany GmbH, Goodyear GmbH & Co. KG, Dunlop GmbH & Co. KG, Goodyear Luxembourg Tires SA, the Lenders named therein and JPMorgan Chase Bank, as Administrative Agent and Collateral Agent (incorporated by reference, filed as Exhibit 4.3 to Goodyear’s Form 10-Q for the quarter ended March 31, 2003, File No. 1-1927).

X-1

Exhibit
Table
Item			Exhibit
No.		Description of Exhibit	Number
	(e)	First Amendment dated as of February 19, 2004 to the Term Loan and Revolving Credit Agreement dated as of March 31, 2003 among Goodyear, Goodyear Dunlop Tires Europe B.V., Goodyear Dunlop Tires Germany GmbH, Goodyear GmbH & Co. KG, Dunlop GmbH & Co. KG, Goodyear Luxembourg Tires SA, JPMorgan Chase Bank, as Administrative Agent and Collateral Agent, and the lenders party thereto (incorporated by reference, filed as Exhibit 4.5 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(f)	Second Amendment dated as of April 16, 2004 to the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, as amended as of February 19, 2004, among Goodyear, Goodyear Dunlop Tires Europe B.V., Goodyear Dunlop Tires Germany GmbH, Goodyear GmbH & Co. KG, Dunlop GmbH & Co. KG, Goodyear Luxembourg Tires SA, JPMorgan Chase Bank, as Administrative Agent and Collateral Agent, and the lenders party thereto (incorporated by reference, filed as Exhibit 4.6 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(g)	Third Amendment dated as of May 18, 2004, to the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among Goodyear, Goodyear Dunlop Tires Europe B.V., Goodyear Dunlop Tires Germany GmbH, Goodyear GmbH & Co. KG, Dunlop GmbH & Co. KG, Goodyear Luxembourg Tires SA, JPMorgan Chase Bank, as Administrative Agent, and the lenders party thereto (incorporated by reference, filed as Exhibit 4.2 to Goodyear’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-1927).
	(h)	Fourth Amendment dated as of May 27, 2004, to the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among Goodyear, Goodyear Dunlop Tires Europe B.V., Goodyear Dunlop Tires Germany GmbH, Goodyear GmbH & Co. KG, Dunlop GmbH & Co. KG, Goodyear Luxembourg Tires SA, JPMorgan Chase Bank, as Administrative Agent, and the lenders party thereto (incorporated by reference, filed as Exhibit 4.3 to Goodyear’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-1927).
	(i)	General Master Purchase Agreement dated December 10, 2004 between Ester Finance Titrisation, as Purchaser, Eurofactor, as Agent, Calyon, as Joint Lead Arranger and as Calculation Agent, Natexis Banques Populairies, as Joint Lead Arranger, Goodyear Dunlop Tires Finance Europe B.V. and the Sellers listed therein.		4.1
	(j)	Master Subordinated Deposit Agreement dated December 10, 2004 between Eurofactor, as Agent, Calyon, as Calculation Agent, Ester Finance Titrisation, as Purchaser, and Goodyear Dunlop Tires Finance Europe B.V.		4.2
	(k)	Master Complementary Deposit Agreement dated December 10, 2004 between Eurofactor, as Agent, Calyon, as Calculation Agent, Ester Finance Titrisation, as Purchaser, and Goodyear Dunlop Tires Finance Europe B.V.		4.3
	(l)	Amended and Restated Term Loan and Revolving Credit Agreement dated as of February 19, 2004 among Goodyear, JPMorgan Chase Bank, as Administrative Agent, and the lenders party thereto (incorporated by reference, filed as Exhibit 4.8 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(m)	First Amendment dated as of April 16, 2004 to the Amended and Restated Term Loan and Revolving Credit Agreement dated as of February 19, 2004 among Goodyear, JPMorgan Chase Bank, as Administrative Agent, and the lenders party thereto (incorporated by reference, filed as Exhibit 4.9 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).

X-2

Exhibit
Table
Item			Exhibit
No.		Description of Exhibit	Number
	(n)	Second Amendment dated as of May 27, 2004, to the Amended and Restated Term Loan and Revolving Credit Agreement dated as of February 19, 2004, among Goodyear, the lenders party thereto, JPMorgan Chase Bank, as Administrative Agent (incorporated by reference, filed as Exhibit 4.4 to Goodyear’s Form 10-Q for the quarter ended June 30, 2004, File No. 1-1927).
	(o)	Master Guarantee and Collateral Agreement dated as of March 31, 2003, as Amended and Restated as of February 20, 2004, among Goodyear, the subsidiaries of Goodyear identified therein, the lenders party thereto and JPMorgan Chase Bank, as Collateral Agent (incorporated by reference, filed as Exhibit 4.10 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(p)	Indenture dated as of March 12, 2004 among Goodyear, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as Trustee (incorporated by reference, filed as Exhibit 4.11 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(q)	Note Purchase Agreement dated as of March 12, 2004 among Goodyear, certain subsidiaries of Goodyear and the investors listed therein (incorporated by reference, filed as Exhibit 4.12 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(r)	Registration Rights Agreement dated as of March 12, 2004 among Goodyear, certain subsidiaries of Goodyear and the investors listed therein (incorporated by reference, filed as Exhibit 4.13 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(s)	Collateral Agreement dated as of March 12, 2004 among Goodyear, certain subsidiaries of Goodyear and Wilmington Trust Company, as Collateral Agent (incorporated by reference, filed as Exhibit 4.14 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(t)	Lien Subordination and Intercreditor Agreement dated as of March 12, 2004 among Goodyear, certain subsidiaries of Goodyear, JPMorgan Chase Bank and Wilmington Trust Company (incorporated by reference, filed as Exhibit 4.15 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(u)	Guarantee and Collateral Agreement, dated as of August 17, 2004, among Goodyear, as Borrower, the subsidiaries of Goodyear identified therein, and JPMorgan Chase Bank, as Collateral Agent (incorporated by reference, filed as Exhibit 4.1 to Goodyear’s Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927).
	(v)	Deposit-Funded Credit Agreement, dated as of August 17, 2004, among Goodyear, the lenders party thereto, the issuing banks party thereto, JPMorgan Chase Bank, as Administrative Agent, J.P. Morgan Securities Inc., as Joint Lead Arranger and Sole Bookrunner, and BNP Paribas, as Joint Lead Arranger (incorporated by reference, filed as Exhibit 4.2 to Goodyear’s Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927).
	(w)	Note Purchase Agreement, dated June 28, 2004, among Goodyear and the purchasers listed therein (incorporated by reference, filed as Exhibit 4.3 to Goodyear’s Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927).
	(x)	Indenture, dated as of July 2, 2004, between Goodyear, as Company, and Wells Fargo Bank, N.A., as Trustee (incorporated by reference, filed as Exhibit 4.4 to Goodyear’s Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927).
	(y)	Registration Rights Agreement, dated as of July 2, 2004, among Goodyear, Goldman, Sachs & Co., Deutsche Bank Securities Inc., and J.P. Morgan Securities Inc. (incorporated by reference, filed as Exhibit 4.5 to Goodyear’s Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927).

X-3

Exhibit
Table
Item				Exhibit
No.			Description of Exhibit	Number
			Information concerning Goodyear’s long-term debt is set forth at Note 11, captioned “Financing Arrangements and Derivative Financial Instruments,” at the sub-caption “Long Term Debt and Financing Arrangements,” in the Financial Statements set forth at Item 8 of this Annual Report and is incorporated herein by reference. In accordance with Item 601(b)(4)(iii) of Regulation S-K, agreements and instruments defining the rights of holders of long-term debt of the Company pursuant to which the amount of securities authorized thereunder does not exceed 10% of the consolidated assets of the Company and its subsidiaries are not filed herewith. The Company hereby agrees to furnish a copy of any such agreement or instrument to the Securities and Exchange Commission upon request.
	10		Material Contracts
		(a)*	2002 Performance Plan of the Company (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, File No. 1-1927).
		(b)*	1997 Performance Incentive Plan of the Company (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, File No. 1-1927).
		(c)*	1989 Goodyear Performance and Equity Incentive Plan (incorporated by reference, filed as Exhibit A to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1989, File No. 1-1927).
		(d)*	Performance Recognition Plan of the Company adopted effective January 1, 2001 (incorporated by reference, filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 1-1927).
		(e)*	Goodyear Supplementary Pension Plan, as restated and amended December 3, 2001 (incorporated by reference, filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, File No. 1-1927).
		(f)*	Goodyear Employee Severance Plan, as adopted on February 14, 1989 (incorporated by reference, filed as Exhibit A-II to the Company’s Annual Report on Form 10-K for the year ended December 31, 1988, File No. 1-1927).
		(g)*	The Goodyear Tire & Rubber Company Stock Option Plan for Hourly Bargaining Unit Employees at Designated Locations, as amended December 4, 2001 (incorporated by reference, filed as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, File No. 1-1927).
		(h)*	The Goodyear Tire & Rubber Company Deferred Compensation Plan for Executives, amended and restated as of January 1, 2002 (incorporated by reference, filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, File No. 1-1927).
		(i)*	First Amendment to The Goodyear Tire & Rubber Company Deferred Compensation Plan for Executives effective as of December 3, 2002 (incorporated by reference, filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, File No. 1-1927).
		(j)*	1994 Restricted Stock Award Plan for Non-Employee Directors of the Company, as adopted effective June 1, 1994 (incorporated by reference, filed as Exhibit B to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, File No. 1-1927).
		(k)*	Outside Directors’ Equity Participation Plan, as adopted February 2, 1996 and amended February 3, 1998 (incorporated by reference, filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 1-1927).

X-4

Exhibit
Table
Item			Exhibit
No.		Description of Exhibit	Number
	(l)*	Executive Performance Plan of The Goodyear Tire & Rubber Company (incorporated by reference, filed as Exhibit 10.1 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003).
	(m)	Umbrella Agreement, dated as of June 14, 1999, between the Company and Sumitomo Rubber Industries, Ltd. (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, File No. 1-1927).
	(n)	Amendment No. 1 to the Umbrella Agreement dated as of January 1, 2003, between the Company and Sumitomo Rubber Industries, Ltd. (incorporated by reference, filed as Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002).
	(o)	Amendment No. 2 to the Umbrella Agreement dated as of April 7, 2003, between the Company and Sumitomo Rubber Industries, Ltd.		10.1
	(p)	Agreement dated as of March 3, 2003, between Goodyear and Sumitomo Rubber Industries, Ltd. amending certain provisions of the alliance agreements (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003).
	(q)	Amendment No. 3 to the Umbrella Agreement dated July 15, 2004, between the Company and Sumitomo Rubber Industries, Ltd. (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927).
	(r)	Joint Venture Agreement for Europe, dated as of June 14, 1999 (and amendment No. 1 dated as of September 1, 1999), among the Company, Goodyear S.A., a French corporation, Goodyear S.A., a Luxembourg corporation, Goodyear Canada Inc., Sumitomo Rubber Industries, Ltd., and Sumitomo Rubber Europe B.V. (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, File No. 1-1927).
	(s)	Shareholders Agreement for the Europe JVC, dated as of June 14, 1999, among the Company, Goodyear S.A., a French corporation, Goodyear S.A., a Luxembourg corporation, Goodyear Canada Inc., and Sumitomo Rubber Industries, Ltd. (incorporated by reference, filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, File No. 1-1927).
	(t)	Amendment No. 1 to the Shareholders Agreement for the Europe JVC, dated April 21, 2000, among the Company, Goodyear S.A., a French corporation, Goodyear S.A., a Luxembourg corporation, Goodyear Canada Inc. and Sumitomo Rubber Industries, Ltd.		10.2
	(u)	Amendment No. 2 to the Shareholders Agreement for the Europe JVC dated July 15, 2004, among the Company, Goodyear S.A., a French corporation, Goodyear S.A., a Luxembourg corporation, Goodyear Canada Inc., and Sumitomo Rubber Industries, Ltd. (incorporated by reference, filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, File No. 1-1927).
	(v)*	Letter agreement dated September 11, 2000, between the Company and Robert J. Keegan (incorporated by reference, filed as Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, File No. 1-1927).
	(w)*	Supplement and amendment to letter agreement between the Company and Robert J. Keegan dated February 3, 2004 (incorporated by reference, filed as Exhibit 10.2 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
	(x)*	Form of Restricted Stock Purchase Agreement.		10.3

X-5

Exhibit
Table
Item				Exhibit
No.			Description of Exhibit	Number
		(y)*	Stock Option Grant Agreement dated October 3, 2000, between the Company and Robert J. Keegan (incorporated by reference, filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, File No. 1-1927).
		(z)*	Form of Performance Equity Grant Agreement (incorporated by reference, filed as Exhibit 10.3 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
		(aa)*	Copy of Hourly and Salaried Employees Stock Option Plan of the Company as amended September 30, 2002 (incorporated by reference, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 1-1927).
		(bb)*	Forms of Stock Option Grant Agreements for options and SARs, Part I, Agreement for Non-Qualified Stock Options, and Part II, Agreement for Non-Qualified Stock Options with tandem Stock Appreciation Rights (incorporated by reference, filed as Exhibit 10.4 to Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-1927).
		(cc)*	Form of Grant Agreement for Executive Performance Plan (incorporated by reference, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 28, 2005, File No. 1-1927).
		(dd)*	Letter Agreement dated July 14, 2004, between the Company and Robert W. Tieken (incorporated by reference, filed as Exhibit 10.1 to Goodyear’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, File No. 1-1927).
		(ee)*	Schedule of Outside Directors’ Annual Compensation.		10.4
		(ff)*	Schedule of Salary and Bonus for Named Executive Officers.		10.5
	12		Statement re Computation of Ratios
		(a)	Statement setting forth the Computation of Ratio of Earnings to Fixed Charges.		12
	21		Subsidiaries
		(a)	List of subsidiaries of the Company at December 31, 2004.		21.1
	23		Consents of Independent Registered Public Accounting Firms
		(a)	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.		23.1
		(b)	Consent of KPMG LLP, independent registered public accounting firm.		23.2
	24		Powers of Attorney
		(a)	Powers of Attorney of Officers and Directors signing this report.		24.1
	31		302 Certifications
		(a)	Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		31.1
		(b)	Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		31.2
	32		906 Certifications
		(a)	Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.		32.1

*  Indicates management contract or compensatory plan or arrangement.

X-6 EX-4.1 2 l12143aexv4w1.txt EX-4.1 GENERAL MASTER PURCHASE AGREEMENT EXHIBIT 4.1 GOODYEAR - -------------------------------------------------------------------------------- GENERAL MASTER PURCHASE AGREEMENT IN RELATION TO THE SECURITISATION OF TRADE RECEIVABLES OF CERTAIN EUROPEAN SUBSIDIARIES OF THE GOODYEAR GROUP - -------------------------------------------------------------------------------- DATED 10 DECEMBER 2004 BETWEEN ESTER FINANCE TITRISATION as Purchaser EUROFACTOR as Agent CALYON as Joint Lead Arranger and as Calculation Agent NATEXIS BANQUES POPULAIRES as Joint Lead Arranger GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V. as Centralising Unit THE SELLERS listed in Schedule 9 AND GOODYEAR DUNLOP TIRES GERMANY GMBH [GIDE LOYRETTE NOUEL LOGO] - -------------------------------------------------------------------------------- ASSOCIATION D'AVOCATS A LA COUR DE PARIS 26, COURS ALBERT 1ER 75008 PARIS TEL. +33 (0)1 40 75 60 00 FAX +33 (0)1 43 59 37 79 E-MAIL INFO@GIDE.COM WWW.GIDE.COM TABLE OF CONTENTS ARTICLE 1. Definitions......................................................................................... 6 ARTICLE 2. Interpretation...................................................................................... 6 ARTICLE 3. Purpose of this Agreement........................................................................... 7 ARTICLE 4. Term of this Agreement.............................................................................. 10 ARTICLE 5. Conditions precedent to the commencement of this Agreement.......................................... 11 ARTICLE 6. Current Account..................................................................................... 12 ARTICLE 7. Amount of the Purchaser's Funding................................................................... 15 ARTICLE 8. Subordinated Deposit................................................................................ 18 ARTICLE 9. Complementary Deposit............................................................................... 18 ARTICLE 10. Fees................................................................................................ 19 ARTICLE 11. Representations and warranties...................................................................... 20 ARTICLE 12. General covenants................................................................................... 23 ARTICLE 13. Early amortisation.................................................................................. 35 ARTICLE 14. Taxes............................................................................................... 41 ARTICLE 15. Changes in circumstances............................................................................ 43 ARTICLE 16. Order of priority during the Amortisation Period.................................................... 44 ARTICLE 17. Payments............................................................................................ 46 ARTICLE 18. Conditions in relation to any purchase of Purchasable Receivables................................... 48 ARTICLE 19. Conformity warranties for Purchasable Receivables................................................... 49 ARTICLE 20. Identification of the contractual documentation for the Sold Receivables - Access to documents...... 50 ARTICLE 21. Collection of Sold Receivables...................................................................... 51 ARTICLE 22. Assessment Report and Back-Up Servicer Report....................................................... 56 ARTICLE 23. Application of payments and payments of collections................................................. 56 ARTICLE 24. Renegotiation....................................................................................... 57 ARTICLE 25. Representation mandate.............................................................................. 58 ARTICLE 26. Obligations of care................................................................................. 59 ARTICLE 27. Commission for and costs of collection.............................................................. 59 ARTICLE 28. Deemed Collections.................................................................................. 61 ARTICLE 29. Fees and expenses................................................................................... 63 ARTICLE 30. Substitution and agency............................................................................. 63 ARTICLE 31. Confidentiality..................................................................................... 64 - 2 - ARTICLE 32. Notices............................................................................................. 65 ARTICLE 33. Exercise of rights - Recourse - No petition......................................................... 65 ARTICLE 34. Transferability of this Agreement................................................................... 66 ARTICLE 35. Amendment to the Transaction Documents.............................................................. 66 ARTICLE 36. Indemnities......................................................................................... 67 ARTICLE 37. Indivisibility...................................................................................... 69 ARTICLE 38. Execution and Evidence.............................................................................. 69 ARTICLE 39. Withdrawal of Sellers............................................................................... 69 ARTICLE 40. Governing Law - Jurisdiction........................................................................ 70 SCHEDULE 1. MASTER DEFINITIONS SCHEDULE........................................................ 74 SCHEDULE 2. CONDITIONS PRECEDENT TO THE COMMENCEMENT OF THIS AGREEMENT......................... SCHEDULE 3. FORM OF ASSESSMENT REPORT.......................................................... SCHEDULE 4. FORM OF SELLER'S AUDITORS CERTIFICATE.............................................. SCHEDULE 5. FORM OF SELLER'S AND CENTRALISING UNIT'S SOLVENCY CERTIFICATE...................... SCHEDULE 6. FORM OF THE SELLER'S AND THE CENTRALISING UNIT'S LEGAL COUNSEL OPINION............. SCHEDULE 7. LIST OF ADDRESSEES................................................................. SCHEDULE 8. FORM OF NOTIFICATION OF WITHDRAWAL OF ONE OR MORE SELLER(S)........................ SCHEDULE 9. LIST OF SELLERS.................................................................... SCHEDULE 10. FORM OF COMFORT LETTER AND PERFORMANCE LETTER...................................... SCHEDULE 11. LIST OF CALENDAR DATES OF THE TRANSACTION.......................................... SCHEDULE 12. REPORTING DOCUMENT RELATING TO THE SOLD RECEIVABLES (ARTICLE 12.3.3)............... SCHEDULE 13. CONFORMITY WARRANTIES FOR PURCHASABLE RECEIVABLES.................................. SCHEDULE 14. LIST OF EXCLUDED DEBTORS........................................................... SCHEDULE 15. FORM OF CALCULATION LETTER......................................................... SCHEDULE 16. FINANCIAL CONVENANTS DEFINITIONS................................................... 102 SCHEDULE 17. FORM OF LETTER IN RELATION TO THE LIMITATION OF RECOURSE OF CREDITORS OF ESTER FINANCE TITRISATION REGARDING THE GOODYEAR SECURITSATION TRANSACTION............... - 3 - BETWEEN 1. ESTER FINANCE TITRISATION, a company incorporated under French law and authorised as a credit institution (etablissement de credit), having its registered office at 19 Boulevard des Italiens, 75 002 Paris, France, registered with the Trade and Companies Registry of Paris under the number 414 886 226, whose representative is duly authorised for the purpose of this Agreement (the "PURCHASER"); 2. EUROFACTOR, a company incorporated under French law and authorised as a credit institution (etablissement de credit), having its registered office at Tour d'Asnieres, 4, avenue Laurent Cely, 92608 Asnieres, France, registered with the Trade and Companies Registry of Nanterre under the number 642 041 560, whose representative is duly authorised for the purpose of this Agreement (the "AGENT"); 3. CALYON, a company incorporated under French law and authorised as a credit institution (etablissement de credit), having its registered office at 9 quai du President Paul Doumer, 92920 Paris La Defense Cedex, France, registered with the Trade and Companies Registry of Nanterre under the number 304 187 701, whose representatives are duly authorised for the purpose of this Agreement ("CALYON", "JOINT LEAD ARRANGER" or the "CALCULATION AGENT"); 4. NATEXIS BANQUES POPULAIRES, a limited company (societe anonyme) incorporated under French law and duly authorised as a credit institution (etablissement de credit), having its registered office at 45, rue Saint Dominique 75007 Paris, France and registered with the Trade and Companies Registry of Paris (Registre du Commerce et des Societes de Paris) under the number 542 044 524, whose representatives are duly authorised for the purpose of this Agreement ("NBP" or "JOINT LEAD ARRANGER"); 5. GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V., a company incorporated under Dutch law, having its registered office at Deboelelaan 7, 1083 HJ, Amsterdam, The Netherlands, registered with the Companies Registry of Amsterdam under the number 34197964, whose representative is duly authorised for the purpose of this Agreement (hereafter referred to as the "CENTRALISING UNIT"); 6. THE COMPANIES listed in Schedule 9 (each of them as a "SELLER" and collectively the "SELLERS"); 7. GOODYEAR DUNLOP TIRES GERMANY GMBH, a company incorporated under the laws of the Federal Republic of Germany, having its registered office at Dunlopstrasse 2, 63450 Hanau, Germany, registered with the commercial register of the local court in Hanau under number HRB 7163 ("GOODYEAR DUNLOP TIRES GERMANY GMBH"). - 4 - WHEREAS: 1. GOODYEAR DUNLOP TIRES France S.A., (the "FRENCH SELLER"), FULDA REIFEN GmbH & Co KG, M-PLUS MULTIMARKENMANAGEMENT GmbH & Co KG, GOODYEAR GmbH & Co KG, DUNLOP GmbH & Co KG (the "GERMAN SELLERS"), GOODYEAR DUNLOP TIRES Italia SPA (the "ITALIAN SELLER") and GOODYEAR DUNLOP TIRES Espana SA (the "SPANISH SELLER") are in the business of manufacturing and/or supplying tyres and activities relating thereto, and hold receivables over certain customers. 2. In order to provide financing to the Sellers, CALYON has proposed to set up a securitisation transaction by way of the sale, on an ongoing basis, of trade receivables resulting from the ordinary business of the Sellers in France, Germany, Italy and Spain (the "SECURITISATION TRANSACTION"). 3. Pursuant to the Securitisation Transaction, such trade receivables will be purchased by the Purchaser from the Sellers twice a month and in accordance with the receivables purchase agreements governed by the relevant law of the jurisdiction where the relevant Seller is located (the "RECEIVABLES PURCHASE AGREEMENTS"). 4. The Purchaser has agreed to acquire certain trade receivables (the "PURCHASABLE RECEIVABLES") held by the Sellers subject to the terms and conditions contained in this Agreement and in the Receivables Purchase Agreements. 5. The Purchaser shall fund the acquisition of Purchasable Receivables: (i) partly out of a senior deposit (the "SENIOR DEPOSIT") effected by the Depositor with the Purchaser in accordance with a master senior deposit agreement (the "MASTER SENIOR DEPOSIT AGREEMENT"); and (ii) partly by way of set-off against any amount due and payable by the Centralising Unit to the Purchaser in connection with (a) a subordinated deposit (the "SUBORDINATED DEPOSIT") to be effected by the Centralising Unit with the Purchaser in accordance with the terms and conditions of a master subordinated deposit agreement (the "MASTER SUBORDINATED DEPOSIT AGREEMENT") and (b) a complementary deposit (the "COMPLEMENTARY DEPOSIT") to be effected by the Centralising Unit with the Purchaser in accordance with the terms and conditions of a master complementary deposit agreement (the "MASTER COMPLEMENTARY DEPOSIT AGREEMENT"). 6. The receivable held by the Depositor over the Purchaser in connection with the repayment of the Senior Deposit shall be assigned to a French fonds commun de creances (the "FUND") set up in accordance with Articles L.214-43 to L.214-49 of the Monetary and Financial Code (Code monetaire et financier) which shall issue related units to be subscribed by LMA S.A., Elixir Funding Limited and any other Issuer which participates in the Securitisation Transaction. Each Issuer shall fund the subscription of units, by issuing commercial paper (the "NOTES"). - 5 - 7. The Centralising Unit shall be appointed by the Sellers to act as their agent (mandataire) for the purposes of carrying out certain activities, in accordance with the provisions of this general master purchase agreement (the "GENERAL MASTER PURCHASE AGREEMENT" or the "AGREEMENT"). 8. For the purposes of the General Master Purchase Agreement and the relevant Receivables Purchase Agreement, the Purchaser shall appoint the Sellers for the recovery of collections in accordance with a Collection Mandate (the "COLLECTION MANDATE"). 9. Due to the number of Sellers and the different Receivables Purchase Agreements under which Purchasable Receivables will be purchased by the Purchaser from the Sellers, the parties have agreed to enter into this General Master Purchase Agreement to set out a Master Definitions Schedule, common terms, representations and warranties, general covenants and all other provisions provided for by this General Master Purchase Agreement that will apply in respect of the Receivables Purchase Agreements. NOW IT IS HEREBY AGREED AS FOLLOWS: CHAPTER I - INTERPRETATION ARTICLE 1. DEFINITIONS Capitalised terms and expressions used in this Agreement shall have the same meaning as ascribed to such terms and expressions in the Master Definitions Schedule set out in Schedule 1 hereto. The schedules hereto shall form an integral part of this Agreement. ARTICLE 2. INTERPRETATION (i) The titles of the Chapters, the Schedules and the Articles (including their paragraphs) used herein and the table of contents are for convenience of reference only, and shall not be used to interpret this Agreement. (ii) In this Agreement, except if the context calls for another interpretation: (a) references to "CHAPTERS", "ARTICLES" and "SCHEDULES" shall be construed as references to the chapters, articles and schedules of this Agreement and references to this Agreement include its schedules; (b) words in the plural shall cover the singular and vice versa; (c) references to the time of the day shall refer to Paris time, unless otherwise stipulated; - 6 - (d) references to a person shall include its permitted assignees, transferees and successors; (e) references to a document shall mean such document, as amended, replaced by novation or varied from time to time; (f) references to a provision of law shall mean such provision as amended or re-enacted. CHAPTER II - PURPOSE - TERM - CONDITIONS PRECEDENT ARTICLE 3. PURPOSE OF THIS AGREEMENT 3.1 Pursuant to the terms and conditions of this Agreement, the relevant Receivables Purchase Agreements and, where applicable, the relevant Transfer Deeds, the Sellers shall sell Purchasable Receivables to the Purchaser and the Purchaser shall purchase Purchasable Receivables from the Sellers on each Settlement Date during the Replenishment Period. 3.2 The parties agree that the Purchaser shall fund the acquisition of Purchasable Receivables as follows: (i) partly out of a Senior Deposit effected by the Depositor with the Purchaser in accordance with the Master Senior Deposit Agreement, for an amount which shall not exceed the Maximum Amount of the Program, as determined in accordance with Article 7 (Amount of the Purchaser's Funding); (ii) partly by way of set-off against any amount due and payable by the Centralising Unit to the Purchaser in connection with (a) a Subordinated Deposit to be effected by the Centralising Unit with the Purchaser in accordance with the provisions of the Master Subordinated Deposit Agreement and (b) a Complementary Deposit to be effected by the Centralising Unit with the Purchaser in accordance with the provisions of the Master Complementary Deposit Agreement, for an amount which shall not exceed the Maximum Amount of the Complementary Deposit. 3.3 The parties hereby acknowledge that the Centralising Unit is acting for the purposes of this Agreement, in its own name and behalf, but also in the name and on behalf of the Sellers, pursuant to the terms of a mandate (mandat) expressly granted by each of the Sellers to the Centralising Unit and which the Centralising Unit hereby accepts. By virtue of this mandate, the Sellers appoint the Centralising Unit to act in their name and on their behalf and to perform the following obligations in accordance with the provisions of the Transaction Documents: (i) receive all Payments due by the Purchaser to the Sellers in respect of the Sold Receivables, (ii) make any payment due by the Sellers to the Purchaser and the Agent pursuant to the Transaction Documents, such payments covering inter alia the amount due in respect of Actual Collections or Adjusted Collections, (iii) enter into the Current Account - 7 - relationship set forth in Article 6, (iv) negotiate with the Purchaser, in particular upon the occurrence of any of the events set out in Articles 13, 14 and 15, (v) deliver to the Purchaser on the Initial Settlement Date and on each Settlement Date during the Replenishment Period, the Transfer Deeds received from the Sellers or executed by the Centralising Unit and, on each Information Date, the List of Purchasable Receivables, (vi) receive or give any notices, mails, or documents provided pursuant to the Transaction Documents, (vii) exercise any rights arising in respect of the Transaction Documents (with the exception of the Master Subordinated Deposit Agreement and the Master Complementary Deposit Agreement, in respect of which the Centralising Unit acts in its own name and on its own behalf), and (viii) deliver to the Purchaser the Assessment Reports substantially in the form set out in Schedule 3 to this Agreement. The Sellers and the Centralising Unit have entered into the Intercompany Arrangements, which provide, among other things, for the allocation of all sums due and/or received in connection with the Transaction Documents to which each Seller and the Centralising Unit is a party. Such Intercompany Arrangements shall provide inter alia that each Seller has an effective recourse against the defaulting Seller, the other Sellers and GOODYEAR DUNLOP TIRES EUROPE BV for any payment that any Seller or the Centralising Unit may be required to make under the joint and several liability provisions provided for under Article 3.6. The Sellers and the Centralising Unit hereby irrevocably and unconditionally undertake to refrain from exercising any rights of recourse against the Purchaser, the Agent and/or CALYON in connection with such allocation. 3.4. The parties agree that the Purchaser shall appoint the Sellers to act as collection agents for the servicing of the Sold Receivables, in accordance with the provisions of Article 21. 3.5 This Agreement shall apply automatically to any Transfer Deed delivered by the Centralising Unit, acting in the name and on behalf of a Seller to the Purchaser or any other similar document agreed between a Seller and the Purchaser, pursuant to the relevant Receivables Purchase Agreement. 3.6 Joint and several liability 3.6.1. The parties agree that the obligations of each Seller under this Agreement shall be several but not joint, and shall be construed as if each Seller had entered into a separate agreement with the Purchaser. 3.6.2. By way of exception to the foregoing, each Seller, Goodyear Dunlop Tires Germany GmbH and the Centralising Unit shall be jointly and severally liable to the Purchaser for the payment by a Seller, GOODYEAR DUNLOP TIRES EUROPE BV and/or the Centralising Unit of (i) any sums due under the Transaction Documents and notably (without limitation) for the transfer of Adjusted Collections on the due date to the Purchaser, in accordance with the provisions of Article 23, and (ii) any claim for damages against a Seller for breach of its representations and warranties or for failure to perform its obligations under this Agreement and the other Transaction Documents to which it is a party. - 8 - 3.6.3. Notwithstanding any other provision of this Agreement, the parties hereto agree that any claim enforceable under Article 3.6.2 above against any of the German Sellers or Goodyear Dunlop Tires Germany GmbH (each a "GERMAN PARTY", together the "GERMAN PARTIES") shall on any date on which payment is requested pursuant to Article 3.6.2 be limited to the amounts calculated as follows (the "FREE EQUITY AMOUNT"): (a) in the case of Goodyear Dunlop Tires Germany GmbH, the amount of its Net Assets less its Registered Share Capital as of such date; (b) in the case of a German Seller, the amount of its respective Net Assets as of such date, provided that such amount shall be reduced to the extent payment thereof would result in the Net Assets of RVM Reifen Vertriebsmanagement GmbH ("RVM") (or any successor general partner of such German Seller) falling short of the Registered Share Capital of RVM as of such date. For the purpose of this Article 3.6, "NET ASSETS" means, in respect of any entity as of any date, the result of (a) the sum of the amounts shown under the balance sheet positions pursuant to Section 266 (2) (A), (B) and (C) of the German Commercial Code (Handelsgesetzbuch), with the exception of any loan repayment claims against any of such entity's affiliates (other than such entity's subsidiaries) (or other, economically equivalent claims, including recourse claims against a defaulting Seller under the Intercompany Arrangements), less (b) the sum of the amounts of liabilities shown under the balance sheet positions pursuant to Section 266 (3) (B), (C) and (D) of the German Commercial Code, in each case as determined as of such date; and "REGISTERED SHARE CAPITAL" means, in respect of any entity as of any date, the amount shown under the balance sheet position pursuant to Section 266 (3) (A) I of the German Commercial Code as determined as of such date. The calculation of the Free Equity Amount shall be made as of the date of any payment request pursuant to Article 3.6.2 above. 3.6.4 If, upon a payment request to any German Party under Article 3.6.2 above, such German Party is of the reasonable opinion that the amount requested exceeds the Free Equity Amount at the time of such request, such German Party shall provide evidence to the Purchaser that the payment in full of the amount requested would result: (a) in the case of Goodyear Dunlop Tires Germany GmbH, in the amount of its Net Assets falling below the amount of its Registered Share Capital; (b) in the case of the German Sellers, in the amount of the Net Assets of RVM falling below RVM's Registered Share Capital, including, without limitation, plausible calculations made by such German Party and all supporting documents reasonably requested by the Purchaser, and a written statement from the statutory auditors of Goodyear Dunlop Tires Germany GmbH (in case of Article 3.6.3 (a)) and RVM (in the case of Article 3.6.3 (b)) to the Purchaser to the effect that the amount of the payment requested exceeds the Free Equity Amount of Goodyear Dunlop Tires Germany GmbH (in case of Article 3.6.3 (a)) and/or of RVM (in the case of Article 3.6.3 (b)). - 9 - 3.6.5 For the purposes of calculating the Free Equity Amount, loans and other contractual liabilities incurred in negligent or wilful violation of the provisions of this Agreement shall be disregarded. In the event that a payment is requested under Article 3.6.2 above, the relevant German Party and/or RVM (in the case of Article 3.6.3 (b)) shall realise, to the extent (i) the Free Equity Amount falls short of the amount so requested, (ii) required to enable the relevant German Party to make the requested payment, and (iii) legally permitted, assets that are shown in the balance sheet with a book value (Buchwert) that is significantly lower than the market value of the assets at the time of such request if such assets are not necessary for the business of such German Party and/or RVM (in the case of Article 3.6.3 (b)) (betriebsnotwendig). 3.6.6 None of the above restrictions on enforcement shall apply if and to the extent such enforcement relates to any obligations of the German Parties other than under Article 3.6.2. 3.6.7. The parties expressly agree that the Sellers and the Centralising Unit shall not have any responsibility for any non payment by any Debtor of any sums due in respect of the Sold Receivables, except to the extent that the Purchaser may exercise recourse for such non payment against the Subordinated Deposit and, as the case may be, the Complementary Deposit, as provided herein and, for the avoidance of any doubt, to the extent of any Deemed Collections in accordance with the provisions of Article 28. ARTICLE 4. TERM OF THIS AGREEMENT 4.1 This Agreement shall commence on the date hereof and end on the Program Expiry Date. For the purposes of this Agreement and the Receivables Purchase Agreements, the parties agree that there shall be two periods: (i) the Replenishment Period, which commences on the date hereof and ends on the Commitment Expiry Date (excluded); and (ii) the Amortisation Period, which commences on the Commitment Expiry Date and ends on the Program Expiry Date. - 10 - 4.2 The parties expressly agree that, in the event that there are any Sold Receivables outstanding on the Program Expiry Date: (a) until such time as (i) any sums due under the Master Senior Deposit Agreement have been paid, or (ii) the Centralising Unit, acting in the name and on behalf of the Sellers, has repurchased all such Sold Receivables from the Purchaser: (i) the Centralising Unit shall make a payment to the Purchaser for an amount equal to any collections actually received by the Sellers arising in relation to those Sold Receivables which are outstanding; and (ii) the Conformity Warranties set out in Article 19 (Conformity Warranties for Purchasable Receivables) and the relevant Seller's covenants in relation to the Sold Receivables as set out in Articles 12 (General Covenants), 16 (Order of Priority during the Amortisation Period), 21 (Collection of Sold Receivables), 23 (Application of Payments and Payments of collections), 24 (Renegotiation), and 25 (Representation Mandate) shall remain in force ; (b) thereafter, up to an amount equal to any portion of the Complementary Deposit and/or the Subordinated Deposit that was not reimbursed on the Program Expiry Date plus any Deferred Purchase Price that remained outstanding on such date, any Adjusted Collections shall be refunded to the Centralising Unit. In any event, the parties expressly agree that, even after the Program Expiry Date, the provisions set out in Articles 14 (Taxes), 15 (Changes in Circumstances), 29 (Fees and expenses), 31 (Confidentiality), 33 (Exercise of Rights - Recourse- Non Petition), 36 (Indemnities), 40 (Governing law - Jurisdiction) shall remain in force. 4.3. The Centralising Unit, acting in the name and on behalf of the Sellers, may, upon written notice given to the Purchaser at least nine (9) Business Days before a Funded Settlement Date during the Amortisation Period or at any time after the Program Expiry Date, offer to repurchase all outstanding Sold Receivables from the Purchaser, at a price equal to the nominal value of such Sold Receivables or such other price as the parties may agree. Such purchase price shall be applied towards the payments and in the order specified in Article 16 and, to the extent applicable, shall be set off against any amounts due to the Centralising Unit in accordance with said Article 16. ARTICLE 5. CONDITIONS PRECEDENT TO THE COMMENCEMENT OF THIS AGREEMENT This Agreement shall not take effect unless and until the Purchaser has received, on the date hereof, all the documents referred to in Schedule 2, and has determined that the same are satisfactory as to form and substance. - 11 - CHAPTER III - CURRENT ACCOUNT - DEPOSITS ARTICLE 6. CURRENT ACCOUNT 6.1 Current Account agreement 6.1.1 The Purchaser and the Centralising Unit hereby agree to enter into a current account relationship (relation de compte courant) (the "CURRENT ACCOUNT"). 6.1.2 Any sum due either by (i) the Purchaser to the Centralising Unit, acting in its own name or in the name of the Sellers pursuant to the Transaction Documents and/or by (ii) the Sellers or the Centralising Unit, acting in its own name or in the name of the Sellers, to the Purchaser pursuant to the Transaction Documents shall be recorded respectively as credit or debit on the Current Account. Any mutual debit or credit that does not arise from the Transaction Documents shall be excluded from the Current Account. 6.2 Automatic Set-off The parties hereby agree that any debit and credit recorded on the Current Account shall be automatically set-off (compenses). 6.3 Balance 6.3.1 On each Calculation Date, the Agent shall calculate the balance of the Current Account, in accordance with the provisions of Article 12.3.1., on the basis of information it has received pursuant to such Article 12.3.1., and shall forthwith provide the Centralising Unit and the Purchaser with such calculation. 6.3.2 In the case of a debit balance of the Current Account on a Calculation Date, as stated in the Current Account statement communicated in accordance with the provisions of Article 6.3.1., the Centralising Unit shall pay to the Purchaser's Account in immediately available funds an amount equal to such debit balance, on the Funded Settlement Date or on the Intermediary Settlement Date in relation to which the Current Account statement is drawn up, in accordance with the provisions of Article 17.5. 6.3.3 In the case of a credit balance of the Current Account on a Calculation Date, as stated in the Current Account statement communicated in accordance with the provisions of Article 6.3.1., the Purchaser shall pay to the Centralising Unit's Account in immediately available funds an amount equal to such credit balance on the Funded Settlement Date or on the Intermediary Settlement Date in relation to which the Current Account statement has been drawn up, in accordance with the provisions of Article 17.5. 6.3.4. Once the payment referred to in Article 6.3.2. or in Article 6.3.3. has been made, the Current Account shall be balanced at zero (0). - 12 - 6.4 Entry on Current Account 6.4.1 On the Initial Settlement Date, the Purchaser shall record: (i) on the debit of the Current Account, an amount equal to the Subordinated Deposit calculated as of the Initial Settlement Date in accordance with Article 8 (Subordinated Deposit); (ii) on the debit of the Current Account, an amount equal to the Complementary Deposit calculated as of the Initial Settlement Date in accordance with Article 9 (Complementary Deposit); (iii) on the debit of the Current Account, the amount of the Adjusted Collections calculated in respect of such Initial Settlement Date; and (iv) on the credit of the Current Account an amount equal to the Initial Purchase Price of the Purchasable Receivables sold on the Initial Settlement Date within the limits provided for by Article 12.3.1. 6.4.2 On each Intermediary Settlement Date during the Replenishment Period, the Purchaser shall enter: (i) on the debit of the Current Account, (a) an amount equal to any Increase in the Subordinated Deposit on such date, (b) an amount equal to any Increase in the Complementary Deposit on such date, (c) the amount of the Adjusted Collections calculated in respect of such date, (d) the amount of any payment due with respect to the repurchase of Doubtful Receivables on such date, and (e) any other sums due by the Centralising Unit acting on its own behalf or on behalf of the Sellers, to the Purchaser pursuant to the Transaction Documents, and not paid otherwise. - 13 - (ii) on the credit of the Current Account, (a) an amount equal to the Initial Purchase Price of the Purchasable Receivables purchased on such date within the limits set out in Article 12.3.1, (b) an amount equal to any Reduction of the Subordinated Deposit on such date, (c) an amount equal to any Reduction of the Complementary Deposit on such date, and (d) any other sums due by the Purchaser to the Centralising Unit acting on its own behalf or on behalf of the Sellers pursuant to the Transaction Documents, and not paid otherwise. 6.4.3 On each Funded Settlement Date during the Replenishment Period, the Purchaser shall enter: (i) on the debit of the Current Account, (a) an amount equal to any Increase in the Subordinated Deposit on such date, (b) an amount equal to any Increase in the Complementary Deposit on such date, (c) the amount of the Adjusted Collections calculated in respect of such date, (d) the amount of any payment due with respect to the repurchase of Doubtful Receivables on such date, and (e) any other sums due by the Centralising Unit acting on its own behalf or on behalf of the Sellers, to the Purchaser pursuant to the Transaction Documents, and not paid otherwise. (ii) on the credit of the Current Account, (a) an amount equal to the Initial Purchase Price of the Sold Receivables purchased on such date within the limits set out in Article 12.3.1, (b) an amount equal to any Deferred Purchase Price payable on such date, (c) an amount equal to any Reduction of the Subordinated Deposit on such date; (d) an amount equal to any Reduction of the Complementary Deposit on such date, and (e) any other sums due by the Purchaser to the Centralising Unit acting on its own behalf or on behalf of the Sellers pursuant to the Transaction Documents, and not paid otherwise. - 14 - The parties hereby agree that all entries on the Current Account are calculated, for any Settlement Date during the Replenishment Period, on the Calculation Date preceding such Settlement Date, and that, once entered in the Current Account, such entries shall constitute payments for the purposes of the Transaction Documents. 6.5. Termination of the Current Account The current account relationship shall terminate, and the Current Account shall be closed, on the Commitment Expiry Date. ARTICLE 7. AMOUNT OF THE PURCHASER'S FUNDING 7.1 Maximum Amount of the Purchaser's Funding 7.1.1. The Purchaser shall fund Payments (the "PURCHASER'S FUNDING") out of a Senior Deposit, up to a maximum amount (the "MAXIMUM AMOUNT OF THE PURCHASER'S FUNDING") equal to the Maximum Amount of the Program. The Senior Deposit shall create an indebtedness of the Purchaser to the Depositor in relation to the repayment of such Senior Deposit. 7.1.2. At any time before the Commitment Expiry Date, the Centralising Unit, acting in the name and on behalf of the Sellers, shall have the right to request a partial reduction of the Maximum Amount of the Program, subject to thirty (30) Business Days prior written notice (or such shorter notice as may be agreed by the parties) to the Purchaser and as from the date of receipt of such notice by the Purchaser; provided that, if the Maximum Amount of the Program is reduced to below the Minimum Amount of the Program, the Commitment Expiry Date shall be deemed to have occurred on the effective date of such intended reduction. Such reduction of the Maximum Amount of the Program shall take effect on the first Funded Settlement Date during the Replenishment Period after the notice period referred to in the paragraph above and shall be definitive and irrevocable until the following anniversary date of this Agreement falling after such reduction. On such anniversary date, the Centralising Unit, acting in the name and on behalf of the Sellers, shall have the right to request either a decrease or an increase of the Maximum Amount of the Program, provided that any such increase shall be limited to an amount equal to the aggregate amount of all reductions made since the preceding anniversary date of this Agreement pursuant to the preceding paragraph. The Purchaser shall not accept any request to increase the Maximum Amount of the Program without the prior written consent of the Liquidity Banks and the Issuers. 7.1.3. In the event that any Liquidity Agreement is not renewed as a result of a Liquidity Commitment Non Renewal, the Maximum Amount of the Program shall be partially and automatically reduced by an amount equal to the commitment of the relevant Liquidity Bank. Such reduction of the Maximum Amount of the Program shall take effect on the Funded Settlement Date following the date upon which an event described above has occurred and shall be definitive and irrevocable. - 15 - 7.1.4. In the event the Maximum Amount of the Program is reduced in accordance with the provisions of Articles 7.1.2. or 7.1.3. above, the Maximum Amount of the Purchaser's Funding shall be reduced so that the Maximum Amount of the Purchaser's Funding is equal to the reduced Maximum Amount of the Program. 7.2 Amount of the Purchaser's Funding on the Initial Settlement Date On the Initial Settlement Date, the amount of the Purchaser's Funding shall be equal to (i) the lower of the following amounts: (a) the Outstanding Amount of Eligible Receivables to be purchased by the Purchaser on such date, multiplied by the excess of: - one (1) less; - the sum of the Overcollateralisation Rate and the Discount Rate; and (b) the Maximum Amount of the Purchaser's Funding; (ii) less the amount of the Excess Foreseen Collections for such Initial Settlement Date, rounded down to the nearest whole multiple of EUR 1,800. 7.3 Change in the Purchaser's Funding On each Funded Settlement Date during the Replenishment Period other than the Initial Settlement Date, the Purchaser's Funding shall be adjusted as follows: (a) if: (i) the lower of the following amounts: x) the Outstanding Amount of Eligible Receivables already purchased and to be purchased by the Purchaser on such date, multiplied by the excess of: - one (1) less; - the sum of the Overcollateralisation Rate and the Discount Rate; and (y) the Maximum Amount of the Purchaser's Funding; less, except if any Early Amortisation Event defined in the Article 13.3. has occurred before the Assessment Date for such Settlement Date, the amount of the Excess Foreseen Collections for such Settlement Date, rounded down to the nearest whole multiple of EUR 1,800; - 16 - exceeds (ii) the amount of the Purchaser's Funding outstanding on the preceding Funded Settlement Date; then the Purchaser's Funding shall be increased by an amount equal to such excess (the "INCREASE IN THE PURCHASER'S FUNDING"); and (b) if: (i) the lower of the following amounts: (x) the Outstanding Amount of Eligible Receivables already purchased and to be purchased by the Purchaser on such date, multiplied by the excess of: - one (1) less; - the sum of the Overcollateralisation Rate and the Discount Rate; and (y) the Maximum Amount of the Purchaser's Funding; less, except if any Early Amortisation Event defined in the Article 13.3. has occurred before the Assessment Date for such Settlement Date, the amount of the Excess Foreseen Collections for such Settlement Date, rounded down to the nearest whole multiple of EUR 1,800; is lower than (ii) the amount of the Purchaser's Funding outstanding on the preceding Funded Settlement Date; then the Purchaser's Funding shall be reduced by the amount of such difference (the "REDUCTION IN THE PURCHASER'S FUNDING"). 7.4 Amount of the Purchaser's Funding in the event of a Potential Early Amortisation Event In the event that a Potential Early Amortisation Event occurs, and as long as such Potential Early Amortisation Event is continuing, the amount of the Purchaser's Funding shall be limited to the amount of the Purchaser's Funding on the Funded Settlement Date before such Potential Early Amortisation Event has occurred. - 17 - ARTICLE 8. SUBORDINATED DEPOSIT Pursuant to the terms of a Master Subordinated Deposit Agreement entered into between the Centralising Unit and the Purchaser on the date hereof, the Centralising Unit shall make a Subordinated Deposit with the Purchaser. The main provisions of the Master Subordinated Deposit Agreement are as follows: 8.1 Subordinated Deposit On the Initial Settlement Date and on each following Settlement Date during the Replenishment Period, the amount of the Subordinated Deposit shall be calculated by the Agent in accordance with the provisions of schedules 1 and 2 of the Master Subordinated Deposit Agreement. The Agent shall calculate the amount of the Subordinated Deposit on each Calculation Date. On any Calculation Date, during the Replenishment Period, the Agent shall calculate the difference between (i) the amount of the Subordinated Deposit to be made on such Settlement Date, and (ii) the amount of the Subordinated Deposit made on the preceding Settlement Date. 8.2 Pledge of the Subordinated Deposit The Subordinated Deposit shall be pledged as cash collateral (affecte a titre de gage-especes) by the Centralising Unit in favour of the Purchaser, to secure the payment of (i) any sum due by the Debtors to the Purchaser in respect of the Sold Receivables and (ii) any sum due to the Purchaser by any Seller or the Centralising Unit pursuant to the Transaction Documents. 8.3 Repayment of the Subordinated Deposit The repayment of the Subordinated Deposit shall be carried out in accordance with the terms and conditions set forth in the Master Subordinated Deposit Agreement and Article 16 (Order of Priority during the Amortisation Period). ARTICLE 9. COMPLEMENTARY DEPOSIT Pursuant to the terms of a Master Complementary Deposit Agreement entered into between the Centralising Unit and the Purchaser on the date hereof, the Centralising Unit shall make a Complementary Deposit with the Purchaser. The main provisions of the Master Complementary Deposit Agreement are as follows: 9.1 Complementary Deposit The Centralising Unit shall make a Complementary Deposit with the Purchaser in accordance with the terms and conditions of the Master Complementary Deposit Agreement. - 18 - On the Initial Settlement Date and on each following Settlement Date during the Replenishment Period, the amount of the Complementary Deposit shall be calculated by the Agent in accordance with the provisions of schedule 1 of the Master Complementary Deposit Agreement. 9.2 Pledge of the Complementary Deposit The Complementary Deposit shall be pledged as cash collateral (affecte a titre de gage-especes) by the Centralising Unit in favour of the Purchaser, to secure the payment of (i) any sum due by the Debtors to the Purchaser in respect of the Sold Receivables and (ii) any sum due to the Purchaser by any Seller or the Centralising Unit pursuant to the Transaction Documents, provided that no party shall be entitled to receive, as a result of such pledge, any amounts in addition to those that it is entitled to receive pursuant to Article 16. 9.3 Repayment of the Complementary Deposit The repayment of the Complementary Deposit shall be carried out in accordance with the terms and conditions set forth in the Master Complementary Deposit Agreement and Article 16 (Order of Priority during the Amortisation Period) hereunder. CHAPTER IV - FEES ARTICLE 10. FEES 10.1 On each Funded Settlement Date (except the Initial Settlement Date), the Centralising Unit shall pay to the Agent, the Management Fee which is due to compensate the Agent for its services under this Agreement. 10.2 Such Management Fee shall be equal to EUR 20,900 per month (V.A.T. excluded), increased by the applicable V.A.T ; provided that if the Securitisation Transaction is terminated by the Centralising Unit during the first two years of the Securitisation Transaction (other than a termination after there has been an Early Amortisation Event or a drawing under a Liquidity Agreement or a Liquidity Bank Letter), then the minimum amount of the Management Fee for the year in which the Securitisation Transaction is terminated shall be equal to EUR 250,000 (V.A.T. excluded), increased by the applicable V.A.T. As from the beginning of the third year until the fifth year of the Securitisation Transaction, in the event that the Centralising Unit decides to terminate the Securitisation Transaction and repurchases the Sold Receivables upon such termination (other than a termination after there has been an Early Amortisation Event or a drawing under a Liquidity Agreement or an Liquidity Bank Letter) and does not inform the Agent at the latest three months beforehand, the Centralising Unit undertakes to pay an amount upon such termination equal to the lesser of (i) the Management Fee for three months (EUR 62,700) (VAT excluded), increased by the applicable V.A.T, from the date on which the notice of termination is delivered minus any Management Fee otherwise paid after notice of termination is delivered and (ii) the Management Fee for the period from such termination until the expiration date of the Liquidity Agreements. - 19 - 10.3 The Agent shall notify the amount of the Management Fee to the Centralising Unit, at the latest before 5.00 pm on the Calculation Date immediately preceding any Funded Settlement Date. 10.4 On each Funded Settlement Date, the Centralising Unit shall pay the Management Fee by crediting the Agent's Account before 12.00 (noon), for an amount equal to the Management Fee, as determined in accordance with 10.2. The parties acknowledge that the payment of such Management Fee by the Centralising Unit to the Agent shall be expressly excluded from the Current Account mechanism. 10.5 In the event that the Centralising Unit fails to pay such Management Fee on a Funded Settlement Date, the Purchaser shall proceed forthwith with the payment of such Management Fee, on the Centralising Unit's behalf to the extent of the Adjusted Collections received. As such, the Purchaser shall be, upon delivery of a subrogation notice by the Agent, subrogated in the rights of the Agent against the Centralising Unit to the extent of the sums paid to the Agent in respect of the Management Fee. CHAPTER V - REPRESENTATIONS AND WARRANTIES - GENERAL COVENANTS ARTICLE 11. REPRESENTATIONS AND WARRANTIES 11.1 Each Seller, Goodyear Dunlop Tires Germany GmbH and the Centralising Unit represents and warrants to the Purchaser at the date hereof as follows: (i) - in the case of the French Seller, it is a limited company (societe anonyme) duly incorporated and validly existing under French law, or - in the case of the German Sellers, it is a limited partnership (Gesellschaft mit beschrankter Haftung & Co Kommanditgesellschaft) or (in the case of Goodyear Dunlop Tires Germany GmbH) a limited liability company (Gesellschaft mit beschrankter Haftung), duly established and validly existing under German law, or - in the case of the Italian Seller, it is a joint stock company (societa per azioni) duly incorporated and validly existing under Italian law, or - in the case of the Spanish Seller, it is a corporation (sociedad anonima) duly incorporated and validly existing under Spanish law, or - in the case of the Centralising Unit, it is a limited liability company duly incorporated and validly existing under Dutch law ; - 20 - (ii) it has the capacity (a) to carry on its business, as currently conducted, and to own all of the assets appearing on its balance sheet, except where failure of such capacity would not be reasonably likely to result in a Material Adverse Effect, and (b) to enter into and perform its obligations under the Transaction Documents to which it is a party; (iii) it does not require any power or authorisation to execute the Transaction Documents to which it is a party or to perform its obligations under the Transaction Documents, that it has not already obtained, unless, in the case of any Governmental Authorisation, the failure to obtain such authorisation would not be reasonably likely to result in a Material Adverse Effect; (iv) - except to the extent that no Material Adverse Effect would be reasonably likely to result, the execution of the Transaction Documents to which it is a party and the performance of its obligations under the Transaction Documents will not contravene (a) any of the provisions of its articles of association or of any other of its constitutional or organisational documents, (b) any laws or regulations applicable to it, or (c) any contractual obligations, negative pledges, agreements or undertakings to which it is a party or by which it is bound; - the execution of the Transaction Documents to which it is a party and the performance of its obligations under the Transaction Documents will not contravene (x) if such concept is applicable in the relevant jurisdiction, the corporate interest (interet social) of the Centralising Unit or the relevant Seller and (y) in the case of each of the German Parties, Section 30 and seq. of the German Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschrankter Haftung); (v) the Transaction Documents to which it is a party constitute its legal, valid and binding obligations and are enforceable against it in accordance with their terms, subject to applicable bankruptcy, insolvency, moratorium and other laws affecting creditors' right generally; (vi) all of the documents that it has provided to the Purchaser pursuant to the Transaction Documents are accurate and correct in all material respects as of their respective dates and as of the date of their delivery, and the audited, certified annual accounts were prepared in accordance with the relevant Accounting Principles and give, in all material respects, a true, accurate and fair view (comptes reguliers, sinceres et qui donnent une image fidele) of its results for the relevant fiscal year; (vii) it carries on its business in compliance with all of the relevant laws and regulations applicable to it, except where failure to do so would not be reasonably likely to have a Material Adverse Effect; (viii) there are no actions, suits or proceedings pending or, to its knowledge, threatened to be raised or brought against it, which are reasonably likely to result in a Material Adverse Effect, or any material litigation that challenges or seeks to prevent the Securitisation Transaction; - 21 - (ix) except as specifically disclosed in writing to the Purchaser before the date hereof, no event has occurred since the closing date of its last fiscal year that is reasonably likely to adversely and materially affect, impede or prohibit the execution or the performance of its obligations under the Transaction Documents to which it is a party or that is otherwise reasonably likely to have a Material Adverse Affect; (x) no Early Amortisation Event of the type described in Article 13.3. has occurred and is continuing; (xi) GOODYEAR DUNLOP TIRES EUROPE BV holds directly or indirectly 100% in the Centralising Unit's share capital and voting rights and more than 50% in each Seller's share capital and voting rights and as such exercises effective control over the Centralising Unit and the Sellers within the meaning of Article L.511-7.3 of the French Monetary and Financial Code (Code monetaire et financier); (xii) it has received on the date hereof a certified true copy or final drafts of the Transaction Documents to be executed on the date hereof and has full knowledge of the same; (xiii) it has carried out its own legal, tax and accounting analysis as to the consequences of the execution and performance of its obligations under the Transaction Documents, and agrees that the Purchaser, the Joint Lead Arrangers, the Issuers and the Liquidity Banks shall have no liability to any of the Sellers or the Centralising Unit in that respect; (xiv) it has entered into intercompany arrangements with the Centralising Unit and the other Sellers, pursuant to which it has undertaken (a) to reimburse the Centralising Unit for certain fees, including any amount paid on its behalf and any losses arising under the Transaction Documents, (b) to pay the Centralising Unit a direct and sufficient consideration for the making of the Subordinated Deposit and the Complementary Deposit and compensate the Centralising Unit as is appropriate in respect of all losses incurred by the latter arising from the making of the Subordinated Deposit and the Complementary Deposit, and (c) to ensure that fees and expenses or any other sums due by the Sellers under the Transaction Documents are allocated among the Sellers in accordance with their respective corporate interest, if such concept is applicable in the relevant jurisdiction (the "INTERCOMPANY ARRANGEMENTS"); (xv) it has entered into intercompany arrangements which shall, inter alia, (a) if complied with, ensure due compliance of each of the German Sellers, Goodyear Dunlop Tires Germany GmbH and GOODYEAR DUNLOP TIRES EUROPE BV, GOODYEAR and/or any other shareholder or affiliate of the German Sellers with the relevant applicable corporate capital maintenance provisions, including, without limitation, Section 30 of the German Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschrankter Haftung), and (b) ensure that none of the German Sellers supports, directly or indirectly, the uncollectability of any Sold Receivables purchased by the Purchaser from any other German Seller without any required consideration therefor; (xvi) no Lien has been created or exists (other than any Liens contemplated by the Transaction Documents) (a) in relation to any Sold Receivables (and related rights) assigned by it prior to their respective assignment to the Purchaser or in respect of the - 22 - Collection Accounts, with the exception of those Liens which arise by operation of applicable laws and regulations, or (b) over the Subordinated Deposit and/or the Complementary Deposit; (xvii) its obligations under the Transaction Documents rank and will rank at least pari passu with all other present and future unsecured and unsubordinated obligations (with the exception of those preferred by law generally); (xviii) it is not entitled to claim immunity from suit, execution, attachment or other legal process in any proceeding taken in the jurisdiction of its incorporation in relation to any Transaction Documents; (xix) it is not subject to Insolvency Proceedings and is not insolvent within the meaning of applicable laws; (xx) in the case of each German Seller, (a) such German Seller has, to the extent permissible, opted for payment on a monthly basis of self-assessed or assessed VAT, (b) such German Seller having applied for a permanent extension for the filing of monthly returns (Dauerfristverlangerung) has posted a special advance estimated tax payment to the relevant tax office and (c) any such self-assessed or assessed VAT owed by such German Seller in accordance with applicable German VAT laws and regulations, has been paid to the relevant German tax administration when due; and (xxi) in the case of each German Seller, there is no dispute, action, suit or proceeding pending or, to its knowledge, threatened to be raised or brought against it, except for disputes, actions, suits or proceedings that such German Seller disputes in good faith, by any German tax administration in relation to any VAT tax payment or the calculation of such VAT. 11.2 The above representations and warranties shall be deemed to be repeated by each Seller and the Centralising Unit, as applicable, on each Settlement Date during the Replenishment Period upon the issue or, as the case may be, the execution of any Transfer Deed. Such representations and warranties shall remain in force until the Program Expiry Date. ARTICLE 12. GENERAL COVENANTS The following general covenants shall remain in force from the date hereof until the Program Expiry Date. - 23 - 12.1 Sellers 12.1.1 Affirmative covenants: Each Seller undertakes: (i) to provide the Purchaser without undue delay, on a non consolidated basis, with: (a) its annual accounts (balance sheet, profit and loss accounts and annexes), as published and certified by its statutory auditors, the report of the board of directors and statutory auditors relating thereto and an extract of the minutes of the shareholders' annual general meeting approving the said accounts, no later than forty-five (45) calendar days following the holding of its shareholders' annual general meeting; (b) all published interim financial information ; (c) all other information, reports or statements as the Purchaser may at any time reasonably request in so far as is permitted by applicable laws and regulations, and depending on the type of information requested, in accordance with the different procedures applicable to the communication of information under this Agreement; (ii) to request promptly any authorisation as may become necessary for the performance of its obligations under this Agreement; (iii) to do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business, except to the extent that failures to keep in effect such rights, licenses, permits, privileges and franchises would not be reasonably likely to result in a Material Adverse Effect; (iv) upon knowledge by the relevant Seller that (a) an Early Amortisation Event defined in Article 13.3 has occurred, to notify or cause to be notified forthwith the Purchaser and provide a copy of the same to the Joint Lead Arrangers and (b) a Potential Early Amortisation Event has occurred, to notify or cause to be notified forthwith the Purchaser and provide a copy of the same to the Joint Lead Arrangers and, where applicable, of actions which the Seller has taken and/or proposes to take with respect thereto in order to prevent such Potential Early Amortisation Event from becoming an Early Amortisation Event; (v) to carry on its business in all material aspects in accordance with all applicable laws and regulations, except where failure to do so would not be reasonably likely to have a Material Adverse Effect; - 24 - (vi) upon the Purchaser's request, which shall be subject to a reasonable prior notice, to arrange forthwith for bi-annual audits to be carried out by the Purchaser or by any other entity appointed by the Purchaser for such purposes, of its receivables and collection procedures. The audits shall be conducted at the expense of and paid by the Centralising Unit, acting in the name and on behalf of the Sellers, it being understood that: - the main bi-annual audit shall be carried out at the latest two (2) months before the anniversary date of this Agreement; - prior to the carrying out of the second bi-annual audit, the Agent shall ask the Purchaser, the Liquidity Banks and the Back-Up Servicer whether and the extent to which a second bi-annual audit is necessary; this second bi-annual audit will not be carried out in the event that the Agent, the Purchaser, the Liquidity Banks and the Back-Up Servicer unanimously confirm in writing that such a second bi-annual audit is unnecessary; (vii) commencing on the date on which an Auditors Certificate is drawn up in accordance with Article 5 (Conditions precedent to the commencement of this Agreement), to deliver to the Purchaser an Auditors Certificate within six (6) calendar months after the date of delivery of the previous Auditors Certificate in the form set out in Schedule 4; (viii) to notify forthwith the Purchaser, promptly upon becoming aware, of any material adverse change in relation to any Sold Receivable, and to promptly respond to any reasonable written request of the Purchaser, the Agent, any Back-Up Servicer or any Italian Back-Up Servicer concerning any event in relation to any Sold Receivable which is reasonably likely to endanger the payment of a sum under such Sold Receivable; (ix) to keep the Purchaser fully informed of the existence and progress of (a) any material litigation relating to a Sold Receivable, (b) any claim or litigation relating to the Sold Receivables before the courts or in arbitration for the purposes of recovering material sums due under such Sold Receivables, (c) any claim or litigation relating to the Sold Receivables before the courts or in arbitration for the purposes of recovering sums due under such Sold Receivable, upon written request of the Purchaser, the Agent, any Back-Up Servicer or any Italian Back-Up Servicer, and (d) any action, suit or proceeding described in Article 11.1. (viii); (x) to submit to the Purchaser, as soon as practicable, on the Purchaser's reasonable request and subject to the provisions of Article 20 (Identification of the contractual documentation for the Sold Receivables - Access to documents) and Article 31 (Confidentiality), all documents which enable the latter to verify that the Seller has properly fulfilled its contractual obligations concerning the collection of sums due under the Sold Receivables, to the extent permitted by applicable laws or regulations and in particular, in the case of the Protected Debtors, by the provisions of the Data Protection Trust Agreement; - 25 - (xi) to transfer or cause to be transferred to the Purchaser all Adjusted Collections in accordance with the provisions of Article 23 (Application of payments and payments of collections); (xii) commencing on the date on which a Solvency Certificate is drawn up in accordance with Article 5 (Conditions precedent to the commencement of this Agreement), to deliver to the Purchaser a Solvency Certificate (on a date which shall be a Settlement Date during the Replenishment Period) on a quarterly basis in accordance with the form set out in Schedule 5; (xiii) to execute any and all further documents, agreements and instruments, and take all such further actions, as may be reasonably requested by the Purchaser in order to ensure that the sales of Purchasable Receivables to the Purchaser under the Receivables Purchase Agreements constitute valid and perfected sales of such Purchasable Receivables and the security interests created over the Collection Accounts for the benefit of the Purchaser constitute valid and perfected security interests; (xiv) to inform the Purchaser, as soon as possible and in so far permitted by applicable laws and regulations, of its intention to restructure such Seller leading to GOODYEAR DUNLOP TIRES EUROPE BV ceasing to hold directly or indirectly more than 50% in the voting rights of such Seller; (xv) to ensure that steps are taken to maintain the performance of the billing and recovery procedures and accountancy methods in relation to the customer account (compte client) of such Seller, with the same degree of skill and care as evidenced during the audits carried out on behalf of the Purchaser or any of their agents during the structuring phase of the Securitisation Transaction; (xvi) to ensure that any information transmitted by the Centralising Unit or such Seller during the term of this Agreement and pursuant to the Transaction Documents is true and accurate in all material respects; (xvii) to maintain effective and in full force at all times the Intercompany Arrangements with the Centralising Unit and the other Sellers, and not to change such Intercompany Arrangements in any way that may adversely affect the rights of the Purchaser under the Securitisation Transaction; - 26 - (xviii) to maintain effective and in full force at all times, such internal arrangements between the German Sellers, Goodyear Dunlop Tires Germany GmbH and GOODYEAR DUNLOP TIRES EUROPE BV, GOODYEAR and/or any other shareholder or affiliate of the German Sellers which are necessary to (i) if complied with, ensure due compliance of each of the German Sellers, Goodyear Dunlop Tires Germany GmbH and GOODYEAR DUNLOP TIRES EUROPE BV, GOODYEAR and/or any other shareholder or affiliate of the German Sellers with the relevant applicable corporate capital maintenance provisions, including, without limitation,Section 30 of the German Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschrankter Haftung), and (ii) ensure that none of the German Sellers supports, directly or indirectly, the uncollectability of any Sold Receivables purchased by the Purchaser from any other German Seller without any required consideration therefor; (xix) to keep any Bill of Exchange relating to a Sold Receivable as custodian of the Purchaser for collection purposes unless the Sellers' Collection Mandate has been terminated and it has received notification from the Purchaser to deliver such Bill of Exchange to the Purchaser or any third party appointed by the Purchaser; (xx) (a) in the case of the Spanish Seller, to take such steps and do all things as to notarise before a Spanish Public Notary (x) as of the date hereof, the Spanish law governed Receivables Purchase Agreement, the Transfer Deed delivered pursuant thereto on the Initial Settlement Date (specifying in such Transfer Deed any promissory notes which must be transferred in accordance with this Agreement and the relevant Receivables Purchase Agreement) and the Spanish Collection Account Agreements and (y) on each Settlement Date during the Replenishment Period, any Transfer Deed delivered pursuant to the relevant Receivables Purchase Agreement (specifying in such Transfer Deeds any promissory notes which must be transferred in accordance with this Agreement and the relevant Receivables Purchase Agreement), it being understood at all times that the costs of such notarisation shall be borne by the Spanish Seller; (b) in the case of the Italian Seller, to take such steps and do all things as to notarise before an Italian Public Notary as of the date hereof, the Italian law governed Collection Account Agreements, it being understood that the costs of such notarisation shall be borne by the Italian Seller; (xxi) (a) to instruct any Debtor, which has not been already informed, to pay any sum due under a Sold Receivable to the relevant Collection Account(s) and, from the date hereof, to collect any sums due under a Sold Receivable exclusively on the relevant Collection Account(s), and (b) to promptly transfer to the relevant Collection Account(s) any sums paid by a Debtor in a different manner than to the relevant Collection Account(s); - 27 - (xxii) in the case of the Italian Seller, to grant the Italian Stand-By Servicer/Italian Back-Up Servicer a prior irrevocable mandate which has been signed by the Italian Seller authorizing the Italian Back Up Servicer, whenever an Italian Notice of Transfer has to be sent in accordance with this Agreement, to execute the Italian Notice of Transfer, it being provided that the Italian Stand-By Servicer/Italian Back-Up Servicer shall not use such irrevocable mandate for any purpose other than the execution of the Italian Notice of Transfer; (xxiii) in the case of the Italian Seller, to grant the Italian Stand-By Servicer/Italian Back-Up Servicer a prior irrevocable mandate which has been signed by the Italian Seller authorising the Italian Stand-By Servicer/Italian Back-Up Servicer to send RID collections through the banking network by using the SIA code granted to the Italian Seller, it being provided that the Italian Stand-By Servicer/Italian Back-Up Servicer shall not use such irrevocable mandate for any purpose other than the performance of the back-up servicing activities; (xiv) in the case of the Italian Seller and if the RID collection system is used in connection with the Italian Debtors, to provide the Italian Stand-By Servicer/Italian Back-Up Servicer with all necessary information required for the purpose of sending RID applications through the banking network (and namely the SIA code granted to the Italian Seller) and ensure or cause to ensure that the List of Italian Purchasable Receivables has been correctly completed with such information; (xxv) in the case of the Italian Seller and if the RIBA collection system is used in connection with the Italian Debtors, to provide the Italian Stand-By Servicer/Italian Back-Up Servicer with all necessary information required for the purpose of issuing RIBA over Italian Debtors which have agreed to such means of payments and ensure or cause to ensure that the List of Italian Purchasable Receivables has been correctly completed with such information; and (xxvi) in the case of each German Seller, (a) (w) to opt or continue to opt at all times for payment of self-assessed or assessed VAT on a monthly basis, (x) having applied for a permanent extension for the filing of monthly returns (Dauerfristverlangerung) post and maintain posted a special advance estimated tax payment to the relevant tax office, (y) to calculate and self-assess VAT on a monthly basis in accordance with German VAT laws and regulations and (z) to pay any VAT when due to the relevant German tax administration on a monthly basis; (b) to provide the Purchaser on each Information Date with (x) a monthly report detailing the calculation of VAT due in relation to the preceding calendar month in accordance with German VAT laws and regulations, and (y) evidence of the payment of any amounts of VAT when due to the relevant German tax administration, as described in such monthly report; (c) to submit promptly upon request of the Purchaser a statement and/or evidence in respect of any VAT payment; - 28 - (d) to ensure that, promptly upon request of the Purchaser at any time and in any event semi annually (x) its auditors or any qualified accountants carry out an audit in relation to its VAT assessment procedures and VAT payment in accordance with applicable law and regulations, detailing the calculation and the payment of VAT during the period since the previous audit or (as relevant) during the last six (6) calendar months and (y) the results of such audit are forthwith communicated to the Purchaser, whereby the costs of such audit shall be borne by such German Seller. 12.1.2 Negative covenants Each Seller undertakes: (i) (a) not to sell, lease, transfer or dispose of, the whole or a substantial part of its business or assets whether in a single transaction or by a number of transactions. Such prohibitions do not however apply to: (w) disposals in the ordinary course of the business of the Centralising Unit or of any Seller; (x) disposals between the Centralising Unit and any Seller(s) or between any Sellers or within the GOODYEAR Group; (y) disposals for arm's length consideration on normal commercial terms; or (z) other disposals which are not reasonably likely to materially prejudice the rights of the Purchaser hereunder or adversely and materially affect the collectibility of the Sold Receivables; and (b) except for any intra-group mergers or reorganisations within the GOODYEAR Group, not to purchase all or part of the assets of any individual, undertaking or company, and not to enter into any merger (fusion), demerger (scission) or proceeding of a similar nature, which is reasonably likely to materially prejudice the rights of the Purchaser hereunder or adversely affects such Seller's ability to collect the Sold Receivables; (ii) not to vary any of its collection procedures currently in operation on the date hereof, without the prior written consent of the Purchaser if such a variation is reasonably likely to adversely affect the quality of such collection procedures; (iii) (a) not to deliver to the Purchaser any document containing information concerning the Sold Receivables which it knows to be inaccurate or incomplete; (b) not to deliver to the Purchaser any document containing information concerning the Sold Receivables which it, in the exercise of reasonable diligence, should reasonably have known to be inaccurate or incomplete, in any material respect; (iv) not to use any software for the management of the Sold Receivables unless the software user licence allows it to be used to monitor the Sold Receivables, except in cases that would not be reasonably likely to result in a Material Adverse Effect; - 29 - (v) to abstain from varying the corporate purposes or changing the legal form of such Seller, except to the extent related to any intra-group mergers or reorganisations within the GOODYEAR Group or to the extent that such variation or change would not be reasonably likely to result in a Material Adverse Effect; (vi) not to endorse, transfer or deliver to any person a Bill of Exchange relating to a Sold Receivable unless such an endorsement, transfer or delivery is made for the benefit of the Purchaser and, upon request of the Purchaser, to endorse, transfer or deliver, to the Purchaser or any third party designated by the Purchaser, acting pursuant to a power of attorney provided by a separate agreement, any and all Bills of Exchange corresponding to Sold Receivables and take all such measures deemed necessary by the Purchaser in order to preserve its rights hereunder; and (vii) not to create, incur, assume or permit to exist any Liens (other than any Liens contemplated by the Transaction Documents) (a) in relation to any Sold Receivables (and related rights) prior to their respective assignment to the Purchaser or in respect of the Collection Accounts, with the exception of those Liens required by applicable laws and regulations, or (b) over the Subordinated Deposit and/or the Complementary Deposit. 12.2 Centralising Unit 12.2.1 Affirmative covenants The Centralising Unit undertakes: (i) to provide the Purchaser without undue delay, on a non consolidated basis, with: (a) its annual accounts (balance sheet, profit and loss accounts and annexes), as published and certified by its statutory auditors, the related report of the board of directors and statutory auditors, and an extract of the minutes of the shareholders' annual general meeting approving the said accounts, no later than forty-five calendar days (45) following the holding of its shareholders' annual general meeting; (b) all published interim financial information; and (c) all other information, reports or statements as the Purchaser may at any time reasonably request and depending on the type of information requested, in accordance with the procedures applicable to the communication of information under this Agreement; (ii) to request promptly any authorisation as may become necessary for the performance of its obligations under the Transaction Documents to which it is a party; - 30 - (iii) to do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business, except to the extent that failure to keep in effect such rights, licenses, permits privileges and franchises would not be reasonably likely to result in a Material Adverse Effect; (iv) upon knowledge by the Centralising Unit that (a) an Early Amortisation Event has occurred, to notify forthwith the Purchaser of the same and (b) a Potential Early Amortisation Event has occurred, to notify forthwith the Purchaser of the same and, where applicable, of actions which the Centralising Unit has taken and/or proposes to take with respect thereto in order to prevent such Potential Early Amortisation Event from becoming an Early Amortisation Event; (v) to carry on its business in accordance with all applicable laws and regulations, except where failure to do so would not be reasonably likely to result in a Material Adverse Effect; (vi) on the first sixth month anniversary of the date hereof following the date on which it has appointed a statutory auditor within the meaning of article 2:393 of the Dutch Civil Code, to deliver to the Purchaser an Auditors Certificate in a form reasonably acceptable to the Purchaser and thereafter to deliver an Auditors Certificate in such form within six month after the date of the delivery of the previous Auditors Certificate; (vii) commencing on the date on which a Solvency Certificate is drawn up in accordance with Article 5 (Conditions precedent to the commencement of this Agreement), to deliver to the Purchaser (on a date which shall be a Settlement Date during the Replenishment Period), a Solvency Certificate within three (3) calendar months after the date of delivery of the previous Solvency Certificate, in accordance with the form set out in Schedule 5; (viii) to provide the Agent on each Information Date before 11.00 pm with a copy of the Assessment Report and a List of Purchasable Receivables in the form agreed between the parties to this Agreement; (ix) to provide on each Settlement Date during the Replenishment Period before 9.00 am, the Transfer Deeds; (x) to transmit to the Agent and the Purchaser a certificate evidencing compliance with the Financial Covenants at the time of delivery of such financial information described in points (a) and (b) of section 5.01 of the European Credit Facility; (xi) to inform the Purchaser, as soon as possible, and in so far as is permitted by applicable laws and regulations of any restructuring leading to GOODYEAR DUNLOP TIRES EUROPE B.V. ceasing to hold directly or indirectly 100% in the voting rights of the Centralising Unit; - 31 - (xii) to ensure that any information transmitted by the Centralising Unit or any of the Sellers during the course of the Securitisation Transaction and pursuant to the Transaction Documents is accurate and true in all material respects; (xiii) to maintain effective and in full force at all times the Intercompany Arrangements with the Centralising Unit and the other Sellers, and not to change such Intercompany Arrangements in any way that may adversely affect the rights of the Purchaser under the Securitisation Transaction. 12.2.2 Negative covenants The Centralising Unit undertakes: (i) to abstain from changing its legal form, its corporate existence and varying its corporate purposes, except to the extent that such variation or change would not be reasonably likely to adversely affect the performance of its obligations under the Transaction Documents; (ii) not to create, incur, assume or permit to exist any Liens in relation to any of its assets, except for Liens provided under the Transaction Documents, or to the extent required by applicable laws or regulations. 12.3 Agent 12.3.1 The Agent hereby agrees with the other parties that it shall, at the latest on each Calculation Date: (i) identify a selection in the List of Purchasable Receivables sent by the Centralising Unit, acting in the name and on behalf of the Sellers, on the preceding Information Date, in order to select the Purchasable Receivables which shall be purchased by the Purchaser from the Sellers on the next Settlement Date during the Replenishment Period, so that the Outstanding Amount of Sold Receivables (taking into account the Outstanding Amount of Purchasable Receivables to be purchased on the following Settlement Date during the Replenishment Period) shall not exceed the sum of the Maximum Amount of the Purchaser's Funding, the amount of the Subordinated Deposit, the Maximum Amount of the Complementary Deposit and the Discount Reserve; (ii) identify among the Purchasable Receivables selected in accordance with point (i) above, Eligible Receivables, which shall be selected so that the Outstanding Amount of Eligible Receivables due by Debtors of the same Group on such date shall not exceed the Maximum Concentration Rate multiplied by the Outstanding Amount of the Eligible Receivables on such date; - 32 - (iii) send to the Centralising Unit, acting in the name and on behalf of the Sellers, before 5.00 pm on such Calculation Date a list containing the Purchasable Receivables (and identifying specifically the Eligible Receivables) to be purchased on the next Settlement Date during the Replenishment Period, along with the Outstanding Amount of Purchasable Receivables and the Outstanding Amount of Eligible Receivables; (iv) calculate, as of the following Settlement Date: (a) the balance of the Current Account; (b) the Discount Amount; (c) the amount of the Discount Reserve, if such Calculation Date immediately precedes a Settlement Date; (d) the Outstanding Amount of Sold Receivables and the Outstanding Amount of Eligible Receivables, globally and for each Seller individually; (e) the amount of the Purchaser's Funding, including any increase or reduction in the level of such funding if such Calculation Date precedes immediately a Funded Settlement Date; (f) the amount of the Subordinated Deposit; (g) the amount of the Complementary Deposit; (h) as the case may be, the amount of the Foreseen Collections; (i) the amount of the Adjusted Collections; and (j) any other amounts agreed between the Agent and the Centralising Unit. (v) give notice before 5.00 pm on such Calculation Date to the Centralising Unit acting, as the case may be, on its own behalf or on behalf of the Sellers, of the calculations (with supporting details) carried out pursuant to the above paragraph (iv) in order to provide the information needed, as the case may be, for the payment to be made on the following Settlement Date pursuant to Article 6.3, in accordance with the letter described in Schedule 15; (vi) communicate the calculation of any Increase in the Purchaser's Funding or any Reduction in the Purchaser's Funding in accordance with the provisions of Article 7.3 to the Depositor. The parties agree that, in the event that any party becomes aware of any error in the calculation carried out by the Agent pursuant to the present Article 12.3.1, such party shall forthwith notify the Agent in order to rectify such an error. 12.3.2. At the latest on each Calculation Date, the Agent shall, at the request of any Joint Lead Arranger, forthwith transmit a copy of the Assessment Reports, the Lists of Purchasable - 33 - Receivables or any reporting documents relating to the Sold Receivables and provide the Joint Lead Arrangers with any information relating to the amount of Adjusted Collections received from the Sellers by the Purchaser on such Calculation Date. CALYON shall ensure that the Centralising Unit and the Sellers have furnished the information referred to in the paragraph above to the Agent and the Purchaser. 12.3.3 On each Calculation Date before 5.00 pm, the Calculation Agent undertakes to deliver forthwith, to the Centralising Unit acting in the name and on behalf of the Sellers, a document relating to the Sold Receivables, in the form attached hereto as Schedule 12.1, as modified from time to time by the parties to this Agreement, and to provide a copy of such document to the Joint Lead Arrangers. After each Settlement Date, the Calculation Agent undertakes to deliver forthwith to each Issuer, a report document relating to the Sold Receivables, in the form attached hereto as Schedule 12.2, as modified from time to time between the Agent, the Purchaser and the Issuers. For the purposes of the relevant reporting documents, the parties agree that CALYON shall be responsible for ensuring that such reporting requirements are carried out. 12.4 Failure to deliver Assessment Report or List of Purchasable Receivables 12.4.1 In the event that the Centralising Unit fails to provide the Agent with a copy of the Assessment Report and/or a List of Purchasable Receivables within one (1) Business Day after an Information Date, or provides the Agent with a copy of the Assessment Report and/or a List of Purchasable Receivables, that is incomplete in relation to one or several Sellers (with respect to any Seller, a "DELIVERY FAILURE"), the Agent shall carry out the identification and the calculations referred to in Articles 12.3.1 and 12.3.2 as follows: - - in relation to Sellers for which there is no Delivery Failure, on the basis of the Assessment Report and the List of Purchasable Receivables provided to the Agent on such Information Date; and - - in relation to Sellers for which there is a Delivery Failure, on the basis of the Assessment Report and the List of Purchasable Receivables provided to the Agent on the preceding Information Date; provided that the Centralising Unit has sent to the Agent a single consolidated Assessment Report and a single List of Purchasable Receivables. If the Agent has not received such single consolidated Assessment Report and such List of Purchasable Receivables, it shall make its calculations on the basis of the single consolidated Assessment Report and single List of Purchasable Receivables received on the previous Information Date. 12.4.2 In the event of any failure to comply with the provisions of Article 12.2.1. (viii), the Centralising Unit shall comply with such provisions with respect to the documents required to be delivered on or before the next Information Date. 12.4.3 The Centralising Unit shall provide, on each Information Date, the list of Sold - 34 - Receivables which are Doubtful Receivables and to be retransferred to the relevant Seller in accordance with article 4.2 of the relevant Receivables Purchase Agreement. 12.5 Purchaser Other than as contemplated by the Transaction Documents, the Purchaser undertakes not to (a) sell, transfer or otherwise dispose of any Sold Receivables or (b) create, incur, assume or permit to exist any Liens over any Sold Receivables (and related rights), with the exception of those Liens required by applicable laws and regulations. CHAPTER VI - EARLY AMORTISATION ARTICLE 13. EARLY AMORTISATION 13.1 Early Amortisation Events in relation to the Securitisation Transaction: The fact that the Purchaser's Funding falls below the Minimum Amount of the Program shall constitute an Early Amortisation Event with respect to this Agreement and the Receivables Purchase Agreements. 13.2 Early Amortisation Event in relation to the Purchaser: If any event occurs, which is not an event that is due to CALYON or that could have been prevented by CALYON, and which, in the Rating Agencies' opinion, jeopardises the "bankruptcy remote character" of the Purchaser, the Purchaser may terminate its Commitment to purchase Purchasable Receivables from the Sellers subject to notice made in writing to the Centralising Unit. In such an event, the Commitment Expiry Date shall be deemed to have occurred on the thirtieth (30th) calendar day following receipt by the Centralising Unit of the Purchaser's Termination Notice. Such Purchaser's Termination Notice shall state the reasons for the Rating Agencies' opinion. 13.3 Early Amortisation Events in relation to any Seller or the Centralising Unit: Each of the following events shall constitute an Early Amortisation Event with respect to this Agreement and the Receivables Purchase Agreements: (i) the Centralising Unit requests the termination of the Replenishment Period ; (ii) any Seller, the Centralising Unit, GOODYEAR DUNLOP TIRES EUROPE BV, GOODYEAR or any Material Subsidiary has entered into Insolvency Proceedings; (iii) any failure by a Seller, the Centralising Unit or GOODYEAR DUNLOP TIRES EUROPE BV to make a payment (including any deposit or transfer of Adjusted Collections to the Purchaser) when due under the Transaction Documents: - 35 - (w) which is not remedied within two (2) Business Days, provided that such failure is due to a technical reason which affects the means of payment in the banking system used by such Seller or by the Centralising Unit and is not otherwise covered by clause (y) below; (x) which is not remedied within four (4) Business Days, where such failure arises in relation to the payment of the Management Fee or the Stand-by Fee; (y) which is not a scheduled payment under the Transaction Documents and which is not remedied within two (2) Business Days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware thereof; (z) which is a scheduled payment (including a payment due pursuant to Article 6.3.2.) and is not otherwise covered by clause (w) or (x) above; (iv) any restructuring of (a) a Seller leading to GOODYEAR ceasing to hold directly or indirectly more than 50% in the share capital and voting rights of such a Seller, or (b) GOODYEAR DUNLOP TIRES EUROPE BV leading to GOODYEAR ceasing to hold directly or indirectly more than 50% in the share capital and voting rights of GOODYEAR DUNLOP TIRES EUROPE BV, or (c) the Centralising Unit leading to GOODYEAR DUNLOP TIRES EUROPE BV ceasing to hold, directly or indirectly, 100% in the share capital and voting rights of the Centralising Unit; (v) any default by any Seller, the Centralising Unit or GOODYEAR DUNLOP TIRES EUROPE BV (including any material default in the collection obligations set forth in Articles 21, 24, 25 and 26) other than the defaults referred to in paragraph (iii) above or paragraphs (vi) and (vii) below, in relation to any of their obligations under the Transaction Documents: - which is not remedied within one (1) Business Day after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware thereof, if such default is in relation to their respective obligations under Article 12.2.1 (viii), and the Centralising Unit does not comply with Article 12.4.2; - which is not remedied within one (1) Business Day after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware thereof, if such default is in relation to their respective obligations under 12.2.1 (ix); - which is not remedied within fifteen (15) Business Days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware, if such default is in relation to their respective obligations under 12.1.1. (iv), (x), (xiii), (xvi), (xxi), and 12.2.1. (iv), (xii); - which is a default of the obligations arising under 12.1.2 or 12.2.2, which (a) if capable of remedy, is not remedied within fifteen (15) Business Days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware, or (b) if not capable of remedy, has not been waived - 36 - by the Purchaser within five (5) Business Days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware; - which is not remedied within thirty (30) Business Days after written notice received from the Purchaser, or, if earlier, after a Responsible Officer becoming aware; (vi) any failure by any Seller or the Centralising Unit to deliver an Auditors Certificate, complying with the relevant form attached as Schedule 4, as provided for under Article 12.1.1 (vii) and 12.2.1 (vi), which is not remedied within fifteen (15) Business Days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware; (vii) any failure by any Seller or the Centralising Unit to deliver a Solvency Certificate, complying with the relevant form attached as Schedule 5, as provided for under Article 12.1.1 (xii) and 12.2.1 (vii), which is not remedied within ten (10) Business Days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware; (viii) any representation and warranty made by any Seller, the Centralising Unit or GOODYEAR DUNLOP TIRES EUROPE BV under the Transaction Documents (other than under Article 19), or any information contained in any document delivered by any Seller or the Centralising Unit or GOODYEAR DUNLOP TIRES EUROPE BV to the Purchaser pursuant thereto, is found to have been inaccurate on the date on which it was made or delivered, if such inaccuracy (a) is not remedied or waived accordingly within thirty (30) days after written notice received from the Purchaser, or, if earlier, after a Responsible Officer becoming aware and (b) is reasonably likely to result in a Material Adverse Effect; (ix) any Material Indebtedness of GOODYEAR DUNLOP TIRES EUROPE BV, or any of its subsidiaries, or GOODYEAR (a) has not been paid or repaid when due (after giving effect to any applicable grace period) or (b) has become due and payable before its stated date of payment as a result of a declared default and after the expiry of any applicable grace period provided that, in each case, such default has not been waived pursuant to the terms of the relevant agreement; (x) there is an attachment, freezing or seizure (saisie) order against all or any material part of the property, assets or revenues of the Centralising Unit, any of the Sellers or GOODYEAR DUNLOP TIRES EUROPE BV or in the event that the Centralising Unit, any of the Sellers or GOODYEAR DUNLOP TIRES EUROPE BV has become subject at any time to any court order or other court process having similar effect and such attachment, seizure (saisie), court order or court process remains in effect and is not discharged during a period of forty-five (45) calendar days following the date on which it was served; (xi) any change of any kind in any Seller's or Centralising Unit's articles of association, business or assets, which would be reasonably likely to result in a Material Adverse Effect; - 37 - (xii) the validity of the Transaction Documents or a Transfer Deed issued pursuant to the Receivables Purchase Agreement or any Payment hereunder or thereunder is successfully challenged by any enforcement order issued or judgment obtained as a result of proceedings before any court (including arbitration proceedings); (xiii) whenever on three (3) successive Funded Settlement Dates, the Overcollateralisation Rate is higher than the Maximum Overcollateralisation Rate; (xiv) (a) any of the Transaction Documents becomes illegal or, cannot, for any reason whatsoever, be performed pursuant to their respective terms, and such illegality or inability to be performed is reasonably expected to prejudice the rights of the Purchaser in any material respect; (b) a Transfer Deed becomes illegal or, cannot, for any reason whatsoever, be performed pursuant to its terms, and such illegality or inability to be performed is reasonably expected to prejudice the rights of the Purchaser; (xv) (a) the ratio of (a) Consolidated Senior Secured Indebtedness to (b) Consolidated EBITDA of Goodyear for the most recent period of four consecutive fiscal quarters for which financial statements have been filed with the United States Securities and Exchange Commission, to be greater than 4.00 to 1.00; (b) the ratio of (x) Consolidated EBITDA of GOODYEAR to (y) Consolidated Interest Expense of GOODYEAR, for any period of four (4) consecutive fiscal quarters is less than 2.00 to 1.00; or (c) the ratio of (x) Consolidated Net Indebtedness to (y) Consolidated EBITDA of GOODYEAR DUNLOP TIRES EUROPE BV for the most recent period of four consecutive fiscal quarters for which financial statements have been filed with the United States Securities and Exchange Commission, is greater than 3.00 to 1.00; (d) for so long as such provision exists under the European Credit Facility, the Consolidated Net Worth of GOODYEAR at the end of any fiscal quarter is less than the amount set forth below for such date:

Fiscal Quarter Ending Minimum Amount - --------------------------- -------------- On or before March 31, 2006 2,000,000,000 thereafter 1,750,000,000

and, in each case, there has been no Applicable Waiver or Amendment on or prior to the 60th calendar day after the occurrence of any such event. In addition, this Agreement shall be automatically amended, with no further actions required by the parties hereto, to reflect the changes made in any Applicable Waiver or Amendment. Capitalized terms used in this Article 13.3 (xv) and not defined in Schedule 1 have the meanings set forth for such terms in Schedule 16; (xvi) if all Sellers withdraw from the Agreement in accordance with the provisions of Article 39; - 38 - (xvii) the three-month rolling average of the Delinquency Percentage exceeds 3.5%, and such event is not waived within thirty (30) days after notice received from the Purchaser, or, if earlier, after a Responsible Officer becomes aware thereof; (xviii) the three-month rolling average of the Default Percentage exceeds 2.5%, and such event is not waived within thirty (30) days after notice received from the Purchaser, or, if earlier, after a Responsible Officer becomes aware thereof; and (xix) the three-month rolling average of the Dilution Percentage exceeds 10.5%, and such event is not waived within thirty (30) days after notice received from the Purchaser, or, if earlier, after a Responsible Officer becomes aware thereof. 13.4 Consequences of Early Amortisation Events Except for the Early Amortisation Event described in Article 13.2, the effect of which is set out in such Article, the consequences of the Early Amortisation Events shall be as follows: (i) If an Early Amortisation Event referred to in Articles 13.1 or 13.3 occurs and has not been waived, the Purchaser may or, if all the Liquidity Banks (which shall be consulted by the Purchaser upon the occurrence of such an Early Amortisation Event) instruct the Purchaser to do so, shall terminate by notice in writing to the Centralising Unit (the "PURCHASER'S TERMINATION NOTICE"), its Commitment to purchase Purchasable Receivables from the Sellers. Upon knowledge by the Purchaser of the occurrence of an Early Amortisation Event and provided such Early Amortization Event has not been waived and as soon as the Purchaser has determined that such an occurrence shall entail the occurrence of the Commitment Expiry Date, a Purchaser's Termination Notice may be sent forthwith. In such an event, the Commitment Expiry Date shall be deemed to have occurred on the date of receipt of the Purchaser's Termination Notice by the Centralising Unit. However, if upon consultation of the Liquidity Banks in accordance with the above paragraph, such Liquidity Banks cannot agree among themselves as to the termination by the Purchaser of its Commitment, and where the Purchaser has not already decided in its own discretion to terminate its Commitment, the relevant Liquidity Bank (the "TERMINATING LIQUIDITY BANK") may decide to terminate its own commitments under the Liquidity Agreement, upon notice in writing to the Centralising Unit, the Purchaser and the other Liquidity Bank(s) no later than the Information Date preceding the Funded Settlement Date on which such termination is to be effective. In the event of the termination of its(their) commitment by the Terminating Liquidity Bank(s), the Maximum Amount of the Program shall be partially and automatically reduced by an amount equal to the commitment of such Terminating Liquidity Bank(s). Such reduction of the Maximum Amount of the Program shall take effect on the Funded Settlement Date following the date upon which the termination of its(their) commitment by the Terminating Liquidity Bank(s) has occurred and shall be definitive and irrevocable. - 39 - (ii) By way of further exception to the foregoing, if an Early Amortisation Event set forth in Article 13.3 (iv), (v), (vi), (vii), (x), (xi), (xii), and (xiv) occurs exclusively in relation to certain but not all Sellers, the Purchaser shall give notice thereof to the relevant Seller(s) and the Centralising Unit. The parties hereby agree that upon receipt by the relevant Seller(s) and the Centralising Unit of such notice, the Purchaser shall be entitled to purchase no further Purchasable Receivables from the relevant Seller(s) (the "EXCLUDED SELLER(S)"). The Purchaser's Commitment shall not otherwise be affected, except that if the aggregate amount of Sold Receivables assigned by the Excluded Seller(s) on the preceding six (6) Settlement Dates represents more than 45% of the aggregate amount of Sold Receivables assigned by all Sellers on such dates, the Commitment Expiry Date shall be deemed to have occurred on the date of receipt of the notice referred to above. For the avoidance of doubt, if any Potential Early Amortisation Event occurs, the parties agree that such event shall not constitute an Early Amortisation Event if a suitable agreement between the parties has been reached within the grace period (if any) provided for the related Early Amortisation Event in Article 13.3. - 40 - CHAPTER VII - TAXES - CHANGES IN CIRCUMSTANCES ARTICLE 14. TAXES 14.1. All payments to be made by each Seller, acting as a Seller or as a sub-servicer of the Sold Receivables, or the Centralising Unit to the Purchaser under this Agreement shall be made free, clear of and without deduction for or on account of tax (not being tax imposed on the general income of the Purchaser), unless the Seller or the Centralising Unit is required by mandatory provisions of law to make such a payment subject to the deduction or withholding of tax, in which case the sum to be paid by the Seller or the Centralising Unit in respect of which such deduction or withholding is required to be made shall, to the extent permitted by law, be increased to the extent necessary to ensure that, after the making of the required deduction or withholding, the Purchaser receives and retains (free from any liability in respect of any such deduction or withholding) a net sum equal to the sum which it would have received and so retained had no such deduction or withholding been made or required to be made. In the event that any payment made by the Centralising Unit hereunder is subject to any withholding or deduction, the Purchaser shall use reasonable efforts to recover any tax credit that it may be entitled to on account of such withholding or deduction and shall remit to the Centralising Unit any amounts so recovered, up to the amount necessary for the Seller to be (after that payment) in the same after-tax position as it would have been if such withholding or deduction had not been made, within the limit of the sums so recovered by the Purchaser. If the increase referred to above is contrary to any applicable law, the Purchaser and the Centralising Unit, acting in the name and on behalf of the Sellers, shall work together as soon as possible and in good faith to seek a solution acceptable to the parties. If no suitable agreement has been reached within thirty (30) calendar days following the coming into force of such deduction or withholding of tax, the Commitment Expiry Date shall be deemed to have occurred on the thirtieth day after such deduction or withholding comes into force. The parties hereby agree that during the thirty-day period provided in the foregoing sentence, no Purchasable Receivables shall be sold to the Purchaser by the Sellers concerned by such deduction for or on account of tax or by all the Sellers if such deduction for or on account of tax relates to the Centralising Unit, on a Funded Settlement Date. 14.2. Each Seller shall bear any value added tax or similar tax (a "VAT PAYMENT") to which any transaction contemplated under the Securitisation Transaction may be subject or give rise towards any party having entered into the Securitisation Transaction (other than the Sellers and the Centralising Unit); and each Seller shall fully indemnify the Purchaser or any party having entered into the Securitisation Transaction (other than the Sellers or the Centralising Unit), from and against any losses or liabilities which any of them may properly incur or otherwise suffer as a result of any delay in paying or omission to pay such value added tax or similar tax. - 41 - If a Seller makes a VAT Payment and a credit against, relief or remission for, or repayment of taxes is attributable to that VAT Payment (a "VAT CREDIT"), the Purchaser shall use reasonable efforts to obtain the repayment of such VAT Credit, and once the Purchaser has obtained the repayment of such VAT Credit, the Purchaser shall transfer such amount to the relevant Seller so that the Seller will be (after that payment) in the same after-tax position as it would have been in had the VAT Payment not been made by the Seller, and within the limit of the sums actually paid to the Purchaser under the repayment of such VAT Credit. 14.3. In the event of any Insolvency Proceedings opened against any German Seller, if the insolvency administrator is involved in the enforcement of any pledge over the Collection Account(s) for the benefit of the Purchaser and if such insolvency administrator is entitled to claim a deduction of fees ("ENFORCEMENT FEES") from the credit balance recorded on such Collection Account(s) at the date of institution of such Insolvency Proceedings, the relevant German Seller and/or the Centralising Unit shall pay to the Purchaser any sums corresponding to such Enforcement Fees. 14.4 In the event that the Purchaser, a Liquidity Bank, the Issuers, the Management Company, the Custodian, the Fund, the Depositor or the Agent (each a "TAX INDEMNIFIED PARTY") has to bear any new tax or withholding tax or any other tax related charge not yet in force on any sum which it owes and in relation to the Securitisation Transaction, the Centralising Unit, acting in the name and on behalf of the Sellers, undertakes to indemnify such Tax Indemnified Party up to the amount of this new taxation or withholding tax or other tax charge, in the currency in which such deduction, withholding or other tax charge must be paid. In the event that any payment is made by the Centralising Unit to the Purchaser pursuant to this Article 14.4, the Purchaser shall use reasonable efforts to recover any tax credit that it may be entitled to on account of such new tax and shall remit to the Centralising Unit any amounts so recovered up to the amount necessary for the Seller to be (after that payment) in the same after-tax position as it would have been if such new tax had not been paid, within the limit of the sums so recovered by the Purchaser. 14.5 In the event that any Tax Indemnified Party (including, in particular, the Purchaser) has incurred any losses or liability resulting from or in relation to any recourse by the any German tax administration against the Purchaser with respect to any Sold Receivable, the relevant German Seller shall indemnify such Tax Indemnified Party up to the amount of such losses or liability incurred and in the currency in which such loss or liability has been incurred, provided that the recourse by such German tax administration against the Purchaser is based on section 13c of the German VAT Act or on any related or equivalent provision of German law. 14.6 Nothing in this Article 14 shall be construed so as to oblige the Purchaser to bear costs and expenses of whatever nature or to disclose confidential information relating to, inter alia, the organisation of its activities nor affect in any way its right to organise its tax affairs in a manner which it considers most beneficial. - 42 - ARTICLE 15. CHANGES IN CIRCUMSTANCES 15.1 If, as a result of (i) the implementation after the date of this Agreement of any change in the applicable laws, regulations, accounting standards or regulatory requirements or any change in the interpretation or application of the aforementioned and/or (ii) the implementation after the date of this Agreement of any applicable directive, request or requirement (whether or not having the force of law) of any central bank, self-regulating organisation, governmental, fiscal, monetary or other authority (including inter alia directives, requests, instructions, accounting standards or requirements which affect the manner in which any bank is required to maintain equity capital (own funds), taking into account its assets, liabilities, contingent liabilities or commitments): (i) the cost of the Purchaser, a Liquidity Bank, any Issuer, the Management Company, the Custodian, the Fund, the Depositor or the Agent making available, agreeing to make available, maintaining or funding any Payment and/or assuming or maintaining their Commitment or otherwise giving effect to this Agreement shall be increased; and/or (ii) any sum received or receivable by the Purchaser, a Liquidity Bank, any Issuer, the Management Company, the Custodian, the Fund, the Depositor or the Agent under the Transaction Documents shall be reduced (except for tax imposed on the general income of the Purchaser or default of a Debtor under any Sold Receivables); and/or (iii) the Purchaser, the Liquidity Bank, any Issuer, the Management Company, the Custodian, the Fund, the Depositor or the Agent shall become liable to make any payment on account of tax (except for tax imposed on its general income), or shall be compelled or obliged to forego any interest or other return, on or calculated by reference to the Commitment or any Payment under this Agreement; as soon as such event has occurred and provided that such information is publicly available, the Purchaser, the Liquidity Bank, the Issuer, the Management Company, the Custodian, the Fund, the Depositor or the Agent shall be entitled to claim from the Centralising Unit, acting as the case may be on its own behalf or on behalf of the Sellers, an indemnity equal to (a) the increased costs referred to in (i) above, and/or (b) the reduction referred to in (ii) above and/or (c) the amount referred to in (iii) above. To this effect, the Purchaser shall give notice to the Centralising Unit, by delivering to the latter a certificate specifying in sufficient detail the occurrence of the changes in circumstances and, if possible, the estimated amount and the actual amount and the reason(s) for the indemnity payable under this Article. 15.2 In the event of any dispute as to the amount of such an indemnity, the Purchaser and the Centralising Unit acting in the name and on behalf of the Sellers, shall work together as soon as possible and in good faith to seek a solution acceptable to the parties; in the event of a dispute, such indemnity shall nevertheless be paid by the Centralising Unit, acting on its own behalf and on behalf of the Sellers, who shall make the payment of such indemnity forthwith following receipt of the notice sent by the Purchaser. If no suitable agreement has been reached within thirty (30) calendar days following the coming into force of such event, the Commitment Expiry Date shall be deemed to have occurred on the thirtieth day after such an event. The parties hereby agree that during the - 43 - thirty-day period provided in the foregoing sentence, no Purchasable Receivables shall be sold to the Purchaser on a Settlement Date. CHAPTER VIII - ORDER OF PRIORITY - PAYMENTS ARTICLE 16. ORDER OF PRIORITY DURING THE AMORTISATION PERIOD 16.1. On each Settlement Date during the Amortisation Period, the Purchaser shall apply the Distributed Amounts, in the following order: 1. to the payment of any of the following sums that are due and payable on such date in accordance with the provisions of the Master Senior Deposit Agreement: 1.1. the Margin due to ESTER FINANCE; 1.2. the Immobilisation Indemnity due pursuant to article 8.1 of the Master Senior Deposit Agreement; 1.3. the Deposit Fee due pursuant to article 8.2 of the Master Senior Deposit Agreement; until their full payment; provided that on each Intermediary Settlement Date, the sums referred to in this point 1. to be paid on the next Funded Settlement Date, calculated prorata temporis, shall be excluded from the Distributed Amounts available on such Intermediary Settlement Date and shall be reserved by the Purchaser in order to be paid on such Funded Settlement Date; 2. to the payment of any sum due and payable prior to such date, by the Sellers or the Centralising Unit to the Purchaser under the Transaction Documents and which remains unpaid on such date, until its full repayment; 3. to the payment of any sum due and payable in respect of the Purchaser's Funding, in accordance with the provisions of the Master Senior Deposit Agreement and, pari passu, in respect of the Complementary Deposit, in accordance with the provisions of the Master Complementary Deposit Agreement, until their full payment; provided that on each Intermediary Settlement Date, the sums referred to in this point 3., due in respect of the Purchaser's Funding and to be paid on the next Funded Settlement Date shall be excluded from the Distributed Amounts available on such Intermediary Settlement Date and reserved by the Purchaser in order to be paid on such Funded Settlement Date; - 44 - 4. to the payment to the Centralising Unit of any amount equal to the Excess Forseen Collections, outstanding as of the last Settlement Date before being reduced to zero (unless otherwise reimbursed); 5. to the payment of any outstanding Deferred Purchase Price to be made pursuant to the provisions of each Receivables Purchase Agreement; 6. to the repayment of the Subordinated Deposit. 16.2. On each Settlement Date during the Amortisation Period, if any Seller and/or the Centralising Unit fail(s) to make a payment when due under the Transaction Documents in respect of the Adjusted Collections and, pursuant to the provisions of Article 21.3, the collection mandate given to the Sellers has been terminated, the Purchaser shall apply the Distributed Amounts, in the following order: 1. to the payment of any sums due and payable on such date in respect of the Purchaser's Funding, in accordance with the provisions of the Master Senior Deposit Agreement, as follows: 1.1. the Margin due to ESTER FINANCE; 1.2. the Immobilisation Indemnity due pursuant to article 8.1 of the Master Senior Deposit Agreement; 1.3. the Deposit Fee due pursuant to article 8.2 of the Master Senior Deposit Agreement; until their full payment; provided that on each Intermediary Settlement Date, the sums referred to in this point 1. to be paid on the next Funded Settlement Date, calculated prorata temporis, shall be excluded from the Distributed Amounts available on such Intermediary Settlement Date and reserved by the Purchaser in order to be paid on such Funded Settlement Date; 2. to the payment of any sum due and payable prior to such date, by the Sellers or the Centralising Unit to the Purchaser under the Transaction Documents and which remains unpaid on such date, until its full repayment; 3. to the payment of any sum due and payable in respect of the Purchaser's Funding, up to an amount equal to the sum due under the Transaction Documents in respect of the Adjusted Collections and which any Seller and/or the Centralising Unit has failed to pay (the "PRIORITY AMOUNT"); provided that on each Intermediary Settlement Date, the sums referred to in this point 3. to be paid on the next Funded Settlement Date shall be excluded from the Distributed Amounts available on such Intermediary Settlement Date and be reserved by the Purchaser in order to be paid on such Funded Settlement Date; - 45 - 4. to the payment of any sum remaining due and payable in respect of the Purchaser's Funding, in accordance with the provisions of the Master Senior Deposit Agreement and, pari passu, in respect of that portion of the Complementary Deposit that exceeds the Priority Amount, in accordance with the provisions of the Master Complementary Deposit Agreement, until their full payment; provided that on each Intermediary Settlement Date, the sums referred to in this point 4., due in respect of the Purchaser's Funding and to be paid on the next Funded Settlement Date shall be excluded from the Distributed Amounts available on such Intermediary Settlement Date and reserved by the Purchaser in order to be paid on such Funded Settlement Date; 5. to the repayment of any residual sum due in respect of the Complementary Deposit; 6. to the payment to the Centralising Unit of any amount equal to the Excess Forseen Collections, outstanding as of the last Settlement Date before being reduced to zero (unless otherwise reimbursed); 7. to the payment of any Deferred Purchase Price to be made pursuant with the provisions of each Receivables Purchase Agreement; 8. to the repayment of the Subordinated Deposit. ARTICLE 17. PAYMENTS 17.1 For the purpose of the payment of any sum due under this Agreement, the Agent, the Purchaser, each Seller and the Centralising Unit acting, as the case may be, on its own behalf or on behalf of the Sellers, expressly agree to use exclusively the following bank accounts: (i) the Purchaser's Account; (ii) the Centralising Unit's Account; (iii) the Collection Accounts; (iv) the Purchaser's Collection Accounts; and (v) the Agent's Account. The parties hereunder acknowledge that such accounts shall be used exclusively for the purposes and in accordance with the terms of this Agreement. 17.2 The Euro is the currency of payment for each and every sum due at any time under the Transaction Documents. - 46 - 17.3 The Purchaser shall be entitled to set-off (i) any amount due and payable by the Purchaser to the Centralising Unit on its behalf or on behalf of the Sellers under the Transaction Documents and (ii) any amount due and payable by the Centralising Unit on its behalf or on behalf of the Sellers to the Purchaser under the Transaction Documents. The Centralising Unit, acting on its behalf or on behalf of the Sellers, shall be entitled to set-off (i) any amount due and payable by the Purchaser to the Centralising Unit on its behalf or on behalf of the Sellers under the Transaction Documents and (ii) any amount due and payable by the Centralising Unit on its behalf or on behalf of the Sellers to the Purchaser under the Transaction Documents. 17.4 For the purposes of this Article, any payments falling due on a day which is not a Business Day shall instead fall due on the following Business Day. 17.5 The Centralising Unit acting, as the case may be, on its own behalf or on behalf of any Seller, shall give to its bank before 12.00 (noon) on the Business Day following each Calculation Date, an irrevocable instruction to transfer (ordre de virement irrevocable), from the Centralising Unit's Account to the Purchaser's Account, any amount due to the Purchaser on such Funded Settlement Date or on such Intermediary Settlement Date in accordance with the Transaction Documents, to be credited with immediately available funds, before 12.00 (noon), on the said Funded Settlement Date or Intermediary Settlement Date. The Purchaser shall give to its bank one Business Day before each Funded Settlement Date or each Intermediary Settlement Date, before 10.00 am, an irrevocable instruction to transfer (ordre de virement irrevocable), from the Purchaser's Account to the Centralising Unit's Account, any amount due, as the case may be, to the Centralising Unit on such Funded Settlement Date or on such Intermediary Settlement Date, in accordance with the Transaction Documents, to be credited with immediately available funds, before 12.00 (noon), on the said Funded Settlement Date or on the said Intermediary Settlement Date. 17.6 The Centralising Unit acting, as the case may be, on its own behalf or on behalf of any Seller, shall give to CALYON, acting as holder of the Centralising Unit's bank account, at least two (2) Business Days before the Initial Settlement Date, irrevocable orders to pay on the Initial Settlement Date, before any other debit on such Centralising Unit's bank account and within the limits of the sums credited on the Centralising Unit's bank account by the Purchaser on the Initial Settlement Date: - - to CALYON, acting on its own behalf and on behalf of its legal counsel (Gide Loyrette Nouel); - - to NBP, acting on its behalf and on behalf of its legal counsel (Allen & Overy); - - to each Issuers and Liquidity Banks, each acting on their own behalf and on behalf of their legal counsel; - - to the Agent, to Eurofactor AG and to INTESA MEDIOFACTORING S.p.A; - 47 - any structuring, arranger and legal fees, costs and expenses (including any up-front fees as a result of the putting in place of an Italian Back Up Servicer) due to each of the above and to their respective legal counsel. 17.7 Any default by the Centralising Unit acting, as the case may be, on its own behalf or on behalf of any Seller, in the fulfilment of its payment obligations under this Agreement shall automatically entitle the Purchaser, without having to give prior notice, to receive interest on any amounts payable and remaining unpaid (excluded), calculated from the date when such payment was due (included) until the date of actual payment, at a rate of EURIBOR 1 month + 2% per annum payable on the date of actual payment (excluded). CHAPTER IX - PURCHASE OF PURCHASABLE RECEIVABLES ARTICLE 18. CONDITIONS IN RELATION TO ANY PURCHASE OF PURCHASABLE RECEIVABLES 18.1 Conditions precedent in relation to any purchase of Purchasable Receivables The Purchaser shall not be obliged on any Settlement Date during the Replenishment Period, to purchase from any Seller, Purchasable Receivables unless each of the following conditions have been fulfilled on such Settlement Date: (i) the representations and warranties made by the Seller and the Centralising Unit referred to in Article 11 (Representations and Warranties) remain valid and accurate on such Settlement Date; (ii) the Centralising Unit has transmitted the Assessment Report to the Agent and delivered the List of Purchasable Receivables to the Purchaser on the Information Date immediately preceding such Settlement Date; (iii) the amount of the Subordinated Deposit, the Complementary Deposit and any Increase in the Subordinated Deposit and any Increase in the Complementary Deposit applicable on such Settlement Date, has been recorded on the debit balance of the Current Account; (iv) the Payment to be made and the Transfer Deeds to be delivered pursuant hereto do not violate any law or regulation in force on such Settlement Date; (v) such Settlement Date is not later than the Commitment Expiry Date; (vi) the Purchaser has received to its satisfaction, on or before such Settlement Date, (a) an Auditors Certificate in relation to the Sellers and the Centralising Unit, not older than six (6) calendar months, and (b) a Solvency Certificate in relation to the Centralising - 48 - Unit, to the French Seller, to the German Sellers, to the Italian Seller and to the Spanish Seller, not older than three (3) calendar months; (vii) no Early Amortisation Event has occurred on such date; (viii) the selection of the Purchasable Receivables to be purchased from the Sellers by the Purchaser has been carried out in accordance with the selection procedure set forth in Article 12.3.1; and (ix) the Centralising Unit, acting on behalf of the Sellers, has transferred the Adjusted Collections to the Purchaser, to the extent required by Article 23 (Application of payments and payments of collections). 18.2 Conditions subsequent to any Purchase of Purchasable Receivables on a Settlement Date during the Replenishment Period In the event that any of the following conditions have not been fulfilled on any Settlement Date during the Replenishment Period, such a failure shall constitute an automatic and immediate termination (condition resolutoire de plein droit) of the assignment by the Sellers to the Purchaser of the Sold Receivables sold on such Settlement Date : (i) the Centralising Unit has not credited the Purchaser's Account for an amount equal to any debit balance of the Current Account in accordance with the provisions of Article 6.3.3. on such date before 12.00 (noon); or (ii) If such Settlement Date is a Funded Settlement Date, the Depositor has not duly made or increased the Senior Deposit in respect of its commitment to effect a Senior Deposit in accordance with and subject to the terms of the Master Senior Deposit Agreement. ARTICLE 19. CONFORMITY WARRANTIES FOR PURCHASABLE RECEIVABLES Each Seller represents and warrants to the Purchaser that, as of the Assessment Date relating to the Settlement Date on which a Purchasable Receivable shall be sold, such Purchasable Receivable (other than a Net Miscellaneous Receivable or with respect to the Initial Settlement Date a Defaulted Receivable) shall exist, and, to its knowledge, except as specifically identified on the Assessment Report (it being provided that even if such Purchasable Receivables are so identified, this shall be without prejudice to the rights of the Purchaser to exercise any recourse against the relevant Seller as provided for under this Agreement and, in particular, shall not prevent the Purchaser from exercising any recourse in connection with Article 28) shall conform to the characteristics specified in article 7 (Description of Purchasable Receivables) of each Receivables Purchase Agreement, with the description as it appears on the Transfer Deed and the electronic support relating to such Transfer Deed and with the characteristics specified in Schedule 13. - 49 - Each Seller and the Purchaser agree that the Conformity Warranties set out in this Article: (i) shall be given by each Seller to the Purchaser and shall apply to all of its Purchasable Receivables designated on any Transfer Deed and the related support; (ii) shall take effect upon the mere transfer by each Seller or the Centralising Unit to the Purchaser of a Transfer Deed and the related supports, in accordance with and subject to the relevant Receivables Purchase Agreement; (iii) shall be valid for such Purchasable Receivable on the relevant Information Date and shall remain in force until the Purchaser's Funding has been repaid in full. ARTICLE 20. IDENTIFICATION OF THE CONTRACTUAL DOCUMENTATION FOR THE SOLD RECEIVABLES - ACCESS TO DOCUMENTS The Parties irrevocably agree that each purchase of Purchasable Receivables carried out pursuant to this Agreement and the relevant Receivables Purchase Agreement shall entitle the Purchaser or any other agent appointed in a discretionary way by the same, solely in order to protect and/or to enforce its right in connection with the Securitisation Transaction, to access the original copies of the contractual documentation or the computer or paper information underlying the Sold Receivables and, the support listing the Sold Receivables and to make duplicate copies of such documents; provided that (i) the Purchaser or its agent shall have the right to obtain the original copies of such documents to the extent required to enforce their rights under the Transaction Documents and (ii) in respect of the Protected Debtors, the provisions of the present Article shall only apply if the conditions set forth in the Data Protection Trust Agreement are met. Each Seller irrevocably agrees to allow the Purchaser or any other person appointed by it unrestricted access to the said documents provided that (i) such Seller has been given two (2) Business Days prior notice thereof, (ii) the Purchaser or any other person, whom the Purchaser appoints undertakes not to disclose any confidential information except where permitted in the circumstances provided for by Article 31 (Confidentiality) and (iii) in respect of the Protected Debtors, subject to the provisions of the Data Protection Trust Agreement. The Purchaser or any other person, whom the Purchaser appoints, shall in no way be obliged to reimburse the Centralising Unit or the Sellers, for any expense incurred by the Centralising Unit or the Sellers when allowing access to use the relevant documents, nor to compensate the Centralising Unit or the Sellers for any loss which such access or use might cause, other than any loss resulting from the gross negligence (faute lourde) or willfull misconduct (dol) of the Purchaser or such other person or the breach by the Purchaser of its material obligations under the Transaction Documents. - 50 - CHAPTER X - COLLECTION OF SOLD RECEIVABLES ARTICLE 21. COLLECTION OF SOLD RECEIVABLES 21.1 Seller's Collection Mandate The Purchaser hereby appoints each Seller, who accepts, to act as the Collection Agent for the purposes of the collection of Sold Receivables under a Collection Mandate in accordance with the terms and subject to the conditions of this Agreement and the relevant Receivables Purchase Agreement. Each Seller hereby irrevocably renounces resigning from its role as Collection Agent for the duration of this Agreement. In addition, the Purchaser hereby appoints the Sellers, who hereby accept to act on its behalf for the purposes of Articles 24 and 25 or where expressly provided for in this Agreement or any of the Receivables Purchase Agreements. 21.2 Collection Support The Purchaser may request the Back-Up Servicer(s) and/or the Italian Back-Up Servicer(s) to provide the relevant Sellers with logistic support to carry out the collection of Sold Receivables with greater efficiency, provided that the Back-Up Servicer(s) and the Italian Back-Up Servicer(s) shall not be obliged to provide such logistic support. If the Centralising Unit, acting in the name and on behalf of the Sellers, accepts such offer and the relevant Back-Up Servicer(s) and/or the Italian Back-Up Servicer(s) accept(s) to provide such logistic support, it shall reimburse the Back-Up Servicer(s) and/or the Italian Back-Up Servicer(s) for any duly documented costs incurred in connection with the setting up of such logistic support. 21.3 Termination of the Collection Mandate 21.3.1. Solely in the event of: (i) any Early Amortisation Event under Article 13.3. (xv); (ii) any failure of any of the Sellers to comply with their respective obligations under Article 12.1.2 (vi), which is not remedied within fifteen (15) Business Days after written notice received from the Purchaser, or, if ealier, after a Responsible Officer becoming aware; (iii) entry of any Seller, the Centralising Unit, GOODYEAR DUNLOP TIRES EUROPE BV, GOODYEAR or any Material Subsidiary into Insolvency Proceedings; - 51 - (iv) any failure by a Seller or the Centralising Unit or GOODYEAR DUNLOP TIRES EUROPE BV to make a payment (including any deposit or transfer of Adjusted Collections to the Purchaser) when due under the Transaction Documents (w) which is not remedied within two (2) Business Days, provided that such failure is due to a technical reason which affects the means of payment in the banking system used by such Seller or by the Centralising Unit and is not otherwise covered by clause (y) below; (x) which is not remedied within four (4) Business Days, where such failure arises in relation to the payment of the Management Fee or the Stand-by Fee; (y) which is not a scheduled payment under the Transaction Documents and which is not remedied within two (2) Business Days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware thereof; (z) which is a scheduled payment (including a payment due pursuant to Article 6.3.2.) and is not otherwise covered by clause (w) or (x) above; (v) any restructuring of (a) a Seller leading to GOODYEAR ceasing to hold directly or indirectly more than 50% in the share capital and voting rights of such a Seller, or (b) GOODYEAR DUNLOP TIRES EUROPE BV leading to GOODYEAR ceasing to hold directly or indirectly more than 50% in the share capital and voting rights of GOODYEAR DUNLOP TIRES EUROPE BV, or (c) the Centralising Unit leading to GOODYEAR DUNLOP TIRES EUROPE BV ceasing to hold directly or indirectly 100% in the share capital and voting rights of the Centralising Unit; (vi) any failure by any Seller or the Centralising Unit to deliver an Auditors Certificate, complying with the relevant form attached as Schedule 4, as provided for under Article 12.1.1 (vii) and 12.2.1 (vi), which is not remedied within fifteen (15) Business Days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware thereof; (vii) any failure by any Seller or the Centralising Unit to deliver a Solvency Certificate, complying with the relevant form attached as Schedule 5, as provided for under Article 12.1.1 (xii) and 12.2.1 (vii), which is not remedied within ten (10) Business Days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware thereof; (viii) any Material Indebtedness of GOODYEAR TIRES EUROPE BV or any of its subsidiaries, or GOODYEAR (a) has not been paid or repaid when due (after giving effect to any applicable grace period) or (b) has become due and payable before its stated date of payment as a result of a declared default and after the expiry of any applicable grace period, provided that, in each case, such default has not been waived pursuant to the terms of the relevant agreement; (ix) any change of any kind, in any Seller's or Centralising Unit's articles of association, business or assets, which would be reasonably likely to result in a Material Adverse Effect; - 52 - (x) any representation and warranty made by any Seller, the Centralising Unit or GOODYEAR DUNLOP TIRES EUROPE BV under the Transaction Documents (other than under Article 19), or any information contained in any document delivered by any Seller or the Centralising Unit or GOODYEAR DUNLOP TIRES EUROPE BV to the Purchaser pursuant thereto, is found to have been inaccurate on the date on which it was made or delivered, if such inaccuracy (a) is not remedied or waived accordingly within thirty (30) days after written notice received from the Purchaser or, if earlier, after a Responsible Officer becoming aware thereof, and (b) is reasonably likely to result in a Material Adverse Effect; (xi) there is an attachment, freezing or seizure (saisie) order against all or any material part of the property, assets or revenues of the Centralising Unit or any of the Sellers or GOODYEAR DUNLOP TIRES EUROPE BV or in the event that either the Centralising Unit or any of the Sellers or GOODYEAR DUNLOP TIRES EUROPE BV has become subject at any time to any court order or other court process having similar effect and such attachment, seizure (saisie), court order or court process remains in effect and is not discharged during a period of fourty five (45) calendar days following the date on which it was served; (xii) the validity of the Transaction Documents or a Transfer Deed issued pursuant to the Receivables Purchase Agreement or any Payment hereunder or thereunder is successfully challenged by any enforcement order issued or judgment obtained as a result of proceedings before any court (including arbitration proceedings); or (xiii) (a) any of the Transaction Documents becomes illegal or, cannot, for any reason whatsoever, be performed pursuant to their respective terms, and such illegality or inability to be performed is reasonably expected to prejudice the rights of the Purchaser in any material respect; (b) a Transfer Deed becomes illegal or, cannot, for any reason whatsoever, be performed pursuant to its terms, and such illegality or inability to be performed is reasonably expected to prejudice the rights of the Purchaser; (xiv) any Collection Account Agreement is terminated for whatever reason and such Collection Account Agreement is not replaced by (a) a then existing Collection Account Agreement or (b) an equivalent collection account agreement that has been approved by the Purchaser, the Agent, the Issuers and the Liquidity Banks (such consent not to be unreasonably withheld or delayed); - 53 - the Purchaser may terminate the appointment of each Seller for collection of the Sold Receivables by issuing or causing any other entity it has appointed for such purpose to issue to this effect: (i) a letter sent by registered mail with acknowledgement of receipt to each Seller; and (ii) subsequently and in relation to the Italian Seller, an Italian Notice of Transfer to each of the Debtors, in accordance with the Italian Receivables Purchase Agreement, provided that the cost of delivery of any Italian Notice of Transfer is borne exclusively by the Centralising Unit, acting in the name and on behalf of the Sellers and shall be reasonable and duly documented; (iii) subsequently and in relation to the other Sellers, a Notice of Transfer to each of the Debtors, in accordance with the relevant Receivables Purchase Agreement, provided that the cost of delivery of a Notice of Transfer is borne exclusively by the Centralising Unit, acting in the name and on behalf of the Sellers and shall be reasonable and duly documented. The appointment of any Seller for the purpose of the collection of any Sold Receivable shall terminate automatically on the date of receipt by the Centralising Unit, acting in the name and on behalf of the relevant Seller, of the letter referred to under (i) above. As of such date, the Seller shall forthwith transfer to the credit of the relevant Purchaser's Collection Account any amount received from the relevant Debtors relating to the Sold Receivables, in accordance with the provisions of the Collection Account Agreements. The termination of the appointment of a Seller as collection agent shall not affect the obligations of such Seller under this Agreement or the relevant Receivables Purchase Agreement, with the exception of those relating to the collection of the Sold Receivables. Notwithstanding any other provisions of this Agreement, neither the Purchaser nor any of its agents shall, at any time other than following the termination of the collection mandate of the Sellers pursuant to this Article 21.3.1, contact or communicate with any Debtor in respect of any Sold Receivable or the Securitisation Transaction. 21.3.2. In addition, the Purchaser shall be entitled to appoint (i) a (or several) Back-Up Servicer(s) for the collection of all or part of the Sold Receivables for which a Notice of Transfer has been delivered to the relevant Debtors in accordance with Article 21.3.1 above, and (ii) an (or several) Italian Back-Up Servicer(s) for the collection of all or part of the Italian Sold Receivables for which an Italian Notice of Transfer has been delivered to the relevant Debtors in accordance with Article 21.3.1 above. The Purchaser confirms that, as a condition precedent to its(their) appointment(s), the Back-Up Servicer(s) and the Italian Back-Up Servicer(s) have (or will have) agreed with the Purchaser to comply with the provisions of this Agreement. - 54 - Each Seller, upon being notified of the exercise of such a right by the Purchaser undertakes: (i) to take all steps and do all things to enable the Back-Up Servicer(s) and the Italian Back-Up Servicer(s) to take over the Seller's undertakings as collection agent(s); (ii) to deliver in accordance with the provisions of Article 20 (Identification of the contractual documentation for the Sold Receivables - Access to documents) and Article 31 (Confidentiality) to the Back-Up Servicer(s) and to the Italian Back-Up Servicer(s) any and all original copies of the contractual documentation or the computer information concerning the Sold Receivables as well as any other document as might be reasonably requested by the Back-Up Servicer(s) and/or the Italian Back-Up Servicer(s) in order to perform its(their) obligations as servicer(s); (iii) to transfer forthwith to the credit of the relevant Purchaser's Collection Account, any Actual Collections relating to Sold Receivables it may directly receive from any Debtor; (iv) to indemnify forthwith the Purchaser, for any reasonable costs and expenses duly evidenced and incurred by the latter in relation to the Notice of Transfer and the Italian Notice of Transfer; and (v) to indemnify forthwith the Purchaser, for any reasonable costs incurred by the latter due to the appointment of the Back-Up Servicer(s) and/or the Italian Back-Up Servicer(s) to act as collection agent(s), provided that the Back-Up Servicer(s) and the Italian Back-Up Servicer(s) furnishes(furnish) any documents evidencing such costs within the limits set forth in Article 27.3. The Purchaser shall, immediately upon payment by the Centralising Unit, acting on its own behalf and on behalf of the Sellers, of all amounts owed to the Purchaser, (i) take all steps necessary to terminate any rights it may have with respect to any Collection Accounts, and (ii) if the Sellers' collection mandate has been terminated pursuant to the terms of this Article, revoke any collection mandate granted to the Back-Up Servicers, to the Italian Back-Up Servicer(s) or any other agent of the Purchaser. 21.3.3. Each of the Sellers hereby irrevocably renounces resigning from its role under the collection mandate referred to in this Article 21 for the duration of this Agreement. Such collection mandate may only be terminated in the circumstances and in accordance with the procedures provided for in the present article or, with respect to a particular Seller, if it has ceased to be a party to this agreement in accordance with the provisions herein, when all Sold Receivables originated by such Seller have been collected, repurchased in accordance with this Agreement or determined to be uncollectible. - 55 - ARTICLE 22. ASSESSMENT REPORT AND BACK-UP SERVICER REPORT 22.1. As long as a Seller acts as collection agent in respect of any Sold Receivable, such Seller shall draw up or cause to be drawn up, an Assessment Report in the form set out in Schedule 3, which shall be delivered by the Centralising Unit acting in the name and on behalf of the Sellers to the Agent on each Information Date. 22.2. In the event of the termination of the Collection Mandate, in accordance with the provisions of Article 21.3, the Purchaser or, as the case may be, the Back-Up Servicers shall draw up a Back-Up Servicer Report on each Information Date. ARTICLE 23. APPLICATION OF PAYMENTS AND PAYMENTS OF COLLECTIONS 23.1. Application of Payments Subject to any applicable laws and to the provisions of the Collection Account Agreements, any payment received by a Seller from any of its Debtors shall be applied first to Sold Receivables (before being applied to other obligations of such Debtor), unless the said Debtor has given express instruction otherwise. 23.2. Payment of collections 23.2.1. In so far as a Seller acts as collection agent in respect of any Sold Receivable, the Parties agree that: (i) during the Replenishment Period, on each Settlement Date, Adjusted Collections shall be recorded and applied in the manner provided for in Article 6; (ii) during the Replenishment Period, on each Funded Settlement Date, the Cash Collections Advance shall be transferred by the Centralising Unit to the Purchaser's Account before 12.00 (noon) on such Settlement Date; (iii) on each Settlement Date during the Amortisation Period, the Centralising Unit shall transfer to the Purchaser's Account the Adjusted Collections. If a Seller no longer acts as collection agent in respect of any Sold Receivable, the Parties agree that the relevant Back-Up Servicer or Italian Back-Up Servicer shall transfer to each relevant Purchaser's Collection Account the Actual Collections made in relation to the Sold Receivables purchased from such Seller. Such Actual Collections shall be applied to the payments in the manner provided for in Article 6 until the Commitment Expiry Date, and thereafter, as provided for in Article 16. 23.2.2 Except as provided for in Article 23.2.1., the Sellers and the Centralising Unit shall not be required to transfer any collections to the Purchaser. - 56 - 23.3. Collection Accounts The Sellers and the Purchaser have agreed to put in place Collection Accounts in each jurisdiction concerned by the Securitisation Transaction (i.e. France, Germany, Italy and Spain) in order to segregate any cash received by the Sellers, when acting in their capacity as collection agent under the foregoing provisions and the relevant Receivables Purchase Agreement. A Collection Account Agreement shall be concluded in relation to each Collection Account. Notwithstanding the provisions of Article 23.1 hereof and of the Collection Account Agreements, the Purchaser agrees that, in the event that the Centralising Unit provides reasonably satisfactory evidence that a payment made to any Collection Account does not relate to Sold Receivables or Retransferred Receivables (as defined in the Collection Account Agreements), the Purchaser shall promptly authorise the return of such payment to the Centralising Unit, within the limit of the credit balance of the relevant Collection Account. ARTICLE 24. RENEGOTIATION 24.1 Authorisation to renegotiate in Insolvency Proceedings Each Seller acting on behalf of the Purchaser may, in the context of Insolvency Proceedings relating to any Debtor (if Insolvency Proceedings apply to such Debtor), participate in the setting up of a voluntary rescheduling and may make proposals for that purpose, provided that: (i) it complies with its obligations under Article 26 (Obligations of care); and (ii) in the event that the Outstanding Amount of the Sold Receivables subject to such renegotiation exceeds 1,500,000 euro, it has obtained the prior written consent of the Purchaser to renegotiate. 24.2. Renegotiations as to amount and maturity date The Purchaser agrees that each Seller, acting on behalf of the Purchaser, may issue Credit Notes, Year End Rebates or Commercial Discounts in accordance with its management procedures and accordingly modify the amount and Maturity Date of the Sold Receivables for which such Credit Notes, Year End Rebates or Commercial Discounts have been issued, provided that the Seller performs its obligations set forth under Article 28 (Deemed collections). - 57 - 24.3. Other renegotiations Subject to the provisions of Articles 24.1 and 24.2, the Purchaser authorises each Seller, acting in the name and on behalf of the Purchaser, to agree to new terms in relation to any Sold Receivable: (a) if the Purchaser expressly consents in writing; (b) without prior notification to or consent of the Purchaser, provided that such renegotiation: (i) complies with its obligations under Article 26 (Obligations of care); and (ii) does not adversely affect the rights of the Purchaser under such Sold Receivables, including any security interests, privileges and ancillary rights attached thereto; or (c) without prior notification to or consent of the Purchaser, if such Sold Receivable is a Defaulted Receivable. ARTICLE 25. REPRESENTATION MANDATE The Purchaser hereby appoints each Seller as its agent to undertake and to conduct, in the name and on behalf of the Purchaser, all proceedings in court or out of court as are necessary for the collection of the Sold Receivables, including those deeds and formalities required for such proceedings, subject to compliance with its obligations set out in Article 26 (Obligations of care). In particular, each Seller shall freely issue and conduct, in the name and on behalf of the Purchaser, all writs, pleadings, arguments, enforcement proceedings, interventions by agreement or order, defences, defences to third party proceedings, and appeals, as may be necessary in its opinion to recover the sums due under the Sold Receivables. The Purchaser agrees that it shall intervene in any claims or proceedings initiated upon such Seller's request to assist such Seller in any claims or proceedings initiated by the latter, in the event that such Seller deems it necessary or whenever required by the applicable statutory or regulatory provisions. Each Seller agrees that it shall intervene in any claim or proceedings initiated upon the Purchaser's request to assist the Purchaser in any claims or proceedings initiated by the Purchaser, in the event that the Purchaser deems it necessary or whenever required by the applicable statutory or regulatory provisions, provided that the Purchaser shall not initiate any such claim or proceeding unless (i) the collection mandate of the Sellers has been terminated pursuant to the provisions of Article 21.3 or (ii) after the Program Expiry Date, any amount remains due to the Purchaser under any of the Transaction Documents. Furthermore, the Purchaser authorises each Seller to issue, as appropriate, a subrogation receipt to any third party in return for any full and irrevocable payment made by that third party in substitution for any Debtor. - 58 - Any expenses incurred by each Seller in carrying out its mandate shall be borne exclusively by such Seller. ARTICLE 26. OBLIGATIONS OF CARE Each Seller undertakes to act in the collection of the sums due under the Sold Receivables in accordance with the standards of a prudent and informed businessman, and to be no less diligent than it would be in collecting sums due under its own receivables, and in particular: (i) to apply to the collection of the sums due under the Sold Receivables, procedures that comply in all material respects with all applicable laws and regulations and the contracts underlying the Sold Receivables; (ii) to take such measures as may reasonably be required to ensure that all security interests, rights, claims, privileges and other benefits (droits accessoires) attached to the Sold Receivables, remain in force and are exercised in a timely fashion; (iii) to take such steps as are reasonably necessary to oppose any claim challenging the existence, validity, amount or maturity of the Sold Receivables or the security interests, rights, claims, privileges and other benefits attached thereto, if any; (iv) to take such steps, including without limitation any legal actions such as proceedings in court, as may be reasonably necessary and appropriate for the collection of the sums due under the Sold Receivables; and (v) to take such steps to cause any attachment, seizure (saisie) or any other enforcement measure levied or applied against any accounts where the sums due pursuant to the collection of Sold Receivables are received, to be released or withdrawn within thirty (30) calendar days. ARTICLE 27. COMMISSION FOR AND COSTS OF COLLECTION 27.1. The Parties agree that the Sellers to whom such tasks are delegated shall not receive a commission or remuneration for providing the collection service. 27.2. Each Seller shall bear its own costs incurred in the course of providing the collection service, without any claim against the Purchaser, for reimbursement. The termination of the mandate granted to the Sellers in Article 21 (Collection of Sold Receivables) shall not give to the Sellers any right to compensation. - 59 - 27.3. In the event that a (or several) Back-Up Servicer(s) or Italian Back-Up Servicer(s) is(are) appointed to act as agent for the collection of all or part of the Sold Receivables pursuant to the terms of Article 21.3, such Back-Up Servicer(s) or Italian Back-Up Servicer(s) shall be entitled to receive from the Centralising Unit, acting on behalf of the Sellers, a fee, in accordance with the provisions of the General Servicing Agreement and the Italian Servicing Agreement. The parties acknowledge that the payment of such Stand-By Fee shall be expressly excluded from the Current Account mechanism. In the event that the Centralising Unit fails to pay the amounts referred to under Articles 27.2 and 27.3 on any Funded Settlement Date, the Purchaser shall proceed forthwith to the payment of such amounts, on the Centralising Unit's behalf. As such, the Purchaser shall be, upon delivery of a subrogation notice (quittance subrogative) by the Back-Up Servicer(s) or the Italian Back-Up Servicer(s), subrogated in the rights of the Back-Up Servicer(s) or of Italian Back-Up Servicer(s) against the Centralising Unit to the extent of the sums paid to the Back-Up Servicer(s) or to the Italian Back-Up Servicer(s). 27.4. Stand-by servicing 27.4.1. As consideration for the preparation and putting in place of the back-up servicer procedure, each of the Stand-By Servicer and the Italian Stand-By Servicer shall be entitled to receive an up-front fee in accordance with the provisions of the General Servicing Agreement and the Italian Servicing Agreement, which shall be paid on the date hereof by the Centralising Unit. The parties acknowledge that the payment of such up-front fee shall be expressly excluded from the Current Account mechanism. 27.4.2. On each Funded Settlement Date, the Centralising Unit shall pay to each of the Back-Up Servicers and the Italian Back-Up Servicer a Stand-By Fee whose aim shall be to compensate the Back-Up Servicer/Italian Back-Up Servicer's undertaking to act as back-up servicer upon request during the term of the Agreement, in accordance with the provisions of the General Servicing Agreement and the Italian Servicing Agreement. The parties acknowledge that the payment of such Stand-By Fee shall be expressly excluded from the Current Account mechanism. 27.4.3. In the event that the Purchaser exercices any of its rights to collect sums directly from any Collection Account(s), in accordance with the relevant provisions of the Collection Account Agreement(s), the Centralising Unit shall pay to the Stand-by Servicer fees in accordance with the provisions of the General Servicing Agreement. The parties acknowledge that the payment of such fees shall be expressly excluded from the Current Account mechanism. 27.4.4 In the event that the Centralising Unit fails to pay any fees described in the present Article 27.4 on a Funded Settlement Date, the Purchaser shall proceed forthwith with the payment of such fees, on the Centralising Unit's behalf to the extent of the Adjusted Collections received. As such, the Purchaser shall be, upon delivery of a subrogation notice by the (Italian) Back-Up Servicer(s)/(Italian) Stand-By Servicer, subrogated in the rights of the (Italian) Back-Up Servicer(s)/(Italian) Stand-By Servicer against the Centralising Unit to the extent of the sums paid to the (Italian) Back-Up Servicer(s)/(Italian) Stand-By Servicer in respect of these fees. - 60 - 27.5. Data Protection Trustee 27.5.1. The Centralising Unit, acting on behalf the German Seller, shall pay to each of the Data Protection Trustee the compensation described in the Data Protection Trustee Agreement. The parties acknowledge that the payment of such compensation shall be expressly excluded from the Current Account mechanism. 27.5.2 In the event that the Centralising Unit fails to pay the compensation described in the present Article 27.5, the Purchaser shall proceed with the payment of such compensation, on the Centralising Unit's behalf to the extent of the Adjusted Collections received. As such, the Purchaser shall be, upon delivery of a subrogation notice by the Data Protection Trustee, subrogated in the rights of the Data Protection Trustee against the Centralising Unit to the extent of the sums paid to the Data Protection Trustee in respect of this compensation. CHAPTER XI - DEEMED COLLECTIONS ARTICLE 28. DEEMED COLLECTIONS 28.1. Upon the occurrence of any one of the following events: (i) the issue of any Credit Notes or Commercial Discounts as referred to in Article 24.2, in relation to any Sold Receivables; (ii) any contract, which gives rise to a Sold Receivable, has been terminated and the relevant goods have been billed but remain to be delivered by any Seller, in whole or in part, on the termination date of such contract; (iii) any set-off agreed by any Seller or by operation of law or by a court decision between debts owed to any Debtor and the Sold Receivables against such Debtor; (iv) any Sold Receivable has been cancelled, in whole or in part; (v) any Amended Invoice arises; (vi) the issue of any Credit Note over Snow Tires, in relation to any Sold Receivables; or (vii) the issue of any Year End Rebates, in relation to any Sold Receivables, unless such Year End Rebates have been cancelled or paid in cash by the relevant Seller; the relevant Seller shall be deemed to have received the amount it would have collected if such event had not occurred (the "DEEMED COLLECTION"), provided that no Deemed Collection shall be due as a result of a Debtor's failure, independent from and beyond one Seller's control and from any of (i) through (vii) above, to make payments in respect of Sold Receivables. - 61 - Moreover, given the internal billing procedures of each Seller, it may be the case that certain Sold Receivables are declared by a Seller as being extinguished partially or completely, in an Assessment Report and/or in any electronic file attached thereto, even though such Sold Receivables have not been fully paid by their respective Debtors (the "DEEMED EXTINGUISHED RECEIVABLES"). Therefore, in order to offset the absence of any payment of cash collections arising in relation to such Deemed Extinguished Receivables, such Deemed Extinguished Receivables shall be considered as a Deemed Collection and shall be paid pursuant to Articles 28.2 and 28.3. 28.2. The relevant Sellers, the Centralising Unit and the Agent shall cooperate to determine the amount of Deemed Collections, provided that: (i) during the Replenishment Period, the amount of Deemed Collections shall be debited from the Current Account through the adjustment of Adjusted Collections (as provided in the definition of such term); (ii) during the Amortisation Period, the amount of Deemed Collections shall be transferred by the Centralising Unit to the Purchaser's Account on each Funded Settlement Date and on each Intermediary Settlement Date. 28.3. In the event that any Seller or, as the case may be, the Centralising Unit, acting in the name and on behalf of the Sellers, fails to pay any Deemed Collections as required pursuant to Article 28.2 (ii), the Purchaser may automatically set-off (a) the amount of such Deemed Collections against (b) any amount due or thereafter to become due to such Seller or, as the case may be, to the Centralising Unit, under the Transaction Documents. As soon as practicable, the Purchaser shall notify the Centralising Unit after exercise of its right of set-off. In the event that, notwithstanding such set-off, Deemed Collections still remain unpaid, the Purchaser shall have recourse against the relevant Seller's assets or, as the case may be, against the Centralising Unit's assets, but only to the extent of the amounts remaining unpaid. Any unpaid Deemed Collection shall remain outstanding until it has been paid in full in accordance with the present Article 28.3. - 62 - CHAPTER XII - MISCELLANEOUS ARTICLE 29. FEES AND EXPENSES The Centralising Unit acting in the name and on behalf of the Sellers shall reimburse the Purchaser, acting for its own account and/or as proxy for (i) any reasonable and duly documented expenses (including legal fees, costs and expenses) arising out of any modification, waiver or amendment of the Transaction Documents to which the Centralising Unit and/or the Sellers are a party and requested by the Centralising Unit, acting in the name and on behalf of the Sellers, or the Rating Agencies, (ii) any reasonable and duly documented expenses, claims, damages and liabilities (including legal fees, costs and expenses) incurred in connection with the preservation and/or enforcement of the rights of the Purchaser, the Issuers and the Liquidity Banks under the Securitisation Transaction or (iii) any reasonable and duly documented expenses (including legal fees, costs and expenses) incurred in connection with the renewal of any Liquidity Agreement and, as the case may be, in connection with the implementation of an alternative funding described in any Liquidity Bank Letter, subject to prior communication by the Purchaser to the Centralising Unit of an estimate of fees in the event that the Centralising Unit requests this estimate. ARTICLE 30. SUBSTITUTION AND AGENCY Each Party shall have the right to be assisted by, to appoint or to substitute for itself one or more third parties in the performance of certain tasks provided that: (i) such Party has given prior written notice to the other Party and, in any case, the Purchaser has notified the Rating Agencies; (ii) such Party remains liable to the other Party for the proper performance of those tasks and the relevant third party (parties) has (have) expressly renounced any right to any contractual claim against the other Party; (iii) the relevant third party (parties) undertake(s) to comply with all obligations binding upon such Party under this Agreement; (iv) the Rating Agencies have confirmed that the contemplated change will not entail a downgrading or withdrawal of the current rating of the Notes issued by the Issuers or that the contemplated change will reduce such downgrading or prevent such withdrawal; and (v) each other Party has given prior written consent to this appointment and/or substitution, such consent not to be unreasonably withheld. - 63 - ARTICLE 31. CONFIDENTIALITY Each Party agrees to treat all information of any kind transmitted by any other Party in connection with the Securitisation Transaction as confidential. The Parties agree not to disclose such information to any other person and to ensure that their respective personnel similarly respect the confidential nature of such information. This provision shall not prevent: (i) either Party from transmitting such information as may be required by its statutory auditors, public organisations or any governmental, regulatory, fiscal, or monetary institution or other authority, in so far as it is obliged to do so by the applicable laws and regulations in force; (ii) the Purchaser from transmitting such information to any person who will provide or will undertake to provide directly or indirectly funds to the Purchaser or any agent appointed by the Purchaser pursuant to Article 20 (Identification of the contractual documentation for the Sold Receivables - Access to Documents), provided that the Purchaser undertakes that such person shall be bound to treat such information as confidential under the same terms and subject to the same conditions as provided for in the Transaction Documents; (iii) the Purchaser from using any original or duplicate copy of the contractual documentation or any computer information referred to in Article 20 (Identification of the contractual documentation for the Sold Receivables-Access to documents) of this Agreement in order to take all such measures deemed necessary by the Purchaser to preserve, and/or enforce its rights under the Transaction Documents, including without limitation any legal actions; (iv) either Party from providing the Rating Agencies with any information they may require; (v) either Party from transmitting such information as may be in the public domain other than as a result of a breach of this Article or a breach of any other confidentiality obligation; (vi) subject to GOODYEAR's prior written consent, CALYON, the Issuers and the Liquidity Banks from using exclusively the following information: the amount involved in the Securitisation Transaction, the countries concerned, the number of Sellers, the structure of the transaction, the identity of the legal counsel involved in the Securitisation Transaction, the closing date of the Securitisation Transaction, the maturity of the Securitisation Transaction and the identity of the parties to the Securitisation Transaction; and (vii) the Purchaser and CALYON from transmitting such information to any other person involved in the Securitisation Transaction, provided that the Purchaser and the CALYON undertake that such person shall be bound to treat such information as confidential under the same terms and subject to the same conditions as provided for in the Transaction Documents. - 64 - This obligation to preserve confidentiality shall remain valid for ten (10) years from the Program Expiry Date. ARTICLE 32. NOTICES 32.1. Except as otherwise set forth in the Transaction Documents, all notices, requests or communications which must or may be made pursuant to this Agreement shall be by way of writing, mail or fax. 32.2. All notices, requests or communications to be made and all documents to be delivered from one Party to the other Party under the Transaction Documents shall be made and delivered to the addressees referred to in Schedule 7 hereto (and in the case of the Sellers, to the Centralising Unit, acting in the name and on behalf of the Sellers). 32.3. All notices, requests or communications made and all documents delivered under the Transaction Documents shall only take effect upon the date of their receipt by its addressee. 32.4. Each of the Parties may at any time modify the addressee of the notices, requests or communications to be made and the documents to be delivered to it under the Transaction Documents by sending to that effect a letter or fax to the other Party indicating the name of the new addressee. 32.5. The Parties agree that the Centralising Unit shall be responsible for receiving written notice on behalf of the Sellers, and that any notice given to the Centralising Unit shall be deemed validly received by all of the Sellers upon receipt by the Centralising Unit. 32.6. The Parties agree that the Purchaser shall be responsible for receiving written notice on behalf of the Agent, the Joint Lead Arrangers and the Calculation Agent, and that any notice given to the Purchaser shall be deemed validly received by the Agent, the Joint Lead Arrangers and the Calculation Agent upon receipt by the Purchaser. ARTICLE 33. EXERCISE OF RIGHTS - RECOURSE - NO PETITION 33.1. All rights conferred on the Purchaser by this Agreement or by any other document delivered pursuant to or incidental to this Agreement, including rights conferred by law, shall be cumulative and may be exercised at any time. 33.2. The fact that a Party does not exercise a right or delays doing so shall in no way be treated as a waiver of that right. The exercise of one right or a partial exercise shall not prevent any Party from exercising such a right in the future, or from exercising any other right. - 65 - 33.3. Limited Recourse The parties waive any right that they may have to initiate any proceeding whatsoever in relation to the contractual liability (responsabilite contractuelle) of the Purchaser, except in the case of its own gross negligence (faute lourde) or willful misconduct (dol) and agree to limit their claims and recourse against the Purchaser (including in the event of a breach by the Purchaser of any of its representations and warranties, or any of its obligations hereunder) to the amount of the Available Funds on the relevant date. 33.4. Any recourse of the Purchaser against the Sellers, the Centralising Unit or any of their respective Affiliates, directors, officers and employees in relation to the non payment by any Debtors of any sums due under the Sold Receivables, shall be limited to the amount of the Subordinated Deposit and, to the extent provided in Article 16, the Complementary Deposit. 33.5 Non Petition The Parties irrevocably and unconditionally undertake and agree not to institute any legal proceedings, take other steps or institute other proceedings against ESTER FINANCE, the purpose of which is the appointment of a conciliator or an ad hoc agent, or the opening of receivership proceedings or insolvency proceedings or any other similar proceedings. ARTICLE 34. TRANSFERABILITY OF THIS AGREEMENT This Agreement is entered into on the intuitu personae of the parties to this Agreement. It is agreed that none of the parties may transfer this Agreement, or the rights and obligations under this Agreement, to any third party whatsoever without the prior written consent of all the other parties. ARTICLE 35. AMENDMENT TO THE TRANSACTION DOCUMENTS No amendment to the Transaction Documents may be made without the written consent of each other party thereto and (a) unless the Rating Agencies (i) have been informed and provided by CALYON with all necessary details they may require in respect of such contemplated amendment and (ii) have confirmed that the contemplated amendment will not entail a downgrading or withdrawal of the current ratings of the Notes issued by the Issuers, or that the contemplated amendment will reduce such downgrading or prevent such withdrawal, and (b) each Issuer and each Liquidity Bank has given its prior written consent to such amendment (such consent not being unreasonably withheld or delayed). Moreover, the Purchaser shall not accept any amendment to any Collection Account Agreement to which it is a party without the prior written consent of the Issuers and the Liquidity Banks (such consent not to be unreasonably withheld or delayed). - 66 - The Purchaser hereby covenants to the Centralising Unit and the Sellers that none of the Securitisation Documents, to which the Centralising Unit, the Sellers, GOODYEAR DUNLOP TIRES EUROPE BV or GOODYEAR are not party, shall be amended or otherwise modified in a way adverse to the Centralising Unit, the Sellers, GOODYEAR DUNLOP TIRES EUROPE BV or GOODYEAR without their prior written consent (such consent or denial thereof not to be unreasonably delayed). ARTICLE 36. INDEMNITIES Without limiting any other rights which the Indemnified Parties may have under the Transaction Documents or any related documents or under applicable law, each of the Centralising Unit and each Seller hereby agrees to indemnify the Purchaser, the Agent, the Joint Lead Arrangers, the Calculation Agent, the Depositor, the Issuers, the Liquidity Banks, each of their respective affiliates and each officer, director, employee and agent of any of the foregoing (each an "INDEMNIFIED PARTY") from and against any and all damages, losses, claims, liabilities, costs and expenses (including reasonable attorneys' fees and disbursements) (and, in each case, any value added tax thereon) in any way arising out of the Transaction Documents or any documents related to the Securitisation Transaction (excluding, however, any of the foregoing (a) to the extent resulting from the gross negligence (faute lourde) or willful misconduct (dol) on the part of such Indemnified Party or the breach by an Indemnified Party of material obligations under any Transaction Document or any related document, as finally determined by a court of competent jurisdiction), or (b) constituting recourse for Sold Receivables which are not paid or are uncollectible on account of the insolvency, bankruptcy or inability to pay of the applicable obligor) (collectively, "INDEMNIFIED AMOUNTS"), including, without limitation, any and all damages, losses, claims, liabilities, costs and expenses incurred by or asserted against any Indemnified Party as a result of: (a) any claims, actions, suits or proceedings commenced by any Debtor or any of its affiliates or any third party in connection with any of the Sold Receivables, the transactions out of which they arose or the goods or services the sale or provision of which gave rise to any Sold Receivables; (b) reliance on any representation or warranty or statement made or deemed made by or on behalf of any Seller, the Centralising Unit or GOODYEAR DUNLOP TIRES EUROPE BV under or in connection with any Transaction Document or any related agreement or any certificate or report delivered pursuant hereto or thereto that, in either case, shall have been false or incorrect when made or deemed made; (c) any failure of any Seller, the Centralising Unit or GOODYEAR DUNLOP TIRES EUROPE BV to perform its duties or obligations under this Agreement or the other Transaction Documents; (d) any governmental investigation, litigation or proceeding related to this Agreement or in respect of any Sold Receivable; - 67 - (e) the failure by any Seller or any of its affiliates to comply with any applicable law with respect to any Sold Receivable (or any contract by which it arose or by which it is evidenced or governed), or the nonconformity of any Sold Receivable (or such contract) with any such applicable law, or any action taken by any of the Sellers or their affiliates or agents in the enforcement or collection of any Sold Receivable; (f) any failure of the Purchaser to have and maintain ownership of the Sold Receivables, free and clear of any Liens other than those contemplated in the Transaction Documents, or any attempt by any person to avoid, rescind or set aside any sale of Purchasable Receivables by any Seller to the Purchaser as contemplated by the Transaction Documents; (g) any dispute, claim, offset or defense (other than discharge in bankruptcy or similar defense arising from the Debtor's insolvency or inability to pay) of any Debtor to the payment of any Sold Receivable; (h) the failure of any Seller to pay when due any value added taxes or other taxes payable in connection with any of the Receivables or the transactions out of which they arose; (i) any commingling of collections on Sold Receivables with any other monies of the Seller, the Centralising Unit or any of their Affiliates; (j) the use by the Sellers or their Affiliates of any monies received by them in payment of the Initial Purchase Price or Deferred Purchase Price of Sold Receivables; (k) any products liability or environmental claim, or personal injury or property damage claim, or other similar or related claim or action of any sort whatsoever arising out of or in connection with goods, merchandise or services which relates to any Sold Receivables; (l) a Payment and/or a Transfer Deed ceases to achieve a perfect transfer of Purchasable Receivables as set out in the Receivables Purchase Agreement; (m) any Conformity Warranty for Sold Receivables made by a Seller under Article 19 (Conformity Warranties for Purchasable Receivables) (without regard to any knowedge therein) is found to have been inaccurate at the date it was made. The Sellers and the Centralising Unit shall pay on demand to the Purchaser or, at the Purchaser's direction, to the relevant Indemnified Parties all amounts necessary to indemnify the Indemnified Parties from and against any and all Indemnified Amounts. - 68 - ARTICLE 37. INDIVISIBILITY Each party acknowledges that this Agreement, the Master Subordinated Deposit Agreement and the Master Complementary Deposit Agreement shall form a single set of contractual rights and obligations and that, if the Master Subordinated Deposit Agreement, or the Master Complementary Deposit Agreement becomes void or ceases to be effective and enforceable for any reason whatsoever, this Agreement shall also become void or cease to be effective and enforceable accordingly. Any payment already made by the Centralising Unit acting in the name and on behalf of the Sellers or on its own behalf to the Purchaser under this Agreement, the Receivables Purchase Agreements, the Master Subordinated Deposit Agreement and the Master Complementary Deposit Agreement shall not be affected by such a nullity, ineffectiveness or unenforceability. ARTICLE 38. EXECUTION AND EVIDENCE 38.1. The parties hereby agree that, due to the Assemblact R.C. procedure, which prevents any substitution or addition of any page, each party shall only (i) initial the first and last page of this Agreement and (ii) sign on the execution page. 38.2. The parties hereby agree not to register this Agreement with the French tax administration, although if one party elects to do so, it shall carry out such a registration at its own expense. 38.3. In accordance with Article 1325 of the French Civil Code, the Sellers, having the same interest in this Agreement, hereby agree that one executed copy of this Agreement, to be kept by the Centralising Unit, shall form title and represent the obligation of each Seller as if a separate original copy had been executed by him. ARTICLE 39. WITHDRAWAL OF SELLERS 39.1. The Centralising Unit acting in the name and on behalf of the Sellers, may notify the Purchaser and the Joint Lead Arrangers in writing, in the form set out in Schedule 8, of any request for the withdrawal of one or more Sellers from the Securitisation Transaction and the Transaction Documents to which it is a party. Such request for withdrawal shall be examined as soon as possible and shall be subject to the following conditions: (i) confirmation by the Rating Agencies that such withdrawal shall not entail a deterioration or withdrawal of the current rating of the Notes issued by the Issuers; (ii) the obtaining of the prior written consent of each Liquidity Bank; (iii) the conclusion of any amendment to the Transaction Documents, necessary in the Purchaser's opinion; and - 69 - (iv) the signature by the Seller or Sellers of any document or agreement enabling the relevant Seller to withdraw as a party to this Agreement and the relevant Receivables Purchase Agreement. The parties agree that such Seller or Sellers shall not be bound by any new obligations in respect of this Agreement and the relevant Receivables Purchase Agreement(s), without prejudice to the obligations arising before such Seller(s)' withdrawal from this Agreement and the relevant Receivables Purchase Agreement(s). 39.2. The withdrawal of any Seller or Sellers shall (i) be requested by the Centralising Unit at least two (2) calendar months before the date contemplated for the withdrawal of such Seller(s) and (ii) take effect on the first Funded Settlement Date following the fulfilment of the foregoing conditions precedent. The parties agree that each Joint Lead Arranger shall use its best efforts (dans le cadre d'une obligation de moyens) to respond as soon as possible. 39.3. Any reasonable and duly documented cost (including legal fees) and commissions incurred by the Purchaser and/or the Joint Lead Arrangers in connection with the withdrawal of one or more Sellers shall be borne by the Centralising Unit acting in the name and on behalf of the Sellers. The parties agree that prior to notification by the Centralising Unit to the Purchaser of the request for the withdrawal of such Sellers, the Centralising Unit shall be entitled to request the Purchaser to indicate the costs to be borne in connection with such withdrawal. The Purchaser shall respond within ten (10) calendar days following such request, after which the Centralising Unit shall have five (5) calendar days to notify the Purchaser of its acceptance or refusal of such costs. CHAPTER XIII - GOVERNING LAW - JURISDICTION ARTICLE 40. GOVERNING LAW - JURISDICTION 40.1. This Agreement shall be governed by French law. 40.2. Any dispute as to the validity, interpretation, performance or any other matter arising out of this Agreement shall be subject to the jurisdiction of the competent courts of Paris (Cour d'appel de Paris). The choice of this jurisdiction is entirely for the benefit of the Purchaser which shall retain the right to bring proceedings in any other competent court. - 70 - Made in Paris, on 10 December 2004, in seven (7) originals. GOODYEAR DUNLOP TIRES FRANCE S.A. represented by /s/ Michel Leducq -------------------------------------------- duly authorised for the purpose of executing this Agreement FULDA REIFEN GMBH & CO. KG represented by /s/ Klaus Romanus --------------------------------------------- duly authorised for the purpose of executing this Agreement M-PLUS MULTIMARKENMANAGEMENT GMBH & CO. KG represented by /s/ Klaus Romanus -------------------------------------------- duly authorised for the purpose of executing this Agreement GOODYEAR GMBH & CO. KG represented by /s/ Klaus Romanus -------------------------------------------- duly authorised for the purpose of executing this Agreement DUNLOP GMBH & CO. KG represented by /s/ Klaus Romanus -------------------------------------------- duly authorised for the purpose of executing this Agreement - 71 - GOODYEAR DUNLOP TIRES ITALIA SPA represented by /s/ Pierre Alain Nilsson --------------------------------------------- duly authorised for the purpose of executing this Agreement GOODYEAR DUNLOP TIRES ESPANA S.A. represented by /s/ Pierre Alain Nilsson --------------------------------------------- duly authorised for the purpose of executing this Agreement GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V. represented by /s/ Ronald M. Archer --------------------------------------------- duly authorised for the purpose of executing this Agreement GOODYEAR DUNLOP TIRES GERMANY GMBH represented by /s/ Gottfried Hess --------------------------------------------- duly authorised for the purpose of executing this Agreement EUROFACTOR represented by /s/ Nathalie Rossen --------------------------------------------- duly authorised for the purpose of executing this Agreement ESTER FINANCE TITRISATION represented by /s/ Richard Sinclair --------------------------------------------- duly authorised for the purpose of executing this Agreement - 72 - CALYON represented by /s/ Richard Sinclair and by /s/ G. Campagne-Simon --------------------- ------------------------------- duly authorised for the purpose of executing this Agreement NBP represented by/s/ Huy-Hoang Dang and by /s/ R. Graire ------------------ ------------------------------------- duly authorised for the purpose of executing this Agreement - 73 - SCHEDULE 1. MASTER DEFINITIONS SCHEDULE "ACCOUNTING PRINCIPLES" means generally accepted accounting principles (GAAP) in the United States or any other accounting principles which may be adopted by the Centralising Unit or any of the Sellers and which apply in their relevant jurisdiction. "ACTUAL COLLECTIONS" means all cash collections actually received by any Seller in respect of such Sold Receivables. "ADJUSTED COLLECTIONS" means, in relation to all the Sellers and with respect to the Sold Receivables: (a) on the Initial Settlement Date, an amount equal to any Excess Foreseen Collections for such date; (b) on any Settlement Date, as long as the Sellers act as collection agents in respect of any Sold Receivables and in relation to the Seller(s) acting as collection agents and for which an Assessment Report and a List of Purchasable Receivables have been provided pursuant Article 12.2.1 (viii): (i) - any File Collections between the Assessment Date relating to the preceding Settlement Date and the Assessment Date relating to such Settlement Date; - less any amount received on each Purchaser's Collection Account (net of any debit made on such Purchaser's Collection Account, corresponding to errors, reverse entries, unpaid amounts and returns in relation to payments already made on the corresponding Collection Account) by the debiting of the Collection Accounts between the Assessment Date relating to the preceding Settlement Date and the Assessment Date relating to such Settlement Date; - less an amount equal to any Excess Foreseen Collections calculated with respect to the previous Settlement Date; - increased, if such Settlement Date is a Funded Settlement Date, by an amount equal to any Excess Foreseen Collections received in cash on the Purchaser's Account on the previous Intermediary Settlement Date; - increased by an amount equal to any Excess Foreseen Collections for such Settlement Date; - 74 - - less, if such Settlement Date is a Funded Settlement Date, the Cash Collections Advance calculated by the Calculation Agent for such Settlement Date and paid by the Centralising Unit on the Purchaser's Account; plus (ii) all Deemed Collections determined to have occurred in accordance with Article 28.2 during the period between the last Assessment Date and the preceding Assessment Date; (c) on any Settlement Date other than the Initial Settlement Date, as long as the Sellers act as collection agents in respect of any Sold Receivables and in relation to the Seller(s) acting as collection agents, and for which an Assessment Report and a List of Purchasable Receivables have not been provided pursuant Article 12.2.1 (viii): (i) - any Actual Collections between the Assessment Date relating to the preceding Settlement Date and the Assessment Date relating to such Settlement Date; - less any amount received on each Purchaser's Collection Account (net of any debit made on such Purchaser's Collection Account, corresponding to errors, reverse entries, unpaid amounts and returns in relation to payments already made on the corresponding Collection Account) by the debiting of the Collection Accounts between the Assessment Date relating to the preceding Settlement Date and the Assessment Date relating to such Settlement Date; - less an amount equal to any Excess Foreseen Collections calculated with respect to the previous Settlement Date; - increased, if such Settlement Date is a Funded Settlement Date, by an amount equal to any Excess Foreseen Collections received in cash on the Purchaser's Account on the previous Intermediary Settlement Date; - increased by an amount equal to any Excess Foreseen Collections for such Settlement Date; - less, if such Settlement Date is a Funded Settlement Date, the Cash Collections Advance calculated by the Calculation Agent for such Settlement Date and to the extent paid by the Centralising Unit on the Purchaser's Account; plus (ii) all Deemed Collections determined to have occurred in accordance with Article 28.2 during the period between the last Assessment Date and the preceding Assessment Date; - 75 - (d) at any time, in the event of the termination of the collection mandate given to any Seller and in relation to the Sellers for which the collection mandate has been terminated and until the Program Expiry Date: (i) all cash collections received by the Purchaser which have actually been paid by the Debtors or by any other person obliged to make payment in respect of such Sold Receivables; plus (ii) all Deemed Collections determined to have occurred in accordance with Article 28.2; and (e) at any time after the Program Expiry Date, all cash collections received by the Purchaser which have actually been paid by the Debtors or by any other person obliged to make payment in respect of such Sold Receivables. "AFFILIATE" means, in relation to any entity, any other entity, which either directly or indirectly controls, is controlled by, or is under common control with, such an entity: (i) for the purposes of those entities located within the French jurisdiction, the term "control", shall have the meaning set out in Article L.233.3 of the French Commercial Code (Code de commerce); and (ii) for the purposes of those entities which are not located in France, the term control, shall mean the relationship between a parent company and a subsidiary as defined in Article 1 of Directive 83/349/EEC. "AGENT" means EUROFACTOR in its capacity as agent of the transaction. "AGENT'S ACCOUNT" means the account number 30002/00869/9E/07, opened by the Agent in the books of CALYON. "AGREEMENT" means this general master purchase agreement, as amended and/or supplemented from time to time. "AMENDED INVOICE" means the sums corresponding to any Sold Receivable, which has been the subject of an issued invoice, and which, in order to (i) take into account the commercial practices of the Sellers or (ii) amend any material errors appearing on such invoice, has been cancelled and replaced by a new invoice. "AMORTISATION PERIOD" means the period of time commencing on the Commitment Expiry Date and ending on the Program Expiry Date during which no more Purchasable Receivables shall be purchased by the Purchaser in accordance with the terms and conditions of this Agreement. "APPLICABLE LENDERS" means the lenders or other providers of funding under the European Credit Facility. - 76 - "APPLICABLE WAIVER OR AMENDMENT" means a waiver concerning, or amendment of, any of the events set forth in Article 13.3(xv)(a), (b), (c) or (d) (including the related definitions) and the corresponding provision and definitions of the European Credit Facility that is approved by any combination of the lenders under the European Credit Facility and the Liquidity Banks representing more than 50% of the aggregate amount of (i) all loans and unused commitments under the European Credit Facility plus (ii) commitments pursuant to Liquidity Agreements to provide the outstanding amount of the Purchaser's Funding, in each case as of the date of such approval. "ASSESSMENT DATE" means each of the dates identified as such in Schedule 11. "ASSESSMENT REPORT" means the assessment report drawn up on each Information Date as of the preceding Assessment Date in accordance with Article 22, substantially in the form of Schedule 3 or as modified by mutual agreement between the Centralising Unit, the Purchaser, and the Agent. "AUDITORS CERTIFICATE" means the certificate issued by the Sellers' statutory auditors (commissaires aux comptes) and the Centralising Unit's statutory auditors for the benefit of the Purchaser, as set out in the form of Schedule 4. "AVAILABLE FUNDS" means, on any date, and with regard to the Securitisation Transaction, any sums received by or on behalf of the Purchaser and required to be held by or on behalf of the Purchaser or paid to the Centralising Unit, the Sellers or GOODYEAR DUNLOP TIRES EUROPE BV pursuant to the Securitisation Transaction after the allocations of funds, and subject to the order of priority, provided for under Article 16. "BACK-UP SERVICER" means EUROFACTOR and/or any entity appointed by the Purchaser to replace or assist the Sellers in the collection and servicing of the Sold Receivables held by any French, German and/or Spanish Debtors. "BACK-UP SERVICER REPORT" means the assessment report to be drawn up, as the case may be, by the Back-Up Servicer on each Information Date. "BILL OF EXCHANGE" means any negotiable instrument in the form of a bill of exchange (lettre de change, effet de commerce, letra de cambio) or promissory note (billet a ordre, pagare) or, in the case of any German Seller, any bills of exchange (gezogene Wechsel) issued by such German Seller (with full liability) and accepted by the relevant debtor and blank-endorsed by such German Seller at a place in Germany or promissory notes (eigene Wechsel) issued and accepted by the relevant debtor and blank-endorsed by such German Seller at a place in Germany (with full liability), provided that (i) any such bill of exchange has been issued pursuant to the German Bills of Exchange Act (as in effect on the relevant purchase date), and complies with all requirements as to form under the German Bills of Exchange Act (formell ordnungsgema(beta)er Wechsel) and is free of any corrections; (ii) the currency of the Bill of Exchange is Euro; (iii) the Bill of Exchange is fully enforceable against the relevant debtor, freely transferable, and free from any liens or other rights of third parties, or their Italian equivalent issued by a Seller in connection with any Purchasable Receivables. - 77 - "BUSINESS DAY" means any day other than a Saturday or a Sunday on which banks are open for business in Paris, Madrid, Frankfurt, Rome, London, Jersey and New York and which is a TARGET Day. "CALCULATION AGENT" means CALYON. "CALCULATION DATE" means each of the dates identified as such in Schedule 11 and on which, in particular, the Agent shall make the calculations specified in Article 12.3. "CALYON" means a French limited company (societe anonyme) authorised as a credit institution (etablissement de credit) and having its registered office at at 9 quai du President Paul Doumer, 92920 Paris La Defense Cedex, France, registered with the Companies Registry of Nanterre (Registre du Commerce et des Societes de Nanterre) under the number 304 187 701. "CASH COLLECTIONS ADVANCE" means an amount equal to the aggregate amount of the Assignment Costs (as defined in point 2 of schedule 3 of the French Receivables Purchase Agreement, point 2 of schedule 4 of the German Receivables Purchase Agreement, point 2 of schedule 3 of the Italian Receivables Purchase Agreement, and/or point 2 of schedule 5 of the Spanish Receivables Purchase Agreement). "CENTRALISING UNIT" means GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V. which shall act on behalf of the Sellers in relation to the implementation of the Securitisation Transaction. "CENTRALISING UNIT'S ACCOUNT" means the account number 31489 00010 00218477562 / 47 opened by the Centralising Unit in the books of CALYON. "COLLECTION ACCOUNT" means any collection account opened in any of the jurisdictions concerned by the Securitisation Transaction held by any Seller and/or the Purchaser and which is governed by and/or subject to the relevant Collection Account Agreement. "COLLECTION ACCOUNT AGREEMENT" means any of the following agreements and the related pledge for each jurisdiction in which a Seller party hereto is located, and, in particular, (a) in relation to France - - two co-ownership bank account agreements (each a "CO-OWNERSHIP BANK ACCOUNT AGREEMENT") (Conventions de Compte Indivis) concluded on 10 December, 2004 between Goodyear Dunlop Tires France S.A., Ester Finance Titrisation, the relevant account bank and Eurofactor governed by French law; - - the co-ownerhip agreement ("CO-OWNERSHIP AGREEMENT") (Convention d'Indivision) concluded on 10 December, 2004 between Goodyear Dunlop Tires France S.A., Ester Finance Titrisation, Calyon and Eurofactor governed by French law; - 78 - - - three pledges over the share of the credit balance of the co-owned account (each a "PLEDGE OVER THE SHARE OF THE CREDIT BALANCE OF THE CO-OWNED ACCOUNT") (Nantissement sur la Quote Part du Solde du Compte Indivis) concluded on 10 December, 2004 between Goodyear Dunlop Tires France S.A. and Ester Finance Titrisation governed by French law; (b) in relation to Germany - - the collection account pledge agreement (the "GOODYEAR COLLECTION ACCOUNT PLEDGE AGREEMENT") concluded on 10 December, 2004 between Goodyear GmbH & Co KG, Ester Finance Titrisation, Eurofactor and Calyon and governed by German law; - - the collection account pledge agreement (the "FULDA COLLECTION ACCOUNT PLEDGE AGREEMENT") concluded on 10 December, 2004 between Fulda Reifen GmbH & Co KG, Ester Finance Titrisation, Eurofactor and Calyon and governed by German law; - - the collection account pledge agreement (the "DUNLOP COLLECTION ACCOUNT PLEDGE AGREEMENT") concluded on 10 December, 2004 between Dunlop GmbH & Co KG, Ester Finance Titrisation, Eurofactor and Calyon and governed by German law; - - the collection account pledge agreement (the "M-PLUS COLLECTION ACCOUNT PLEDGE AGREEMENT") concluded on 10 December, 2004 between M-Plus Multimarkenmanagement GmbH & Co.KG, Ester Finance Titrisation, Eurofactor and Calyon and governed by German law; - - in relation to each German Collection Account Pledge Agreement, a side letter agreement (the "SIDE Letter") concluded between each relevant account bank, Ester Finance Titrisation and the relevant German Seller; (c) in relation to Italy - - the Mandate Agreement concluded on 10 December, 2004 between Goodyear Dunlop Tires Italia S.p.A, Ester Finance Titrisation and the Agent governed by Italian law; - - each of the three (3) Pledge Agreements over the the Balance of the Collection Account concluded on 10 December, 2004 between Goodyear Dunlop Tires Italia S.p.A, Ester Finance Titrisation and each account bank, governed by Italian law; (d) in relation to Spain - - the Agreement for the Administration and the Operation of a Current Account with Restricted Availability (the "CURRENT ACCOUNT AGREEMENT") concluded on 10 December, 2004 between Goodyear Dunlop Tires Espana S.A., Ester Finance Titrisation, the account bank, Eurofactor and Calyon governed by Spanish law; - 79 - - - the pledge over the share of the balance of the current account and of the current account (the "PLEDGE OVER THE SHARE OF THE BALANCE OF THE CURRENT ACCOUNT AND OF THE CURRENT ACCOUNT") concluded on 10 December, 2004 between Goodyear Dunlop Tires Espana S.A., Ester Finance Titrisation, the account bank and Calyon governed by Spanish law. "COLLECTION MANDATE" means the mandate granted by the Purchaser to the Sellers pursuant to Article 21.1. "COMFORT LETTER" means a comfort letter granted by GOODYEAR DUNLOP TIRES EUROPE BV in the form set out in Schedule 10. "COMMERCIAL DISCOUNT" means, in relation to any Sold Receivable, any decrease in the face value of such receivable resulting from the granting of a discount for prompt payment, for quantity or as fidelity premium. "COMMITMENT" means the commitment of the Purchaser to purchase Purchasable Receivables from the Sellers, in accordance with this Agreement and the Receivables Purchase Agreements, subject to the conditions precedent and conditions subsequent set forth hereunder and thereunder. "COMMITMENT EXPIRY DATE" means the earliest of the following dates: (i) upon the occurrence of a Liquidity Commitment Non Renewal in relation to all Liquidity Agreements, the expiry of all Liquidity Agreements; (ii) the Business Day immediately preceding the fifth (5 degrees) anniversary date of the Initial Settlement Date; and (iii) the date on which the Commitment is terminated in accordance with Articles 7.1.2., 13, 14 and 15. "COMPLEMENTARY DEPOSIT" means any complementary deposit effected by the Centralising Unit with the Purchaser in accordance with the terms of Article 9 and the Master Complementary Deposit Agreement. "CONFORMITY WARRANTIES" means the warranties given by each Seller to the Purchaser in accordance with Article 19 (Conformity Warranties). "CREDIT NOTE" means, in relation to any Sold Receivable, any decrease in the face value of such receivable or any cancellation of such receivable granted by any Seller in accordance with its management procedures, other than a Credit Note over Snow Tyres and a credit note resulting from Year End Rebates. "CREDIT NOTE OVER SNOW TYRES" means, in relation to any Sold Receivable, any decrease in the face value of such receivable or any cancellation of such receivable granted by any Seller (i) in accordance with its management procedures and (ii) to a customer subsequent to the taking back by the said Seller of snow tyres. - 80 - "CURRENT ACCOUNT" means the current account relationship established between the Centralising Unit, acting in the name and on behalf of the Sellers and the Purchaser pursuant to the provisions of Article 6 (Current Account). "CUSTODIAN" means CALYON, acting in its capacity as Custodian (depositaire) of the assets of the Fund within the meaning of Article L.214-48.II of the French Monetary and Financial Code (Code monetaire et financier). "DATA PROTECTION TRUST AGREEMENT" means the agreement dated the date hereof entered into between the German Sellers, the Agent and the Data Protection Trustee. "DATA PROTECTION TRUSTEE" means EUROFACTOR AG, a stock corporation (Aktiengesellschaft) incorporated under the laws of the Federal Republic of Germany registered in the commercial registry of the Local Court (Amtsgericht) in Munchen under registration number HRB 138351. "DEBTOR" means in relation to any sold receivable the person obligated to make payment of such a receivable. "DEEMED COLLECTIONS" means any amount that any Seller is deemed to have received in the circumstances set out in Article 28 (Deemed Collections), and notably any Deemed Extinguished Receivables. "DEEMED EXTINGUISHED RECEIVABLES" has the meaning set forth in Article 28 (Deemed Collections). "DEFAULT PERCENTAGE" means on any Assessment Date preceding an Intermediary Settlement Date, the ratio expressed as a percentage of: (i) the sum of the Outstanding Amount of Defaulted Receivables and Doubtful Receivables that were neither Defaulted Receivables nor Doubtful Receivables as of the Assessment Date relating to the preceding Intermediary Settlement Date; and (ii) the Outstanding Amount of the Sold Receivables purchased by the Purchaser between the 6th Intermediary Settlement Date (excluded) before such Intermediary Settlement Date and the 5th Intermediary Settlement Date (included) before such Intermediary Settlement Date. "DEFAULTED RECEIVABLE" means, on any Calculation Date, any Sold Receivable which, as of the preceding Assessment Date, is not a Doubtful Receivable transferred back to the Sellers and has any of the following characteristics on such Calculation Date: (i) the Sold Receivable remains unpaid by its relevant debtor for more than 90 days after the Maturity Date of such Sold Receivable; (ii) the Sold Receivable is owed by a Debtor which is subject to Insolvency Proceedings and has not been counted under paragraph (i) above; or - 81 - (iii) the Sold Receivable has been or, under the relevant Seller's credit and collection policies, would have been written off as uncollectible and has not been counted under paragraphs (i) and (ii) above. "DEFERRED PURCHASE PRICE" means, (a) for each Funded Settlement Date during the Replenishment Period, the highest of zero and: - - the Discount Reserve for all Sellers calculated as of the previous Intermediary Settlement Date, - - increased by the total Discount Amount for all Sellers relating to the Sold Receivables purchased on such Funded Settlement Date, - - decreased by the Cash Collections Advance payable by the Purchaser (or directly by the Centralising Unit) on such Funded Settlement Date, - - decreased by the total Discount Reserve for all Sellers calculated as of such Funded Settlement Date, - - and increased quarterly by the Interest of Placement Amount, as defined in the Receivables Purchase Agreements, and (b) as of the Commitment Expiry Date, the Discount Reserve as of the Settlement Date immediately preceding the Commitment Expiry Date, plus any Discount Amount relating to Sold Receivables that were not included in the Deferred Purchase Price payable on the Funded Settlement Date preceding the Commitment Expiry Date; in accordance with the formula set forth in schedule 3 of the French and German Receivables Purchase Agreement, in schedule 3 of the Italian Receivables Purchase Agreement, and in schedule 5 of the Spanish Receivables Purchase Agreement. "DELINQUENCY PERCENTAGE" means on any Assessment Date preceding an Intermediary Settlement Date, the ratio expressed as a percentage of: (i) the sum of the Outstanding Amount of Delinquent Receivables and Doubtful Receivables that were neither Delinquent Receivables nor Doubtful Receivables as of the Assessment Date relating to the preceding Intermediary Settlement Date; and (ii) the Outstanding Amount of the Sold Receivables purchased by the Purchaser between the 5th Intermediary Settlement Date (excluded) before such Intermediary Settlement Date and the 4th Intermediary Settlement Date (included) before such Intermediary Settlement Date. - 82 - "DELINQUENT RECEIVABLE" means, on any Assessment Date, any Sold Receivable which is not a Doubtful Receivable transferred back to the Sellers and has any of the following characteristics on such Calculation Date: (i) the Sold Receivable remains unpaid by its relevant Debtor for more than 60 days after the Maturity Date of such Sold Receivable; (ii) the Sold Receivable is owed by a Debtor which is subject to Insolvency Proceedings and has not been counted under paragraph (i) above; or (iii) the Sold Receivable has been or, under the relevant Seller's credit and collection policies, would have been written off as uncollectible and has not been counted under paragraphs (i) and (ii) above. "DEPOSIT FEE" means the fee due to CALYON, in the conditions set forth in article 8 of the Master Senior Deposit Agreement and which shall be paid by ESTER FINANCE to CALYON, or any credit institution which replaces the latter for the purposes of carrying out its functions under the Master Senior Deposit Agreement, as a remuneration for its undertaking to make the Senior Deposit on a periodic basis during the Replenishment Period. It is agreed that the Deposit Fee shall be paid to CALYON, or any other credit institution which replaces the latter for the purposes of carrying out its functions under the Master Senior Deposit Agreement, even after the transfer to the Fund of receivables in repayment of the Senior Deposit. "DEPOSITOR" means CALYON acting in its capacity as depositor pursuant to the Master Senior Deposit Agreement and any successor, transferee or assignee. "DILUTION PERCENTAGE" means as calculated on any Calculation Date preceding an Funded Settlement Date, the ratio expressed as a percentage of: (i) the aggregate amount of Credit Notes issued between the Assessment Date (included) preceding the last Intermediary Settlement Date and the Assessment Date (excluded) preceding the preceding Intermediary Settlement Date; and (ii) the Outstanding Amount of the Sold Receivables purchased by the Purchaser between the 2nd Intermediary Settlement Date (excluded) before the last Assessment Date and the Intermediary Settlement Date (included) preceding such last Assessment Date. "DISCOUNT AMOUNT" means, on any Settlement Date during the Replenishment Period, in relation to the Sold Receivables, the amount equal to the Discount Rate applicable on such date multiplied by the Outstanding Amount of Purchasable Receivables to be purchased by the Purchaser on such date. "DISCOUNT RATE" has the meaning set forth in schedule 2 of the French Receivables Purchase Agreement, schedule 3 of the German Receivables Purchase Agreement, schedule 2 of the Italian Receivables Purchase Agreement, and/or schedule 4 of the Spanish Receivables Purchase Agreement. - 83 - "DISCOUNT RESERVE" has the meaning set forth in schedule 2 of the French Receivables Purchase Agreement, schedule 3 of the German Receivables Purchase Agreement, schedule 2 of the Italian Receivables Purchase Agreement, and/or schedule 4 of the Spanish Receivables Purchase Agreement "DISTRIBUTED AMOUNTS" means, on any Settlement Date during the Amortisation Period, the sum of: - - the amount of Adjusted Collections as determined as of such date; - - the amount in the Purchaser's Account as of the last Assessment Date, within the limit of the sums in the Purchaser's Account on such Settlement; and - - the amount in each Purchaser's Collection Account (net of any debit made on such Purchaser's Collection Account, corresponding to errors, reverse entries, unpaid amounts and returns in relation to payments already made on the corresponding Collection Account) as of the last Assessment Date, within the limit of the sums in each Purchaser's Collection Account on such Settlement Date. "DOUBTFUL RECEIVABLE" means any Sold Receivable which is, according to the Accounting Principles, doubtful given the situation of the Debtor or open to challenge. "DOWNGRADING EVENT" means, in relation to a Liquidity Bank, the downgrading of its rating by a Rating Agency under A1 (for Moody's Investors Services), P1 (for Standard & Poors) or F1 (for Fitch Ratings). "EARLY AMORTISATION EVENT" means any of the events set out in Article 13 (Early Amortisation). "ELIGIBLE DEBTOR" means a Debtor having the characteristics described in detail in article 8 of each Receivables Purchase Agreement. "ELIGIBLE RECEIVABLE" means any Sold Receivable which has the following characteristics on the Settlement Date during the Replenishment Period: (i) the date on which the Sold Receivable is due is not later than 150 days after the Assessment Date preceding such Settlement Date; (ii) the Sold Receivable has not remained unpaid by the relevant Debtor for more than 72 days after the Maturity Date of such Sold Receivable; (iii) the debtor of such Sold Receivable has a V.A.T or a CMS identification number indicated in the electronic support attached to the relevant Transfer Deed delivered to the Purchaser in relation to such Sold Receivable and such Sold Receivable is identified on such electronic support in a manner which complies with the electronic exchange procedures agreed between the Agent, the Purchaser, the Centralising Unit and the Sellers; (iv) the Sold Receivable is not a Net Miscellaneous Receivable. - 84 - "ESTER FINANCE" means ESTER FINANCE TITRISATION S.A., a company incorporated under French law and authorised as a credit institution (etablissement de credit), having its registered office at 19, Boulevard des Italiens, 75 002 Paris, France, registered with the Companies Registry of Paris under the number 414 886 226. "EURIBOR 1 MONTH" means the reference rate known as the "European Inter-Bank Offered Rate" in the form of the rate listed under the aegis of the European Banking Federation and published at approximately 11.00 am (Brussels time), by TELERATE (page 248 and 249) or REUTERS (page EURIBOR) (or whatever page that may be substituted therefor) for a one month period. "EURO" OR "EUR" means the currency of the participating Member States of the European Union in accordance with the definition given under Article 109-L-4 of the European Union Treaty and in Council Regulation (EC) n. 974/98 of May 3, 1998 on the introduction of the euro. "EUROFACTOR" means, a company incorporated under French law and authorised as a credit institution (etablissement de credit) having its registered office at Tour d'Asnieres, 4 avenue Laurent Cely, 92608 Asnieres, France, registered with the Trade and Companies Registry of Nanterre under the number 642 041 560. "EUROPEAN CREDIT FACILITY" means the $650,000,000 Term Loan and Revolving Credit Agreement, dated as of March 31, 2003, among GOODYEAR DUNLOP TIRES EUROPE BV, the other borrowers thereunder, the lenders thereunder, JPMorgan Chase Bank, as administrative agent, and Deutsche Bank AG, as syndication agent, as amended, refinanced, replaced or otherwise modified from time to time. "EXCESS FORESEEN COLLECTIONS" means, with respect to a Settlement Date as long as any sums remain due under the Senior Deposit, the excess of (a) the amount of Foreseen Collections for such Settlement Date, over (b) the amount of the Complementary Deposit to be made on such Settlement Date. From the date on which any sums due under the Senior Deposit have been paid, or in the event an Early Amortisation Event described under Article 13.3 has occurred, the amount of Excess Foreseen Collections shall be equal to zero (0) as from such date or event. "EXCLUDED DEBTOR" means any debtor mentioned in the list set forth in Schedule 14, as modified by mutual agreement between the Centralising Unit, the Purchaser and the Agent, in accordance with the provisions of Article 35. "FILE COLLECTIONS" means, with respect to any period, all collections (excluding Deemed Collections) on Sold Receivables which, on the basis of the information included in any Assessment Report and the electronic date file attached thereto, were expected to be received during such period by a Seller as calculated by the Agent on the basis of the Assessment Reports and the electronic support attached thereto. "FINANCIAL COVENANTS" means the financial covenants set forth in Article 13.3(xv) and the related definitions. - 85 - "FINANCIAL INDEBTEDNESS" means, in relation to any person: (i) any indebtedness for monies borrowed or raised by that person; (ii) any indebtedness (actual or contingent) of that person under any guarantee, security, indemnity or other commitment designed to protect any creditor against loss in respect of any Financial Indebtedness of any third party; (iii) any indebtedness under or in respect of any acceptance credit opened on behalf of that person; (iv) any indebtedness under any debenture, note, bond, certificate of deposit, cash certificate, bill of exchange, commercial paper or similar instrument on which that person is liable as drawer, acceptor, endorser, issuers or otherwise; (v) any indebtedness for money owing in respect of any interest rate swap or currency swap, such indebtedness to be measured on a marked-to-market basis at the relevant time and to include, vis-a-vis any particular counterparty, application of the relevant ISDA or FBF netting procedures; and (vi) any payment obligations under any lease entered into for the purpose of obtaining or raising finance. - 86 - "FORESEEN COLLECTIONS" means, as calculated on each Calculation Date by the Agent on the basis of the electronic data file received from the Centralising Unit on the preceding Information Date, (i) - all cash collections paid or expected to be paid as from the last Assessment Date until the Settlement Date following the next Settlement Date by the Debtors under the Sold Receivables (including the Purchasable Receivable to be purchased on the following Settlement Date and excluding Net Miscellaneous Receivables and excluding Defaulted Receivables), on the basis of the contractual maturity date of such Sold Receivables; - less, within the limit of the cash collections in relation to the Sold Receivables unpaid after their Maturity Date, the amount of Non Allocated Cash and non allocated Credit Notes with a maturity date until the Settlement Date following the next Settlement Date weighted by the ratio of: (a) unpaid Sold Receivables (minus Net Miscellaneous Receivables minus Defaulted Receivables) after their respective Maturity Date, over (b) unpaid Sold Receivables after their respective Maturity Date minus Defaulted Receivables; (ii) weighted by the ratio of: (a) the Senior Deposit (before computation of Excess Foreseen Collections), the Discount Reserve and the portion of the Subordinated Deposit covering the Senior Deposit (before computation of Excess Foreseen Collections) and the Discount Reserve (computed as follows: Subordinated Deposit multiplied by ((Senior Deposit (before computation of Excess Foreseen Collections) + Discount Reserve) / (Senior Deposit (before computation of Excess Foreseen Collections) + Discount Reserve + Complementary Deposit))); over (b) the Outstanding Amount of Sold Receivables, as of the next Settlement Date; (iii) weighted by the ratio of: (a) the last audited theoretical average days of sales outstanding of accounts receivable of the Sellers, used in the determination of the Subordinated Deposit; over (b) the last audited actual days of sales outstanding of accounts receivable of the Sellers; and (iv) weighted by a risk ratio equal to one (1) on the date hereof, it being provided that such ratio may be reduced upon the request of the Centralising Unit, subject to the prior written consent of the Purchaser, the Issuers and the Liquidity Banks. - 87 - "FORMER SECURITISATION TRANSACTION" means, with respect to a Seller, any past securitisation transaction involving all or part of trade receivables of such Seller. "FRENCH SECURITISATION TRANSACTION" means the securitisation transaction arranged by CALYON (succeeding in the rights of CREDIT LYONNAIS) in connection with the transfer of all or part of trade receivables of GOODYEAR DUNLOP TIRES FRANCE S.A. to ESTER FINANCE on the basis of the French master receivables purchase agreement entered into by GOODYEAR DUNLOP TIRES FRANCE S.A., ESTER FINANCE, EUROFACTOR and CALYON (succeeding in the rights of CREDIT LYONNAIS) on 20 September 2001, as amended. "FRENCH SELLER" means GOODYEAR DUNLOP TIRES FRANCE S.A. "FUND" means FCC Triple P, a fonds commun de creances, set up by the Management Company and CALYON (as depositary) in accordance with the provisions of Article L.214-47 of the French Monetary and Financial Code (Code monetaire et financier) for the purposes of the Securitisation Transaction. "FUNDED SETTLEMENT DATE" means the Initial Settlement Date and each of the dates identified "Funded Settlement Date" on Schedule 11 falling on or prior to the Program Expiry Date. "GAAP" means, in relation to any person, the generally accepted accounting principles in the jurisdiction in which such person is organized. "GENERAL SERVICING AGREEMENT" means the master back-up servicing agreement concluded on the date hereof between the Purchaser and the Stand-by Servicer/Back-Up Servicer which sets forth (i) the duties of the Stand-By Servicer before the termination of the collection mandate given to each Seller, (ii) upon its appointment, the conditions according to which EUROFACTOR shall act as Back-Up Servicer and (iii) the conditions under which EUROFACTOR shall assist the Italian Back-Up Servicer in the performance of certain back-up servicing activities . "GERMAN SELLER" means each of FULDA REIFEN GmbH & Co. KG, M-PLUS MULTIMARKENMANAGEMENT GmbH & Co. KG, GOODYEAR GmbH & Co. KG and DUNLOP GmbH & Co. KG. "GOODYEAR" means the parent company of the Goodyear Group, i.e. THE GOODYEAR TIRE & RUBBER COMPANY, a company incorporated under the laws of Ohio, having its registered office at 1144 East Market Street, Ohio, United States of America. "GOODYEAR GROUP" means the group of entities comprised of GOODYEAR and its Affiliates. "GOODYEAR DUNLOP TIRES EUROPE BV" means the Goodyear Dunlop Tires Europe B.V., parent company of the French, German, Italian and Spanish Sellers, incorporated under the laws of the Netherlands, having its registered office at De Boelelaan 7, 1083 HJ, Amsterdam, The Netherlands, and registered with the Companies Registry of Amsterdam under the number 33225215. - 88 - "GOVERNMENTAL AUTHORISATION" means any authorization given by any "Governmental Authority" as such term is defined in the European Credit Facility. "GROUP" means, in relation to any Debtor, the group of entities comprised of this Debtor and its Affiliates. "IMMOBILISATION INDEMNITY" means any immobilisation indemnity paid by ESTER FINANCE to the Depositor in accordance with the Master Senior Deposit Agreement. "INCREASE IN THE COMPLEMENTARY DEPOSIT" means, on any Settlement Date during the Replenishment Period, the excess of (a) the amount of the Complementary Deposit on such Settlement Date in accordance with the Master Complementary Deposit Agreement over (b) the amount of the Complementary Deposit on the preceding Settlement Date. "INCREASE IN THE SUBORDINATED DEPOSIT" means, on any Settlement Date during the Replenishment Period, the excess of (a) the amount of the Subordinated Deposit on such Settlement Date in accordance with the Master Subordinated Deposit Agreement over (b) the amount of the Subordinated Deposit on the preceding Settlement Date. "INFORMATION DATE" means each of the dates identified as such in Schedule 11 and on which the Centralising Unit, acting in the name and on behalf of the Sellers, is required to transmit to the Agent the Assessment Report prepared as of the preceding Assessment Date, as well as the List of Purchasable Receivables. "INITIAL PURCHASE PRICE" means, in relation to any Purchasable Receivable to be acquired by the Purchaser in respect of each Seller and on any Settlement Date during the Replenishment Period, the Outstanding Amount of Purchasable Receivables less the applicable Discount Amount. "INITIAL SETTLEMENT DATE" means 21st December, 2004. "INSOLVENCY PROCEEDINGS" means: (i) in relation to any person being resident in France or having its principal place of business in France : - a reference to such person being unable to pay its debt as they fall due (cessation des paiements) or initiating voluntary arrangements with its creditors (reglement amiable) or being subject to insolvency proceedings opened by a competent court (redressement ou liquidation judiciaire), all of which as construed by Articles L.611-1 et seq. of the French Commercial Code (formerly French Law no.84-148 of March 1, 1984) or, as the case may be, by Articles L.620-1 et seq. of the French Commercial Code (formerly French Law n.85-98 of January 25, 1985); - whenever any auditor of such person has declared an alert procedure (procedure d'alerte) within the meaning of Article 234-1 of the French Commercial Code; - 89 - (ii) in relation to any person being resident in Germany or having its principal place of business in Germany, a reference to such person that is overindebted (uberschuldet), unable to pay its debts as they fall due (zahlungsunfahig) or such status is imminent (drohende Zahlungsunfahigkeit) or is subject to insolvency (including preliminary insolvency proceedings) or dissolution proceedings; (iii) in relation to any person being resident in Spain or having the center of its interests in Spain, (hereinafter, the "SPANISH RESIDENT"): - the Spanish Resident files an application with a court to be declared to be subject to creditors' composition ("concurso") within the meaning of the Spanish law 22/2003, dated July 9, 2003 or subject to any equivalent situation as provided by any law that could complement, replace or amend it; - a third party applies to a court for a declaration that the Spanish Resident is subject to creditors' composition ("concurso") within the meaning of the Spanish law 22/2003 and the court accepts to follow the creditors' composition proceedings, or any other equivalent situation as provided by any other law that could complement, replace or amend them; - the Spanish Resident is subject to governmental or judicial administration in Spain (intervencion administrativa o administracion judicial); - any insolvency proceeding, as defined in Council Regulation (EC) No 1346/2000, of 29 May 2000 on Insolvency Proceedings is taken in any jurisdiction regarding the Spanish Resident; (iv) in relation to any person being resident in Italy or having the center of its interests in Italy, (hereinafter, the "ITALIAN RESIDENT"): - the Italian Resident is insolvent, being unable to fulfil its obligations regularly, namely in due time and with usual means, pursuant to article 5 of the Italian Bankruptcy Law (insolvenza); - the Italian Resident is declared bankrupt upon its own application or petition of the creditor/s or petition of the Public Prosecutor or ex officio by the judge when during a civil proceeding the insolvency of the company comes out, pursuant to articles 6 et seq. of the Italian Bankruptcy Law (fallimento); - the Italian Resident, being insolvent, files an application for arrangement with creditors with the competent judge, proposing an arrangement pursuant to articles 160 et seq. of the Italian Bankruptcy Law (concordato preventivo); - the Italian Resident, being unable to fulfil its obligations due to a temporary and reversible crisis, files an application with the tribunal in order to have the management of its business and the administration of its assets under the direction of the supervisory judge and the judicial commissioner pursuant to articles 187 et seq. of the Italian Bankruptcy Law (amministrazione controllata); - 90 - - the Italian Resident is under Compulsory administrative liquidation pursuant to articles 194 et seq. of the Italian Bankruptcy Law (liquidazione coatta amministrativa); - the Italian Resident, being a large undertaking, is under extraordinary administration pursuant to Law 270/1999 (amministrazione straordinaria); - if and when applicable, the Italian Resident, being eligible for the extraordinary administration and meeting additional requirements set by law, is under reorganization pursuant to Legislative Decree no. 347 of 23 December 2003, as amended by Law Decree no. 119 of 3 May 2004 (ristrutturazione industriale di grandi imprese in stato di insolvenza); - any of the above insolvency proceeding is taken in any jurisdiction regarding the Italian Resident pursuant to Council Regulation (EC) no. 1346/2000 of 29 May 2000 on insolvency proceedings; (v) in relation to any person being resident in the Netherlands or having its principal place of business in the Netherlands, (hereinafter, the "DUTCH RESIDENT"), a reference to such person that is subject to any bankruptcy (faillissement), suspension of payments (surseance van betaling) or any other insolvency proceedings listed in Annex A of the Council Regulations (EC) No. 1346/2000 on Insolvency Proceedings or any other insolvency proceedings or analogous proceeding in each case opened by a competent court, including, but not limited to, emergency regulations ("noodregeling") as referred to in the Act on the Supervision Act of the Credit System ("Wet toezicht kredietwezen 1992") on the Supervision of the Insurance System ("Wet toezicht verzekeringsbedrijf 1993"). (vi) in relation to any person being resident in the United States or having its principal place of business in the United States: (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (x) liquidation, reorganization, bankruptcy, moratorium, suspension of payment or other relief in respect of such person or its debts, or of a substantial part of its assets, under any U.S. federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (y) the appointment of a receiver, trustee in bankruptcy, custodian, sequestrator, conservator or similar official for such person or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 90 days or an order or decree approving or ordering any of the foregoing shall be entered; - 91 - (b) such person (v) voluntarily commences any proceeding or file any petition seeking liquidation, reorganization, bankruptcy, moratorium, suspension of payment or other relief under any U.S. federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (w) consents to the institution of, or fails to contest in a timely and appropriate manner, any proceeding or petition described in clause (a) of this section (x) applies for or consents to the appointment of a receiver, trustee in bankruptcy, custodian, sequestrator, conservator or similar official for such person or for a substantial part of its assets, (y) makes a general assignment for the benefit of creditors or (z) takes any action for the purpose of effecting any of the foregoing; (c) such person admits in writing its inability or fails generally to pay its debts as they become due; (vii) in relation to Elixir Funding Limited, means a resolution is passed for the winding-up or dissolution of Elixir Funding Limited, or a liquidator is appointed in respect of Elixir Funding Limited or any of its assets, or there is an for a declaration of en desatre in respect of the property of Elixir Funding Limited or for the property of Elixir Funding Limited to be placed under the control of the Courts of Jersey, or Elixir becomes "bankrupt" as defined in the Interpretation (Jersey) Law 1954; or (viii) in relation to any other person, any similar provision applicable to it. "INTERCOMPANY ARRANGEMENTS" shall have the meaning set forth in Article 11.1. (xiv). "INTERMEDIARY SETTLEMENT DATE" means each of the dates identified as an "Intermediary Settlement Date" on Schedule 11 falling on or prior to the Program Expiry Date. "ISSUERS" means : (i) LMA S.A., a French limited company (societe anonyme) having its registered office at 6-8, rue Menars, 75002 Paris, France, registered with the Company Registry of Paris (Registre du Commerce et des Societes de Paris), under the number 383 275 187; or (ii) Elixir Funding Limited, a public company incorporated with limited liability under the laws of Jersey, having its registered office at St Paul's Gate, New Street, Saint Helier, Jersey, Channel islands JE2 34A, registered with the Companies Registry of Jersey under number 71548; or (iii) any other person who may enter the Securitisation Transaction from time to time in order to subscribe to units issued by the Fund and to finance such subscription by issuing Notes. "ITALIAN BACK UP SERVICER" means, in relation to the Sold Receivables purchased from the Italian Seller, MEDIOFACTORING. "ITALIAN NOTICE OF TRANSFER" means any notice issued by the Purchaser or any entity, acting on behalf of the Purchaser and appointed by the same for such purpose, to any Italian Debtor in accordance with a Italian Receivables Purchase Agreement. - 92 - "ITALIAN SELLER" means GOODYEAR DUNLOP TIRES Italia S.P.A. "ITALIAN SERVICING AGREEMENT" means the specific back-up servicing agreement concluded on the date hereof between the Purchaser and the Italian Stand-by Servicer/Italian Back-Up Servicer which sets forth (i) the duties of the Italian Stand-by Servicer before the termination of the collection mandate given to the Italian Seller, and (ii) upon its appointment, the conditions according to which MEDIOFACTORING shall act as Italian Back-Up Servicer . "ITALIAN STAND-BY SERVICER" means, in relation to the back-up servicing activities for those Sold Receivables purchased from the Italian Seller, MEDIOFACTORING. "JOINT-LEAD ARRANGER" means each of CALYON and NBP, acting in its capacity as joint-lead arranger of the Securitisation Transaction. "LIENS" means, in respect to any asset, any mortgage, deed of trust, lien, delegation of claims, pledge, hypothecation, encumbrance, charge of security interest in, on or of such asset. "LIQUIDITY AGREEMENT" means (i) any unit purchase agreement (promesse d'achat et de revente de parts) dated the date hereof, as amended and/or supplemented from time to time, entered into between an Issuer and a Liquidity Bank pursuant to which the Liquidity Bank has undertaken to purchase from such Issuer, all or part of the units of the Fund held by the Issuer, or (ii) any credit facility agreement dated the date hereof, as amended and/or supplemented from time to time, entered into between an Issuer and a Liquidity Bank pursuant to which the Liquidity Bank has undertaken to make loans to an Issuer secured by such units, or (iii) a swap agreement, repurchase agreement or other financial instrument dated the date hereof, as amended and/or supplemented from time to time, entered into between an Issuer and a Liquidity Bank, pursuant to which the Liquidity Bank has undertaken to make certain payments to an Issuer in relation to such units. "LIQUIDITY BANK" means a bank or any other credit institution (etablissement de credit) (or any successor, transferee and assignee thereof), in each case rated at least A1, P1 and/or F1 by the relevant Rating Agencies at the time when it enters into or renews its commitment under a Liquidity Agreement, that has undertaken to purchase from an Issuer, all or part of the units of the Fund held by such Issuer or to make loans to an Issuer secured by such units or otherwise to make payments to an Issuer in relation to such units. "LIQUIDITY BANK LETTER" means, in relation to any Liquidity Bank, the letter executed by such Liquidity Bank on 10 December 2004 and which relates to the commitment to provide the Purchaser with an alternative funding, subject to the conditions provided in such letter. "LIQUIDITY COMMITMENT NON RENEWAL" means, in relation to any Liquidity Bank : (a) the non renewal of a Liquidity Agreement in any of the following cases: (i) such Liquidity Agreement is not renewed at its expiry date, and the relevant Liquidity Bank has not been replaced with another bank that is rated at least A1, P1 and/or F1 by the relevant Rating Agencies; - 93 - (ii) (x) as a result of Market Disruption, a drawing is made under such Liquidity Agreement in order to acquire all or part of the units of the Fund, and (y) such drawing remains outstanding until the expiry date of such Liquidity Agreement; (iii) (x) as a result of a Downgrading Event, a drawing is made under such Liquidity Agreement in order to acquire all or part of the units of the Fund, (y) such drawing remains outstanding until the expiry date of such Liquidity Agreement, and (z) the relevant Liquidity Bank has not been replaced with another bank that is rated at least A1, P1 and/or F1 by the relevant Rating Agencies; or (iv) (x) a drawing is made under any Liquidity Agreement for any reason other than those listed above, (y) such drawing remains outstanding until the expiry date of such Liquidity Agreement, and (z) the relevant Liquidity Bank has not been replaced with another bank that is rated at least A1, P1 and/or F1 by the relevant Rating Agencies; or (b) the expiry of the commitment of such Liquidity Bank under the relevant Liquidity Bank Letter. "LIST OF PURCHASABLE RECEIVABLES" means any list of Purchasable Receivables, on each Assessment Date, in the form agreed between the parties, to be provided by the Centralising Unit, acting in the name and on behalf of the Sellers, to the Purchaser. "MANAGEMENT COMPANY" means ABC Gestion, a limited company (societe anonyme), authorised as a Management Company (Societe de Gestion), in accordance with the provisions of Article L.247-47 of the Code Monetaire et Financier, having its registered office at 19, boulevard des Italiens - 75002 Paris, registered with the Trade and Companies Registry of Paris under the number 353 716 160. "MANAGEMENT FEE" means the management fee set out in Article 10 (Fees). "MARGIN" means the margin which aims to cover any administrative, financial and management costs incurred by ESTER FINANCE, equal to EUR 2,000 per month payable on each Funded Settlement Date. "MARKET DISRUPTION" means the occurrence of any event leading to any placement agent acting for an Issuer being unable to find investors to purchase whole or part of the Notes that would otherwise be issued by that Issuer. "MASTER COMPLEMENTARY DEPOSIT AGREEMENT" means the agreement dated 10 December, 2004, as amended and/or supplemented from time to time, entered into between the Purchaser and the Centralising Unit, under which the Centralising Unit shall effect a Complementary Deposit with the Purchaser. "MASTER DEFINITIONS SCHEDULE" means this master definitions schedule which determines the meaning of the terms and expressions used in the Transaction Documents. - 94 - "MASTER SENIOR DEPOSIT AGREEMENT" means the agreement dated 15 December, 2004, as amended and/or supplemented from time to time, entered into between the Purchaser and the Depositor under which the Depositor has agreed to make a Senior Deposit with the Purchaser. "MASTER SUBORDINATED DEPOSIT AGREEMENT" means the agreement dated 10 December, 2004, as amended and/or supplemented from time to time, entered into between the Purchaser and the Centralising Unit, under which the Centralising Unit shall effect a Subordinated Deposit with the Purchaser. "MATERIAL ADVERSE EFFECT" means a material adverse change in or effect on (i) the ability of the Sellers and the Centralising Unit, taken as a whole, or of GOODYEAR DUNLOP TIRES EUROPE BV to perform their obligations under the Securitisation Documents that are material to the rights or interests of the Purchaser, the Depositor, the Issuers or the Liquidity Banks under the Securitisation Documents to which they are parties, (ii) the ability of the Purchaser to collect the amounts due under the Purchasable Receivables or the rights and interests of the Purchaser in the Sold Receivables, or (iii) the rights of or benefits available to the Purchaser, the Depositor, the Issuers or the Liquidity Banks under the Securitisation Documents that are material to the rights or interests of such parties thereunder including as a result of any material adverse change in or effect on the business, operations, properties, assets or financial condition (including as a result of the effects of any contingent liabilities) of GOODYEAR and its Subsidiaries (including the Sellers), taken as a whole. "MATERIAL INDEBTEDNESS" means Financial Indebtedness of GOODYEAR and any of its subsidiaries in an aggregate principal amount exceeding USD 25,000,000 (or the equivalent in any other currency or currencies). "MATURITY DATE" means, in relation to any Purchasable Receivable, the date on which such Purchasable Receivable becomes due and payable by the relevant debtor. "MATERIAL SUBSIDIARY" means, at any time, each subsidiary of GOODYEAR DUNLOP TIRES EUROPE BV other than subsidiaries that do not represent more than 1% for any such individual subsidiary, or more than 5% in the aggregate for all such subsidiaries, of either (a) the total assets of GOODYEAR and its consolidated subsidiaries or (b) the revenues of GOODYEAR and its consolidated subsidiaries for the period of four (4) fiscal quarters most recently ended, in each case determined in accordance with GAAP. "MAXIMUM AMOUNT OF THE COMPLEMENTARY DEPOSIT" means an amount equal to EUR 950,000,000 on the date hereof, as this amount may be modified from time to time by the parties to the Master Complementary Deposit Agreement in accordance with the terms of the Master Complementary Deposit Agreement. "MAXIMUM AMOUNT OF THE PROGRAM" means an amount equal to EUR 275,000,000, or any other amount as determined pursuant to Articles 7.1.2 and 7.1.3. Without prejudice to the provisions of Articles 7.1.2 and 7.1.3, it is expressly agreed between the Parties that the Maximum Amount of the Program shall be equal to EUR 165,000,000 as long as the Issuers shall only be LMA S.A. and Elixir Funding Limited. "MAXIMUM AMOUNT OF THE PURCHASER'S FUNDING" means the amount set out in Article 7.1. - 95 - "MAXIMUM CONCENTRATION RATE" means : - - 10%, in relation to the Debtors of the Renault Group, taken as a whole, as long as such Debtors maintain short-term ratings not lower than A2 / P2 from Moody's and Standard &Poor's, and 6% so long as such Debtors maintain short-term ratings lower than A2 / P2 but not lower than A3 / P3 from Moody's and Standard & Poor's; - - 10%, in relation to the Debtors of the Peugeot Group, taken as a whole, as long as such Debtors maintain short-term ratings not lower than A2 / P2 from Moody's and Standard &Poor's, and 6% so long as such Debtors maintain short-term ratings lower than A2 / P2 but not lower than A3 / P3 from Moody's and Standard & Poor's; - - 10%, in relation to the Debtors of the Michelin Group, taken as a whole, as long as such Debtors maintain short-term ratings not lower than A2 / P2 from Moody's and Standard &Poor's, and 6% so long as such Debtors maintain short-term ratings lower than A2 / P2 but not lower than A3 / P3 from Moody's and Standard & Poor's; - - 2%, in relation to the Debtors of the Massa Pneu Group, taken as a whole ; or - - 4%, in relation to any other Debtor and to any Debtors of a Debtor Group named above which does not maintain the ratings specified above as a condition to a higher Maximum Concentration Rate. "MAXIMUM OVERCOLLATERALISATION RATE" means, as of the Initial Settlement Date and on each Funded Settlement Date thereafter, the rate equal to 50 %. Such rate may be modified provided that there has been an amendment to the Master Subordinated Deposit Agreement. "MINIMUM AMOUNT OF THE PROGRAM" means, on the date hereof, the amount of EUR 27,500,000, as may be amended from time to time pursuant to the provisions of the Agreement. "MISCELLANEOUS ACCOUNTING CREDIT ENTRIES" means, in relation to any Seller, Miscellaneous Accounting Entries booked on the credit side of the account receivables of an Eligible Debtor. "MISCELLANEOUS ACCOUNTING DEBIT ENTRIES" means, in relation to any Seller, Miscellaneous Accounting Entries booked on the debit side of the account receivables of an Eligible Debtor. "MISCELLANEOUS ACCOUNTING ENTRIES" means, in relation to any Seller, accounting entries other than invoices, credit notes or cash payments that appear on the debit side or credit side of the account receivables of an Eligible Debtor. "NET MISCELLANEOUS RECEIVABLE" means, in relation to any Seller, any Purchasable Receivable corresponding to the amount equal to the Miscellaneous Accounting Debit Entries minus Miscellaneous Accounting Credit Entries. "NON ALLOCATED CASH" means any collection recorded in any Seller's accounting system, which has not yet posted to the payment of a receivable. - 96 - "NOTES" means any US commercial paper, Billets de Tresorerie or any other short-term notes such as a Euro commercial paper. "NOTICE OF TRANSFER" means any notice issued by the Purchaser or any entity, acting on behalf of the Purchaser and appointed by the same for such purpose, to any Debtor in accordance with a Receivables Purchase Agreement. "OUTSTANDING AMOUNT" means, at all times: (i) in relation to any Purchasable Receivables, the aggregate principal amount remaining due in respect of such Purchasable Receivables; (ii) in relation to any Eligible Receivables, the aggregate principal amount remaining due in respect of such Eligible Receivables; (iii) in relation to any Defaulted Receivables, the aggregate principal amount remaining due in respect of such Defaulted Receivables; (iv) in relation to any Delinquent Receivables, the aggregate principal amount remaining due in respect of such Delinquent Receivables; (v) in relation to any Sold Receivables, the aggregate principal amount remaining due in respect of such Sold Receivables; (vi) in relation to any Net Miscellaneous Receivables, the aggregate principal amount remaining due in respect of such Net Miscellaneous Receivables. The parties acknowledge that the Outstanding Amount of any receivables means the total net amount of such receivables (including all taxes less any credit notes issued, set-off, partial payments and other written off debts, as calculated by the Agent on the basis of the Assessment Reports and the electronic supports attached thereto). "OVERCOLLATERALISATION RATE" means, on each Calculation Date preceding the Initial Settlement Date or a Funded Settlement Date during the Replenishment Period, the rate determined in accordance with the provisions of Schedule 1 of the Master Subordinated Deposit Agreement. The Overcollateralisation Rate shall be calculated by the Agent on each Calculation Date preceding a Funded Settlement Date and shall apply with respect to the two next Settlement Dates. "PARTIES" means the parties to this Agreement. "PAYMENT" means any payment to be made by the Purchaser to the Centralising Unit, in accordance with article 4.1 of the relevant Receivables Purchase Agreement. "PERFORMANCE LETTER" means the performance letter granted by GOODYEAR DUNLOP TIRES EUROPE BV in the form set out in Schedule 10. - 97 - "POTENTIAL EARLY AMORTISATION EVENT" means any event or condition which, but for the giving of any notice or the lapse of any time period or both required for an Early Amortisation Event to occur under Article 13, would constitute an Early Amortisation Event. "PRIORITY AMOUNT" has the meaning set forth in Article 16.2. "PROGRAM EXPIRY DATE" means, in relation to any Seller and the Centralising Unit, the earlier of the following dates: (i) the Business Day, on or after the Commitment Expiry Date, on which all sums due to the Purchaser under this Agreement and the relevant Receivables Purchase Agreement have been fully paid; or (ii) the first Funded Settlement Date (included) falling on or after twelve (12) calendar months after the Commitment Expiry Date. "PROTECTED DEBTOR" means those German Debtors, which are either individual merchants (kaufleute) or commercial partnerships (Personenhandelsgesellschaften) organised as an Offene Handelsgesellschaft (OHG), Gesellschaft Burgerlichen Rechts (GBR) or Kommanditgesellschaft (KG). "PURCHASABLE RECEIVABLE" means any of the receivables of any Seller that meet the characteristics set forth in article 7 of the Receivables Purchase Agreement to which such Seller is a party. "PURCHASER" means ESTER FINANCE. "PURCHASER'S ACCOUNT" means the account number 30002/869/2739T/78, opened by the Purchaser in the books of CALYON. "PURCHASER'S COLLECTION ACCOUNT" means any of the bank account opened in the name of the Purchaser, as mentioned in the Collection Account Agreements. "PURCHASER'S FUNDING" means that portion of the Outstanding Amount of Eligible Receivables which is funded by the Purchaser out of the Senior Deposit, the amount of which is determined in accordance with Article 7 (Amount of the Purchaser's Funding). "PURCHASER'S TERMINATION NOTICE" means any notice issued by the Purchaser to the Centralising Unit in the circumstances set out in Article 13.2 or 13.4. "RATING AGENCIES" means Fitch Ratings, Moody's Investors Services and Standard & Poors, or any other entity to which such agencies may transfer their credit rating business or with which they may consolidate, amalgamate or merge. - 98 - "RECEIVABLES PURCHASE AGREEMENTS" means the receivables purchase agreements entered into between the Sellers, the Purchaser and the Agent for the purchase of the Purchasable Receivables under the Securitisation Transaction and more specifically: (i) a Receivables Purchase Agreement governed by French law entered into by the French Seller in respect of their Purchasable Receivables; (ii) a Receivables Purchase Agreement governed by German law entered into by the German Sellers in respect of their Purchasable Receivables; (iii) a Receivables Purchase Agreement governed by Italian law entered into by the Italian Seller in respect of its Purchasable Receivables; (iv) a Receivables Purchase Agreement governed by Spanish law entered into by the Spanish Seller in respect of its Purchasable Receivables. "REDUCTION OF THE COMPLEMENTARY DEPOSIT" means on any Settlement Date during the Replenishment Period, the excess, if any, of (a) the amount of the Complementary Deposit on the preceding Settlement Date over (b) the amount of the Complementary Deposit on such Settlement Date in accordance with the Master Complementary Deposit Agreement. "REDUCTION OF THE SUBORDINATED DEPOSIT" means on any Settlement Date during the Replenishment Period, the excess, if any, of (a) the amount of the Subordinated Deposit on the preceding Settlement Date over (b) the amount of the Subordinated Deposit on such Settlement Date in accordance with the Master Subordinated Deposit Agreement. "REGISTERED SHARE CAPITAL" has the meaning set forth in Article 3.6.3. "REPLENISHMENT PERIOD" means the period of time commencing on the date hereof and ending on the Commitment Expiry Date during which the Purchaser undertakes to purchase Purchasable Receivables on each Settlement Date. "RESPONSIBLE OFFICER" means the chief financial officer or treasurer of GOODYEAR or the Vice President, Finance or equivalent officer of GOODYEAR DUNLOP TIRES EUROPE BV. On the date hereof, the chief financial officer and the treasurer of GOODYEAR are, respectively, Richard Kramer and Darren Wells and the Vice President, Finance of GOODYEAR DUNLOP TIRES EUROPE BV is Ronn Archer. GOODYEAR DUNLOP TIRES EUROPE BV and GOODYEAR shall promptly update the name and contact details of such Responsible Officer. "SECURITISATION DOCUMENTS" means the Transaction Documents, the Master Senior Deposit Agreement, the transfer and servicing agreement to be concluded with the Fund, the Fund regulations and any Liquidity Agreements. "SECURITISATION TRANSACTION" means the securitisation transaction carried out pursuant to the Transaction Documents. "SELLERS" means, collectively, the French Seller, the German Sellers, the Italian Seller and the Spanish Seller. - 99 - "SENIOR DEPOSIT" means the deposits effected by the Depositor with the Purchaser in accordance with the terms of the Master Senior Deposit Agreement.. "SETTLEMENT DATE" means a Funded Settlement Date or an Intermediary Settlement Date. "SOLD RECEIVABLES" means, in relation to any Seller, those Purchasable Receivables (i) which have been purchased from such Seller by the Purchaser pursuant to the Receivables Purchase Agreement to which such Seller is a party, and (ii) which have not been repurchased from the Purchaser. "SOLVENCY CERTIFICATE" means any certificate issued by the Sellers and Centralising Unit, in the form of Schedule 5. "SPANISH SELLER" means GOODYEAR DUNLOP TIRES Espana SA. "STAND-BY FEE" means the management fee set out in Article 27.4. "STAND-BY SERVICER" means EUROFACTOR. "SUBORDINATED DEPOSIT" means any subordinated deposit effected by the Centralising Unit with the Purchaser in accordance with the terms of Article 8 and the Master Subordinated Deposit Agreement. "SUBORDINATED DEPOSITOR" means the Centralising Unit. "SUBSIDIARY" means with respect to an entity (the "Parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which are consolidated with those of the Parent in the Parent's consolidated statements in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the Parent or one or more subsidiaries of the Parent or by the Parent and one or more subsidiaries of the Parent. "TARGET DAY" means a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is operating. "TRANSACTION DOCUMENTS" means this Agreement, the Master Subordinated Deposit Agreement, the Master Complementary Deposit Agreement, the Receivables Purchase Agreements, the Collection Account Agreements, the Comfort Letter and the Performance Letter. "TRANSFER DEED" means any bordereau referred to in each Receivables Purchase Agreement, which shall be issued by the relevant Seller or the Centralising Unit, acting in the name and on behalf of each Seller, on each Settlement Date during the Replenishment Period, in the form of schedule 2 of the relevant Receivables Purchase Agreement. - 100 - "USD" or "US DOLLAR" refers to the lawful currency of the United States of America. "VAT CREDIT" has the meaning set forth in Article 14.2. "YEAR END REBATES" means deferred rebates granted by any Seller at the end of each year (or according to any periodicity) to some of its customers according to the fulfillment of their purchase commitments. These Year End Rebates may give rise to Credit Notes issued by the Sellers or to invoices issued by the customers over the relevant Sellers. - 101 - SCHEDULE 16. FINANCIAL COVENANTS DEFINITIONS "CONSOLIDATED EBITDA" of any Person means, for any period, Consolidated Net Income of such Person for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such period, (ii) income tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) all non-cash non-recurring charges for such period, (v) all Rationalization Charges for such period, (vi) other expense for such period, (vii) equity in losses of affiliates for such period, (viii) foreign exchange currency losses for such period and (ix) minority interest in net income of subsidiaries for such period, minus (b) without duplication, to the extent included in determining such Consolidated Net Income (except with respect to (ii) and (iii) below), (i) any non-cash extraordinary gains for such period, (ii) cash expenditures (other than Rationalization Charges) during such period in respect of items that resulted in non-cash non-recurring charges during any prior period after the date hereof, (iii) Excess Cash Rationalization Charges, (iv) other income for such period, (v) equity in earnings of affiliates for such period, (vi) foreign exchange currency gains for such period and (vii) minority interest in net losses of subsidiaries for such period, all determined on a consolidated basis in accordance with GAAP. "CONSOLIDATED INTEREST EXPENSE" of any Person means, for any period the sum of, without duplication, (a) the consolidated interest expense (including imputed interest expense in respect of Capital Lease Obligations and excluding fees and other origination costs included in interest expense and arising from Indebtedness incurred at any time) of such Person and its Consolidated Subsidiaries for such period, determined in accordance with GAAP but excluding capitalized interest, (b) all cash dividends paid during such period in respect of Permitted Preferred Stock and (c) all finance expense related to Securitization Transactions, excluding amortization of origination and other fees. "CONSOLIDATED NET INCOME" of any Person means, for any period, the net income or loss of such Person and its Consolidated Subsidiaries for such period determined in accordance with GAAP. "CONSOLIDATED NET INDEBTEDNESS" means, at any time, the sum for GOODYEAR DUNLOP TIRES EUROPE BV and its Consolidated Subsidiaries at such time, without duplication, of (a) all Indebtedness that is included on GOODYEAR DUNLOP TIRES EUROPE BV's consolidated balance sheet (excluding any Indebtedness owed to GOODYEAR or any of its Subsidiaries), minus the excess, if any, of the sum for GOODYEAR DUNLOP TIRES EUROPE BV and its Consolidated Subsidiaries of all cash and Permitted Investments, over USD 100,000,000. "CONSOLIDATED NET WORTH" means, as of the last day of any fiscal quarter, (a) the sum for GOODYEAR of (i) the stated value of outstanding common stock, (ii) capital surplus and (iii) retained earnings, excluding for purposes of such calculation the effect of (A) all non-cash non-recurring charges (including the $84,700,000 of charges incurred in connection with - 102 - GOODYEAR's restatement of its financial statements from 1998 through the second quarter of 2003, reflected in SEC filings made in the fourth quarter of 2003), and all non-cash Rationalization Charges and (B) all losses and gains on sales of assets other than in the ordinary course of business and all other non-cash non-recurring gains, in each case in (A) and (B) above after December 31, 2002, minus (b) any portion of the amount computed pursuant to clause (a) of this definition that is attributable to Tire & Wheel Assemblies, Inc. "CONSOLIDATED SENIOR SECURED INDEBTEDNESS" means, at any time, the sum for Goodyear and its Consolidated Subsidiaries at such time, without duplication, of (a) all Indebtedness that is included on Goodyear's consolidated balance sheet and is secured by any assets of Goodyear or a Consolidated Subsidiary of Goodyear, (b) all Capital Lease Obligations, (c) all synthetic lease financings, (d) all Indebtedness of South Pacific Tyres that is secured by any of its assets or by assets of the Borrower or a Consolidated Subsidiary and (e) all Securitization Transactions, all determined in accordance with GAAP. For purposes of computing Consolidated Senior Secured Indebtedness, the amount of any synthetic lease financing shall equal the amount that would be capitalized in respect of such lease if it were a Capital Lease Obligation. "EXCESS CASH RATIONALIZATION CHARGES" means, for any period, (i) with respect to GOODYEAR, cash expenditures of GOODYEAR and its Consolidated Subsidiaries with respect to Rationalization Charges recorded on Goodyear's consolidated income statement after March 31, 2003; provided, however, that for such cash expenditures incurred after September 1, 2003, Excess Cash Rationalization Charges shall only include the aggregate amount of such cash expenditures which exceed the sum of USD 100,000,000 (or USD 50,000,000 if incurred prior to December 31, 2003) plus 25% of the Net Cash Proceeds from the issuance and sale of its Equity Interests or Indebtedness pursuant to Section 6.01(q) of the European Credit Facility and (ii) with respect to GOODYEAR DUNLOP TIRES EUROPE BV, cash expenditures of GOODYEAR DUNLOP TIRES EUROPE BV and its Consolidated Subsidiaries with respect to Rationalization Charges recorded on GOODYEAR DUNLOP TIRES EUROPE BV's consolidated income statement after March 31, 2003; provided, however, that for such cash expenditures incurred after September 1, 2003, Excess Cash Rationalization Charges shall only include the aggregate amount of such cash expenditures which exceed the sum of USD 50,000,000 plus 12.5% of the Net Cash Proceeds from the issuance and sale by GOODYEAR of its Equity Interests or Indebtedness pursuant to Section 6.01(q) of the European Credit Facility. "RATIONALIZATION CHARGES" means, for any period, cash and non-cash charges related to rationalization actions designed to reduce capacity, eliminate redundancies and reduce costs. "CAPITAL LEASE OBLIGATIONS", "CONSOLIDATED SUBSIDIARY", "EQUITY INTERESTS", "INDEBTEDNESS", "PERSON", "NET CASH PROCEEDS", "PERMITTED PREFERRED STOCK" and "SECURITIZATION TRANSACTION" have the meanings given to such terms in the European Credit Facility as in effect on the date hereof, and any amendments thereto that have been made in connection with any Applicable Waiver or Amendment. - 103 - EX-4.2 3 l12143aexv4w2.txt EX-4.2 MASTER SUBORDINATED DEPOSIT AGREEMENT EXHIBIT 4.2 GOODYEAR - -------------------------------------------------------------------------------- MASTER SUBORDINATED DEPOSIT AGREEMENT - -------------------------------------------------------------------------------- DATED 10 DECEMBER, 2004 Between EUROFACTOR as Agent CALYON as Calculation Agent ESTER FINANCE TITRISATION as Purchaser AND GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V. as Subordinated Depositor or Centralising Unit [GIDE LOYRETTE NOUEL LOGO] - -------------------------------------------------------------------------------- ASSOCIATION D'AVOCATS A LA COUR DE PARIS 26, COURS ALBERT 1ER 75008 PARIS TEL. +33 (0)1 40 75 60 00 FAX +33 (0)1 43 59 37 79 E-MAIL INFO@GIDE.COM WWW.GIDE.COM TABLE OF CONTENTS ARTICLE 1. Definitions............................................................... 5 ARTICLE 2. Interpretation............................................................ 5 ARTICLE 3. Purpose of this Agreement................................................. 6 ARTICLE 4. Duration of the Agreement................................................. 6 ARTICLE 5. Amount of the Subordinated Deposit........................................ 7 ARTICLE 6. No interest - no unavailability fee....................................... 8 ARTICLE 7. Repayment................................................................. 9 ARTICLE 8. Payments.................................................................. 10 ARTICLE 9. Representations and warranties............................................ 10 ARTICLE 10. Application of the Subordinated Deposit as cash collateral for the benefit of the Purchaser.................................................. 11 ARTICLE 11. Fees and expenses......................................................... 12 ARTICLE 12. Substitution and agency................................................... 12 ARTICLE 13. Confidentiality........................................................... 12 ARTICLE 14. Transferability of this Agreement......................................... 13 ARTICLE 15. Notices................................................................... 13 ARTICLE 16. Exercise of rights........................................................ 13 ARTICLE 17. Indivisibility............................................................ 14 ARTICLE 18. Partial invalidity........................................................ 14 ARTICLE 19. Amendments................................................................ 14 ARTICLE 20. Limited recourse - Non petition........................................... 15 ARTICLE 21. Governing law - jurisdiction.............................................. 15 SCHEDULE 1. CALCULATION OF THE OVERCOLLATERALISATION RATE............................. 17 SCHEDULE 2. CALCULATION OF THE SUBORDINATED DEPOSIT................................... 20 - 2 - BETWEEN 1. EUROFACTOR, a company incorporated under French law, authorised as a credit institution (etablissement de credit) and having its registered office at Tour d'Asnieres, 4, avenue Laurent Cely, 92608 Asnieres, France, registered with the Trade and Companies Registry of Nanterre under the number 642 041 560, whose representative is duly authorised for the purpose of this agreement (the "AGENT"); 2. CALYON, a company incorporated under French law and authorised as a credit institution (etablissement de credit), having its registered office at 9 quai du President Paul Doumer, 92920 Paris La Defense Cedex, France, registered with the Trade and Companies Registry of Nanterre under the number 304 187 701, whose representatives are duly authorised for the purpose of this agreement (the "CALCULATION AGENT"); 3. ESTER FINANCE TITRISATION, a limited company with a management and supervisory board (societe anonyme a directoire et conseil de surveillance) incorporated under French law and authorised as a credit institution (etablissement de credit), having its registered office at 19 Boulevard des Italiens, 75002 Paris, France, registered with the Trade and Companies Registry of Paris under the number 414 886 226, whose representative is duly authorised for the purpose of this agreement ("ESTER FINANCE" or the "PURCHASER"); 4. GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V., a company incorporated under Dutch law, having its registered office at Deboelelaan 7, 1083 HJ, Amsterdam, The Netherlands, registered with the Trade and Companies Registry of Amsterdam under the number 34197964, whose representative is duly authorised for the purpose of this agreement (hereafter referred to as the "CENTRALISING UNIT" or the "SUBORDINATED DEPOSITOR"). - 3 - WHEREAS GOODYEAR DUNLOP TIRES France S.A., FULDA REIFEN GmbH & Co KG, M-PLUS MULTIMARKENMANAGEMENT GmbH & Co KG, GOODYEAR GmbH & Co KG, DUNLOP GmbH & Co KG, GOODYEAR DUNLOP TIRES Italia SpA and GOODYEAR DUNLOP TIRES Espana SA (the "SELLERS") are in the business of manufacturing and/or supplying tyres and activities relating thereto, and hold receivables over their respective debtors. In order to provide financing to the Sellers, CALYON as arranger has proposed to set up a securitisation transaction by way of the sale, on an ongoing basis, of trade receivables resulting from the usual business of the Sellers in France, Germany, Italy and Spain. For such purposes, ESTER FINANCE has undertaken to purchase certain trade receivables held by the Sellers (the "PURCHASABLE RECEIVABLES") by way of a transfer of receivables pursuant to the provisions of the French law governed General Master Purchase Agreement (the "GENERAL MASTER PURCHASE AGREEMENT") and the receivables purchase agreements (the "RECEIVABLES PURCHASE AGREEMENTS") governed by French, German, Italian and Spanish law depending of the laws of the incorporation of the relevant Seller. ESTER FINANCE shall fund the acquisition of Purchasable Receivables: (i) partly out of a senior deposit (the "SENIOR DEPOSIT") effected by the Depositor with the Purchaser in accordance with a master senior deposit agreement (the "MASTER SENIOR DEPOSIT AGREEMENT") and (ii) partly by way of set-off against any amount due and payable by the Centralising Unit to the Purchaser in connection with (a) a subordinated deposit (the "SUBORDINATED DEPOSIT") to be effected by the Centralising Unit with the Purchaser in accordance with the terms and conditions of the present master subordinated deposit agreement (the "MASTER SUBORDINATED DEPOSIT AGREEMENT") and (b) a complementary deposit (the "COMPLEMENTARY DEPOSIT") to be effected by the Centralising Unit with the Purchaser in accordance with the terms and conditions of a master complementary deposit agreement (the "MASTER COMPLEMENTARY DEPOSIT AGREEMENT"). The Purchaser and the Subordinated Depositor are willing to define the terms and conditions according to which the Subordinated Deposit shall be made by the Subordinated Depositor with the Purchaser and shall be pledged as cash collateral in favour of the Purchaser and have agreed to enter into this agreement under the terms and subject to the conditions set forth hereunder. - 4 - NOW IT IS HEREBY AGREED AS FOLLOWS: CHAPTER I - INTERPRETATION ARTICLE 1. DEFINITIONS Capitalised terms and expressions used in this Master Subordinated Deposit Agreement shall have the same meaning as ascribed to such terms and expressions in the glossary attached as schedule 1 to the General Master Purchase Agreement. ARTICLE 2. INTERPRETATION (i) The titles of the Chapters, the Schedules and the Articles (including their paragraphs) used herein and the table of contents are for convenience of reference only, and shall not be used to interpret this Master Subordinated Deposit Agreement. (ii) In this Master Subordinated Deposit Agreement, except if the context calls for another interpretation: (a) references to "CHAPTERS", "ARTICLES" and "SCHEDULES" shall be construed as references to the chapters, articles and schedules of this Master Subordinated Deposit Agreement and references to this Master Subordinated Deposit Agreement include its schedules; (b) words in the plural shall cover the singular and vice versa; (c) references to the time of the day shall refer to Paris time, unless otherwise stipulated; (d) references to a person shall include its permitted assignees, transferees and successors; (e) references to a document shall mean this document, as amended, replaced by novation or varied from time to time; (f) references to "PARTIES" must be interpreted as references to the parties to the present agreement, and to a "PARTY" shall refer to any of the Parties. - 5 - CHAPTER II - PURPOSE - DURATION ARTICLE 3. PURPOSE OF THIS AGREEMENT 3.1 The Subordinated Depositor shall make a Subordinated Deposit with the Purchaser in accordance with the terms of this Master Subordinated Deposit Agreement. 3.2 The Subordinated Deposit made by the Subordinated Depositor under this Master Subordinated Deposit Agreement shall be applied and pledged as cash collateral (affecte a titre de gage-especes) in favour of the Purchaser in accordance with and subject to the provisions of Article 10 below. All repayments of principal to be made by the Purchaser to the Subordinated Depositor in respect of the Subordinated Deposit shall be made up to the amount and to the extent of the sums received by the Purchaser in respect of the Sold Receivables in the manner described under Article 7 below. During the Amortisation Period, such repayments under the Subordinated Deposit shall be subject to the order of priority of payments provided for under article 16 of the General Master Purchase Agreement and shall, in particular, occur after the full and definitive repayment of any sum due under the Senior Deposit. The Subordinated Depositor agrees that, for the purposes of the repayment of sums due to it under the Subordinated Deposit or otherwise under this Agreement prior to the Program Expiry Date, it will look solely to the amount of the sums received by the Purchaser under the General Master Purchase Agreement until the Program Expiry Date in respect of the Sold Receivables and that the Subordinated Depositor shall not, in such capacity, take or pursue any judicial or other proceedings, or exercise any right or remedy that it might otherwise have against the Purchaser or the Purchaser's assets save to the extent required for the recovery of such sums. ARTICLE 4. DURATION OF THE AGREEMENT 4.1 This Agreement shall enter into force on the date hereof and shall terminate on the Program Expiry Date. 4.2 The Subordinated Deposit shall be repaid in the manner described in Article 7 below. - 6 - CHAPTER III - AMOUNT OF THE SUBORDINATED DEPOSIT ARTICLE 5. AMOUNT OF THE SUBORDINATED DEPOSIT 5.1 Amount of the Subordinated Deposit On each Calculation Date preceding a Settlement Date during the Replenishment Period, the amount of the Subordinated Deposit shall be calculated in accordance with the provisions of Schedule 1 and Schedule 2. On each Calculation Date, during the Replenishment Period, the Agent shall calculate the difference between (i) the amount of the Subordinated Deposit on the following Settlement Date, and (ii) the amount of the Subordinated Deposit on the preceding Settlement Date. During the Amortisation Period until the Program Expiry Date, the amount of the Subordinated Deposit shall be equal to the amount of the Subordinated Deposit as at the last Funded Settlement Date, and shall be repaid, after full repayment of the Senior Deposit, in accordance with the provisions of Article 7. The amount of the Subordinated Deposit shall be calculated by the Agent on each Calculation Date. 5.2 Calculation and setting up of the Subordinated Deposit 5.2.1 Calculation (i) At the latest on the Calculation Date preceding the Initial Settlement Date, the Agent shall calculate and notify forthwith the Purchaser and the Subordinated Depositor the amount of the Subordinated Deposit to be made in accordance with Article 5.1 above on the Initial Settlement Date, together with the details of such calculation. (ii) On each Calculation Date thereafter during the Replenishment Period, the Agent shall calculate and notify forthwith the Purchaser and the Subordinated Depositor of the difference between (i) the amount of the Subordinated Deposit on the related Settlement Date, and (ii) the amount of the Subordinated Deposit on the preceding Settlement Date, together with the details of such calculation. If the new amount of the Subordinated Deposit is higher than the amount of the Subordinated Deposit on the preceding Settlement Date, the Subordinated Deposit shall be increased by the Euro amount of the difference (the "INCREASE IN THE SUBORDINATED DEPOSIT"). If the new amount of the Subordinated Deposit is lower than the amount of the Subordinated Deposit on the preceding Settlement Date, the Subordinated Deposit shall be reduced by the Euro amount of the difference (the "REDUCTION OF THE SUBORDINATED DEPOSIT"). - 7 - For the avoidance of doubt, any reference to the Subordinated Deposit in the Transaction Documents shall be to the Subordinated Deposit as it may be increased or reduced in accordance with this Article 5.2.1. 5.2.2 Setting up of the Subordinated Deposit (i) On the Initial Settlement Date, before 9.00 a.m. (Paris time), the Subordinated Depositor shall make a Subordinated Deposit in Euro with the Purchaser. Such Subordinated Deposit shall be made by crediting the Current Account, for the amount calculated in accordance with Article 5.2.1 (i) above, in accordance with and subject to the provisions of article 6.4 of the General Master Purchase Agreement. (ii) On each Settlement Date after the Initial Settlement Date, during the Replenishment Period, before 9.00 a.m. (Paris time): (a) the Subordinated Depositor shall make a deposit in respect of the Subordinated Deposit in Euro with the Purchaser, for an amount corresponding to any Increase in the Subordinated Deposit, as calculated in accordance with Article 5.2.1 (ii) above; or (b) the Purchaser shall repay a portion of the Subordinated Deposit to the Subordinated Depositor, for an amount corresponding to any Reduction of the Subordinated Deposit, as calculated in accordance with Article 5.2.1 (ii) above, subject to the provisions of Article 7 below. The payments to be made pursuant to (i) and (ii) above shall be effected in accordance with and subject to the provisions of article 6.4 of the General Master Purchase Agreement. ARTICLE 6. NO INTEREST - NO UNAVAILABILITY FEE The Purchaser and the Subordinated Depositor hereby expressly agree that the Subordinated Deposit shall not bear interest and that no unavailability fee shall be paid to the Subordinated Depositor in relation to the making of the Subordinated Deposit. The Subordinated Depositor acknowledges that it has entered into intercompany arrangements with the Sellers (the "INTERCOMPANY ARRANGEMENTS") pursuant to which the Subordinated Depositor will receive from each Seller any necessary consideration for the making of the Subordinated Deposit and will be indemnified in an appropriate manner by each Seller in accordance with its corporate interest and in respect of the losses incurred by it as a result of the Subordinated Deposit made under this Master Subordinated Deposit Agreement. - 8 - CHAPTER IV - REPAYMENT - PAYMENTS ARTICLE 7. REPAYMENT 7.1 Principle The repayment of the Subordinated Deposit, which shall be carried out until the Program Expiry Date, shall always be subject to (i) the provisions of Article 3.2 above and (ii) the order of priority of payments set forth under article 16 of the General Master Purchase Agreement and Article 7.2 below, and in particular shall be subject to the full repayment of any amount due under the Senior Deposit. 7.2 Repayment of the Subordinated Deposit 7.2.1 On each Settlement Date during the Replenishment Period, the Purchaser shall repay, if applicable, the Subordinated Deposit to the Subordinated Depositor, for an amount equal to any Reduction of the Subordinated Deposit in the manner calculated under Article 5.2.1 above. 7.2.2 On each Settlement Date during the Amortisation Period, and until the Program Expiry Date, the Purchaser shall repay to the Subordinated Depositor the Subordinated Deposit, to the extent of the amount resulting from the allocations set out in article 16 of the General Master Purchase Agreement. The Parties agree that, for the avoidance of doubt, and in accordance with the order of priority set forth under article 16 of the General Master Purchase Agreement which the Centralising Unit expressly acknowledges and accepts, the Subordinated Deposit shall not be repaid during the Amortisation Period, inter alia, until full repayment of the Senior Deposit. 7.2.3 Such repayment shall be effected by means of the Distributed Amounts received by the Purchaser under the Sold Receivables until the Program Expiry Date and in accordance with the order of priority of payments as described in article 16 of the General Master Purchase Agreement. 7.2.4 In the event that, on the Program Expiry Date, the Subordinated Deposit has not been repaid in full in accordance with the provisions of this Master Subordinated Deposit Agreement, the Purchaser shall be irrevocably released from any repayment obligations hereunder. 7.3. In the event that during the Amortisation Period, the Centralising Unit, acting in the name and on behalf of the Sellers, repurchases all outstanding Sold Receivables from the Purchaser in accordance with article 4.3 of the General Master Purchase Agreement, the purchase price of such Sold Receivables shall be applied by the Purchaser to the repayment of the Subordinated Deposit in the order specified in article 16 of the General Master Purchase Agreement. - 9 - ARTICLE 8. PAYMENTS 8.1 All payments to be made in accordance with this Master Subordinated Deposit Agreement shall be made in Euro. 8.2 All repayments of principal and all payments falling due on a day which is not a Business Day shall instead fall due on the following Business Day. 8.3 At any time, until the Program Expiry Date, subject to article 6 of the General Master Purchase Agreement, the Purchaser shall be entitled to set-off (i) any amount due and payable by the Purchaser to the Subordinated Depositor in respect of the Subordinated Deposit and (ii) any amount due and payable by the Subordinated Depositor to the Purchaser under this Agreement or any of the Transaction Documents. CHAPTER V - GENERAL PROVISIONS ARTICLE 9. REPRESENTATIONS AND WARRANTIES The Subordinated Depositor hereby represents and warrants to the Purchaser, as follows: (i) it is a liability company duly incorporated and validly existing under Dutch law and has the capacity (a) to carry on its business, as currently conducted, and to own all of the assets appearing on its balance sheet, except where not having such capacity would not be reasonably likely to result in a Material Adverse Effect, and (b) to enter into and perform its obligations under this Master Subordinated Deposit Agreement; (ii) the execution of this Master Subordinated Deposit Agreement does not require any authorisation with respect to the Subordinated Depositor that has not already been obtained and communicated to the Purchaser, unless, in the case of any Governmental Authorisation, the failure to obtain such authorisation would not be reasonably likely to result in a Material Adverse Effect; (iii) the execution of this Master Subordinated Deposit Agreement and the performance of the obligations under this Master Subordinated Deposit Agreement do not contravene any of the provisions of the Subordinated Depositor's articles and memorandum of association, agreements or undertakings to which it is a party or by which it is bound, and do not in any manner contravene the statutes and regulations applicable to it, except, in each case, to the extent that no Material Adverse Effect would result from such breach; (iv) the obligations arising out of this Master Subordinated Deposit Agreement are binding on the Subordinated Depositor and enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium and other laws affecting creditors' rights generally; - 10 - (v) in the event that, in accordance with the provisions of this Master Subordinated Deposit Agreement and the General Master Purchase Agreement, the Subordinated Depositor is not repaid in full on the Program Expiry Date, the Subordinated Depositor shall incur any losses out of its own business, and the Purchaser shall not be liable, in any manner whatsoever, in this respect (except, as the case may be, as provided in article 4.2 (b) of the General Master Purchase Agreement); and (vi) the constitution of the Subordinated Deposit as cash collateral (affectation a titre de gage especes) in favour of the Purchaser, as set forth in Article 10 below, complies with the Subordinated Depositor's corporate interest and does not exceed its financial capabilities; the Subordinated Depositor has entered into Intercompany Arrangements with the Sellers and GOODYEAR DUNLOP TIRES EUROPE B.V., pursuant to which the Subordinated Depositor shall receive from each Seller any necessary consideration for making the Subordinated Deposit and shall be indemnified as is appropriate by each Seller and GOODYEAR DUNLOP TIRES EUROPE B.V. in respect of the losses incurred by the Subordinated Depositor as a result of the Subordinated Deposit made under this Master Subordinated Deposit Agreement. CHAPTER VI - CASH COLLATERAL ARTICLE 10. APPLICATION OF THE SUBORDINATED DEPOSIT AS CASH COLLATERAL FOR THE BENEFIT OF THE PURCHASER 10.1 The Subordinated Depositor hereby irrevocably agrees that the Subordinated Deposit made under this Agreement shall, by virtue of this Article, be pledged and consequently applied as cash collateral (affecte a titre de gage-especes) by the Centralising Unit in favour of the Purchaser until the Program Expiry Date, to secure the payment of (i) any sum due by the Debtors to the Purchaser in respect of the Sold Receivables and (ii) any sum due to the Purchaser by any Seller or the Centralising Unit pursuant to the Transaction Documents. The Subordinated Depositor hereby irrevocably agrees that the pledge and application of the Subordinated Deposit as cash collateral (affectation du depot subordonne a titre de gage-especes) in favour of the Purchaser shall transfer to the Purchaser the ownership of those sums received under the Subordinated Deposit. 10.2 The cash collateral (gage-especes) shall be deemed created and effective as of the date on which the Subordinated Deposit is made with the Purchaser. 10.3 The obligation of the Purchaser to transfer back to the Subordinated Depositor the Subordinated Deposit (creance en restitution) shall automatically be reduced by any principal amount paid by the Purchaser to the Subordinated Depositor on account of the Subordinated Deposit in accordance with Article 7 above. 10.4 The outstanding amount of the Subordinated Deposit, as of the Program Expiry Date shall be applied by the Purchaser against the aggregate of (a) any remaining sums due to the Purchaser in respect of the Sold Receivables, and (b) any remaining sums due to the - 11 - Purchaser by the Sellers or the Centralising Unit pursuant to the Transaction Documents, remaining due as of the Program Expiry Date. The amount so applied shall automatically reduce the obligation of the Purchaser, to transfer back the outstanding amount of the Subordinated Deposit to the Subordinated Depositor (creance en restitution). CHAPTER VII - MISCELLANEOUS ARTICLE 11. FEES AND EXPENSES The Subordinated Depositor, in the name and on behalf of the Sellers, shall bear, in particular, any costs and expenses incurred by CALYON as arranger, EUROFACTOR as Agent, and ESTER FINANCE, in accordance with article 29 of General Master Purchase Agreement. ARTICLE 12. SUBSTITUTION AND AGENCY Each Party shall have the right to be assisted by, to appoint or to substitute for itself one or more third parties in the performance of certain tasks provided that: (i) such Party has given prior written notice of the exercise of that right to the other Parties; (ii) such Party remains liable to the other Parties for the proper performance of those tasks and that the relevant third party/parties has or have expressly renounced any right to any contractual claim against the other Parties; (iii) the relevant third party/parties undertake(s) to comply with all obligations binding upon such Party under this Master Subordinated Deposit Agreement; and (iv) the substitution, assistance or agency shall not entail an increase in the costs incurred by the other Parties. The Parties acknowledge however that, in order to avoid doubt, this Article shall not apply to the Subordinated Depositor in respect of the making of the Subordinated Deposit. ARTICLE 13. CONFIDENTIALITY For the purposes to this Master Subordinated Deposit Agreement, the Parties agree to be bound by the provisions relating to confidentiality as provided for by article 31 of the General Master Purchase Agreement. - 12 - ARTICLE 14. TRANSFERABILITY OF THIS AGREEMENT Subject to article 12 above, this Master Subordinated Deposit Agreement is concluded on the intuitu personae of the Parties to this Master Subordinated Deposit Agreement. Therefore, none of the Parties may transfer this Master Subordinated Deposit Agreement, or its rights and/or obligations hereunder, to any third party whatsoever, without the prior written consent of the other Parties. ARTICLE 15. NOTICES 15.1. Except as otherwise set forth in the Transaction Documents, all notices, requests or communications which must or may be made pursuant to this Master Subordinated Deposit Agreement shall be by way of writing, mail or fax. 15.2. All notices, requests or communications to be made and all documents to be delivered from one Party to the other Party under the Master Subordinated Deposit Agreement shall be made and delivered to the addressees referred to in schedule 7 to the General Master Purchase Agreement. 15.3. All notices, requests or communications made and all documents delivered under the Master Subordinated Deposit Agreement shall only take effect upon the date of their receipt by its addressee. 15.4. Each of the Parties may at any time modify the addressee of the notices, requests or communications to be made and the documents to be delivered to it under the Master Subordinated Deposit Agreement by sending to that effect a letter or fax to the other Party indicating the name of the new addressee. 15.5. The Parties agree that the Centralising Unit shall be responsible for receiving written notice on behalf of the Sellers, and that any notice given by the Purchaser to the Sellers and delivered to the Centralising Unit shall be deemed validly received by all of the Sellers upon receipt by the Centralising Unit. ARTICLE 16. EXERCISE OF RIGHTS 16.1 All rights conferred on the Purchaser under this Master Subordinated Deposit Agreement or by any other document delivered pursuant to or incidental to this Master Subordinated Deposit Agreement or any Transaction Document, including rights conferred by law, shall be cumulative and may be exercised at any time. 16.2 The fact that the Purchaser or the Subordinated Depositor does not exercise a right or delays in doing so shall in no way be construed as a waiver of that right. The exercise of any right or a partial exercise shall not prevent the Purchaser or the Subordinated Depositor from exercising such a right again in the future, or from exercising any other right. - 13 - ARTICLE 17. INDIVISIBILITY Each Party acknowledges that the General Master Purchase Agreement, the Master Subordinated Deposit Agreement and the Master Complementary Deposit Agreement shall form a single set of contractual rights and obligations and that, if the General Master Purchase Agreement, or the Master Complementary Deposit Agreement becomes void or ceases to be effective and enforceable for any reason whatsoever, this Master Subordinated Deposit Agreement shall also become void or cease to be effective and enforceable accordingly. Any payment already made by the Centralising Unit acting in the name and on behalf of the Sellers or on its own behalf to the Purchaser under this Master Subordinated Deposit Agreement, the General Master Purchase Agreement, the Receivables Purchase Agreements, the Master Subordinated Deposit Agreement and the Master Complementary Deposit Agreement shall not be affected by such a nullity, ineffectiveness or unenforceability. ARTICLE 18. PARTIAL INVALIDITY If one or more provisions of this Master Subordinated Deposit Agreement is or becomes invalid, illegal or unenforceable in any respect in any jurisdiction or with respect to any Party, such invalidity, illegality or unenforceability in such jurisdiction or with respect to such Party or Parties shall not, to the fullest extent permitted by applicable law, render invalid, illegal or unenforceable such provision or provisions in any other jurisdiction or with respect to any other Party or Parties hereto. Such invalid, illegal or unenforceable provision shall be replaced by the Parties to such contract with a provision which comes as close as reasonably possible to the intentions of the invalid, illegal or unenforceable provision. Any fees, costs and expenses incurred by the Parties in connection with any amendment necessary or advisable pursuant to this Article shall be borne exclusively by the Subordinated Depositor. ARTICLE 19. AMENDMENTS No amendment to this Master Subordinated Deposit Agreement may be made without the written consent of each other Party thereto and (a) unless the Rating Agencies (i) have been informed and provided by the Arranger with all necessary details they may require in respect of such contemplated amendment and (ii) have confirmed that the contemplated amendment will not entail a downgrading or withdrawal of the current ratings of any Notes issued by the Issuers, or that the contemplated amendment will reduce a downgrading or withdrawal which would otherwise occur, but for such amendment being made, and (b) each Issuer and each Liquidity Bank has given its prior written consent to such amendment (such consent not being unreasonably withheld or delayed). - 14 - ARTICLE 20. LIMITED RECOURSE - NON PETITION 20.1. Limited recourse Each of the Parties agrees to limit their respective claims and recourse against ESTER FINANCE (including in the event of a breach by ESTER FINANCE of any of its representations and warranties, or any of its obligations hereunder) to the amount of the Available Funds on the relevant date. 20.2. Non Petition Each of the Parties irrevocably and unconditionally undertakes and agrees: (a) not to exercise any rights of contractual or other recourse which it may have against ESTER FINANCE in the event of a breach by ESTER FINANCE of any of its representations and warranties, or any of its obligations under this Master Subordinated Deposit Agreement, except in the event of the gross negligence (faute lourde) or wilful misconduct (dol) on the part of ESTER FINANCE; and (b) not to institute any legal proceedings, take other steps or institute other proceedings against ESTER FINANCE, the purpose or effect of which is the appointment of a conciliator or an ad hoc agent, or the opening of receivership proceedings or insolvency proceedings (redressement judiciaire or liquidation judiciaire) or any other similar proceedings. ARTICLE 21. GOVERNING LAW - JURISDICTION 21.1 This Master Subordinated Deposit Agreement shall be governed by French law. 21.2 Any dispute as to the validity, interpretation, performance or any other matter arising out of this Master Subordinated Deposit Agreement shall be subject to the jurisdiction of the competent courts of Paris (Cour d'appel de Paris). The choice of this jurisdiction is entirely for the benefit of the Purchaser which shall retain the right to bring proceedings in any other competent court. - 15 - Executed in four (4) originals in Paris on 10 December, 2004. ESTER FINANCE /s/ Richard Sinclair ----------------------------------- Name : Richard Sinclair Title : Director General GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V. /s/ Ronald M. Archer ----------------------------------- Name : Ronald M. Archer Title : Vice President-Finance and Chief Financial Officer EUROFACTOR /s/ Nathalie Rossen ----------------------------------- Name : Nathalie Rossen Title : Responsible Titrisation CALYON /s/ Richard Sinclair /s/ G. Campagne-Simon - ------------------------------ ---------------------------- Name : Richard Sinclair Name : G. Campagne-Simon Title : Executive Director Title : - 16 - SCHEDULE 1. CALCULATION OF THE OVERCOLLATERALISATION RATE EUROFACTOR calculates the Overcollateralisation Rate for each Funded Settlement Date applied for such Funded Settlement Date and the next Intermediary Settlement Date during the Replenishment Period as follows: Criteria such as theoretical DSO, loss horizon and dilution horizon could be updated during the life time of the program, according to any change in the collecting and management procedures of the Sellers as noticed during the follow-up audits. OVERCOLLATERALISATION RATE (m) (*) = MAXIMUM [30%; Maximum [Loss Reserve (m) + Dilution Reserve (m); Floor Reserve (m)] + YER Reserve (m) + Customer/Supplier Reserve (m)] (*) As used herein, "m" means, with respect to any Funded Settlement Date, as the case may be, the Assessment Date related to the preceding Intermediary Settlement Date or the calendar month ending on such Assessment Date and "m-X" means the Xth calendar month preceding such calendar month. 1. LOSS RESERVE - - Theoretical days of sales outstanding(DSO) : 81 days (**) - - Defaulted Receivables period : beyond 90 days past due - - Stress factor : 2,25 - - Loss horizon : 5 months and 26 days (***) X months and Y days LOSS RESERVE (m) = Stress factor * Loss horizon ratio (m) * maximum within the last 12 months of the Loss ratio (m) Loss horizon ratio (m) = [Y/30 * Turnover (m-X) + Turnover (m-[X-1]) + Turnover (m-[X-2]) + ... + Turnover (m)] / [Outstanding Amount of Sold Receivables as of the end of month m - Outstanding Amount of Defaulted Receivables as of the end of month m - Outstanding Amount of Net Miscellaneous Receivables as of the end of month m] Turnover (m) = Gross Sold Receivables sold during the relevant period VAT included Loss ratio (m) = average within the 3 last calendar months of the Defaulted ratio Defaulted Receivables (m) = Sold Receivables that became Defaulted Receivables during the relevant month - 17 - Defaulted ratio (m) = Defaulted Receivables (m) / Turnover (m-[X+1]) (**) Theoretical DSO corresponds to the average theoretical condition of payment of invoicing as provided by the Seller at each follow up audit (***) Loss horizon is equal to theoretical DSO plus the Defaulted Receivables period plus 5 days. 2. DILUTION RESERVE - - Dilution horizon : 1 month (****) - - Stress factor (SF) : 2,25 DILUTION RESERVE (m) = [{SF * ED} + {DS - ED}*{DS/ED}] * DHR (m) Expected Dilution (ED) = average Dilution ratio within the last 12 months Dilution ratio (m) = Net Credit Notes (m) / Turnover (m-1) Net credit notes (m) = new Credit Notes issued during the relevant month, based on the reporting template filled monthly by each seller, excluding any Miscellaneous Accounting Credit Entries Dilution Spike (DS) = Maximum Dilution ratio within the last 12 months Dilution horizon ratio (DHR) = Turnover (m) / [Outstanding Amount of Sold Receivables as of the end of month m - Outstanding Amount of Defaulted Receivables as of the end of month m - Outstanding Amount of Net Miscellaneous Receivables as of the end of month m] (****) Dilution horizon is equal to the estimated average amount of time elapsed from the creation of an Eligible Receivable to the issuance of a Credit Note pertaining thereto. 3. FLOOR RESERVE FLOOR RESERVE (m) = [Concentration factor (m) + Dilution component (m)] Concentration factor (m) = {Maximum [sum of the SRO on the 5 debtors groups with the largest SRO who are non rated or non investment grade; sum of the SRO of the 3 debtors groups with the largest SRO who are rated A-3; sum of the SRO of the - 18 - 2 debtors groups with the largest SRO rated A-2; SRO for debtor group with the largest SRO rated A-1]} / Outstanding Amount of Eligible Receivables as of "m" SRO = Outstanding Amount of Eligible Receivables, on the relevant Assessment Date Debtors Group = means a group of debtors for which a parent company owns 50% + 1 of voting rights. Dilution component (m) = Expected Dilution (m) * Dilution horizon ratio (m) 4. YER RESERVE YER RESERVE (m) = Maximum Consolidated YER(1) (m) / [Outstanding Amount of Sold Receivables as of the end of month m - Outstanding Amount of Defaulted Receivables as of the end of month m - Outstanding Amount of Net Miscellaneous Receivables as of the end of month m] (1) Consolidated YER declared in the Assessment Report 5. CUSTOMER / SUPPLIER RESERVE CUSTOMER / SUPPLIER RESERVE (m) = Customer - Suppliers outstanding(2) (m) / [Outstanding Amount of Sold Receivables as of the end of month m - Outstanding Amount of Defaulted Receivables as of the end of month m - Outstanding Amount of Net Miscellaneous Receivables as of the end of month m] (2) Customer- Suppliers outstanding such as declared in the Assessment Report By exception, the Overcollateralisation Rate for the Initial Settlement Date will be fixed at 30%. - 19 - SCHEDULE 2. CALCULATION OF THE SUBORDINATED DEPOSIT ON EACH SETTLEMENT DATE DURING THE REPLENISHMENT PERIOD: SUBORDINATED DEPOSIT = Overcollateralisation Rate, * [Outstanding Amount of Sold Receivables on such Settlement Date (1) - Outstanding Amount of Defaulted Receivables on such Settlement Date (2) - Outstanding Amount of Net Miscellaneous Receivables on such Settlement Date]; + Outstanding Amount of Defaulted Receivables on such Settlement Date (2) + Outstanding Amount of Net Miscellaneous Receivables (3) on such Settlement Date. (1) Taking into account Purchasable Receivables to be purchased on such Settlement Date. (2) Excluding any such receivables that, after becoming Doubtful Receivables, have been repurchased. (3) As long as the Outstanding Amount of Net Miscellaneous Receivables is positive. - 20 - EX-4.3 4 l12143aexv4w3.txt EX-4.3 MASTER COMPLEMENTARY DEPOSIT AGREEMENT EXHIBIT 4.3 GOODYEAR - -------------------------------------------------------------------------------- MASTER COMPLEMENTARY DEPOSIT AGREEMENT - -------------------------------------------------------------------------------- DATED 10 DECEMBER, 2004 Between EUROFACTOR as Agent CALYON as Calculation Agent ESTER FINANCE TITRISATION as Purchaser AND GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V. as Complementary Depositor or Centralising Unit [GIDE LOYRETTE NOUEL LOGO] - -------------------------------------------------------------------------------- ASSOCIATION D'AVOCATS A LA COUR DE PARIS 26, COURS ALBERT 1ER 75008 PARIS TEL. +33 (0)1 40 75 60 00 FAX +33 (0)1 43 59 37 79 E-MAIL INFO@GIDE.COM WWW.GIDE.COM TABLE OF CONTENTS ARTICLE 1. Definitions........................................................................ 5 ARTICLE 2. Interpretation..................................................................... 5 ARTICLE 3. Purpose of this Agreement.......................................................... 6 ARTICLE 4. Duration of the Agreement.......................................................... 6 ARTICLE 5. Amount of the Complementary Deposit................................................ 7 ARTICLE 6. No interest - Unavailability fee................................................... 8 ARTICLE 7. Repayment.......................................................................... 9 ARTICLE 8. Payments........................................................................... 10 ARTICLE 9. Representations and warranties - undertakings...................................... 10 ARTICLE 10. Application of the Complementary Deposit as cash collateral for the benefit of the Purchaser................................................................... 11 ARTICLE 11. Fees and expenses.................................................................. 12 ARTICLE 12. Substitution and agency............................................................ 12 ARTICLE 13. Confidentiality.................................................................... 13 ARTICLE 14. Transferability of this Agreement.................................................. 13 ARTICLE 15. Notices............................................................................ 13 ARTICLE 16. Exercise of rights................................................................. 14 ARTICLE 17. Indivisibility..................................................................... 14 ARTICLE 18. Partial invalidity................................................................. 14 ARTICLE 19. Amendments......................................................................... 15 ARTICLE 20. Limited recourse - non petition.................................................... 15 ARTICLE 21. Governing law - jurisdiction....................................................... 15 Schedule 1. Calculation of the Amount of the Complementary Deposit............................. 17 - 2 - BETWEEN 1. EUROFACTOR, a company incorporated under French law, authorised as a credit institution (etablissement de credit) and having its registered office at Tour d'Asnieres, 4, avenue Laurent Cely, 92608 Asnieres, France, registered with the Trade and Companies Registry of Nanterre under the number 642 041 560, whose representative is duly authorised for the purpose of this agreement (the "AGENT"); 2. CALYON, a company incorporated under French law and authorised as a credit institution (etablissement de credit), having its registered office at 9 quai du President Paul Doumer, 92920 Paris La Defense Cedex, France, registered with the Trade and Companies Registry of Nanterre under the number 304 187 701, whose representatives are duly authorised for the purpose of this agreement (the "CALCULATION AGENT"); 3. ESTER FINANCE TITRISATION, a limited company with a management and supervisory board (societe anonyme a directoire et conseil de surveillance) incorporated under French law and authorised as a credit institution (etablissement de credit), having its registered office at 19 Boulevard des Italiens, 75002 Paris, France, registered with the Trade and Companies Registry of Paris under the number 414 886 226, whose representative is duly authorised for the purpose of this agreement ("ESTER FINANCE" or the "PURCHASER"); 4. GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V., a company incorporated under Dutch law, having its registered office at Deboelelaan 7, 1083 HJ, Amsterdam, The Netherlands, registered with the Trade and Companies Registry of Amsterdam, under the number 34197964, whose representative is duly authorised for the purpose of this agreement (hereafter referred to as the "CENTRALISING UNIT" or the "COMPLEMENTARY DEPOSITOR"). - 3 - WHEREAS GOODYEAR DUNLOP TIRES France S.A., FULDA REIFEN GmbH & Co KG, M-PLUS MULTIMARKENMANAGEMENT GmbH & Co KG, GOODYEAR GmbH & Co KG, DUNLOP GmbH & Co KG, GOODYEAR DUNLOP TIRES Italia SpA and GOODYEAR DUNLOP TIRES Espana SA (the "SELLERS") are in the business of manufacturing and/or supplying tyres and activities relating thereto, and hold receivables over their respective debtors. In order to provide financing to the Sellers, CALYON as arranger has proposed to set up a securitisation transaction by way of the sale, on an ongoing basis, of trade receivables resulting from the usual business of the Sellers in France, Germany, Italy and Spain. For such purposes, ESTER FINANCE has undertaken to purchase certain trade receivables held by the Sellers (the "PURCHASABLE RECEIVABLES") by way of a transfer of receivables pursuant to the provisions of the French law governed General Master Purchase Agreement (the "GENERAL MASTER PURCHASE AGREEMENT") and receivables purchase agreements (the "RECEIVABLES PURCHASE AGREEMENTS") governed by French, German, Italian and Spanish law depending of the laws of the incorporation of the relevant Seller. ESTER FINANCE shall fund the acquisition of Purchasable Receivables: (i) partly out of a senior deposit (the "SENIOR DEPOSIT") effected by the Depositor with the Purchaser in accordance with a master senior deposit agreement (the "MASTER SENIOR DEPOSIT AGREEMENT"); and (ii) partly by way of set-off against any amount due and payable by the Centralising Unit to the Purchaser in connection with (a) a subordinated deposit (the "SUBORDINATED DEPOSIT") to be effected by the Centralising Unit with the Purchaser in accordance with the terms and conditions of a master subordinated deposit agreement (the "MASTER SUBORDINATED DEPOSIT AGREEMENT") and (b) a complementary deposit (the "COMPLEMENTARY DEPOSIT") to be effected by the Centralising Unit with the Purchaser in accordance with the terms and conditions of the present master complementary deposit agreement (the "MASTER COMPLEMENTARY DEPOSIT AGREEMENT"). The Purchaser and the Complementary Depositor are willing to define the terms and conditions according to which the Complementary Deposit shall be made by the Complementary Depositor with the Purchaser and shall be pledged as cash collateral in favour of the Purchaser and have agreed to enter into this agreement under the terms and subject to the conditions set forth hereunder. - 4 - NOW IT IS HEREBY AGREED AS FOLLOWS: CHAPTER I - INTERPRETATION ARTICLE 1. DEFINITIONS Capitalised terms and expressions used in this Master Complementary Deposit Agreement shall have the same meaning as ascribed to such terms and expressions in the glossary set out in schedule 1 to the General Master Purchase Agreement. ARTICLE 2. INTERPRETATION (i) The titles of the Chapters, the Schedules and the Articles (including their paragraphs) used herein and the table of contents are for convenience of reference only, and shall not be used to interpret this Master Complementary Deposit Agreement. (ii) In this Master Complementary Deposit Agreement, except if the context calls for another interpretation: (a) references to "CHAPTERS", "ARTICLES" and "SCHEDULES" shall be construed as references to the chapters, articles and schedules of this Master Complementary Deposit Agreement and references to this Master Complementary Deposit Agreement include its schedules; (b) words in the plural shall cover the singular and vice versa; (c) references to the time of the day shall refer to Paris time, unless otherwise stipulated; (d) references to a person shall include its permitted assignees, transferees and successors; (e) references to a document shall mean this document, as amended, replaced by novation or varied from time to time; (f) references to "PARTIES" must be interpreted as references to the parties to the present agreement, and to a "PARTY" shall refer to any of the Parties. - 5 - CHAPTER II - AMOUNT - PURPOSE - DURATION ARTICLE 3. PURPOSE OF THIS AGREEMENT 3.1 The Complementary Depositor shall make a Complementary Deposit with the Purchaser in accordance with the terms of this Master Complementary Deposit Agreement. 3.2 The Complementary Deposit made by the Complementary Depositor under this Master Complementary Deposit Agreement shall be applied and pledged as cash collateral (affecte a titre de gage-especes) in favour of the Purchaser in accordance with and subject to the provisions of Article 10. All repayments of principal to be made by the Purchaser to the Complementary Depositor in respect of the Complementary Deposit shall be made up to the amount and to the extent of the sums received by the Purchaser in respect of the Sold Receivables in the manner described in Article 7. During the Amortisation Period, such repayments under the Complementary Deposit shall be subject to the order of priority of payments provided for under article 16 of the General Master Purchase Agreement. The Complementary Depositor agrees that, for the purposes of repayment of the Complementary Deposit, it will look solely to the amount of the sums received by the Purchaser under the General Master Purchase Agreement in respect of the Sold Receivables until the Program Expiry Date and that the Complementary Depositor shall not, in such capacity, otherwise take or pursue any judicial or other proceedings, or exercise any right or remedy that it might otherwise have, against the Purchaser or the Purchaser's assets save to the extent required for the recovery of such sums. ARTICLE 4. DURATION OF THE AGREEMENT 4.1 This Master Complementary Deposit Agreement shall enter into force on the date hereof and shall terminate on the Program Expiry Date. 4.2 The Complementary Deposit shall be repaid in the manner described in Article 7. - 6 - CHAPTER III - AMOUNT OF THE COMPLEMENTARY DEPOSIT ARTICLE 5. AMOUNT OF THE COMPLEMENTARY DEPOSIT 5.1 Amount of the Complementary Deposit The Complementary Depositor shall make a Complementary Deposit with the Purchaser in accordance with the terms and conditions of this Master Complementary Deposit Agreement. The amount of the Complementary Deposit shall, at all times during the Replenishment Period, be calculated in accordance with the provisions of Schedule 1. During the Amortisation Period, the Complementary Deposit, as calculated as of the last Funded Settlement Date of the Replenisment Period, shall be repaid until the Program Expiry Date, after full repayment of the Senior Deposit, subject to the order of priority set forth in Article 7. The amount of the Complementary Deposit shall be calculated by the Agent on each Calculation Date. 5.2 Calculation and setting up of the Complementary Deposit 5.2.1 Calculation (i) At the latest on the Calculation Date preceding the Initial Settlement Date, the Agent shall calculate and notify forthwith the Purchaser and the Complementary Depositor the amount of the Complementary Deposit to be made in accordance with Article 5.1 above on the Initial Settlement Date, together with the details of such calculation. (ii) On any subsequent Calculation Date during the Replenishment Period, the Agent shall calculate and notify forthwith the Purchaser and the Complementary Depositor (i) the amount of the Complementary Deposit in accordance with Article 5.1 above on the related Settlement Date, and (ii) the amount of the Complementary Deposit on the preceding Settlement Date, together with the details of such calculation. If the new amount of the Complementary Deposit is higher than the amount of the Complementary Deposit on the preceding Settlement Date, the Complementary Deposit shall be increased by the Euro amount of the difference (the "INCREASE IN THE COMPLEMENTARY DEPOSIT"). If the new amount of the Complementary Deposit is lower than the amount of the Complementary Deposit on the preceding Settlement Date, the Complementary Deposit shall be reduced by the Euro amount of the difference (the "REDUCTION OF THE COMPLEMENTARY DEPOSIT"). - 7 - For the avoidance of doubt, any reference to the Complementary Deposit in the Transaction Documents shall be to the Complementary Deposit as it may be increased or reduced in accordance with this Article 5.2.1. 5.2.2 Setting up of the Complementary Deposit (i) On the Initial Settlement Date, before 9.00 am (Paris time), the Complementary Deposit shall be made in Euro with the Purchaser by crediting the Current Account, for the amount calculated in accordance with Article 5.2.1. (ii) On each Settlement Date after the Initial Settlement Date, during the Replenishment Period, before 9.00 am (Paris time): (a) the Complementary Depositor shall make a deposit in respect of the Complementary Deposit in Euro with the Purchaser for an amount corresponding to any Increase in the Complementary Deposit, as calculated in accordance with Article 5.2.1 (ii); or (b) the Purchaser shall repay a portion of the Complementary Deposit to the Complementary Depositor for an amount corresponding to any Reduction of the Complementary Deposit, as calculated in accordance with Article 5.2.1 (ii), subject to the provisions of Article 7. The payments to be made pursuant to (i) and (ii) above shall be effected in accordance with and subject to the provisions of article 6.4 of the General Master Purchase Agreement. ARTICLE 6. NO INTEREST - UNAVAILABILITY FEE The Purchaser and the Complementary Depositor hereby expressly agree that the Complementary Deposit shall not bear interest and that no unavailability fee shall be paid to the Complementary Depositor in relation to the making of the Complementary Deposit. The Complementary Depositor acknowledges that it has entered into intercompany arrangements with the Sellers (the "INTERCOMPANY ARRANGEMENTS") pursuant to which the Complementary Depositor will receive from each Seller any necessary consideration for the making of the Complementary Deposit and will be indemnified in an appropriate manner by each Seller in accordance with its corporate interest and in respect of the losses incurred by it as a result of the Complementary Deposit made under this Master Complementary Deposit Agreement. - 8 - CHAPTER IV - REPAYMENT - PAYMENTS ARTICLE 7. REPAYMENT 7.1 Principle The repayment of the Complementary Deposit, which shall be carried out until the Program Expiry Date, shall always be subject to (i) the provisions of Article 3.2 above and (ii) the order of priority of payments set forth under article 16 of the General Master Purchase Agreement and under Article 7.2. 7.2 Repayment of the Complementary Deposit 7.2.1 On each Intermediary Purchase Date or Funded Settlement Date during the Replenishment Period, the Purchaser shall repay, if applicable, the Complementary Deposit to the Complementary Depositor, for an amount equal to any Reduction of the Complementary Deposit as calculated under Article 5.2.1 above. 7.2.2 On each Settlement Date during the Amortisation Period, and until the Program Expiry Date, the Purchaser shall repay the Complementary Deposit to the Complementary Depositor, for an amount resulting from the allocations set out in article 16 of the General Master Purchase Agreement. Such repayment shall be principally effected by means of the Distributed Amounts received by the Purchaser under the Sold Receivables until the Program Expiry Date and in accordance with the order of priority of payments as described in article 16 of the General Master Purchase Agreement. In the event that, on the Program Expiry Date, the Distributed Amounts do not permit the repayment in full of any outstanding amount remaining unpaid under the Senior Deposit and under the Complementary Deposit, then, any outstanding amount remaining unpaid under the Complementary Deposit shall reduce the right to repayment to the Complementary Depositor of the Complementary Deposit. 7.3. In the event that during the Amortisation Period, the Centralising Unit, acting in the name and on behalf of the Sellers, repurchases all outstanding Sold Receivables from the Purchaser in accordance with article 4.3. of the General Master Purchase Agreement, the purchase price of such Sold Receivables shall be applied by the Purchaser to the repayment of the Complementary Deposit in accordance with the order provided for under article 16 of the General Master Purchase Agreement. - 9 - ARTICLE 8. PAYMENTS 8.1 All payments to be made in accordance with this Master Complementary Deposit Agreement shall be made in Euro. 8.2 All repayments of principal and all payments falling due on a day which is not a Business Day shall instead fall due on the following Business Day. 8.3 At any time, until the Program Expiry Date, subject to article 6 of the General Master Purchase Agreement, the Purchaser shall be entitled to set-off (i) any amount due and payable by the Purchaser to the Complementary Depositor in respect of the Complementary Deposit and (ii) any amount due and payable by the Complementary Depositor to the Purchaser under this Agreement or any of the Transaction Documents. CHAPTER V - GENERAL PROVISIONS ARTICLE 9. REPRESENTATIONS AND WARRANTIES - UNDERTAKINGS The Complementary Depositor hereby represents and warrants to the Purchaser, as follows: (i) it is a liability company duly incorporated and validly existing under Dutch law and has the capacity (a) to carry on its business, as currently conducted, and to own all of the assets appearing on its balance sheet, except where not having such capacity would not be reasonably likely to result in a Material Adverse Effect, and (b) to enter into and perform its obligations under this Master Complementary Deposit Agreement; (ii) the execution of this Master Complementary Deposit Agreement does not require any authorisation with respect to the Complementary Depositor that has not already been obtained and communicated to the Purchaser, unless in the case of any Governemental Authorisation, the failure to obtain such authorisation would not be reasonably likely to result in a Material Adverse Effect ; (iii) the execution of this Master Complementary Deposit Agreement and the performance of the obligations under this Master Complementary Deposit Agreement do not contravene any of the provisions of the Complementary Depositor's articles and memorandum of association, agreements or undertakings to which it is a party or by which it is bound, and do not in any manner contravene the statutes and regulations applicable to it, except in each case, to the extent that no Material Adverse Effect would result from such breach; (iv) the obligations arising out of this Master Complementary Deposit Agreement are binding on the Complementary Depositor and enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium and other laws affecting creditors' rights generally; - 10 - (v) in the event that, in accordance with the provisions of this Master Complementary Deposit Agreement and the General Master Purchase Agreement, the Complementary Deposit is not repaid in full on the Program Expiry Date, the Complementary Depositor shall incur any losses out of its own business, and the Purchaser shall not be liable, in any manner whatsoever, in this respect (except, as the case may be, as provided in article 4.2 (b) of the General Master Purchase Agreement); and (vi) the constitution of the Complementary Deposit as cash collateral (affectation a titre de gage especes) in favour of the Purchaser, as set forth in Article 10 below, complies with the Complementary Depositor's corporate interest and does not exceed its financial capabilities ; the Complementary Depositor has entered into Intercompany Arrangements with the Sellers and GOODYEAR DUNLOP TIRES EUROPE B.V., pursuant to which the Complementary Depositor shall receive from each Seller any necessary consideration for making the Complementary Deposit and shall be indemnified as is appropriate by each Seller and GOODYEAR DUNLOP TIRES EUROPE B.V. in respect of any losses incurred by the Complementary Depositor as a result of the Complementary Deposit made under this Master Complementary Deposit Agreement. CHAPTER VI - CASH COLLATERAL ARTICLE 10. APPLICATION OF THE COMPLEMENTARY DEPOSIT AS CASH COLLATERAL FOR THE BENEFIT OF THE PURCHASER 10.1 The Complementary Depositor hereby irrevocably agrees that the Complementary Deposit made under this Agreement shall, by virtue of this Article, be pledged as cash collateral (affecte a titre de gage-especes) by the Centralising Unit in favour of the Purchaser until the Program Expiry Date, to secure the payment of (i) any sum due to the Purchaser in respect of the Sold Receivables, and (ii) any sum due to the Purchaser by any Seller or the Centralising Unit pursuant to the Transaction Documents; provided that no party shall be entitled to receive, as a result of such pledge, any amounts in addition to those that they are entitled to receive pursuant to Article 16 of the General Master Purchase Agreement. The Complementary Depositor hereby irrevocably agrees that the pledging of the Complementary Deposit as cash collateral (affectation du depot complementaire a titre de gage-especes) in favour of the Purchaser shall transfer to the Purchaser the ownership of the sums received under the Complementary Deposit. 10.2 The cash collateral (gage-especes) shall be deemed created and effective as of the date on which the Complementary Deposit is made with the Purchaser. - 11 - 10.3 The obligation of the Purchaser to transfer back to the Complementary Depositor the Complementary Deposit (creance en restitution) shall automatically be reduced by any principal amount paid by the Purchaser to the Complementary Depositor in relation to the Complementary Deposit in accordance with Article 7 above. 10.4 The Complementary Depositor acknowledges that in accordance with the security referred to above, during the Amortisation Period, it may not in any case nor at any moment claim repayment of the Complementary Deposit other than within the limit of the Distributed Amounts received by the Purchaser, which are available for the application to the Complementary Depositor, in accordance with Article 7. CHAPTER VII - MISCELLANEOUS ARTICLE 11. FEES AND EXPENSES The Complementary Depositor, in the name and on behalf of the Sellers, shall bear, in particular, any costs and expenses incurred by CALYON as arranger, EUROFACTOR as Agent, and ESTER FINANCE, in accordance with article 29 of General Master Purchase Agreement. ARTICLE 12. SUBSTITUTION AND AGENCY Each Party shall have the right to be assisted by, to appoint or to substitute for itself one or more third parties in the performance of certain tasks provided that: (i) such Party has given prior written notice of the exercise of that right to the other Parties; (ii) such Party remains liable to the other Parties for the proper performance of those tasks and the relevant third party/parties has or have expressly renounced any right to any contractual claim against the other Parties; (iii) the relevant third party/parties undertake(s) to comply with all obligations binding upon such Party under this Master Complementary Deposit Agreement; and (iv) the substitution, assistance or agency shall not entail an increase in the costs incurred by the other Parties. The Parties acknowledge however that, in order to avoid doubt, this Article shall not apply to the Complementary Depositor in respect of the making of the Complementary Deposit. - 12 - ARTICLE 13. CONFIDENTIALITY For the purposes to this Master Complementary Deposit Agreement, the Parties agree to be bound by the provisions relating to confidentiality as provided for under article 31 (Confidentiality) of the General Master Purchase Agreement. ARTICLE 14. TRANSFERABILITY OF THIS AGREEMENT Subject to Article 12, this Master Complementary Deposit Agreement is concluded on the intuitu personae of the Parties to this Master Complementary Deposit Agreement. Therefore, none of the Parties may transfer this Master Complementary Deposit Agreement, or its rights and/or obligations hereunder, to any third party whatsoever, without the prior written consent of the other Parties. ARTICLE 15. NOTICES 15.1. Except as otherwise set forth in the Transaction Documents, all notices, requests or communications which must or may be made pursuant to this Master Complementary Deposit Agreement shall be by way of writing, mail or fax. 15.2. All notices, requests or communications to be made and all documents to be delivered from one Party to the other Party under the Master Complementary Deposit Agreement shall be made and delivered to the addressees referred to in schedule 7 to the General Master Purchase Agreement. 15.3. All notices, requests or communications made and all documents delivered under the Master Complementary Deposit Agreement shall only take effect upon the date of their receipt by its addressee. 15.4. Each of the Parties may at any time modify the addressee of the notices, requests or communications to be made and the documents to be delivered to it under the Master Complementary Deposit Agreement by sending to that effect a letter or fax to the other Party indicating the name of the new addressee. 15.5. The Parties agree that the Centralising Unit shall be responsible for receiving written notice on behalf of the Sellers, and that any notice given by the Purchaser to the Sellers and delivered to the Centralising Unit shall be deemed validly received by all of the Sellers upon receipt by the Centralising Unit. - 13 - ARTICLE 16. EXERCISE OF RIGHTS 16.1 All rights conferred on the Purchaser under this Master Complementary Deposit Agreement or by any other document delivered pursuant to or incidental to this Master Complementary Deposit Agreement or any Transaction Document, including rights conferred by law, shall be cumulative and may be exercised at any time. 16.2 The fact that the Purchaser or the Complementary Depositor does not exercise a right or delays in doing so shall in no way be construed as a waiver of that right. The exercise of any right or a partial exercise of such a right shall not prevent the Purchaser or the Complementary Depositor from exercising such a right again in the future, or from exercising any other right. ARTICLE 17. INDIVISIBILITY Each Party acknowledges that the General Master Purchase Agreement, the Master Subordinated Deposit Agreement and the Master Complementary Deposit Agreement shall form a single set of contractual rights and obligations and that, if the General Master Purchase Agreement, or the Master Subordinated Deposit Agreement becomes void or ceases to be effective and enforceable for any reason whatsoever, this Master Complementary Deposit Agreement shall also become void or cease to be effective and enforceable accordingly. Any payment already made by the Centralising Unit acting in the name and on behalf of the Sellers or on its own behalf to the Purchaser under this Master Complementary Deposit Agreement, the General Master Purchase Agreement, the Receivables Purchase Agreements and the Master Subordinated Deposit Agreement shall not be affected by such a nullity, ineffectiveness or unenforceability. ARTICLE 18. PARTIAL INVALIDITY If one or more provisions of this Master Complementary Deposit Agreement is or becomes invalid, illegal or unenforceable in any respect in any jurisdiction or with respect to any Party, such invalidity, illegality or unenforceability in such jurisdiction or with respect to such Party or Parties shall not, to the extent permitted by applicable law, render invalid, illegal or unenforceable such provision or provisions in any other jurisdiction or with respect to any other Party or Parties hereto. Such invalid, illegal or unenforceable provision shall be replaced by the Parties to such contract with a provision which reflects in so far as is reasonably possible the intentions of the invalid, illegal or unenforceable provision. Any fees, costs and expenses incurred by the Parties in connection with any amendment necessary or advisable pursuant to this Article shall be borne exclusively by the Complementary Depositor. - 14 - ARTICLE 19. AMENDMENTS No amendment to this Master Complementary Deposit Agreement may be made without the written consent of each other party hereto and (a) unless the Rating Agencies (i) have been informed and provided by the Arranger with all necessary details they may require in respect of such contemplated amendment and (ii) have confirmed that the contemplated amendment will not entail a downgrading or withdrawal of the current ratings of the Notes issued by the Issuers, or that the contemplated amendment will reduce such downgrading or prevent such withdrawal, and (b) each Issuer and each Liquidity Bank has given its prior written consent to such amendment (such consent not being unreasonably withheld or delayed). ARTICLE 20. LIMITED RECOURSE - NON PETITION 20.1. Limited Recourse Each of the Parties agrees to limit its claims and recourse against ESTER FINANCE (including in the event of a breach by ESTER FINANCE of any of its representations and warranties, or any of its obligations hereunder) to the amount of the Available Funds on the relevant date. 20.2. Non Petition Each of the Parties irrevocably and unconditionally undertakes and agrees: (a) not to exercise any rights of contractual or other recourse which it may have against ESTER FINANCE in the event of a breach by ESTER FINANCE of any of its representations and warranties, or any of its obligations under this Master Complementary Deposit Agreement, except in the event of the gross negligence (faute lourde) or wilful misconduct (dol) on the part of ESTER FINANCE; and (b) not to institute any legal proceedings, take other steps or institute other proceedings against ESTER FINANCE, the purpose or effect of which is the appointment of a conciliator or an ad hoc agent, or the opening of receivership proceedings or insolvency proceedings (redressement judiciaire or liquidation judiciaire) or any other similar proceedings. ARTICLE 21. GOVERNING LAW - JURISDICTION 21.1 This Master Complementary Deposit Agreement shall be governed by French law. 21.2 Any dispute as to the validity, interpretation, performance or any other matter arising out of this Master Complementary Deposit Agreement shall be subject to the jurisdiction of the competent courts of Paris (Cour d'appel de Paris). The choice of this jurisdiction is entirely for the benefit of the Purchaser which shall retain the right to bring proceedings in any other competent court. - 15 - Made in Paris, On 10 December, 2004, in four (4) originals. ESTER FINANCE /s/ Richard Sinclair --------------------------------- Name : Richard Sinclair Title : Director General GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V. /s/ Ronald M. Archer --------------------------------- Name : Ronald M. Archer Title : Vice President-Finance and Chief Financial Officer EUROFACTOR /s/ Nathalie Rossen --------------------------------- Name : Nathalie Rossen Title : CALYON /s/ Richard Sinclair /s/ G. Campagne-Simon - ------------------------------ -------------------------- Name : Richard Sinclair Name : Title : Executive Director Title : - 16 - SCHEDULE 1. CALCULATION OF THE AMOUNT OF THE COMPLEMENTARY DEPOSIT 1. DURING THE REPLENISHMENT PERIOD, UNLESS AN EARLY AMORTISATION EVENT DESCRIBED IN ARTICLE 13.3. OF THE GENERAL MASTER PURCHASE AGREEMENT HAS OCCURRED AND A PROCEDURE OF SEPARATION OF FLOWS UNDER THE COLLECTION ACCOUNT AGREEMENTS HAS BEEN IMPLEMENTED 1.1. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON THE INITIAL SETTLEMENT DATE COMPLEMENTARY DEPOSIT = Initial Purchase Price of Purchasable Receivables; - Subordinated Deposit; - Senior Deposit; - Adjusted Collections calculated as of such date. 1.2. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON EACH FUNDED SETTLEMENT DATE COMPLEMENTARY DEPOSIT = Complementary Deposit as of the preceding Settlement Date + Initial Purchase Price of Purchasable Receivables to be purchased on such Settlement Date; - Adjusted Collections calculated as of such Settlement Date; - Amount of the Subordinated Deposit on such Settlement Date minus the amount of the Subordinated Deposit on the preceding Settlement Date; - Amount of the Senior Deposit on such Settlement Date minus the amount of the Senior Deposit on the preceding Settlement Date; + Deferred Purchase Price calculated as of such Settlement Date. - 17 - 1.3. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON EACH INTERMEDIARY SETTLEMENT DATE COMPLEMENTARY DEPOSIT = Complementary Deposit as of the preceding Settlement Date + Initial Purchase Price of Purchasable Receivables to be purchased on such Settlement Date; - Adjusted Collections calculated as of such Settlement Date; - Amount of the Subordinated Deposit on such Settlement Date minus the amount of the Subordinated Deposit on the preceding Settlement Date; + Excess Foreseen Collections to be received in cash on the Purchaser's Account for such Settlement Date. 2. DURING THE REPLENISHMENT PERIOD, IF AN EARLY AMORTISATION EVENT DESCRIBED IN ARTICLE 13.3. OF THE GENERAL MASTER PURCHASE AGREEMENT HAS OCCURRED AND A PROCEDURE OF SEPARATION OF FLOWS UNDER THE COLLECTION ACCOUNT AGREEMENTS HAS BEEN IMPLEMENTED 2.1. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON A FUNDED SETTLEMENT DATE COMPLEMENTARY DEPOSIT = Complementary Deposit as of the preceding Settlement Date + Initial Purchase Price of Purchasable Receivables to be purchased on such Settlement Date; - Adjusted Collections calculated as of such Settlement Date; - amount of the Subordinated Deposit on such Settlement Date minus the amount of the Subordinated Deposit on the preceding Settlement Date; - amount of the Senior Deposit on such Settlement Date minus the amount of the Senior Deposit on the preceding Settlement Date; - 18 - - any amount received on the Purchaser's Collection Accounts within the period between the Assessment Date preceding such Settlement Date and the preceding Assessment Date; + Deferred Purchase Price calculated as of such Settlement Date. 2.2. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON AN INTERMEDIARY SETTLEMENT DATE COMPLEMENTARY DEPOSIT = Complementary Deposit as of the preceding Settlement Date + Initial Purchase Price of Purchasable Receivables to be purchased on such Settlement Date; - Adjusted Collections calculated as of such Settlement Date; - amount of the Subordinated Deposit on such Settlement Date minus the amount of the Subordinated Deposit on the preceding Settlement Date; - any amount received on the Purchaser's Collection Accounts within the period between the Assessment Date preceding such Settlement Date and the preceding Assessment Date. - 19 - EX-10.1 5 l12143aexv10w1.txt EX-10.1 AMENDMENT #2 TO UMBRELLA AGREEMENT EXHIBIT 10.1 AMENDMENT NO. 2 TO UMBRELLA AGREEMENT This Amendment No. 2 to the Umbrella Agreement dated as of June 14, 1999 ("UMBRELLA AGREEMENT") is dated as of April 7, 2003 ("AMENDMENT NO. 2") and is by and between The Goodyear Tire & Rubber Company, a company organized and existing under the laws of the State of Ohio of the United States of America ("GOODYEAR") and Sumitomo Rubber Industries, Ltd., a company organized and existing under the laws of Japan ("SRI"). WITNESSETH: WHEREAS, the parties have agreed that notwithstanding the provisions of Article 10.02 of the Umbrella Agreement, Goodyear shall be permitted to sell some or all of its shares of Common Stock in SRI on the terms hereinafter mentioned. WHEREAS, the parties have agreed that, notwithstanding such provisions, Goodyear shall be permitted, following any such sale, to purchase shares of Common Stock in SRI. WHEREAS, the parties have agreed to make a number of consequential amendments to the Umbrella Agreement to allow such sales and purchases of shares of Common Stock in SRI by Goodyear, and to govern their relationship following any such sales. NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. AMENDMENT OF MAINTENANCE OF CROSS INVESTMENTS 1.1 The parties hereby amend Article 10.02 of the Umbrella Agreement so as to delete the existing Article 10.02(a) in its entirety and to restate such Article as follows: "10.02 Maintenance of Cross Investments. (a) Subject to the provisions of clauses (a)(i) to (a)(vii) and paragraphs (b) and (c) of this Article 10.02 and so long as no Global Exit shall have occurred, Goodyear shall not purchase, sell, or dispose of or otherwise transfer (whether for cash or other consideration) its interest (including any beneficial interest as defined under the 1934 Act), in any shares of SRI Common Stock or other voting securities of SRI without the prior written consent of SRI and SRI shall not purchase, sell, or dispose of or otherwise transfer (whether for cash or other consideration) its interest in any shares of Goodyear Common Stock or 1 other voting securities of Goodyear without the prior written consent of Goodyear; provided that: (i) Goodyear may agree to sell, in one or more transactions or instalments, its interest (including any beneficial interest as defined under the 1934 Act), in any shares of SRI Common Stock provided that any such sales are completed between 31 March 2003 and 30 June 2003 (inclusive); (ii) following any sale by Goodyear of any interest in any shares of SRI Common Stock pursuant to clause (a)(i) above, Goodyear may in the period up to and including 30 June 2008 purchase (by such method as may be agreed between the parties from time to time), in one or more transactions or instalments, such number of shares of SRI Common Stock as is necessary to restore Goodyear's percentage interest in SRI's total issued and outstanding shares of Common Stock (from time to time) from the percentage interest following such sale or sales (the "POST-SALE PERCENTAGE") to ten percent (10%) (the "ORIGINAL PERCENTAGE"); (iii) if, by purchases made pursuant to clause (a)(ii) above, Goodyear restores its percentage interest in SRI's total issued and outstanding shares of Common Stock to the Original Percentage, Goodyear may from time to time thereafter purchase such shares of SRI's Common Stock as is necessary to maintain Goodyear's percentage interest in SRI's total issued and outstanding shares of Common Stock at the Original Percentage. If Goodyear makes a purchase pursuant to this clause (a)(iii) it shall promptly give written notice thereof to SRI; (iv) notwithstanding any restriction imposed by the confidentiality agreement between Goodyear and SRI dated 19 January 2003 (the "CONFIDENTIALITY AGREEMENT"), following any sale by Goodyear of any interest in any shares of SRI Common Stock pursuant to clause (a)(i) above, upon 14 calendar days prior written notice, SRI may (subject to clause (a)(v) below) sell its interest (including any beneficial interest as defined under the 1934 Act), in one or more transactions or installments, in any shares of Goodyear Common Stock until the earlier of 30 June 2008 or such date as Goodyear restores its percentage interest in SRI's total issued and outstanding shares of Common Stock to the Original Percentage. If SRI makes a sale pursuant to this clause (a)(iv) it shall promptly give written notice thereof to Goodyear; (v) SRI may only sell its interest in shares of Goodyear Common Stock pursuant to clause (a)(iv) above to the extent such interest to be sold does not reduce SRI's percentage interest in Goodyear's total issued and outstanding shares of 2 Common Stock as existed immediately following conversion of the Goodyear Note by more than the fraction given by the following calculation: 10 minus Post Sale Percentage / 10 (vi) notwithstanding any restriction imposed by the Confidentiality Agreement, following any sale by SRI of any interest in any shares of Goodyear Common Stock pursuant to clause (a)(iv) above, SRI may in the period up to and including 30 June 2008 purchase (by such method as may be agreed between the parties from time to time), in one or more transactions or instalments, such number of shares of Goodyear Common Stock as is necessary to restore SRI's percentage interest in Goodyear's total issued and outstanding shares of Common Stock (from time to time) to the same percentage interest as existed immediately following conversion of the Goodyear Note. If, by purchases made pursuant to clause (a)(ii) above, Goodyear restores its percentage interest in SRI's total issued and outstanding shares of Common Stock to the Original Percentage on a date before 30 June 2008, SRI will endeavour to restore its percentage interest in Goodyear's total issued and outstanding shares of Common Stock (from time to time) to the same percentage interest as existed immediately following conversion of the Goodyear Note as soon as reasonably practicable after such date; and (vii) notwithstanding any restriction imposed by the Confidentiality Agreement, SRI may from time to time purchase such shares of Goodyear's Common Stock as is necessary to maintain SRI's percentage interest in Goodyear's total issued and outstanding shares of Common Stock as existed immediately following the conversion of the Goodyear Note. If SRI makes a purchase pursuant to this clause (a)(vii) it shall promptly give written notice thereof to Goodyear." 1.2 The parties hereby amend Article 10.02 of the Umbrella Agreement so as to delete Article 10.02(c) in its entirety and to restate such Article as follows: "(c) In the event SRI issues additional shares of its Common Stock and if, as a result of such issuance, Goodyear's percentage interest in SRI Common Stock is reduced, Goodyear shall be entitled to purchase, on the open market or in negotiated private transactions, such additional shares as shall allow it to obtain such number of shares of SRI Common Stock as would increase its percentage shareholding in SRI to the Original Percentage. SRI shall furnish to Goodyear (i) within 45 days of the close of 3 each calendar quarter, notice of the total number of issued and outstanding shares of SRI Common Stock and (ii) promptly following recommendation by the SRI Board of Directors of a date on which a dividend on SRI Common Stock will be paid, but not later than fourteen (14) days preceding such dividend payment date, notice of such dividend payment date and of the total number of shares of SRI Common Stock (x) issued and outstanding on the date of such recommendation and (y), unless prohibited by law, projected to be issued and outstanding on the forthcoming dividend payment date. In the event that Goodyear notifies SRI that Goodyear is unable to purchase on the open market or in negotiated private transactions, such additional shares as shall allow it to maintain its shareholding at the Original Percentage, then SRI shall, to the extent permitted by applicable law, at SRI's election, either: (i) issue to Goodyear at the then current market price such additional shares as shall allow Goodyear to maintain its shareholding at the Original Percentage; or (ii) use its best efforts (but without the incurrence of unreasonable cost or liability) to arrange for Goodyear to purchase at the then current market price from a third party such additional shares as shall allow Goodyear to maintain its shareholding at the Original Percentage; or (iii) use its best efforts (but without the incurrence of unreasonable cost or liability) to take such other measures, as shall allow Goodyear to maintain its shareholding at the Original Percentage. In addition, SRI shall promptly (and in any event within five working days) upon a request from Goodyear, furnish Goodyear with the total number of issued and outstanding shares of SRI Common Stock on the date of such request. The foregoing provisions of this Article 10.02(c) shall only apply: (A) before the date of the first sale (if any) by Goodyear of any interest in any shares of SRI Common Stock pursuant to clause (a)(i) above; and (B) after such time (being no later than 30 June 2008) as Goodyear's percentage interest in any shares of SRI Common Stock (from time to time) is restored to the Original Percentage pursuant to purchases made in accordance with clause (a)(ii) above." 4 2. AMENDMENT TO GOODYEAR'S RIGHT TO NOMINATE SRI DIRECTOR 2.1 The parties hereby amend Article 10.03 of the Umbrella Agreement so as to add, at the end of Article 10.03(a), the following: "If the Alliance is terminated at any time pursuant to a Global Exit Right, Goodyear shall procure that the director appointed pursuant to this Article 10.03(a) shall resign from the SRI Board of Directors (without compensation)." 2.2 The parties hereby amend Article 10.03 of the Umbrella Agreement so as to delete Article 10.03(d) in its entirety and to restate such Article as follows: "(d) Following any sale by Goodyear of any interest in any shares of SRI Common Stock pursuant to clause (a)(i) of Article 10.02 (as a consequence of which Goodyear will own less than ten percent (10%) of the total issued and outstanding shares of SRI Common Stock), SRI may, until the earlier of 30 June 2008 and such time as Goodyear restores its shareholding to ten percent (10%) of the total issued and outstanding shares of SRI Common Stock (from time to time), at its sole discretion, invite a Goodyear executive (or another person reasonably satisfactory to SRI) as Goodyear may nominate to stand for election to its Board of Directors (and SRI shall use its reasonable efforts (but without the incurrence of unreasonable cost or liability) to ensure such person will be elected to its Board of Directors (or any successor governing board)). Following such person's appointment to the Board of Directors paragraphs (b) and (c) of this Article 10.03 shall apply in relation to such director. If, at any time on or before 30 June 2008, Goodyear restores its shareholding to ten percent (10%) of the total issued and outstanding shares of SRI Common Stock (from time to time), this Article 10.03(d) shall cease to have effect and the director appointed pursuant to this Article 10.03(d) shall be deemed to have been appointed pursuant to Article 10.03(a), which shall continue to apply thereafter. If, by 30 June 2008, Goodyear has not restored its shareholding to ten percent (10%) of the total issued and outstanding shares of SRI Common Stock (from time to time), or, if the Alliance is terminated at any time pursuant to a Global Exit Right, Goodyear shall procure that the director appointed pursuant to this Article 10.03(d) shall resign from the SRI Board of Directors (without compensation) and Article 10.03(a) shall cease to apply." 2.3 The parties hereby amend Article 10.03 of the Umbrella Agreement so as to add, at the end of Article 10.03(e), the following: "The foregoing provisions of this Article 10.03(e) shall not apply from the date of the first sale (if any) by Goodyear of any interest in any shares of SRI Common Stock pursuant to clause (a)(i) of Article 10.02 until such time (if any) as Goodyear's 5 percentage interest in any shares of SRI Common Stock (from time to time) is restored to the Original Percentage pursuant to purchases made in accordance with clause (a)(ii) of Article 10.02." 3. GENERAL 3.1 The parties hereby amend the Umbrella Agreement to give effect to the provisions of this Amendment No. 2 but in all other respects the other terms and conditions of the Umbrella Agreement shall continue without change. 3.2 The parties hereby acknowledge that expressions used in this Amendment No. 2 will have the same meanings as are ascribed thereto in the Umbrella Agreement unless otherwise specifically defined herein. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to the Umbrella Agreement to be duly executed as of the day and year first above written in this Amendment No. 2. THE GOODYEAR TIRE & RUBBER COMPANY By: /s/ Clark E. Sprang ----------------------------------------- Clark E. Sprang Title: Senior Vice President Business Development and Integration Attest: /s/ Anthony E. Miller ------------------------------------- Anthony E. Miller Assistant Secretary SUMITOMO RUBBER INDUSTRIES, LTD. By: /s/ Ryochi Sawada ----------------------------------------- Ryochi Sawada Title: Representative Director and Executive Director Attest: /s/ Makoto Teshima ------------------------------------- Makoto Teshima General Manager Legal Department 6 EX-10.2 6 l12143aexv10w2.txt EX-10.2 AMEND #1 TO SHAREHOLDERS AGREEMENT FOR EUROPE EXHIBIT 10.2 April 21, 2000 Sumitomo Rubber Industries, Ltd 6-9, 3-Chome Wakinohama-cho, Chuo-Ku Kobe 651 Japan Attention: Naoto Saito, Chairman Re: Shareholders Agreement for the Europe JVC dated as of June 14, 1999 by and among The Goodyear Tire & Rubber Company ("Goodyear"), Goodyear S.A., a Luxembourg corporation, Goodyear S.A., a French corporation, Goodyear Canada Inc. and Sumitomo Rubber Industries, Ltd. (the "European Shareholders Agreement") and this Amendment No.1. Dear Saito-san: Goodyear hereby requests that the other parties to the European Shareholders Agreement hereby agree to adopt this Amendment No. 1 to such agreement so as to allow the Birmingham factory site of Goodyear Dunlop Tires Europe B.V. ("GDTE") and/or Affiliates controlled by it to be closed, discontinued and/or disposed of notwithstanding any provision of Article 9.10 of the European Shareholders Agreement limiting such action during the two (2) years after the operational start-up date (September 1, 1999) of GDTE. The undersigned, as parties to the European Shareholders Agreement and/or shareholders of GDTE also hereby authorize and confirm that such a closure, discontinuance and/or disposal of the Birmingham factory site is authorized for the purpose of Article 3.6 (xiv) and/or (xv) of the European Shareholders Agreement. The parties agree that the European Shareholders Agreement shall be amended to give effect of the foregoing but in all other respects the other terms and conditions of the European Shareholders Agreement shall continue without change. All expressions used in this Amendment No. 1 shall have the same meanings as are ascribed to them in the European Shareholders Agreement unless otherwise specifically defined herein. If you are in agreement with the foregoing, please so indicate by signing this letter and the accompanying duplicate copies, one copy of which is for your files. THE GOODYEAR TIRE & RUBBER COMPANY By: /s/ Samir Gibara ------------------------------- Samir Gibara Title: Chairman of the Board, Chief Executive Officer and President Confirmed and agreed to by all the undersigned as of the date first above written SUMITOMO RUBBER INDUSTRIES, LTD. By: /s/ Naoto Saito ------------------------------ Naoto Saito Title: Chairman GOODYEAR S.A., a Luxembourg corporation By: /s/ Samir Gibara ------------------------------ Samir Gibara Title: Attorney-in-fact GOODYEAR S.A., a French corporation By: /s/ Samir Gibara ------------------------------ Samir Gibara Title: Attorney-in-fact GOODYEAR CANADA INC. By: /s/ Samir Gibara ------------------------------ Samir Gibara Title: Attorney-in fact EX-10.3 7 l12143aexv10w3.txt EX-10.3 RESTRICTED STOCK PURCHASE AGREEMENT EXHIBIT 10.3 RESTRICTED STOCK PURCHASE AGREEMENT THIS AGREEMENT is made and entered into this __day of ___________, between The Goodyear Tire & Rubber Company, an Ohio corporation, with its principal office at 1144 East Market Street, Akron, Ohio 44316-0001 (hereinafter referred to as the "Company"), and __________________________ residing at _________ (hereinafter referred to as "Executive"). WITNESSETH: THAT WHEREAS, Executive became an employee of the Company on ____________ and was elected __________ of the Company by the Board of Directors of the Company effective _______________; and WHEREAS, the Compensation Committee of the Board of Directors of the Company deemed it in the best interest of the Company and in furtherance of the purposes of the 2002 Performance Plan of The Goodyear Tire & Rubber Company (the "Plan") to award restricted shares of the Common Stock, without par value, of the Company (the "Common Stock") to Executive pursuant to the Plan on and subject to the terms, conditions and restrictions set forth herein; and WHEREAS, in accordance with action duly taken by the Compensation Committee of the Board of Directors and by the Board of Directors, the following sets forth the terms, conditions and restrictions of the award. NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereby agree as follows: SECTION 1. AWARD; PURCHASE AND SALE OF SHARES. The Company awards pursuant to the Plan and agrees to sell to Executive, and Executive agrees to subscribe for and purchase from the Company, on and subject to the terms and conditions set forth in this Agreement, _________ shares of the Common Stock (the "Shares") at a purchase price of one cent ($.01) per share. The aggregate purchase price of _____________ for the Shares shall be paid by Executive by check, payable to the order of the Company, or by such other method as may be acceptable to the Company. The purchase and sale shall be consummated at the principal offices of the Company at such time as shall be agreed upon by the Company and Executive, but in no event later _____________. Upon receipt of the purchase price, the Company will cause a certificate or certificates for the Shares to be issued to Executive as the registered owner thereof. Upon the purchase and issuance of the Shares, Executive will be entitled to receive dividends and exercise voting rights. Executive agrees that the Shares shall be subject to the restrictions on transfer set forth in Section 2 of this Agreement and to the Purchase Option set forth in Section 3 of this Agreement. Executive hereby agrees that the Company shall retain, at its principal offices, possession of the certificate or certificates representing the Shares, duly endorsed in blank by Executive or with duly executed stock power(s) attached, all in a form suitable for the transfer of the Shares. SECTION 2. RESTRICTIONS ON TRANSFER. Executive shall not have the right or power to, and shall not, sell, assign, transfer, pledge, hypothecate, or otherwise dispose of, by operation of law or otherwise, any of the Shares, or any interest therein, so long as and to the extent that the Shares are subject to the Purchase Option of the Company provided for at Section 3 of this Agreement. SECTION 3. COMPANY PURCHASE OPTION. A. The Company shall have the right and option to purchase all of the Shares from Executive for one cent ($.01) per share (the "Option Price"), if Executive ceases to be employed by the Company for any reason (the "Purchase Option"), except as expressly provided in Subsection B of this Section 3. Except as otherwise provided in Subsection C of this Section 3, the Purchase Option of the Company will expire on _____________ if Executive has been continuously employed from the date of this Agreement through ________________. B. In the event Executive ceases to be an employee of the Company at any time subsequent to _____________ by reason of his death or total disability (as defined in the Company's Long Term Disability Benefits for Salaried Employees Plan (the "LTDB Plan")), the Purchase Option shall thereupon terminate in respect of that number of the Shares which is equal to the product of (i) _____, multiplied by (ii) a fraction the numerator of which is the number of full calendar months elapsed during the period beginning on _______________ and ending on the date of the death or total disability (as defined in the LTDB Plan) of Executive, and the denominator of which is 36. C. In the event that on or before __________ the Company determines that it would not be able to deduct for Federal Income Tax purposes the entire value of the Shares (less the purchase price paid by Executive by reason of the provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), or any successor statute, in the ____ tax year of the Company, then the restrictions on transfer set forth in Section 2 of this Agreement shall continue and the Purchase Option of the Company shall be automatically extended until such date as the value of such Shares would be deductible by the Company for Federal Income Tax purposes. The Purchase Option of the Company shall be extended pursuant to this Subsection C only to the extent, and only in respect of that number of the Shares, necessary in order to assure the deductibility by the Company for Federal Income Tax purposes of the value of the Shares (net of the purchase price paid by Executive). D. Notwithstanding anything herein to the contrary, in the event that a Change in Control (as defined at Section 13 of the Plan) shall occur at any time after ________________, the Purchase Option of the Company shall automatically terminate in respect of all of the Shares on the date on which such Change in Control occurs. E. The Company may exercise the Purchase Option by delivering or mailing to Executive, or to his estate at his address, written notice of exercise within 60 days after the termination of ("Executive's") employment with the Company, which notice shall specify the number of Shares to be purchased. The Company shall thereafter tender to Executive or his estate the option price in respect of that number of Shares being purchased within 90 days after ("Executive's") termination of employment with the Company. If and to the extent the Purchase Option is not exercised within the aforesaid 60-day period, or the purchase is not completed within the aforesaid 90-day period, as the case may be, the Purchase Option of the Company shall automatically expire. F. After the time when any of the Shares are required to be transferred to the Company pursuant to Subsection A of this Agreement, the Company shall not pay any dividend to Executive on account of those Shares, or permit Executive to exercise any of the privileges or rights of a shareholder with respect to those Shares, but shall, insofar as permitted by law, treat the Company as the owner of the Shares. SECTION 4. EFFECT OF PROHIBITED TRANSFER. The Company shall not be required (a) to transfer on its books any of the Shares that shall have been, or are purported or represented to have been, sold or transferred in violation of any of the provisions of this Agreement; or (b) to treat as owner of such Shares or to pay dividends to any transferee to whom any such Shares shall have been, or are purported or represented to have been, so sold or transferred. SECTION 5. RESTRICTIVE LEGEND. All certificates representing the Shares shall have affixed thereto a legend in substantially the following form, in addition to any other legends that may be required under Federal or state securities laws: The shares of stock represented by this certificate are subject to restrictions on transfer and conditions of forfeiture set forth in the Restricted Stock Purchase Agreement, dated ______________, between the Company and Executive, which agreement is on file with, and available for inspection without charge at the office of, the Secretary of the Company at 1144 East Market Street, Akron, Ohio 44316-0001. SECTION 6. CERTAIN RESALE LIMITATIONS. A. The Shares have been registered under the Securities Act for issuance pursuant to the Plan. Executive acknowledges that in the event he shall be deemed to be an "affiliate" of the Company (within the meaning of that term as used in Rule 144 promulgated under the Securities Act of 1933), a sale of all or a portion of the Shares will be subject to certain provisions of said Rule 144 under the Securities Act. B. Executive agrees that he will not sell, transfer, or otherwise dispose of any of the Shares except in conformance with all applicable provisions of the Securities Act and that the Company shall have no obligation to cause the registration of the Shares for resale by Executive if he is an "affiliate". C. A legend substantially in the following form will be placed on the certificate or certificates representing the Shares: The shares represented by this certificate may not be sold, transferred, or otherwise disposed of in the absence of an effective registration statement under that Act or an opinion of counsel satisfactory to the Company to the effect that registration is not required. SECTION 7. ADJUSTMENTS. If from time to time during the period the Shares are subject to the restrictions on transfer set forth in this Agreement or the Purchase Option of the Company is in effect in whole or in part there is any stock split-up, stock dividend, stock distribution, or other reclassification of the Common Stock of the Company, or any merger, consolidation, or sale of substantially all of the assets of the Company, any and all new, substitute, or additional securities to which Executive is entitled by reason of his ownership of the Shares shall be subject immediately to the award (and be included as "Shares" therein), the restrictions on the transfer of the Shares set forth in this Agreement, the Purchase Option of the Company, and the other provisions of this Agreement in the same manner and to the same extent as the Shares. The Purchase Option of the Company and the Option Price and the other terms of the award shall be adjusted appropriately. If as a result of any adjustment which requires the calculation of the number of Shares, the number so computed is not a whole number, the number of Shares shall be the number computed rounded down to the next whole number. Any adjustment consistent with the provisions hereof made by the Compensation Committee of the Board of Directors shall be binding on Executive. SECTION 8. WITHHOLDING TAXES. A. Executive acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to him any federal, state, or local taxes of any kind required by law to be withheld with respect to the Shares. B. If Executive elects in accordance with Section 83(b) of the Internal Revenue Code to recognize ordinary income in respect of the Shares in 2004, the Company will require, at the time of that election, that Executive make an additional payment to the Company for withholding taxes, the amount of which shall be based on the difference, if any, between the purchase price of the Shares and the fair market value of the Shares as of the date of the purchase of the Shares by Executive. SECTION 9. SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. SECTION 10. WAIVER. Any provision contained in this Agreement may be waived, either generally or in any particular instance, by the Board of Directors of the Company. SECTION 11. BINDING EFFECT. This Agreement shall be binding upon, and inure to the benefit of, the Company and Executive and their respective heirs, executors, administrators, legal representatives, successors and assigns. SECTION 12. NO RIGHTS TO EMPLOYMENT. Nothing contained in this Agreement shall be construed as giving Executive any right to be retained, in any position, as an employee of the Company. SECTION 13. NOTICE. Any notice required or permitted hereunder shall be deemed served if personally delivered, delivered by courier service or mailed by registered or certified mail, postage prepaid, and properly addressed to the respective party to whom such notice relates, at the addresses set forth in this Agreement or at such different addresses as shall be specified by a notice given in the manner herein provided. SECTION 14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether oral or written, pertaining to the Shares or otherwise relating to the subject matter of this Agreement. SECTION 15. AMENDMENT. This Agreement may be amended or modified only by a written instrument executed by both the Company and Executive. SECTION 16. GOVERNING LAW. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Ohio. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. THE GOODYEAR TIRE & RUBBER COMPANY By: -------------------------------------- Chairman of the Board, President and Chief Executive Officer Attest: ---------------------------------- Secretary ---------------------------------- Name EX-10.4 8 l12143aexv10w4.txt EX-10.4 SCHEDULE OF OUTSIDE DIRECTORS' ANNUAL COMPENSATION EXHIBIT 10.4 SCHEDULE OF OUTSIDE DIRECTORS' ANNUAL COMPENSATION (EFFECTIVE JANUARY 1, 2004) Component Board Retainer Presiding Director $125,000 ($31,250 per calendar quarter) All Other Directors $70,000 ($17,500 per calendar quarter) Committee Chair Retainer Audit Committee Chair $15,000 ($3,750 per calendar quarter) Other Committee Chairs $5,000 ($1,250 per calendar quarter) ODEPP Stock Unit Accruals* $70,000 Meeting Fees (Board or Committee)** Attended Meeting $1,700 Telephonic Meeting $1,000 *Under the Outside Directors Equity Participation Plan (the "Plan"), on the first business day of each calendar quarter each director will have $17,500 accrued to his or her plan account. Amounts accrued are converted into units equivalent in value to shares of Common Stock at the fair market value on the accrual date. Each director may also choose to have 25%, 50%, 75% or 100% of his or her retainer and meeting fees deferred and converted into share equivalents under the Plan. **Meeting fees only apply for total meetings attended in excess of 24 per year. EX-10.5 9 l12143aexv10w5.txt EX-10.5 SCHEDULE OF SALARY AND BONUS FOR NAMED EXECUTIVE OFFICERS EXHIBIT 10.5 SCHEDULE OF 2005 SALARY AND TARGET BONUS FOR NAMED EXECUTIVE OFFICERS (AS DEFINED IN ITEM 402(A)(3) OF REGULATION S-K) Effective May 1, 2005, the annual salary compensation for each of the Named Executive Officers is: Robert J. Keegan, Chairman of the Board, Chief Executive Officer and President, $1,100,000; Jonathan D. Rich, President, North American Tire, $445,200; C. Thomas Harvie, Senior Vice President, General Counsel and Secretary, $446,100; Richard J. Kramer, Executive Vice President and Chief Financial Officer, $461,100; and Michael J. Roney, President, European Union Tire, $418,100. Target bonuses for 2005 under the Company's Performance Recognition Plan for each of the Named Executive Officers are: Mr. Keegan, $1,500,000; Mr. Rich, $385,000; Mr. Harvie, $290,000; Mr. Kramer, $330,000; and Mr. Roney $361,000. Payment of 2005 bonuses will be made from a payment pool, the size of which will depend on the extent to which the specific financial performance targets established by the Committee are met. The target aggregate payment pool for 2005 is $27.8 million. Earnings before interest and taxes less finance charges ("EBIT") and operating cash flow are the financial performance measures under the Performance Recognition Plan for fiscal year 2005. Funding of the 2005 payment pool will be based 50% on each performance measure and could range from zero to 200% of the target amount depending on the level of operating cash flow and EBIT achieved. In addition, payouts for each of the Named Executive Officers may be adjusted based on individual performance. EX-12 10 l12143aexv12.htm EX-12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

Exhibit 12

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

		Year Ended December 31,
				Restated
		2004		2003			2002			2001			2000
(Dollars in millions)
EARNINGS
Income (loss) before income taxes		$	322.7	$	(690.3	)	$	(19.0	)	$	(339.0	)	$	69.9
Add:
Amortization of previously capitalized interest			11.3		10.7			10.2			9.9			9.8
Minority interest in net income of consolidated subsidiaries with fixed charges			62.6		36.3			57.1			28.0			45.5
Proportionate share of fixed charges of investees accounted for by the equity method			0.3		7.2			4.7			4.1			5.8
Proportionate share of net loss of investees accounted for by the equity method			1.1		21.2			17.1			42.8			28.6
	Total additions		75.3		75.4			89.1			84.8			89.7
Deduct:
Capitalized interest			6.7		8.0			7.2			1.7			11.9
Minority interest in net loss of consolidated subsidiaries			6.4		14.9			5.3			15.0			8.3
Undistributed proportionate share of net income of investees accounted for by the equity method			6.1		3.9			1.7			0.3			2.9
	Total deductions		19.2		26.8			14.2			17.0			23.1
TOTAL EARNINGS		$	378.8	$	(641.7	)	$	55.9		$	(271.2	)	$	136.5
FIXED CHARGES
Interest expense		$	368.8	$	296.3		$	242.7		$	298.0		$	282.9
Capitalized interest			6.7		8.0			7.2			1.7			11.9
Amortization of debt discount, premium or expense			61.0		43.7			8.8			6.0			1.5
Interest portion of rental expense(1)			91.7		88.4			76.7			74.1			73.5
Proportionate share of fixed charges of investees accounted for by the equity method			0.3		7.2			4.7			4.1			5.8
TOTAL FIXED CHARGES		$	528.5	$	443.6		$	340.1		$	383.9		$	375.6
TOTAL EARNINGS BEFORE FIXED CHARGES		$	907.3	$	(198.1	)	$	396.0		$	112.7		$	512.1
RATIO OF EARNINGS TO FIXED CHARGES			1.72		*			1.16			**			1.36

*  Earnings for the year ended December 31, 2003 were inadequate to cover fixed charges. The coverage deficiency was $641.7 million.

**  Earnings for the year ended December 31, 2001 were inadequate to cover fixed charges. The coverage deficiency was $271.2 million.

(1)  Interest portion of rental expense is estimated to equal ¹/3 of such expense, which is considered a reasonable approximation of the interest factor.

EX-4.1

                                                                     EXHIBIT 4.1

GOODYEAR

- --------------------------------------------------------------------------------

                        GENERAL MASTER PURCHASE AGREEMENT
   IN RELATION TO THE SECURITISATION OF TRADE RECEIVABLES OF CERTAIN EUROPEAN
                       SUBSIDIARIES OF THE GOODYEAR GROUP

- --------------------------------------------------------------------------------

                             DATED 10 DECEMBER 2004

                                     BETWEEN

                            ESTER FINANCE TITRISATION
                                  as Purchaser

                                   EUROFACTOR
                                    as Agent

                                     CALYON
                 as Joint Lead Arranger and as Calculation Agent

                           NATEXIS BANQUES POPULAIRES
                             as Joint Lead Arranger

                    GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V.
                              as Centralising Unit

                                   THE SELLERS
                              listed in Schedule 9

                                       AND

                       GOODYEAR DUNLOP TIRES GERMANY GMBH

                           [GIDE LOYRETTE NOUEL LOGO]

- --------------------------------------------------------------------------------

                    ASSOCIATION D'AVOCATS A LA COUR DE PARIS
           26, COURS ALBERT 1ER 75008 PARIS TEL. +33 (0)1 40 75 60 00
                            FAX +33 (0)1 43 59 37 79
                       E-MAIL INFO@GIDE.COM WWW.GIDE.COM



                                TABLE OF CONTENTS

                                                                                                                            
ARTICLE 1.  Definitions.........................................................................................                6
ARTICLE 2.  Interpretation......................................................................................                6
ARTICLE 3.  Purpose of this Agreement...........................................................................                7
ARTICLE 4.  Term of this Agreement..............................................................................               10
ARTICLE 5.  Conditions precedent to the commencement of this Agreement..........................................               11
ARTICLE 6.  Current Account.....................................................................................               12
ARTICLE 7.  Amount of the Purchaser's Funding...................................................................               15
ARTICLE 8.  Subordinated Deposit................................................................................               18
ARTICLE 9.  Complementary Deposit...............................................................................               18
ARTICLE 10. Fees................................................................................................               19
ARTICLE 11. Representations and warranties......................................................................               20
ARTICLE 12. General covenants...................................................................................               23
ARTICLE 13. Early amortisation..................................................................................               35
ARTICLE 14. Taxes...............................................................................................               41
ARTICLE 15. Changes in circumstances............................................................................               43
ARTICLE 16. Order of priority during the Amortisation Period....................................................               44
ARTICLE 17. Payments............................................................................................               46
ARTICLE 18. Conditions in relation to any purchase of Purchasable Receivables...................................               48
ARTICLE 19. Conformity warranties for Purchasable Receivables...................................................               49
ARTICLE 20. Identification of the contractual documentation for the Sold Receivables - Access to documents......               50
ARTICLE 21. Collection of Sold Receivables......................................................................               51
ARTICLE 22. Assessment Report and Back-Up Servicer Report.......................................................               56
ARTICLE 23. Application of payments and payments of collections.................................................               56
ARTICLE 24. Renegotiation.......................................................................................               57
ARTICLE 25. Representation mandate..............................................................................               58
ARTICLE 26. Obligations of care.................................................................................               59
ARTICLE 27. Commission for and costs of collection..............................................................               59
ARTICLE 28. Deemed Collections..................................................................................               61
ARTICLE 29. Fees and expenses...................................................................................               63
ARTICLE 30. Substitution and agency.............................................................................               63
ARTICLE 31. Confidentiality.....................................................................................               64



                                     - 2 -



                                                                                                                            
ARTICLE 32. Notices.............................................................................................               65
ARTICLE 33. Exercise of rights - Recourse - No petition.........................................................               65
ARTICLE 34. Transferability of this Agreement...................................................................               66
ARTICLE 35. Amendment to the Transaction Documents..............................................................               66
ARTICLE 36. Indemnities.........................................................................................               67
ARTICLE 37. Indivisibility......................................................................................               69
ARTICLE 38. Execution and Evidence..............................................................................               69
ARTICLE 39. Withdrawal of Sellers...............................................................................               69
ARTICLE 40. Governing Law - Jurisdiction........................................................................               70



                                                                                                                           
SCHEDULE 1.  MASTER DEFINITIONS SCHEDULE........................................................                               74
SCHEDULE 2.  CONDITIONS PRECEDENT TO THE COMMENCEMENT OF THIS AGREEMENT.........................
SCHEDULE 3.  FORM OF ASSESSMENT REPORT..........................................................
SCHEDULE 4.  FORM OF SELLER'S AUDITORS CERTIFICATE..............................................
SCHEDULE 5.  FORM OF SELLER'S AND CENTRALISING UNIT'S SOLVENCY CERTIFICATE......................
SCHEDULE 6.  FORM OF THE SELLER'S AND THE CENTRALISING UNIT'S LEGAL COUNSEL OPINION.............
SCHEDULE 7.  LIST OF ADDRESSEES.................................................................
SCHEDULE 8.  FORM OF NOTIFICATION OF WITHDRAWAL OF ONE OR MORE SELLER(S)........................
SCHEDULE 9.  LIST OF SELLERS....................................................................
SCHEDULE 10. FORM OF COMFORT LETTER AND PERFORMANCE LETTER......................................
SCHEDULE 11. LIST OF CALENDAR DATES OF THE TRANSACTION..........................................
SCHEDULE 12. REPORTING DOCUMENT RELATING TO THE SOLD RECEIVABLES (ARTICLE 12.3.3)...............
SCHEDULE 13. CONFORMITY WARRANTIES FOR PURCHASABLE RECEIVABLES..................................
SCHEDULE 14. LIST OF EXCLUDED DEBTORS...........................................................
SCHEDULE 15. FORM OF CALCULATION LETTER.........................................................
SCHEDULE 16. FINANCIAL CONVENANTS DEFINITIONS...................................................                              102
SCHEDULE 17. FORM OF LETTER IN RELATION TO THE LIMITATION OF RECOURSE OF CREDITORS OF ESTER
             FINANCE TITRISATION REGARDING THE GOODYEAR SECURITSATION TRANSACTION...............



                                     - 3 -



BETWEEN

1. ESTER FINANCE TITRISATION, a company incorporated under French law and
authorised as a credit institution (etablissement de credit), having its
registered office at 19 Boulevard des Italiens, 75 002 Paris, France, registered
with the Trade and Companies Registry of Paris under the number 414 886 226,
whose representative is duly authorised for the purpose of this Agreement (the
"PURCHASER");

2. EUROFACTOR, a company incorporated under French law and authorised as a
credit institution (etablissement de credit), having its registered office at
Tour d'Asnieres, 4, avenue Laurent Cely, 92608 Asnieres, France, registered with
the Trade and Companies Registry of Nanterre under the number 642 041 560, whose
representative is duly authorised for the purpose of this Agreement (the
"AGENT");

3. CALYON, a company incorporated under French law and authorised as a credit
institution (etablissement de credit), having its registered office at 9 quai du
President Paul Doumer, 92920 Paris La Defense Cedex, France, registered with the
Trade and Companies Registry of Nanterre under the number 304 187 701, whose
representatives are duly authorised for the purpose of this Agreement ("CALYON",
"JOINT LEAD ARRANGER" or the "CALCULATION AGENT");

4. NATEXIS BANQUES POPULAIRES, a limited company (societe anonyme) incorporated
under French law and duly authorised as a credit institution (etablissement de
credit), having its registered office at 45, rue Saint Dominique 75007 Paris,
France and registered with the Trade and Companies Registry of Paris (Registre
du Commerce et des Societes de Paris) under the number 542 044 524, whose
representatives are duly authorised for the purpose of this Agreement ("NBP" or
"JOINT LEAD ARRANGER");

5. GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V., a company incorporated under Dutch
law, having its registered office at Deboelelaan 7, 1083 HJ, Amsterdam, The
Netherlands, registered with the Companies Registry of Amsterdam under the
number 34197964, whose representative is duly authorised for the purpose of this
Agreement (hereafter referred to as the "CENTRALISING UNIT");

6. THE COMPANIES listed in Schedule 9 (each of them as a "SELLER" and
collectively the "SELLERS");

7. GOODYEAR DUNLOP TIRES GERMANY GMBH, a company incorporated under the laws of
the Federal Republic of Germany, having its registered office at Dunlopstrasse
2, 63450 Hanau, Germany, registered with the commercial register of the local
court in Hanau under number HRB 7163 ("GOODYEAR DUNLOP TIRES GERMANY GMBH").

                                     - 4 -



WHEREAS:

1. GOODYEAR DUNLOP TIRES France S.A., (the "FRENCH SELLER"), FULDA REIFEN GmbH &
Co KG, M-PLUS MULTIMARKENMANAGEMENT GmbH & Co KG, GOODYEAR GmbH & Co KG, DUNLOP
GmbH & Co KG (the "GERMAN SELLERS"), GOODYEAR DUNLOP TIRES Italia SPA (the
"ITALIAN SELLER") and GOODYEAR DUNLOP TIRES Espana SA (the "SPANISH SELLER") are
in the business of manufacturing and/or supplying tyres and activities relating
thereto, and hold receivables over certain customers.

2. In order to provide financing to the Sellers, CALYON has proposed to set up a
securitisation transaction by way of the sale, on an ongoing basis, of trade
receivables resulting from the ordinary business of the Sellers in France,
Germany, Italy and Spain (the "SECURITISATION TRANSACTION").

3. Pursuant to the Securitisation Transaction, such trade receivables will be
purchased by the Purchaser from the Sellers twice a month and in accordance with
the receivables purchase agreements governed by the relevant law of the
jurisdiction where the relevant Seller is located (the "RECEIVABLES PURCHASE
AGREEMENTS").

4. The Purchaser has agreed to acquire certain trade receivables (the
"PURCHASABLE RECEIVABLES") held by the Sellers subject to the terms and
conditions contained in this Agreement and in the Receivables Purchase
Agreements.

5. The Purchaser shall fund the acquisition of Purchasable Receivables:

(i)      partly out of a senior deposit (the "SENIOR DEPOSIT") effected by the
         Depositor with the Purchaser in accordance with a master senior deposit
         agreement (the "MASTER SENIOR DEPOSIT AGREEMENT"); and

(ii)     partly by way of set-off against any amount due and payable by the
         Centralising Unit to the Purchaser in connection with (a) a
         subordinated deposit (the "SUBORDINATED DEPOSIT") to be effected by the
         Centralising Unit with the Purchaser in accordance with the terms and
         conditions of a master subordinated deposit agreement (the "MASTER
         SUBORDINATED DEPOSIT AGREEMENT") and (b) a complementary deposit (the
         "COMPLEMENTARY DEPOSIT") to be effected by the Centralising Unit with
         the Purchaser in accordance with the terms and conditions of a master
         complementary deposit agreement (the "MASTER COMPLEMENTARY DEPOSIT
         AGREEMENT").

6. The receivable held by the Depositor over the Purchaser in connection with
the repayment of the Senior Deposit shall be assigned to a French fonds commun
de creances (the "FUND") set up in accordance with Articles L.214-43 to L.214-49
of the Monetary and Financial Code (Code monetaire et financier) which shall
issue related units to be subscribed by LMA S.A., Elixir Funding Limited and any
other Issuer which participates in the Securitisation Transaction. Each Issuer
shall fund the subscription of units, by issuing commercial paper (the "NOTES").

                                     - 5 -



7. The Centralising Unit shall be appointed by the Sellers to act as their agent
(mandataire) for the purposes of carrying out certain activities, in accordance
with the provisions of this general master purchase agreement (the "GENERAL
MASTER PURCHASE AGREEMENT" or the "AGREEMENT").

8. For the purposes of the General Master Purchase Agreement and the relevant
Receivables Purchase Agreement, the Purchaser shall appoint the Sellers for the
recovery of collections in accordance with a Collection Mandate (the "COLLECTION
MANDATE").

9. Due to the number of Sellers and the different Receivables Purchase
Agreements under which Purchasable Receivables will be purchased by the
Purchaser from the Sellers, the parties have agreed to enter into this General
Master Purchase Agreement to set out a Master Definitions Schedule, common
terms, representations and warranties, general covenants and all other
provisions provided for by this General Master Purchase Agreement that will
apply in respect of the Receivables Purchase Agreements.

NOW IT IS HEREBY AGREED AS FOLLOWS:

                           CHAPTER I - INTERPRETATION

ARTICLE 1. DEFINITIONS

Capitalised terms and expressions used in this Agreement shall have the same
meaning as ascribed to such terms and expressions in the Master Definitions
Schedule set out in Schedule 1 hereto. The schedules hereto shall form an
integral part of this Agreement.

ARTICLE 2. INTERPRETATION

(i) The titles of the Chapters, the Schedules and the Articles (including their
paragraphs) used herein and the table of contents are for convenience of
reference only, and shall not be used to interpret this Agreement.

(ii)     In this Agreement, except if the context calls for another
         interpretation:

         (a)   references to "CHAPTERS", "ARTICLES" and "SCHEDULES" shall be
               construed as references to the chapters, articles and schedules
               of this Agreement and references to this Agreement include its
               schedules;

         (b)   words in the plural shall cover the singular and vice versa;

         (c)   references to the time of the day shall refer to Paris time,
               unless otherwise stipulated;

                                     - 6 -



         (d)   references to a person shall include its permitted assignees,
               transferees and successors;

         (e)   references to a document shall mean such document, as amended,
               replaced by novation or varied from time to time;

         (f)   references to a provision of law shall mean such provision as
               amended or re-enacted.

               CHAPTER II - PURPOSE - TERM - CONDITIONS PRECEDENT

ARTICLE 3. PURPOSE OF THIS AGREEMENT

3.1 Pursuant to the terms and conditions of this Agreement, the relevant
Receivables Purchase Agreements and, where applicable, the relevant Transfer
Deeds, the Sellers shall sell Purchasable Receivables to the Purchaser and the
Purchaser shall purchase Purchasable Receivables from the Sellers on each
Settlement Date during the Replenishment Period.

3.2 The parties agree that the Purchaser shall fund the acquisition of
Purchasable Receivables as follows:

(i)      partly out of a Senior Deposit effected by the Depositor with the
         Purchaser in accordance with the Master Senior Deposit Agreement, for
         an amount which shall not exceed the Maximum Amount of the Program, as
         determined in accordance with Article 7 (Amount of the Purchaser's
         Funding);

(ii)     partly by way of set-off against any amount due and payable by the
         Centralising Unit to the Purchaser in connection with (a) a
         Subordinated Deposit to be effected by the Centralising Unit with the
         Purchaser in accordance with the provisions of the Master Subordinated
         Deposit Agreement and (b) a Complementary Deposit to be effected by the
         Centralising Unit with the Purchaser in accordance with the provisions
         of the Master Complementary Deposit Agreement, for an amount which
         shall not exceed the Maximum Amount of the Complementary Deposit.

3.3 The parties hereby acknowledge that the Centralising Unit is acting for the
purposes of this Agreement, in its own name and behalf, but also in the name and
on behalf of the Sellers, pursuant to the terms of a mandate (mandat) expressly
granted by each of the Sellers to the Centralising Unit and which the
Centralising Unit hereby accepts. By virtue of this mandate, the Sellers appoint
the Centralising Unit to act in their name and on their behalf and to perform
the following obligations in accordance with the provisions of the Transaction
Documents: (i) receive all Payments due by the Purchaser to the Sellers in
respect of the Sold Receivables, (ii) make any payment due by the Sellers to the
Purchaser and the Agent pursuant to the Transaction Documents, such payments
covering inter alia the amount due in respect of Actual Collections or Adjusted
Collections, (iii) enter into the Current Account

                                     - 7 -



relationship set forth in Article 6, (iv) negotiate with the Purchaser, in
particular upon the occurrence of any of the events set out in Articles 13, 14
and 15, (v) deliver to the Purchaser on the Initial Settlement Date and on each
Settlement Date during the Replenishment Period, the Transfer Deeds received
from the Sellers or executed by the Centralising Unit and, on each Information
Date, the List of Purchasable Receivables, (vi) receive or give any notices,
mails, or documents provided pursuant to the Transaction Documents, (vii)
exercise any rights arising in respect of the Transaction Documents (with the
exception of the Master Subordinated Deposit Agreement and the Master
Complementary Deposit Agreement, in respect of which the Centralising Unit acts
in its own name and on its own behalf), and (viii) deliver to the Purchaser the
Assessment Reports substantially in the form set out in Schedule 3 to this
Agreement.

The Sellers and the Centralising Unit have entered into the Intercompany
Arrangements, which provide, among other things, for the allocation of all sums
due and/or received in connection with the Transaction Documents to which each
Seller and the Centralising Unit is a party. Such Intercompany Arrangements
shall provide inter alia that each Seller has an effective recourse against the
defaulting Seller, the other Sellers and GOODYEAR DUNLOP TIRES EUROPE BV for any
payment that any Seller or the Centralising Unit may be required to make under
the joint and several liability provisions provided for under Article 3.6. The
Sellers and the Centralising Unit hereby irrevocably and unconditionally
undertake to refrain from exercising any rights of recourse against the
Purchaser, the Agent and/or CALYON in connection with such allocation.

3.4. The parties agree that the Purchaser shall appoint the Sellers to act as
collection agents for the servicing of the Sold Receivables, in accordance with
the provisions of Article 21.

3.5 This Agreement shall apply automatically to any Transfer Deed delivered by
the Centralising Unit, acting in the name and on behalf of a Seller to the
Purchaser or any other similar document agreed between a Seller and the
Purchaser, pursuant to the relevant Receivables Purchase Agreement.

3.6 Joint and several liability

3.6.1. The parties agree that the obligations of each Seller under this
Agreement shall be several but not joint, and shall be construed as if each
Seller had entered into a separate agreement with the Purchaser.

3.6.2. By way of exception to the foregoing, each Seller, Goodyear Dunlop Tires
Germany GmbH and the Centralising Unit shall be jointly and severally liable to
the Purchaser for the payment by a Seller, GOODYEAR DUNLOP TIRES EUROPE BV
and/or the Centralising Unit of (i) any sums due under the Transaction Documents
and notably (without limitation) for the transfer of Adjusted Collections on the
due date to the Purchaser, in accordance with the provisions of Article 23, and
(ii) any claim for damages against a Seller for breach of its representations
and warranties or for failure to perform its obligations under this Agreement
and the other Transaction Documents to which it is a party.

                                     - 8 -



3.6.3. Notwithstanding any other provision of this Agreement, the parties hereto
agree that any claim enforceable under Article 3.6.2 above against any of the
German Sellers or Goodyear Dunlop Tires Germany GmbH (each a "GERMAN PARTY",
together the "GERMAN PARTIES") shall on any date on which payment is requested
pursuant to Article 3.6.2 be limited to the amounts calculated as follows (the
"FREE EQUITY AMOUNT"):

(a)      in the case of Goodyear Dunlop Tires Germany GmbH, the amount of its
         Net Assets less its Registered Share Capital as of such date;

(b)      in the case of a German Seller, the amount of its respective Net Assets
         as of such date, provided that such amount shall be reduced to the
         extent payment thereof would result in the Net Assets of RVM Reifen
         Vertriebsmanagement GmbH ("RVM") (or any successor general partner of
         such German Seller) falling short of the Registered Share Capital of
         RVM as of such date.

For the purpose of this Article 3.6, "NET ASSETS" means, in respect of any
entity as of any date, the result of (a) the sum of the amounts shown under the
balance sheet positions pursuant to Section 266 (2) (A), (B) and (C) of the
German Commercial Code (Handelsgesetzbuch), with the exception of any loan
repayment claims against any of such entity's affiliates (other than such
entity's subsidiaries) (or other, economically equivalent claims, including
recourse claims against a defaulting Seller under the Intercompany
Arrangements), less (b) the sum of the amounts of liabilities shown under the
balance sheet positions pursuant to Section 266 (3) (B), (C) and (D) of the
German Commercial Code, in each case as determined as of such date; and
"REGISTERED SHARE CAPITAL" means, in respect of any entity as of any date, the
amount shown under the balance sheet position pursuant to Section 266 (3) (A) I
of the German Commercial Code as determined as of such date.

The calculation of the Free Equity Amount shall be made as of the date of any
payment request pursuant to Article 3.6.2 above.

3.6.4 If, upon a payment request to any German Party under Article 3.6.2 above,
such German Party is of the reasonable opinion that the amount requested exceeds
the Free Equity Amount at the time of such request, such German Party shall
provide evidence to the Purchaser that the payment in full of the amount
requested would result:

(a)      in the case of Goodyear Dunlop Tires Germany GmbH, in the amount of its
         Net Assets falling below the amount of its Registered Share Capital;

(b)      in the case of the German Sellers, in the amount of the Net Assets of
         RVM falling below RVM's Registered Share Capital,

including, without limitation, plausible calculations made by such German Party
and all supporting documents reasonably requested by the Purchaser, and a
written statement from the statutory auditors of Goodyear Dunlop Tires Germany
GmbH (in case of Article 3.6.3 (a)) and RVM (in the case of Article 3.6.3 (b))
to the Purchaser to the effect that the amount of the payment requested exceeds
the Free Equity Amount of Goodyear Dunlop Tires Germany GmbH (in case of Article
3.6.3 (a)) and/or of RVM (in the case of Article 3.6.3 (b)).

                                     - 9 -



3.6.5 For the purposes of calculating the Free Equity Amount, loans and other
contractual liabilities incurred in negligent or wilful violation of the
provisions of this Agreement shall be disregarded.

In the event that a payment is requested under Article 3.6.2 above, the relevant
German Party and/or RVM (in the case of Article 3.6.3 (b)) shall realise, to the
extent (i) the Free Equity Amount falls short of the amount so requested, (ii)
required to enable the relevant German Party to make the requested payment, and
(iii) legally permitted, assets that are shown in the balance sheet with a book
value (Buchwert) that is significantly lower than the market value of the assets
at the time of such request if such assets are not necessary for the business of
such German Party and/or RVM (in the case of Article 3.6.3 (b))
(betriebsnotwendig).

3.6.6 None of the above restrictions on enforcement shall apply if and to the
extent such enforcement relates to any obligations of the German Parties other
than under Article 3.6.2.

3.6.7. The parties expressly agree that the Sellers and the Centralising Unit
shall not have any responsibility for any non payment by any Debtor of any sums
due in respect of the Sold Receivables, except to the extent that the Purchaser
may exercise recourse for such non payment against the Subordinated Deposit and,
as the case may be, the Complementary Deposit, as provided herein and, for the
avoidance of any doubt, to the extent of any Deemed Collections in accordance
with the provisions of Article 28.

ARTICLE 4. TERM OF THIS AGREEMENT

4.1 This Agreement shall commence on the date hereof and end on the Program
Expiry Date. For the purposes of this Agreement and the Receivables Purchase
Agreements, the parties agree that there shall be two periods:

(i)      the Replenishment Period, which commences on the date hereof and ends
         on the Commitment Expiry Date (excluded); and

(ii)     the Amortisation Period, which commences on the Commitment Expiry Date
         and ends on the Program Expiry Date.

                                     - 10 -



4.2 The parties expressly agree that, in the event that there are any Sold
Receivables outstanding on the Program Expiry Date:

(a) until such time as (i) any sums due under the Master Senior Deposit
Agreement have been paid, or (ii) the Centralising Unit, acting in the name and
on behalf of the Sellers, has repurchased all such Sold Receivables from the
Purchaser:

(i)      the Centralising Unit shall make a payment to the Purchaser for an
         amount equal to any collections actually received by the Sellers
         arising in relation to those Sold Receivables which are outstanding;
         and

(ii)     the Conformity Warranties set out in Article 19 (Conformity Warranties
         for Purchasable Receivables) and the relevant Seller's covenants in
         relation to the Sold Receivables as set out in Articles 12 (General
         Covenants), 16 (Order of Priority during the Amortisation Period), 21
         (Collection of Sold Receivables), 23 (Application of Payments and
         Payments of collections), 24 (Renegotiation), and 25 (Representation
         Mandate) shall remain in force ;

(b) thereafter, up to an amount equal to any portion of the Complementary
Deposit and/or the Subordinated Deposit that was not reimbursed on the Program
Expiry Date plus any Deferred Purchase Price that remained outstanding on such
date, any Adjusted Collections shall be refunded to the Centralising Unit.

In any event, the parties expressly agree that, even after the Program Expiry
Date, the provisions set out in Articles 14 (Taxes), 15 (Changes in
Circumstances), 29 (Fees and expenses), 31 (Confidentiality), 33 (Exercise of
Rights - Recourse- Non Petition), 36 (Indemnities), 40 (Governing law -
Jurisdiction) shall remain in force.

4.3. The Centralising Unit, acting in the name and on behalf of the Sellers,
may, upon written notice given to the Purchaser at least nine (9) Business Days
before a Funded Settlement Date during the Amortisation Period or at any time
after the Program Expiry Date, offer to repurchase all outstanding Sold
Receivables from the Purchaser, at a price equal to the nominal value of such
Sold Receivables or such other price as the parties may agree. Such purchase
price shall be applied towards the payments and in the order specified in
Article 16 and, to the extent applicable, shall be set off against any amounts
due to the Centralising Unit in accordance with said Article 16.

ARTICLE 5. CONDITIONS PRECEDENT TO THE COMMENCEMENT OF THIS AGREEMENT

This Agreement shall not take effect unless and until the Purchaser has
received, on the date hereof, all the documents referred to in Schedule 2, and
has determined that the same are satisfactory as to form and substance.

                                     - 11 -



                    CHAPTER III - CURRENT ACCOUNT - DEPOSITS

ARTICLE 6. CURRENT ACCOUNT

6.1 Current Account agreement

6.1.1 The Purchaser and the Centralising Unit hereby agree to enter into a
current account relationship (relation de compte courant) (the "CURRENT
ACCOUNT").

6.1.2 Any sum due either by (i) the Purchaser to the Centralising Unit, acting
in its own name or in the name of the Sellers pursuant to the Transaction
Documents and/or by (ii) the Sellers or the Centralising Unit, acting in its own
name or in the name of the Sellers, to the Purchaser pursuant to the Transaction
Documents shall be recorded respectively as credit or debit on the Current
Account. Any mutual debit or credit that does not arise from the Transaction
Documents shall be excluded from the Current Account.

6.2 Automatic Set-off

The parties hereby agree that any debit and credit recorded on the Current
Account shall be automatically set-off (compenses).

6.3 Balance

6.3.1 On each Calculation Date, the Agent shall calculate the balance of the
Current Account, in accordance with the provisions of Article 12.3.1., on the
basis of information it has received pursuant to such Article 12.3.1., and shall
forthwith provide the Centralising Unit and the Purchaser with such calculation.

6.3.2 In the case of a debit balance of the Current Account on a Calculation
Date, as stated in the Current Account statement communicated in accordance with
the provisions of Article 6.3.1., the Centralising Unit shall pay to the
Purchaser's Account in immediately available funds an amount equal to such debit
balance, on the Funded Settlement Date or on the Intermediary Settlement Date in
relation to which the Current Account statement is drawn up, in accordance with
the provisions of Article 17.5.

6.3.3 In the case of a credit balance of the Current Account on a Calculation
Date, as stated in the Current Account statement communicated in accordance with
the provisions of Article 6.3.1., the Purchaser shall pay to the Centralising
Unit's Account in immediately available funds an amount equal to such credit
balance on the Funded Settlement Date or on the Intermediary Settlement Date in
relation to which the Current Account statement has been drawn up, in accordance
with the provisions of Article 17.5.

6.3.4. Once the payment referred to in Article 6.3.2. or in Article 6.3.3. has
been made, the Current Account shall be balanced at zero (0).

                                     - 12 -



6.4 Entry on Current Account

6.4.1 On the Initial Settlement Date, the Purchaser shall record:

(i)      on the debit of the Current Account, an amount equal to the
         Subordinated Deposit calculated as of the Initial Settlement Date in
         accordance with Article 8 (Subordinated Deposit);

(ii)     on the debit of the Current Account, an amount equal to the
         Complementary Deposit calculated as of the Initial Settlement Date in
         accordance with Article 9 (Complementary Deposit);

(iii)    on the debit of the Current Account, the amount of the Adjusted
         Collections calculated in respect of such Initial Settlement Date; and

(iv)     on the credit of the Current Account an amount equal to the Initial
         Purchase Price of the Purchasable Receivables sold on the Initial
         Settlement Date within the limits provided for by Article 12.3.1.

6.4.2    On each Intermediary Settlement Date during the Replenishment Period,
         the Purchaser shall enter:

(i)      on the debit of the Current Account,

         (a)   an amount equal to any Increase in the Subordinated Deposit on
               such date,

         (b)   an amount equal to any Increase in the Complementary Deposit on
               such date,

         (c)   the amount of the Adjusted Collections calculated in respect of
               such date,

         (d)   the amount of any payment due with respect to the repurchase of
               Doubtful Receivables on such date, and

         (e)   any other sums due by the Centralising Unit acting on its own
               behalf or on behalf of the Sellers, to the Purchaser pursuant to
               the Transaction Documents, and not paid otherwise.

                                     - 13 -



(ii)     on the credit of the Current Account,

         (a)   an amount equal to the Initial Purchase Price of the Purchasable
               Receivables purchased on such date within the limits set out in
               Article 12.3.1,

         (b)   an amount equal to any Reduction of the Subordinated Deposit on
               such date,

         (c)   an amount equal to any Reduction of the Complementary Deposit on
               such date, and

         (d)   any other sums due by the Purchaser to the Centralising Unit
               acting on its own behalf or on behalf of the Sellers pursuant to
               the Transaction Documents, and not paid otherwise.

6.4.3 On each Funded Settlement Date during the Replenishment Period, the
Purchaser shall enter:

(i)      on the debit of the Current Account,

         (a)   an amount equal to any Increase in the Subordinated Deposit on
               such date,

         (b)   an amount equal to any Increase in the Complementary Deposit on
               such date,

         (c)   the amount of the Adjusted Collections calculated in respect of
               such date,

         (d)   the amount of any payment due with respect to the repurchase of
               Doubtful Receivables on such date, and

         (e)   any other sums due by the Centralising Unit acting on its own
               behalf or on behalf of the Sellers, to the Purchaser pursuant to
               the Transaction Documents, and not paid otherwise.

(ii)     on the credit of the Current Account,

         (a)   an amount equal to the Initial Purchase Price of the Sold
               Receivables purchased on such date within the limits set out in
               Article 12.3.1,

         (b)   an amount equal to any Deferred Purchase Price payable on such
               date,

         (c)   an amount equal to any Reduction of the Subordinated Deposit on
               such date;

         (d)   an amount equal to any Reduction of the Complementary Deposit on
               such date, and

         (e)   any other sums due by the Purchaser to the Centralising Unit
               acting on its own behalf or on behalf of the Sellers pursuant to
               the Transaction Documents, and not paid otherwise.

                                     - 14 -



The parties hereby agree that all entries on the Current Account are calculated,
for any Settlement Date during the Replenishment Period, on the Calculation Date
preceding such Settlement Date, and that, once entered in the Current Account,
such entries shall constitute payments for the purposes of the Transaction
Documents.

6.5. Termination of the Current Account

The current account relationship shall terminate, and the Current Account shall
be closed, on the Commitment Expiry Date.

ARTICLE 7. AMOUNT OF THE PURCHASER'S FUNDING

7.1 Maximum Amount of the Purchaser's Funding

7.1.1. The Purchaser shall fund Payments (the "PURCHASER'S FUNDING") out of a
Senior Deposit, up to a maximum amount (the "MAXIMUM AMOUNT OF THE PURCHASER'S
FUNDING") equal to the Maximum Amount of the Program.

The Senior Deposit shall create an indebtedness of the Purchaser to the
Depositor in relation to the repayment of such Senior Deposit.

7.1.2. At any time before the Commitment Expiry Date, the Centralising Unit,
acting in the name and on behalf of the Sellers, shall have the right to request
a partial reduction of the Maximum Amount of the Program, subject to thirty (30)
Business Days prior written notice (or such shorter notice as may be agreed by
the parties) to the Purchaser and as from the date of receipt of such notice by
the Purchaser; provided that, if the Maximum Amount of the Program is reduced to
below the Minimum Amount of the Program, the Commitment Expiry Date shall be
deemed to have occurred on the effective date of such intended reduction.

Such reduction of the Maximum Amount of the Program shall take effect on the
first Funded Settlement Date during the Replenishment Period after the notice
period referred to in the paragraph above and shall be definitive and
irrevocable until the following anniversary date of this Agreement falling after
such reduction. On such anniversary date, the Centralising Unit, acting in the
name and on behalf of the Sellers, shall have the right to request either a
decrease or an increase of the Maximum Amount of the Program, provided that any
such increase shall be limited to an amount equal to the aggregate amount of all
reductions made since the preceding anniversary date of this Agreement pursuant
to the preceding paragraph. The Purchaser shall not accept any request to
increase the Maximum Amount of the Program without the prior written consent of
the Liquidity Banks and the Issuers.

7.1.3. In the event that any Liquidity Agreement is not renewed as a result of a
Liquidity Commitment Non Renewal, the Maximum Amount of the Program shall be
partially and automatically reduced by an amount equal to the commitment of the
relevant Liquidity Bank.

Such reduction of the Maximum Amount of the Program shall take effect on the
Funded Settlement Date following the date upon which an event described above
has occurred and shall be definitive and irrevocable.

                                     - 15 -



7.1.4. In the event the Maximum Amount of the Program is reduced in accordance
with the provisions of Articles 7.1.2. or 7.1.3. above, the Maximum Amount of
the Purchaser's Funding shall be reduced so that the Maximum Amount of the
Purchaser's Funding is equal to the reduced Maximum Amount of the Program.

7.2 Amount of the Purchaser's Funding on the Initial Settlement Date

On the Initial Settlement Date, the amount of the Purchaser's Funding shall be
equal to

(i)      the lower of the following amounts:

         (a)   the Outstanding Amount of Eligible Receivables to be purchased by
               the Purchaser on such date, multiplied by the excess of:

               -  one (1) less;

               -  the sum of the Overcollateralisation Rate and the Discount
               Rate; and

         (b)   the Maximum Amount of the Purchaser's Funding;

(ii)     less the amount of the Excess Foreseen Collections for such Initial
         Settlement Date,

rounded down to the nearest whole multiple of EUR 1,800.

7.3 Change in the Purchaser's Funding

On each Funded Settlement Date during the Replenishment Period other than the
Initial Settlement Date, the Purchaser's Funding shall be adjusted as follows:

(a)      if:

         (i)   the lower of the following amounts:

               x)   the Outstanding Amount of Eligible Receivables
                    already purchased and to be purchased by the
                    Purchaser on such date, multiplied by the excess of:

                    -  one (1) less;

                    -  the sum of the Overcollateralisation Rate and the
                    Discount Rate; and

               (y)  the Maximum Amount of the Purchaser's Funding;

               less, except if any Early Amortisation Event defined in the
               Article 13.3. has occurred before the Assessment Date for such
               Settlement Date, the amount of the Excess Foreseen Collections
               for such Settlement Date,

               rounded down to the nearest whole multiple of EUR 1,800;

                                     - 16 -



         exceeds

         (ii)  the amount of the Purchaser's Funding outstanding on the
               preceding Funded Settlement Date;

         then the Purchaser's Funding shall be increased by an amount equal to
         such excess (the "INCREASE IN THE PURCHASER'S FUNDING"); and

(b)      if:

         (i)   the lower of the following amounts:

               (x)  the Outstanding Amount of Eligible Receivables
                    already purchased and to be purchased by the
                    Purchaser on such date, multiplied by the excess of:

                    -    one (1) less;

                    -    the sum of the Overcollateralisation Rate and the
                    Discount Rate; and

               (y)  the Maximum Amount of the Purchaser's Funding;

               less, except if any Early Amortisation Event defined in the
               Article 13.3. has occurred before the Assessment Date for such
               Settlement Date, the amount of the Excess Foreseen Collections
               for such Settlement Date,

               rounded down to the nearest whole multiple of EUR 1,800;

         is lower than

         (ii)  the amount of the Purchaser's Funding outstanding on the
               preceding Funded Settlement Date;

         then the Purchaser's Funding shall be reduced by the amount of such
         difference (the "REDUCTION IN THE PURCHASER'S FUNDING").

7.4      Amount of the Purchaser's Funding in the event of a Potential Early
         Amortisation Event

In the event that a Potential Early Amortisation Event occurs, and as long as
such Potential Early Amortisation Event is continuing, the amount of the
Purchaser's Funding shall be limited to the amount of the Purchaser's Funding on
the Funded Settlement Date before such Potential Early Amortisation Event has
occurred.

                                     - 17 -



ARTICLE 8. SUBORDINATED DEPOSIT

Pursuant to the terms of a Master Subordinated Deposit Agreement entered into
between the Centralising Unit and the Purchaser on the date hereof, the
Centralising Unit shall make a Subordinated Deposit with the Purchaser. The main
provisions of the Master Subordinated Deposit Agreement are as follows:

8.1 Subordinated Deposit

On the Initial Settlement Date and on each following Settlement Date during the
Replenishment Period, the amount of the Subordinated Deposit shall be calculated
by the Agent in accordance with the provisions of schedules 1 and 2 of the
Master Subordinated Deposit Agreement.

The Agent shall calculate the amount of the Subordinated Deposit on each
Calculation Date.

On any Calculation Date, during the Replenishment Period, the Agent shall
calculate the difference between (i) the amount of the Subordinated Deposit to
be made on such Settlement Date, and (ii) the amount of the Subordinated Deposit
made on the preceding Settlement Date.

8.2 Pledge of the Subordinated Deposit

The Subordinated Deposit shall be pledged as cash collateral (affecte a titre de
gage-especes) by the Centralising Unit in favour of the Purchaser, to secure the
payment of (i) any sum due by the Debtors to the Purchaser in respect of the
Sold Receivables and (ii) any sum due to the Purchaser by any Seller or the
Centralising Unit pursuant to the Transaction Documents.

8.3 Repayment of the Subordinated Deposit

The repayment of the Subordinated Deposit shall be carried out in accordance
with the terms and conditions set forth in the Master Subordinated Deposit
Agreement and Article 16 (Order of Priority during the Amortisation Period).

ARTICLE 9. COMPLEMENTARY DEPOSIT

Pursuant to the terms of a Master Complementary Deposit Agreement entered into
between the Centralising Unit and the Purchaser on the date hereof, the
Centralising Unit shall make a Complementary Deposit with the Purchaser. The
main provisions of the Master Complementary Deposit Agreement are as follows:

9.1 Complementary Deposit

The Centralising Unit shall make a Complementary Deposit with the Purchaser in
accordance with the terms and conditions of the Master Complementary Deposit
Agreement.

                                     - 18 -



On the Initial Settlement Date and on each following Settlement Date during the
Replenishment Period, the amount of the Complementary Deposit shall be
calculated by the Agent in accordance with the provisions of schedule 1 of the
Master Complementary Deposit Agreement.

9.2 Pledge of the Complementary Deposit

The Complementary Deposit shall be pledged as cash collateral (affecte a titre
de gage-especes) by the Centralising Unit in favour of the Purchaser, to secure
the payment of (i) any sum due by the Debtors to the Purchaser in respect of the
Sold Receivables and (ii) any sum due to the Purchaser by any Seller or the
Centralising Unit pursuant to the Transaction Documents, provided that no party
shall be entitled to receive, as a result of such pledge, any amounts in
addition to those that it is entitled to receive pursuant to Article 16.

9.3 Repayment of the Complementary Deposit

The repayment of the Complementary Deposit shall be carried out in accordance
with the terms and conditions set forth in the Master Complementary Deposit
Agreement and Article 16 (Order of Priority during the Amortisation Period)
hereunder.

                                CHAPTER IV - FEES

ARTICLE 10. FEES

10.1 On each Funded Settlement Date (except the Initial Settlement Date), the
Centralising Unit shall pay to the Agent, the Management Fee which is due to
compensate the Agent for its services under this Agreement.

10.2 Such Management Fee shall be equal to EUR 20,900 per month (V.A.T.
excluded), increased by the applicable V.A.T ; provided that if the
Securitisation Transaction is terminated by the Centralising Unit during the
first two years of the Securitisation Transaction (other than a termination
after there has been an Early Amortisation Event or a drawing under a Liquidity
Agreement or a Liquidity Bank Letter), then the minimum amount of the Management
Fee for the year in which the Securitisation Transaction is terminated shall be
equal to EUR 250,000 (V.A.T. excluded), increased by the applicable V.A.T. As
from the beginning of the third year until the fifth year of the Securitisation
Transaction, in the event that the Centralising Unit decides to terminate the
Securitisation Transaction and repurchases the Sold Receivables upon such
termination (other than a termination after there has been an Early Amortisation
Event or a drawing under a Liquidity Agreement or an Liquidity Bank Letter) and
does not inform the Agent at the latest three months beforehand, the
Centralising Unit undertakes to pay an amount upon such termination equal to the
lesser of (i) the Management Fee for three months (EUR 62,700) (VAT excluded),
increased by the applicable V.A.T, from the date on which the notice of
termination is delivered minus any Management Fee otherwise paid after notice of
termination is delivered and (ii) the Management Fee for the period from such
termination until the expiration date of the Liquidity Agreements.

                                     - 19 -



10.3 The Agent shall notify the amount of the Management Fee to the Centralising
Unit, at the latest before 5.00 pm on the Calculation Date immediately preceding
any Funded Settlement Date.

10.4 On each Funded Settlement Date, the Centralising Unit shall pay the
Management Fee by crediting the Agent's Account before 12.00 (noon), for an
amount equal to the Management Fee, as determined in accordance with 10.2. The
parties acknowledge that the payment of such Management Fee by the Centralising
Unit to the Agent shall be expressly excluded from the Current Account
mechanism.

10.5 In the event that the Centralising Unit fails to pay such Management Fee on
a Funded Settlement Date, the Purchaser shall proceed forthwith with the payment
of such Management Fee, on the Centralising Unit's behalf to the extent of the
Adjusted Collections received. As such, the Purchaser shall be, upon delivery of
a subrogation notice by the Agent, subrogated in the rights of the Agent against
the Centralising Unit to the extent of the sums paid to the Agent in respect of
the Management Fee.

         CHAPTER V - REPRESENTATIONS AND WARRANTIES - GENERAL COVENANTS

ARTICLE 11. REPRESENTATIONS AND WARRANTIES

11.1 Each Seller, Goodyear Dunlop Tires Germany GmbH and the Centralising Unit
represents and warrants to the Purchaser at the date hereof as follows:

(i)      -     in the case of the French Seller, it is a limited company
               (societe anonyme) duly incorporated and validly existing under
               French law, or

         -     in the case of the German Sellers, it is a limited partnership
               (Gesellschaft mit beschrankter Haftung & Co
               Kommanditgesellschaft) or (in the case of Goodyear Dunlop Tires
               Germany GmbH) a limited liability company (Gesellschaft mit
               beschrankter Haftung), duly established and validly existing
               under German law, or

         -     in the case of the Italian Seller, it is a joint stock company
               (societa per azioni) duly incorporated and validly existing under
               Italian law, or

         -     in the case of the Spanish Seller, it is a corporation (sociedad
               anonima) duly incorporated and validly existing under Spanish
               law, or

         -     in the case of the Centralising Unit, it is a limited liability
               company duly incorporated and validly existing under Dutch law ;

                                     - 20 -



(ii)     it has the capacity (a) to carry on its business, as currently
         conducted, and to own all of the assets appearing on its balance sheet,
         except where failure of such capacity would not be reasonably likely to
         result in a Material Adverse Effect, and (b) to enter into and perform
         its obligations under the Transaction Documents to which it is a party;

(iii)    it does not require any power or authorisation to execute the
         Transaction Documents to which it is a party or to perform its
         obligations under the Transaction Documents, that it has not already
         obtained, unless, in the case of any Governmental Authorisation, the
         failure to obtain such authorisation would not be reasonably likely to
         result in a Material Adverse Effect;

(iv)     -     except to the extent that no Material Adverse Effect would be
               reasonably likely to result, the execution of the Transaction
               Documents to which it is a party and the performance of its
               obligations under the Transaction Documents will not contravene
               (a) any of the provisions of its articles of association or of
               any other of its constitutional or organisational documents, (b)
               any laws or regulations applicable to it, or (c) any contractual
               obligations, negative pledges, agreements or undertakings to
               which it is a party or by which it is bound;

         -     the execution of the Transaction Documents to which it is a party
               and the performance of its obligations under the Transaction
               Documents will not contravene (x) if such concept is applicable
               in the relevant jurisdiction, the corporate interest (interet
               social) of the Centralising Unit or the relevant Seller and (y)
               in the case of each of the German Parties, Section 30 and seq. of
               the German Limited Liability Companies Act (Gesetz betreffend die
               Gesellschaften mit beschrankter Haftung);

(v)      the Transaction Documents to which it is a party constitute its legal,
         valid and binding obligations and are enforceable against it in
         accordance with their terms, subject to applicable bankruptcy,
         insolvency, moratorium and other laws affecting creditors' right
         generally;

(vi)     all of the documents that it has provided to the Purchaser pursuant to
         the Transaction Documents are accurate and correct in all material
         respects as of their respective dates and as of the date of their
         delivery, and the audited, certified annual accounts were prepared in
         accordance with the relevant Accounting Principles and give, in all
         material respects, a true, accurate and fair view (comptes reguliers,
         sinceres et qui donnent une image fidele) of its results for the
         relevant fiscal year;

(vii)    it carries on its business in compliance with all of the relevant laws
         and regulations applicable to it, except where failure to do so would
         not be reasonably likely to have a Material Adverse Effect;

(viii)   there are no actions, suits or proceedings pending or, to its
         knowledge, threatened to be raised or brought against it, which are
         reasonably likely to result in a Material Adverse Effect, or any
         material litigation that challenges or seeks to prevent the
         Securitisation Transaction;

                                     - 21 -



(ix)     except as specifically disclosed in writing to the Purchaser before the
         date hereof, no event has occurred since the closing date of its last
         fiscal year that is reasonably likely to adversely and materially
         affect, impede or prohibit the execution or the performance of its
         obligations under the Transaction Documents to which it is a party or
         that is otherwise reasonably likely to have a Material Adverse Affect;

(x)      no Early Amortisation Event of the type described in Article 13.3. has
         occurred and is continuing;

(xi)     GOODYEAR DUNLOP TIRES EUROPE BV holds directly or indirectly 100% in
         the Centralising Unit's share capital and voting rights and more than
         50% in each Seller's share capital and voting rights and as such
         exercises effective control over the Centralising Unit and the Sellers
         within the meaning of Article L.511-7.3 of the French Monetary and
         Financial Code (Code monetaire et financier);

(xii)    it has received on the date hereof a certified true copy or final
         drafts of the Transaction Documents to be executed on the date hereof
         and has full knowledge of the same;

(xiii)   it has carried out its own legal, tax and accounting analysis as to the
         consequences of the execution and performance of its obligations under
         the Transaction Documents, and agrees that the Purchaser, the Joint
         Lead Arrangers, the Issuers and the Liquidity Banks shall have no
         liability to any of the Sellers or the Centralising Unit in that
         respect;

(xiv)    it has entered into intercompany arrangements with the Centralising
         Unit and the other Sellers, pursuant to which it has undertaken (a) to
         reimburse the Centralising Unit for certain fees, including any amount
         paid on its behalf and any losses arising under the Transaction
         Documents, (b) to pay the Centralising Unit a direct and sufficient
         consideration for the making of the Subordinated Deposit and the
         Complementary Deposit and compensate the Centralising Unit as is
         appropriate in respect of all losses incurred by the latter arising
         from the making of the Subordinated Deposit and the Complementary
         Deposit, and (c) to ensure that fees and expenses or any other sums due
         by the Sellers under the Transaction Documents are allocated among the
         Sellers in accordance with their respective corporate interest, if such
         concept is applicable in the relevant jurisdiction (the "INTERCOMPANY
         ARRANGEMENTS");

(xv)     it has entered into intercompany arrangements which shall, inter alia,
         (a) if complied with, ensure due compliance of each of the German
         Sellers, Goodyear Dunlop Tires Germany GmbH and GOODYEAR DUNLOP TIRES
         EUROPE BV, GOODYEAR and/or any other shareholder or affiliate of the
         German Sellers with the relevant applicable corporate capital
         maintenance provisions, including, without limitation, Section 30 of
         the German Limited Liability Companies Act (Gesetz betreffend die
         Gesellschaften mit beschrankter Haftung), and (b) ensure that none of
         the German Sellers supports, directly or indirectly, the
         uncollectability of any Sold Receivables purchased by the Purchaser
         from any other German Seller without any required consideration
         therefor;

(xvi)    no Lien has been created or exists (other than any Liens contemplated
         by the Transaction Documents) (a) in relation to any Sold Receivables
         (and related rights) assigned by it prior to their respective
         assignment to the Purchaser or in respect of the

                                     - 22 -



         Collection Accounts, with the exception of those Liens which arise by
         operation of applicable laws and regulations, or (b) over the
         Subordinated Deposit and/or the Complementary Deposit;

(xvii)   its obligations under the Transaction Documents rank and will rank at
         least pari passu with all other present and future unsecured and
         unsubordinated obligations (with the exception of those preferred by
         law generally);

(xviii)  it is not entitled to claim immunity from suit, execution, attachment
         or other legal process in any proceeding taken in the jurisdiction of
         its incorporation in relation to any Transaction Documents;

(xix)    it is not subject to Insolvency Proceedings and is not insolvent within
         the meaning of applicable laws;

(xx)     in the case of each German Seller, (a) such German Seller has, to the
         extent permissible, opted for payment on a monthly basis of
         self-assessed or assessed VAT, (b) such German Seller having applied
         for a permanent extension for the filing of monthly returns
         (Dauerfristverlangerung) has posted a special advance estimated tax
         payment to the relevant tax office and (c) any such self-assessed or
         assessed VAT owed by such German Seller in accordance with applicable
         German VAT laws and regulations, has been paid to the relevant German
         tax administration when due; and

(xxi)    in the case of each German Seller, there is no dispute, action, suit or
         proceeding pending or, to its knowledge, threatened to be raised or
         brought against it, except for disputes, actions, suits or proceedings
         that such German Seller disputes in good faith, by any German tax
         administration in relation to any VAT tax payment or the calculation of
         such VAT.

11.2     The above representations and warranties shall be deemed to be repeated
by each Seller and the Centralising Unit, as applicable, on each Settlement Date
during the Replenishment Period upon the issue or, as the case may be, the
execution of any Transfer Deed. Such representations and warranties shall remain
in force until the Program Expiry Date.

ARTICLE 12. GENERAL COVENANTS

The following general covenants shall remain in force from the date hereof until
the Program Expiry Date.

                                     - 23 -



12.1 Sellers

12.1.1 Affirmative covenants:

Each Seller undertakes:

(i)      to provide the Purchaser without undue delay, on a non consolidated
         basis, with:

         (a)   its annual accounts (balance sheet, profit and loss accounts and
               annexes), as published and certified by its statutory auditors,
               the report of the board of directors and statutory auditors
               relating thereto and an extract of the minutes of the
               shareholders' annual general meeting approving the said accounts,
               no later than forty-five (45) calendar days following the holding
               of its shareholders' annual general meeting;

         (b)   all published interim financial information ;

         (c)   all other information, reports or statements as the Purchaser may
               at any time reasonably request in so far as is permitted by
               applicable laws and regulations, and depending on the type of
               information requested, in accordance with the different
               procedures applicable to the communication of information under
               this Agreement;

(ii)     to request promptly any authorisation as may become necessary for the
         performance of its obligations under this Agreement;

(iii)    to do or cause to be done all things necessary to preserve, renew and
         keep in full force and effect its legal existence and the rights,
         licenses, permits, privileges and franchises material to the conduct of
         its business, except to the extent that failures to keep in effect such
         rights, licenses, permits, privileges and franchises would not be
         reasonably likely to result in a Material Adverse Effect;

(iv)     upon knowledge by the relevant Seller that (a) an Early Amortisation
         Event defined in Article 13.3 has occurred, to notify or cause to be
         notified forthwith the Purchaser and provide a copy of the same to the
         Joint Lead Arrangers and (b) a Potential Early Amortisation Event has
         occurred, to notify or cause to be notified forthwith the Purchaser and
         provide a copy of the same to the Joint Lead Arrangers and, where
         applicable, of actions which the Seller has taken and/or proposes to
         take with respect thereto in order to prevent such Potential Early
         Amortisation Event from becoming an Early Amortisation Event;

(v)      to carry on its business in all material aspects in accordance with all
         applicable laws and regulations, except where failure to do so would
         not be reasonably likely to have a Material Adverse Effect;

                                     - 24 -



(vi)     upon the Purchaser's request, which shall be subject to a reasonable
         prior notice, to arrange forthwith for bi-annual audits to be carried
         out by the Purchaser or by any other entity appointed by the Purchaser
         for such purposes, of its receivables and collection procedures. The
         audits shall be conducted at the expense of and paid by the
         Centralising Unit, acting in the name and on behalf of the Sellers, it
         being understood that:

         -     the main bi-annual audit shall be carried out at the latest two
               (2) months before the anniversary date of this Agreement;

         -     prior to the carrying out of the second bi-annual audit, the
               Agent shall ask the Purchaser, the Liquidity Banks and the
               Back-Up Servicer whether and the extent to which a second
               bi-annual audit is necessary;

         this second bi-annual audit will not be carried out in the event that
         the Agent, the Purchaser, the Liquidity Banks and the Back-Up Servicer
         unanimously confirm in writing that such a second bi-annual audit is
         unnecessary;

(vii)    commencing on the date on which an Auditors Certificate is drawn up in
         accordance with Article 5 (Conditions precedent to the commencement of
         this Agreement), to deliver to the Purchaser an Auditors Certificate
         within six (6) calendar months after the date of delivery of the
         previous Auditors Certificate in the form set out in Schedule 4;

(viii)   to notify forthwith the Purchaser, promptly upon becoming aware, of any
         material adverse change in relation to any Sold Receivable, and to
         promptly respond to any reasonable written request of the Purchaser,
         the Agent, any Back-Up Servicer or any Italian Back-Up Servicer
         concerning any event in relation to any Sold Receivable which is
         reasonably likely to endanger the payment of a sum under such Sold
         Receivable;

(ix)     to keep the Purchaser fully informed of the existence and progress of
         (a) any material litigation relating to a Sold Receivable, (b) any
         claim or litigation relating to the Sold Receivables before the courts
         or in arbitration for the purposes of recovering material sums due
         under such Sold Receivables, (c) any claim or litigation relating to
         the Sold Receivables before the courts or in arbitration for the
         purposes of recovering sums due under such Sold Receivable, upon
         written request of the Purchaser, the Agent, any Back-Up Servicer or
         any Italian Back-Up Servicer, and (d) any action, suit or proceeding
         described in Article 11.1. (viii);

(x)      to submit to the Purchaser, as soon as practicable, on the Purchaser's
         reasonable request and subject to the provisions of Article 20
         (Identification of the contractual documentation for the Sold
         Receivables - Access to documents) and Article 31 (Confidentiality),
         all documents which enable the latter to verify that the Seller has
         properly fulfilled its contractual obligations concerning the
         collection of sums due under the Sold Receivables, to the extent
         permitted by applicable laws or regulations and in particular, in the
         case of the Protected Debtors, by the provisions of the Data Protection
         Trust Agreement;

                                     - 25 -



(xi)     to transfer or cause to be transferred to the Purchaser all Adjusted
         Collections in accordance with the provisions of Article 23
         (Application of payments and payments of collections);

(xii)    commencing on the date on which a Solvency Certificate is drawn up in
         accordance with Article 5 (Conditions precedent to the commencement of
         this Agreement), to deliver to the Purchaser a Solvency Certificate (on
         a date which shall be a Settlement Date during the Replenishment
         Period) on a quarterly basis in accordance with the form set out in
         Schedule 5;

(xiii)   to execute any and all further documents, agreements and instruments,
         and take all such further actions, as may be reasonably requested by
         the Purchaser in order to ensure that the sales of Purchasable
         Receivables to the Purchaser under the Receivables Purchase Agreements
         constitute valid and perfected sales of such Purchasable Receivables
         and the security interests created over the Collection Accounts for the
         benefit of the Purchaser constitute valid and perfected security
         interests;

(xiv)    to inform the Purchaser, as soon as possible and in so far permitted by
         applicable laws and regulations, of its intention to restructure such
         Seller leading to GOODYEAR DUNLOP TIRES EUROPE BV ceasing to hold
         directly or indirectly more than 50% in the voting rights of such
         Seller;

(xv)     to ensure that steps are taken to maintain the performance of the
         billing and recovery procedures and accountancy methods in relation to
         the customer account (compte client) of such Seller, with the same
         degree of skill and care as evidenced during the audits carried out on
         behalf of the Purchaser or any of their agents during the structuring
         phase of the Securitisation Transaction;

(xvi)    to ensure that any information transmitted by the Centralising Unit or
         such Seller during the term of this Agreement and pursuant to the
         Transaction Documents is true and accurate in all material respects;

(xvii)   to maintain effective and in full force at all times the Intercompany
         Arrangements with the Centralising Unit and the other Sellers, and not
         to change such Intercompany Arrangements in any way that may adversely
         affect the rights of the Purchaser under the Securitisation
         Transaction;

                                     - 26 -



(xviii)  to maintain effective and in full force at all times, such internal
         arrangements between the German Sellers, Goodyear Dunlop Tires Germany
         GmbH and GOODYEAR DUNLOP TIRES EUROPE BV, GOODYEAR and/or any other
         shareholder or affiliate of the German Sellers which are necessary to
         (i) if complied with, ensure due compliance of each of the German
         Sellers, Goodyear Dunlop Tires Germany GmbH and GOODYEAR DUNLOP TIRES
         EUROPE BV, GOODYEAR and/or any other shareholder or affiliate of the
         German Sellers with the relevant applicable corporate capital
         maintenance provisions, including, without limitation,Section 30 of the
         German Limited Liability Companies Act (Gesetz betreffend die
         Gesellschaften mit beschrankter Haftung), and (ii) ensure that none of
         the German Sellers supports, directly or indirectly, the
         uncollectability of any Sold Receivables purchased by the Purchaser
         from any other German Seller without any required consideration
         therefor;

(xix)    to keep any Bill of Exchange relating to a Sold Receivable as custodian
         of the Purchaser for collection purposes unless the Sellers' Collection
         Mandate has been terminated and it has received notification from the
         Purchaser to deliver such Bill of Exchange to the Purchaser or any
         third party appointed by the Purchaser;

(xx)     (a)   in the case of the Spanish Seller, to take such steps and do all
               things as to notarise before a Spanish Public Notary (x) as of
               the date hereof, the Spanish law governed Receivables Purchase
               Agreement, the Transfer Deed delivered pursuant thereto on the
               Initial Settlement Date (specifying in such Transfer Deed any
               promissory notes which must be transferred in accordance with
               this Agreement and the relevant Receivables Purchase Agreement)
               and the Spanish Collection Account Agreements and (y) on each
               Settlement Date during the Replenishment Period, any Transfer
               Deed delivered pursuant to the relevant Receivables Purchase
               Agreement (specifying in such Transfer Deeds any promissory notes
               which must be transferred in accordance with this Agreement and
               the relevant Receivables Purchase Agreement), it being understood
               at all times that the costs of such notarisation shall be borne
               by the Spanish Seller;

         (b)   in the case of the Italian Seller, to take such steps and do all
               things as to notarise before an Italian Public Notary as of the
               date hereof, the Italian law governed Collection Account
               Agreements, it being understood that the costs of such
               notarisation shall be borne by the Italian Seller;

(xxi)    (a) to instruct any Debtor, which has not been already informed, to pay
         any sum due under a Sold Receivable to the relevant Collection
         Account(s) and, from the date hereof, to collect any sums due under a
         Sold Receivable exclusively on the relevant Collection Account(s), and
         (b) to promptly transfer to the relevant Collection Account(s) any sums
         paid by a Debtor in a different manner than to the relevant Collection
         Account(s);

                                     - 27 -



(xxii)   in the case of the Italian Seller, to grant the Italian Stand-By
         Servicer/Italian Back-Up Servicer a prior irrevocable mandate which has
         been signed by the Italian Seller authorizing the Italian Back Up
         Servicer, whenever an Italian Notice of Transfer has to be sent in
         accordance with this Agreement, to execute the Italian Notice of
         Transfer, it being provided that the Italian Stand-By Servicer/Italian
         Back-Up Servicer shall not use such irrevocable mandate for any purpose
         other than the execution of the Italian Notice of Transfer;

(xxiii)  in the case of the Italian Seller, to grant the Italian Stand-By
         Servicer/Italian Back-Up Servicer a prior irrevocable mandate which has
         been signed by the Italian Seller authorising the Italian Stand-By
         Servicer/Italian Back-Up Servicer to send RID collections through the
         banking network by using the SIA code granted to the Italian Seller, it
         being provided that the Italian Stand-By Servicer/Italian Back-Up
         Servicer shall not use such irrevocable mandate for any purpose other
         than the performance of the back-up servicing activities;

(xiv)    in the case of the Italian Seller and if the RID collection system is
         used in connection with the Italian Debtors, to provide the Italian
         Stand-By Servicer/Italian Back-Up Servicer with all necessary
         information required for the purpose of sending RID applications
         through the banking network (and namely the SIA code granted to the
         Italian Seller) and ensure or cause to ensure that the List of Italian
         Purchasable Receivables has been correctly completed with such
         information;

(xxv)    in the case of the Italian Seller and if the RIBA collection system is
         used in connection with the Italian Debtors, to provide the Italian
         Stand-By Servicer/Italian Back-Up Servicer with all necessary
         information required for the purpose of issuing RIBA over Italian
         Debtors which have agreed to such means of payments and ensure or cause
         to ensure that the List of Italian Purchasable Receivables has been
         correctly completed with such information; and

(xxvi)   in the case of each German Seller,

         (a)   (w) to opt or continue to opt at all times for payment of
               self-assessed or assessed VAT on a monthly basis, (x) having
               applied for a permanent extension for the filing of monthly
               returns (Dauerfristverlangerung) post and maintain posted a
               special advance estimated tax payment to the relevant tax office,
               (y) to calculate and self-assess VAT on a monthly basis in
               accordance with German VAT laws and regulations and (z) to pay
               any VAT when due to the relevant German tax administration on a
               monthly basis;

         (b)   to provide the Purchaser on each Information Date with (x) a
               monthly report detailing the calculation of VAT due in relation
               to the preceding calendar month in accordance with German VAT
               laws and regulations, and (y) evidence of the payment of any
               amounts of VAT when due to the relevant German tax
               administration, as described in such monthly report;

         (c)   to submit promptly upon request of the Purchaser a statement
               and/or evidence in respect of any VAT payment;

                                     - 28 -



         (d)   to ensure that, promptly upon request of the Purchaser at any
               time and in any event semi annually (x) its auditors or any
               qualified accountants carry out an audit in relation to its VAT
               assessment procedures and VAT payment in accordance with
               applicable law and regulations, detailing the calculation and the
               payment of VAT during the period since the previous audit or (as
               relevant) during the last six (6) calendar months and (y) the
               results of such audit are forthwith communicated to the
               Purchaser, whereby the costs of such audit shall be borne by such
               German Seller.

12.1.2 Negative covenants

Each Seller undertakes:

(i)      (a)   not to sell, lease, transfer or dispose of, the whole or a
               substantial part of its business or assets whether in a single
               transaction or by a number of transactions. Such prohibitions do
               not however apply to: (w) disposals in the ordinary course of the
               business of the Centralising Unit or of any Seller; (x) disposals
               between the Centralising Unit and any Seller(s) or between any
               Sellers or within the GOODYEAR Group; (y) disposals for arm's
               length consideration on normal commercial terms; or (z) other
               disposals which are not reasonably likely to materially prejudice
               the rights of the Purchaser hereunder or adversely and materially
               affect the collectibility of the Sold Receivables; and

         (b)   except for any intra-group mergers or reorganisations within the
               GOODYEAR Group, not to purchase all or part of the assets of any
               individual, undertaking or company, and not to enter into any
               merger (fusion), demerger (scission) or proceeding of a similar
               nature, which is reasonably likely to materially prejudice the
               rights of the Purchaser hereunder or adversely affects such
               Seller's ability to collect the Sold Receivables;

(ii)     not to vary any of its collection procedures currently in operation on
         the date hereof, without the prior written consent of the Purchaser if
         such a variation is reasonably likely to adversely affect the quality
         of such collection procedures;

(iii)    (a)   not to deliver to the Purchaser any document containing
               information concerning the Sold Receivables which it knows to be
               inaccurate or incomplete;

         (b)   not to deliver to the Purchaser any document containing
               information concerning the Sold Receivables which it, in the
               exercise of reasonable diligence, should reasonably have known to
               be inaccurate or incomplete, in any material respect;

(iv)     not to use any software for the management of the Sold Receivables
         unless the software user licence allows it to be used to monitor the
         Sold Receivables, except in cases that would not be reasonably likely
         to result in a Material Adverse Effect;

                                     - 29 -



(v)      to abstain from varying the corporate purposes or changing the legal
         form of such Seller, except to the extent related to any intra-group
         mergers or reorganisations within the GOODYEAR Group or to the extent
         that such variation or change would not be reasonably likely to result
         in a Material Adverse Effect;

(vi)     not to endorse, transfer or deliver to any person a Bill of Exchange
         relating to a Sold Receivable unless such an endorsement, transfer or
         delivery is made for the benefit of the Purchaser and, upon request of
         the Purchaser, to endorse, transfer or deliver, to the Purchaser or any
         third party designated by the Purchaser, acting pursuant to a power of
         attorney provided by a separate agreement, any and all Bills of
         Exchange corresponding to Sold Receivables and take all such measures
         deemed necessary by the Purchaser in order to preserve its rights
         hereunder; and

(vii)    not to create, incur, assume or permit to exist any Liens (other than
         any Liens contemplated by the Transaction Documents) (a) in relation to
         any Sold Receivables (and related rights) prior to their respective
         assignment to the Purchaser or in respect of the Collection Accounts,
         with the exception of those Liens required by applicable laws and
         regulations, or (b) over the Subordinated Deposit and/or the
         Complementary Deposit.

12.2     Centralising Unit

12.2.1   Affirmative covenants

The Centralising Unit undertakes:

(i)      to provide the Purchaser without undue delay, on a non consolidated
         basis, with:

         (a)   its annual accounts (balance sheet, profit and loss accounts and
               annexes), as published and certified by its statutory auditors,
               the related report of the board of directors and statutory
               auditors, and an extract of the minutes of the shareholders'
               annual general meeting approving the said accounts, no later than
               forty-five calendar days (45) following the holding of its
               shareholders' annual general meeting;

         (b)   all published interim financial information; and

         (c)   all other information, reports or statements as the Purchaser may
               at any time reasonably request and depending on the type of
               information requested, in accordance with the procedures
               applicable to the communication of information under this
               Agreement;

(ii)     to request promptly any authorisation as may become necessary for the
         performance of its obligations under the Transaction Documents to which
         it is a party;

                                     - 30 -



(iii)    to do or cause to be done all things necessary to preserve, renew and
         keep in full force and effect its legal existence and the rights,
         licenses, permits, privileges and franchises material to the conduct of
         its business, except to the extent that failure to keep in effect such
         rights, licenses, permits privileges and franchises would not be
         reasonably likely to result in a Material Adverse Effect;

(iv)     upon knowledge by the Centralising Unit that (a) an Early Amortisation
         Event has occurred, to notify forthwith the Purchaser of the same and
         (b) a Potential Early Amortisation Event has occurred, to notify
         forthwith the Purchaser of the same and, where applicable, of actions
         which the Centralising Unit has taken and/or proposes to take with
         respect thereto in order to prevent such Potential Early Amortisation
         Event from becoming an Early Amortisation Event;

(v)      to carry on its business in accordance with all applicable laws and
         regulations, except where failure to do so would not be reasonably
         likely to result in a Material Adverse Effect;

(vi)     on the first sixth month anniversary of the date hereof following the
         date on which it has appointed a statutory auditor within the meaning
         of article 2:393 of the Dutch Civil Code, to deliver to the Purchaser
         an Auditors Certificate in a form reasonably acceptable to the
         Purchaser and thereafter to deliver an Auditors Certificate in such
         form within six month after the date of the delivery of the previous
         Auditors Certificate;

(vii)    commencing on the date on which a Solvency Certificate is drawn up in
         accordance with Article 5 (Conditions precedent to the commencement of
         this Agreement), to deliver to the Purchaser (on a date which shall be
         a Settlement Date during the Replenishment Period), a Solvency
         Certificate within three (3) calendar months after the date of delivery
         of the previous Solvency Certificate, in accordance with the form set
         out in Schedule 5;

(viii)   to provide the Agent on each Information Date before 11.00 pm with a
         copy of the Assessment Report and a List of Purchasable Receivables in
         the form agreed between the parties to this Agreement;

(ix)     to provide on each Settlement Date during the Replenishment Period
         before 9.00 am, the Transfer Deeds;

(x)      to transmit to the Agent and the Purchaser a certificate evidencing
         compliance with the Financial Covenants at the time of delivery of such
         financial information described in points (a) and (b) of section 5.01
         of the European Credit Facility;

(xi)     to inform the Purchaser, as soon as possible, and in so far as is
         permitted by applicable laws and regulations of any restructuring
         leading to GOODYEAR DUNLOP TIRES EUROPE B.V. ceasing to hold directly
         or indirectly 100% in the voting rights of the Centralising Unit;

                                     - 31 -



(xii)    to ensure that any information transmitted by the Centralising Unit or
         any of the Sellers during the course of the Securitisation Transaction
         and pursuant to the Transaction Documents is accurate and true in all
         material respects;

(xiii)   to maintain effective and in full force at all times the Intercompany
         Arrangements with the Centralising Unit and the other Sellers, and not
         to change such Intercompany Arrangements in any way that may adversely
         affect the rights of the Purchaser under the Securitisation
         Transaction.

12.2.2   Negative covenants

The Centralising Unit undertakes:

(i)      to abstain from changing its legal form, its corporate existence and
         varying its corporate purposes, except to the extent that such
         variation or change would not be reasonably likely to adversely affect
         the performance of its obligations under the Transaction Documents;

(ii)     not to create, incur, assume or permit to exist any Liens in relation
         to any of its assets, except for Liens provided under the Transaction
         Documents, or to the extent required by applicable laws or regulations.

12.3     Agent

12.3.1   The Agent hereby agrees with the other parties that it shall, at the
latest on each Calculation Date:

(i)      identify a selection in the List of Purchasable Receivables sent by the
         Centralising Unit, acting in the name and on behalf of the Sellers, on
         the preceding Information Date, in order to select the Purchasable
         Receivables which shall be purchased by the Purchaser from the Sellers
         on the next Settlement Date during the Replenishment Period, so that
         the Outstanding Amount of Sold Receivables (taking into account the
         Outstanding Amount of Purchasable Receivables to be purchased on the
         following Settlement Date during the Replenishment Period) shall not
         exceed the sum of the Maximum Amount of the Purchaser's Funding, the
         amount of the Subordinated Deposit, the Maximum Amount of the
         Complementary Deposit and the Discount Reserve;

(ii)     identify among the Purchasable Receivables selected in accordance with
         point (i) above, Eligible Receivables, which shall be selected so that
         the Outstanding Amount of Eligible Receivables due by Debtors of the
         same Group on such date shall not exceed the Maximum Concentration Rate
         multiplied by the Outstanding Amount of the Eligible Receivables on
         such date;

                                     - 32 -



(iii)    send to the Centralising Unit, acting in the name and on behalf of the
         Sellers, before 5.00 pm on such Calculation Date a list containing the
         Purchasable Receivables (and identifying specifically the Eligible
         Receivables) to be purchased on the next Settlement Date during the
         Replenishment Period, along with the Outstanding Amount of Purchasable
         Receivables and the Outstanding Amount of Eligible Receivables;

(iv)     calculate, as of the following Settlement Date:

         (a)   the balance of the Current Account;

         (b)   the Discount Amount;

         (c)   the amount of the Discount Reserve, if such Calculation Date
               immediately precedes a Settlement Date;

         (d)   the Outstanding Amount of Sold Receivables and the Outstanding
               Amount of Eligible Receivables, globally and for each Seller
               individually;

         (e)   the amount of the Purchaser's Funding, including any increase or
               reduction in the level of such funding if such Calculation Date
               precedes immediately a Funded Settlement Date;

         (f)   the amount of the Subordinated Deposit;

         (g)   the amount of the Complementary Deposit;

         (h)   as the case may be, the amount of the Foreseen Collections;

         (i)   the amount of the Adjusted Collections; and

         (j)   any other amounts agreed between the Agent and the Centralising
               Unit.

(v)      give notice before 5.00 pm on such Calculation Date to the Centralising
         Unit acting, as the case may be, on its own behalf or on behalf of the
         Sellers, of the calculations (with supporting details) carried out
         pursuant to the above paragraph (iv) in order to provide the
         information needed, as the case may be, for the payment to be made on
         the following Settlement Date pursuant to Article 6.3, in accordance
         with the letter described in Schedule 15;

(vi)     communicate the calculation of any Increase in the Purchaser's Funding
         or any Reduction in the Purchaser's Funding in accordance with the
         provisions of Article 7.3 to the Depositor.

The parties agree that, in the event that any party becomes aware of any error
in the calculation carried out by the Agent pursuant to the present Article
12.3.1, such party shall forthwith notify the Agent in order to rectify such an
error.

12.3.2. At the latest on each Calculation Date, the Agent shall, at the request
of any Joint Lead Arranger, forthwith transmit a copy of the Assessment Reports,
the Lists of Purchasable

                                     - 33 -



Receivables or any reporting documents relating to the Sold Receivables and
provide the Joint Lead Arrangers with any information relating to the amount of
Adjusted Collections received from the Sellers by the Purchaser on such
Calculation Date.

CALYON shall ensure that the Centralising Unit and the Sellers have furnished
the information referred to in the paragraph above to the Agent and the
Purchaser.

12.3.3 On each Calculation Date before 5.00 pm, the Calculation Agent undertakes
to deliver forthwith, to the Centralising Unit acting in the name and on behalf
of the Sellers, a document relating to the Sold Receivables, in the form
attached hereto as Schedule 12.1, as modified from time to time by the parties
to this Agreement, and to provide a copy of such document to the Joint Lead
Arrangers.

After each Settlement Date, the Calculation Agent undertakes to deliver
forthwith to each Issuer, a report document relating to the Sold Receivables, in
the form attached hereto as Schedule 12.2, as modified from time to time between
the Agent, the Purchaser and the Issuers.

For the purposes of the relevant reporting documents, the parties agree that
CALYON shall be responsible for ensuring that such reporting requirements are
carried out.

12.4     Failure to deliver Assessment Report or List of Purchasable Receivables

12.4.1   In the event that the Centralising Unit fails to provide the Agent with
a copy of the Assessment Report and/or a List of Purchasable Receivables within
one (1) Business Day after an Information Date, or provides the Agent with a
copy of the Assessment Report and/or a List of Purchasable Receivables, that is
incomplete in relation to one or several Sellers (with respect to any Seller, a
"DELIVERY FAILURE"), the Agent shall carry out the identification and the
calculations referred to in Articles 12.3.1 and 12.3.2 as follows:

- -        in relation to Sellers for which there is no Delivery Failure, on the
         basis of the Assessment Report and the List of Purchasable Receivables
         provided to the Agent on such Information Date; and

- -        in relation to Sellers for which there is a Delivery Failure, on the
         basis of the Assessment Report and the List of Purchasable Receivables
         provided to the Agent on the preceding Information Date;

provided that the Centralising Unit has sent to the Agent a single consolidated
Assessment Report and a single List of Purchasable Receivables. If the Agent has
not received such single consolidated Assessment Report and such List of
Purchasable Receivables, it shall make its calculations on the basis of the
single consolidated Assessment Report and single List of Purchasable Receivables
received on the previous Information Date.

12.4.2   In the event of any failure to comply with the provisions of Article
12.2.1. (viii), the Centralising Unit shall comply with such provisions with
respect to the documents required to be delivered on or before the next
Information Date.

12.4.3   The Centralising Unit shall provide, on each Information Date, the list
of Sold

                                     - 34 -



Receivables which are Doubtful Receivables and to be retransferred to the
relevant Seller in accordance with article 4.2 of the relevant Receivables
Purchase Agreement.

12.5 Purchaser

Other than as contemplated by the Transaction Documents, the Purchaser
undertakes not to (a) sell, transfer or otherwise dispose of any Sold
Receivables or (b) create, incur, assume or permit to exist any Liens over any
Sold Receivables (and related rights), with the exception of those Liens
required by applicable laws and regulations.

                         CHAPTER VI - EARLY AMORTISATION

ARTICLE 13. EARLY AMORTISATION

13.1 Early Amortisation Events in relation to the Securitisation Transaction:

The fact that the Purchaser's Funding falls below the Minimum Amount of the
Program shall constitute an Early Amortisation Event with respect to this
Agreement and the Receivables Purchase Agreements.

13.2 Early Amortisation Event in relation to the Purchaser:

If any event occurs, which is not an event that is due to CALYON or that could
have been prevented by CALYON, and which, in the Rating Agencies' opinion,
jeopardises the "bankruptcy remote character" of the Purchaser, the Purchaser
may terminate its Commitment to purchase Purchasable Receivables from the
Sellers subject to notice made in writing to the Centralising Unit. In such an
event, the Commitment Expiry Date shall be deemed to have occurred on the
thirtieth (30th) calendar day following receipt by the Centralising Unit of the
Purchaser's Termination Notice. Such Purchaser's Termination Notice shall state
the reasons for the Rating Agencies' opinion.

13.3 Early Amortisation Events in relation to any Seller or the Centralising
Unit:

Each of the following events shall constitute an Early Amortisation Event with
respect to this Agreement and the Receivables Purchase Agreements:

(i)      the Centralising Unit requests the termination of the Replenishment
         Period ;

(ii)     any Seller, the Centralising Unit, GOODYEAR DUNLOP TIRES EUROPE BV,
         GOODYEAR or any Material Subsidiary has entered into Insolvency
         Proceedings;

(iii)    any failure by a Seller, the Centralising Unit or GOODYEAR DUNLOP TIRES
         EUROPE BV to make a payment (including any deposit or transfer of
         Adjusted Collections to the Purchaser) when due under the Transaction
         Documents:

                                     - 35 -



         (w)      which is not remedied within two (2) Business Days, provided
                  that such failure is due to a technical reason which affects
                  the means of payment in the banking system used by such Seller
                  or by the Centralising Unit and is not otherwise covered by
                  clause (y) below;

         (x)      which is not remedied within four (4) Business Days, where
                  such failure arises in relation to the payment of the
                  Management Fee or the Stand-by Fee;

         (y)      which is not a scheduled payment under the Transaction
                  Documents and which is not remedied within two (2) Business
                  Days after written notice received from the Purchaser or, if
                  earlier, after a Responsible Officer becoming aware thereof;

         (z)      which is a scheduled payment (including a payment due pursuant
                  to Article 6.3.2.) and is not otherwise covered by clause (w)
                  or (x) above;

(iv)     any restructuring of (a) a Seller leading to GOODYEAR ceasing to hold
         directly or indirectly more than 50% in the share capital and voting
         rights of such a Seller, or (b) GOODYEAR DUNLOP TIRES EUROPE BV leading
         to GOODYEAR ceasing to hold directly or indirectly more than 50% in the
         share capital and voting rights of GOODYEAR DUNLOP TIRES EUROPE BV, or
         (c) the Centralising Unit leading to GOODYEAR DUNLOP TIRES EUROPE BV
         ceasing to hold, directly or indirectly, 100% in the share capital and
         voting rights of the Centralising Unit;

(v)      any default by any Seller, the Centralising Unit or GOODYEAR DUNLOP
         TIRES EUROPE BV (including any material default in the collection
         obligations set forth in Articles 21, 24, 25 and 26) other than the
         defaults referred to in paragraph (iii) above or paragraphs (vi) and
         (vii) below, in relation to any of their obligations under the
         Transaction Documents:

         -     which is not remedied within one (1) Business Day after written
               notice received from the Purchaser or, if earlier, after a
               Responsible Officer becoming aware thereof, if such default is in
               relation to their respective obligations under Article 12.2.1
               (viii), and the Centralising Unit does not comply with Article
               12.4.2;

         -     which is not remedied within one (1) Business Day after written
               notice received from the Purchaser or, if earlier, after a
               Responsible Officer becoming aware thereof, if such default is in
               relation to their respective obligations under 12.2.1 (ix);

         -     which is not remedied within fifteen (15) Business Days after
               written notice received from the Purchaser or, if earlier, after
               a Responsible Officer becoming aware, if such default is in
               relation to their respective obligations under 12.1.1. (iv), (x),
               (xiii), (xvi), (xxi), and 12.2.1. (iv), (xii);

         -     which is a default of the obligations arising under 12.1.2 or
               12.2.2, which (a) if capable of remedy, is not remedied within
               fifteen (15) Business Days after written notice received from the
               Purchaser or, if earlier, after a Responsible Officer becoming
               aware, or (b) if not capable of remedy, has not been waived

                                     - 36 -



               by the Purchaser within five (5) Business Days after written
               notice received from the Purchaser or, if earlier, after a
               Responsible Officer becoming aware;

         -     which is not remedied within thirty (30) Business Days after
               written notice received from the Purchaser, or, if earlier, after
               a Responsible Officer becoming aware;

(vi)     any failure by any Seller or the Centralising Unit to deliver an
         Auditors Certificate, complying with the relevant form attached as
         Schedule 4, as provided for under Article 12.1.1 (vii) and 12.2.1 (vi),
         which is not remedied within fifteen (15) Business Days after written
         notice received from the Purchaser or, if earlier, after a Responsible
         Officer becoming aware;

(vii)    any failure by any Seller or the Centralising Unit to deliver a
         Solvency Certificate, complying with the relevant form attached as
         Schedule 5, as provided for under Article 12.1.1 (xii) and 12.2.1
         (vii), which is not remedied within ten (10) Business Days after
         written notice received from the Purchaser or, if earlier, after a
         Responsible Officer becoming aware;

(viii)   any representation and warranty made by any Seller, the Centralising
         Unit or GOODYEAR DUNLOP TIRES EUROPE BV under the Transaction Documents
         (other than under Article 19), or any information contained in any
         document delivered by any Seller or the Centralising Unit or GOODYEAR
         DUNLOP TIRES EUROPE BV to the Purchaser pursuant thereto, is found to
         have been inaccurate on the date on which it was made or delivered, if
         such inaccuracy (a) is not remedied or waived accordingly within thirty
         (30) days after written notice received from the Purchaser, or, if
         earlier, after a Responsible Officer becoming aware and (b) is
         reasonably likely to result in a Material Adverse Effect;

(ix)     any Material Indebtedness of GOODYEAR DUNLOP TIRES EUROPE BV, or any of
         its subsidiaries, or GOODYEAR (a) has not been paid or repaid when due
         (after giving effect to any applicable grace period) or (b) has become
         due and payable before its stated date of payment as a result of a
         declared default and after the expiry of any applicable grace period
         provided that, in each case, such default has not been waived pursuant
         to the terms of the relevant agreement;

(x)      there is an attachment, freezing or seizure (saisie) order against all
         or any material part of the property, assets or revenues of the
         Centralising Unit, any of the Sellers or GOODYEAR DUNLOP TIRES EUROPE
         BV or in the event that the Centralising Unit, any of the Sellers or
         GOODYEAR DUNLOP TIRES EUROPE BV has become subject at any time to any
         court order or other court process having similar effect and such
         attachment, seizure (saisie), court order or court process remains in
         effect and is not discharged during a period of forty-five (45)
         calendar days following the date on which it was served;

(xi)     any change of any kind in any Seller's or Centralising Unit's articles
         of association, business or assets, which would be reasonably likely to
         result in a Material Adverse Effect;

                                     - 37 -



(xii)    the validity of the Transaction Documents or a Transfer Deed issued
         pursuant to the Receivables Purchase Agreement or any Payment hereunder
         or thereunder is successfully challenged by any enforcement order
         issued or judgment obtained as a result of proceedings before any court
         (including arbitration proceedings);

(xiii)   whenever on three (3) successive Funded Settlement Dates, the
         Overcollateralisation Rate is higher than the Maximum
         Overcollateralisation Rate;

(xiv)    (a)   any of the Transaction Documents becomes illegal or, cannot, for
               any reason whatsoever, be performed pursuant to their respective
               terms, and such illegality or inability to be performed is
               reasonably expected to prejudice the rights of the Purchaser in
               any material respect;

         (b)   a Transfer Deed becomes illegal or, cannot, for any reason
               whatsoever, be performed pursuant to its terms, and such
               illegality or inability to be performed is reasonably expected to
               prejudice the rights of the Purchaser;

(xv)     (a)   the ratio of (a) Consolidated Senior Secured Indebtedness to (b)
               Consolidated EBITDA of Goodyear for the most recent period of
               four consecutive fiscal quarters for which financial statements
               have been filed with the United States Securities and Exchange
               Commission, to be greater than 4.00 to 1.00;

         (b)   the ratio of (x) Consolidated EBITDA of GOODYEAR to (y)
               Consolidated Interest Expense of GOODYEAR, for any period of four
               (4) consecutive fiscal quarters is less than 2.00 to 1.00; or

         (c)   the ratio of (x) Consolidated Net Indebtedness to (y)
               Consolidated EBITDA of GOODYEAR DUNLOP TIRES EUROPE BV for the
               most recent period of four consecutive fiscal quarters for which
               financial statements have been filed with the United States
               Securities and Exchange Commission, is greater than 3.00 to 1.00;

         (d)   for so long as such provision exists under the European Credit
               Facility, the Consolidated Net Worth of GOODYEAR at the end of
               any fiscal quarter is less than the amount set forth below for
               such date:



  Fiscal Quarter Ending                       Minimum Amount
- ---------------------------                   --------------
                                           
On or before March 31, 2006                   2,000,000,000
thereafter                                    1,750,000,000


         and, in each case, there has been no Applicable Waiver or Amendment on
         or prior to the 60th calendar day after the occurrence of any such
         event. In addition, this Agreement shall be automatically amended, with
         no further actions required by the parties hereto, to reflect the
         changes made in any Applicable Waiver or Amendment.

         Capitalized terms used in this Article 13.3 (xv) and not defined in
         Schedule 1 have the meanings set forth for such terms in Schedule 16;

(xvi)    if all Sellers withdraw from the Agreement in accordance with the
         provisions of Article 39;

                                     - 38 -



(xvii)   the three-month rolling average of the Delinquency Percentage exceeds
         3.5%, and such event is not waived within thirty (30) days after
         notice received from the Purchaser, or, if earlier, after a Responsible
         Officer becomes aware thereof;

(xviii)  the three-month rolling average of the Default Percentage exceeds
         2.5%, and such event is not waived within thirty (30) days after notice
         received from the Purchaser, or, if earlier, after a Responsible
         Officer becomes aware thereof; and

(xix)    the three-month rolling average of the Dilution Percentage exceeds
         10.5%, and such event is not waived within thirty (30) days after
         notice received from the Purchaser, or, if earlier, after a Responsible
         Officer becomes aware thereof.

13.4     Consequences of Early Amortisation Events

Except for the Early Amortisation Event described in Article 13.2, the effect of
which is set out in such Article, the consequences of the Early Amortisation
Events shall be as follows:

(i)      If an Early Amortisation Event referred to in Articles 13.1 or 13.3
         occurs and has not been waived, the Purchaser may or, if all the
         Liquidity Banks (which shall be consulted by the Purchaser upon the
         occurrence of such an Early Amortisation Event) instruct the Purchaser
         to do so, shall terminate by notice in writing to the Centralising Unit
         (the "PURCHASER'S TERMINATION NOTICE"), its Commitment to purchase
         Purchasable Receivables from the Sellers. Upon knowledge by the
         Purchaser of the occurrence of an Early Amortisation Event and provided
         such Early Amortization Event has not been waived and as soon as the
         Purchaser has determined that such an occurrence shall entail the
         occurrence of the Commitment Expiry Date, a Purchaser's Termination
         Notice may be sent forthwith. In such an event, the Commitment Expiry
         Date shall be deemed to have occurred on the date of receipt of the
         Purchaser's Termination Notice by the Centralising Unit.

         However, if upon consultation of the Liquidity Banks in accordance with
         the above paragraph, such Liquidity Banks cannot agree among themselves
         as to the termination by the Purchaser of its Commitment, and where the
         Purchaser has not already decided in its own discretion to terminate
         its Commitment, the relevant Liquidity Bank (the "TERMINATING LIQUIDITY
         BANK") may decide to terminate its own commitments under the Liquidity
         Agreement, upon notice in writing to the Centralising Unit, the
         Purchaser and the other Liquidity Bank(s) no later than the Information
         Date preceding the Funded Settlement Date on which such termination is
         to be effective.

         In the event of the termination of its(their) commitment by the
         Terminating Liquidity Bank(s), the Maximum Amount of the Program shall
         be partially and automatically reduced by an amount equal to the
         commitment of such Terminating Liquidity Bank(s). Such reduction of the
         Maximum Amount of the Program shall take effect on the Funded
         Settlement Date following the date upon which the termination of
         its(their) commitment by the Terminating Liquidity Bank(s) has occurred
         and shall be definitive and irrevocable.

                                     - 39 -



(ii)     By way of further exception to the foregoing, if an Early Amortisation
         Event set forth in Article 13.3 (iv), (v), (vi), (vii), (x), (xi),
         (xii), and (xiv) occurs exclusively in relation to certain but not all
         Sellers, the Purchaser shall give notice thereof to the relevant
         Seller(s) and the Centralising Unit. The parties hereby agree that upon
         receipt by the relevant Seller(s) and the Centralising Unit of such
         notice, the Purchaser shall be entitled to purchase no further
         Purchasable Receivables from the relevant Seller(s) (the "EXCLUDED
         SELLER(S)"). The Purchaser's Commitment shall not otherwise be
         affected, except that if the aggregate amount of Sold Receivables
         assigned by the Excluded Seller(s) on the preceding six (6) Settlement
         Dates represents more than 45% of the aggregate amount of Sold
         Receivables assigned by all Sellers on such dates, the Commitment
         Expiry Date shall be deemed to have occurred on the date of receipt of
         the notice referred to above.

For the avoidance of doubt, if any Potential Early Amortisation Event occurs,
the parties agree that such event shall not constitute an Early Amortisation
Event if a suitable agreement between the parties has been reached within the
grace period (if any) provided for the related Early Amortisation Event in
Article 13.3.

                                     - 40 -



                 CHAPTER VII - TAXES - CHANGES IN CIRCUMSTANCES

ARTICLE 14. TAXES

14.1. All payments to be made by each Seller, acting as a Seller or as a
sub-servicer of the Sold Receivables, or the Centralising Unit to the Purchaser
under this Agreement shall be made free, clear of and without deduction for or
on account of tax (not being tax imposed on the general income of the
Purchaser), unless the Seller or the Centralising Unit is required by mandatory
provisions of law to make such a payment subject to the deduction or withholding
of tax, in which case the sum to be paid by the Seller or the Centralising Unit
in respect of which such deduction or withholding is required to be made shall,
to the extent permitted by law, be increased to the extent necessary to ensure
that, after the making of the required deduction or withholding, the Purchaser
receives and retains (free from any liability in respect of any such deduction
or withholding) a net sum equal to the sum which it would have received and so
retained had no such deduction or withholding been made or required to be made.

In the event that any payment made by the Centralising Unit hereunder is subject
to any withholding or deduction, the Purchaser shall use reasonable efforts to
recover any tax credit that it may be entitled to on account of such withholding
or deduction and shall remit to the Centralising Unit any amounts so recovered,
up to the amount necessary for the Seller to be (after that payment) in the same
after-tax position as it would have been if such withholding or deduction had
not been made, within the limit of the sums so recovered by the Purchaser.

If the increase referred to above is contrary to any applicable law, the
Purchaser and the Centralising Unit, acting in the name and on behalf of the
Sellers, shall work together as soon as possible and in good faith to seek a
solution acceptable to the parties.

If no suitable agreement has been reached within thirty (30) calendar days
following the coming into force of such deduction or withholding of tax, the
Commitment Expiry Date shall be deemed to have occurred on the thirtieth day
after such deduction or withholding comes into force. The parties hereby agree
that during the thirty-day period provided in the foregoing sentence, no
Purchasable Receivables shall be sold to the Purchaser by the Sellers concerned
by such deduction for or on account of tax or by all the Sellers if such
deduction for or on account of tax relates to the Centralising Unit, on a Funded
Settlement Date.

14.2. Each Seller shall bear any value added tax or similar tax (a "VAT
PAYMENT") to which any transaction contemplated under the Securitisation
Transaction may be subject or give rise towards any party having entered into
the Securitisation Transaction (other than the Sellers and the Centralising
Unit); and each Seller shall fully indemnify the Purchaser or any party having
entered into the Securitisation Transaction (other than the Sellers or the
Centralising Unit), from and against any losses or liabilities which any of them
may properly incur or otherwise suffer as a result of any delay in paying or
omission to pay such value added tax or similar tax.

                                     - 41 -



If a Seller makes a VAT Payment and a credit against, relief or remission for,
or repayment of taxes is attributable to that VAT Payment (a "VAT CREDIT"), the
Purchaser shall use reasonable efforts to obtain the repayment of such VAT
Credit, and once the Purchaser has obtained the repayment of such VAT Credit,
the Purchaser shall transfer such amount to the relevant Seller so that the
Seller will be (after that payment) in the same after-tax position as it would
have been in had the VAT Payment not been made by the Seller, and within the
limit of the sums actually paid to the Purchaser under the repayment of such VAT
Credit.

14.3. In the event of any Insolvency Proceedings opened against any German
Seller, if the insolvency administrator is involved in the enforcement of any
pledge over the Collection Account(s) for the benefit of the Purchaser and if
such insolvency administrator is entitled to claim a deduction of fees
("ENFORCEMENT FEES") from the credit balance recorded on such Collection
Account(s) at the date of institution of such Insolvency Proceedings, the
relevant German Seller and/or the Centralising Unit shall pay to the Purchaser
any sums corresponding to such Enforcement Fees.

14.4 In the event that the Purchaser, a Liquidity Bank, the Issuers, the
Management Company, the Custodian, the Fund, the Depositor or the Agent (each a
"TAX INDEMNIFIED PARTY") has to bear any new tax or withholding tax or any other
tax related charge not yet in force on any sum which it owes and in relation to
the Securitisation Transaction, the Centralising Unit, acting in the name and on
behalf of the Sellers, undertakes to indemnify such Tax Indemnified Party up to
the amount of this new taxation or withholding tax or other tax charge, in the
currency in which such deduction, withholding or other tax charge must be paid.

In the event that any payment is made by the Centralising Unit to the Purchaser
pursuant to this Article 14.4, the Purchaser shall use reasonable efforts to
recover any tax credit that it may be entitled to on account of such new tax and
shall remit to the Centralising Unit any amounts so recovered up to the amount
necessary for the Seller to be (after that payment) in the same after-tax
position as it would have been if such new tax had not been paid, within the
limit of the sums so recovered by the Purchaser.

14.5 In the event that any Tax Indemnified Party (including, in particular, the
Purchaser) has incurred any losses or liability resulting from or in relation to
any recourse by the any German tax administration against the Purchaser with
respect to any Sold Receivable, the relevant German Seller shall indemnify such
Tax Indemnified Party up to the amount of such losses or liability incurred and
in the currency in which such loss or liability has been incurred, provided that
the recourse by such German tax administration against the Purchaser is based on
section 13c of the German VAT Act or on any related or equivalent provision of
German law.

14.6 Nothing in this Article 14 shall be construed so as to oblige the Purchaser
to bear costs and expenses of whatever nature or to disclose confidential
information relating to, inter alia, the organisation of its activities nor
affect in any way its right to organise its tax affairs in a manner which it
considers most beneficial.

                                     - 42 -



ARTICLE 15. CHANGES IN CIRCUMSTANCES

15.1    If, as a result of (i) the implementation after the date of this
Agreement of any change in the applicable laws, regulations, accounting
standards or regulatory requirements or any change in the interpretation or
application of the aforementioned and/or (ii) the implementation after the date
of this Agreement of any applicable directive, request or requirement (whether
or not having the force of law) of any central bank, self-regulating
organisation, governmental, fiscal, monetary or other authority (including inter
alia directives, requests, instructions, accounting standards or requirements
which affect the manner in which any bank is required to maintain equity capital
(own funds), taking into account its assets, liabilities, contingent liabilities
or commitments):

(i)      the cost of the Purchaser, a Liquidity Bank, any Issuer, the Management
         Company, the Custodian, the Fund, the Depositor or the Agent making
         available, agreeing to make available, maintaining or funding any
         Payment and/or assuming or maintaining their Commitment or otherwise
         giving effect to this Agreement shall be increased; and/or

(ii)     any sum received or receivable by the Purchaser, a Liquidity Bank, any
         Issuer, the Management Company, the Custodian, the Fund, the Depositor
         or the Agent under the Transaction Documents shall be reduced (except
         for tax imposed on the general income of the Purchaser or default of a
         Debtor under any Sold Receivables); and/or

(iii)    the Purchaser, the Liquidity Bank, any Issuer, the Management Company,
         the Custodian, the Fund, the Depositor or the Agent shall become liable
         to make any payment on account of tax (except for tax imposed on its
         general income), or shall be compelled or obliged to forego any
         interest or other return, on or calculated by reference to the
         Commitment or any Payment under this Agreement;

as soon as such event has occurred and provided that such information is
publicly available, the Purchaser, the Liquidity Bank, the Issuer, the
Management Company, the Custodian, the Fund, the Depositor or the Agent shall be
entitled to claim from the Centralising Unit, acting as the case may be on its
own behalf or on behalf of the Sellers, an indemnity equal to (a) the increased
costs referred to in (i) above, and/or (b) the reduction referred to in (ii)
above and/or (c) the amount referred to in (iii) above. To this effect, the
Purchaser shall give notice to the Centralising Unit, by delivering to the
latter a certificate specifying in sufficient detail the occurrence of the
changes in circumstances and, if possible, the estimated amount and the actual
amount and the reason(s) for the indemnity payable under this Article.

15.2    In the event of any dispute as to the amount of such an indemnity, the
Purchaser and the Centralising Unit acting in the name and on behalf of the
Sellers, shall work together as soon as possible and in good faith to seek a
solution acceptable to the parties; in the event of a dispute, such indemnity
shall nevertheless be paid by the Centralising Unit, acting on its own behalf
and on behalf of the Sellers, who shall make the payment of such indemnity
forthwith following receipt of the notice sent by the Purchaser.

If no suitable agreement has been reached within thirty (30) calendar days
following the coming into force of such event, the Commitment Expiry Date shall
be deemed to have occurred on the thirtieth day after such an event. The parties
hereby agree that during the

                                     - 43 -



thirty-day period provided in the foregoing sentence, no Purchasable Receivables
shall be sold to the Purchaser on a Settlement Date.

                   CHAPTER VIII - ORDER OF PRIORITY - PAYMENTS

ARTICLE 16. ORDER OF PRIORITY DURING THE AMORTISATION PERIOD

16.1.    On each Settlement Date during the Amortisation Period, the Purchaser
shall apply the Distributed Amounts, in the following order:

1.       to the payment of any of the following sums that are due and payable on
         such date in accordance with the provisions of the Master Senior
         Deposit Agreement:

         1.1.  the Margin due to ESTER FINANCE;

         1.2.  the Immobilisation Indemnity due pursuant to article 8.1 of the
               Master Senior Deposit Agreement;

         1.3.  the Deposit Fee due pursuant to article 8.2 of the Master Senior
               Deposit Agreement;

         until their full payment;

         provided that on each Intermediary Settlement Date, the sums referred
         to in this point 1. to be paid on the next Funded Settlement Date,
         calculated prorata temporis, shall be excluded from the Distributed
         Amounts available on such Intermediary Settlement Date and shall be
         reserved by the Purchaser in order to be paid on such Funded Settlement
         Date;

2.       to the payment of any sum due and payable prior to such date, by the
         Sellers or the Centralising Unit to the Purchaser under the Transaction
         Documents and which remains unpaid on such date, until its full
         repayment;

3.       to the payment of any sum due and payable in respect of the Purchaser's
         Funding, in accordance with the provisions of the Master Senior Deposit
         Agreement and, pari passu, in respect of the Complementary Deposit, in
         accordance with the provisions of the Master Complementary Deposit
         Agreement, until their full payment;

         provided that on each Intermediary Settlement Date, the sums referred
         to in this point 3., due in respect of the Purchaser's Funding and to
         be paid on the next Funded Settlement Date shall be excluded from the
         Distributed Amounts available on such Intermediary Settlement Date and
         reserved by the Purchaser in order to be paid on such Funded Settlement
         Date;

                                     - 44 -



4.       to the payment to the Centralising Unit of any amount equal to the
         Excess Forseen Collections, outstanding as of the last Settlement Date
         before being reduced to zero (unless otherwise reimbursed);

5.       to the payment of any outstanding Deferred Purchase Price to be made
         pursuant to the provisions of each Receivables Purchase Agreement;

6.       to the repayment of the Subordinated Deposit.

16.2.    On each Settlement Date during the Amortisation Period, if any Seller
and/or the Centralising Unit fail(s) to make a payment when due under the
Transaction Documents in respect of the Adjusted Collections and, pursuant to
the provisions of Article 21.3, the collection mandate given to the Sellers has
been terminated, the Purchaser shall apply the Distributed Amounts, in the
following order:

1.       to the payment of any sums due and payable on such date in respect of
         the Purchaser's Funding, in accordance with the provisions of the
         Master Senior Deposit Agreement, as follows:

         1.1.  the Margin due to ESTER FINANCE;

         1.2.  the Immobilisation Indemnity due pursuant to article 8.1 of the
               Master Senior Deposit Agreement;

         1.3.  the Deposit Fee due pursuant to article 8.2 of the Master Senior
               Deposit Agreement;

         until their full payment;

         provided that on each Intermediary Settlement Date, the sums referred
         to in this point 1. to be paid on the next Funded Settlement Date,
         calculated prorata temporis, shall be excluded from the Distributed
         Amounts available on such Intermediary Settlement Date and reserved by
         the Purchaser in order to be paid on such Funded Settlement Date;

2.       to the payment of any sum due and payable prior to such date, by the
         Sellers or the Centralising Unit to the Purchaser under the Transaction
         Documents and which remains unpaid on such date, until its full
         repayment;

3.       to the payment of any sum due and payable in respect of the Purchaser's
         Funding, up to an amount equal to the sum due under the Transaction
         Documents in respect of the Adjusted Collections and which any Seller
         and/or the Centralising Unit has failed to pay (the "PRIORITY AMOUNT");

         provided that on each Intermediary Settlement Date, the sums referred
         to in this point 3. to be paid on the next Funded Settlement Date shall
         be excluded from the Distributed Amounts available on such Intermediary
         Settlement Date and be reserved by the Purchaser in order to be paid on
         such Funded Settlement Date;

                                     - 45 -



4.       to the payment of any sum remaining due and payable in respect of the
         Purchaser's Funding, in accordance with the provisions of the Master
         Senior Deposit Agreement and, pari passu, in respect of that portion of
         the Complementary Deposit that exceeds the Priority Amount, in
         accordance with the provisions of the Master Complementary Deposit
         Agreement, until their full payment;

         provided that on each Intermediary Settlement Date, the sums referred
         to in this point 4., due in respect of the Purchaser's Funding and to
         be paid on the next Funded Settlement Date shall be excluded from the
         Distributed Amounts available on such Intermediary Settlement Date and
         reserved by the Purchaser in order to be paid on such Funded Settlement
         Date;

5.       to the repayment of any residual sum due in respect of the
         Complementary Deposit;

6.       to the payment to the Centralising Unit of any amount equal to the
         Excess Forseen Collections, outstanding as of the last Settlement Date
         before being reduced to zero (unless otherwise reimbursed);

7.       to the payment of any Deferred Purchase Price to be made pursuant with
         the provisions of each Receivables Purchase Agreement;

8.       to the repayment of the Subordinated Deposit.

ARTICLE 17. PAYMENTS

17.1 For the purpose of the payment of any sum due under this Agreement, the
Agent, the Purchaser, each Seller and the Centralising Unit acting, as the case
may be, on its own behalf or on behalf of the Sellers, expressly agree to use
exclusively the following bank accounts:

(i)      the Purchaser's Account;

(ii)     the Centralising Unit's Account;

(iii)    the Collection Accounts;

(iv)     the Purchaser's Collection Accounts; and

(v)      the Agent's Account.

The parties hereunder acknowledge that such accounts shall be used exclusively
for the purposes and in accordance with the terms of this Agreement.

17.2 The Euro is the currency of payment for each and every sum due at any time
under the Transaction Documents.

                                     - 46 -



17.3 The Purchaser shall be entitled to set-off (i) any amount due and payable
by the Purchaser to the Centralising Unit on its behalf or on behalf of the
Sellers under the Transaction Documents and (ii) any amount due and payable by
the Centralising Unit on its behalf or on behalf of the Sellers to the Purchaser
under the Transaction Documents.

The Centralising Unit, acting on its behalf or on behalf of the Sellers, shall
be entitled to set-off (i) any amount due and payable by the Purchaser to the
Centralising Unit on its behalf or on behalf of the Sellers under the
Transaction Documents and (ii) any amount due and payable by the Centralising
Unit on its behalf or on behalf of the Sellers to the Purchaser under the
Transaction Documents.

17.4 For the purposes of this Article, any payments falling due on a day which
is not a Business Day shall instead fall due on the following Business Day.

17.5 The Centralising Unit acting, as the case may be, on its own behalf or on
behalf of any Seller, shall give to its bank before 12.00 (noon) on the Business
Day following each Calculation Date, an irrevocable instruction to transfer
(ordre de virement irrevocable), from the Centralising Unit's Account to the
Purchaser's Account, any amount due to the Purchaser on such Funded Settlement
Date or on such Intermediary Settlement Date in accordance with the Transaction
Documents, to be credited with immediately available funds, before 12.00 (noon),
on the said Funded Settlement Date or Intermediary Settlement Date.

The Purchaser shall give to its bank one Business Day before each Funded
Settlement Date or each Intermediary Settlement Date, before 10.00 am, an
irrevocable instruction to transfer (ordre de virement irrevocable), from the
Purchaser's Account to the Centralising Unit's Account, any amount due, as the
case may be, to the Centralising Unit on such Funded Settlement Date or on such
Intermediary Settlement Date, in accordance with the Transaction Documents, to
be credited with immediately available funds, before 12.00 (noon), on the said
Funded Settlement Date or on the said Intermediary Settlement Date.

17.6 The Centralising Unit acting, as the case may be, on its own behalf or on
behalf of any Seller, shall give to CALYON, acting as holder of the Centralising
Unit's bank account, at least two (2) Business Days before the Initial
Settlement Date, irrevocable orders to pay on the Initial Settlement Date,
before any other debit on such Centralising Unit's bank account and within the
limits of the sums credited on the Centralising Unit's bank account by the
Purchaser on the Initial Settlement Date:

- -        to CALYON, acting on its own behalf and on behalf of its legal counsel
         (Gide Loyrette Nouel);

- -        to NBP, acting on its behalf and on behalf of its legal counsel (Allen
         & Overy);

- -        to each Issuers and Liquidity Banks, each acting on their own behalf
         and on behalf of their legal counsel;

- -        to the Agent, to Eurofactor AG and to INTESA MEDIOFACTORING S.p.A;

                                     - 47 -



any structuring, arranger and legal fees, costs and expenses (including any
up-front fees as a result of the putting in place of an Italian Back Up
Servicer) due to each of the above and to their respective legal counsel.

17.7 Any default by the Centralising Unit acting, as the case may be, on its own
behalf or on behalf of any Seller, in the fulfilment of its payment obligations
under this Agreement shall automatically entitle the Purchaser, without having
to give prior notice, to receive interest on any amounts payable and remaining
unpaid (excluded), calculated from the date when such payment was due (included)
until the date of actual payment, at a rate of EURIBOR 1 month + 2% per annum
payable on the date of actual payment (excluded).

                CHAPTER IX - PURCHASE OF PURCHASABLE RECEIVABLES

ARTICLE 18. CONDITIONS IN RELATION TO ANY PURCHASE OF PURCHASABLE RECEIVABLES

18.1 Conditions precedent in relation to any purchase of Purchasable Receivables

The Purchaser shall not be obliged on any Settlement Date during the
Replenishment Period, to purchase from any Seller, Purchasable Receivables
unless each of the following conditions have been fulfilled on such Settlement
Date:

(i)      the representations and warranties made by the Seller and the
         Centralising Unit referred to in Article 11 (Representations and
         Warranties) remain valid and accurate on such Settlement Date;

(ii)     the Centralising Unit has transmitted the Assessment Report to the
         Agent and delivered the List of Purchasable Receivables to the
         Purchaser on the Information Date immediately preceding such Settlement
         Date;

(iii)    the amount of the Subordinated Deposit, the Complementary Deposit and
         any Increase in the Subordinated Deposit and any Increase in the
         Complementary Deposit applicable on such Settlement Date, has been
         recorded on the debit balance of the Current Account;

(iv)     the Payment to be made and the Transfer Deeds to be delivered pursuant
         hereto do not violate any law or regulation in force on such Settlement
         Date;

(v)      such Settlement Date is not later than the Commitment Expiry Date;

(vi)     the Purchaser has received to its satisfaction, on or before such
         Settlement Date, (a) an Auditors Certificate in relation to the Sellers
         and the Centralising Unit, not older than six (6) calendar months, and
         (b) a Solvency Certificate in relation to the Centralising

                                     - 48 -



         Unit, to the French Seller, to the German Sellers, to the Italian
         Seller and to the Spanish Seller, not older than three (3) calendar
         months;

(vii)    no Early Amortisation Event has occurred on such date;

(viii)   the selection of the Purchasable Receivables to be purchased from the
         Sellers by the Purchaser has been carried out in accordance with the
         selection procedure set forth in Article 12.3.1; and

(ix)     the Centralising Unit, acting on behalf of the Sellers, has transferred
         the Adjusted Collections to the Purchaser, to the extent required by
         Article 23 (Application of payments and payments of collections).

18.2 Conditions subsequent to any Purchase of Purchasable Receivables on a
Settlement Date during the Replenishment Period

In the event that any of the following conditions have not been fulfilled on any
Settlement Date during the Replenishment Period, such a failure shall constitute
an automatic and immediate termination (condition resolutoire de plein droit) of
the assignment by the Sellers to the Purchaser of the Sold Receivables sold on
such Settlement Date :

(i)      the Centralising Unit has not credited the Purchaser's Account for an
         amount equal to any debit balance of the Current Account in accordance
         with the provisions of Article 6.3.3. on such date before 12.00 (noon);
         or

(ii)     If such Settlement Date is a Funded Settlement Date, the Depositor has
         not duly made or increased the Senior Deposit in respect of its
         commitment to effect a Senior Deposit in accordance with and subject to
         the terms of the Master Senior Deposit Agreement.

ARTICLE 19. CONFORMITY WARRANTIES FOR PURCHASABLE RECEIVABLES

Each Seller represents and warrants to the Purchaser that, as of the Assessment
Date relating to the Settlement Date on which a Purchasable Receivable shall be
sold, such Purchasable Receivable (other than a Net Miscellaneous Receivable or
with respect to the Initial Settlement Date a Defaulted Receivable) shall exist,
and, to its knowledge, except as specifically identified on the Assessment
Report (it being provided that even if such Purchasable Receivables are so
identified, this shall be without prejudice to the rights of the Purchaser to
exercise any recourse against the relevant Seller as provided for under this
Agreement and, in particular, shall not prevent the Purchaser from exercising
any recourse in connection with Article 28) shall conform to the characteristics
specified in article 7 (Description of Purchasable Receivables) of each
Receivables Purchase Agreement, with the description as it appears on the
Transfer Deed and the electronic support relating to such Transfer Deed and with
the characteristics specified in Schedule 13.

                                     - 49 -



Each Seller and the Purchaser agree that the Conformity Warranties set out in
this Article:

(i)      shall be given by each Seller to the Purchaser and shall apply to all
         of its Purchasable Receivables designated on any Transfer Deed and the
         related support;

(ii)     shall take effect upon the mere transfer by each Seller or the
         Centralising Unit to the Purchaser of a Transfer Deed and the related
         supports, in accordance with and subject to the relevant Receivables
         Purchase Agreement;

(iii)    shall be valid for such Purchasable Receivable on the relevant
         Information Date and shall remain in force until the Purchaser's
         Funding has been repaid in full.

ARTICLE 20. IDENTIFICATION OF THE CONTRACTUAL DOCUMENTATION FOR THE SOLD
RECEIVABLES - ACCESS TO DOCUMENTS

The Parties irrevocably agree that each purchase of Purchasable Receivables
carried out pursuant to this Agreement and the relevant Receivables Purchase
Agreement shall entitle the Purchaser or any other agent appointed in a
discretionary way by the same, solely in order to protect and/or to enforce its
right in connection with the Securitisation Transaction, to access the original
copies of the contractual documentation or the computer or paper information
underlying the Sold Receivables and, the support listing the Sold Receivables
and to make duplicate copies of such documents; provided that (i) the Purchaser
or its agent shall have the right to obtain the original copies of such
documents to the extent required to enforce their rights under the Transaction
Documents and (ii) in respect of the Protected Debtors, the provisions of the
present Article shall only apply if the conditions set forth in the Data
Protection Trust Agreement are met.

Each Seller irrevocably agrees to allow the Purchaser or any other person
appointed by it unrestricted access to the said documents provided that (i) such
Seller has been given two (2) Business Days prior notice thereof, (ii) the
Purchaser or any other person, whom the Purchaser appoints undertakes not to
disclose any confidential information except where permitted in the
circumstances provided for by Article 31 (Confidentiality) and (iii) in respect
of the Protected Debtors, subject to the provisions of the Data Protection Trust
Agreement.

The Purchaser or any other person, whom the Purchaser appoints, shall in no way
be obliged to reimburse the Centralising Unit or the Sellers, for any expense
incurred by the Centralising Unit or the Sellers when allowing access to use the
relevant documents, nor to compensate the Centralising Unit or the Sellers for
any loss which such access or use might cause, other than any loss resulting
from the gross negligence (faute lourde) or willfull misconduct (dol) of the
Purchaser or such other person or the breach by the Purchaser of its material
obligations under the Transaction Documents.

                                     - 50 -



                   CHAPTER X - COLLECTION OF SOLD RECEIVABLES

ARTICLE 21. COLLECTION OF SOLD RECEIVABLES

21.1 Seller's Collection Mandate

The Purchaser hereby appoints each Seller, who accepts, to act as the Collection
Agent for the purposes of the collection of Sold Receivables under a Collection
Mandate in accordance with the terms and subject to the conditions of this
Agreement and the relevant Receivables Purchase Agreement. Each Seller hereby
irrevocably renounces resigning from its role as Collection Agent for the
duration of this Agreement.

In addition, the Purchaser hereby appoints the Sellers, who hereby accept to act
on its behalf for the purposes of Articles 24 and 25 or where expressly provided
for in this Agreement or any of the Receivables Purchase Agreements.

21.2 Collection Support

The Purchaser may request the Back-Up Servicer(s) and/or the Italian Back-Up
Servicer(s) to provide the relevant Sellers with logistic support to carry out
the collection of Sold Receivables with greater efficiency, provided that the
Back-Up Servicer(s) and the Italian Back-Up Servicer(s) shall not be obliged to
provide such logistic support. If the Centralising Unit, acting in the name and
on behalf of the Sellers, accepts such offer and the relevant Back-Up
Servicer(s) and/or the Italian Back-Up Servicer(s) accept(s) to provide such
logistic support, it shall reimburse the Back-Up Servicer(s) and/or the Italian
Back-Up Servicer(s) for any duly documented costs incurred in connection with
the setting up of such logistic support.

21.3 Termination of the Collection Mandate

21.3.1. Solely in the event of:

(i)     any Early Amortisation Event under Article 13.3. (xv);

(ii)    any failure of any of the Sellers to comply with their respective
        obligations under Article 12.1.2 (vi), which is not remedied within
        fifteen (15) Business Days after written notice received from the
        Purchaser, or, if ealier, after a Responsible Officer becoming aware;

(iii)   entry of any Seller, the Centralising Unit, GOODYEAR DUNLOP TIRES
        EUROPE BV, GOODYEAR or any Material Subsidiary into Insolvency
        Proceedings;

                                     - 51 -



(iv)     any failure by a Seller or the Centralising Unit or GOODYEAR DUNLOP
         TIRES EUROPE BV to make a payment (including any deposit or transfer of
         Adjusted Collections to the Purchaser) when due under the Transaction
         Documents

         (w)   which is not remedied within two (2) Business Days, provided that
               such failure is due to a technical reason which affects the means
               of payment in the banking system used by such Seller or by the
               Centralising Unit and is not otherwise covered by clause (y)
               below;

         (x)   which is not remedied within four (4) Business Days, where such
               failure arises in relation to the payment of the Management Fee
               or the Stand-by Fee;

         (y)   which is not a scheduled payment under the Transaction Documents
               and which is not remedied within two (2) Business Days after
               written notice received from the Purchaser or, if earlier, after
               a Responsible Officer becoming aware thereof;

         (z)   which is a scheduled payment (including a payment due pursuant to
               Article 6.3.2.) and is not otherwise covered by clause (w) or (x)
               above;

(v)      any restructuring of (a) a Seller leading to GOODYEAR ceasing to hold
         directly or indirectly more than 50% in the share capital and voting
         rights of such a Seller, or (b) GOODYEAR DUNLOP TIRES EUROPE BV leading
         to GOODYEAR ceasing to hold directly or indirectly more than 50% in the
         share capital and voting rights of GOODYEAR DUNLOP TIRES EUROPE BV, or
         (c) the Centralising Unit leading to GOODYEAR DUNLOP TIRES EUROPE BV
         ceasing to hold directly or indirectly 100% in the share capital and
         voting rights of the Centralising Unit;

(vi)     any failure by any Seller or the Centralising Unit to deliver an
         Auditors Certificate, complying with the relevant form attached as
         Schedule 4, as provided for under Article 12.1.1 (vii) and 12.2.1 (vi),
         which is not remedied within fifteen (15) Business Days after written
         notice received from the Purchaser or, if earlier, after a Responsible
         Officer becoming aware thereof;

(vii)    any failure by any Seller or the Centralising Unit to deliver a
         Solvency Certificate, complying with the relevant form attached as
         Schedule 5, as provided for under Article 12.1.1 (xii) and 12.2.1
         (vii), which is not remedied within ten (10) Business Days after
         written notice received from the Purchaser or, if earlier, after a
         Responsible Officer becoming aware thereof;

(viii)   any Material Indebtedness of GOODYEAR TIRES EUROPE BV or any of its
         subsidiaries, or GOODYEAR (a) has not been paid or repaid when due
         (after giving effect to any applicable grace period) or (b) has become
         due and payable before its stated date of payment as a result of a
         declared default and after the expiry of any applicable grace period,
         provided that, in each case, such default has not been waived pursuant
         to the terms of the relevant agreement;

(ix)     any change of any kind, in any Seller's or Centralising Unit's articles
         of association, business or assets, which would be reasonably likely to
         result in a Material Adverse Effect;

                                     - 52 -



(x)      any representation and warranty made by any Seller, the Centralising
         Unit or GOODYEAR DUNLOP TIRES EUROPE BV under the Transaction Documents
         (other than under Article 19), or any information contained in any
         document delivered by any Seller or the Centralising Unit or GOODYEAR
         DUNLOP TIRES EUROPE BV to the Purchaser pursuant thereto, is found to
         have been inaccurate on the date on which it was made or delivered, if
         such inaccuracy (a) is not remedied or waived accordingly within thirty
         (30) days after written notice received from the Purchaser or, if
         earlier, after a Responsible Officer becoming aware thereof, and (b) is
         reasonably likely to result in a Material Adverse Effect;

(xi)     there is an attachment, freezing or seizure (saisie) order against all
         or any material part of the property, assets or revenues of the
         Centralising Unit or any of the Sellers or GOODYEAR DUNLOP TIRES EUROPE
         BV or in the event that either the Centralising Unit or any of the
         Sellers or GOODYEAR DUNLOP TIRES EUROPE BV has become subject at any
         time to any court order or other court process having similar effect
         and such attachment, seizure (saisie), court order or court process
         remains in effect and is not discharged during a period of fourty five
         (45) calendar days following the date on which it was served;

(xii)    the validity of the Transaction Documents or a Transfer Deed issued
         pursuant to the Receivables Purchase Agreement or any Payment hereunder
         or thereunder is successfully challenged by any enforcement order
         issued or judgment obtained as a result of proceedings before any court
         (including arbitration proceedings); or

(xiii)   (a)   any of the Transaction Documents becomes illegal or, cannot, for
               any reason whatsoever, be performed pursuant to their respective
               terms, and such illegality or inability to be performed is
               reasonably expected to prejudice the rights of the Purchaser in
               any material respect;

         (b)   a Transfer Deed becomes illegal or, cannot, for any reason
               whatsoever, be performed pursuant to its terms, and such
               illegality or inability to be performed is reasonably expected to
               prejudice the rights of the Purchaser;

(xiv)    any Collection Account Agreement is terminated for whatever reason and
         such Collection Account Agreement is not replaced by (a) a then
         existing Collection Account Agreement or (b) an equivalent collection
         account agreement that has been approved by the Purchaser, the Agent,
         the Issuers and the Liquidity Banks (such consent not to be
         unreasonably withheld or delayed);

                                     - 53 -



the Purchaser may terminate the appointment of each Seller for collection of the
Sold Receivables by issuing or causing any other entity it has appointed for
such purpose to issue to this effect:

(i)      a letter sent by registered mail with acknowledgement of receipt to
         each Seller; and

(ii)     subsequently and in relation to the Italian Seller, an Italian Notice
         of Transfer to each of the Debtors, in accordance with the Italian
         Receivables Purchase Agreement, provided that the cost of delivery of
         any Italian Notice of Transfer is borne exclusively by the Centralising
         Unit, acting in the name and on behalf of the Sellers and shall be
         reasonable and duly documented;

(iii)    subsequently and in relation to the other Sellers, a Notice of Transfer
         to each of the Debtors, in accordance with the relevant Receivables
         Purchase Agreement, provided that the cost of delivery of a Notice of
         Transfer is borne exclusively by the Centralising Unit, acting in the
         name and on behalf of the Sellers and shall be reasonable and duly
         documented.

The appointment of any Seller for the purpose of the collection of any Sold
Receivable shall terminate automatically on the date of receipt by the
Centralising Unit, acting in the name and on behalf of the relevant Seller, of
the letter referred to under (i) above. As of such date, the Seller shall
forthwith transfer to the credit of the relevant Purchaser's Collection Account
any amount received from the relevant Debtors relating to the Sold Receivables,
in accordance with the provisions of the Collection Account Agreements.

The termination of the appointment of a Seller as collection agent shall not
affect the obligations of such Seller under this Agreement or the relevant
Receivables Purchase Agreement, with the exception of those relating to the
collection of the Sold Receivables. Notwithstanding any other provisions of this
Agreement, neither the Purchaser nor any of its agents shall, at any time other
than following the termination of the collection mandate of the Sellers pursuant
to this Article 21.3.1, contact or communicate with any Debtor in respect of any
Sold Receivable or the Securitisation Transaction.

21.3.2. In addition, the Purchaser shall be entitled to appoint (i) a (or
several) Back-Up Servicer(s) for the collection of all or part of the Sold
Receivables for which a Notice of Transfer has been delivered to the relevant
Debtors in accordance with Article 21.3.1 above, and (ii) an (or several)
Italian Back-Up Servicer(s) for the collection of all or part of the Italian
Sold Receivables for which an Italian Notice of Transfer has been delivered to
the relevant Debtors in accordance with Article 21.3.1 above.

The Purchaser confirms that, as a condition precedent to its(their)
appointment(s), the Back-Up Servicer(s) and the Italian Back-Up Servicer(s) have
(or will have) agreed with the Purchaser to comply with the provisions of this
Agreement.

                                     - 54 -



Each Seller, upon being notified of the exercise of such a right by the
Purchaser undertakes:

(i)      to take all steps and do all things to enable the Back-Up Servicer(s)
         and the Italian Back-Up Servicer(s) to take over the Seller's
         undertakings as collection agent(s);

(ii)     to deliver in accordance with the provisions of Article 20
         (Identification of the contractual documentation for the Sold
         Receivables - Access to documents) and Article 31 (Confidentiality) to
         the Back-Up Servicer(s) and to the Italian Back-Up Servicer(s) any and
         all original copies of the contractual documentation or the computer
         information concerning the Sold Receivables as well as any other
         document as might be reasonably requested by the Back-Up Servicer(s)
         and/or the Italian Back-Up Servicer(s) in order to perform its(their)
         obligations as servicer(s);

(iii)    to transfer forthwith to the credit of the relevant Purchaser's
         Collection Account, any Actual Collections relating to Sold Receivables
         it may directly receive from any Debtor;

(iv)     to indemnify forthwith the Purchaser, for any reasonable costs and
         expenses duly evidenced and incurred by the latter in relation to the
         Notice of Transfer and the Italian Notice of Transfer; and

(v)      to indemnify forthwith the Purchaser, for any reasonable costs incurred
         by the latter due to the appointment of the Back-Up Servicer(s) and/or
         the Italian Back-Up Servicer(s) to act as collection agent(s), provided
         that the Back-Up Servicer(s) and the Italian Back-Up Servicer(s)
         furnishes(furnish) any documents evidencing such costs within the
         limits set forth in Article 27.3.

The Purchaser shall, immediately upon payment by the Centralising Unit, acting
on its own behalf and on behalf of the Sellers, of all amounts owed to the
Purchaser, (i) take all steps necessary to terminate any rights it may have with
respect to any Collection Accounts, and (ii) if the Sellers' collection mandate
has been terminated pursuant to the terms of this Article, revoke any collection
mandate granted to the Back-Up Servicers, to the Italian Back-Up Servicer(s) or
any other agent of the Purchaser.

21.3.3. Each of the Sellers hereby irrevocably renounces resigning from its role
under the collection mandate referred to in this Article 21 for the duration of
this Agreement. Such collection mandate may only be terminated in the
circumstances and in accordance with the procedures provided for in the present
article or, with respect to a particular Seller, if it has ceased to be a party
to this agreement in accordance with the provisions herein, when all Sold
Receivables originated by such Seller have been collected, repurchased in
accordance with this Agreement or determined to be uncollectible.

                                     - 55 -



ARTICLE 22. ASSESSMENT REPORT AND BACK-UP SERVICER REPORT

22.1. As long as a Seller acts as collection agent in respect of any Sold
Receivable, such Seller shall draw up or cause to be drawn up, an Assessment
Report in the form set out in Schedule 3, which shall be delivered by the
Centralising Unit acting in the name and on behalf of the Sellers to the Agent
on each Information Date.

22.2. In the event of the termination of the Collection Mandate, in accordance
with the provisions of Article 21.3, the Purchaser or, as the case may be, the
Back-Up Servicers shall draw up a Back-Up Servicer Report on each Information
Date.

ARTICLE 23. APPLICATION OF PAYMENTS AND PAYMENTS OF COLLECTIONS

23.1. Application of Payments

Subject to any applicable laws and to the provisions of the Collection Account
Agreements, any payment received by a Seller from any of its Debtors shall be
applied first to Sold Receivables (before being applied to other obligations of
such Debtor), unless the said Debtor has given express instruction otherwise.

23.2. Payment of collections

23.2.1. In so far as a Seller acts as collection agent in respect of any Sold
Receivable, the Parties agree that:

(i)      during the Replenishment Period, on each Settlement Date, Adjusted
         Collections shall be recorded and applied in the manner provided for in
         Article 6;

(ii)     during the Replenishment Period, on each Funded Settlement Date, the
         Cash Collections Advance shall be transferred by the Centralising Unit
         to the Purchaser's Account before 12.00 (noon) on such Settlement Date;

(iii)    on each Settlement Date during the Amortisation Period, the
         Centralising Unit shall transfer to the Purchaser's Account the
         Adjusted Collections.

If a Seller no longer acts as collection agent in respect of any Sold
Receivable, the Parties agree that the relevant Back-Up Servicer or Italian
Back-Up Servicer shall transfer to each relevant Purchaser's Collection Account
the Actual Collections made in relation to the Sold Receivables purchased from
such Seller. Such Actual Collections shall be applied to the payments in the
manner provided for in Article 6 until the Commitment Expiry Date, and
thereafter, as provided for in Article 16.

23.2.2 Except as provided for in Article 23.2.1., the Sellers and the
Centralising Unit shall not be required to transfer any collections to the
Purchaser.

                                     - 56 -



23.3. Collection Accounts

The Sellers and the Purchaser have agreed to put in place Collection Accounts in
each jurisdiction concerned by the Securitisation Transaction (i.e. France,
Germany, Italy and Spain) in order to segregate any cash received by the
Sellers, when acting in their capacity as collection agent under the foregoing
provisions and the relevant Receivables Purchase Agreement.

A Collection Account Agreement shall be concluded in relation to each Collection
Account.

Notwithstanding the provisions of Article 23.1 hereof and of the Collection
Account Agreements, the Purchaser agrees that, in the event that the
Centralising Unit provides reasonably satisfactory evidence that a payment made
to any Collection Account does not relate to Sold Receivables or Retransferred
Receivables (as defined in the Collection Account Agreements), the Purchaser
shall promptly authorise the return of such payment to the Centralising Unit,
within the limit of the credit balance of the relevant Collection Account.

ARTICLE 24. RENEGOTIATION

24.1 Authorisation to renegotiate in Insolvency Proceedings

Each Seller acting on behalf of the Purchaser may, in the context of Insolvency
Proceedings relating to any Debtor (if Insolvency Proceedings apply to such
Debtor), participate in the setting up of a voluntary rescheduling and may make
proposals for that purpose, provided that:

(i)      it complies with its obligations under Article 26 (Obligations of
         care); and

(ii)     in the event that the Outstanding Amount of the Sold Receivables
         subject to such renegotiation exceeds 1,500,000 euro, it has obtained
         the prior written consent of the Purchaser to renegotiate.

24.2. Renegotiations as to amount and maturity date

The Purchaser agrees that each Seller, acting on behalf of the Purchaser, may
issue Credit Notes, Year End Rebates or Commercial Discounts in accordance with
its management procedures and accordingly modify the amount and Maturity Date of
the Sold Receivables for which such Credit Notes, Year End Rebates or Commercial
Discounts have been issued, provided that the Seller performs its obligations
set forth under Article 28 (Deemed collections).

                                     - 57 -



24.3. Other renegotiations

Subject to the provisions of Articles 24.1 and 24.2, the Purchaser authorises
each Seller, acting in the name and on behalf of the Purchaser, to agree to new
terms in relation to any Sold Receivable:

(a)      if the Purchaser expressly consents in writing;

(b)      without prior notification to or consent of the Purchaser, provided
         that such renegotiation:

         (i)   complies with its obligations under Article 26 (Obligations of
               care); and

         (ii)  does not adversely affect the rights of the Purchaser under such
               Sold Receivables, including any security interests, privileges
               and ancillary rights attached thereto; or

(c)      without prior notification to or consent of the Purchaser, if such Sold
         Receivable is a Defaulted Receivable.

ARTICLE 25. REPRESENTATION MANDATE

The Purchaser hereby appoints each Seller as its agent to undertake and to
conduct, in the name and on behalf of the Purchaser, all proceedings in court or
out of court as are necessary for the collection of the Sold Receivables,
including those deeds and formalities required for such proceedings, subject to
compliance with its obligations set out in Article 26 (Obligations of care). In
particular, each Seller shall freely issue and conduct, in the name and on
behalf of the Purchaser, all writs, pleadings, arguments, enforcement
proceedings, interventions by agreement or order, defences, defences to third
party proceedings, and appeals, as may be necessary in its opinion to recover
the sums due under the Sold Receivables.

The Purchaser agrees that it shall intervene in any claims or proceedings
initiated upon such Seller's request to assist such Seller in any claims or
proceedings initiated by the latter, in the event that such Seller deems it
necessary or whenever required by the applicable statutory or regulatory
provisions.

Each Seller agrees that it shall intervene in any claim or proceedings initiated
upon the Purchaser's request to assist the Purchaser in any claims or
proceedings initiated by the Purchaser, in the event that the Purchaser deems it
necessary or whenever required by the applicable statutory or regulatory
provisions, provided that the Purchaser shall not initiate any such claim or
proceeding unless (i) the collection mandate of the Sellers has been terminated
pursuant to the provisions of Article 21.3 or (ii) after the Program Expiry
Date, any amount remains due to the Purchaser under any of the Transaction
Documents.

Furthermore, the Purchaser authorises each Seller to issue, as appropriate, a
subrogation receipt to any third party in return for any full and irrevocable
payment made by that third party in substitution for any Debtor.

                                     - 58 -



Any expenses incurred by each Seller in carrying out its mandate shall be borne
exclusively by such Seller.

ARTICLE 26. OBLIGATIONS OF CARE

Each Seller undertakes to act in the collection of the sums due under the Sold
Receivables in accordance with the standards of a prudent and informed
businessman, and to be no less diligent than it would be in collecting sums due
under its own receivables, and in particular:

(i)      to apply to the collection of the sums due under the Sold Receivables,
         procedures that comply in all material respects with all applicable
         laws and regulations and the contracts underlying the Sold Receivables;

(ii)     to take such measures as may reasonably be required to ensure that all
         security interests, rights, claims, privileges and other benefits
         (droits accessoires) attached to the Sold Receivables, remain in force
         and are exercised in a timely fashion;

(iii)    to take such steps as are reasonably necessary to oppose any claim
         challenging the existence, validity, amount or maturity of the Sold
         Receivables or the security interests, rights, claims, privileges and
         other benefits attached thereto, if any;

(iv)     to take such steps, including without limitation any legal actions such
         as proceedings in court, as may be reasonably necessary and appropriate
         for the collection of the sums due under the Sold Receivables; and

(v)      to take such steps to cause any attachment, seizure (saisie) or any
         other enforcement measure levied or applied against any accounts where
         the sums due pursuant to the collection of Sold Receivables are
         received, to be released or withdrawn within thirty (30) calendar days.

ARTICLE 27. COMMISSION FOR AND COSTS OF COLLECTION

27.1. The Parties agree that the Sellers to whom such tasks are delegated shall
not receive a commission or remuneration for providing the collection service.

27.2. Each Seller shall bear its own costs incurred in the course of providing
the collection service, without any claim against the Purchaser, for
reimbursement. The termination of the mandate granted to the Sellers in Article
21 (Collection of Sold Receivables) shall not give to the Sellers any right to
compensation.

                                     - 59 -



27.3. In the event that a (or several) Back-Up Servicer(s) or Italian Back-Up
Servicer(s) is(are) appointed to act as agent for the collection of all or part
of the Sold Receivables pursuant to the terms of Article 21.3, such Back-Up
Servicer(s) or Italian Back-Up Servicer(s) shall be entitled to receive from the
Centralising Unit, acting on behalf of the Sellers, a fee, in accordance with
the provisions of the General Servicing Agreement and the Italian Servicing
Agreement. The parties acknowledge that the payment of such Stand-By Fee shall
be expressly excluded from the Current Account mechanism.

In the event that the Centralising Unit fails to pay the amounts referred to
under Articles 27.2 and 27.3 on any Funded Settlement Date, the Purchaser shall
proceed forthwith to the payment of such amounts, on the Centralising Unit's
behalf. As such, the Purchaser shall be, upon delivery of a subrogation notice
(quittance subrogative) by the Back-Up Servicer(s) or the Italian Back-Up
Servicer(s), subrogated in the rights of the Back-Up Servicer(s) or of Italian
Back-Up Servicer(s) against the Centralising Unit to the extent of the sums paid
to the Back-Up Servicer(s) or to the Italian Back-Up Servicer(s).

27.4. Stand-by servicing

27.4.1. As consideration for the preparation and putting in place of the back-up
servicer procedure, each of the Stand-By Servicer and the Italian Stand-By
Servicer shall be entitled to receive an up-front fee in accordance with the
provisions of the General Servicing Agreement and the Italian Servicing
Agreement, which shall be paid on the date hereof by the Centralising Unit. The
parties acknowledge that the payment of such up-front fee shall be expressly
excluded from the Current Account mechanism.

27.4.2. On each Funded Settlement Date, the Centralising Unit shall pay to each
of the Back-Up Servicers and the Italian Back-Up Servicer a Stand-By Fee whose
aim shall be to compensate the Back-Up Servicer/Italian Back-Up Servicer's
undertaking to act as back-up servicer upon request during the term of the
Agreement, in accordance with the provisions of the General Servicing Agreement
and the Italian Servicing Agreement. The parties acknowledge that the payment of
such Stand-By Fee shall be expressly excluded from the Current Account
mechanism.

27.4.3. In the event that the Purchaser exercices any of its rights to collect
sums directly from any Collection Account(s), in accordance with the relevant
provisions of the Collection Account Agreement(s), the Centralising Unit shall
pay to the Stand-by Servicer fees in accordance with the provisions of the
General Servicing Agreement. The parties acknowledge that the payment of such
fees shall be expressly excluded from the Current Account mechanism.

27.4.4 In the event that the Centralising Unit fails to pay any fees described
in the present Article 27.4 on a Funded Settlement Date, the Purchaser shall
proceed forthwith with the payment of such fees, on the Centralising Unit's
behalf to the extent of the Adjusted Collections received. As such, the
Purchaser shall be, upon delivery of a subrogation notice by the (Italian)
Back-Up Servicer(s)/(Italian) Stand-By Servicer, subrogated in the rights of the
(Italian) Back-Up Servicer(s)/(Italian) Stand-By Servicer against the
Centralising Unit to the extent of the sums paid to the (Italian) Back-Up
Servicer(s)/(Italian) Stand-By Servicer in respect of these fees.

                                     - 60 -



27.5. Data Protection Trustee

27.5.1. The Centralising Unit, acting on behalf the German Seller, shall pay to
each of the Data Protection Trustee the compensation described in the Data
Protection Trustee Agreement. The parties acknowledge that the payment of such
compensation shall be expressly excluded from the Current Account mechanism.

27.5.2 In the event that the Centralising Unit fails to pay the compensation
described in the present Article 27.5, the Purchaser shall proceed with the
payment of such compensation, on the Centralising Unit's behalf to the extent of
the Adjusted Collections received. As such, the Purchaser shall be, upon
delivery of a subrogation notice by the Data Protection Trustee, subrogated in
the rights of the Data Protection Trustee against the Centralising Unit to the
extent of the sums paid to the Data Protection Trustee in respect of this
compensation.

                         CHAPTER XI - DEEMED COLLECTIONS

ARTICLE 28. DEEMED COLLECTIONS

28.1. Upon the occurrence of any one of the following events:

(i)      the issue of any Credit Notes or Commercial Discounts as referred to in
         Article 24.2, in relation to any Sold Receivables;

(ii)     any contract, which gives rise to a Sold Receivable, has been
         terminated and the relevant goods have been billed but remain to be
         delivered by any Seller, in whole or in part, on the termination date
         of such contract;

(iii)    any set-off agreed by any Seller or by operation of law or by a court
         decision between debts owed to any Debtor and the Sold Receivables
         against such Debtor;

(iv)     any Sold Receivable has been cancelled, in whole or in part;

(v)      any Amended Invoice arises;

(vi)     the issue of any Credit Note over Snow Tires, in relation to any Sold
         Receivables; or

(vii)    the issue of any Year End Rebates, in relation to any Sold Receivables,
         unless such Year End Rebates have been cancelled or paid in cash by the
         relevant Seller;

the relevant Seller shall be deemed to have received the amount it would have
collected if such event had not occurred (the "DEEMED COLLECTION"), provided
that no Deemed Collection shall be due as a result of a Debtor's failure,
independent from and beyond one Seller's control and from any of (i) through
(vii) above, to make payments in respect of Sold Receivables.

                                     - 61 -



Moreover, given the internal billing procedures of each Seller, it may be the
case that certain Sold Receivables are declared by a Seller as being
extinguished partially or completely, in an Assessment Report and/or in any
electronic file attached thereto, even though such Sold Receivables have not
been fully paid by their respective Debtors (the "DEEMED EXTINGUISHED
RECEIVABLES"). Therefore, in order to offset the absence of any payment of cash
collections arising in relation to such Deemed Extinguished Receivables, such
Deemed Extinguished Receivables shall be considered as a Deemed Collection and
shall be paid pursuant to Articles 28.2 and 28.3.

28.2. The relevant Sellers, the Centralising Unit and the Agent shall cooperate
to determine the amount of Deemed Collections, provided that:

(i)      during the Replenishment Period, the amount of Deemed Collections shall
         be debited from the Current Account through the adjustment of Adjusted
         Collections (as provided in the definition of such term);

(ii)     during the Amortisation Period, the amount of Deemed Collections shall
         be transferred by the Centralising Unit to the Purchaser's Account on
         each Funded Settlement Date and on each Intermediary Settlement Date.

28.3. In the event that any Seller or, as the case may be, the Centralising
Unit, acting in the name and on behalf of the Sellers, fails to pay any Deemed
Collections as required pursuant to Article 28.2 (ii), the Purchaser may
automatically set-off (a) the amount of such Deemed Collections against (b) any
amount due or thereafter to become due to such Seller or, as the case may be, to
the Centralising Unit, under the Transaction Documents. As soon as practicable,
the Purchaser shall notify the Centralising Unit after exercise of its right of
set-off.

In the event that, notwithstanding such set-off, Deemed Collections still remain
unpaid, the Purchaser shall have recourse against the relevant Seller's assets
or, as the case may be, against the Centralising Unit's assets, but only to the
extent of the amounts remaining unpaid.

Any unpaid Deemed Collection shall remain outstanding until it has been paid in
full in accordance with the present Article 28.3.

                                     - 62 -



                           CHAPTER XII - MISCELLANEOUS

ARTICLE 29. FEES AND EXPENSES

The Centralising Unit acting in the name and on behalf of the Sellers shall
reimburse the Purchaser, acting for its own account and/or as proxy for (i) any
reasonable and duly documented expenses (including legal fees, costs and
expenses) arising out of any modification, waiver or amendment of the
Transaction Documents to which the Centralising Unit and/or the Sellers are a
party and requested by the Centralising Unit, acting in the name and on behalf
of the Sellers, or the Rating Agencies, (ii) any reasonable and duly documented
expenses, claims, damages and liabilities (including legal fees, costs and
expenses) incurred in connection with the preservation and/or enforcement of the
rights of the Purchaser, the Issuers and the Liquidity Banks under the
Securitisation Transaction or (iii) any reasonable and duly documented expenses
(including legal fees, costs and expenses) incurred in connection with the
renewal of any Liquidity Agreement and, as the case may be, in connection with
the implementation of an alternative funding described in any Liquidity Bank
Letter, subject to prior communication by the Purchaser to the Centralising Unit
of an estimate of fees in the event that the Centralising Unit requests this
estimate.

ARTICLE 30. SUBSTITUTION AND AGENCY

Each Party shall have the right to be assisted by, to appoint or to substitute
for itself one or more third parties in the performance of certain tasks
provided that:

(i)      such Party has given prior written notice to the other Party and, in
         any case, the Purchaser has notified the Rating Agencies;

(ii)     such Party remains liable to the other Party for the proper performance
         of those tasks and the relevant third party (parties) has (have)
         expressly renounced any right to any contractual claim against the
         other Party;

(iii)    the relevant third party (parties) undertake(s) to comply with all
         obligations binding upon such Party under this Agreement;

(iv)     the Rating Agencies have confirmed that the contemplated change will
         not entail a downgrading or withdrawal of the current rating of the
         Notes issued by the Issuers or that the contemplated change will reduce
         such downgrading or prevent such withdrawal; and

(v)      each other Party has given prior written consent to this appointment
         and/or substitution, such consent not to be unreasonably withheld.

                                     - 63 -



ARTICLE 31. CONFIDENTIALITY

Each Party agrees to treat all information of any kind transmitted by any other
Party in connection with the Securitisation Transaction as confidential. The
Parties agree not to disclose such information to any other person and to ensure
that their respective personnel similarly respect the confidential nature of
such information.

This provision shall not prevent:

(i)      either Party from transmitting such information as may be required by
         its statutory auditors, public organisations or any governmental,
         regulatory, fiscal, or monetary institution or other authority, in so
         far as it is obliged to do so by the applicable laws and regulations in
         force;

(ii)     the Purchaser from transmitting such information to any person who will
         provide or will undertake to provide directly or indirectly funds to
         the Purchaser or any agent appointed by the Purchaser pursuant to
         Article 20 (Identification of the contractual documentation for the
         Sold Receivables - Access to Documents), provided that the Purchaser
         undertakes that such person shall be bound to treat such information as
         confidential under the same terms and subject to the same conditions as
         provided for in the Transaction Documents;

(iii)    the Purchaser from using any original or duplicate copy of the
         contractual documentation or any computer information referred to in
         Article 20 (Identification of the contractual documentation for the
         Sold Receivables-Access to documents) of this Agreement in order to
         take all such measures deemed necessary by the Purchaser to preserve,
         and/or enforce its rights under the Transaction Documents, including
         without limitation any legal actions;

(iv)     either Party from providing the Rating Agencies with any information
         they may require;

(v)      either Party from transmitting such information as may be in the public
         domain other than as a result of a breach of this Article or a breach
         of any other confidentiality obligation;

(vi)     subject to GOODYEAR's prior written consent, CALYON, the Issuers and
         the Liquidity Banks from using exclusively the following information:
         the amount involved in the Securitisation Transaction, the countries
         concerned, the number of Sellers, the structure of the transaction, the
         identity of the legal counsel involved in the Securitisation
         Transaction, the closing date of the Securitisation Transaction, the
         maturity of the Securitisation Transaction and the identity of the
         parties to the Securitisation Transaction; and

(vii)    the Purchaser and CALYON from transmitting such information to any
         other person involved in the Securitisation Transaction, provided that
         the Purchaser and the CALYON undertake that such person shall be bound
         to treat such information as confidential under the same terms and
         subject to the same conditions as provided for in the Transaction
         Documents.

                                     - 64 -



This obligation to preserve confidentiality shall remain valid for ten (10)
years from the Program Expiry Date.

ARTICLE 32. NOTICES

32.1. Except as otherwise set forth in the Transaction Documents, all notices,
requests or communications which must or may be made pursuant to this Agreement
shall be by way of writing, mail or fax.

32.2. All notices, requests or communications to be made and all documents to be
delivered from one Party to the other Party under the Transaction Documents
shall be made and delivered to the addressees referred to in Schedule 7 hereto
(and in the case of the Sellers, to the Centralising Unit, acting in the name
and on behalf of the Sellers).

32.3. All notices, requests or communications made and all documents delivered
under the Transaction Documents shall only take effect upon the date of their
receipt by its addressee.

32.4. Each of the Parties may at any time modify the addressee of the notices,
requests or communications to be made and the documents to be delivered to it
under the Transaction Documents by sending to that effect a letter or fax to the
other Party indicating the name of the new addressee.

32.5. The Parties agree that the Centralising Unit shall be responsible for
receiving written notice on behalf of the Sellers, and that any notice given to
the Centralising Unit shall be deemed validly received by all of the Sellers
upon receipt by the Centralising Unit.

32.6. The Parties agree that the Purchaser shall be responsible for receiving
written notice on behalf of the Agent, the Joint Lead Arrangers and the
Calculation Agent, and that any notice given to the Purchaser shall be deemed
validly received by the Agent, the Joint Lead Arrangers and the Calculation
Agent upon receipt by the Purchaser.

ARTICLE 33. EXERCISE OF RIGHTS - RECOURSE - NO PETITION

33.1. All rights conferred on the Purchaser by this Agreement or by any other
document delivered pursuant to or incidental to this Agreement, including rights
conferred by law, shall be cumulative and may be exercised at any time.

33.2. The fact that a Party does not exercise a right or delays doing so shall
in no way be treated as a waiver of that right. The exercise of one right or a
partial exercise shall not prevent any Party from exercising such a right in the
future, or from exercising any other right.

                                     - 65 -



33.3. Limited Recourse

The parties waive any right that they may have to initiate any proceeding
whatsoever in relation to the contractual liability (responsabilite
contractuelle) of the Purchaser, except in the case of its own gross negligence
(faute lourde) or willful misconduct (dol) and agree to limit their claims and
recourse against the Purchaser (including in the event of a breach by the
Purchaser of any of its representations and warranties, or any of its
obligations hereunder) to the amount of the Available Funds on the relevant
date.

33.4. Any recourse of the Purchaser against the Sellers, the Centralising Unit
or any of their respective Affiliates, directors, officers and employees in
relation to the non payment by any Debtors of any sums due under the Sold
Receivables, shall be limited to the amount of the Subordinated Deposit and, to
the extent provided in Article 16, the Complementary Deposit.

33.5 Non Petition

The Parties irrevocably and unconditionally undertake and agree not to institute
any legal proceedings, take other steps or institute other proceedings against
ESTER FINANCE, the purpose of which is the appointment of a conciliator or an ad
hoc agent, or the opening of receivership proceedings or insolvency proceedings
or any other similar proceedings.

ARTICLE 34. TRANSFERABILITY OF THIS AGREEMENT

This Agreement is entered into on the intuitu personae of the parties to this
Agreement. It is agreed that none of the parties may transfer this Agreement, or
the rights and obligations under this Agreement, to any third party whatsoever
without the prior written consent of all the other parties.

ARTICLE 35. AMENDMENT TO THE TRANSACTION DOCUMENTS

No amendment to the Transaction Documents may be made without the written
consent of each other party thereto and (a) unless the Rating Agencies (i) have
been informed and provided by CALYON with all necessary details they may require
in respect of such contemplated amendment and (ii) have confirmed that the
contemplated amendment will not entail a downgrading or withdrawal of the
current ratings of the Notes issued by the Issuers, or that the contemplated
amendment will reduce such downgrading or prevent such withdrawal, and (b) each
Issuer and each Liquidity Bank has given its prior written consent to such
amendment (such consent not being unreasonably withheld or delayed).

Moreover, the Purchaser shall not accept any amendment to any Collection Account
Agreement to which it is a party without the prior written consent of the
Issuers and the Liquidity Banks (such consent not to be unreasonably withheld or
delayed).

                                     - 66 -



The Purchaser hereby covenants to the Centralising Unit and the Sellers that
none of the Securitisation Documents, to which the Centralising Unit, the
Sellers, GOODYEAR DUNLOP TIRES EUROPE BV or GOODYEAR are not party, shall be
amended or otherwise modified in a way adverse to the Centralising Unit, the
Sellers, GOODYEAR DUNLOP TIRES EUROPE BV or GOODYEAR without their prior written
consent (such consent or denial thereof not to be unreasonably delayed).

ARTICLE 36. INDEMNITIES

Without limiting any other rights which the Indemnified Parties may have under
the Transaction Documents or any related documents or under applicable law, each
of the Centralising Unit and each Seller hereby agrees to indemnify the
Purchaser, the Agent, the Joint Lead Arrangers, the Calculation Agent, the
Depositor, the Issuers, the Liquidity Banks, each of their respective affiliates
and each officer, director, employee and agent of any of the foregoing (each an
"INDEMNIFIED PARTY") from and against any and all damages, losses, claims,
liabilities, costs and expenses (including reasonable attorneys' fees and
disbursements) (and, in each case, any value added tax thereon) in any way
arising out of the Transaction Documents or any documents related to the
Securitisation Transaction (excluding, however, any of the foregoing (a) to the
extent resulting from the gross negligence (faute lourde) or willful misconduct
(dol) on the part of such Indemnified Party or the breach by an Indemnified
Party of material obligations under any Transaction Document or any related
document, as finally determined by a court of competent jurisdiction), or (b)
constituting recourse for Sold Receivables which are not paid or are
uncollectible on account of the insolvency, bankruptcy or inability to pay of
the applicable obligor) (collectively, "INDEMNIFIED AMOUNTS"), including,
without limitation, any and all damages, losses, claims, liabilities, costs and
expenses incurred by or asserted against any Indemnified Party as a result of:

(a)      any claims, actions, suits or proceedings commenced by any Debtor or
         any of its affiliates or any third party in connection with any of the
         Sold Receivables, the transactions out of which they arose or the goods
         or services the sale or provision of which gave rise to any Sold
         Receivables;

(b)      reliance on any representation or warranty or statement made or deemed
         made by or on behalf of any Seller, the Centralising Unit or GOODYEAR
         DUNLOP TIRES EUROPE BV under or in connection with any Transaction
         Document or any related agreement or any certificate or report
         delivered pursuant hereto or thereto that, in either case, shall have
         been false or incorrect when made or deemed made;

(c)      any failure of any Seller, the Centralising Unit or GOODYEAR DUNLOP
         TIRES EUROPE BV to perform its duties or obligations under this
         Agreement or the other Transaction Documents;

(d)      any governmental investigation, litigation or proceeding related to
         this Agreement or in respect of any Sold Receivable;

                                     - 67 -



(e)      the failure by any Seller or any of its affiliates to comply with any
         applicable law with respect to any Sold Receivable (or any contract by
         which it arose or by which it is evidenced or governed), or the
         nonconformity of any Sold Receivable (or such contract) with any such
         applicable law, or any action taken by any of the Sellers or their
         affiliates or agents in the enforcement or collection of any Sold
         Receivable;

(f)      any failure of the Purchaser to have and maintain ownership of the Sold
         Receivables, free and clear of any Liens other than those contemplated
         in the Transaction Documents, or any attempt by any person to avoid,
         rescind or set aside any sale of Purchasable Receivables by any Seller
         to the Purchaser as contemplated by the Transaction Documents;

(g)      any dispute, claim, offset or defense (other than discharge in
         bankruptcy or similar defense arising from the Debtor's insolvency or
         inability to pay) of any Debtor to the payment of any Sold Receivable;

(h)      the failure of any Seller to pay when due any value added taxes or
         other taxes payable in connection with any of the Receivables or the
         transactions out of which they arose;

(i)      any commingling of collections on Sold Receivables with any other
         monies of the Seller, the Centralising Unit or any of their Affiliates;

(j)      the use by the Sellers or their Affiliates of any monies received by
         them in payment of the Initial Purchase Price or Deferred Purchase
         Price of Sold Receivables;

(k)      any products liability or environmental claim, or personal injury or
         property damage claim, or other similar or related claim or action of
         any sort whatsoever arising out of or in connection with goods,
         merchandise or services which relates to any Sold Receivables;

(l)      a Payment and/or a Transfer Deed ceases to achieve a perfect transfer
         of Purchasable Receivables as set out in the Receivables Purchase
         Agreement;

(m)      any Conformity Warranty for Sold Receivables made by a Seller under
         Article 19 (Conformity Warranties for Purchasable Receivables) (without
         regard to any knowedge therein) is found to have been inaccurate at the
         date it was made.

The Sellers and the Centralising Unit shall pay on demand to the Purchaser or,
at the Purchaser's direction, to the relevant Indemnified Parties all amounts
necessary to indemnify the Indemnified Parties from and against any and all
Indemnified Amounts.

                                     - 68 -



ARTICLE 37. INDIVISIBILITY

Each party acknowledges that this Agreement, the Master Subordinated Deposit
Agreement and the Master Complementary Deposit Agreement shall form a single set
of contractual rights and obligations and that, if the Master Subordinated
Deposit Agreement, or the Master Complementary Deposit Agreement becomes void or
ceases to be effective and enforceable for any reason whatsoever, this Agreement
shall also become void or cease to be effective and enforceable accordingly. Any
payment already made by the Centralising Unit acting in the name and on behalf
of the Sellers or on its own behalf to the Purchaser under this Agreement, the
Receivables Purchase Agreements, the Master Subordinated Deposit Agreement and
the Master Complementary Deposit Agreement shall not be affected by such a
nullity, ineffectiveness or unenforceability.

ARTICLE 38. EXECUTION AND EVIDENCE

38.1. The parties hereby agree that, due to the Assemblact R.C. procedure, which
prevents any substitution or addition of any page, each party shall only (i)
initial the first and last page of this Agreement and (ii) sign on the execution
page.

38.2. The parties hereby agree not to register this Agreement with the French
tax administration, although if one party elects to do so, it shall carry out
such a registration at its own expense.

38.3. In accordance with Article 1325 of the French Civil Code, the Sellers,
having the same interest in this Agreement, hereby agree that one executed copy
of this Agreement, to be kept by the Centralising Unit, shall form title and
represent the obligation of each Seller as if a separate original copy had been
executed by him.

ARTICLE 39. WITHDRAWAL OF SELLERS

39.1. The Centralising Unit acting in the name and on behalf of the Sellers, may
notify the Purchaser and the Joint Lead Arrangers in writing, in the form set
out in Schedule 8, of any request for the withdrawal of one or more Sellers from
the Securitisation Transaction and the Transaction Documents to which it is a
party. Such request for withdrawal shall be examined as soon as possible and
shall be subject to the following conditions:

(i)      confirmation by the Rating Agencies that such withdrawal shall not
         entail a deterioration or withdrawal of the current rating of the Notes
         issued by the Issuers;

(ii)     the obtaining of the prior written consent of each Liquidity Bank;

(iii)    the conclusion of any amendment to the Transaction Documents, necessary
         in the Purchaser's opinion; and

                                     - 69 -



(iv)     the signature by the Seller or Sellers of any document or agreement
         enabling the relevant Seller to withdraw as a party to this Agreement
         and the relevant Receivables Purchase Agreement. The parties agree that
         such Seller or Sellers shall not be bound by any new obligations in
         respect of this Agreement and the relevant Receivables Purchase
         Agreement(s), without prejudice to the obligations arising before such
         Seller(s)' withdrawal from this Agreement and the relevant Receivables
         Purchase Agreement(s).

39.2. The withdrawal of any Seller or Sellers shall (i) be requested by the
Centralising Unit at least two (2) calendar months before the date contemplated
for the withdrawal of such Seller(s) and (ii) take effect on the first Funded
Settlement Date following the fulfilment of the foregoing conditions precedent.
The parties agree that each Joint Lead Arranger shall use its best efforts (dans
le cadre d'une obligation de moyens) to respond as soon as possible.

39.3. Any reasonable and duly documented cost (including legal fees) and
commissions incurred by the Purchaser and/or the Joint Lead Arrangers in
connection with the withdrawal of one or more Sellers shall be borne by the
Centralising Unit acting in the name and on behalf of the Sellers. The parties
agree that prior to notification by the Centralising Unit to the Purchaser of
the request for the withdrawal of such Sellers, the Centralising Unit shall be
entitled to request the Purchaser to indicate the costs to be borne in
connection with such withdrawal. The Purchaser shall respond within ten (10)
calendar days following such request, after which the Centralising Unit shall
have five (5) calendar days to notify the Purchaser of its acceptance or refusal
of such costs.

                   CHAPTER XIII - GOVERNING LAW - JURISDICTION

ARTICLE 40. GOVERNING LAW - JURISDICTION

40.1. This Agreement shall be governed by French law.

40.2. Any dispute as to the validity, interpretation, performance or any other
matter arising out of this Agreement shall be subject to the jurisdiction of the
competent courts of Paris (Cour d'appel de Paris). The choice of this
jurisdiction is entirely for the benefit of the Purchaser which shall retain the
right to bring proceedings in any other competent court.

                                     - 70 -



Made in Paris,
on 10 December 2004, in seven (7) originals.

GOODYEAR DUNLOP TIRES FRANCE S.A.

represented by /s/ Michel Leducq
               --------------------------------------------
duly authorised for the purpose of executing this Agreement

FULDA REIFEN GMBH & CO. KG

represented by /s/ Klaus Romanus
              ---------------------------------------------
duly authorised for the purpose of executing this Agreement

M-PLUS MULTIMARKENMANAGEMENT GMBH & CO. KG

represented by /s/ Klaus Romanus
               --------------------------------------------
duly authorised for the purpose of executing this Agreement

GOODYEAR GMBH & CO. KG

represented by /s/ Klaus Romanus
               --------------------------------------------
duly authorised for the purpose of executing this Agreement

DUNLOP GMBH & CO. KG

represented by /s/ Klaus Romanus
               --------------------------------------------
duly authorised for the purpose of executing this Agreement

                                     - 71 -



GOODYEAR DUNLOP TIRES ITALIA SPA

represented by /s/ Pierre Alain Nilsson
              ---------------------------------------------
duly authorised for the purpose of executing this Agreement

GOODYEAR DUNLOP TIRES ESPANA S.A.

represented by /s/ Pierre Alain Nilsson
              ---------------------------------------------
duly authorised for the purpose of executing this Agreement

GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V.

represented by /s/ Ronald M. Archer
              ---------------------------------------------
duly authorised for the purpose of executing this Agreement

GOODYEAR DUNLOP TIRES GERMANY GMBH

represented by /s/ Gottfried Hess
              ---------------------------------------------
duly authorised for the purpose of executing this Agreement

EUROFACTOR

represented by /s/ Nathalie Rossen
              ---------------------------------------------
duly authorised for the purpose of executing this Agreement

ESTER FINANCE TITRISATION

represented by /s/ Richard Sinclair
              ---------------------------------------------
duly authorised for the purpose of executing this Agreement

                                     - 72 -



CALYON

represented by /s/ Richard Sinclair     and by /s/ G. Campagne-Simon
               ---------------------           -------------------------------
duly authorised for the purpose of executing this Agreement

NBP

represented by/s/ Huy-Hoang Dang   and by /s/ R. Graire
              ------------------          -------------------------------------
duly authorised for the purpose of executing this Agreement

                                     - 73 -



                    SCHEDULE 1. MASTER DEFINITIONS SCHEDULE

"ACCOUNTING PRINCIPLES" means generally accepted accounting principles (GAAP) in
the United States or any other accounting principles which may be adopted by the
Centralising Unit or any of the Sellers and which apply in their relevant
jurisdiction.

"ACTUAL COLLECTIONS" means all cash collections actually received by any Seller
in respect of such Sold Receivables.

"ADJUSTED COLLECTIONS" means, in relation to all the Sellers and with respect to
the Sold Receivables:

(a)      on the Initial Settlement Date, an amount equal to any Excess Foreseen
         Collections for such date;

(b)      on any Settlement Date, as long as the Sellers act as collection agents
         in respect of any Sold Receivables and in relation to the Seller(s)
         acting as collection agents and for which an Assessment Report and a
         List of Purchasable Receivables have been provided pursuant Article
         12.2.1 (viii):

         (i)   -  any File Collections between the Assessment Date relating to
                  the preceding Settlement Date and the Assessment Date relating
                  to such Settlement Date;

               -  less any amount received on each Purchaser's Collection
                  Account (net of any debit made on such Purchaser's Collection
                  Account, corresponding to errors, reverse entries, unpaid
                  amounts and returns in relation to payments already made on
                  the corresponding Collection Account) by the debiting of the
                  Collection Accounts between the Assessment Date relating to
                  the preceding Settlement Date and the Assessment Date relating
                  to such Settlement Date;

               -  less an amount equal to any Excess Foreseen Collections
                  calculated with respect to the previous Settlement Date;

               -  increased, if such Settlement Date is a Funded Settlement
                  Date, by an amount equal to any Excess Foreseen Collections
                  received in cash on the Purchaser's Account on the previous
                  Intermediary Settlement Date;

               -  increased by an amount equal to any Excess Foreseen
                  Collections for such Settlement Date;

                                     - 74 -


            -     less, if such Settlement Date is a Funded Settlement Date, the
                  Cash Collections Advance calculated by the Calculation Agent
                  for such Settlement Date and paid by the Centralising Unit on
                  the Purchaser's Account; plus

      (ii)  all Deemed Collections determined to have occurred in accordance
            with Article 28.2 during the period between the last Assessment Date
            and the preceding Assessment Date;

(c)   on any Settlement Date other than the Initial Settlement Date, as long as
      the Sellers act as collection agents in respect of any Sold Receivables
      and in relation to the Seller(s) acting as collection agents, and for
      which an Assessment Report and a List of Purchasable Receivables have not
      been provided pursuant Article 12.2.1 (viii):

      (i)   -     any Actual Collections between the Assessment Date relating to
                  the preceding Settlement Date and the Assessment Date relating
                  to such Settlement Date;

            -     less any amount received on each Purchaser's Collection
                  Account (net of any debit made on such Purchaser's Collection
                  Account, corresponding to errors, reverse entries, unpaid
                  amounts and returns in relation to payments already made on
                  the corresponding Collection Account) by the debiting of the
                  Collection Accounts between the Assessment Date relating to
                  the preceding Settlement Date and the Assessment Date relating
                  to such Settlement Date;

            -     less an amount equal to any Excess Foreseen Collections
                  calculated with respect to the previous Settlement Date;

            -     increased, if such Settlement Date is a Funded Settlement
                  Date, by an amount equal to any Excess Foreseen Collections
                  received in cash on the Purchaser's Account on the previous
                  Intermediary Settlement Date;

            -     increased by an amount equal to any Excess Foreseen
                  Collections for such Settlement Date;

            -     less, if such Settlement Date is a Funded Settlement Date, the
                  Cash Collections Advance calculated by the Calculation Agent
                  for such Settlement Date and to the extent paid by the
                  Centralising Unit on the Purchaser's Account; plus

      (ii)  all Deemed Collections determined to have occurred in accordance
            with Article 28.2 during the period between the last Assessment Date
            and the preceding Assessment Date;

                                     - 75 -


(d)   at any time, in the event of the termination of the collection mandate
      given to any Seller and in relation to the Sellers for which the
      collection mandate has been terminated and until the Program Expiry Date:

      (i)   all cash collections received by the Purchaser which have actually
            been paid by the Debtors or by any other person obliged to make
            payment in respect of such Sold Receivables; plus

      (ii)  all Deemed Collections determined to have occurred in accordance
            with Article 28.2; and

(e)   at any time after the Program Expiry Date, all cash collections received
      by the Purchaser which have actually been paid by the Debtors or by any
      other person obliged to make payment in respect of such Sold Receivables.

"AFFILIATE" means, in relation to any entity, any other entity, which either
directly or indirectly controls, is controlled by, or is under common control
with, such an entity:

(i)   for the purposes of those entities located within the French jurisdiction,
      the term "control", shall have the meaning set out in Article L.233.3 of
      the French Commercial Code (Code de commerce); and

(ii)  for the purposes of those entities which are not located in France, the
      term control, shall mean the relationship between a parent company and a
      subsidiary as defined in Article 1 of Directive 83/349/EEC.

"AGENT" means EUROFACTOR in its capacity as agent of the transaction.

"AGENT'S ACCOUNT" means the account number 30002/00869/9E/07, opened by the
Agent in the books of CALYON.

"AGREEMENT" means this general master purchase agreement, as amended and/or
supplemented from time to time.

"AMENDED INVOICE" means the sums corresponding to any Sold Receivable, which has
been the subject of an issued invoice, and which, in order to (i) take into
account the commercial practices of the Sellers or (ii) amend any material
errors appearing on such invoice, has been cancelled and replaced by a new
invoice.

"AMORTISATION PERIOD" means the period of time commencing on the Commitment
Expiry Date and ending on the Program Expiry Date during which no more
Purchasable Receivables shall be purchased by the Purchaser in accordance with
the terms and conditions of this Agreement.

"APPLICABLE LENDERS" means the lenders or other providers of funding under the
European Credit Facility.

                                     - 76 -


"APPLICABLE WAIVER OR AMENDMENT" means a waiver concerning, or amendment of, any
of the events set forth in Article 13.3(xv)(a), (b), (c) or (d) (including the
related definitions) and the corresponding provision and definitions of the
European Credit Facility that is approved by any combination of the lenders
under the European Credit Facility and the Liquidity Banks representing more
than 50% of the aggregate amount of (i) all loans and unused commitments under
the European Credit Facility plus (ii) commitments pursuant to Liquidity
Agreements to provide the outstanding amount of the Purchaser's Funding, in each
case as of the date of such approval.

"ASSESSMENT DATE" means each of the dates identified as such in Schedule 11.

"ASSESSMENT REPORT" means the assessment report drawn up on each Information
Date as of the preceding Assessment Date in accordance with Article 22,
substantially in the form of Schedule 3 or as modified by mutual agreement
between the Centralising Unit, the Purchaser, and the Agent.

"AUDITORS CERTIFICATE" means the certificate issued by the Sellers' statutory
auditors (commissaires aux comptes) and the Centralising Unit's statutory
auditors for the benefit of the Purchaser, as set out in the form of Schedule 4.

"AVAILABLE FUNDS" means, on any date, and with regard to the Securitisation
Transaction, any sums received by or on behalf of the Purchaser and required to
be held by or on behalf of the Purchaser or paid to the Centralising Unit, the
Sellers or GOODYEAR DUNLOP TIRES EUROPE BV pursuant to the Securitisation
Transaction after the allocations of funds, and subject to the order of
priority, provided for under Article 16.

"BACK-UP SERVICER" means EUROFACTOR and/or any entity appointed by the Purchaser
to replace or assist the Sellers in the collection and servicing of the Sold
Receivables held by any French, German and/or Spanish Debtors.

"BACK-UP SERVICER REPORT" means the assessment report to be drawn up, as the
case may be, by the Back-Up Servicer on each Information Date.

"BILL OF EXCHANGE" means any negotiable instrument in the form of a bill of
exchange (lettre de change, effet de commerce, letra de cambio) or promissory
note (billet a ordre, pagare) or, in the case of any German Seller, any bills of
exchange (gezogene Wechsel) issued by such German Seller (with full liability)
and accepted by the relevant debtor and blank-endorsed by such German Seller at
a place in Germany or promissory notes (eigene Wechsel) issued and accepted by
the relevant debtor and blank-endorsed by such German Seller at a place in
Germany (with full liability), provided that (i) any such bill of exchange has
been issued pursuant to the German Bills of Exchange Act (as in effect on the
relevant purchase date), and complies with all requirements as to form under the
German Bills of Exchange Act (formell ordnungsgema(beta)er Wechsel) and is free
of any corrections; (ii) the currency of the Bill of Exchange is Euro; (iii) the
Bill of Exchange is fully enforceable against the relevant debtor, freely
transferable, and free from any liens or other rights of third parties, or their
Italian equivalent issued by a Seller in connection with any Purchasable
Receivables.

                                     - 77 -


"BUSINESS DAY" means any day other than a Saturday or a Sunday on which banks
are open for business in Paris, Madrid, Frankfurt, Rome, London, Jersey and New
York and which is a TARGET Day.

"CALCULATION AGENT" means CALYON.

"CALCULATION DATE" means each of the dates identified as such in Schedule 11 and
on which, in particular, the Agent shall make the calculations specified in
Article 12.3.

"CALYON" means a French limited company (societe anonyme) authorised as a credit
institution (etablissement de credit) and having its registered office at at 9
quai du President Paul Doumer, 92920 Paris La Defense Cedex, France, registered
with the Companies Registry of Nanterre (Registre du Commerce et des Societes de
Nanterre) under the number 304 187 701.

"CASH COLLECTIONS ADVANCE" means an amount equal to the aggregate amount of the
Assignment Costs (as defined in point 2 of schedule 3 of the French Receivables
Purchase Agreement, point 2 of schedule 4 of the German Receivables Purchase
Agreement, point 2 of schedule 3 of the Italian Receivables Purchase Agreement,
and/or point 2 of schedule 5 of the Spanish Receivables Purchase Agreement).

"CENTRALISING UNIT" means GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V. which shall
act on behalf of the Sellers in relation to the implementation of the
Securitisation Transaction.

"CENTRALISING UNIT'S ACCOUNT" means the account number 31489 00010 00218477562 /
47 opened by the Centralising Unit in the books of CALYON.

"COLLECTION ACCOUNT" means any collection account opened in any of the
jurisdictions concerned by the Securitisation Transaction held by any Seller
and/or the Purchaser and which is governed by and/or subject to the relevant
Collection Account Agreement.

"COLLECTION ACCOUNT AGREEMENT" means any of the following agreements and the
related pledge for each jurisdiction in which a Seller party hereto is located,
and, in particular,

(a)   in relation to France

- -     two co-ownership bank account agreements (each a "CO-OWNERSHIP BANK
      ACCOUNT AGREEMENT") (Conventions de Compte Indivis) concluded on 10
      December, 2004 between Goodyear Dunlop Tires France S.A., Ester Finance
      Titrisation, the relevant account bank and Eurofactor governed by French
      law;

- -     the co-ownerhip agreement ("CO-OWNERSHIP AGREEMENT") (Convention
      d'Indivision) concluded on 10 December, 2004 between Goodyear Dunlop Tires
      France S.A., Ester Finance Titrisation, Calyon and Eurofactor governed by
      French law;

                                     - 78 -


- -     three pledges over the share of the credit balance of the co-owned account
      (each a "PLEDGE OVER THE SHARE OF THE CREDIT BALANCE OF THE CO-OWNED
      ACCOUNT") (Nantissement sur la Quote Part du Solde du Compte Indivis)
      concluded on 10 December, 2004 between Goodyear Dunlop Tires France S.A.
      and Ester Finance Titrisation governed by French law;

(b)   in relation to Germany

- -     the collection account pledge agreement (the "GOODYEAR COLLECTION ACCOUNT
      PLEDGE AGREEMENT") concluded on 10 December, 2004 between Goodyear GmbH &
      Co KG, Ester Finance Titrisation, Eurofactor and Calyon and governed by
      German law;

- -     the collection account pledge agreement (the "FULDA COLLECTION ACCOUNT
      PLEDGE AGREEMENT") concluded on 10 December, 2004 between Fulda Reifen
      GmbH & Co KG, Ester Finance Titrisation, Eurofactor and Calyon and
      governed by German law;

- -     the collection account pledge agreement (the "DUNLOP COLLECTION ACCOUNT
      PLEDGE AGREEMENT") concluded on 10 December, 2004 between Dunlop GmbH & Co
      KG, Ester Finance Titrisation, Eurofactor and Calyon and governed by
      German law;

- -     the collection account pledge agreement (the "M-PLUS COLLECTION ACCOUNT
      PLEDGE AGREEMENT") concluded on 10 December, 2004 between M-Plus
      Multimarkenmanagement GmbH & Co.KG, Ester Finance Titrisation, Eurofactor
      and Calyon and governed by German law;

- -     in relation to each German Collection Account Pledge Agreement, a side
      letter agreement (the "SIDE Letter") concluded between each relevant
      account bank, Ester Finance Titrisation and the relevant German Seller;

(c)   in relation to Italy

- -     the Mandate Agreement concluded on 10 December, 2004 between Goodyear
      Dunlop Tires Italia S.p.A, Ester Finance Titrisation and the Agent
      governed by Italian law;

- -     each of the three (3) Pledge Agreements over the the Balance of the
      Collection Account concluded on 10 December, 2004 between Goodyear Dunlop
      Tires Italia S.p.A, Ester Finance Titrisation and each account bank,
      governed by Italian law;

(d)   in relation to Spain

- -     the Agreement for the Administration and the Operation of a Current
      Account with Restricted Availability (the "CURRENT ACCOUNT AGREEMENT")
      concluded on 10 December, 2004 between Goodyear Dunlop Tires Espana S.A.,
      Ester Finance Titrisation, the account bank, Eurofactor and Calyon
      governed by Spanish law;

                                     - 79 -


- -     the pledge over the share of the balance of the current account and of the
      current account (the "PLEDGE OVER THE SHARE OF THE BALANCE OF THE CURRENT
      ACCOUNT AND OF THE CURRENT ACCOUNT") concluded on 10 December, 2004
      between Goodyear Dunlop Tires Espana S.A., Ester Finance Titrisation, the
      account bank and Calyon governed by Spanish law.

"COLLECTION MANDATE" means the mandate granted by the Purchaser to the Sellers
pursuant to Article 21.1.

"COMFORT LETTER" means a comfort letter granted by GOODYEAR DUNLOP TIRES EUROPE
BV in the form set out in Schedule 10.

"COMMERCIAL DISCOUNT" means, in relation to any Sold Receivable, any decrease in
the face value of such receivable resulting from the granting of a discount for
prompt payment, for quantity or as fidelity premium.

"COMMITMENT" means the commitment of the Purchaser to purchase Purchasable
Receivables from the Sellers, in accordance with this Agreement and the
Receivables Purchase Agreements, subject to the conditions precedent and
conditions subsequent set forth hereunder and thereunder.

"COMMITMENT EXPIRY DATE" means the earliest of the following dates:

(i)   upon the occurrence of a Liquidity Commitment Non Renewal in relation to
      all Liquidity Agreements, the expiry of all Liquidity Agreements;

(ii)  the Business Day immediately preceding the fifth (5 degrees) anniversary
      date of the Initial Settlement Date; and

(iii) the date on which the Commitment is terminated in accordance with Articles
      7.1.2., 13, 14 and 15.

"COMPLEMENTARY DEPOSIT" means any complementary deposit effected by the
Centralising Unit with the Purchaser in accordance with the terms of Article 9
and the Master Complementary Deposit Agreement.

"CONFORMITY WARRANTIES" means the warranties given by each Seller to the
Purchaser in accordance with Article 19 (Conformity Warranties).

"CREDIT NOTE" means, in relation to any Sold Receivable, any decrease in the
face value of such receivable or any cancellation of such receivable granted by
any Seller in accordance with its management procedures, other than a Credit
Note over Snow Tyres and a credit note resulting from Year End Rebates.

"CREDIT NOTE OVER SNOW TYRES" means, in relation to any Sold Receivable, any
decrease in the face value of such receivable or any cancellation of such
receivable granted by any Seller (i) in accordance with its management
procedures and (ii) to a customer subsequent to the taking back by the said
Seller of snow tyres.

                                     - 80 -


"CURRENT ACCOUNT" means the current account relationship established between the
Centralising Unit, acting in the name and on behalf of the Sellers and the
Purchaser pursuant to the provisions of Article 6 (Current Account).

"CUSTODIAN" means CALYON, acting in its capacity as Custodian (depositaire) of
the assets of the Fund within the meaning of Article L.214-48.II of the French
Monetary and Financial Code (Code monetaire et financier).

"DATA PROTECTION TRUST AGREEMENT" means the agreement dated the date hereof
entered into between the German Sellers, the Agent and the Data Protection
Trustee.

"DATA PROTECTION TRUSTEE" means EUROFACTOR AG, a stock corporation
(Aktiengesellschaft) incorporated under the laws of the Federal Republic of
Germany registered in the commercial registry of the Local Court (Amtsgericht)
in Munchen under registration number HRB 138351.

"DEBTOR" means in relation to any sold receivable the person obligated to make
payment of such a receivable.

"DEEMED COLLECTIONS" means any amount that any Seller is deemed to have received
in the circumstances set out in Article 28 (Deemed Collections), and notably any
Deemed Extinguished Receivables.

"DEEMED EXTINGUISHED RECEIVABLES" has the meaning set forth in Article 28
(Deemed Collections).

"DEFAULT PERCENTAGE" means on any Assessment Date preceding an Intermediary
Settlement Date, the ratio expressed as a percentage of:

(i)   the sum of the Outstanding Amount of Defaulted Receivables and Doubtful
      Receivables that were neither Defaulted Receivables nor Doubtful
      Receivables as of the Assessment Date relating to the preceding
      Intermediary Settlement Date; and

(ii)  the Outstanding Amount of the Sold Receivables purchased by the Purchaser
      between the 6th Intermediary Settlement Date (excluded) before such
      Intermediary Settlement Date and the 5th Intermediary Settlement Date
      (included) before such Intermediary Settlement Date.

"DEFAULTED RECEIVABLE" means, on any Calculation Date, any Sold Receivable
which, as of the preceding Assessment Date, is not a Doubtful Receivable
transferred back to the Sellers and has any of the following characteristics on
such Calculation Date:

(i)   the Sold Receivable remains unpaid by its relevant debtor for more than 90
      days after the Maturity Date of such Sold Receivable;

(ii)  the Sold Receivable is owed by a Debtor which is subject to Insolvency
      Proceedings and has not been counted under paragraph (i) above; or

                                     - 81 -


(iii) the Sold Receivable has been or, under the relevant Seller's credit and
      collection policies, would have been written off as uncollectible and has
      not been counted under paragraphs (i) and (ii) above.

"DEFERRED PURCHASE PRICE" means, (a) for each Funded Settlement Date during the
Replenishment Period, the highest of zero and:

- -     the Discount Reserve for all Sellers calculated as of the previous
      Intermediary Settlement Date,

- -     increased by the total Discount Amount for all Sellers relating to the
      Sold Receivables purchased on such Funded Settlement Date,

- -     decreased by the Cash Collections Advance payable by the Purchaser (or
      directly by the Centralising Unit) on such Funded Settlement Date,

- -     decreased by the total Discount Reserve for all Sellers calculated as of
      such Funded Settlement Date,

- -     and increased quarterly by the Interest of Placement Amount, as defined in
      the Receivables Purchase Agreements, and

(b)   as of the Commitment Expiry Date, the Discount Reserve as of the
      Settlement Date immediately preceding the Commitment Expiry Date, plus any
      Discount Amount relating to Sold Receivables that were not included in the
      Deferred Purchase Price payable on the Funded Settlement Date preceding
      the Commitment Expiry Date;

in accordance with the formula set forth in schedule 3 of the French and German
Receivables Purchase Agreement, in schedule 3 of the Italian Receivables
Purchase Agreement, and in schedule 5 of the Spanish Receivables Purchase
Agreement.

"DELINQUENCY PERCENTAGE" means on any Assessment Date preceding an Intermediary
Settlement Date, the ratio expressed as a percentage of:

(i)   the sum of the Outstanding Amount of Delinquent Receivables and Doubtful
      Receivables that were neither Delinquent Receivables nor Doubtful
      Receivables as of the Assessment Date relating to the preceding
      Intermediary Settlement Date; and

(ii)  the Outstanding Amount of the Sold Receivables purchased by the Purchaser
      between the 5th Intermediary Settlement Date (excluded) before such
      Intermediary Settlement Date and the 4th Intermediary Settlement Date
      (included) before such Intermediary Settlement Date.

                                     - 82 -


"DELINQUENT RECEIVABLE" means, on any Assessment Date, any Sold Receivable which
is not a Doubtful Receivable transferred back to the Sellers and has any of the
following characteristics on such Calculation Date:

(i)   the Sold Receivable remains unpaid by its relevant Debtor for more than 60
      days after the Maturity Date of such Sold Receivable;

(ii)  the Sold Receivable is owed by a Debtor which is subject to Insolvency
      Proceedings and has not been counted under paragraph (i) above; or

(iii) the Sold Receivable has been or, under the relevant Seller's credit and
      collection policies, would have been written off as uncollectible and has
      not been counted under paragraphs (i) and (ii) above.

"DEPOSIT FEE" means the fee due to CALYON, in the conditions set forth in
article 8 of the Master Senior Deposit Agreement and which shall be paid by
ESTER FINANCE to CALYON, or any credit institution which replaces the latter for
the purposes of carrying out its functions under the Master Senior Deposit
Agreement, as a remuneration for its undertaking to make the Senior Deposit on a
periodic basis during the Replenishment Period. It is agreed that the Deposit
Fee shall be paid to CALYON, or any other credit institution which replaces the
latter for the purposes of carrying out its functions under the Master Senior
Deposit Agreement, even after the transfer to the Fund of receivables in
repayment of the Senior Deposit.

"DEPOSITOR" means CALYON acting in its capacity as depositor pursuant to the
Master Senior Deposit Agreement and any successor, transferee or assignee.

"DILUTION PERCENTAGE" means as calculated on any Calculation Date preceding an
Funded Settlement Date, the ratio expressed as a percentage of:

(i)   the aggregate amount of Credit Notes issued between the Assessment Date
      (included) preceding the last Intermediary Settlement Date and the
      Assessment Date (excluded) preceding the preceding Intermediary Settlement
      Date; and

(ii)  the Outstanding Amount of the Sold Receivables purchased by the Purchaser
      between the 2nd Intermediary Settlement Date (excluded) before the last
      Assessment Date and the Intermediary Settlement Date (included) preceding
      such last Assessment Date.

"DISCOUNT AMOUNT" means, on any Settlement Date during the Replenishment Period,
in relation to the Sold Receivables, the amount equal to the Discount Rate
applicable on such date multiplied by the Outstanding Amount of Purchasable
Receivables to be purchased by the Purchaser on such date.

"DISCOUNT RATE" has the meaning set forth in schedule 2 of the French
Receivables Purchase Agreement, schedule 3 of the German Receivables Purchase
Agreement, schedule 2 of the Italian Receivables Purchase Agreement, and/or
schedule 4 of the Spanish Receivables Purchase Agreement.

                                     - 83 -


"DISCOUNT RESERVE" has the meaning set forth in schedule 2 of the French
Receivables Purchase Agreement, schedule 3 of the German Receivables Purchase
Agreement, schedule 2 of the Italian Receivables Purchase Agreement, and/or
schedule 4 of the Spanish Receivables Purchase Agreement

"DISTRIBUTED AMOUNTS" means, on any Settlement Date during the Amortisation
Period, the sum of:

- -     the amount of Adjusted Collections as determined as of such date;

- -     the amount in the Purchaser's Account as of the last Assessment Date,
      within the limit of the sums in the Purchaser's Account on such
      Settlement; and

- -     the amount in each Purchaser's Collection Account (net of any debit made
      on such Purchaser's Collection Account, corresponding to errors, reverse
      entries, unpaid amounts and returns in relation to payments already made
      on the corresponding Collection Account) as of the last Assessment Date,
      within the limit of the sums in each Purchaser's Collection Account on
      such Settlement Date.

"DOUBTFUL RECEIVABLE" means any Sold Receivable which is, according to the
Accounting Principles, doubtful given the situation of the Debtor or open to
challenge.

"DOWNGRADING EVENT" means, in relation to a Liquidity Bank, the downgrading of
its rating by a Rating Agency under A1 (for Moody's Investors Services), P1 (for
Standard & Poors) or F1 (for Fitch Ratings).

"EARLY AMORTISATION EVENT" means any of the events set out in Article 13 (Early
Amortisation).

"ELIGIBLE DEBTOR" means a Debtor having the characteristics described in detail
in article 8 of each Receivables Purchase Agreement.

"ELIGIBLE RECEIVABLE" means any Sold Receivable which has the following
characteristics on the Settlement Date during the Replenishment Period:

(i)   the date on which the Sold Receivable is due is not later than 150 days
      after the Assessment Date preceding such Settlement Date;

(ii)  the Sold Receivable has not remained unpaid by the relevant Debtor for
      more than 72 days after the Maturity Date of such Sold Receivable;

(iii) the debtor of such Sold Receivable has a V.A.T or a CMS identification
      number indicated in the electronic support attached to the relevant
      Transfer Deed delivered to the Purchaser in relation to such Sold
      Receivable and such Sold Receivable is identified on such electronic
      support in a manner which complies with the electronic exchange procedures
      agreed between the Agent, the Purchaser, the Centralising Unit and the
      Sellers;

(iv)  the Sold Receivable is not a Net Miscellaneous Receivable.

                                     - 84 -


"ESTER FINANCE" means ESTER FINANCE TITRISATION S.A., a company incorporated
under French law and authorised as a credit institution (etablissement de
credit), having its registered office at 19, Boulevard des Italiens, 75 002
Paris, France, registered with the Companies Registry of Paris under the number
414 886 226.

"EURIBOR 1 MONTH" means the reference rate known as the "European Inter-Bank
Offered Rate" in the form of the rate listed under the aegis of the European
Banking Federation and published at approximately 11.00 am (Brussels time), by
TELERATE (page 248 and 249) or REUTERS (page EURIBOR) (or whatever page that may
be substituted therefor) for a one month period.

"EURO" OR "EUR" means the currency of the participating Member States of the
European Union in accordance with the definition given under Article 109-L-4 of
the European Union Treaty and in Council Regulation (EC) n. 974/98 of May 3,
1998 on the introduction of the euro.

"EUROFACTOR" means, a company incorporated under French law and authorised as a
credit institution (etablissement de credit) having its registered office at
Tour d'Asnieres, 4 avenue Laurent Cely, 92608 Asnieres, France, registered with
the Trade and Companies Registry of Nanterre under the number 642 041 560.

"EUROPEAN CREDIT FACILITY" means the $650,000,000 Term Loan and Revolving Credit
Agreement, dated as of March 31, 2003, among GOODYEAR DUNLOP TIRES EUROPE BV,
the other borrowers thereunder, the lenders thereunder, JPMorgan Chase Bank, as
administrative agent, and Deutsche Bank AG, as syndication agent, as amended,
refinanced, replaced or otherwise modified from time to time.

"EXCESS FORESEEN COLLECTIONS" means, with respect to a Settlement Date as long
as any sums remain due under the Senior Deposit, the excess of (a) the amount of
Foreseen Collections for such Settlement Date, over (b) the amount of the
Complementary Deposit to be made on such Settlement Date. From the date on which
any sums due under the Senior Deposit have been paid, or in the event an Early
Amortisation Event described under Article 13.3 has occurred, the amount of
Excess Foreseen Collections shall be equal to zero (0) as from such date or
event.

"EXCLUDED DEBTOR" means any debtor mentioned in the list set forth in Schedule
14, as modified by mutual agreement between the Centralising Unit, the Purchaser
and the Agent, in accordance with the provisions of Article 35.

"FILE COLLECTIONS" means, with respect to any period, all collections (excluding
Deemed Collections) on Sold Receivables which, on the basis of the information
included in any Assessment Report and the electronic date file attached thereto,
were expected to be received during such period by a Seller as calculated by the
Agent on the basis of the Assessment Reports and the electronic support attached
thereto.

"FINANCIAL COVENANTS" means the financial covenants set forth in Article
13.3(xv) and the related definitions.

                                     - 85 -


"FINANCIAL INDEBTEDNESS" means, in relation to any person:

(i)   any indebtedness for monies borrowed or raised by that person;

(ii)  any indebtedness (actual or contingent) of that person under any
      guarantee, security, indemnity or other commitment designed to protect any
      creditor against loss in respect of any Financial Indebtedness of any
      third party;

(iii) any indebtedness under or in respect of any acceptance credit opened on
      behalf of that person;

(iv)  any indebtedness under any debenture, note, bond, certificate of deposit,
      cash certificate, bill of exchange, commercial paper or similar instrument
      on which that person is liable as drawer, acceptor, endorser, issuers or
      otherwise;

(v)   any indebtedness for money owing in respect of any interest rate swap or
      currency swap, such indebtedness to be measured on a marked-to-market
      basis at the relevant time and to include, vis-a-vis any particular
      counterparty, application of the relevant ISDA or FBF netting procedures;
      and

(vi)  any payment obligations under any lease entered into for the purpose of
      obtaining or raising finance.

                                     - 86 -


"FORESEEN COLLECTIONS" means, as calculated on each Calculation Date by the
Agent on the basis of the electronic data file received from the Centralising
Unit on the preceding Information Date,

(i)   -     all cash collections paid or expected to be paid as from the last
            Assessment Date until the Settlement Date following the next
            Settlement Date by the Debtors under the Sold Receivables (including
            the Purchasable Receivable to be purchased on the following
            Settlement Date and excluding Net Miscellaneous Receivables and
            excluding Defaulted Receivables), on the basis of the contractual
            maturity date of such Sold Receivables;

      -     less, within the limit of the cash collections in relation to the
            Sold Receivables unpaid after their Maturity Date, the amount of Non
            Allocated Cash and non allocated Credit Notes with a maturity date
            until the Settlement Date following the next Settlement Date
            weighted by the ratio of:

            (a)   unpaid Sold Receivables (minus Net Miscellaneous Receivables
                  minus Defaulted Receivables) after their respective Maturity
                  Date, over

            (b)   unpaid Sold Receivables after their respective Maturity Date
                  minus Defaulted Receivables;

(ii)  weighted by the ratio of:

      (a)   the Senior Deposit (before computation of Excess Foreseen
            Collections), the Discount Reserve and the portion of the
            Subordinated Deposit covering the Senior Deposit (before computation
            of Excess Foreseen Collections) and the Discount Reserve (computed
            as follows: Subordinated Deposit multiplied by ((Senior Deposit
            (before computation of Excess Foreseen Collections) + Discount
            Reserve) / (Senior Deposit (before computation of Excess Foreseen
            Collections) + Discount Reserve + Complementary Deposit))); over

      (b)   the Outstanding Amount of Sold Receivables, as of the next
            Settlement Date;

(iii) weighted by the ratio of:

      (a)   the last audited theoretical average days of sales outstanding of
            accounts receivable of the Sellers, used in the determination of the
            Subordinated Deposit; over

      (b)   the last audited actual days of sales outstanding of accounts
            receivable of the Sellers;

and

(iv)  weighted by a risk ratio equal to one (1) on the date hereof, it being
      provided that such ratio may be reduced upon the request of the
      Centralising Unit, subject to the prior written consent of the Purchaser,
      the Issuers and the Liquidity Banks.

                                     - 87 -


"FORMER SECURITISATION TRANSACTION" means, with respect to a Seller, any past
securitisation transaction involving all or part of trade receivables of such
Seller.

"FRENCH SECURITISATION TRANSACTION" means the securitisation transaction
arranged by CALYON (succeeding in the rights of CREDIT LYONNAIS) in connection
with the transfer of all or part of trade receivables of GOODYEAR DUNLOP TIRES
FRANCE S.A. to ESTER FINANCE on the basis of the French master receivables
purchase agreement entered into by GOODYEAR DUNLOP TIRES FRANCE S.A., ESTER
FINANCE, EUROFACTOR and CALYON (succeeding in the rights of CREDIT LYONNAIS) on
20 September 2001, as amended.

"FRENCH SELLER" means GOODYEAR DUNLOP TIRES FRANCE S.A.

"FUND" means FCC Triple P, a fonds commun de creances, set up by the Management
Company and CALYON (as depositary) in accordance with the provisions of Article
L.214-47 of the French Monetary and Financial Code (Code monetaire et financier)
for the purposes of the Securitisation Transaction.

"FUNDED SETTLEMENT DATE" means the Initial Settlement Date and each of the dates
identified "Funded Settlement Date" on Schedule 11 falling on or prior to the
Program Expiry Date.

"GAAP" means, in relation to any person, the generally accepted accounting
principles in the jurisdiction in which such person is organized.

"GENERAL SERVICING AGREEMENT" means the master back-up servicing agreement
concluded on the date hereof between the Purchaser and the Stand-by
Servicer/Back-Up Servicer which sets forth (i) the duties of the Stand-By
Servicer before the termination of the collection mandate given to each Seller,
(ii) upon its appointment, the conditions according to which EUROFACTOR shall
act as Back-Up Servicer and (iii) the conditions under which EUROFACTOR shall
assist the Italian Back-Up Servicer in the performance of certain back-up
servicing activities .

"GERMAN SELLER" means each of FULDA REIFEN GmbH & Co. KG, M-PLUS
MULTIMARKENMANAGEMENT GmbH & Co. KG, GOODYEAR GmbH & Co. KG and DUNLOP GmbH &
Co. KG.

"GOODYEAR" means the parent company of the Goodyear Group, i.e. THE GOODYEAR
TIRE & RUBBER COMPANY, a company incorporated under the laws of Ohio, having its
registered office at 1144 East Market Street, Ohio, United States of America.

"GOODYEAR GROUP" means the group of entities comprised of GOODYEAR and its
Affiliates.

"GOODYEAR DUNLOP TIRES EUROPE BV" means the Goodyear Dunlop Tires Europe B.V.,
parent company of the French, German, Italian and Spanish Sellers, incorporated
under the laws of the Netherlands, having its registered office at De Boelelaan
7, 1083 HJ, Amsterdam, The Netherlands, and registered with the Companies
Registry of Amsterdam under the number 33225215.

                                     - 88 -


"GOVERNMENTAL AUTHORISATION" means any authorization given by any "Governmental
Authority" as such term is defined in the European Credit Facility.

"GROUP" means, in relation to any Debtor, the group of entities comprised of
this Debtor and its Affiliates.

"IMMOBILISATION INDEMNITY" means any immobilisation indemnity paid by ESTER
FINANCE to the Depositor in accordance with the Master Senior Deposit Agreement.

"INCREASE IN THE COMPLEMENTARY DEPOSIT" means, on any Settlement Date during the
Replenishment Period, the excess of (a) the amount of the Complementary Deposit
on such Settlement Date in accordance with the Master Complementary Deposit
Agreement over (b) the amount of the Complementary Deposit on the preceding
Settlement Date.

"INCREASE IN THE SUBORDINATED DEPOSIT" means, on any Settlement Date during the
Replenishment Period, the excess of (a) the amount of the Subordinated Deposit
on such Settlement Date in accordance with the Master Subordinated Deposit
Agreement over (b) the amount of the Subordinated Deposit on the preceding
Settlement Date.

"INFORMATION DATE" means each of the dates identified as such in Schedule 11 and
on which the Centralising Unit, acting in the name and on behalf of the Sellers,
is required to transmit to the Agent the Assessment Report prepared as of the
preceding Assessment Date, as well as the List of Purchasable Receivables.

"INITIAL PURCHASE PRICE" means, in relation to any Purchasable Receivable to be
acquired by the Purchaser in respect of each Seller and on any Settlement Date
during the Replenishment Period, the Outstanding Amount of Purchasable
Receivables less the applicable Discount Amount.

"INITIAL SETTLEMENT DATE" means 21st December, 2004.

"INSOLVENCY PROCEEDINGS" means:

(i)   in relation to any person being resident in France or having its principal
      place of business in France :

      -     a reference to such person being unable to pay its debt as they fall
            due (cessation des paiements) or initiating voluntary arrangements
            with its creditors (reglement amiable) or being subject to
            insolvency proceedings opened by a competent court (redressement ou
            liquidation judiciaire), all of which as construed by Articles
            L.611-1 et seq. of the French Commercial Code (formerly French Law
            no.84-148 of March 1, 1984) or, as the case may be, by Articles
            L.620-1 et seq. of the French Commercial Code (formerly French Law
            n.85-98 of January 25, 1985);

      -     whenever any auditor of such person has declared an alert procedure
            (procedure d'alerte) within the meaning of Article 234-1 of the
            French Commercial Code;

                                     - 89 -


(ii)  in relation to any person being resident in Germany or having its
      principal place of business in Germany, a reference to such person that is
      overindebted (uberschuldet), unable to pay its debts as they fall due
      (zahlungsunfahig) or such status is imminent (drohende
      Zahlungsunfahigkeit) or is subject to insolvency (including preliminary
      insolvency proceedings) or dissolution proceedings;

(iii) in relation to any person being resident in Spain or having the center of
      its interests in Spain, (hereinafter, the "SPANISH RESIDENT"):

      -     the Spanish Resident files an application with a court to be
            declared to be subject to creditors' composition ("concurso") within
            the meaning of the Spanish law 22/2003, dated July 9, 2003 or
            subject to any equivalent situation as provided by any law that
            could complement, replace or amend it;

      -     a third party applies to a court for a declaration that the Spanish
            Resident is subject to creditors' composition ("concurso") within
            the meaning of the Spanish law 22/2003 and the court accepts to
            follow the creditors' composition proceedings, or any other
            equivalent situation as provided by any other law that could
            complement, replace or amend them;

      -     the Spanish Resident is subject to governmental or judicial
            administration in Spain (intervencion administrativa o
            administracion judicial);

      -     any insolvency proceeding, as defined in Council Regulation (EC) No
            1346/2000, of 29 May 2000 on Insolvency Proceedings is taken in any
            jurisdiction regarding the Spanish Resident;

(iv)  in relation to any person being resident in Italy or having the center of
      its interests in Italy, (hereinafter, the "ITALIAN RESIDENT"):

      -     the Italian Resident is insolvent, being unable to fulfil its
            obligations regularly, namely in due time and with usual means,
            pursuant to article 5 of the Italian Bankruptcy Law (insolvenza);

      -     the Italian Resident is declared bankrupt upon its own application
            or petition of the creditor/s or petition of the Public Prosecutor
            or ex officio by the judge when during a civil proceeding the
            insolvency of the company comes out, pursuant to articles 6 et seq.
            of the Italian Bankruptcy Law (fallimento);

      -     the Italian Resident, being insolvent, files an application for
            arrangement with creditors with the competent judge, proposing an
            arrangement pursuant to articles 160 et seq. of the Italian
            Bankruptcy Law (concordato preventivo);

      -     the Italian Resident, being unable to fulfil its obligations due to
            a temporary and reversible crisis, files an application with the
            tribunal in order to have the management of its business and the
            administration of its assets under the direction of the supervisory
            judge and the judicial commissioner pursuant to articles 187 et seq.
            of the Italian Bankruptcy Law (amministrazione controllata);

                                     - 90 -


      -     the Italian Resident is under Compulsory administrative liquidation
            pursuant to articles 194 et seq. of the Italian Bankruptcy Law
            (liquidazione coatta amministrativa);

      -     the Italian Resident, being a large undertaking, is under
            extraordinary administration pursuant to Law 270/1999
            (amministrazione straordinaria);

      -     if and when applicable, the Italian Resident, being eligible for the
            extraordinary administration and meeting additional requirements set
            by law, is under reorganization pursuant to Legislative Decree no.
            347 of 23 December 2003, as amended by Law Decree no. 119 of 3 May
            2004 (ristrutturazione industriale di grandi imprese in stato di
            insolvenza);

      -     any of the above insolvency proceeding is taken in any jurisdiction
            regarding the Italian Resident pursuant to Council Regulation (EC)
            no. 1346/2000 of 29 May 2000 on insolvency proceedings;

(v)   in relation to any person being resident in the Netherlands or having its
      principal place of business in the Netherlands, (hereinafter, the "DUTCH
      RESIDENT"), a reference to such person that is subject to any bankruptcy
      (faillissement), suspension of payments (surseance van betaling) or any
      other insolvency proceedings listed in Annex A of the Council Regulations
      (EC) No. 1346/2000 on Insolvency Proceedings or any other insolvency
      proceedings or analogous proceeding in each case opened by a competent
      court, including, but not limited to, emergency regulations
      ("noodregeling") as referred to in the Act on the Supervision Act of the
      Credit System ("Wet toezicht kredietwezen 1992") on the Supervision of the
      Insurance System ("Wet toezicht verzekeringsbedrijf 1993").

(vi)  in relation to any person being resident in the United States or having
      its principal place of business in the United States:

      (a)   an involuntary proceeding shall be commenced or an involuntary
            petition shall be filed seeking (x) liquidation, reorganization,
            bankruptcy, moratorium, suspension of payment or other relief in
            respect of such person or its debts, or of a substantial part of its
            assets, under any U.S. federal, state or foreign bankruptcy,
            insolvency, receivership or similar law now or hereafter in effect
            or (y) the appointment of a receiver, trustee in bankruptcy,
            custodian, sequestrator, conservator or similar official for such
            person or for a substantial part of its assets, and, in any such
            case, such proceeding or petition shall continue undismissed for 90
            days or an order or decree approving or ordering any of the
            foregoing shall be entered;

                                     - 91 -


      (b)   such person (v) voluntarily commences any proceeding or file any
            petition seeking liquidation, reorganization, bankruptcy,
            moratorium, suspension of payment or other relief under any U.S.
            federal, state or foreign bankruptcy, insolvency, receivership or
            similar law now or hereafter in effect, (w) consents to the
            institution of, or fails to contest in a timely and appropriate
            manner, any proceeding or petition described in clause (a) of this
            section (x) applies for or consents to the appointment of a
            receiver, trustee in bankruptcy, custodian, sequestrator,
            conservator or similar official for such person or for a substantial
            part of its assets, (y) makes a general assignment for the benefit
            of creditors or (z) takes any action for the purpose of effecting
            any of the foregoing;

      (c)   such person admits in writing its inability or fails generally to
            pay its debts as they become due;

(vii) in relation to Elixir Funding Limited, means a resolution is passed for
      the winding-up or dissolution of Elixir Funding Limited, or a liquidator
      is appointed in respect of Elixir Funding Limited or any of its assets, or
      there is an for a declaration of en desatre in respect of the property of
      Elixir Funding Limited or for the property of Elixir Funding Limited to be
      placed under the control of the Courts of Jersey, or Elixir becomes
      "bankrupt" as defined in the Interpretation (Jersey) Law 1954; or

(viii) in relation to any other person, any similar provision applicable to it.

"INTERCOMPANY ARRANGEMENTS" shall have the meaning set forth in Article 11.1.
(xiv).

"INTERMEDIARY SETTLEMENT DATE" means each of the dates identified as an
"Intermediary Settlement Date" on Schedule 11 falling on or prior to the Program
Expiry Date.

"ISSUERS" means :

(i)   LMA S.A., a French limited company (societe anonyme) having its registered
      office at 6-8, rue Menars, 75002 Paris, France, registered with the
      Company Registry of Paris (Registre du Commerce et des Societes de Paris),
      under the number 383 275 187; or

(ii)  Elixir Funding Limited, a public company incorporated with limited
      liability under the laws of Jersey, having its registered office at St
      Paul's Gate, New Street, Saint Helier, Jersey, Channel islands JE2 34A,
      registered with the Companies Registry of Jersey under number 71548; or

(iii) any other person who may enter the Securitisation Transaction from time to
      time in order to subscribe to units issued by the Fund and to finance such
      subscription by issuing Notes.

"ITALIAN BACK UP SERVICER" means, in relation to the Sold Receivables purchased
from the Italian Seller, MEDIOFACTORING.

"ITALIAN NOTICE OF TRANSFER" means any notice issued by the Purchaser or any
entity, acting on behalf of the Purchaser and appointed by the same for such
purpose, to any Italian Debtor in accordance with a Italian Receivables Purchase
Agreement.

                                     - 92 -


"ITALIAN SELLER" means GOODYEAR DUNLOP TIRES Italia S.P.A.

"ITALIAN SERVICING AGREEMENT" means the specific back-up servicing agreement
concluded on the date hereof between the Purchaser and the Italian Stand-by
Servicer/Italian Back-Up Servicer which sets forth (i) the duties of the Italian
Stand-by Servicer before the termination of the collection mandate given to the
Italian Seller, and (ii) upon its appointment, the conditions according to which
MEDIOFACTORING shall act as Italian Back-Up Servicer .

"ITALIAN STAND-BY SERVICER" means, in relation to the back-up servicing
activities for those Sold Receivables purchased from the Italian Seller,
MEDIOFACTORING.

"JOINT-LEAD ARRANGER" means each of CALYON and NBP, acting in its capacity as
joint-lead arranger of the Securitisation Transaction.

"LIENS" means, in respect to any asset, any mortgage, deed of trust, lien,
delegation of claims, pledge, hypothecation, encumbrance, charge of security
interest in, on or of such asset.

"LIQUIDITY AGREEMENT" means (i) any unit purchase agreement (promesse d'achat et
de revente de parts) dated the date hereof, as amended and/or supplemented from
time to time, entered into between an Issuer and a Liquidity Bank pursuant to
which the Liquidity Bank has undertaken to purchase from such Issuer, all or
part of the units of the Fund held by the Issuer, or (ii) any credit facility
agreement dated the date hereof, as amended and/or supplemented from time to
time, entered into between an Issuer and a Liquidity Bank pursuant to which the
Liquidity Bank has undertaken to make loans to an Issuer secured by such units,
or (iii) a swap agreement, repurchase agreement or other financial instrument
dated the date hereof, as amended and/or supplemented from time to time, entered
into between an Issuer and a Liquidity Bank, pursuant to which the Liquidity
Bank has undertaken to make certain payments to an Issuer in relation to such
units.

"LIQUIDITY BANK" means a bank or any other credit institution (etablissement de
credit) (or any successor, transferee and assignee thereof), in each case rated
at least A1, P1 and/or F1 by the relevant Rating Agencies at the time when it
enters into or renews its commitment under a Liquidity Agreement, that has
undertaken to purchase from an Issuer, all or part of the units of the Fund held
by such Issuer or to make loans to an Issuer secured by such units or otherwise
to make payments to an Issuer in relation to such units.

"LIQUIDITY BANK LETTER" means, in relation to any Liquidity Bank, the letter
executed by such Liquidity Bank on 10 December 2004 and which relates to the
commitment to provide the Purchaser with an alternative funding, subject to the
conditions provided in such letter.

"LIQUIDITY COMMITMENT NON RENEWAL" means, in relation to any Liquidity Bank :

(a)   the non renewal of a Liquidity Agreement in any of the following cases:

      (i)   such Liquidity Agreement is not renewed at its expiry date, and the
            relevant Liquidity Bank has not been replaced with another bank that
            is rated at least A1, P1 and/or F1 by the relevant Rating Agencies;

                                     - 93 -


      (ii)  (x) as a result of Market Disruption, a drawing is made under such
            Liquidity Agreement in order to acquire all or part of the units of
            the Fund, and (y) such drawing remains outstanding until the expiry
            date of such Liquidity Agreement;

      (iii) (x) as a result of a Downgrading Event, a drawing is made under such
            Liquidity Agreement in order to acquire all or part of the units of
            the Fund, (y) such drawing remains outstanding until the expiry date
            of such Liquidity Agreement, and (z) the relevant Liquidity Bank has
            not been replaced with another bank that is rated at least A1, P1
            and/or F1 by the relevant Rating Agencies; or

      (iv)  (x) a drawing is made under any Liquidity Agreement for any reason
            other than those listed above, (y) such drawing remains outstanding
            until the expiry date of such Liquidity Agreement, and (z) the
            relevant Liquidity Bank has not been replaced with another bank that
            is rated at least A1, P1 and/or F1 by the relevant Rating Agencies;
            or

(b)   the expiry of the commitment of such Liquidity Bank under the relevant
      Liquidity Bank Letter.

"LIST OF PURCHASABLE RECEIVABLES" means any list of Purchasable Receivables, on
each Assessment Date, in the form agreed between the parties, to be provided by
the Centralising Unit, acting in the name and on behalf of the Sellers, to the
Purchaser.

"MANAGEMENT COMPANY" means ABC Gestion, a limited company (societe anonyme),
authorised as a Management Company (Societe de Gestion), in accordance with the
provisions of Article L.247-47 of the Code Monetaire et Financier, having its
registered office at 19, boulevard des Italiens - 75002 Paris, registered with
the Trade and Companies Registry of Paris under the number 353 716 160.

"MANAGEMENT FEE" means the management fee set out in Article 10 (Fees).

"MARGIN" means the margin which aims to cover any administrative, financial and
management costs incurred by ESTER FINANCE, equal to EUR 2,000 per month payable
on each Funded Settlement Date.

"MARKET DISRUPTION" means the occurrence of any event leading to any placement
agent acting for an Issuer being unable to find investors to purchase whole or
part of the Notes that would otherwise be issued by that Issuer.

"MASTER COMPLEMENTARY DEPOSIT AGREEMENT" means the agreement dated 10 December,
2004, as amended and/or supplemented from time to time, entered into between the
Purchaser and the Centralising Unit, under which the Centralising Unit shall
effect a Complementary Deposit with the Purchaser.

"MASTER DEFINITIONS SCHEDULE" means this master definitions schedule which
determines the meaning of the terms and expressions used in the Transaction
Documents.

                                     - 94 -


"MASTER SENIOR DEPOSIT AGREEMENT" means the agreement dated 15 December, 2004,
as amended and/or supplemented from time to time, entered into between the
Purchaser and the Depositor under which the Depositor has agreed to make a
Senior Deposit with the Purchaser.

"MASTER SUBORDINATED DEPOSIT AGREEMENT" means the agreement dated 10 December,
2004, as amended and/or supplemented from time to time, entered into between the
Purchaser and the Centralising Unit, under which the Centralising Unit shall
effect a Subordinated Deposit with the Purchaser.

"MATERIAL ADVERSE EFFECT" means a material adverse change in or effect on (i)
the ability of the Sellers and the Centralising Unit, taken as a whole, or of
GOODYEAR DUNLOP TIRES EUROPE BV to perform their obligations under the
Securitisation Documents that are material to the rights or interests of the
Purchaser, the Depositor, the Issuers or the Liquidity Banks under the
Securitisation Documents to which they are parties, (ii) the ability of the
Purchaser to collect the amounts due under the Purchasable Receivables or the
rights and interests of the Purchaser in the Sold Receivables, or (iii) the
rights of or benefits available to the Purchaser, the Depositor, the Issuers or
the Liquidity Banks under the Securitisation Documents that are material to the
rights or interests of such parties thereunder including as a result of any
material adverse change in or effect on the business, operations, properties,
assets or financial condition (including as a result of the effects of any
contingent liabilities) of GOODYEAR and its Subsidiaries (including the
Sellers), taken as a whole.

"MATERIAL INDEBTEDNESS" means Financial Indebtedness of GOODYEAR and any of its
subsidiaries in an aggregate principal amount exceeding USD 25,000,000 (or the
equivalent in any other currency or currencies).

"MATURITY DATE" means, in relation to any Purchasable Receivable, the date on
which such Purchasable Receivable becomes due and payable by the relevant
debtor.

"MATERIAL SUBSIDIARY" means, at any time, each subsidiary of GOODYEAR DUNLOP
TIRES EUROPE BV other than subsidiaries that do not represent more than 1% for
any such individual subsidiary, or more than 5% in the aggregate for all such
subsidiaries, of either (a) the total assets of GOODYEAR and its consolidated
subsidiaries or (b) the revenues of GOODYEAR and its consolidated subsidiaries
for the period of four (4) fiscal quarters most recently ended, in each case
determined in accordance with GAAP.

"MAXIMUM AMOUNT OF THE COMPLEMENTARY DEPOSIT" means an amount equal to EUR
950,000,000 on the date hereof, as this amount may be modified from time to time
by the parties to the Master Complementary Deposit Agreement in accordance with
the terms of the Master Complementary Deposit Agreement.

"MAXIMUM AMOUNT OF THE PROGRAM" means an amount equal to EUR 275,000,000, or any
other amount as determined pursuant to Articles 7.1.2 and 7.1.3. Without
prejudice to the provisions of Articles 7.1.2 and 7.1.3, it is expressly agreed
between the Parties that the Maximum Amount of the Program shall be equal to EUR
165,000,000 as long as the Issuers shall only be LMA S.A. and Elixir Funding
Limited.

"MAXIMUM AMOUNT OF THE PURCHASER'S FUNDING" means the amount set out in Article
7.1.

                                     - 95 -


"MAXIMUM CONCENTRATION RATE" means :

- -     10%, in relation to the Debtors of the Renault Group, taken as a whole,
      as long as such Debtors maintain short-term ratings not lower than A2 / P2
      from Moody's and Standard &Poor's, and 6% so long as such Debtors maintain
      short-term ratings lower than A2 / P2 but not lower than A3 / P3 from
      Moody's and Standard & Poor's;

- -     10%, in relation to the Debtors of the Peugeot Group, taken as a whole,
      as long as such Debtors maintain short-term ratings not lower than A2 / P2
      from Moody's and Standard &Poor's, and 6% so long as such Debtors maintain
      short-term ratings lower than A2 / P2 but not lower than A3 / P3 from
      Moody's and Standard & Poor's;

- -     10%, in relation to the Debtors of the Michelin Group, taken as a whole,
      as long as such Debtors maintain short-term ratings not lower than A2 / P2
      from Moody's and Standard &Poor's, and 6% so long as such Debtors maintain
      short-term ratings lower than A2 / P2 but not lower than A3 / P3 from
      Moody's and Standard & Poor's;

- -     2%, in relation to the Debtors of the Massa Pneu Group, taken as a whole
      ; or

- -     4%, in relation to any other Debtor and to any Debtors of a Debtor Group
      named above which does not maintain the ratings specified above as a
      condition to a higher Maximum Concentration Rate.

"MAXIMUM OVERCOLLATERALISATION RATE" means, as of the Initial Settlement Date
and on each Funded Settlement Date thereafter, the rate equal to 50 %. Such rate
may be modified provided that there has been an amendment to the Master
Subordinated Deposit Agreement.

"MINIMUM AMOUNT OF THE PROGRAM" means, on the date hereof, the amount of EUR
27,500,000, as may be amended from time to time pursuant to the provisions of
the Agreement.

"MISCELLANEOUS ACCOUNTING CREDIT ENTRIES" means, in relation to any Seller,
Miscellaneous Accounting Entries booked on the credit side of the account
receivables of an Eligible Debtor.

"MISCELLANEOUS ACCOUNTING DEBIT ENTRIES" means, in relation to any Seller,
Miscellaneous Accounting Entries booked on the debit side of the account
receivables of an Eligible Debtor.

"MISCELLANEOUS ACCOUNTING ENTRIES" means, in relation to any Seller, accounting
entries other than invoices, credit notes or cash payments that appear on the
debit side or credit side of the account receivables of an Eligible Debtor.

"NET MISCELLANEOUS RECEIVABLE" means, in relation to any Seller, any Purchasable
Receivable corresponding to the amount equal to the Miscellaneous Accounting
Debit Entries minus Miscellaneous Accounting Credit Entries.

"NON ALLOCATED CASH" means any collection recorded in any Seller's accounting
system, which has not yet posted to the payment of a receivable.

                                     - 96 -


"NOTES" means any US commercial paper, Billets de Tresorerie or any other
short-term notes such as a Euro commercial paper.

"NOTICE OF TRANSFER" means any notice issued by the Purchaser or any entity,
acting on behalf of the Purchaser and appointed by the same for such purpose, to
any Debtor in accordance with a Receivables Purchase Agreement.

"OUTSTANDING AMOUNT" means, at all times:

(i)   in relation to any Purchasable Receivables, the aggregate principal amount
      remaining due in respect of such Purchasable Receivables;

(ii)  in relation to any Eligible Receivables, the aggregate principal amount
      remaining due in respect of such Eligible Receivables;

(iii) in relation to any Defaulted Receivables, the aggregate principal amount
      remaining due in respect of such Defaulted Receivables;

(iv)  in relation to any Delinquent Receivables, the aggregate principal amount
      remaining due in respect of such Delinquent Receivables;

(v)   in relation to any Sold Receivables, the aggregate principal amount
      remaining due in respect of such Sold Receivables;

(vi)  in relation to any Net Miscellaneous Receivables, the aggregate principal
      amount remaining due in respect of such Net Miscellaneous Receivables.

The parties acknowledge that the Outstanding Amount of any receivables means the
total net amount of such receivables (including all taxes less any credit notes
issued, set-off, partial payments and other written off debts, as calculated by
the Agent on the basis of the Assessment Reports and the electronic supports
attached thereto).

"OVERCOLLATERALISATION RATE" means, on each Calculation Date preceding the
Initial Settlement Date or a Funded Settlement Date during the Replenishment
Period, the rate determined in accordance with the provisions of Schedule 1 of
the Master Subordinated Deposit Agreement. The Overcollateralisation Rate shall
be calculated by the Agent on each Calculation Date preceding a Funded
Settlement Date and shall apply with respect to the two next Settlement Dates.

"PARTIES" means the parties to this Agreement.

"PAYMENT" means any payment to be made by the Purchaser to the Centralising
Unit, in accordance with article 4.1 of the relevant Receivables Purchase
Agreement.

"PERFORMANCE LETTER" means the performance letter granted by GOODYEAR DUNLOP
TIRES EUROPE BV in the form set out in Schedule 10.

                                     - 97 -


"POTENTIAL EARLY AMORTISATION EVENT" means any event or condition which, but for
the giving of any notice or the lapse of any time period or both required for an
Early Amortisation Event to occur under Article 13, would constitute an Early
Amortisation Event.

"PRIORITY AMOUNT" has the meaning set forth in Article 16.2.

"PROGRAM EXPIRY DATE" means, in relation to any Seller and the Centralising
Unit, the earlier of the following dates:

(i)   the Business Day, on or after the Commitment Expiry Date, on which all
      sums due to the Purchaser under this Agreement and the relevant
      Receivables Purchase Agreement have been fully paid; or

(ii)  the first Funded Settlement Date (included) falling on or after twelve
      (12) calendar months after the Commitment Expiry Date.

"PROTECTED DEBTOR" means those German Debtors, which are either individual
merchants (kaufleute) or commercial partnerships (Personenhandelsgesellschaften)
organised as an Offene Handelsgesellschaft (OHG), Gesellschaft Burgerlichen
Rechts (GBR) or Kommanditgesellschaft (KG).

"PURCHASABLE RECEIVABLE" means any of the receivables of any Seller that meet
the characteristics set forth in article 7 of the Receivables Purchase Agreement
to which such Seller is a party.

"PURCHASER" means ESTER FINANCE.

"PURCHASER'S ACCOUNT" means the account number 30002/869/2739T/78, opened by the
Purchaser in the books of CALYON.

"PURCHASER'S COLLECTION ACCOUNT" means any of the bank account opened in the
name of the Purchaser, as mentioned in the Collection Account Agreements.

"PURCHASER'S FUNDING" means that portion of the Outstanding Amount of Eligible
Receivables which is funded by the Purchaser out of the Senior Deposit, the
amount of which is determined in accordance with Article 7 (Amount of the
Purchaser's Funding).

"PURCHASER'S TERMINATION NOTICE" means any notice issued by the Purchaser to the
Centralising Unit in the circumstances set out in Article 13.2 or 13.4.

"RATING AGENCIES" means Fitch Ratings, Moody's Investors Services and Standard &
Poors, or any other entity to which such agencies may transfer their credit
rating business or with which they may consolidate, amalgamate or merge.

                                     - 98 -


"RECEIVABLES PURCHASE AGREEMENTS" means the receivables purchase agreements
entered into between the Sellers, the Purchaser and the Agent for the purchase
of the Purchasable Receivables under the Securitisation Transaction and more
specifically:

(i)   a Receivables Purchase Agreement governed by French law entered into by
      the French Seller in respect of their Purchasable Receivables;

(ii)  a Receivables Purchase Agreement governed by German law entered into by
      the German Sellers in respect of their Purchasable Receivables;

(iii) a Receivables Purchase Agreement governed by Italian law entered into by
      the Italian Seller in respect of its Purchasable Receivables;

(iv)  a Receivables Purchase Agreement governed by Spanish law entered into by
      the Spanish Seller in respect of its Purchasable Receivables.

"REDUCTION OF THE COMPLEMENTARY DEPOSIT" means on any Settlement Date during the
Replenishment Period, the excess, if any, of (a) the amount of the Complementary
Deposit on the preceding Settlement Date over (b) the amount of the
Complementary Deposit on such Settlement Date in accordance with the Master
Complementary Deposit Agreement.

"REDUCTION OF THE SUBORDINATED DEPOSIT" means on any Settlement Date during the
Replenishment Period, the excess, if any, of (a) the amount of the Subordinated
Deposit on the preceding Settlement Date over (b) the amount of the Subordinated
Deposit on such Settlement Date in accordance with the Master Subordinated
Deposit Agreement.

"REGISTERED SHARE CAPITAL" has the meaning set forth in Article 3.6.3.

"REPLENISHMENT PERIOD" means the period of time commencing on the date hereof
and ending on the Commitment Expiry Date during which the Purchaser undertakes
to purchase Purchasable Receivables on each Settlement Date.

"RESPONSIBLE OFFICER" means the chief financial officer or treasurer of GOODYEAR
or the Vice President, Finance or equivalent officer of GOODYEAR DUNLOP TIRES
EUROPE BV. On the date hereof, the chief financial officer and the treasurer of
GOODYEAR are, respectively, Richard Kramer and Darren Wells and the Vice
President, Finance of GOODYEAR DUNLOP TIRES EUROPE BV is Ronn Archer. GOODYEAR
DUNLOP TIRES EUROPE BV and GOODYEAR shall promptly update the name and contact
details of such Responsible Officer.

"SECURITISATION DOCUMENTS" means the Transaction Documents, the Master Senior
Deposit Agreement, the transfer and servicing agreement to be concluded with the
Fund, the Fund regulations and any Liquidity Agreements.

"SECURITISATION TRANSACTION" means the securitisation transaction carried out
pursuant to the Transaction Documents.

"SELLERS" means, collectively, the French Seller, the German Sellers, the
Italian Seller and the Spanish Seller.

                                     - 99 -


"SENIOR DEPOSIT" means the deposits effected by the Depositor with the Purchaser
in accordance with the terms of the Master Senior Deposit Agreement..

"SETTLEMENT DATE" means a Funded Settlement Date or an Intermediary Settlement
Date.

"SOLD RECEIVABLES" means, in relation to any Seller, those Purchasable
Receivables (i) which have been purchased from such Seller by the Purchaser
pursuant to the Receivables Purchase Agreement to which such Seller is a party,
and (ii) which have not been repurchased from the Purchaser.

"SOLVENCY CERTIFICATE" means any certificate issued by the Sellers and
Centralising Unit, in the form of Schedule 5.

"SPANISH SELLER" means GOODYEAR DUNLOP TIRES Espana SA.

"STAND-BY FEE" means the management fee set out in Article 27.4.

"STAND-BY SERVICER" means EUROFACTOR.

"SUBORDINATED DEPOSIT" means any subordinated deposit effected by the
Centralising Unit with the Purchaser in accordance with the terms of Article 8
and the Master Subordinated Deposit Agreement.

"SUBORDINATED DEPOSITOR" means the Centralising Unit.

"SUBSIDIARY" means with respect to an entity (the "Parent") at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which are consolidated with those of the Parent in the Parent's
consolidated statements in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or, in the case
of a partnership, more than 50% of the general partnership interests are, as of
such date, owned, controlled or held by the Parent or one or more subsidiaries
of the Parent or by the Parent and one or more subsidiaries of the Parent.

"TARGET DAY" means a day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer (TARGET) System is operating.

"TRANSACTION DOCUMENTS" means this Agreement, the Master Subordinated Deposit
Agreement, the Master Complementary Deposit Agreement, the Receivables Purchase
Agreements, the Collection Account Agreements, the Comfort Letter and the
Performance Letter.

"TRANSFER DEED" means any bordereau referred to in each Receivables Purchase
Agreement, which shall be issued by the relevant Seller or the Centralising
Unit, acting in the name and on behalf of each Seller, on each Settlement Date
during the Replenishment Period, in the form of schedule 2 of the relevant
Receivables Purchase Agreement.

                                    - 100 -


"USD" or "US DOLLAR" refers to the lawful currency of the United States of
America.

"VAT CREDIT" has the meaning set forth in Article 14.2.

"YEAR END REBATES" means deferred rebates granted by any Seller at the end of
each year (or according to any periodicity) to some of its customers according
to the fulfillment of their purchase commitments. These Year End Rebates may
give rise to Credit Notes issued by the Sellers or to invoices issued by the
customers over the relevant Sellers.

                                    - 101 -


                  SCHEDULE 16. FINANCIAL COVENANTS DEFINITIONS

"CONSOLIDATED EBITDA" of any Person means, for any period, Consolidated Net
Income of such Person for such period plus (a) without duplication and to the
extent deducted in determining such Consolidated Net Income, the sum of (i)
Consolidated Interest Expense for such period, (ii) income tax expense for such
period, (iii) all amounts attributable to depreciation and amortization for such
period, (iv) all non-cash non-recurring charges for such period, (v) all
Rationalization Charges for such period, (vi) other expense for such period,
(vii) equity in losses of affiliates for such period, (viii) foreign exchange
currency losses for such period and (ix) minority interest in net income of
subsidiaries for such period, minus (b) without duplication, to the extent
included in determining such Consolidated Net Income (except with respect to
(ii) and (iii) below), (i) any non-cash extraordinary gains for such period,
(ii) cash expenditures (other than Rationalization Charges) during such period
in respect of items that resulted in non-cash non-recurring charges during any
prior period after the date hereof, (iii) Excess Cash Rationalization Charges,
(iv) other income for such period, (v) equity in earnings of affiliates for such
period, (vi) foreign exchange currency gains for such period and (vii) minority
interest in net losses of subsidiaries for such period, all determined on a
consolidated basis in accordance with GAAP.

"CONSOLIDATED INTEREST EXPENSE" of any Person means, for any period the sum of,
without duplication, (a) the consolidated interest expense (including imputed
interest expense in respect of Capital Lease Obligations and excluding fees and
other origination costs included in interest expense and arising from
Indebtedness incurred at any time) of such Person and its Consolidated
Subsidiaries for such period, determined in accordance with GAAP but excluding
capitalized interest, (b) all cash dividends paid during such period in respect
of Permitted Preferred Stock and (c) all finance expense related to
Securitization Transactions, excluding amortization of origination and other
fees.

"CONSOLIDATED NET INCOME" of any Person means, for any period, the net income or
loss of such Person and its Consolidated Subsidiaries for such period determined
in accordance with GAAP.

"CONSOLIDATED NET INDEBTEDNESS" means, at any time, the sum for GOODYEAR DUNLOP
TIRES EUROPE BV and its Consolidated Subsidiaries at such time, without
duplication, of (a) all Indebtedness that is included on GOODYEAR DUNLOP TIRES
EUROPE BV's consolidated balance sheet (excluding any Indebtedness owed to
GOODYEAR or any of its Subsidiaries), minus the excess, if any, of the sum for
GOODYEAR DUNLOP TIRES EUROPE BV and its Consolidated Subsidiaries of all cash
and Permitted Investments, over USD 100,000,000.

"CONSOLIDATED NET WORTH" means, as of the last day of any fiscal quarter, (a)
the sum for GOODYEAR of (i) the stated value of outstanding common stock, (ii)
capital surplus and (iii) retained earnings, excluding for purposes of such
calculation the effect of (A) all non-cash non-recurring charges (including the
$84,700,000 of charges incurred in connection with

                                    - 102 -


GOODYEAR's restatement of its financial statements from 1998 through the second
quarter of 2003, reflected in SEC filings made in the fourth quarter of 2003),
and all non-cash Rationalization Charges and (B) all losses and gains on sales
of assets other than in the ordinary course of business and all other non-cash
non-recurring gains, in each case in (A) and (B) above after December 31, 2002,
minus (b) any portion of the amount computed pursuant to clause (a) of this
definition that is attributable to Tire & Wheel Assemblies, Inc.

"CONSOLIDATED SENIOR SECURED INDEBTEDNESS" means, at any time, the sum for
Goodyear and its Consolidated Subsidiaries at such time, without duplication, of
(a) all Indebtedness that is included on Goodyear's consolidated balance sheet
and is secured by any assets of Goodyear or a Consolidated Subsidiary of
Goodyear, (b) all Capital Lease Obligations, (c) all synthetic lease financings,
(d) all Indebtedness of South Pacific Tyres that is secured by any of its assets
or by assets of the Borrower or a Consolidated Subsidiary and (e) all
Securitization Transactions, all determined in accordance with GAAP. For
purposes of computing Consolidated Senior Secured Indebtedness, the amount of
any synthetic lease financing shall equal the amount that would be capitalized
in respect of such lease if it were a Capital Lease Obligation.

"EXCESS CASH RATIONALIZATION CHARGES" means, for any period, (i) with respect to
GOODYEAR, cash expenditures of GOODYEAR and its Consolidated Subsidiaries with
respect to Rationalization Charges recorded on Goodyear's consolidated income
statement after March 31, 2003; provided, however, that for such cash
expenditures incurred after September 1, 2003, Excess Cash Rationalization
Charges shall only include the aggregate amount of such cash expenditures which
exceed the sum of USD 100,000,000 (or USD 50,000,000 if incurred prior to
December 31, 2003) plus 25% of the Net Cash Proceeds from the issuance and sale
of its Equity Interests or Indebtedness pursuant to Section 6.01(q) of the
European Credit Facility and (ii) with respect to GOODYEAR DUNLOP TIRES EUROPE
BV, cash expenditures of GOODYEAR DUNLOP TIRES EUROPE BV and its Consolidated
Subsidiaries with respect to Rationalization Charges recorded on GOODYEAR DUNLOP
TIRES EUROPE BV's consolidated income statement after March 31, 2003; provided,
however, that for such cash expenditures incurred after September 1, 2003,
Excess Cash Rationalization Charges shall only include the aggregate amount of
such cash expenditures which exceed the sum of USD 50,000,000 plus 12.5% of the
Net Cash Proceeds from the issuance and sale by GOODYEAR of its Equity Interests
or Indebtedness pursuant to Section 6.01(q) of the European Credit Facility.

"RATIONALIZATION CHARGES" means, for any period, cash and non-cash charges
related to rationalization actions designed to reduce capacity, eliminate
redundancies and reduce costs.

"CAPITAL LEASE OBLIGATIONS", "CONSOLIDATED SUBSIDIARY", "EQUITY INTERESTS",
"INDEBTEDNESS", "PERSON", "NET CASH PROCEEDS", "PERMITTED PREFERRED STOCK" and
"SECURITIZATION TRANSACTION" have the meanings given to such terms in the
European Credit Facility as in effect on the date hereof, and any amendments
thereto that have been made in connection with any Applicable Waiver or
Amendment.

                                    - 103 -

EX-4.2

                                                                     EXHIBIT 4.2

GOODYEAR

- --------------------------------------------------------------------------------

                      MASTER SUBORDINATED DEPOSIT AGREEMENT

- --------------------------------------------------------------------------------

                             DATED 10 DECEMBER, 2004

                                     Between

                                   EUROFACTOR
                                    as Agent

                                     CALYON
                              as Calculation Agent

                            ESTER FINANCE TITRISATION
                                  as Purchaser

                                       AND

                    GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V.
                 as Subordinated Depositor or Centralising Unit

                           [GIDE LOYRETTE NOUEL LOGO]

- --------------------------------------------------------------------------------

                    ASSOCIATION D'AVOCATS A LA COUR DE PARIS

           26, COURS ALBERT 1ER 75008 PARIS TEL. +33 (0)1 40 75 60 00
                            FAX +33 (0)1 43 59 37 79
                        E-MAIL INFO@GIDE.COM WWW.GIDE.COM


                                TABLE OF CONTENTS

                                                                                      
ARTICLE 1.  Definitions...............................................................    5
ARTICLE 2.  Interpretation............................................................    5
ARTICLE 3.  Purpose of this Agreement.................................................    6
ARTICLE 4.  Duration of the Agreement.................................................    6
ARTICLE 5.  Amount of the Subordinated Deposit........................................    7
ARTICLE 6.  No interest - no unavailability fee.......................................    8
ARTICLE 7.  Repayment.................................................................    9
ARTICLE 8.  Payments..................................................................   10
ARTICLE 9.  Representations and warranties............................................   10
ARTICLE 10. Application of the Subordinated Deposit as cash collateral for the
            benefit of the Purchaser..................................................   11
ARTICLE 11. Fees and expenses.........................................................   12
ARTICLE 12. Substitution and agency...................................................   12
ARTICLE 13. Confidentiality...........................................................   12
ARTICLE 14. Transferability of this Agreement.........................................   13
ARTICLE 15. Notices...................................................................   13
ARTICLE 16. Exercise of rights........................................................   13
ARTICLE 17. Indivisibility............................................................   14
ARTICLE 18. Partial invalidity........................................................   14
ARTICLE 19. Amendments................................................................   14
ARTICLE 20. Limited recourse - Non petition...........................................   15
ARTICLE 21. Governing law - jurisdiction..............................................   15
SCHEDULE 1. CALCULATION OF THE OVERCOLLATERALISATION RATE.............................   17
SCHEDULE 2. CALCULATION OF THE SUBORDINATED DEPOSIT...................................   20




                                     - 2 -


BETWEEN

1. EUROFACTOR, a company incorporated under French law, authorised as a credit
institution (etablissement de credit) and having its registered office at Tour
d'Asnieres, 4, avenue Laurent Cely, 92608 Asnieres, France, registered with the
Trade and Companies Registry of Nanterre under the number 642 041 560, whose
representative is duly authorised for the purpose of this agreement (the
"AGENT");

2. CALYON, a company incorporated under French law and authorised as a credit
institution (etablissement de credit), having its registered office at 9 quai du
President Paul Doumer, 92920 Paris La Defense Cedex, France, registered with the
Trade and Companies Registry of Nanterre under the number 304 187 701, whose
representatives are duly authorised for the purpose of this agreement (the
"CALCULATION AGENT");

3. ESTER FINANCE TITRISATION, a limited company with a management and
supervisory board (societe anonyme a directoire et conseil de surveillance)
incorporated under French law and authorised as a credit institution
(etablissement de credit), having its registered office at 19 Boulevard des
Italiens, 75002 Paris, France, registered with the Trade and Companies Registry
of Paris under the number 414 886 226, whose representative is duly authorised
for the purpose of this agreement ("ESTER FINANCE" or the "PURCHASER");

4. GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V., a company incorporated under Dutch
law, having its registered office at Deboelelaan 7, 1083 HJ, Amsterdam, The
Netherlands, registered with the Trade and Companies Registry of Amsterdam under
the number 34197964, whose representative is duly authorised for the purpose of
this agreement (hereafter referred to as the "CENTRALISING UNIT" or the
"SUBORDINATED DEPOSITOR").

                                     - 3 -


WHEREAS

GOODYEAR DUNLOP TIRES France S.A., FULDA REIFEN GmbH & Co KG, M-PLUS
MULTIMARKENMANAGEMENT GmbH & Co KG, GOODYEAR GmbH & Co KG, DUNLOP GmbH & Co KG,
GOODYEAR DUNLOP TIRES Italia SpA and GOODYEAR DUNLOP TIRES Espana SA (the
"SELLERS") are in the business of manufacturing and/or supplying tyres and
activities relating thereto, and hold receivables over their respective debtors.

In order to provide financing to the Sellers, CALYON as arranger has proposed to
set up a securitisation transaction by way of the sale, on an ongoing basis, of
trade receivables resulting from the usual business of the Sellers in France,
Germany, Italy and Spain.

For such purposes, ESTER FINANCE has undertaken to purchase certain trade
receivables held by the Sellers (the "PURCHASABLE RECEIVABLES") by way of a
transfer of receivables pursuant to the provisions of the French law governed
General Master Purchase Agreement (the "GENERAL MASTER PURCHASE AGREEMENT") and
the receivables purchase agreements (the "RECEIVABLES PURCHASE AGREEMENTS")
governed by French, German, Italian and Spanish law depending of the laws of the
incorporation of the relevant Seller.

ESTER FINANCE shall fund the acquisition of Purchasable Receivables:

(i)   partly out of a senior deposit (the "SENIOR DEPOSIT") effected by the
      Depositor with the Purchaser in accordance with a master senior deposit
      agreement (the "MASTER SENIOR DEPOSIT AGREEMENT") and

(ii)  partly by way of set-off against any amount due and payable by the
      Centralising Unit to the Purchaser in connection with (a) a subordinated
      deposit (the "SUBORDINATED DEPOSIT") to be effected by the Centralising
      Unit with the Purchaser in accordance with the terms and conditions of the
      present master subordinated deposit agreement (the "MASTER SUBORDINATED
      DEPOSIT AGREEMENT") and (b) a complementary deposit (the "COMPLEMENTARY
      DEPOSIT") to be effected by the Centralising Unit with the Purchaser in
      accordance with the terms and conditions of a master complementary deposit
      agreement (the "MASTER COMPLEMENTARY DEPOSIT AGREEMENT").

The Purchaser and the Subordinated Depositor are willing to define the terms and
conditions according to which the Subordinated Deposit shall be made by the
Subordinated Depositor with the Purchaser and shall be pledged as cash
collateral in favour of the Purchaser and have agreed to enter into this
agreement under the terms and subject to the conditions set forth hereunder.

                                     - 4 -


NOW IT IS HEREBY AGREED AS FOLLOWS:

                           CHAPTER I - INTERPRETATION

ARTICLE 1. DEFINITIONS

Capitalised terms and expressions used in this Master Subordinated Deposit
Agreement shall have the same meaning as ascribed to such terms and expressions
in the glossary attached as schedule 1 to the General Master Purchase Agreement.

ARTICLE 2. INTERPRETATION

(i) The titles of the Chapters, the Schedules and the Articles (including their
paragraphs) used herein and the table of contents are for convenience of
reference only, and shall not be used to interpret this Master Subordinated
Deposit Agreement.

(ii) In this Master Subordinated Deposit Agreement, except if the context calls
for another interpretation:

      (a)   references to "CHAPTERS", "ARTICLES" and "SCHEDULES" shall be
            construed as references to the chapters, articles and schedules of
            this Master Subordinated Deposit Agreement and references to this
            Master Subordinated Deposit Agreement include its schedules;

      (b)   words in the plural shall cover the singular and vice versa;

      (c)   references to the time of the day shall refer to Paris time, unless
            otherwise stipulated;

      (d)   references to a person shall include its permitted assignees,
            transferees and successors;

      (e)   references to a document shall mean this document, as amended,
            replaced by novation or varied from time to time;

      (f)   references to "PARTIES" must be interpreted as references to the
            parties to the present agreement, and to a "PARTY" shall refer to
            any of the Parties.

                                     - 5 -


                         CHAPTER II - PURPOSE - DURATION

ARTICLE 3. PURPOSE OF THIS AGREEMENT

3.1 The Subordinated Depositor shall make a Subordinated Deposit with the
Purchaser in accordance with the terms of this Master Subordinated Deposit
Agreement.

3.2 The Subordinated Deposit made by the Subordinated Depositor under this
Master Subordinated Deposit Agreement shall be applied and pledged as cash
collateral (affecte a titre de gage-especes) in favour of the Purchaser in
accordance with and subject to the provisions of Article 10 below.

All repayments of principal to be made by the Purchaser to the Subordinated
Depositor in respect of the Subordinated Deposit shall be made up to the amount
and to the extent of the sums received by the Purchaser in respect of the Sold
Receivables in the manner described under Article 7 below. During the
Amortisation Period, such repayments under the Subordinated Deposit shall be
subject to the order of priority of payments provided for under article 16 of
the General Master Purchase Agreement and shall, in particular, occur after the
full and definitive repayment of any sum due under the Senior Deposit.

The Subordinated Depositor agrees that, for the purposes of the repayment of
sums due to it under the Subordinated Deposit or otherwise under this Agreement
prior to the Program Expiry Date, it will look solely to the amount of the sums
received by the Purchaser under the General Master Purchase Agreement until the
Program Expiry Date in respect of the Sold Receivables and that the Subordinated
Depositor shall not, in such capacity, take or pursue any judicial or other
proceedings, or exercise any right or remedy that it might otherwise have
against the Purchaser or the Purchaser's assets save to the extent required for
the recovery of such sums.

ARTICLE 4. DURATION OF THE AGREEMENT

4.1 This Agreement shall enter into force on the date hereof and shall terminate
on the Program Expiry Date.

4.2 The Subordinated Deposit shall be repaid in the manner described in Article
7 below.

                                     - 6 -


                CHAPTER III - AMOUNT OF THE SUBORDINATED DEPOSIT

ARTICLE 5. AMOUNT OF THE SUBORDINATED DEPOSIT

5.1 Amount of the Subordinated Deposit

On each Calculation Date preceding a Settlement Date during the Replenishment
Period, the amount of the Subordinated Deposit shall be calculated in accordance
with the provisions of Schedule 1 and Schedule 2.

On each Calculation Date, during the Replenishment Period, the Agent shall
calculate the difference between (i) the amount of the Subordinated Deposit on
the following Settlement Date, and (ii) the amount of the Subordinated Deposit
on the preceding Settlement Date.

During the Amortisation Period until the Program Expiry Date, the amount of the
Subordinated Deposit shall be equal to the amount of the Subordinated Deposit as
at the last Funded Settlement Date, and shall be repaid, after full repayment of
the Senior Deposit, in accordance with the provisions of Article 7.

The amount of the Subordinated Deposit shall be calculated by the Agent on each
Calculation Date.

5.2 Calculation and setting up of the Subordinated Deposit

5.2.1 Calculation

(i) At the latest on the Calculation Date preceding the Initial Settlement Date,
the Agent shall calculate and notify forthwith the Purchaser and the
Subordinated Depositor the amount of the Subordinated Deposit to be made in
accordance with Article 5.1 above on the Initial Settlement Date, together with
the details of such calculation.

(ii) On each Calculation Date thereafter during the Replenishment Period, the
Agent shall calculate and notify forthwith the Purchaser and the Subordinated
Depositor of the difference between (i) the amount of the Subordinated Deposit
on the related Settlement Date, and (ii) the amount of the Subordinated Deposit
on the preceding Settlement Date, together with the details of such calculation.

If the new amount of the Subordinated Deposit is higher than the amount of the
Subordinated Deposit on the preceding Settlement Date, the Subordinated Deposit
shall be increased by the Euro amount of the difference (the "INCREASE IN THE
SUBORDINATED DEPOSIT").

If the new amount of the Subordinated Deposit is lower than the amount of the
Subordinated Deposit on the preceding Settlement Date, the Subordinated Deposit
shall be reduced by the Euro amount of the difference (the "REDUCTION OF THE
SUBORDINATED DEPOSIT").

                                     - 7 -


For the avoidance of doubt, any reference to the Subordinated Deposit in the
Transaction Documents shall be to the Subordinated Deposit as it may be
increased or reduced in accordance with this Article 5.2.1.

5.2.2 Setting up of the Subordinated Deposit

(i) On the Initial Settlement Date, before 9.00 a.m. (Paris time), the
Subordinated Depositor shall make a Subordinated Deposit in Euro with the
Purchaser. Such Subordinated Deposit shall be made by crediting the Current
Account, for the amount calculated in accordance with Article 5.2.1 (i) above,
in accordance with and subject to the provisions of article 6.4 of the General
Master Purchase Agreement.

(ii) On each Settlement Date after the Initial Settlement Date, during the
Replenishment Period, before 9.00 a.m. (Paris time):

      (a)   the Subordinated Depositor shall make a deposit in respect of the
            Subordinated Deposit in Euro with the Purchaser, for an amount
            corresponding to any Increase in the Subordinated Deposit, as
            calculated in accordance with Article 5.2.1 (ii) above; or

      (b)   the Purchaser shall repay a portion of the Subordinated Deposit to
            the Subordinated Depositor, for an amount corresponding to any
            Reduction of the Subordinated Deposit, as calculated in accordance
            with Article 5.2.1 (ii) above, subject to the provisions of Article
            7 below.

The payments to be made pursuant to (i) and (ii) above shall be effected in
accordance with and subject to the provisions of article 6.4 of the General
Master Purchase Agreement.

ARTICLE 6. NO INTEREST - NO UNAVAILABILITY FEE

The Purchaser and the Subordinated Depositor hereby expressly agree that the
Subordinated Deposit shall not bear interest and that no unavailability fee
shall be paid to the Subordinated Depositor in relation to the making of the
Subordinated Deposit.

The Subordinated Depositor acknowledges that it has entered into intercompany
arrangements with the Sellers (the "INTERCOMPANY ARRANGEMENTS") pursuant to
which the Subordinated Depositor will receive from each Seller any necessary
consideration for the making of the Subordinated Deposit and will be indemnified
in an appropriate manner by each Seller in accordance with its corporate
interest and in respect of the losses incurred by it as a result of the
Subordinated Deposit made under this Master Subordinated Deposit Agreement.

                                     - 8 -


                        CHAPTER IV - REPAYMENT - PAYMENTS

ARTICLE 7. REPAYMENT

7.1 Principle

The repayment of the Subordinated Deposit, which shall be carried out until the
Program Expiry Date, shall always be subject to (i) the provisions of Article
3.2 above and (ii) the order of priority of payments set forth under article 16
of the General Master Purchase Agreement and Article 7.2 below, and in
particular shall be subject to the full repayment of any amount due under the
Senior Deposit.

7.2 Repayment of the Subordinated Deposit

7.2.1 On each Settlement Date during the Replenishment Period, the Purchaser
shall repay, if applicable, the Subordinated Deposit to the Subordinated
Depositor, for an amount equal to any Reduction of the Subordinated Deposit in
the manner calculated under Article 5.2.1 above.

7.2.2 On each Settlement Date during the Amortisation Period, and until the
Program Expiry Date, the Purchaser shall repay to the Subordinated Depositor the
Subordinated Deposit, to the extent of the amount resulting from the allocations
set out in article 16 of the General Master Purchase Agreement.

The Parties agree that, for the avoidance of doubt, and in accordance with the
order of priority set forth under article 16 of the General Master Purchase
Agreement which the Centralising Unit expressly acknowledges and accepts, the
Subordinated Deposit shall not be repaid during the Amortisation Period, inter
alia, until full repayment of the Senior Deposit.

7.2.3 Such repayment shall be effected by means of the Distributed Amounts
received by the Purchaser under the Sold Receivables until the Program Expiry
Date and in accordance with the order of priority of payments as described in
article 16 of the General Master Purchase Agreement.

7.2.4 In the event that, on the Program Expiry Date, the Subordinated Deposit
has not been repaid in full in accordance with the provisions of this Master
Subordinated Deposit Agreement, the Purchaser shall be irrevocably released from
any repayment obligations hereunder.

7.3. In the event that during the Amortisation Period, the Centralising Unit,
acting in the name and on behalf of the Sellers, repurchases all outstanding
Sold Receivables from the Purchaser in accordance with article 4.3 of the
General Master Purchase Agreement, the purchase price of such Sold Receivables
shall be applied by the Purchaser to the repayment of the Subordinated Deposit
in the order specified in article 16 of the General Master Purchase Agreement.

                                     - 9 -


ARTICLE 8. PAYMENTS

8.1 All payments to be made in accordance with this Master Subordinated Deposit
Agreement shall be made in Euro.

8.2 All repayments of principal and all payments falling due on a day which is
not a Business Day shall instead fall due on the following Business Day.

8.3 At any time, until the Program Expiry Date, subject to article 6 of the
General Master Purchase Agreement, the Purchaser shall be entitled to set-off
(i) any amount due and payable by the Purchaser to the Subordinated Depositor in
respect of the Subordinated Deposit and (ii) any amount due and payable by the
Subordinated Depositor to the Purchaser under this Agreement or any of the
Transaction Documents.

                         CHAPTER V - GENERAL PROVISIONS

ARTICLE 9. REPRESENTATIONS AND WARRANTIES

The Subordinated Depositor hereby represents and warrants to the Purchaser, as
follows:

(i)   it is a liability company duly incorporated and validly existing under
      Dutch law and has the capacity (a) to carry on its business, as currently
      conducted, and to own all of the assets appearing on its balance sheet,
      except where not having such capacity would not be reasonably likely to
      result in a Material Adverse Effect, and (b) to enter into and perform its
      obligations under this Master Subordinated Deposit Agreement;

(ii)  the execution of this Master Subordinated Deposit Agreement does not
      require any authorisation with respect to the Subordinated Depositor that
      has not already been obtained and communicated to the Purchaser, unless,
      in the case of any Governmental Authorisation, the failure to obtain such
      authorisation would not be reasonably likely to result in a Material
      Adverse Effect;

(iii) the execution of this Master Subordinated Deposit Agreement and the
      performance of the obligations under this Master Subordinated Deposit
      Agreement do not contravene any of the provisions of the Subordinated
      Depositor's articles and memorandum of association, agreements or
      undertakings to which it is a party or by which it is bound, and do not in
      any manner contravene the statutes and regulations applicable to it,
      except, in each case, to the extent that no Material Adverse Effect would
      result from such breach;

(iv)  the obligations arising out of this Master Subordinated Deposit Agreement
      are binding on the Subordinated Depositor and enforceable in accordance
      with their respective terms, subject to applicable bankruptcy, insolvency,
      moratorium and other laws affecting creditors' rights generally;

                                     - 10 -


(v)   in the event that, in accordance with the provisions of this Master
      Subordinated Deposit Agreement and the General Master Purchase Agreement,
      the Subordinated Depositor is not repaid in full on the Program Expiry
      Date, the Subordinated Depositor shall incur any losses out of its own
      business, and the Purchaser shall not be liable, in any manner whatsoever,
      in this respect (except, as the case may be, as provided in article 4.2
      (b) of the General Master Purchase Agreement); and

(vi)  the constitution of the Subordinated Deposit as cash collateral
      (affectation a titre de gage especes) in favour of the Purchaser, as set
      forth in Article 10 below, complies with the Subordinated Depositor's
      corporate interest and does not exceed its financial capabilities; the
      Subordinated Depositor has entered into Intercompany Arrangements with the
      Sellers and GOODYEAR DUNLOP TIRES EUROPE B.V., pursuant to which the
      Subordinated Depositor shall receive from each Seller any necessary
      consideration for making the Subordinated Deposit and shall be indemnified
      as is appropriate by each Seller and GOODYEAR DUNLOP TIRES EUROPE B.V. in
      respect of the losses incurred by the Subordinated Depositor as a result
      of the Subordinated Deposit made under this Master Subordinated Deposit
      Agreement.

                          CHAPTER VI - CASH COLLATERAL

ARTICLE 10. APPLICATION OF THE SUBORDINATED DEPOSIT AS CASH COLLATERAL FOR THE
            BENEFIT OF THE PURCHASER

10.1 The Subordinated Depositor hereby irrevocably agrees that the Subordinated
Deposit made under this Agreement shall, by virtue of this Article, be pledged
and consequently applied as cash collateral (affecte a titre de gage-especes) by
the Centralising Unit in favour of the Purchaser until the Program Expiry Date,
to secure the payment of (i) any sum due by the Debtors to the Purchaser in
respect of the Sold Receivables and (ii) any sum due to the Purchaser by any
Seller or the Centralising Unit pursuant to the Transaction Documents.

The Subordinated Depositor hereby irrevocably agrees that the pledge and
application of the Subordinated Deposit as cash collateral (affectation du depot
subordonne a titre de gage-especes) in favour of the Purchaser shall transfer to
the Purchaser the ownership of those sums received under the Subordinated
Deposit.

10.2 The cash collateral (gage-especes) shall be deemed created and effective as
of the date on which the Subordinated Deposit is made with the Purchaser.

10.3 The obligation of the Purchaser to transfer back to the Subordinated
Depositor the Subordinated Deposit (creance en restitution) shall automatically
be reduced by any principal amount paid by the Purchaser to the Subordinated
Depositor on account of the Subordinated Deposit in accordance with Article 7
above.

10.4 The outstanding amount of the Subordinated Deposit, as of the Program
Expiry Date shall be applied by the Purchaser against the aggregate of (a) any
remaining sums due to the Purchaser in respect of the Sold Receivables, and (b)
any remaining sums due to the

                                     - 11 -


Purchaser by the Sellers or the Centralising Unit pursuant to the Transaction
Documents, remaining due as of the Program Expiry Date.

The amount so applied shall automatically reduce the obligation of the
Purchaser, to transfer back the outstanding amount of the Subordinated Deposit
to the Subordinated Depositor (creance en restitution).

                           CHAPTER VII - MISCELLANEOUS

ARTICLE 11. FEES AND EXPENSES

The Subordinated Depositor, in the name and on behalf of the Sellers, shall
bear, in particular, any costs and expenses incurred by CALYON as arranger,
EUROFACTOR as Agent, and ESTER FINANCE, in accordance with article 29 of General
Master Purchase Agreement.

ARTICLE 12. SUBSTITUTION AND AGENCY

Each Party shall have the right to be assisted by, to appoint or to substitute
for itself one or more third parties in the performance of certain tasks
provided that:

(i)   such Party has given prior written notice of the exercise of that right to
      the other Parties;

(ii)  such Party remains liable to the other Parties for the proper performance
      of those tasks and that the relevant third party/parties has or have
      expressly renounced any right to any contractual claim against the other
      Parties;

(iii) the relevant third party/parties undertake(s) to comply with all
      obligations binding upon such Party under this Master Subordinated Deposit
      Agreement; and

(iv)  the substitution, assistance or agency shall not entail an increase in the
      costs incurred by the other Parties.

The Parties acknowledge however that, in order to avoid doubt, this Article
shall not apply to the Subordinated Depositor in respect of the making of the
Subordinated Deposit.

ARTICLE 13. CONFIDENTIALITY

For the purposes to this Master Subordinated Deposit Agreement, the Parties
agree to be bound by the provisions relating to confidentiality as provided for
by article 31 of the General Master Purchase Agreement.

                                     - 12 -


ARTICLE 14. TRANSFERABILITY OF THIS AGREEMENT

Subject to article 12 above, this Master Subordinated Deposit Agreement is
concluded on the intuitu personae of the Parties to this Master Subordinated
Deposit Agreement. Therefore, none of the Parties may transfer this Master
Subordinated Deposit Agreement, or its rights and/or obligations hereunder, to
any third party whatsoever, without the prior written consent of the other
Parties.

ARTICLE 15. NOTICES

15.1. Except as otherwise set forth in the Transaction Documents, all notices,
requests or communications which must or may be made pursuant to this Master
Subordinated Deposit Agreement shall be by way of writing, mail or fax.

15.2. All notices, requests or communications to be made and all documents to be
delivered from one Party to the other Party under the Master Subordinated
Deposit Agreement shall be made and delivered to the addressees referred to in
schedule 7 to the General Master Purchase Agreement.

15.3. All notices, requests or communications made and all documents delivered
under the Master Subordinated Deposit Agreement shall only take effect upon the
date of their receipt by its addressee.

15.4. Each of the Parties may at any time modify the addressee of the notices,
requests or communications to be made and the documents to be delivered to it
under the Master Subordinated Deposit Agreement by sending to that effect a
letter or fax to the other Party indicating the name of the new addressee.

15.5. The Parties agree that the Centralising Unit shall be responsible for
receiving written notice on behalf of the Sellers, and that any notice given by
the Purchaser to the Sellers and delivered to the Centralising Unit shall be
deemed validly received by all of the Sellers upon receipt by the Centralising
Unit.

ARTICLE 16. EXERCISE OF RIGHTS

16.1 All rights conferred on the Purchaser under this Master Subordinated
Deposit Agreement or by any other document delivered pursuant to or incidental
to this Master Subordinated Deposit Agreement or any Transaction Document,
including rights conferred by law, shall be cumulative and may be exercised at
any time.

16.2 The fact that the Purchaser or the Subordinated Depositor does not exercise
a right or delays in doing so shall in no way be construed as a waiver of that
right. The exercise of any right or a partial exercise shall not prevent the
Purchaser or the Subordinated Depositor from exercising such a right again in
the future, or from exercising any other right.

                                     - 13 -


ARTICLE 17. INDIVISIBILITY

Each Party acknowledges that the General Master Purchase Agreement, the Master
Subordinated Deposit Agreement and the Master Complementary Deposit Agreement
shall form a single set of contractual rights and obligations and that, if the
General Master Purchase Agreement, or the Master Complementary Deposit Agreement
becomes void or ceases to be effective and enforceable for any reason
whatsoever, this Master Subordinated Deposit Agreement shall also become void or
cease to be effective and enforceable accordingly. Any payment already made by
the Centralising Unit acting in the name and on behalf of the Sellers or on its
own behalf to the Purchaser under this Master Subordinated Deposit Agreement,
the General Master Purchase Agreement, the Receivables Purchase Agreements, the
Master Subordinated Deposit Agreement and the Master Complementary Deposit
Agreement shall not be affected by such a nullity, ineffectiveness or
unenforceability.

ARTICLE 18. PARTIAL INVALIDITY

If one or more provisions of this Master Subordinated Deposit Agreement is or
becomes invalid, illegal or unenforceable in any respect in any jurisdiction or
with respect to any Party, such invalidity, illegality or unenforceability in
such jurisdiction or with respect to such Party or Parties shall not, to the
fullest extent permitted by applicable law, render invalid, illegal or
unenforceable such provision or provisions in any other jurisdiction or with
respect to any other Party or Parties hereto.

Such invalid, illegal or unenforceable provision shall be replaced by the
Parties to such contract with a provision which comes as close as reasonably
possible to the intentions of the invalid, illegal or unenforceable provision.
Any fees, costs and expenses incurred by the Parties in connection with any
amendment necessary or advisable pursuant to this Article shall be borne
exclusively by the Subordinated Depositor.

ARTICLE 19. AMENDMENTS

No amendment to this Master Subordinated Deposit Agreement may be made without
the written consent of each other Party thereto and (a) unless the Rating
Agencies (i) have been informed and provided by the Arranger with all necessary
details they may require in respect of such contemplated amendment and (ii) have
confirmed that the contemplated amendment will not entail a downgrading or
withdrawal of the current ratings of any Notes issued by the Issuers, or that
the contemplated amendment will reduce a downgrading or withdrawal which would
otherwise occur, but for such amendment being made, and (b) each Issuer and each
Liquidity Bank has given its prior written consent to such amendment (such
consent not being unreasonably withheld or delayed).

                                     - 14 -


ARTICLE 20. LIMITED RECOURSE - NON PETITION

20.1. Limited recourse

Each of the Parties agrees to limit their respective claims and recourse against
ESTER FINANCE (including in the event of a breach by ESTER FINANCE of any of its
representations and warranties, or any of its obligations hereunder) to the
amount of the Available Funds on the relevant date.

20.2. Non Petition

Each of the Parties irrevocably and unconditionally undertakes and agrees:

(a)   not to exercise any rights of contractual or other recourse which it may
      have against ESTER FINANCE in the event of a breach by ESTER FINANCE of
      any of its representations and warranties, or any of its obligations under
      this Master Subordinated Deposit Agreement, except in the event of the
      gross negligence (faute lourde) or wilful misconduct (dol) on the part of
      ESTER FINANCE; and

(b)   not to institute any legal proceedings, take other steps or institute
      other proceedings against ESTER FINANCE, the purpose or effect of which is
      the appointment of a conciliator or an ad hoc agent, or the opening of
      receivership proceedings or insolvency proceedings (redressement
      judiciaire or liquidation judiciaire) or any other similar proceedings.

ARTICLE 21. GOVERNING LAW - JURISDICTION

21.1 This Master Subordinated Deposit Agreement shall be governed by French law.

21.2 Any dispute as to the validity, interpretation, performance or any other
matter arising out of this Master Subordinated Deposit Agreement shall be
subject to the jurisdiction of the competent courts of Paris (Cour d'appel de
Paris). The choice of this jurisdiction is entirely for the benefit of the
Purchaser which shall retain the right to bring proceedings in any other
competent court.

                                     - 15 -


Executed in four (4) originals in Paris on 10 December, 2004.

                                  ESTER FINANCE

                               /s/ Richard Sinclair
                               -----------------------------------
                               Name : Richard Sinclair
                               Title : Director General

                    GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V.

                               /s/ Ronald M. Archer
                               -----------------------------------
                               Name : Ronald M. Archer
                               Title : Vice President-Finance and Chief
                                       Financial Officer

                                   EUROFACTOR

                               /s/ Nathalie Rossen
                               -----------------------------------
                               Name : Nathalie Rossen
                               Title : Responsible Titrisation

                                     CALYON

/s/ Richard Sinclair                          /s/ G. Campagne-Simon
- ------------------------------                ----------------------------
Name : Richard Sinclair                      Name : G. Campagne-Simon
Title : Executive Director                   Title :

                                     - 16 -


SCHEDULE 1. CALCULATION OF THE OVERCOLLATERALISATION RATE

EUROFACTOR calculates the Overcollateralisation Rate for each Funded Settlement
Date applied for such Funded Settlement Date and the next Intermediary
Settlement Date during the Replenishment Period as follows:

      Criteria such as theoretical DSO, loss horizon and dilution horizon could
      be updated during the life time of the program, according to any change in
      the collecting and management procedures of the Sellers as noticed during
      the follow-up audits.

      OVERCOLLATERALISATION RATE (m) (*) = MAXIMUM [30%; Maximum [Loss Reserve
      (m) + Dilution Reserve (m); Floor Reserve (m)] + YER Reserve (m) +
      Customer/Supplier Reserve (m)]

(*) As used herein, "m" means, with respect to any Funded Settlement Date, as
the case may be, the Assessment Date related to the preceding Intermediary
Settlement Date or the calendar month ending on such Assessment Date and "m-X"
means the Xth calendar month preceding such calendar month.

1.    LOSS RESERVE

- -     Theoretical days of sales outstanding(DSO)   : 81 days (**)
- -     Defaulted Receivables period                 : beyond 90 days past due
- -     Stress factor                                : 2,25
- -     Loss horizon                                 : 5 months and 26 days (***)
                                                     X months and Y days

      LOSS RESERVE (m) = Stress factor * Loss horizon ratio (m) * maximum within
      the last 12 months of the Loss ratio (m)

      Loss horizon ratio (m)            = [Y/30 * Turnover (m-X) + Turnover
                                        (m-[X-1]) + Turnover (m-[X-2]) + ... +
                                        Turnover (m)] / [Outstanding Amount of
                                        Sold Receivables as of the end of month
                                        m - Outstanding Amount of Defaulted
                                        Receivables as of the end of month m -
                                        Outstanding Amount of Net Miscellaneous
                                        Receivables as of the end of month m]

      Turnover (m)                      = Gross Sold Receivables sold during the
                                        relevant period VAT included

      Loss ratio (m)                    = average within the 3 last calendar
                                        months of the Defaulted ratio

      Defaulted Receivables (m)         = Sold Receivables that became Defaulted
                                        Receivables during the relevant month

                                     - 17 -


Defaulted ratio (m)                     = Defaulted Receivables (m) / Turnover
                                        (m-[X+1])

(**) Theoretical DSO corresponds to the average theoretical condition of payment
of invoicing as provided by the Seller at each follow up audit

(***) Loss horizon is equal to theoretical DSO plus the Defaulted Receivables
period plus 5 days.

2.    DILUTION RESERVE

- -     Dilution horizon        : 1 month (****)
- -     Stress factor (SF)      : 2,25

      DILUTION RESERVE (m) = [{SF * ED} + {DS - ED}*{DS/ED}] * DHR (m)

      Expected Dilution (ED)            = average Dilution ratio within the last
                                        12 months

      Dilution ratio (m)                = Net Credit Notes (m) / Turnover (m-1)

      Net credit notes (m)              = new Credit Notes issued during the
                                        relevant month, based on the reporting
                                        template filled monthly by each seller,
                                        excluding any Miscellaneous Accounting
                                        Credit Entries

      Dilution Spike (DS)               = Maximum Dilution ratio within the last
                                        12 months

      Dilution horizon ratio (DHR)      = Turnover (m) / [Outstanding Amount of
                                        Sold Receivables as of the end of month
                                        m - Outstanding Amount of Defaulted
                                        Receivables as of the end of month m -
                                        Outstanding Amount of Net Miscellaneous
                                        Receivables as of the end of month m]

      (****) Dilution horizon is equal to the estimated average amount of time
      elapsed from the creation of an Eligible Receivable to the issuance of a
      Credit Note pertaining thereto.

3.    FLOOR RESERVE

      FLOOR RESERVE (m) = [Concentration factor (m) + Dilution component (m)]

      Concentration factor (m) = {Maximum [sum of the SRO on the 5 debtors
      groups with the largest SRO who are non rated or non investment grade; sum
      of the SRO of the 3 debtors groups with the largest SRO who are rated A-3;
      sum of the SRO of the

                                     - 18 -


      2 debtors groups with the largest SRO rated A-2; SRO for debtor group with
      the largest SRO rated A-1]} / Outstanding Amount of Eligible Receivables
      as of "m"

      SRO               = Outstanding Amount of Eligible Receivables, on the
                        relevant Assessment Date

      Debtors Group     = means a group of debtors for which a parent company
                        owns 50% + 1 of voting rights.

      Dilution component (m)   = Expected Dilution (m)
                                 * Dilution horizon ratio (m)

4.    YER RESERVE

      YER RESERVE (m) = Maximum Consolidated YER(1) (m) / [Outstanding Amount of
      Sold Receivables as of the end of month m - Outstanding Amount of
      Defaulted Receivables as of the end of month m - Outstanding Amount of Net
      Miscellaneous Receivables as of the end of month m]

      (1) Consolidated YER declared in the Assessment Report

5.    CUSTOMER / SUPPLIER RESERVE

      CUSTOMER / SUPPLIER RESERVE (m) = Customer - Suppliers outstanding(2) (m)
      / [Outstanding Amount of Sold Receivables as of the end of month m -
      Outstanding Amount of Defaulted Receivables as of the end of month m -
      Outstanding Amount of Net Miscellaneous Receivables as of the end of month
      m]

      (2) Customer- Suppliers outstanding such as declared in the Assessment
      Report

By exception, the Overcollateralisation Rate for the Initial Settlement Date
will be fixed at 30%.

                                     - 19 -


SCHEDULE 2. CALCULATION OF THE SUBORDINATED DEPOSIT

ON EACH SETTLEMENT DATE DURING THE REPLENISHMENT PERIOD:

      SUBORDINATED DEPOSIT =            Overcollateralisation Rate, *
                                        [Outstanding Amount of Sold Receivables
                                        on such Settlement Date (1) -
                                        Outstanding Amount of Defaulted
                                        Receivables on such Settlement Date (2)
                                        - Outstanding Amount of Net
                                        Miscellaneous Receivables on such
                                        Settlement Date];

                                  +     Outstanding Amount of Defaulted
                                        Receivables on such Settlement
                                        Date (2)

                                  +     Outstanding Amount of Net
                                        Miscellaneous Receivables (3) on
                                        such Settlement Date.

(1) Taking into account Purchasable Receivables to be purchased on such
    Settlement Date.

(2) Excluding any such receivables that, after becoming Doubtful Receivables,
    have been repurchased.

(3) As long as the Outstanding Amount of Net Miscellaneous Receivables is
    positive.

                                     - 20 -

EX-4.3

                                                                     EXHIBIT 4.3

GOODYEAR

- --------------------------------------------------------------------------------

                          MASTER COMPLEMENTARY DEPOSIT
                                   AGREEMENT

- --------------------------------------------------------------------------------

                             DATED 10 DECEMBER, 2004

                                     Between

                                   EUROFACTOR
                                    as Agent

                                     CALYON
                              as Calculation Agent

                            ESTER FINANCE TITRISATION
                                  as Purchaser

                                       AND

                         GOODYEAR DUNLOP TIRES FINANCE
                                  EUROPE B.V.
                 as Complementary Depositor or Centralising Unit

                           [GIDE LOYRETTE NOUEL LOGO]

- --------------------------------------------------------------------------------

                    ASSOCIATION D'AVOCATS A LA COUR DE PARIS
           26, COURS ALBERT 1ER 75008 PARIS TEL. +33 (0)1 40 75 60 00
                            FAX +33 (0)1 43 59 37 79
                        E-MAIL INFO@GIDE.COM WWW.GIDE.COM



                                TABLE OF CONTENTS
                                                                                                
ARTICLE 1.   Definitions........................................................................    5
ARTICLE 2.   Interpretation.....................................................................    5
ARTICLE 3.   Purpose of this Agreement..........................................................    6
ARTICLE 4.   Duration of the Agreement..........................................................    6
ARTICLE 5.   Amount of the Complementary Deposit................................................    7
ARTICLE 6.   No interest - Unavailability fee...................................................    8
ARTICLE 7.   Repayment..........................................................................    9
ARTICLE 8.   Payments...........................................................................   10
ARTICLE 9.   Representations and warranties - undertakings......................................   10
ARTICLE 10.  Application of the Complementary Deposit as cash collateral for the benefit
             of the Purchaser...................................................................   11
ARTICLE 11.  Fees and expenses..................................................................   12
ARTICLE 12.  Substitution and agency............................................................   12
ARTICLE 13.  Confidentiality....................................................................   13
ARTICLE 14.  Transferability of this Agreement..................................................   13
ARTICLE 15.  Notices............................................................................   13
ARTICLE 16.  Exercise of rights.................................................................   14
ARTICLE 17.  Indivisibility.....................................................................   14
ARTICLE 18.  Partial invalidity.................................................................   14
ARTICLE 19.  Amendments.........................................................................   15
ARTICLE 20.  Limited recourse - non petition....................................................   15
ARTICLE 21.  Governing law - jurisdiction.......................................................   15
Schedule 1.  Calculation of the Amount of the Complementary Deposit.............................   17




                                     - 2 -


BETWEEN

1. EUROFACTOR, a company incorporated under French law, authorised as a credit
institution (etablissement de credit) and having its registered office at Tour
d'Asnieres, 4, avenue Laurent Cely, 92608 Asnieres, France, registered with the
Trade and Companies Registry of Nanterre under the number 642 041 560, whose
representative is duly authorised for the purpose of this agreement (the
"AGENT");

2. CALYON, a company incorporated under French law and authorised as a credit
institution (etablissement de credit), having its registered office at 9 quai du
President Paul Doumer, 92920 Paris La Defense Cedex, France, registered with the
Trade and Companies Registry of Nanterre under the number 304 187 701, whose
representatives are duly authorised for the purpose of this agreement (the
"CALCULATION AGENT");

3. ESTER FINANCE TITRISATION, a limited company with a management and
supervisory board (societe anonyme a directoire et conseil de surveillance)
incorporated under French law and authorised as a credit institution
(etablissement de credit), having its registered office at 19 Boulevard des
Italiens, 75002 Paris, France, registered with the Trade and Companies Registry
of Paris under the number 414 886 226, whose representative is duly authorised
for the purpose of this agreement ("ESTER FINANCE" or the "PURCHASER");

4. GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V., a company incorporated under Dutch
law, having its registered office at Deboelelaan 7, 1083 HJ, Amsterdam, The
Netherlands, registered with the Trade and Companies Registry of Amsterdam,
under the number 34197964, whose representative is duly authorised for the
purpose of this agreement (hereafter referred to as the "CENTRALISING UNIT" or
the "COMPLEMENTARY DEPOSITOR").

                                     - 3 -


WHEREAS

GOODYEAR DUNLOP TIRES France S.A., FULDA REIFEN GmbH & Co KG, M-PLUS
MULTIMARKENMANAGEMENT GmbH & Co KG, GOODYEAR GmbH & Co KG, DUNLOP GmbH & Co KG,
GOODYEAR DUNLOP TIRES Italia SpA and GOODYEAR DUNLOP TIRES Espana SA (the
"SELLERS") are in the business of manufacturing and/or supplying tyres and
activities relating thereto, and hold receivables over their respective debtors.

In order to provide financing to the Sellers, CALYON as arranger has proposed to
set up a securitisation transaction by way of the sale, on an ongoing basis, of
trade receivables resulting from the usual business of the Sellers in France,
Germany, Italy and Spain.

For such purposes, ESTER FINANCE has undertaken to purchase certain trade
receivables held by the Sellers (the "PURCHASABLE RECEIVABLES") by way of a
transfer of receivables pursuant to the provisions of the French law governed
General Master Purchase Agreement (the "GENERAL MASTER PURCHASE AGREEMENT") and
receivables purchase agreements (the "RECEIVABLES PURCHASE AGREEMENTS") governed
by French, German, Italian and Spanish law depending of the laws of the
incorporation of the relevant Seller.

ESTER FINANCE shall fund the acquisition of Purchasable Receivables:

(i)   partly out of a senior deposit (the "SENIOR DEPOSIT") effected by the
      Depositor with the Purchaser in accordance with a master senior deposit
      agreement (the "MASTER SENIOR DEPOSIT AGREEMENT"); and

(ii)  partly by way of set-off against any amount due and payable by the
      Centralising Unit to the Purchaser in connection with (a) a subordinated
      deposit (the "SUBORDINATED DEPOSIT") to be effected by the Centralising
      Unit with the Purchaser in accordance with the terms and conditions of a
      master subordinated deposit agreement (the "MASTER SUBORDINATED DEPOSIT
      AGREEMENT") and (b) a complementary deposit (the "COMPLEMENTARY DEPOSIT")
      to be effected by the Centralising Unit with the Purchaser in accordance
      with the terms and conditions of the present master complementary deposit
      agreement (the "MASTER COMPLEMENTARY DEPOSIT AGREEMENT").

The Purchaser and the Complementary Depositor are willing to define the terms
and conditions according to which the Complementary Deposit shall be made by the
Complementary Depositor with the Purchaser and shall be pledged as cash
collateral in favour of the Purchaser and have agreed to enter into this
agreement under the terms and subject to the conditions set forth hereunder.

                                     - 4 -


NOW IT IS HEREBY AGREED AS FOLLOWS:

                           CHAPTER I - INTERPRETATION

ARTICLE 1. DEFINITIONS

Capitalised terms and expressions used in this Master Complementary Deposit
Agreement shall have the same meaning as ascribed to such terms and expressions
in the glossary set out in schedule 1 to the General Master Purchase Agreement.

ARTICLE 2. INTERPRETATION

(i)   The titles of the Chapters, the Schedules and the Articles (including
their paragraphs) used herein and the table of contents are for convenience of
reference only, and shall not be used to interpret this Master Complementary
Deposit Agreement.

(ii)  In this Master Complementary Deposit Agreement, except if the context
calls for another interpretation:

      (a)   references to "CHAPTERS", "ARTICLES" and "SCHEDULES" shall be
            construed as references to the chapters, articles and schedules of
            this Master Complementary Deposit Agreement and references to this
            Master Complementary Deposit Agreement include its schedules;

      (b)   words in the plural shall cover the singular and vice versa;

      (c)   references to the time of the day shall refer to Paris time, unless
            otherwise stipulated;

      (d)   references to a person shall include its permitted assignees,
            transferees and successors;

      (e)   references to a document shall mean this document, as amended,
            replaced by novation or varied from time to time;

      (f)   references to "PARTIES" must be interpreted as references to the
            parties to the present agreement, and to a "PARTY" shall refer to
            any of the Parties.

                                     - 5 -


                    CHAPTER II - AMOUNT - PURPOSE - DURATION

ARTICLE 3. PURPOSE OF THIS AGREEMENT

3.1 The Complementary Depositor shall make a Complementary Deposit with the
Purchaser in accordance with the terms of this Master Complementary Deposit
Agreement.

3.2 The Complementary Deposit made by the Complementary Depositor under this
Master Complementary Deposit Agreement shall be applied and pledged as cash
collateral (affecte a titre de gage-especes) in favour of the Purchaser in
accordance with and subject to the provisions of Article 10.

All repayments of principal to be made by the Purchaser to the Complementary
Depositor in respect of the Complementary Deposit shall be made up to the amount
and to the extent of the sums received by the Purchaser in respect of the Sold
Receivables in the manner described in Article 7. During the Amortisation
Period, such repayments under the Complementary Deposit shall be subject to the
order of priority of payments provided for under article 16 of the General
Master Purchase Agreement.

The Complementary Depositor agrees that, for the purposes of repayment of the
Complementary Deposit, it will look solely to the amount of the sums received by
the Purchaser under the General Master Purchase Agreement in respect of the Sold
Receivables until the Program Expiry Date and that the Complementary Depositor
shall not, in such capacity, otherwise take or pursue any judicial or other
proceedings, or exercise any right or remedy that it might otherwise have,
against the Purchaser or the Purchaser's assets save to the extent required for
the recovery of such sums.

ARTICLE 4. DURATION OF THE AGREEMENT

4.1 This Master Complementary Deposit Agreement shall enter into force on the
date hereof and shall terminate on the Program Expiry Date.

4.2 The Complementary Deposit shall be repaid in the manner described in Article
7.

                                     - 6 -


                CHAPTER III - AMOUNT OF THE COMPLEMENTARY DEPOSIT

ARTICLE 5. AMOUNT OF THE COMPLEMENTARY DEPOSIT

5.1 Amount of the Complementary Deposit

The Complementary Depositor shall make a Complementary Deposit with the
Purchaser in accordance with the terms and conditions of this Master
Complementary Deposit Agreement.

The amount of the Complementary Deposit shall, at all times during the
Replenishment Period, be calculated in accordance with the provisions of
Schedule 1.

During the Amortisation Period, the Complementary Deposit, as calculated as of
the last Funded Settlement Date of the Replenisment Period, shall be repaid
until the Program Expiry Date, after full repayment of the Senior Deposit,
subject to the order of priority set forth in Article 7.

The amount of the Complementary Deposit shall be calculated by the Agent on each
Calculation Date.

5.2 Calculation and setting up of the Complementary Deposit

5.2.1 Calculation

(i) At the latest on the Calculation Date preceding the Initial Settlement Date,
the Agent shall calculate and notify forthwith the Purchaser and the
Complementary Depositor the amount of the Complementary Deposit to be made in
accordance with Article 5.1 above on the Initial Settlement Date, together with
the details of such calculation.

(ii) On any subsequent Calculation Date during the Replenishment Period, the
Agent shall calculate and notify forthwith the Purchaser and the Complementary
Depositor (i) the amount of the Complementary Deposit in accordance with Article
5.1 above on the related Settlement Date, and (ii) the amount of the
Complementary Deposit on the preceding Settlement Date, together with the
details of such calculation.

If the new amount of the Complementary Deposit is higher than the amount of the
Complementary Deposit on the preceding Settlement Date, the Complementary
Deposit shall be increased by the Euro amount of the difference (the "INCREASE
IN THE COMPLEMENTARY DEPOSIT").

If the new amount of the Complementary Deposit is lower than the amount of the
Complementary Deposit on the preceding Settlement Date, the Complementary
Deposit shall be reduced by the Euro amount of the difference (the "REDUCTION OF
THE COMPLEMENTARY DEPOSIT").

                                     - 7 -


For the avoidance of doubt, any reference to the Complementary Deposit in the
Transaction Documents shall be to the Complementary Deposit as it may be
increased or reduced in accordance with this Article 5.2.1.

5.2.2 Setting up of the Complementary Deposit

(i) On the Initial Settlement Date, before 9.00 am (Paris time), the
Complementary Deposit shall be made in Euro with the Purchaser by crediting the
Current Account, for the amount calculated in accordance with Article 5.2.1.

(ii) On each Settlement Date after the Initial Settlement Date, during the
Replenishment Period, before 9.00 am (Paris time):

      (a)   the Complementary Depositor shall make a deposit in respect of the
            Complementary Deposit in Euro with the Purchaser for an amount
            corresponding to any Increase in the Complementary Deposit, as
            calculated in accordance with Article 5.2.1 (ii); or

      (b)   the Purchaser shall repay a portion of the Complementary Deposit to
            the Complementary Depositor for an amount corresponding to any
            Reduction of the Complementary Deposit, as calculated in accordance
            with Article 5.2.1 (ii), subject to the provisions of Article 7.

The payments to be made pursuant to (i) and (ii) above shall be effected in
accordance with and subject to the provisions of article 6.4 of the General
Master Purchase Agreement.

ARTICLE 6. NO INTEREST - UNAVAILABILITY FEE

The Purchaser and the Complementary Depositor hereby expressly agree that the
Complementary Deposit shall not bear interest and that no unavailability fee
shall be paid to the Complementary Depositor in relation to the making of the
Complementary Deposit.

The Complementary Depositor acknowledges that it has entered into intercompany
arrangements with the Sellers (the "INTERCOMPANY ARRANGEMENTS") pursuant to
which the Complementary Depositor will receive from each Seller any necessary
consideration for the making of the Complementary Deposit and will be
indemnified in an appropriate manner by each Seller in accordance with its
corporate interest and in respect of the losses incurred by it as a result of
the Complementary Deposit made under this Master Complementary Deposit
Agreement.

                                     - 8 -


                        CHAPTER IV - REPAYMENT - PAYMENTS

ARTICLE 7. REPAYMENT

7.1 Principle

The repayment of the Complementary Deposit, which shall be carried out until the
Program Expiry Date, shall always be subject to (i) the provisions of Article
3.2 above and (ii) the order of priority of payments set forth under article 16
of the General Master Purchase Agreement and under Article 7.2.

7.2 Repayment of the Complementary Deposit

7.2.1 On each Intermediary Purchase Date or Funded Settlement Date during the
Replenishment Period, the Purchaser shall repay, if applicable, the
Complementary Deposit to the Complementary Depositor, for an amount equal to any
Reduction of the Complementary Deposit as calculated under Article 5.2.1 above.

7.2.2 On each Settlement Date during the Amortisation Period, and until the
Program Expiry Date, the Purchaser shall repay the Complementary Deposit to the
Complementary Depositor, for an amount resulting from the allocations set out in
article 16 of the General Master Purchase Agreement.

Such repayment shall be principally effected by means of the Distributed Amounts
received by the Purchaser under the Sold Receivables until the Program Expiry
Date and in accordance with the order of priority of payments as described in
article 16 of the General Master Purchase Agreement.

In the event that, on the Program Expiry Date, the Distributed Amounts do not
permit the repayment in full of any outstanding amount remaining unpaid under
the Senior Deposit and under the Complementary Deposit, then, any outstanding
amount remaining unpaid under the Complementary Deposit shall reduce the right
to repayment to the Complementary Depositor of the Complementary Deposit.

7.3. In the event that during the Amortisation Period, the Centralising Unit,
acting in the name and on behalf of the Sellers, repurchases all outstanding
Sold Receivables from the Purchaser in accordance with article 4.3. of the
General Master Purchase Agreement, the purchase price of such Sold Receivables
shall be applied by the Purchaser to the repayment of the Complementary Deposit
in accordance with the order provided for under article 16 of the General Master
Purchase Agreement.

                                     - 9 -


ARTICLE 8. PAYMENTS

8.1 All payments to be made in accordance with this Master Complementary Deposit
Agreement shall be made in Euro.

8.2 All repayments of principal and all payments falling due on a day which is
not a Business Day shall instead fall due on the following Business Day.

8.3 At any time, until the Program Expiry Date, subject to article 6 of the
General Master Purchase Agreement, the Purchaser shall be entitled to set-off
(i) any amount due and payable by the Purchaser to the Complementary Depositor
in respect of the Complementary Deposit and (ii) any amount due and payable by
the Complementary Depositor to the Purchaser under this Agreement or any of the
Transaction Documents.

                         CHAPTER V - GENERAL PROVISIONS

ARTICLE 9. REPRESENTATIONS AND WARRANTIES - UNDERTAKINGS

The Complementary Depositor hereby represents and warrants to the Purchaser, as
follows:

(i)   it is a liability company duly incorporated and validly existing under
      Dutch law and has the capacity (a) to carry on its business, as currently
      conducted, and to own all of the assets appearing on its balance sheet,
      except where not having such capacity would not be reasonably likely to
      result in a Material Adverse Effect, and (b) to enter into and perform its
      obligations under this Master Complementary Deposit Agreement;

(ii)  the execution of this Master Complementary Deposit Agreement does not
      require any authorisation with respect to the Complementary Depositor that
      has not already been obtained and communicated to the Purchaser, unless in
      the case of any Governemental Authorisation, the failure to obtain such
      authorisation would not be reasonably likely to result in a Material
      Adverse Effect ;

(iii) the execution of this Master Complementary Deposit Agreement and the
      performance of the obligations under this Master Complementary Deposit
      Agreement do not contravene any of the provisions of the Complementary
      Depositor's articles and memorandum of association, agreements or
      undertakings to which it is a party or by which it is bound, and do not in
      any manner contravene the statutes and regulations applicable to it,
      except in each case, to the extent that no Material Adverse Effect would
      result from such breach;

(iv)  the obligations arising out of this Master Complementary Deposit Agreement
      are binding on the Complementary Depositor and enforceable in accordance
      with their respective terms, subject to applicable bankruptcy, insolvency,
      moratorium and other laws affecting creditors' rights generally;

                                     - 10 -


(v)   in the event that, in accordance with the provisions of this Master
      Complementary Deposit Agreement and the General Master Purchase Agreement,
      the Complementary Deposit is not repaid in full on the Program Expiry
      Date, the Complementary Depositor shall incur any losses out of its own
      business, and the Purchaser shall not be liable, in any manner whatsoever,
      in this respect (except, as the case may be, as provided in article 4.2
      (b) of the General Master Purchase Agreement); and

(vi)  the constitution of the Complementary Deposit as cash collateral
      (affectation a titre de gage especes) in favour of the Purchaser, as set
      forth in Article 10 below, complies with the Complementary Depositor's
      corporate interest and does not exceed its financial capabilities ; the
      Complementary Depositor has entered into Intercompany Arrangements with
      the Sellers and GOODYEAR DUNLOP TIRES EUROPE B.V., pursuant to which the
      Complementary Depositor shall receive from each Seller any necessary
      consideration for making the Complementary Deposit and shall be
      indemnified as is appropriate by each Seller and GOODYEAR DUNLOP TIRES
      EUROPE B.V. in respect of any losses incurred by the Complementary
      Depositor as a result of the Complementary Deposit made under this Master
      Complementary Deposit Agreement.

                          CHAPTER VI - CASH COLLATERAL

ARTICLE 10. APPLICATION OF THE COMPLEMENTARY DEPOSIT AS CASH COLLATERAL FOR THE
            BENEFIT OF THE PURCHASER

10.1 The Complementary Depositor hereby irrevocably agrees that the
Complementary Deposit made under this Agreement shall, by virtue of this
Article, be pledged as cash collateral (affecte a titre de gage-especes) by the
Centralising Unit in favour of the Purchaser until the Program Expiry Date, to
secure the payment of (i) any sum due to the Purchaser in respect of the Sold
Receivables, and (ii) any sum due to the Purchaser by any Seller or the
Centralising Unit pursuant to the Transaction Documents; provided that no party
shall be entitled to receive, as a result of such pledge, any amounts in
addition to those that they are entitled to receive pursuant to Article 16 of
the General Master Purchase Agreement.

The Complementary Depositor hereby irrevocably agrees that the pledging of the
Complementary Deposit as cash collateral (affectation du depot complementaire a
titre de gage-especes) in favour of the Purchaser shall transfer to the
Purchaser the ownership of the sums received under the Complementary Deposit.

10.2 The cash collateral (gage-especes) shall be deemed created and effective as
of the date on which the Complementary Deposit is made with the Purchaser.

                                     - 11 -


10.3 The obligation of the Purchaser to transfer back to the Complementary
Depositor the Complementary Deposit (creance en restitution) shall automatically
be reduced by any principal amount paid by the Purchaser to the Complementary
Depositor in relation to the Complementary Deposit in accordance with Article 7
above.

10.4 The Complementary Depositor acknowledges that in accordance with the
security referred to above, during the Amortisation Period, it may not in any
case nor at any moment claim repayment of the Complementary Deposit other than
within the limit of the Distributed Amounts received by the Purchaser, which are
available for the application to the Complementary Depositor, in accordance with
Article 7.

                           CHAPTER VII - MISCELLANEOUS

ARTICLE 11. FEES AND EXPENSES

The Complementary Depositor, in the name and on behalf of the Sellers, shall
bear, in particular, any costs and expenses incurred by CALYON as arranger,
EUROFACTOR as Agent, and ESTER FINANCE, in accordance with article 29 of General
Master Purchase Agreement.

ARTICLE 12. SUBSTITUTION AND AGENCY

Each Party shall have the right to be assisted by, to appoint or to substitute
for itself one or more third parties in the performance of certain tasks
provided that:

(i)   such Party has given prior written notice of the exercise of that right to
      the other Parties;

(ii)  such Party remains liable to the other Parties for the proper performance
      of those tasks and the relevant third party/parties has or have expressly
      renounced any right to any contractual claim against the other Parties;

(iii) the relevant third party/parties undertake(s) to comply with all
      obligations binding upon such Party under this Master Complementary
      Deposit Agreement; and

(iv)  the substitution, assistance or agency shall not entail an increase in the
      costs incurred by the other Parties.

The Parties acknowledge however that, in order to avoid doubt, this Article
shall not apply to the Complementary Depositor in respect of the making of the
Complementary Deposit.

                                     - 12 -


ARTICLE 13. CONFIDENTIALITY

For the purposes to this Master Complementary Deposit Agreement, the Parties
agree to be bound by the provisions relating to confidentiality as provided for
under article 31 (Confidentiality) of the General Master Purchase Agreement.

ARTICLE 14. TRANSFERABILITY OF THIS AGREEMENT

Subject to Article 12, this Master Complementary Deposit Agreement is concluded
on the intuitu personae of the Parties to this Master Complementary Deposit
Agreement. Therefore, none of the Parties may transfer this Master Complementary
Deposit Agreement, or its rights and/or obligations hereunder, to any third
party whatsoever, without the prior written consent of the other Parties.

ARTICLE 15. NOTICES

15.1. Except as otherwise set forth in the Transaction Documents, all notices,
requests or communications which must or may be made pursuant to this Master
Complementary Deposit Agreement shall be by way of writing, mail or fax.

15.2. All notices, requests or communications to be made and all documents to be
delivered from one Party to the other Party under the Master Complementary
Deposit Agreement shall be made and delivered to the addressees referred to in
schedule 7 to the General Master Purchase Agreement.

15.3. All notices, requests or communications made and all documents delivered
under the Master Complementary Deposit Agreement shall only take effect upon the
date of their receipt by its addressee.

15.4. Each of the Parties may at any time modify the addressee of the notices,
requests or communications to be made and the documents to be delivered to it
under the Master Complementary Deposit Agreement by sending to that effect a
letter or fax to the other Party indicating the name of the new addressee.

15.5. The Parties agree that the Centralising Unit shall be responsible for
receiving written notice on behalf of the Sellers, and that any notice given by
the Purchaser to the Sellers and delivered to the Centralising Unit shall be
deemed validly received by all of the Sellers upon receipt by the Centralising
Unit.

                                     - 13 -


ARTICLE 16. EXERCISE OF RIGHTS

16.1 All rights conferred on the Purchaser under this Master Complementary
Deposit Agreement or by any other document delivered pursuant to or incidental
to this Master Complementary Deposit Agreement or any Transaction Document,
including rights conferred by law, shall be cumulative and may be exercised at
any time.

16.2 The fact that the Purchaser or the Complementary Depositor does not
exercise a right or delays in doing so shall in no way be construed as a waiver
of that right. The exercise of any right or a partial exercise of such a right
shall not prevent the Purchaser or the Complementary Depositor from exercising
such a right again in the future, or from exercising any other right.

ARTICLE 17. INDIVISIBILITY

Each Party acknowledges that the General Master Purchase Agreement, the Master
Subordinated Deposit Agreement and the Master Complementary Deposit Agreement
shall form a single set of contractual rights and obligations and that, if the
General Master Purchase Agreement, or the Master Subordinated Deposit Agreement
becomes void or ceases to be effective and enforceable for any reason
whatsoever, this Master Complementary Deposit Agreement shall also become void
or cease to be effective and enforceable accordingly. Any payment already made
by the Centralising Unit acting in the name and on behalf of the Sellers or on
its own behalf to the Purchaser under this Master Complementary Deposit
Agreement, the General Master Purchase Agreement, the Receivables Purchase
Agreements and the Master Subordinated Deposit Agreement shall not be affected
by such a nullity, ineffectiveness or unenforceability.

ARTICLE 18. PARTIAL INVALIDITY

If one or more provisions of this Master Complementary Deposit Agreement is or
becomes invalid, illegal or unenforceable in any respect in any jurisdiction or
with respect to any Party, such invalidity, illegality or unenforceability in
such jurisdiction or with respect to such Party or Parties shall not, to the
extent permitted by applicable law, render invalid, illegal or unenforceable
such provision or provisions in any other jurisdiction or with respect to any
other Party or Parties hereto.

Such invalid, illegal or unenforceable provision shall be replaced by the
Parties to such contract with a provision which reflects in so far as is
reasonably possible the intentions of the invalid, illegal or unenforceable
provision. Any fees, costs and expenses incurred by the Parties in connection
with any amendment necessary or advisable pursuant to this Article shall be
borne exclusively by the Complementary Depositor.

                                     - 14 -


ARTICLE 19. AMENDMENTS

No amendment to this Master Complementary Deposit Agreement may be made without
the written consent of each other party hereto and (a) unless the Rating
Agencies (i) have been informed and provided by the Arranger with all necessary
details they may require in respect of such contemplated amendment and (ii) have
confirmed that the contemplated amendment will not entail a downgrading or
withdrawal of the current ratings of the Notes issued by the Issuers, or that
the contemplated amendment will reduce such downgrading or prevent such
withdrawal, and (b) each Issuer and each Liquidity Bank has given its prior
written consent to such amendment (such consent not being unreasonably withheld
or delayed).

ARTICLE 20. LIMITED RECOURSE - NON PETITION

20.1. Limited Recourse

Each of the Parties agrees to limit its claims and recourse against ESTER
FINANCE (including in the event of a breach by ESTER FINANCE of any of its
representations and warranties, or any of its obligations hereunder) to the
amount of the Available Funds on the relevant date.

20.2. Non Petition

Each of the Parties irrevocably and unconditionally undertakes and agrees:

(a)   not to exercise any rights of contractual or other recourse which it may
      have against ESTER FINANCE in the event of a breach by ESTER FINANCE of
      any of its representations and warranties, or any of its obligations under
      this Master Complementary Deposit Agreement, except in the event of the
      gross negligence (faute lourde) or wilful misconduct (dol) on the part of
      ESTER FINANCE; and

(b)   not to institute any legal proceedings, take other steps or institute
      other proceedings against ESTER FINANCE, the purpose or effect of which is
      the appointment of a conciliator or an ad hoc agent, or the opening of
      receivership proceedings or insolvency proceedings (redressement
      judiciaire or liquidation judiciaire) or any other similar proceedings.

ARTICLE 21. GOVERNING LAW - JURISDICTION

21.1  This Master Complementary Deposit Agreement shall be governed by French
law.

21.2 Any dispute as to the validity, interpretation, performance or any other
matter arising out of this Master Complementary Deposit Agreement shall be
subject to the jurisdiction of the competent courts of Paris (Cour d'appel de
Paris). The choice of this jurisdiction is entirely for the benefit of the
Purchaser which shall retain the right to bring proceedings in any other
competent court.

                                     - 15 -


Made in Paris,
On 10 December, 2004, in four (4) originals.

                                  ESTER FINANCE

                            /s/ Richard Sinclair
                            ---------------------------------
                            Name : Richard Sinclair
                            Title : Director General

                    GOODYEAR DUNLOP TIRES FINANCE EUROPE B.V.

                            /s/ Ronald M. Archer
                            ---------------------------------
                            Name : Ronald M. Archer
                            Title : Vice President-Finance and Chief
                                     Financial Officer

                                   EUROFACTOR

                            /s/ Nathalie Rossen
                            ---------------------------------
                            Name : Nathalie Rossen
                            Title :

                                     CALYON

/s/ Richard Sinclair                        /s/ G. Campagne-Simon
- ------------------------------              --------------------------
Name : Richard Sinclair                     Name :
Title : Executive Director                  Title :

                                     - 16 -


      SCHEDULE 1. CALCULATION OF THE AMOUNT OF THE COMPLEMENTARY DEPOSIT

1. DURING THE REPLENISHMENT PERIOD, UNLESS AN EARLY AMORTISATION EVENT DESCRIBED
IN ARTICLE 13.3. OF THE GENERAL MASTER PURCHASE AGREEMENT HAS OCCURRED AND A
PROCEDURE OF SEPARATION OF FLOWS UNDER THE COLLECTION ACCOUNT AGREEMENTS HAS
BEEN IMPLEMENTED

1.1. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON THE INITIAL SETTLEMENT DATE

     COMPLEMENTARY DEPOSIT =            Initial Purchase Price of Purchasable
                                        Receivables;

                                        -     Subordinated Deposit;

                                        -     Senior Deposit;

                                        -     Adjusted Collections calculated as
                                              of such date.

1.2. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON EACH FUNDED SETTLEMENT DATE

     COMPLEMENTARY DEPOSIT =        Complementary Deposit as of the preceding
                                    Settlement Date

                                    +     Initial Purchase Price of Purchasable
                                          Receivables to be purchased on such
                                          Settlement Date;

                                    -     Adjusted Collections calculated as
                                          of such Settlement Date;

                                    -     Amount of the Subordinated Deposit on
                                          such Settlement Date minus the amount
                                          of the Subordinated Deposit on the
                                          preceding Settlement Date;

                                    -     Amount of the Senior Deposit on such
                                          Settlement Date minus the amount of
                                          the Senior Deposit on the preceding
                                          Settlement Date;

                                    +     Deferred Purchase Price calculated as
                                          of such Settlement Date.

                                     - 17 -


1.3. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON EACH INTERMEDIARY SETTLEMENT DATE

     COMPLEMENTARY DEPOSIT =        Complementary Deposit as of the preceding
                                    Settlement Date

                                    +     Initial Purchase Price of Purchasable
                                          Receivables to be purchased on such
                                          Settlement Date;

                                    -     Adjusted Collections calculated as of
                                          such Settlement Date;

                                    -     Amount of the Subordinated Deposit on
                                          such Settlement Date minus the amount
                                          of the Subordinated Deposit on the
                                          preceding Settlement Date;

                                    +     Excess Foreseen Collections to be
                                          received in cash on the Purchaser's
                                          Account for such Settlement Date.

2. DURING THE REPLENISHMENT PERIOD, IF AN EARLY AMORTISATION EVENT DESCRIBED IN
ARTICLE 13.3. OF THE GENERAL MASTER PURCHASE AGREEMENT HAS OCCURRED AND A
PROCEDURE OF SEPARATION OF FLOWS UNDER THE COLLECTION ACCOUNT AGREEMENTS HAS
BEEN IMPLEMENTED

2.1. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON A FUNDED SETTLEMENT DATE

     COMPLEMENTARY DEPOSIT =        Complementary Deposit as of the preceding
                                    Settlement Date

                                    +     Initial Purchase Price of Purchasable
                                          Receivables to be purchased on such
                                          Settlement Date;

                                    -     Adjusted Collections calculated as of
                                          such Settlement Date;

                                    -     amount of the Subordinated Deposit on
                                          such Settlement Date minus the amount
                                          of the Subordinated Deposit on the
                                          preceding Settlement Date;

                                    -     amount of the Senior Deposit on such
                                          Settlement Date minus the amount of
                                          the Senior Deposit on the preceding
                                          Settlement Date;

                                     - 18 -


                                    -     any amount received on the Purchaser's
                                          Collection Accounts within the period
                                          between the Assessment Date preceding
                                          such Settlement Date and the preceding
                                          Assessment Date;

                                    +     Deferred Purchase Price calculated as
                                          of such Settlement Date.

2.2. AMOUNT OF THE COMPLEMENTARY DEPOSIT ON AN INTERMEDIARY SETTLEMENT DATE

     COMPLEMENTARY DEPOSIT =        Complementary Deposit as of the preceding
                                    Settlement Date

                                    +     Initial Purchase Price of Purchasable
                                          Receivables to be purchased on such
                                          Settlement Date;

                                    -     Adjusted Collections calculated as of
                                          such Settlement Date;

                                    -     amount of the Subordinated Deposit on
                                          such Settlement Date minus the amount
                                          of the Subordinated Deposit on the
                                          preceding Settlement Date;

                                    -     any amount received on the Purchaser's
                                          Collection Accounts within the period
                                          between the Assessment Date preceding
                                          such Settlement Date and the preceding
                                          Assessment Date.

                                     - 19 -

EX-10.1

                                                                    EXHIBIT 10.1



                               AMENDMENT NO. 2 TO
                               UMBRELLA AGREEMENT



This Amendment No. 2 to the Umbrella Agreement dated as of June 14, 1999
("UMBRELLA AGREEMENT") is dated as of April 7, 2003 ("AMENDMENT NO. 2") and is
by and between The Goodyear Tire & Rubber Company, a company organized and
existing under the laws of the State of Ohio of the United States of America
("GOODYEAR") and Sumitomo Rubber Industries, Ltd., a company organized and
existing under the laws of Japan ("SRI").

WITNESSETH:

         WHEREAS, the parties have agreed that notwithstanding the provisions of
Article 10.02 of the Umbrella Agreement, Goodyear shall be permitted to sell
some or all of its shares of Common Stock in SRI on the terms hereinafter
mentioned.

         WHEREAS, the parties have agreed that, notwithstanding such provisions,
Goodyear shall be permitted, following any such sale, to purchase shares of
Common Stock in SRI.

         WHEREAS, the parties have agreed to make a number of consequential
amendments to the Umbrella Agreement to allow such sales and purchases of shares
of Common Stock in SRI by Goodyear, and to govern their relationship following
any such sales.

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

1.       AMENDMENT OF MAINTENANCE OF CROSS INVESTMENTS

1.1      The parties hereby amend Article 10.02 of the Umbrella Agreement so as
         to delete the existing Article 10.02(a) in its entirety and to restate
         such Article as follows:

         "10.02 Maintenance of Cross Investments. (a) Subject to the provisions
         of clauses (a)(i) to (a)(vii) and paragraphs (b) and (c) of this
         Article 10.02 and so long as no Global Exit shall have occurred,
         Goodyear shall not purchase, sell, or dispose of or otherwise transfer
         (whether for cash or other consideration) its interest (including any
         beneficial interest as defined under the 1934 Act), in any shares of
         SRI Common Stock or other voting securities of SRI without the prior
         written consent of SRI and SRI shall not purchase, sell, or dispose of
         or otherwise transfer (whether for cash or other consideration) its
         interest in any shares of Goodyear Common Stock or




                                        1


         other voting securities of Goodyear without the prior written consent
         of Goodyear; provided that:

         (i)      Goodyear may agree to sell, in one or more transactions or
                  instalments, its interest (including any beneficial interest
                  as defined under the 1934 Act), in any shares of SRI Common
                  Stock provided that any such sales are completed between 31
                  March 2003 and 30 June 2003 (inclusive);

         (ii)     following any sale by Goodyear of any interest in any shares
                  of SRI Common Stock pursuant to clause (a)(i) above, Goodyear
                  may in the period up to and including 30 June 2008 purchase
                  (by such method as may be agreed between the parties from time
                  to time), in one or more transactions or instalments, such
                  number of shares of SRI Common Stock as is necessary to
                  restore Goodyear's percentage interest in SRI's total issued
                  and outstanding shares of Common Stock (from time to time)
                  from the percentage interest following such sale or sales (the
                  "POST-SALE PERCENTAGE") to ten percent (10%) (the "ORIGINAL
                  PERCENTAGE");

         (iii)    if, by purchases made pursuant to clause (a)(ii) above,
                  Goodyear restores its percentage interest in SRI's total
                  issued and outstanding shares of Common Stock to the Original
                  Percentage, Goodyear may from time to time thereafter purchase
                  such shares of SRI's Common Stock as is necessary to maintain
                  Goodyear's percentage interest in SRI's total issued and
                  outstanding shares of Common Stock at the Original Percentage.
                  If Goodyear makes a purchase pursuant to this clause (a)(iii)
                  it shall promptly give written notice thereof to SRI;

         (iv)     notwithstanding any restriction imposed by the confidentiality
                  agreement between Goodyear and SRI dated 19 January 2003 (the
                  "CONFIDENTIALITY AGREEMENT"), following any sale by Goodyear
                  of any interest in any shares of SRI Common Stock pursuant to
                  clause (a)(i) above, upon 14 calendar days prior written
                  notice, SRI may (subject to clause (a)(v) below) sell its
                  interest (including any beneficial interest as defined under
                  the 1934 Act), in one or more transactions or installments, in
                  any shares of Goodyear Common Stock until the earlier of 30
                  June 2008 or such date as Goodyear restores its percentage
                  interest in SRI's total issued and outstanding shares of
                  Common Stock to the Original Percentage. If SRI makes a sale
                  pursuant to this clause (a)(iv) it shall promptly give written
                  notice thereof to Goodyear;

         (v)      SRI may only sell its interest in shares of Goodyear Common
                  Stock pursuant to clause (a)(iv) above to the extent such
                  interest to be sold does not reduce SRI's percentage interest
                  in Goodyear's total issued and outstanding shares of



                                       2


                  Common Stock as existed immediately following conversion of
                  the Goodyear Note by more than the fraction given by the
                  following calculation:

                          10 minus Post Sale Percentage
                                        /
                                       10

         (vi)     notwithstanding any restriction imposed by the Confidentiality
                  Agreement, following any sale by SRI of any interest in any
                  shares of Goodyear Common Stock pursuant to clause (a)(iv)
                  above, SRI may in the period up to and including 30 June 2008
                  purchase (by such method as may be agreed between the parties
                  from time to time), in one or more transactions or
                  instalments, such number of shares of Goodyear Common Stock as
                  is necessary to restore SRI's percentage interest in
                  Goodyear's total issued and outstanding shares of Common Stock
                  (from time to time) to the same percentage interest as existed
                  immediately following conversion of the Goodyear Note. If, by
                  purchases made pursuant to clause (a)(ii) above, Goodyear
                  restores its percentage interest in SRI's total issued and
                  outstanding shares of Common Stock to the Original Percentage
                  on a date before 30 June 2008, SRI will endeavour to restore
                  its percentage interest in Goodyear's total issued and
                  outstanding shares of Common Stock (from time to time) to the
                  same percentage interest as existed immediately following
                  conversion of the Goodyear Note as soon as reasonably
                  practicable after such date; and

         (vii)    notwithstanding any restriction imposed by the Confidentiality
                  Agreement, SRI may from time to time purchase such shares of
                  Goodyear's Common Stock as is necessary to maintain SRI's
                  percentage interest in Goodyear's total issued and outstanding
                  shares of Common Stock as existed immediately following the
                  conversion of the Goodyear Note. If SRI makes a purchase
                  pursuant to this clause (a)(vii) it shall promptly give
                  written notice thereof to Goodyear."

1.2      The parties hereby amend Article 10.02 of the Umbrella Agreement so as
         to delete Article 10.02(c) in its entirety and to restate such Article
         as follows:

"(c)     In the event SRI issues additional shares of its Common Stock and if,
         as a result of such issuance, Goodyear's percentage interest in SRI
         Common Stock is reduced, Goodyear shall be entitled to purchase, on the
         open market or in negotiated private transactions, such additional
         shares as shall allow it to obtain such number of shares of SRI Common
         Stock as would increase its percentage shareholding in SRI to the
         Original Percentage. SRI shall furnish to Goodyear (i) within 45 days
         of the close of





                                       3


         each calendar quarter, notice of the total number of issued and
         outstanding shares of SRI Common Stock and (ii) promptly following
         recommendation by the SRI Board of Directors of a date on which a
         dividend on SRI Common Stock will be paid, but not later than fourteen
         (14) days preceding such dividend payment date, notice of such dividend
         payment date and of the total number of shares of SRI Common Stock (x)
         issued and outstanding on the date of such recommendation and (y),
         unless prohibited by law, projected to be issued and outstanding on the
         forthcoming dividend payment date. In the event that Goodyear notifies
         SRI that Goodyear is unable to purchase on the open market or in
         negotiated private transactions, such additional shares as shall allow
         it to maintain its shareholding at the Original Percentage, then SRI
         shall, to the extent permitted by applicable law, at SRI's election,
         either:

         (i)      issue to Goodyear at the then current market price such
                  additional shares as shall allow Goodyear to maintain its
                  shareholding at the Original Percentage; or

         (ii)     use its best efforts (but without the incurrence of
                  unreasonable cost or liability) to arrange for Goodyear to
                  purchase at the then current market price from a third party
                  such additional shares as shall allow Goodyear to maintain its
                  shareholding at the Original Percentage; or

         (iii)    use its best efforts (but without the incurrence of
                  unreasonable cost or liability) to take such other measures,
                  as shall allow Goodyear to maintain its shareholding at the
                  Original Percentage.

         In addition, SRI shall promptly (and in any event within five working
         days) upon a request from Goodyear, furnish Goodyear with the total
         number of issued and outstanding shares of SRI Common Stock on the date
         of such request.

         The foregoing provisions of this Article 10.02(c) shall only apply:

         (A)      before the date of the first sale (if any) by Goodyear of any
                  interest in any shares of SRI Common Stock pursuant to clause
                  (a)(i) above; and

         (B)      after such time (being no later than 30 June 2008) as
                  Goodyear's percentage interest in any shares of SRI Common
                  Stock (from time to time) is restored to the Original
                  Percentage pursuant to purchases made in accordance with
                  clause (a)(ii) above."




                                       4


2.       AMENDMENT TO GOODYEAR'S RIGHT TO NOMINATE SRI DIRECTOR

2.1      The parties hereby amend Article 10.03 of the Umbrella Agreement so as
         to add, at the end of Article 10.03(a), the following:

         "If the Alliance is terminated at any time pursuant to a Global Exit
         Right, Goodyear shall procure that the director appointed pursuant to
         this Article 10.03(a) shall resign from the SRI Board of Directors
         (without compensation)."

2.2      The parties hereby amend Article 10.03 of the Umbrella Agreement so as
         to delete Article 10.03(d) in its entirety and to restate such Article
         as follows:

"(d)     Following any sale by Goodyear of any interest in any shares of SRI
         Common Stock pursuant to clause (a)(i) of Article 10.02 (as a
         consequence of which Goodyear will own less than ten percent (10%) of
         the total issued and outstanding shares of SRI Common Stock), SRI may,
         until the earlier of 30 June 2008 and such time as Goodyear restores
         its shareholding to ten percent (10%) of the total issued and
         outstanding shares of SRI Common Stock (from time to time), at its sole
         discretion, invite a Goodyear executive (or another person reasonably
         satisfactory to SRI) as Goodyear may nominate to stand for election to
         its Board of Directors (and SRI shall use its reasonable efforts (but
         without the incurrence of unreasonable cost or liability) to ensure
         such person will be elected to its Board of Directors (or any successor
         governing board)). Following such person's appointment to the Board of
         Directors paragraphs (b) and (c) of this Article 10.03 shall apply in
         relation to such director.

         If, at any time on or before 30 June 2008, Goodyear restores its
         shareholding to ten percent (10%) of the total issued and outstanding
         shares of SRI Common Stock (from time to time), this Article 10.03(d)
         shall cease to have effect and the director appointed pursuant to this
         Article 10.03(d) shall be deemed to have been appointed pursuant to
         Article 10.03(a), which shall continue to apply thereafter.

         If, by 30 June 2008, Goodyear has not restored its shareholding to ten
         percent (10%) of the total issued and outstanding shares of SRI Common
         Stock (from time to time), or, if the Alliance is terminated at any
         time pursuant to a Global Exit Right, Goodyear shall procure that the
         director appointed pursuant to this Article 10.03(d) shall resign from
         the SRI Board of Directors (without compensation) and Article 10.03(a)
         shall cease to apply."

2.3      The parties hereby amend Article 10.03 of the Umbrella Agreement so as
         to add, at the end of Article 10.03(e), the following:

         "The foregoing provisions of this Article 10.03(e) shall not apply from
         the date of the first sale (if any) by Goodyear of any interest in any
         shares of SRI Common Stock pursuant to clause (a)(i) of Article 10.02
         until such time (if any) as Goodyear's





                                       5


         percentage interest in any shares of SRI Common Stock (from time to
         time) is restored to the Original Percentage pursuant to purchases made
         in accordance with clause (a)(ii) of Article 10.02."

3.       GENERAL

3.1      The parties hereby amend the Umbrella Agreement to give effect to the
         provisions of this Amendment No. 2 but in all other respects the other
         terms and conditions of the Umbrella Agreement shall continue without
         change.

3.2      The parties hereby acknowledge that expressions used in this Amendment
         No. 2 will have the same meanings as are ascribed thereto in the
         Umbrella Agreement unless otherwise specifically defined herein.


         IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2
to the Umbrella Agreement to be duly executed as of the day and year first above
written in this Amendment No. 2.

                                   THE GOODYEAR TIRE & RUBBER COMPANY

                                   By:               /s/ Clark E. Sprang
                                       -----------------------------------------
                                            Clark E. Sprang
                                   Title:   Senior Vice President
                                            Business Development and Integration

                                   Attest:           /s/ Anthony E. Miller
                                           -------------------------------------
                                            Anthony E. Miller
                                            Assistant Secretary


                                   SUMITOMO RUBBER INDUSTRIES, LTD.

                                   By:               /s/ Ryochi Sawada
                                       -----------------------------------------
                                            Ryochi Sawada
                                   Title:   Representative Director and
                                            Executive Director

                                   Attest:           /s/ Makoto Teshima
                                           -------------------------------------
                                            Makoto Teshima
                                            General Manager
                                            Legal Department


                                       6

EX-10.2

                                                                    EXHIBIT 10.2




April 21, 2000


Sumitomo Rubber Industries, Ltd
6-9, 3-Chome
Wakinohama-cho, Chuo-Ku
Kobe 651
Japan

Attention:  Naoto Saito, Chairman

Re: Shareholders Agreement for the Europe JVC dated as of June 14, 1999 by and
among The Goodyear Tire & Rubber Company ("Goodyear"), Goodyear S.A., a
Luxembourg corporation, Goodyear S.A., a French corporation, Goodyear Canada
Inc. and Sumitomo Rubber Industries, Ltd. (the "European Shareholders
Agreement") and this Amendment No.1.

Dear Saito-san:

Goodyear hereby requests that the other parties to the European Shareholders
Agreement hereby agree to adopt this Amendment No. 1 to such agreement so as to
allow the Birmingham factory site of Goodyear Dunlop Tires Europe B.V. ("GDTE")
and/or Affiliates controlled by it to be closed, discontinued and/or disposed of
notwithstanding any provision of Article 9.10 of the European Shareholders
Agreement limiting such action during the two (2) years after the operational
start-up date (September 1, 1999) of GDTE. The undersigned, as parties to the
European Shareholders Agreement and/or shareholders of GDTE also hereby
authorize and confirm that such a closure, discontinuance and/or disposal of the
Birmingham factory site is authorized for the purpose of Article 3.6 (xiv)
and/or (xv) of the European Shareholders Agreement.

The parties agree that the European Shareholders Agreement shall be amended to
give effect of the foregoing but in all other respects the other terms and
conditions of the European Shareholders Agreement shall continue without change.
All expressions used in this Amendment No. 1 shall have the same meanings as are
ascribed to them in the European Shareholders Agreement unless otherwise
specifically defined herein.

If you are in agreement with the foregoing, please so indicate by signing this
letter and the accompanying duplicate copies, one copy of which is for your
files.






                                          THE GOODYEAR TIRE & RUBBER COMPANY


                                          By:           /s/ Samir Gibara
                                                 -------------------------------
                                                 Samir Gibara
                                          Title: Chairman of the Board, Chief
                                                 Executive Officer and President

Confirmed and agreed to by
all the undersigned as of the
date first above written

SUMITOMO RUBBER INDUSTRIES, LTD.


By:           /s/ Naoto Saito
       ------------------------------
       Naoto Saito
Title: Chairman


GOODYEAR S.A.,
a Luxembourg corporation


By:           /s/ Samir Gibara
       ------------------------------
       Samir Gibara
Title: Attorney-in-fact


GOODYEAR S.A.,
a French corporation


By:           /s/ Samir Gibara
       ------------------------------
       Samir Gibara
Title: Attorney-in-fact


GOODYEAR CANADA INC.


By:           /s/ Samir Gibara
       ------------------------------
       Samir Gibara
Title: Attorney-in fact

EX-10.3

                                                                    EXHIBIT 10.3

                       RESTRICTED STOCK PURCHASE AGREEMENT


         THIS AGREEMENT is made and entered into this __day of ___________,
between The Goodyear Tire & Rubber Company, an Ohio corporation, with its
principal office at 1144 East Market Street, Akron, Ohio 44316-0001 (hereinafter
referred to as the "Company"), and __________________________ residing at
_________ (hereinafter referred to as "Executive").

                                                  WITNESSETH:  THAT

         WHEREAS, Executive became an employee of the Company on ____________
and was elected __________ of the Company by the Board of Directors of the
Company effective _______________; and

         WHEREAS, the Compensation Committee of the Board of Directors of the
Company deemed it in the best interest of the Company and in furtherance of the
purposes of the 2002 Performance Plan of The Goodyear Tire & Rubber Company (the
"Plan") to award restricted shares of the Common Stock, without par value, of
the Company (the "Common Stock") to Executive pursuant to the Plan on and
subject to the terms, conditions and restrictions set forth herein; and

         WHEREAS, in accordance with action duly taken by the Compensation
Committee of the Board of Directors and by the Board of Directors, the following
sets forth the terms, conditions and restrictions of the award.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereby agree as follows:


SECTION 1.  AWARD; PURCHASE AND SALE OF SHARES.

         The Company awards pursuant to the Plan and agrees to sell to
Executive, and Executive agrees to subscribe for and purchase from the Company,
on and subject to the terms and conditions set forth in this Agreement,
_________ shares of the Common Stock (the "Shares") at a purchase price of one
cent ($.01) per share. The aggregate purchase price of _____________ for the
Shares shall be paid by Executive by check, payable to the order of the Company,
or by such other method as may be acceptable to the Company. The purchase and
sale shall be consummated at the principal offices of the Company at such time
as shall be agreed upon by the Company and Executive, but in no event later
_____________. Upon receipt of the purchase price, the Company will cause a
certificate or certificates for the Shares to be issued to Executive as the
registered owner thereof. Upon the purchase and issuance of the Shares,
Executive will be entitled to receive dividends and exercise voting rights.
Executive agrees that the Shares shall be subject to the restrictions on
transfer set forth in Section 2 of this Agreement and to the Purchase Option set
forth in Section 3 of this Agreement. Executive hereby agrees that the Company
shall retain, at its



principal offices, possession of the certificate or certificates representing
the Shares, duly endorsed in blank by Executive or with duly executed stock
power(s) attached, all in a form suitable for the transfer of the Shares.


SECTION 2.  RESTRICTIONS ON TRANSFER.

         Executive shall not have the right or power to, and shall not, sell,
assign, transfer, pledge, hypothecate, or otherwise dispose of, by operation of
law or otherwise, any of the Shares, or any interest therein, so long as and to
the extent that the Shares are subject to the Purchase Option of the Company
provided for at Section 3 of this Agreement.


SECTION 3.  COMPANY PURCHASE OPTION.

         A. The Company shall have the right and option to purchase all of the
Shares from Executive for one cent ($.01) per share (the "Option Price"), if
Executive ceases to be employed by the Company for any reason (the "Purchase
Option"), except as expressly provided in Subsection B of this Section 3. Except
as otherwise provided in Subsection C of this Section 3, the Purchase Option of
the Company will expire on _____________ if Executive has been continuously
employed from the date of this Agreement through ________________.

         B. In the event Executive ceases to be an employee of the Company at
any time subsequent to _____________ by reason of his death or total disability
(as defined in the Company's Long Term Disability Benefits for Salaried
Employees Plan (the "LTDB Plan")), the Purchase Option shall thereupon terminate
in respect of that number of the Shares which is equal to the product of (i)
_____, multiplied by (ii) a fraction the numerator of which is the number of
full calendar months elapsed during the period beginning on _______________ and
ending on the date of the death or total disability (as defined in the LTDB
Plan) of Executive, and the denominator of which is 36.

         C. In the event that on or before __________ the Company determines
that it would not be able to deduct for Federal Income Tax purposes the entire
value of the Shares (less the purchase price paid by Executive by reason of the
provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"), or any successor statute, in the ____ tax year of
the Company, then the restrictions on transfer set forth in Section 2 of this
Agreement shall continue and the Purchase Option of the Company shall be
automatically extended until such date as the value of such Shares would be
deductible by the Company for Federal Income Tax purposes. The Purchase Option
of the Company shall be extended pursuant to this Subsection C only to the
extent, and only in respect of that number of the Shares, necessary in order to
assure the deductibility by the Company for Federal Income Tax purposes of the
value of the Shares (net of the purchase price paid by Executive).




         D. Notwithstanding anything herein to the contrary, in the event that a
Change in Control (as defined at Section 13 of the Plan) shall occur at any time
after ________________, the Purchase Option of the Company shall automatically
terminate in respect of all of the Shares on the date on which such Change in
Control occurs.

         E. The Company may exercise the Purchase Option by delivering or
mailing to Executive, or to his estate at his address, written notice of
exercise within 60 days after the termination of ("Executive's") employment with
the Company, which notice shall specify the number of Shares to be purchased.
The Company shall thereafter tender to Executive or his estate the option price
in respect of that number of Shares being purchased within 90 days after
("Executive's") termination of employment with the Company. If and to the extent
the Purchase Option is not exercised within the aforesaid 60-day period, or the
purchase is not completed within the aforesaid 90-day period, as the case may
be, the Purchase Option of the Company shall automatically expire.

         F. After the time when any of the Shares are required to be transferred
to the Company pursuant to Subsection A of this Agreement, the Company shall not
pay any dividend to Executive on account of those Shares, or permit Executive to
exercise any of the privileges or rights of a shareholder with respect to those
Shares, but shall, insofar as permitted by law, treat the Company as the owner
of the Shares.


SECTION 4.  EFFECT OF PROHIBITED TRANSFER.

         The Company shall not be required (a) to transfer on its books any of
the Shares that shall have been, or are purported or represented to have been,
sold or transferred in violation of any of the provisions of this Agreement; or
(b) to treat as owner of such Shares or to pay dividends to any transferee to
whom any such Shares shall have been, or are purported or represented to have
been, so sold or transferred.


SECTION 5.  RESTRICTIVE LEGEND.

         All certificates representing the Shares shall have affixed thereto a
legend in substantially the following form, in addition to any other legends
that may be required under Federal or state securities laws:

                           The shares of stock represented by this certificate
                           are subject to restrictions on transfer and
                           conditions of forfeiture set forth in the Restricted
                           Stock Purchase Agreement, dated ______________,
                           between the Company and Executive, which agreement is
                           on file with, and available for inspection without
                           charge at the office of, the Secretary of the Company
                           at 1144 East Market Street, Akron, Ohio 44316-0001.






SECTION 6.  CERTAIN RESALE LIMITATIONS.

         A. The Shares have been registered under the Securities Act for
issuance pursuant to the Plan. Executive acknowledges that in the event he shall
be deemed to be an "affiliate" of the Company (within the meaning of that term
as used in Rule 144 promulgated under the Securities Act of 1933), a sale of all
or a portion of the Shares will be subject to certain provisions of said Rule
144 under the Securities Act.

         B. Executive agrees that he will not sell, transfer, or otherwise
dispose of any of the Shares except in conformance with all applicable
provisions of the Securities Act and that the Company shall have no obligation
to cause the registration of the Shares for resale by Executive if he is an
"affiliate".

         C. A legend substantially in the following form will be placed on the
certificate or certificates representing the Shares:

                           The shares represented by this certificate may not be
                           sold, transferred, or otherwise disposed of in the
                           absence of an effective registration statement under
                           that Act or an opinion of counsel satisfactory to the
                           Company to the effect that registration is not
                           required.


SECTION 7.  ADJUSTMENTS.

         If from time to time during the period the Shares are subject to the
restrictions on transfer set forth in this Agreement or the Purchase Option of
the Company is in effect in whole or in part there is any stock split-up, stock
dividend, stock distribution, or other reclassification of the Common Stock of
the Company, or any merger, consolidation, or sale of substantially all of the
assets of the Company, any and all new, substitute, or additional securities to
which Executive is entitled by reason of his ownership of the Shares shall be
subject immediately to the award (and be included as "Shares" therein), the
restrictions on the transfer of the Shares set forth in this Agreement, the
Purchase Option of the Company, and the other provisions of this Agreement in
the same manner and to the same extent as the Shares. The Purchase Option of the
Company and the Option Price and the other terms of the award shall be adjusted
appropriately. If as a result of any adjustment which requires the calculation
of the number of Shares, the number so computed is not a whole number, the
number of Shares shall be the number computed rounded down to the next whole
number. Any adjustment consistent with the provisions hereof made by the
Compensation Committee of the Board of Directors shall be binding on Executive.








SECTION 8.  WITHHOLDING TAXES.

         A. Executive acknowledges and agrees that the Company has the right to
deduct from payments of any kind otherwise due to him any federal, state, or
local taxes of any kind required by law to be withheld with respect to the
Shares.

         B. If Executive elects in accordance with Section 83(b) of the Internal
Revenue Code to recognize ordinary income in respect of the Shares in 2004, the
Company will require, at the time of that election, that Executive make an
additional payment to the Company for withholding taxes, the amount of which
shall be based on the difference, if any, between the purchase price of the
Shares and the fair market value of the Shares as of the date of the purchase of
the Shares by Executive.


SECTION 9.  SEVERABILITY.

         The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, and each other provision of this Agreement shall be severable and
enforceable to the extent permitted by law.


SECTION 10.  WAIVER.

         Any provision contained in this Agreement may be waived, either
generally or in any particular instance, by the Board of Directors of the
Company.


SECTION 11.  BINDING EFFECT.

         This Agreement shall be binding upon, and inure to the benefit of, the
Company and Executive and their respective heirs, executors, administrators,
legal representatives, successors and assigns.


SECTION 12.  NO RIGHTS TO EMPLOYMENT.

         Nothing contained in this Agreement shall be construed as giving
Executive any right to be retained, in any position, as an employee of the
Company.


SECTION 13.  NOTICE.

         Any notice required or permitted hereunder shall be deemed served if
personally delivered, delivered by courier service or mailed by registered or
certified mail, postage




prepaid, and properly addressed to the respective party to whom such notice
relates, at the addresses set forth in this Agreement or at such different
addresses as shall be specified by a notice given in the manner herein provided.


SECTION 14.  ENTIRE AGREEMENT.

         This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether oral or written,
pertaining to the Shares or otherwise relating to the subject matter of this
Agreement.


SECTION 15.  AMENDMENT.

         This Agreement may be amended or modified only by a written instrument
executed by both the Company and Executive.


SECTION 16.  GOVERNING LAW.

         This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of Ohio.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.

                                      THE GOODYEAR TIRE & RUBBER COMPANY



                                      By:
                                         --------------------------------------
                                         Chairman of the Board, President and
                                         Chief Executive Officer



                                      Attest:
                                             ----------------------------------
                                             Secretary



                                             ----------------------------------
                                                        Name

EX-10.4

                                                                   EXHIBIT 10.4

               SCHEDULE OF OUTSIDE DIRECTORS' ANNUAL COMPENSATION
                           (EFFECTIVE JANUARY 1, 2004)

Component

Board Retainer

     Presiding Director                 $125,000 ($31,250 per calendar quarter)

     All Other Directors                $70,000 ($17,500 per calendar quarter)


Committee Chair Retainer

     Audit Committee Chair              $15,000 ($3,750 per calendar quarter)

     Other Committee Chairs             $5,000 ($1,250 per calendar quarter)


ODEPP Stock Unit Accruals*              $70,000


Meeting Fees (Board or Committee)**

     Attended Meeting                   $1,700

     Telephonic Meeting                 $1,000


*Under the Outside Directors Equity Participation Plan (the "Plan"), on the
first business day of each calendar quarter each director will have $17,500
accrued to his or her plan account. Amounts accrued are converted into units
equivalent in value to shares of Common Stock at the fair market value on the
accrual date. Each director may also choose to have 25%, 50%, 75% or 100% of his
or her retainer and meeting fees deferred and converted into share equivalents
under the Plan.

**Meeting fees only apply for total meetings attended in excess of 24 per year.

EX-10.5

                                                                   EXHIBIT 10.5

               SCHEDULE OF 2005 SALARY AND TARGET BONUS FOR NAMED
       EXECUTIVE OFFICERS (AS DEFINED IN ITEM 402(A)(3) OF REGULATION S-K)

Effective May 1, 2005, the annual salary compensation for each of the Named
Executive Officers is:

         Robert J. Keegan, Chairman of the Board, Chief Executive Officer and
         President, $1,100,000;

         Jonathan D. Rich, President, North American Tire, $445,200;

         C. Thomas Harvie, Senior Vice President, General Counsel and Secretary,
         $446,100;

         Richard J. Kramer, Executive Vice President and Chief Financial
         Officer, $461,100; and

         Michael J. Roney, President, European Union Tire, $418,100.

Target bonuses for 2005 under the Company's Performance Recognition Plan for
each of the Named Executive Officers are:

         Mr. Keegan,  $1,500,000;

         Mr. Rich, $385,000;

         Mr. Harvie, $290,000;

         Mr. Kramer, $330,000; and

         Mr. Roney $361,000.

         Payment of 2005 bonuses will be made from a payment pool, the size of
which will depend on the extent to which the specific financial performance
targets established by the Committee are met. The target aggregate payment pool
for 2005 is $27.8 million. Earnings before interest and taxes less finance
charges ("EBIT") and operating cash flow are the financial performance measures
under the Performance Recognition Plan for fiscal year 2005. Funding of the 2005
payment pool will be based 50% on each performance measure and could range from
zero to 200% of the target amount depending on the level of operating cash flow
and EBIT achieved. In addition, payouts for each of the Named Executive Officers
may be adjusted based on individual performance.

EX-12

Exhibit 12

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT(1)(2)(3)(4)

      The subsidiary companies of The Goodyear Tire & Rubber Company at December 31, 2004, and the places of incorporation or organization thereof, are:

	Place of
	Incorporation
Name of Subsidiary	or Organization
UNITED STATES
Allied Tire Sales, Inc.		Florida
Belt Concepts of America, Inc.		Delaware
Celeron Corporation		Delaware
Cosmoflex, Inc.		Delaware
Dapper Tire Co., Inc.		California
Divested Atomic Corporation		Delaware
Divested Companies Holding Company		Delaware
Divested Litchfield Park Properties, Inc.		Arizona
*Goodyear Dunlop Tires North America, Ltd.		Ohio
Goodyear Farms, Inc.		Arizona
Goodyear International Corporation		Delaware
The Goodyear Rubber Plantations Company		Ohio
Goodyear-SRI Global Purchasing Company		Ohio
Goodyear-SRI Global Technology LLC		Ohio
Goodyear Western Hemisphere Corporation		Delaware
The Kelly-Springfield Tire Corporation		Delaware
Laurelwood Properties Inc.		Delaware
Retreading L Inc.		Delaware
Retreading L, Inc. of Oregon		Oregon
*Utica Converters Inc.		Delaware
Wheel Assemblies Inc.		Delaware
Wingfoot Commercial Tire Systems LLC		Ohio
Wingfoot Corporation		Delaware
Wingfoot Ventures Eight Inc.		Delaware
Wingfoot Ventures Four Inc.		Delaware
Wingfoot Ventures Thirteen Inc.		Delaware
INTERNATIONAL
Abacom (Pty.) Ltd.		Botswana
Compania Anonima Goodyear de Venezuela		Venezuela
Compania Goodyear del Peru, S.A.		Peru
Compania Goodyear, S.A. de C.V.		Mexico
Corporacion Industrial Mercurio S.A. de C.V.		Mexico
*Dackia Partners AB		Sweden
*Dunlop Airsprings		France
*Dunlop GmbH & Co. KG		Germany

1

	Place of
	Incorporation
Name of Subsidiary	or Organization
*Dunlop Grund und Service Verwaltungs GmbH		Germany
*Dunlop Tyres Limited		England
*Dunlop Versicherungsservice GmbH		Germany
*Fit Remoulds (Ireland) Limited		Ireland
*Fulda Reifen GmbH & Co. KG		Germany
*GD Furstenwalde Vermogensverwaltungs GmbH		Germany
*GHS Goodyear Handelssysteme GmbH		Germany
Goodyear Australia Pty Limited		Australia
Goodyear Aviation Japan, Ltd.		Japan
Goodyear Belting Pty Limited		Australia
Goodyear Brokers Limited		Bermuda
Goodyear Canada Inc.		Canada
Goodyear Chemical Products SAS		France
*Goodyear Dalian Tire Company Ltd.		China
Goodyear de Chile S.A.I.C.		Chile
Goodyear de Colombia S.A.		Colombia
Goodyear do Brasil Productos de Borracha Ltda		Brazil
*Goodyear Dunlop Financial Service GmbH		Germany
*Goodyear Dunlop Tires Austria GmbH		Austria
*Goodyear Dunlop Tires Baltic A.S.		Estonia
*Goodyear Dunlop Tires Belgium N.V.		Belgium
*Goodyear Dunlop Tires Czech s.r.o.		Czech Republic
*Goodyear Dunlop Tires Danmark A/ S		Denmark
*Goodyear Dunlop Tires Espana S.A.		Spain
*Goodyear Dunlop Tires Europe B.V.		Netherlands
*Goodyear Dunlop Tires Finance Europe B.V.		Netherlands
*Goodyear Dunlop Tires Finland OY		Finland
*Goodyear Dunlop Tires France		France
*Goodyear Dunlop Tires Germany GmbH		Germany
*Goodyear Dunlop Tires Hellas S.A.I.C.		Greece
*Goodyear Dunlop Tires Ireland Limited		Ireland
*Goodyear Dunlop Tires Italia SRL		Italy
*Goodyear Dunlop Tires Hungary Trading Ltd.		Hungary
*Goodyear Dunlop Tires Nederland B.V.		Netherlands
*Goodyear Dunlop Tires Norge A/ S		Norway
*Goodyear Dunlop Tires Polska Sp z.o.o.		Poland
*Goodyear Dunlop Tires Portugal, Unipessoal, Lda.		Portugal
*Goodyear Dunlop Tires Romania Srl		Romania
*Goodyear Dunlop Tires Slovakia s.r.o.		Slovakia
*Goodyear Dunlop Tires Slovenia d.o.o.		Slovenia
*Goodyear Dunlop Tires Suisse S.A.		Switzerland
*Goodyear Dunlop Tires Sverige A.B.		Sweden

2

	Place of
	Incorporation
Name of Subsidiary	or Organization
*Goodyear Dunlop Tyres UK Ltd.		England
Goodyear Earthmover Pty Ltd		Australia
Goodyear Engineered Products Europe d.o.o.		Slovenia
Goodyear Finance Holding S.A.		Luxembourg
Goodyear France Aviation Products S.A.		France
*Goodyear GmbH & Co. KG		Germany
Goodyear India Limited		India
Goodyear Industrial Rubber Products Ltd.		England
*Goodyear Italiana S.p.A.		Italy
Goodyear Jamaica Limited		Jamaica
Goodyear Korea Company		Korea
Goodyear Lastikleri Turk Anonim Sirketi		Turkey
*Goodyear Luxembourg Tires S.A.		Luxembourg
Goodyear Malaysia Berhad		Malaysia
Goodyear Marketing & Sales Snd. Bhd.		Malaysia
Goodyear Maroc S.A.		Morocco
Goodyear Middle East FZE		Dubai
Goodyear Nederland B.V.		Netherlands
Goodyear New Zealand, Ltd.		New Zealand
Goodyear Orient Company (Private) Limited		Singapore
Goodyear Philippines, Inc.		Philippines
Goodyear Productos Industriales S. De R.L. De C.V.		Mexico
Goodyear Productos Industriales, C.A.		Venezuela
Goodyear Qingdao Engineered Elastomers Company Ltd.		China
Goodyear Russia LLC		Russia
Goodyear Sales Company Limited		Taiwan
Goodyear S.A.		France
Goodyear S.A.		Luxembourg
Goodyear Servicios Comerciales S. De R.L. De C.V.		Mexico
Goodyear Servicios Y Asistencia Tecnica S. De R.L. De C.V.		Mexico
Goodyear Singapore Pte Limited		Singapore
Goodyear Solid Woven Belting (Pty) Limited		South Africa
Goodyear South Africa (Proprietary) Limited		South Africa
Goodyear South Asia Tyres Private Limited		India
Goodyear SRI Global Purchasing Yugen Kaisha & Co. Ltd		Japan
Goodyear Taiwan Limited		Taiwan
Goodyear (Thailand) Public Company Limited		Thailand
Goodyear Tyres Pty Ltd		Australia
Goodyear Tyre and Rubber Holdings (Pty.) Ltd		South Africa
Goodyear Wingfoot KK		Japan
Gran Industria de Neumaticos Centroamericana, S.A.		Guatemala
Hi-Q Automotive (Pty.) Ltd.		South Africa
*KDIS Distribution		France

3

	Place of
	Incorporation
Name of Subsidiary	or Organization
Kelly-Springfield Puerto Rico, Inc.		Puerto Rico
Kelly-Springfield Tyre Co. (Australia) Pty. Ltd.		Australia
Magister Limited		Mauritius
*Multimarkenmanagement GmbH & Co KG		Germany
Neumaticos Goodyear S.R.L.		Argentina
Nippon Giant Tire Co., Ltd.		Japan
*Pneu Holding		France
Property Leasing S.A.		Luxembourg
P.T. Goodyear Indonesia Tbk		Indonesia
P.T. Goodyear Sumatra Plantations		Indonesia
Rubber & Associated Manufacturing (Pty) Ltd.		South Africa
RVM Reifen Vertriebsmanagement GmbH		Germany
Sava Tires, d.o.o.		Slovenia
*S.A. Vulco Belgium N.V.		Belgium
Servicios Y Montjes Eagle, S. de R.L.		Mexico
South Pacific Tyres		Australia
South Pacific Tyres New Zealand Limited		New Zealand
*SP Brand Holding GEIE		Belgium
Three Way Tyres (Botswana)		Botswana
Tire Company Debica S.A.		Poland
Tredcor Export Services (Pty) Ltd.		South Africa
Tredcor Southern Zimbabwe (Pvt.) Limited		Zimbabwe
Tredcor (Zambia) Limited		Zambia
Trentyre Limited (Mozambique)		Mozambique
Trentyre Holdings (Pty) Ltd		South Africa
Trentyre (Pty.) Ltd.		South Africa
Trentyre North Zimbabwe (Pvt.) Limited		Zimbabwe
Tyre Services (Botswana)		Botswana
Vulco Development		France
*Vulco France		France
Wingfoot de Chihuahua, S. de R.L. de C.V.		Mexico
Wingfoot Insurance Company Limited		Bermuda
Wingfoot Luxembourg SARL		Luxembourg
Wingfoot Mold Leasing Company		Canada
*4 Fleet Group GmbH		Germany

(1)

Each of the subsidiaries named in the foregoing list conducts its business under its corporate name and, in a few instances, under a shortened form of its corporate name or in combination with a trade name.

(2)

Each of the subsidiaries named in the foregoing list is directly or indirectly wholly-owned by Registrant, except that: (i) each of the subsidiaries listed above marked by an asterisk preceding its name is 75% owned by Registrant; and (ii) in respect of each of the following subsidiaries Registrant owns the indicated percentage of such subsidiary’s equity capital: Goodyear-SRI Global Purchasing Company, 80%; Goodyear-SRI Global Technology LLC, 51%; Compania Goodyear del Peru, S.A., 78%; Goodyear Aviation Japan Ltd., 85%; Goodyear India Limited, 74%; Goodyear Jamaica Limited, 60%; Goodyear

4

	Lastikleri Turk Anonim Sirketi, 74.61%; Goodyear Malaysia Berhad, 51%; Goodyear Maroc S.A., 55%; Goodyear Qingdao Engineered Elastomers Company Ltd., 60%; Goodyear Taiwan Limited, 75.5%; Goodyear Sales Company Limited, 75.5%; Goodyear (Thailand) Public Company Limited, 66.8%; Gran Industria de Neumaticos Centroamericana, S.A., 79%; P.T. Goodyear Indonesia Tbk, 85%; Goodyear Philippines Inc., 88.54%; P.T. Goodyear Sumatra Plantations, 95%; Nippon Giant Tire Co., Ltd., 65%; Goodyear SRI Global Purchasing Yugen Kaisha & Co. Ltd, 80%; Goodyear Marketing & Sales Snd. Bhd, 51%; Sava Tires, d.o.o., 75%; South Pacific Tyres, 50.01%; South Pacific Tyres New Zealand Limited, 50.01%; Tire Company Debica S.A., 59.87%; Goodyear South Asia Tires Private Limited, 99.4%; Vulco Development, 62.2%; Wingfoot Luxembourg SARL, 95%; Trentyre North Zimbabwe (Pvt.) Limited, 51%; Tredcor Southern Zimbabwe (Pvt.) Limited, 60%; Trentyre (Pty.) Ltd., 92%; and Trentyre Limited (Mozambique), 70%.
(3)	In accordance with paragraph (ii) of Part 21 of Item 601(b) of Regulation S-K, the names of approximately 50 subsidiaries have been omitted from the foregoing list.
(4)	Except for Wingfoot Corporation, at December 31, 2004, Goodyear did not have any majority owned subsidiaries that were not consolidated.

5 EX-23.1 12 l12143aexv23w1.htm EX-23.1 CONSENT OF PRICEWATERHOUSECOOPERS LLP

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-90786 and 33-8111) and in the Registration Statements on Form S-8 (Nos. 333-97417, 333-84352, 333-84346, 333-62806, 333-62808, 333-29993, 33-65187, 33-65185, 33-65183, 33-65181, 33-31530, 33-17963, 2-79437 and 2-47905) of The Goodyear Tire & Rubber Company of our report dated March 16, 2005, relating to the consolidated financial statements, financial statement schedules, management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Cleveland, Ohio

March 16, 2005

EX-23.1

Exhibit 23.1

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Partners

South Pacific Tyres:

We consent to the incorporation by reference in the registration statements (Nos. 333-90786 and 33-8111) on Form S-3 and (Nos. 333-97417, 333-84352, 333-84346, 333-62806, 333-62808, 333-29993, 33-65187, 33-65185, 33-65183, 33-65181, 33-31530, 33-17963, 2-79437 and 2-47905) on Form S-8 of The Goodyear Tire & Rubber Company of our report dated October 13, 2004, except for notes 31, 32 and 33 which are as of March 15, 2005, with respect to the consolidated statements of financial position of South Pacific Tyres as of June 30, 2004, 2003 and 2002, and the related consolidated statements of financial performance, partners’ equity and cash flows for each of the years in the three-year period ended June 30, 2004, which report appears in the December 31, 2004, Annual report on Form 10-K of The Goodyear Tire & Rubber Company.

Our report refers to the Partnerships’ restatement of its description of significant differences between generally accepted accounting principles in Australia and generally accepted accounting principles in the United States and their effects on financial performance and partners’ equity for each of the years in the two-year period ended June 30, 2003.

/s/ KPMG

Melbourne, Australia

March 16, 2005

EX-24.1

Exhibit 24.1

THE GOODYEAR TIRE & RUBBER COMPANY

POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors of THE GOODYEAR TIRE & RUBBER COMPANY, a corporation organized and existing under the laws of the State of Ohio (the “Company”), hereby constitute and appoint RICHARD J. KRAMER, C. THOMAS HARVIE, and THOMAS A. CONNELL, and each of them, their true and lawful attorneys-in-fact and agents, each one of them with full power and authority to sign the names of the undersigned directors to the Company’s Annual Report to the Securities and Exchange Commission on Form 10-K for its fiscal year ended December 31, 2004, and to any and all amendments, supplements and exhibits thereto and any other instruments filed in connection therewith; provided, however, that said attorneys-in-fact shall not sign the name of any director unless and until the Annual Report shall have been duly executed by the officers of the Company then serving as the chief executive officer of the Company, the principal financial officer of the Company and the principal accounting officer of the Company; and each of the undersigned hereby ratifies and confirms all that the said attorneys-in-fact and agents, or any one or more of them, shall do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned have subscribed these presents this 9^th day of December, 2004.

/s/ Susan E. Arnold	/s/ James C. Boland
Susan E. Arnold, Director	James C. Boland, Director
/s/ John G. Breen	/s/ Gary D. Forsee
John G. Breen, Director	Gary D. Forsee, Director
/s/ William J. Hudson, Jr.	/s/ Robert J. Keegan
William J. Hudson, Jr., Director	Robert J. Keegan, Director
/s/ Steven A. Minter	/s/ Rodney O’Neal
Steven A. Minter, Director	Rodney O’Neal, Director
/s/ Shirley D. Peterson	/s/ Thomas H. Weidemeyer
Shirley D. Peterson, Director	Thomas H. Weidemeyer, Director

THE GOODYEAR TIRE & RUBBER COMPANY

POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of THE GOODYEAR TIRE & RUBBER COMPANY, a corporation organized and existing under the laws of the State of Ohio (the “Company”), hereby constitutes and appoints RICHARD J. KRAMER, C. THOMAS HARVIE, and THOMAS A. CONNELL, and each of them, her true and lawful attorneys-in-fact and agents, each one of them with full power and authority to sign the name of the undersigned director to the Company’s Annual Report to the Securities and Exchange Commission on Form 10-K for its fiscal year ended December 31, 2004, and to any and all amendments, supplements and exhibits thereto and any other instruments filed in connection therewith; provided, however, that said attorneys-in-fact shall not sign the name of the director unless and until the Annual Report shall have been duly executed by the officers of the Company then serving as the chief executive officer of the Company, the principal financial officer of the Company and the principal accounting officer of the Company; and the undersigned hereby ratifies and confirms all that the said attorneys-in-fact and agents, or any one or more of them, shall do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has subscribed these presents this 23rd day of February, 2005.

/s/ Denise M. Morrison

Denise M. Morrison, Director

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Robert J. Keegan, certify that:

      1. I have reviewed this annual report on Form 10-K of The Goodyear Tire & Rubber Company;

      2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

      3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

      4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

      a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

      b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

      c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

      d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

      5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

      a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

      b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Robert J. Keegan

Robert J. Keegan

President and Chief Executive Officer

(Principal Executive Officer)

Date: March 16, 2005

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Richard J. Kramer, certify that:

      1. I have reviewed this annual report on Form 10-K of The Goodyear Tire & Rubber Company;

      2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

      3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

      4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

      a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

      b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

      c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

      d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

      5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

      a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

      b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Richard J. Kramer

Richard J. Kramer

Executive Vice President and Chief

Financial Officer

(Principal Financial Officer)

Date: March 16, 2005

EX-32.1

EXHIBIT 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

      Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of Title 18, United States Code), each of the undersigned officers of The Goodyear Tire & Rubber Company, an Ohio corporation (the “Company”), hereby certifies with respect to the Annual Report on Form 10-K of the Company for the year ended December 31, 2004 as filed with the Securities and Exchange Commission (the “10-K Report”) that to his knowledge:

      (1) the 10-K Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

      (2) the information contained in the 10-K Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 16, 2005	/s/ Robert J. Keegan
	Robert J. Keegan, President and Chief Executive Officer of The Goodyear Tire & Rubber Company
Dated: March 16, 2005	/s/ Richard J. Kramer
	Richard J. Kramer, Executive Vice President and Chief Financial Officer of The Goodyear Tire & Rubber Company