EXHIBIT 10.3
CONTRACTOR SERVICES AGREEMENT, AS AMENDED
BETWEEN UTMB AND EMSI, INC.
FOR
MEDICAL WASTE INCINERATOR OPERATIONS
AND
ON-SITE MEDICAL WASTE TRANSPORTATION SERVICES
CONTRACTOR SERVICES AGREEMENT
This Services Agreement is made by and between THE UNIVERSITY OF TEXAS
MEDICAL BRANCH AT GALVESTON, a component of the University of Texas System which
is an agency of the State of Texas (hereinafter referred to as UTMB) and BMI
SERVICES, INC., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as Contractor), subject to the approval of University
of Texas System Board of Regents.
WITNESSETH:
WHEREAS, UTMB desires to obtain medical waste management and disposal
services; and
WHEREAS, Contractor represents that it possesses the necessary
qualifications and knowledge to perform these services;
NOW THEREFORE, for the consideration herein expressed, UTMB and
Contractor hereby agree as follows:
I. RESPONSIBILITIES OF CONTRACTOR
1.1 SERVICES. Contractor shall render such services as are set forth per the
Special Conditions, dated October 26, 1995 incorporated herein as Attachment A.
II. TERM AND EFFECTIVE DATE
2.1 TERM. The services shall begin on December 8, 1995 (the "Effective Date")
and shall continue for a period of sixty (60) months unless sooner terminated
as provided in Sections 1.5 and 1.6 per the General Terms and Conditions,
incorporated herein as Attachment B.
2.2 RENEWAL. The Agreement may be renewed upon mutual written agreement of
the parties for a period not to exceed sixty (60) months once the initial
term of the Agreement expires, under the same terms and conditions as set
forth in the Agreement, as amended, unless terminated sooner as provided in
the Agreement.
2.3 EFFECTIVE DATE. This Agreement shall be effective from the Effective Date
provided that it is approved by the Board of Regents of the University of
Texas System and shall continue in effect as described herein. The parties
acknowledge and agree that although the contract may be executed by a UTMB
Galveston official, it is not a legally binding contract until approved by
the Board of Regents of the University of Texas System. UTMB will take all
steps reasonable and necessary to have the contract approved by the Board of
Regents in a timely manner.
III. PAYMENT
3.1 PAYMENT FOR SERVICES. UTMB agrees to pay Contractor for services rendered
by Contractor in accordance with the Rate Schedule dated October 26, 1995
incorporated herein as Attachment C.
IV. CONFLICTING DOCUMENTS
4.1 In the event of conflict, the parties agree that the documents should
control in the following order: (1) Articles I through V of this instant
document; (2) Special Conditions, dated October 26, 1995, Attachment A; (3)
General Terms and Conditions, Attachment B; (4) Rate Schedule dated October
26, 1995, Attachment C; (5) UTMB Request for Proposal for Operation,
Management and Maintenance of Medical Waste Incinerator, RFP 5-29, dated
August 4, 1995, as amended, incorporated herein by reference as Attachment D;
and (6) Contractor's Proposal dated September 7, 1995, incorporated herein by
reference as Attachment E.
V. ACCEPTANCE OF FACILITY
5.1 By signing this Agreement, Contractor accepts UTMB's Incinerator Facility
"As Is" and acknowledges that; a) the Incinerator facility is capable of
being in compliance with TNRCC Permit No. MSW-2232, once construction of UTMB
project #5144 is complete and materials handling equipment is installed, and
b) UTMB has made no representation or warranty of any kind either expressed
or implied as to the condition of the incinerator facility except as
expressly stated within the contract documents.
Executed this 11th day of December ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
MEDICAL BRANCH
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------ -------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President of Marketing Vice President of Business Affairs
11 December 1995 December 11, 1995
------------------------------------ -------------------------------------
Date Date
ATTACHMENT A
SPECIAL CONDITIONS
Dated, October 26, 1995
GENERAL
These Special Conditions and the referenced documents herein are intended to
outline the services to be performed by the Contractor as required by UTMB for
the operation, management and maintenance of UTMB's incinerator facility
including the transport, management, and disposal of medical waste by
Contractor.
It is not the intention to mention herein each and every minor item required. In
the performance and delivery of services hereunder, the Contractor represents
that it has the necessary knowledge, skill, abilities and resources to provide
said services in accordance with the requirements hereof and within best
industry standards and practices. Further, the Contractor represents that it is
familiar with the scope and nature of work required by UTMB, and understands the
conditions under which it will be obligated to operate. No allowance will be
made consequently for any error or omissions, including, without limitations,
negligence of the Contractor in this regard; however, not to be exercised
unreasonably by UTMB.
1.2 CONTRACTOR'S RESPONSIBILITIES
1.2.1 Except as otherwise expressly stated in this document, the
Contractor shall, at its own expense, furnish and pay for all labor,
materials, equipment tools, replacement parts, vehicles, utilities, and any
other items and/or services necessary to properly operate, manage, repair and
maintain UTMB's 'incinerator facility and to transport medical waste to the
facility for disposal in strict conformance with UTMB's permit, TNRCC Permit
No. MSW-2232 and Site Operating Plan, submitted on October 8, 1993 and
subsequently revised July 26, 1994 and September 16, 1994. Contractor's
responsibilities, as related to the utility infrastructure, starts at the
points defined below: all electrical equipment down stream fi7orn the
switchgear (excluding the switchgear and all equipment related to the
TRANSVAC and waste compactor); the municipal water line from the shutoff
valve at the equipment to the process equipment; the sewer line fi7om the
process equipment to the city manhole; and the gas line from the meter to the
process equipment (excluding the crematorium).
1.2.2 The Contractor will pay to UTMB a Fixed Facility Use Fee in
the amount of $30,000.00 per month and a Variable Facility Use Fee in the
amount of $.01/pound per month for each pound of waste disposed of at UTMB's
incinerator inclusive of UTMB's waste or the Guaranteed Volume (ref.
Attachment C), whichever the greater. However, the Fixed Facility Use Fee may
be suspended and credited to Contractor at a rate of $500 per day for each
incinerator unit that is inoperable and unable to process waste, through no
fault of Contractor and Contractor has had to redirect waste on an on-going
basis to another facility for a period of greater than ten (10) days during a
given calendar month, provided Contractor gives UTMB's Coordinator written
notification immediately upon an occurrence of a downed/inoperable
incinerator unit(s). Provided appropriate notice, this credit would start on
the 11th day of shut down and continue until such time as unit is back on
line.
1.2.3 Routine Maintenance and/or Preventative Maintenance as
required per the Site Operating Plan or Manufacturer's Specifications and all
other repairs and maintenance, except as specified herein, will be performed
by the Contractor as part of its operating expenses at no additional charge
to UTMB. Repairs
and/or replacement to Fixed Capital Equipment related to the incinerator
facility (e.g., ID fan motor or Refractory) shall be performed and/or
coordinated by Contractor with payment thereof by Contractor in accordance
with the below schedule unless such repairs are the result of Contractor's
negligence or misconduct or failure to properly maintain the equipment, in
which event Contractor will be responsible for the cost, regardless of how
much Contractor spent on repairs and maintenance that year.
Contractor will be responsible for a maximum limit of $180,000 per year for
repairs and maintenance. Any funds not expended at the end of each year will
automatically rollover into the next contact year to be added to the $180,000.00
limit. During the first year of the contract only, UTMB agrees to stair-step the
limits of Contractor responsibility as volumes increase. The following chart
will explain the schedule of payment responsibilities for the Contractor:
Volume Thresholds - lbs 7,200,000 9,300,000 11,400,000 13,500,000
(Total Facility Volume
including UTMB and
designated accounts)
Annual Limit $120,000.00 $140,000.00 $160,000.00 $180,000.00
Quarterly Limit $30,000.00 $35,000.00 $40,000.00 $45,000.00
A. All maintenance performed will be documented properly and
reported monthly to UTMB. In the event that required expenditures are less
than the quarterly limit in any given quarter the residual will roll over
into the next quarter. The Contractor's liability for repairs and maintenance
shall in no event exceed the annual limit. In the event expenditures are in
the excess of the quarterly or annual limit, UTMB will be liable for all such
excess repairs and maintenance through direct payment or reimbursement
through Facility Use Fee credit to Contractor. Contractor shall provide
written notification to UTMB's Coordinator of any expenditure for repairs
which exceed $ 10,000 with UTMB's approval required for any expenditures for
repair when cumulative expenditures per a given quarter exceed the quarterly
limit by $ 10,000.00. UTMB Will authorize such expenditures within 24 hours
of written notice by Contractor's designated personnel. Non action for a
period of 48 hours or more by UTMB after receipt of written notification
shall entitle Contractor to proceed with repairs and deduct any expenditures
in excess of the herein prescribed limit from the next Facility Use Fee
payment with proper documentation of repairs and expenses.
B. UTMB and Contractor agree to review the repair cost schedule
after year three (3) of the contract term and to adjust the schedule and
Contractor's annual limit for years 4 & 5 as appropriate. Also, at that time,
if Contractor has expended less than the aggregate limit for repairs for
years 1-3 then, Contractor shall reimburse UTMB for UTMB's expenditures
relating to Fixed Capital Equipment made under this section. In the event,
after reimbursement to UTMB, Contractor has not incurred repair expenses in
excess of its aggregate limit (years 1-3) then, Contractor agrees to pay to
UTMB one-half (50%) of the balance remaining. For the purpose of splitting
any unexpended portion of the repair funds the maximum limit of Contractor's
liability will be adjusted to the annual limit indicated in the above table
based on the actual volume of waste disposal of per each year (years 1-3
respectively).
1.2.4 The Contractor will actively market medical waste disposal
services to non-UT System institution entities to be disposed at UTMB's
incinerator facility for efficient utilization of the facility.
1.2.5 The Contractor will actively market to UT System institutions
(UTMB's Designated Accounts) medical waste collection, packaging and
transportation services for medical waste to be disposed at UTMB's
incinerator facility.
1.2.6 The Contractor shall, at its own expense, be responsible for
the proper disposal of medical waste and the transport thereof to an
alternate site in the event UTMB's incinerator facility is not operable or
the facilities capacity is exceeded for any reason.
1.2.7 The Contractor agrees to pay any fines or penalties that may
be imposed for Contractor's failure to comply with the permit and to
indemnify UTMB against any and all costs in this regard. Contractor shall
immediately notify UTMB of any correspondence to or from any regulatory
agency regarding the permit and to cooperate with UTMB in connection with any
permit amendment(s) UTMB may require. UTMB agrees to have an opacity
monitoring system installed if it is deemed necessary to assure compliance
with the permit. Until such time as an opacity monitoring system is installed
UTMB will be responsible for any penalties assessed related to emission
opacity.
1.2.8 Contractor shall be responsible for all its parking
arrangements and expenses/costs thereof. UTMB will not provide any parking
facilities to Contractor or its personnel. UTMB will assist in providing free
and clear access to the facility for waste related commercial vehicles and
maintenance equipment.
1.2.9 Contractor shall reimburse UTMB for all utility costs incurred
by UTMB applicable to incinerator facility operations (exclusive of Trans-Vac
and crematorium system usage). UTMB will ▇▇▇▇ Contractor for utilities based
on actual utilities consumed at the actual rate(s) in effect for each
utility, respectively. At its option, UTMB may, in the event UTMB receives a
discounted utility rate by virtue of it being a university and educational
institution and/or a public entity with such rate being lower than the
commercial rate for such utility then, UTMB shall ▇▇▇▇ Contractor at the
commercial rate in effect.
1.2.10 Contractor will be responsible for, at its expense: ash removal;
testing and disposal; Any damage caused by scrubber blow down due to high pH
concentration as it enters the drainage system; and compliance report fees; and
on any cost associated with environmental cleanup or disposal related to
materials associated with the incinerator facility operations (e.g., caustic
solutions, boiler waters, ash spillage, and spent refractory).
1.3 PERSONNEL
1.3.1 The Contractor shall maintain a staff of properly trained and
experienced personnel to ensure satisfactory performance under this Contract.
If specific professional licenses are required to perform the services
required, the Contractor will be responsible for ensuring personnel are in
compliance. UTMB reserves the right to request the Contractor to remove any
employee, not to be exercised unreasonably.
1.3.2 The Contractor shall designate a project coordinator who shall
be responsible for the coordination and administration of UTMB's account. The
project coordinator shall represent the Contractor in all matters pertaining
to the Contract and have the authority to resolve any and all problems/issues
which may arise.
1.3.3 It having been determined that the INDIVIDUALS NAMED IN THE
CONTRACTOR'S PROPOSAL AND/OR SUCH OTHER INDIVIDUALS WHO ARE TO BE ASSIGNED TO
WORK UNDER THIS CONTRACT AS A RESULT OF NEGOTIATIONS, are necessary for the
successful performance of this Contract, the Contractor agrees that whenever
for any reason, one or more of the aforementioned individuals are unavailable
for performance under this Contract, the Contractor agrees to replace such
individual(s) with an individual(s) of substantially equal abilities and
qualifications, in this regard, the Contractor shall submit to the UTMB
Coordinator in duplicate, a resume giving the full name, fide,
qualifications, and experience, for all such successor personnel prior to
assignment of such personnel to perform work under the Agreement, so that the
UTMB Coordinator may decide whether or not such successor personnel meet the
qualifications of the position, or whether or not they are qualified to
perform work assigned, and advise the Contractor accordingly. If UTMB objects
to any individual proposed to perform a particular service, then Contractor
shall submit to the UTMB Coordinator, in the manner described above, the
name(s) of other individuals for UTMB's consideration.
1.4 CONTRACT SECURITY
1.4.1 Within ten (10) days after notification of award of the
Contract the Contractor must furnish to UTMB a bond of the type and in the
amount specified below. Such bond to be in such form and with such surety as
UTMB may approve. If any surety upon any bond furnished in connection with
this Contract becomes insolvent, or otherwise not authorized to do business
in this State, the Contractor shall promptly furnish equivalent security to
protect the interests of the State of Texas in the prosecution of the work
contemplated by this Contract.
PERFORMANCE BOND: The Contractor, prior to signing the Contract, shall
provide a Performance Bond in the amount of $200,000.00 conditioned upon the
faithful performance of the Contract.
1.4.2 Such Bond shall be executed a corporate surety duly authorized
to do business in the State of Texas, acceptable to UTMB, and on forms
approved by the Attorney General of Texas.
1.4.3 If any surety upon any bond furnished in connection with the
Contract becomes insolvent, or otherwise not authorized to do business in
this State, the Contractor shall promptly furnish equivalent security to
protect the interest of the State of Texas and of persons supplying labor,
materials and/or equipment in the prosecution of the work contemplated by the
Contract.
1.4.4 Each bond shall be accompanied by a valid Power-of-Attorney
(issued by the surety company and attached, signed and sealed, with the
corporate embossed seal, to the bond) authorizing the agent who signs the
bond to commit company to the terms of the bond, and stating (on the face of
the Power-of-Attorney) the limit, if any, in the total amount for which he is
empowered to issue a single bond.
1.4.5 UTILITY SECURITY FUND. Upon receipt of the first utility
statement submitted to Contractor by UTMB, Contractor will pay that amount
plus an amount exactly equal to the statement amount to be placed in escrow.
For each month thereafter, Contractor will pay each statement in full plus
any additional amount necessary to maintain an escrow fund equal to the
highest monthly utility statement received, to date, during the Contract
term. UTMB will release any funds remaining in escrow sixty (60 days after
contract termination).
1.5 UTMB RESPONSIBILITIES
1.5.1 UTMB will maintain ownership of the incinerator facility and
equipment, as well as all rights and privileges associated with TNRCC Permit
No. MSW-2332.
1.5.2 UTMB will be responsible for maintenance and repair including
all cost thereof for all electrical equipment and switchgear up to and
including the switchgear breaker boxes, the municipal water line up to but
not including the equipment shutoff valve, interior and exterior building
lighting, storm water drain from the roof, and boiler feed water line up to
but not including the low water cut-off. In addition, UTMB will provide
maintenance/repair services on budding systems not associated with the
incinerator equipment or associated equipment (A/C, Heat, Plumbing associated
with bathrooms, offices, etc.) and building structure (wall, roof, floors
-excluding painting of floors, etc.) unless such repairs are the result of an
act or omission (including negligence) of the Contractor.
1.5.3 UTMB will provide personnel to operate the crematorium in the
building housing the incinerator facility and the Contractor will have no
maintenance responsibility for the crematory equipment.
1.5.4 Deleted (ref. 1.2.3.)
1.5.5 UTMB will be responsible for the handling and transport to the
incinerator facility of all medical waste generated by UTMB on its campus.
1.5.6 The University of Texas Assistant Vice-President for
Operations has been designated as UTMB's Contract Manager and shall represent
UTMB in all matters pertaining to the contract and is responsible for the
overall administration of the Contract.
The UTMB Contract Manager shall decide all questions which may arise
pertaining to the Contractor's performance of services and fulfillment of
Contractor's obligations and responsibilities under the Contract.
The UTMB Contract Manager may designate a project. coordinator who
shall be responsible for coordinating with Contractor's personnel and address
day to day operational matters pertaining to the Contract and Incinerator
facility operations.
1.6 FACILITY MODIFICATIONS, ENHANCEMENTS OR UPGRADES
1.6.1 UTMB will be responsible for any modifications, upgrades or
enhancements to the facility as a result of a regulatory compliance
requirement or recommendation, at its own expense and discretion.
1.6.2 Contractor may, from time to time, during the term of the
Contract recommend to UTMB enhancements or modifications to the incinerator
facility which will improve the facility's operational efficiency. UTMB will
consider such recommendations on a case by case basis with payment thereof to
be as mutually agreed upon in writing by UTMB and Contractor.
1.7 TRANSPORTATION
Each of UTMB's Designated Accounts, may at its option, assume
responsibility for the packaging, handling and/or transport of the medical waste
it generates and may at its sole discretion, contract for such
services to third parties or perform such services itself. Contractor agrees
to accept and dispose of the Designated Accounts medical waste at the
contracted gate rate set forth in Attachment C.
1.8 DISPUTE RESOLUTION
If at any time there is a dispute between the parties regarding this
Contract and the performance hereunder, the parties agree that they will within
ten (10) days following mailing of written notice of a dispute, engage in good
faith face-to-face negotiations in an attempt to resolve the dispute and shall,
upon failing to negotiate resolution, choose a mutually agreeable third party
neutral, who shall mediate the dispute between the parties. The mediator shall
be a person qualified under the Texas Alternative Dispute Resolution Procedures
Act and shall be appointed by a state district judge or the American Arbitration
Association if the parties are unable to agree upon a qualified person.
Mediation shall be non-binding and shall be confidential. The parties shall
refrain from court proceedings during the mediation process insofar as it can do
so without prejudicing its legal rights. The parties shall participate in good
faith in accordance with the recommendations of the mediator and shall follow
the procedures for mediation as suggested by the mediator. All expenses of
mediation, except expenses of the individual parties, shall be shared equally by
the parties. Each party shall be represented in the mediation by a person with
authority to settle the dispute. If the parties are unable to resolve the
dispute in mediation, then the parties shall resort to litigation in the
District Court of Galveston County. IN NO CASE SHALL THE PROVISION OF THIS
PARAGRAPH DELAY ANY OTHER TIME PERIODS SET FORTH IN THE CONTRACT EXCEPT BY THE
WRITTEN AGREEMENT OF THE PARTIES.
ATTACHMENT B
GENERAL TERMS AND CONDITIONS
1.1 GENERAL
These General Terms and Conditions form and are made a part of UTMB and
BMI, Inc. Agreement, dated December 8, 1995.
1.2 DEFINITIONS
Whenever the following terms are used in these General Terms and
Conditions or in the other Contract Documents the intent and meaning shall be
interpreted as follows:
CONTRACT DOCUMENTS The Contract Documents consist of the UTMB and
Contractor Agreement, the Conditions of the Contract (General and Special
Conditions), Specifications, Bid Proposal Form, Execution of Offer, Respondent's
Questionnaire, and all Addenda issued prior to and any change orders issued
after the execution of the Contract.
UTMB shall mean The University of Texas Medical Branch at Galveston, a
component institution of The University of Texas System.
RESPONDENT shall mean the individual, partnership, corporation, or
other entity responding to this RFP.
CONTRACTOR shall mean the individual, partnership, corporation, or
other entity awarded a Contract under this RFP, in accordance with the terms,
conditions, and requirements herein.
SUB-CONTRACTOR shall mean any individual, partnership, corporation, or
other entity awarded a contract by the Contractor to perform a portion of the
work under the Contract between UTMB and Contractor.
1.3 ENTIRE AGREEMENT
The Contract Documents form the Contract, which represents the entire
and integrated agreement between UTMB and the Contractor and supersedes all
prior negotiations, representation or agreements, either written or oral. The
Contract Documents are complementary, and what is required by any one document
shall be as binding as if required by all.
The terms and conditions of any purchase order, agreements, amendments,
modifications, or other documents submitted by either party which conflict with,
or in any way purport to amend or add to any of the terms and conditions of the
Contract shall be of no force or effect, nor shall govern in any way the subject
matter hereof, unless set forth in writing and signed by both parties.
1.4 TIME OF PERFORMANCE
Time is of the essence in the rendering of services hereunder.
Contractor agrees to perform all obligations and render services set forth in
this Contract in accordance with the schedules herein and as mutually agreed
upon between UTMB and Contractor during the term of this Contract.
1.5 DEFAULT
This Contract may be canceled or terminated by either party upon a
material default of the other party by issue of a written notice of material
default indicating that if the fault is not cured within thirty (30) days of
receipt of said notice, the non-defaulting party may cancel the Contract upon
thirty (30) days written notice.
Without limiting the foregoing, the following shall constitute a
material breach by the Contractor, upon the occurrence of which the Contractor
shall immediately notify UTMB; the Contractor ceases its business operation,
makes a general assignment for the benefit of creditors, is adjudged bankrupt,
or becomes insolvent.
The cancellation of the Contract by either party, under any
circumstances whatsoever, shall not effect or relieve the other party from any
obligation or liability that may have been incurred or will be incurred pursuant
to the Contract and such cancellation shall not limit any other right or remedy
available to either party at law or in equity.
1.6 TERMINATION
A. For Convenience:
The Contract may be terminated, without penalty, by UTMB without cause
by giving thirty (30) days written notice of such termination to the
Contractor.
B. In no event shall such termination by UTMB as provided for under this
Section give rise to any liability on the part of UTMB including, but
not limited to, any claims of Contractor for compensation for
anticipated profits, unabsorbed overhead, or interest on borrowing.
UTMB's sole obligation hereunder is to pay the contractor for products
and/or services ordered and received prior to the date of termination.
1.7 WARRANTIES
In addition to all warranties provided for by law, Contractor hereby
warrants and agrees that:
A. All goods and services covered by the Contract shall conform to the
specifications, drawings, samples or other descriptions set forth in
the Contract or otherwise furnished or adopted by UTMB, and shall be
merchantable fit for the purpose intended, of best quality and
workmanship, and free from all defects. UTMB shall have the right of
inspection and approval, and may, at Contractor's expense, reject and
return nonconforming goods or require re-performance of services, which
are not in compliance with the requirements of the Contract. Defects
shall not be deemed waived by UTMB's failure to notify Contractor upon
receipt of goods or completion of services, or by payment of invoice.
B. All goods and/or services provided under the Contract shall meet or
exceed the Standards established and promulgated under the Federal
occupational Safety and Health Act (Public Law 91-596) and its
regulations in effect or proposed as of the date of the Contract.
C. All goods delivered pursuant to the Contract shall conform to standards
established for such goods in accordance with any applicable federal,
state or local laws and regulations, unless otherwise indicated in the
Contract.
D. The foregoing warranties shall survive acceptance of goods and
performance of services under the Contract.
1.8 PAYMENT
Contractor shall submit itemized invoices for all services furnished in
accordance with the Contract. All charges for expenses which are permitted by
the Contract must be supported by itemized receipts. Invoices must reference the
UTMB purchase order number/contract number and must agree in every detail with
the Contract. Following receipt of a properly submitted invoice, payment will
normally be remitted within thirty (30) days. UTMB's suggested payment terms
are 2% 10 NET 30
1.9 CONTRACT AMENDMENTS
The Contract may be amended within the Contract period by mutual
consent of the parties. No modification or amendment to the Contract shall be
valid, and binding unless in writing and signed by both parties. All
correspondence regarding modifications or amendments to the Contract must be
forwarded to the UTMB Purchasing Department for review and, if satisfactory,
approval.
1.10 INDEPENDENT CONTRACTOR STATUS
The Contractor agrees that the Contractor and the contractor's
employees and agents have no employer-employee relationship with UTMB. UTMB
shall not be responsible for the Federal Insurance Contribution Act (FICA)
payments, federal or state unemployment taxes, income tax withholding, Workers
Compensation Insurance payments, or any other insurance payments, nor will UTMB
furnish any medical or retirement benefits or any paid vacation or sick leave.
1.11 SUBCONTRACTORS
The use of Subcontractors under this Contract is prohibited except with
the express prior written authorization of UTMB. Subcontractors performing work
hereunder and the payment thereof shall be the responsibility of the Contractor
and shall be bound by the terms, conditions and requirements stated in the
contract between UTMB and Contractor.
1.12 COMPLIANCE WITH LAW
The Contractor is aware of, is fully informed about, and is in full
compliance with its obligations under existing applicable law and regulations,
including, without limitation, Title VI of the Civil Rights Act of 1964, as
amended (42 USC 2000(D)), Executive Order 11246, as amended (41 CFR 60-1 and
60-2), Vietnam Era Veterans Readjustment Act of 1974, as amended (41 CFR
60-250), Rehabilitation Act of 1973,
as amended (41 CFR 60-741), Age Discrimination Act of 1975 (42 USC 6101 et
seq.), Non-segregated Facilities (41 CFR 60-1), Omnibus Budget Reconciliation
Provision, Section 952, Fair Labor Standards Act of 1938, Sections 6, 7, and
12, as amended, Immigration Reform and control Act of 1986, and Utilization
of Small Business concerns and Small Business Concerns Owned and Controlled
by Socially and Economically Disadvantaged Individuals (PL 96-507), the
Americans with Disabilities Act of 1990 (42 USC 12101 et seq.), the Civil
Rights Act of 1991 and all laws and regulations and executive orders as are
applicable.
1.13 UTMB'S RIGHT TO AUDIT
At any time during the term of this Contract and for a period of four
(4) years thereafter UTMB or a duly authorized representative of UTMB, The
University of Texas System, or the State of Texas, at its expense and at
reasonable times, reserves the right to audit the Contractor's records and books
relevant to all services provided under this Contract. In the event such an
audit by UTMB reveals any errors/overpayments by UTMB, the Contractor shall
refund UTMB the full amount of such overpayments within thirty (30) days of such
audit findings, or UTMB, at its option, reserves the right to deduct such
amounts owing to UTMB from any payments due Contractor.
1.14 ACCESS TO DOCUMENTS
In accordance with Public Law 99-499 under TEFRA, Contractor agrees to
allow, during and for a period of not less than four (4) years after the Contact
term, access to this Contract and its books, documents, and records, and
contracts between the Contractor and any Subcontractors or related
organizations, including books, documents and records relating to same, by the
comptroller General of the United States, the U.S. Department of Health and
Human Services and their duly authorized representatives.
1.15 TITLE AND RISK OF LOSS
The title and risk of loss of any goods received under this Contact
shall not pass to UTMB until UTMB actually receives, takes possession and
accepts the goods at the point or points of delivery.
1.16 ACCEPTANCE OF PRODUCTS AND SERVICES
All products furnished and all services performed under this Contract
shall be to the satisfaction of UTMB and in accordance with the specifications,
terms, and conditions of the Contract. UTMB reserves the right to inspect the
products furnished or the services performed, and to determine the quality,
acceptability, and fitness of such products or services.
1.17 SALES AND USE TAX
UTMB, as an agency of the State of Texas, qualifies for exemption from
State and Local Sales and Use Taxes pursuant to the provisions of the Texas
Limited Sales, Excise, and Use Tax Act. The contractor may claim exemptions from
payment of applicable State taxes by complying with such procedures as may be
prescribed by the State Comptroller of Public Accounts.
1.18 CERTIFICATE OF INSURANCE
The Contractor shall, prior to commencement of work, provide UTMB with
Certificates of Insurance in the below amounts and shall maintain such coverage
in effect for the full duration of the Contract.
o Worker's Compensation:
Statutory
o Comprehensive General Liability:
$1,000,000.00 each occurrence
$5,000,000.00 in the aggregate
o Environmental Clean-up: (Pollution)
$2,000,000.00 each occurrence
Comprehensive Automobile Liability
o Bodily Injury:
$100,000.00 each person
$500,000.00 each occurrence
o Property Damage:
$100,000.00 each occurrence
o Umbrella Coverage:
$5,000,000.00
Certificates evidencing such coverage must be furnished to UTMB prior to the
state of service. The Certificates shall be provided by the Insurance Carrier
and name UTMB as holder and additional insured. Certificates shall not be
cancelable without thirty (30) days prior written notice.
1.19 INDEMNIFICATION
Contractor agrees to hold the State of Texas, the Board of Regents of
the University of Texas System. UTMB, their officers, employees, and agents
harmless from and indemnify each of them against any and all claims, actions,
damages, suits, proceedings, judgments, and liabilities, except for attorney's
fees, for personal injury, death or property damage, including any environmental
▇▇▇▇▇, resulting from the acts or omissions of Contractor or the acts or
omissions of others under Contractor's supervision and control.
To the extent authorized by the Constitution and laws of the State of
Texas, UTMB agrees to hold Contractor and its officers, employees, and agents
harmless from and indemnify each against any and all claims, actions, damages,
suits, proceedings, judgments, and liabilities, except for attorney's fees, for
personal injury, death, or property damage, to the extent the same result from
the acts or omissions of UTMB or acts or omissions of others under UTMB's
supervision or control.
1.20 FORCE MAJEURE
Neither UTMB nor the Contractor shall be required to perform any term,
condition, or covenant of this Contract so long as such performance is delayed
or prevented by acts of God, material or labor restriction by any governmental
authority, civil riot, floods, hurricanes, or other natural disasters, or any
other cause not reasonable within the control of UTMB or Contractor, and which
by the exercise of due diligence UTMB or the Contractor is unable, wholly or in
part, to prevent or overcome.
1.21 OTHER BENEFITS
It is understood and agreed that no benefits, payments or
considerations received by the Contractor for the performance of services
associated with and pertinent to the contract shall accrue, directly or
indirectly, to any employees, elected or appointed officers or representatives,
or any other person identified as agents of, or who are by definition an
employee of, the State.
1.22 NON-DISCLOSURE
The Contractor and UTMB acknowledge that they or their employees may,
in the performance of the contract, come into the possession of proprietary or
confidential information owned by or in the possession of the other. Neither
party shall use any such information for its own benefit or make such
information available to any person, firm, corporation, or other organization,
whether or not directly or indirectly affiliated with the Contractor or UTMB,
unless required by law.
1.23 PUBLICITY
The contractor agrees that it shall not publicize this Contract or
disclose, confirm or deny any details thereof to third parties or use any
photographs or video recordings of UTMB's employees or patients or use UTMB's
name in connection with any sales promotion or publicity event or otherwise
without the prior express written approval of UTMB except; a) Contractor may
disclose to Customers or potential Customers of Contractor the names and
location of the disposal site/Incinerator facility, and, b) may have customers
or potential customer's of Contractor inspect the incinerator facility upon
approval of UTMB's contact Manager.
1.24 SEVERABILITY
If one or more provisions of the Contract, or the application of any
provision to any party or circumstance, is held invalid, unenforceable, or
illegal in any respect, the remainder of the Contract and the application of the
provision to other parties or circumstances shall remain valid and in full force
and effect.
1.25 NON-WAIVER OF DEFAULTS
Any failure of UTMB at any time, or from time to time, to enforce or
require the strict keeping and performance of any of the terms and conditions of
this Contract, or to exercise a right hereunder, shall not constitute a waiver
of such terms, conditions, or rights, and shall not affect or impair same, or
the right of UTMB at any time to avail itself of same.
1.26 ASSIGNMENT
Neither the Contact, nor any rights, and/or obligations of Contractor
hereunder are assignable or transferable unless agreed to in writing by UTMB.
UTMB shall not be required to recognize any assignment or subcontract made
without its prior written approval, and any such assignment by Contractor shall
be wholly void and ineffective for all purposes unless made in conformity with
this Section.
Contractor may assign payments due hereunder to a bonafide lending
institution for the purpose of obtaining a loan or financing agreement, however,
such assignment shall not relieve contractor of any of its obligation and/or
liabilities under this Agreement or limit any rights of UTMB.
Notwithstanding anything to the contrary, UTMB reserves the right to
assign, in whole or in part, this agreement and any and all rights, duties and
obligations pursuant to this agreement.
1.27 ASSIGNMENT OF OVERCHARGE CLAIMS
The Contractor hereby assigns to UTMB any and all claims for
overcharges associated with the Contract arising under the antitrust laws of the
United States, 15 U.S.C.A., Sec. 1 et seq. (1973), or arising under the
antitrust laws of the State of Texas, Texas Business and Commerce Code
annotated, Sec. 15.01, et seq. (1967).
1.28 PATENT AND COPYRIGHT
The Contractor shall pay any royalties, license fees, copyrights or
trade and service marks required to perform the services required by this
Contract, and agrees to defend and hold harmless the State of Texas, UTMB, the
Board of Regents of the University of Texas System, its officers, employees and
agents from and against any action arising from a claim that the services or
products furnished and/or used by Contractor in the performance of this Contract
infringes upon any patent, copyright, trade secret or trade/service ▇▇▇▇, and
agrees to pay those costs and damages finally awarded against UTMB.
1.29 TEXAS PUBLIC INFORMATION ACT
All information, documentation, and other material submitted by the
Contractor under this Contract is subject to public disclosure under the Texas
Public Information Act (Article 6252 - 17a, V.T.C.S.). The Contractor is hereby
notified that UTMB strictly adheres to this statute and the interpretations
thereof rendered by the Courts and Texas Attorney General. The contractor shall
be deemed to have knowledge of this law and how to protect its legitimate
interests.
1.30 FREEDOM OF ACCESS AND USE OF FACILITIES
The contractor's employees shall have reasonable and free access to use
only those facilities of UTMB that are necessary to perform services under this
Contract and shall have no right of access to any other facilities of UTMB.
1.31 OBSERVANCE OF UTMB RULES AND REGULATIONS
The Contractor agrees that at all times its employees will observe and
comply with all regulations relating to UTMB facilities, including but not
limited to, no smoking, consideration for patients and their families, and
parking and security regulations.
1.32 RECALL NOTICE
The Contractor shall, immediately upon discovery of same, advise UTMB
of any or all required replacement/modifications to equipment or component parts
thereof or withdrawal of product by reason of safety hazard or recall regardless
of the nature of same. Any verbal notification must be confirmed in writing
within twenty-four (24) hours of such verbal notification. All such formal
notices under this paragraph must be submitted to:
The University of Texas Medical Branch at Galveston
Attn: Director of Purchasing
Administration ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
1.33 OTHER LIABILITIES
The individuals signing on behalf of UTMB and the Contractor shall not
be personally liable for the performance of any of the terms of the Contact,
provided however, that they warrant their authority to sign on behalf of UTMB
and the Contractor, respectively. No member, individually or collectively, of
UTMB or the Board of Regents of the University of Texas System ("the State"),
incurs or assumes any individual or personal liability by the execution of the
Contract or by reason of default in the performance of any of the terms hereof.
All such liability of the employees of the State and officers and directors of
the Contractor, as such, is released as a condition of and in consideration of
the execution of the Contract.
1.34 SECTION HEADINGS
All section headings are for convenience of reference only and are not
intended to define or limit the scope of any provisions of the Contract.
1.35 EXECUTION
The Contract may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all together shall constitute but
one and the same Contact. It is also agreed that separate counterparts of the
contract may separately be executed by the parties all with the same force and
effect as if the same counterpart had been executed by all parties.
1.36 NOTICES
Except as otherwise expressly provided, any notice required or
permitted to be given shall be in writing and effective upon receipt and shall
be sent by certified mail, return receipt requested, postage pre-paid, addressed
as follows:
If to Contractor, to the Contractor's last known mailing address.
If to UTMB:
The University of Texas Medical Branch at Galveston
Attn: Vice President for Business Affairs
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
cc: The University of Texas Medical Branch at Galveston
Attn: Director of Purchasing
Administration ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
The University of Texas Medical Branch at Galveston
Attn: Assistant Vice President for Operations
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
1.37 GOVERNING LAW
This Contract shall be construed and governed by the laws of the State
of Texas.
ATTACHMENT C
RATE SCHEDULE
1.0 For waste disposal services furnished by contractor to UTMB, UTMB
agrees to pay contractor as follows:
1.1 Gate Rate for UTMB and UTMB's Designated Accounts shall be
based on the progressive rate schedule, outlined below, with
the Gate Rate adjusted quarterly upon review by UTMB and
Contractor of the actual waste volume processed during the
proceeding quarter.
Progressive Rate Schedule - UTMB - (Prior to repairs being
started on unit number two)
Rate/Lb. $.255 $.240 $.225 $.220
Volume Milestone
in lbs./quarter 1,140,000 1,890,000 2,640,000 3,390,000
1.2 Transport rate for UTMB Designated Accounts shall be $2.00 per
mile calculated based on the round trip distance from the
designated site location to UTMB incinerator facility.
1.3 Supplies (boxes and bags) furnished by Contractor upon request
of UTMB or its designated accounts will be billed at $1.50
each.
1.4 Any waste furnished to Contractor for transport requiring
repackaging will be charged at $30.00 per box plus appropriate
gate rate and transportation charges.
NOTES:
A) The volume milestones are exclusive of UTMB's waste and any UTMB
Designated Account contracting through UTMB.
B) The above rates shall apply to all UTMB Designated Accounts who have
contracted through UTMB.
C) Payment for services provided by Contractor to UTMB Designated Accounts
shall be the responsibility of the Designated Account unless otherwise agreed
to in writing by UTMB.
D) The above rates shall remain and not be subject to adjustment (escalation)
for the initial thirty-six (36) months of the contract term. Thereafter,
rates shall be subject to changes based on the adjustment formula defined in
Section 2.0, below.
E) Contractor to submit invoice by the fifth day of the month following
services and UTMB shall make payment, net thirty (30) days upon UTMB's
receipt of an acceptable and itemized invoice for Contractor. The invoice
must reference the UTMB's contract number.
2.0 Price Adjustments
2.1 Gate Rate. The Gate Rate(s) in effect at the end of the
thirty-sixth (36th) and forty-eighth (48th) month of the
contract term, respectively, shall be subject to adjustments
in accordance with the following formula:
2.1.a. Utilities: Forty percent (40%) of the Gate
Rate(s) in effect at the end of months thirty-six
(36) and forty-eight (48), respectively are subject
to adjustment based on utility rate increases.
Utility rate adjustment will be calculated using the
below formula.
ADJUSTMENT = (GATE RATE) x (40%) x (Rate of Change 1,2 )
Note 1: Rate of Change (first adjustment period) is equal to the quotient of
the billable utility rate in effect for each utility on the last day of the
thirty-sixth (36th) month multiplied by the actual volume of utilities
consumed during the third (3rd) year (months 25-36) of the Contract term
divided by the billable utility rate for each utility established on the
Contract Effective Date (Base Rate) multiplied by the actual volume of
utilities consumed during the third (3rd) year (months 25-36) of the Contract
term minus one (1).
Note 2: Rate of Change (second adjustment period) is equal to the quotient of
the billable utility rate in effect on the last day of the forty-eighth
(48th) month for each utility multiplied by the actual volume of utilities
consumed during the fourth (4th) year (months 37-48) of the Contract term
divided by the billable utility rate established on the Contract Effective
Date (Base Rate) multiplied by the actual volume of utilities consumed during
the fourth (4th) year (months 37-48) of the Contract term minus one (1).
Note 3: Proportional share equals the percentage of UTMB's waste and waste
for UTMB's Designated Accounts as compared to the total waste disposed of at
the facility during the third (3rd) and fourth (4th) years of the Contract
term, respectively.
EXAMPLE:
------------------------------------------------------------------------------------------------------------------------
Rate Volume Year 1 Year 3 Rate of
------------------------------------------------------------------------------------------------------------------------
Extended Cost Extended Change
Cost
------------------------------------------------------------------------------------------------------------------------
Utilities Portion Year 1 Year 3 Year 3
(a) (b) (c) (d) (e)
------------------------------------------------------------------------------------------------------------------------
Gas $/MCF Base ▇▇▇▇ Aggregate (a) * (c) (b) * (c)
------------------------------------------------------------------------------------------------------------------------
Rate Rate Volume
------------------------------------------------------------------------------------------------------------------------
Electricity $/KWH Base ▇▇▇▇ Aggregate (a) * (c) (b) * (c)
------------------------------------------------------------------------------------------------------------------------
Rate Rate Volume
------------------------------------------------------------------------------------------------------------------------
Water$/1000 Gal Base ▇▇▇▇ Aggregate (a) * (c) (b) * (c)
------------------------------------------------------------------------------------------------------------------------
Rate Rate Volume
------------------------------------------------------------------------------------------------------------------------
Total Total (e) (d) - 1
------------------------------------------------------------------------------------------------------------------------
UTMB Proportional Share (UTNIB Waste - lbs / Total Facility Volume - lbs) (f)
------------------------------------------------------------------------------------------------------------------------
Adjustment Rate - Utilities [(e)/(d)-l]*(f)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Rate Volume Year 1 Year 3 Rate of
------------------------------------------------------------------------------------------------------------------------
Extended Extended Change
Utilities Portion Year 1 Year 3 Year 3 Cost Cost
------------------------------------------------------------------------------------------------------------------------
Gas $/N4CF 2.00 2.25 900,000 1,800,000.00 2,025,000.00
------------------------------------------------------------------------------------------------------------------------
Electricity $1KWH 0.40 0.43 750,000 300,000.00 322,500.00
------------------------------------------------------------------------------------------------------------------------
Water$/1000 Gal 1.00 1.05 6,000,000 6,000.00 6,300.00
------------------------------------------------------------------------------------------------------------------------
Total: 2,106,000.00 2,353,800.00 11.77%
------------------------------------------------------------------------------------------------------------------------
UTMB Proportional Share (e.g., 2,600,000- lbs. / 13,500,000 - lbs.) 19.26%
------------------------------------------------------------------------------------------------------------------------
Adjustment Rate - Utilities 2.27%
------------------------------------------------------------------------------------------------------------------------
2.1.b. Labor: Sixty percent (60%) of the Gate Rate shall
represent the labor portion subject to adjustment,
and will be adjusted at a rate of four percent (4%)
per annum, beginning the thirty-seventh (37th) month
(year 4)
e.g. (Gate Rate) (60%) (4% Annual Adjustment)
($0.255) x (.6) x(.04) = $.006/lb.
2.2 Transportation: The rate in effect at the conclusion of the
thirty-sixth (36th) month and forty-eighth (48th) month shall
be adjusted at a rate of four percent (4%) per annum,
respectively.
2.3 Supplies: The rate in effect at the conclusion of the
thirty-sixth (36th) (Boxes/Bags) month and forty-eighth (48th)
month shall be adjusted at a rate of four percent (4%) per
annum, respectively.
3.0 Volume Guarantee and Variable Rate Facility Use Fee
As part of the consideration under this Agreement, Contractor agrees to pay to
UTMB a Variable Rate Facility Use Fee at a rate of $0.01 per pound based on the
actual total volume of medical waste disposed of at the UTMB incinerator
facility, or the Volume Guarantee, whichever the greater amount. The Variable
Rate Facility Use Fee shall be paid by Contractor to UTMB on a monthly basis, in
arrears, on or before the 15th day of the following month.
The Volume Guarantee shall be determined annually by UTMB and Contractor based
on a review of the proceeding years' actual waste volume. In no event shall the
volume guarantee be less than 4,560,000 lbs per year and once a higher volume
level is established, it may not be reduced by Contractor during any subsequent
annual period, except where circumstances arising from regulatory change which
effect operations at the facility.
FIRST AMENDMENT
TO THE CONTRACTOR SERVICE AGREEMENT BETWEEN
THE UNIVERSITY OF TEXAS MEDICAL BRANCH AT GALVESTON
AND
ENVIROCLEAN MANAGEMENT SERVICES, INC.
This first amendment (the "First Amendment") is to the Contractor Service
Agreement (the "Agreement") between The University of Texas Medical Branch at
Galveston, a component institution of The University of Texas System which is an
agency of the State of Texas, ("UTMB") and EnviroClean Management Services, Inc.
("EMSI), and which Agreement became effective on May 28, 1995.
WHEREAS, UTMB and BMI Services, Inc. entered into the Agreement to
provide medical waste disposal services for UTMB;
WHEREAS, BMI Services, Inc. assigned its rights and responsibilities to
EMSI on March 4, 1996;
WHEREAS, the parties desire to amend the Agreement to establish certain
financial terms, equipment repair responsibilities, and the period of
performance covered;
NOW THEREFORE, for and in consideration of the above-stated premises,
the payments, and the covenants and agreements herein contained, UTMB and EMSI
do agree that the Agreement is amended as follows:
1. Regardless of the date of the First Amendment's execution, the parties
agree that the terms of the First Amendment shall be effective from the first
day of April, 1996.
2. Section 2.2 is deleted in its entirety and replaced with the First
Amendment's Section
2.2 Renewal. The Agreement may be renewed upon mutual written
agreement of the parties for a period not to exceed sixty (60) months
once the initial term of the Agreement expires, under the same terms
and conditions as set forth in the Agreement, as amended, unless
terminated sooner as provided in the Agreement.
3. ATTACHMENT A, Section 1.2.2 is deleted in its entirety and replaced with
the First Amendment's ATTACHMENT A, Section 1.2.2
1.2.2. Facility Use Fees
1.2.2.1. FIXED FACILITY USE FEE. The Contractor will pay to UTMB a
Fixed Facility Use Fee in the amount of $15,000 PER MONTH for the use
of one incinerator unit. In the event Contractor utilizes both
incinerators, an additional Fixed Facility Use Fee of $750 PER DAY will
be due for each 24 hour period, or portion thereof, that the second
unit is used by Contractor. This Daily Use Fee will begin being due
when the total plant volume has exceeded 985,000 pounds in a single
month. Once this threshold has been reached and from that point
forward, the Daily Use Fee for the use of the second unit will be due
for each 24 hours period in which the second unit is used. Payment to
UTMB for this use will based on documented usage, supported by the
computerized operations record for both
units. Copies of the incinerator use graphs for the given month will
be submitted in support of the payments.
1.2.2.2. The Fixed Facility Use Fee shall be suspended and Contractor
shall receive a credit at a rate of $500 per day if BOTH incinerator
units are inoperable and unable to process waste, provided however that
Contractor was not at fault in creating the inoperable condition and
provided Contractor has had to redirect waste on an on-going basis to
another facility for a period greater than ten (10) calendar days
during any given calendar month. The ten calendar day period will begin
running from 12:01 a.m. of the next morning following the day
Contractor gives UTMB's Coordinator written notice that both
incinerator units are down/inoperable. The credit will start on the
11th day of shut down and continue until such time as one unit is back
in an operable condition.
1.2.2.3 VARIABLE FACILITY USE FEE. Contractor will also pay to UTMB the
greater amount of either a) a Variable Facility Use Fee in the amount
of $0.01 per pound up to 985,000 pounds monthly, and for each
additional pound of waste exceeding 985,000 pounds monthly, the
variable facility use fee will be increased to $0.02 per pound for each
pound, including UTMB's waste or b) the Guaranteed volume (ref.
Attachment C).
4. ATTACHMENT A, Section 1.2.3, second paragraph is deleted in its entirety
and replaced with the First Amendment's ATTACHMENT A, Section 1.2.3, second
paragraph:
Contractor will be responsible for a maximum limit of $90,000 per
calendar year for repairs and maintenance. Any funds not expended at the end of
each year will automatically rollover into the next year and shall increase by
the rollover amount the $90,000 limit. During the period of April 1, 1996, to
December 31, 1997 only, UTMB agrees to limit the Contractor's maintenance
responsibility for each month to an amount not to exceed $5,000 per month. This
limitation figure would be in addition to normal preventive maintenance costs,
which remain the contractor responsibility completely. Additionally during the
period of April 1, 1996 to December 31, 1997 only, UTMB and Contractor agree to
share all repairs identified in the "Major Repairs Listing" (Attachment D)
equally (50% Contractor and 50% UTMB responsibility), up to a maximum of
$125,000 for the Contractor.
5. ATTACHMENT A, Section 1.2.3, paragraph B, last sentence is deleted in its
entirety and replaced with the First Amendment's ATTACHMENT A, Section 1.2.3,
paragraph B, last sentence:
For the purpose of splitting any unexpended portion of the repair funds
the maximum limit of Contractor's liability will be the sum of all maximum
limits for Contractor's liability established for years 1-3 of the contract
period.
6. ATTACHMENT A, Section 1.4.1, second paragraph, is deleted in its entirety
and replaced with the First Amendment's ATTACHMENT A, Section 1.4.1, second
paragraph:
PERFORMANCE BOND: Contractor shall provide a performance bond
in the amount of $100,000.00 conditioned upon the faithful
performance of the Contract. Subsequently, the performance
bond may be replaced by an Irrevocable Letter of Credit in the
amount of $70,000, subject to UTMB's approval as to source and
form, and must be in force at all times during the term of
this agreement and any extensions.
AGREEMENT BETWEEN UTMB AND ENVIROCLEAN
7. ATTACHMENT B, Section 1.6 is deleted in its entirety and replaced with the
First Amendment's ATTACHMENT B, Section 1.6:
1.6 TERMINATION
1.6.1. This Contract may be terminated by UTMB immediately without
penalty and without cause by giving written notice of such
termination to Contractor.
1.6.2. This Contract may be terminated without penalty by Contractor
without cause upon ninety (90) days written notice to UTMB;
however, the parties agree that Contractor may not exercise
its right to initiate termination under this Section until
December 8, 1997.
1.6.3. In no event shall such termination by UTMB or Contractor as
provided for under this Section give rise to any liability on
the part of UTMB or Contractor including, but not limited to,
any claims of the non-terminating party for compensation for
anticipated profits, unabsorbed overhead, or interest on
borrowing. UTMB's sole obligation hereunder is to pay the
Contractor for products and/or services ordered and received
prior to the date of termination. Contractor's sole obligation
hereunder is to pay UTMB for all Fixed and Variable Use Fees,
utility expenses, and to maintain/repair the incinerator units
in accordance with the terms of this Agreement to the date of
termination.
8. ATTACHMENT C, Section 1. 1 and Section 1.2 is deleted in its entirety and
replaced with the First Amendment's ATTACHMENT C, Section 1. 1 and Section 1.2:
1.1 Gate Rate for UTMB shall be based on the progressive rate
schedule, outlined below, with the Gate Rate adjusted
quarterly upon review by UTMB and Contractor of the actual
waste volume processed during the preceding quarter. Gate Rate
for UTMB's Designated Accounts shall not exceed the
progressive rate schedule below and shall be individually
negotiated between Contractor and each Designated Account.
Progressive Rate Schedule
Rate/Lb. $.225 $.225 $.225 $.220
Volume Milestone
in lbs./quarter 1,140,000 1,890,000 2,640,000 3,390,000
1.2 Transport rate for UTMB from Huntsville, Texas shall not be
greater than $2.00 per mile calculated on the round trip
distance from the pickup site location to the UTMB incinerator
facility. Each Designated Account shall have a transport rate
not greater than $2.00 per mile calculated on the round trip
distance from the pickup site location to the UTMB incinerator
facility except in the event Contractor elects to negotiate
lower rates with specific Designated Accounts.
9. First Amendment ATTACHMENT D is added to read as follows:
ATTACHMENT D
MAJOR EQUIPMENT REPAIRS LISTING
1.1 The parties agree that the following list of Major Equipment
Repairs (the "List") represents the work required to bring both
incinerator units back to operational status. Acceptance of any repair
work by UTMB is subject to the reasonable approval of UTMB Contract
Administrator. All repairs shall be completed no later than December
31, 1997; time is of the essence in completion of the repairs covered
on the List. Changes and/or additions to the List shall only be
effective if in writing and signed by the parties. All other
repair/maintenance work on the facility shall be in accordance with the
Routine Maintenance/Preventive Maintenance Section of the Agreement.
1.2 Major Equipment Repairs are attached as Attachment 1.2:
Except to the extent specifically modified by any property executed
amendment, all the terms and conditions of the AGREEMENT are in full force and
effect, and the parties by their signatures to this FIRST AMENDMENT do hereby
confirm and adopt the AGREEMENT as amended in this FIRST AMENDMENT.
ENVIROCLEAN MANAGEMENT THE UNIVERSITY OF TEXAS MEDICAL
SERVICES, INC. BRANCH AT GALVESTON
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- ------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Manager Vice President for Business Affairs
-------------------
Date: December 17, 1996 Date: October 31, 1996
-------------------- ------------------------------------
FIRST AMENDMENT
TO THE CONTRACTOR SERVICE AGREEMENT BETWEEN
THE UNIVERSITY OF TEXAS MEDICAL BRANCH AT GALVESTON
AND
ENVIROCLEAN MANAGEMENT SERVICES, INC.
Major Equipment Repair Listing
ATTACHMENT 1.2
UNIT 1 NECESSARY REPAIRS ESTIMATED COST
RAM FEED #1
-------------------------------------------------------------------------
Limit Switches $260.00
-------------------------------------------------------------------------
Hydraulic hoses $200.00
-------------------------------------------------------------------------
Repair chamber (weld) $300.00
-------------------------------------------------------------------------
High Temperature Hydraulic Seal $300.00
-------------------------------------------------------------------------
KILN #1
-------------------------------------------------------------------------
Calibration $550.00
-------------------------------------------------------------------------
Patch refractory $2,000.00
-------------------------------------------------------------------------
Repair/replace bypass actuator & seals $2,000.00
-------------------------------------------------------------------------
Repair/replace fiber rotary seal $1,200.00
-------------------------------------------------------------------------
ASH SYSTEM #1
-------------------------------------------------------------------------
Position sensors $150.00
-------------------------------------------------------------------------
Limit switches (2) $250.00
-------------------------------------------------------------------------
Air solenoid $140.00
-------------------------------------------------------------------------
Gasket ring $150.00
-------------------------------------------------------------------------
Plumbing on cooling spray $150.00
-------------------------------------------------------------------------
Hydraulic cylinders $1,200.00
-------------------------------------------------------------------------
Remote switch for manual operation $200.00
-------------------------------------------------------------------------
BOILER #1
-------------------------------------------------------------------------
Replace tube cleaner nozzle arms $14,153.65
-------------------------------------------------------------------------
Replace elbow SS $1,500.00
-------------------------------------------------------------------------
SCRUBBER #1
-------------------------------------------------------------------------
Diff. pressure transmitters (2) $1,600.00
-------------------------------------------------------------------------
Diff. pressure transmitter, quench $800.00
-------------------------------------------------------------------------
Pump bearings and seals (3) $2,500.00
-------------------------------------------------------------------------
Piping repair $300.00
-------------------------------------------------------------------------
ID FAN #1
-------------------------------------------------------------------------
Draft control damper upgrade
-------------------------------------------------------------------------
Rubber sleeve $300.00
-------------------------------------------------------------------------
Shaft $800.00
-------------------------------------------------------------------------
CEMS UNIT #1
-------------------------------------------------------------------------
Chiller assembly $4,800.00
-------------------------------------------------------------------------
Repair clogged sample line $2,400.00
-------------------------------------------------------------------------
WASTE WATER RECOVERY SYSTEM
-------------------------------------------------------------------------
Replace pump $1,500.00
-------------------------------------------------------------------------
Level sensor switch $1,000.00
-------------------------------------------------------------------------
CAUSTIC SYSTEM
-------------------------------------------------------------------------
Heater element and circuitry $1,000.00
-------------------------------------------------------------------------
Temperature controller $500.00
-------------------------------------------------------------------------
Heat tape and insulation $1,600.00
-------------------------------------------------------------------------
Re-build kit for pump $600.00
-------------------------------------------------------------------------
SUBTOTAL $44,503.65
▇▇▇▇ ▇ NECESSARY UPGRADES ESTIMATED COST
ID FAN #1
-------------------------------------------------------------------------
Vibration switch $600.00
-------------------------------------------------------------------------
Draft control damper $9,000.00
-------------------------------------------------------------------------
SCRUBBER
-------------------------------------------------------------------------
Strip chart recorder $700.00
-------------------------------------------------------------------------
% Solids monitor $3,000.00
-------------------------------------------------------------------------
Caustic metering pump $2,700.00
-------------------------------------------------------------------------
KILN #1
-------------------------------------------------------------------------
Emergency dump stack gate $20,000.00
-------------------------------------------------------------------------
PLC programming $3,000.00
-------------------------------------------------------------------------
Flame safety self-check $1,000.00
-------------------------------------------------------------------------
Actuator for sec. combustion air $300.00
-------------------------------------------------------------------------
BOILER #1
-------------------------------------------------------------------------
Air compressor for sootblower, 60 HP $14,000.00
-------------------------------------------------------------------------
Compressor air dryer $4,000.00
-------------------------------------------------------------------------
Air tank, 240 gallon $1,030.00
-------------------------------------------------------------------------
Chemical additive pump $400.00
-------------------------------------------------------------------------
▇▇▇▇▇▇ scintillation monitor $1,500.00
-------------------------------------------------------------------------
Ash shroud $1,500.00
-------------------------------------------------------------------------
SUBTOTAL $62,730.00
▇▇▇▇ ▇ NECESSARY REPAIRS ESTIMATED COST
RAM FEED #2
-------------------------------------------------------------------------
Limit switches $260.00
-------------------------------------------------------------------------
Hydraulic hoses $200.00
-------------------------------------------------------------------------
Hydraulic cylinder $410.00
-------------------------------------------------------------------------
KILN #2
-------------------------------------------------------------------------
Replace burner control assembly $3,900.00
-------------------------------------------------------------------------
Calibration $550.00
-------------------------------------------------------------------------
T/C transmitter assembly $3,140.00
-------------------------------------------------------------------------
Blast gates & quartz glass $900.00
-------------------------------------------------------------------------
Replace PCC burner block assemblies $2,600.00
-------------------------------------------------------------------------
Spray nozzles $300.00
-------------------------------------------------------------------------
Replace missing combustion hardware $1,545.00
-------------------------------------------------------------------------
Patch refractory $5,000.00
-------------------------------------------------------------------------
ASH SYSTEM #2
-------------------------------------------------------------------------
Gasket ring $150.00
-------------------------------------------------------------------------
Limit switches $135.00
-------------------------------------------------------------------------
Plumbing in cooling spray $150.00
-------------------------------------------------------------------------
BOILER #2
-------------------------------------------------------------------------
Replace tube cleaner nozzle arms $14,153.65
-------------------------------------------------------------------------
Reinstall soot blowers & blowdown $5,200.00
-------------------------------------------------------------------------
Steam gage $500.00
-------------------------------------------------------------------------
Hydrotest $800.00
-------------------------------------------------------------------------
SCRUBBERS #2
-------------------------------------------------------------------------
Entrainment separator level controller $550.00
-------------------------------------------------------------------------
Entrainment separator gage $50.00
-------------------------------------------------------------------------
pH probe & controller $1,200.00
-------------------------------------------------------------------------
Control panel relay $55.00
-------------------------------------------------------------------------
Solenoid & valve on water line $125.00
-------------------------------------------------------------------------
ID FAN #2
-------------------------------------------------------------------------
Rotor and shaft $16,900.00
-------------------------------------------------------------------------
Installation labor $1,920.00
-------------------------------------------------------------------------
Balancing $500.00
-------------------------------------------------------------------------
CEMS UNIT #2
-------------------------------------------------------------------------
Refurbish O2 & CO analyzers $16,280.00
-------------------------------------------------------------------------
Sample probe $4,000.00
-------------------------------------------------------------------------
Chiller assembly $4,800.00
-------------------------------------------------------------------------
-------------------------------------------------------------------------
A/C assembly $2,000.00
-------------------------------------------------------------------------
SUBTOTAL $88,273.65
▇▇▇▇ ▇ NECESSARY UPGRADES ESTIMATED COST
ID FAN #2
-------------------------------------------------------------------------
Vibration switch $600.00
-------------------------------------------------------------------------
Damper $9,000.00
-------------------------------------------------------------------------
SCRUBBER #2
-------------------------------------------------------------------------
Strip chart recorder $700.00
-------------------------------------------------------------------------
% Solids monitor $3,000.00
-------------------------------------------------------------------------
Caustic metering pump $2,700.00
-------------------------------------------------------------------------
KILN #2
-------------------------------------------------------------------------
Emergency dump stack gate $20,000.00
-------------------------------------------------------------------------
Install equipment to improve flame stability & $5,645.00
adjustment
-------------------------------------------------------------------------
SUBTOTAL $41,645.00
GRAND TOTAL $237,052.30
SECOND AMENDMENT
TO THE CONTRACTOR SERVICE AGREEMENT BETWEEN
THE UNIVERSITY OF TEXAS MEDICAL BRANCH AT GALVESTON
AND
ENVIROCLEAN MANAGEMENT SERVICES, INC.
This second amendment (the "Second Amendment") is to the Contractor Service
Agreement (the "Agreement") between The University of Texas Medical Branch at
Galveston, a component institution of The University of Texas System which is an
agency of the State of Texas, ("UTMB") and EnviroClean Management Services, Inc.
("EMSI"), and which Agreement became effective on December 8, 1995.
WHEREAS, UTMB and BMI Services, Inc. entered into the Agreement to
provide medical waste disposal services for UTMB;
WHEREAS, BMI Services, Inc. assigned its rights and responsibilities to
EMSI on March 4, 1996;
WHEREAS, the parties amended the Original Agreement in the FIRST
AMENDMENT and;
WHEREAS, the parties desire to amend the First Amendment in this Second
Amendment to correct the effective date of the Agreement from May 28, 1995 to
the correct effective date of December 8, 1995;
WHEREAS, the parties also desire to amend the Agreement in this Second
Amendment to establish certain financial terms, equipment repair
responsibilities, and the period of performance covered;
NOW THEREFORE, for and in consideration of the above-stated premises,
the payments, and the covenants and agreements herein contained, UTMB and EMSI
do agree that the Agreement is amended as follows:
1. First Amendment's Attachment B, Section 1.6 is deleted in its entirety and
replaced with the Second Amendment's Attachment B, Section 1.6
1.6 Termination
1.6.1. This Contract may be terminated by UTMB without penalty and
without cause upon three (3) years written notice of such
termination to EMSI.
1.6.2. This contract may be terminated without penalty by EMSI
without cause upon three (3) years written notice to UTMB.
1.6.3. In no event shall such termination by UTMB or EMSI as provided
for under this Section give rise to any liability on the part
of UTMB or Contractor including, but not limited to, any
claims of the non-terminating party for compensation for
anticipated profits, unabsorbed overhead, or interest on
borrowing. UTMB's sole obligation hereunder is to pay the
Contractor for products and/or services ordered and received
prior to the date of termination. Contractor's sole obligation
hereunder is to pay UTMB for all Fixed and Variable Use Fees,
utility expenses, and to maintain/repair the incinerator units
in accordance with the terms of this Agreement to the date of
termination.
2. First Amendment's ATTACHMENT A, Section 1.2.2 sub-section 1.2.2.1 is
deleted in its entirety and replaced with the Second Amendment's ATTACHMENT
A, Section 1.2.2 sub-section ▇.▇.▇.▇:
1.2.2. Facility Use Fees
1.2.2.1. FIXED FACILITY USE FEE. EMSI will pay to UTMB a Fixed Facility
Use Fee in the amount of $15,000 per month for the use of one
incinerator unit. In the event Contractor utilizes both
incinerators, an additional Fixed Facility Use Fee of $750 per
day will be due for each 24 hour period, or portion thereof,
that the second unit is used by Contractor. This Daily Use Fee
will begin being due when the total plant volume has exceeded
985,000 pounds in a single month. Once this threshold has been
reached and from that point forward, the Daily Use Fee for the
use of the second unit will be due for each 24 hours period in
which the second unit is used. Payment to UTMB for this use
will based on documented usage, supported by the computerized
operations record for both units. Copies of the incinerator
use graphs for the given month will be submitted in support of
the payments. Each month, for up to four consecutive 24 hour
periods, the contractor shall have use of the second unit
without a daily use fee for the purpose of performing
maintenance on the other operating unit. For this credit to be
given the number one unit (or primary unit) must be
operational and only down for normal preventive maintenance
and the monthly facility fees for the first unit must have
been paid to UTMB and all of the contractors accounts current
with UTMB.
3. First Amendment's ATTACHMENT C, Section 1.1 and Section 1.2 is deleted in
its entirety and replaced with the Second Amendment's ATTACHMENT C, Section
1. 1:
1.1 Gate Rate for UTMB shall be based on the progressive rate
schedule, outlined below, with the Gate Rate adjusted
quarterly upon review by UTMB and EMSI of the actual waste
volume processed during the preceding quarter. In return for
the capital investment required from UTMB to complete the
repairs on the second incinerator unit, the contractor agrees
to reduce the gate rate for UTMB to a rate not exceed .225
cents per pound for the remainder of the contract term. Should
the total plant volume exceed the original threshold volume of
3,390,000 pounds per quarter UTMB's gate rate will still
reduce further to .220 per pound as originally agreed. The new
gate rate will commence once repairs are started on the number
two unit. Repairs on unit number two are to be completed
within three months of the actual work start date.
Progressive Rate Schedule - UTMB - (Prior to repairs being
started on unit number two)
Rate/Lb. $.225 $.225 $.225 $.220
Volume Milestone
in lbs./quarter 1,140,000 1,890,000 2,640,000 3,390,000
Progressive Rate Schedule - UTMB - (After repairs are started
on unit number two)
Rate/Lb. $.225 $.225 $.225 $.220
Volume Milestone
in lbs./quarter 1,140,000 1,890,000 2,640,000 3,390,000
Gate Rate for UTMB's Designated Accounts shall not exceed the
progressive rate schedule below and shall be individually
negotiated between EMSI and each Designated Account.
Progressive Rate Schedule - Designated Accounts
Rate/Lb. $.255 $.240 $.225 $.220
Volume Milestone
in lbs./quarter 1,140,000 1,890,000 2,640,000 3,390,000
4. New Second Amendment Section 6.1 is added to read as follows:
VI. ON SITE MEDICAL WASTE TRANSPORTATION
6.1 EMSI agrees to assume full responsibility for the labor and equipment and
supplies necessary for the transportation of medical waste and special waste
to the Services Building from the various designated pick-up sites on the
Galveston Campus. EMSI agrees to perform this service using TNRCC approved
vehicles and properly trained personnel. In return for these services UTMB
agrees to pay EMSI a flat fee of $6,000 per month. EMSI agrees to resolve any
waste accumulation problems within two hours of being notified by UTMB.
Except to the extent specifically modified by any property executed amendment,
all the terms and conditions of the AGREEMENT and the FIRST AMENDMENT are in
full force and effect, and the parties by their signatures to this SECOND
AMENDMENT do hereby confirm and adopt the AGREEMENT as amended in this SECOND
AMENDMENT.
ENVIROCLEAN MANAGEMENT THE UNIVERSITY OF TEXAS MEDICAL
SERVICES, INC. BRANCH AT GALVESTON
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President Vice President for Business Affairs
----------------------------
Date: May 8, 1998 Date: May 12, 1998
---------------------------- ------------------------------
THIRD AMENDMENT
TO THE
CONTRACTOR SERVICE AGREEMENT
BETWEEN
THE UNIVERSITY OF TEXAS MEDICAL BRANCH AT GALVESTON
AND
ENVIROCLEAN MANAGEMENT SERVICES, INC.
This third amendment (the "Third Amendment") is to the Contractor Service
Agreement (the "Agreement" or the "Contract") between The University of Texas
Medical Branch at Galveston, a component institution of The University of Texas
System which is an agency of the State of Texas, ("UTMB") and EnviroClean
Management Services, Inc. ("EMSI"), and which Agreement became effective on
December 8, 1995.
WHEREAS, UTMB and BMI Services, Inc. entered into the Agreement to
provide medical waste disposal services for UTMB;
WHEREAS, BMI Services, Inc. assigned its rights and responsibilities to
EMSI on March 4, 1996;
WHEREAS UTMB and EMSI, INC. amended the Original Agreement in the FIRST
AMEMDMENT and;
WHEREAS UTMB and EMSI, INC. amended the Original Agreement in the
SECOND AMEMDMENT and;
WHEREAS, the parties desire to amend the Agreement to recognize UTMB's
decision to exercise its option to extend the Agreement's term and restructure
equipment repair and maintenance responsibilities;
NOW THEREFORE, for and in consideration of the above-stated premises,
the payments, and the covenants and agreements herein contained, UTMB and EMSI
do agree that the Agreement is amended as follows:
1. Section 1.1 of the Agreement, including the Attachment A of the
agreement is deleted in its entirety and is replaced by the Third Amendment's
Section 1.1, including the Third Amendment's Attachment A, as follows:
1.1 SERVICES. Contractor shall render such services as are set
forth in the Special Conditions, dated December 8, 2000 and incorporated herein
as Third Amendment, Attachment A.
2. The Section 2.1 of the Agreement is deleted in its entirety and is
replaced by the Third Amendment's Section 2.1 as follows:
2.1 TERM. The parties acknowledge that performance began on
December 8, 1995. Regardless of the date of execution of this Third Amendment,
the Contractor's services shall continue for a period of sixty (60) months
beginning on December 8, 2000 and ending on December 8, 2005.
3. Section 3.1 of the Agreement, including its Attachment C of the
Agreement, is deleted in its entirety and is replaced by the Third Amendment's
Section 3.1, and the Third Amendment's Attachment C, as follows:
3.1 PAYMENT FOR SERVICES. UTMB agrees to pay Contractor for
services rendered by Contractor in accordance with the Rate Schedule dated
December 8, 2000 incorporated herein as Third Amendment, Attachment C.
4. The Second Amendment's Attachment B, Section 1.6 is deleted in its
entirety and is replaced with the Third Amendment's Attachment B Section 1.6 as
follows:
1.6 Termination Without Cause.
1.6.1. Either party without cause and without penalty may terminate
this Contract upon written notice of such termination to the other
party. Neither party shall be relieved of its contractual obligations
during the
phase-out period, and Contractor shall at all times provide services
contemplated in the Agreement during the phase-out period in good
faith. The phase-out period shall end on the earlier of:
1.6.1.1.1. Three hundred sixty five (365) calendar days from the
date of written notice of such termination, or
1.6.1.1.2. December 8, 2005, or
1.6.1.1.3. A date mutually agreed to in writing by the parties
1.6.2. If Contractor terminates the Agreement pursuant to this
Section, it shall pay UTMB any unpaid portion of the Capital Renewal
Fee identified in Third Amendment, Attachment A, Section 1.2.3 within
sixty (60) days preceding the termination date.
1.6.3. In no event shall termination under this Section give rise to
any liability on the part of either UTMB or Contractor including, but
not limited to, any claims of the non-terminating party for
compensation for anticipated profits, claims of third parties, or
interest on borrowing.
5. Attachment D is deleted in its entirety.
Except to the extent specifically modified by any properly executed amendment,
all the terms and conditions of the AGREEMENT as amended are in full force and
effect, and the parties by their signatures to this THIRD AMENDMENT do hereby
confirm and adopt the AGREEMENT as amended in this THIRD AMENDMENT.
ENVIROCLEAN MANAGEMENT THE UNIVERSITY OF TEXAS
SERVICES, INC. MEDICAL BRANCH AT GALVESTON
By: ______________________________ ______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: ____________________________ Vice President for Business Affairs
Date: ____________________________ Date: ___________________________
Third Amendment
ATTACHMENT A
SPECIAL CONDITIONS
Dated, December 8, 2000
1.1 GENERAL
These Special Conditions and the referenced documents herein are intended to
outline the services to be performed by the Contractor as required by UTMB for
the operation, and management of UTMB's incinerator facility including the
transport, management, and disposal of medical waste by Contractor.
It is not the intention to mention herein each and every minor item required.
In the performance and delivery of services hereunder, the Contractor
represents that it has the necessary knowledge, skill, abilities and resources
to provide said services in accordance with the requirements hereof and within
best industry standards and practices. Further, the Contractor represents that
it is familiar with the scope and nature of work required by UTMB, and
understands the conditions under which it will be obligated to operate. No
allowance will be made consequently for any error or omissions, including,
without limitations, negligence of the Contractor in this regard; however, not
to be exercised unreasonably by UTMB.
1.2 CONTRACTOR'S RESPONSIBILITIES
1.2.1 General. Except as otherwise expressly stated in this Attachment A,
the Contractor shall, at its own expense, furnish and pay for all labor,
materials, equipment, tools, vehicles, utilities, and any other items and/or
services necessary to properly operate and manage UTMB's incinerator facility
and to transport medical waste to the facility for disposal in strict
conformance with UTMB's permit, TNRCC Permit No. MSW-2232 and the Site
Operating Plan submitted on October 8, 1993 and subsequently revised July 26,
1994 and September 16, 1994 and all future revisions as may be required.
Contractor's utility responsibilities are limited to the utilities required to
operate the building equipment, and the processing equipment used for the
disposal of all waste. This includes all utilities (natural gas, electricity,
water and sewer) required in the building with the exception of the electricity
used for the TRANSVAC System and two municipal solid waste compactors.
Contractor agrees to operate the facility in accordance with the Site Operating
Plan as well as the agreed upon Daily Standard Operating Procedures and any
other procedures or guidelines developed jointly by the Contractor and UTMB.
1.2.2. FIXED FACILITY MAINTENANCE AND USE FEES
1.2.2.1. Fixed Facility Maintenance and Use Fee. The Contractor will pay to
UTMB a Fixed Facility Maintenance and Use Fee in the amount of $17,500 per
month for the use and maintenance of one incinerator unit. This amount will
increase by $12,000 annually each year of the contract according to the
following table:
-------------------------------------------------------------------------------
Year 6 Year 7 Year 8 Year 9 Year 10
-------------------------------------------------------------------------------
$210,000 $222,000 $234,000 $246,000 $258,000
-------------------------------------------------------------------------------
$17,500 Monthly $18,500 Monthly $19,500 Monthly $20,500 Monthly $21,500 Monthly
-------------------------------------------------------------------------------
Inoperable Condition. In the event that the incinerator unit is inoperable and
unable to process waste during the period of December 8, 2000 through July 15,
2001, the Fixed Facility Maintenance and Use Fee shall be adjusted on a pro
rata basis and Contractor shall receive a credit of $583 per day. In order for
Contractor to receive a credit, the following must occur: (1) the incinerator
must be inoperable for a period of greater than ten (10) consecutive operating
days, and (2) Contractor must not be responsible for causing the inoperable
condition. The credit will be due for each consecutive inoperable day in
excess of the 10 days and will be applied as a credit to the following month's
Fixed Facility Maintenance and Use Fee. Should the period of inoperability
exceed a total of 30 days from the first day of inoperability, the contractor
shall receive an additional credit for the first ten days of five thousand
eight hundred and thirty dollars ($5,830.00, or 10 days times $583 per day)
thereby receiving credit for all of the first 30 days of incompatibility.
In the event that the incinerator unit is inoperable and unable to process
waste during the earlier of either the period of July 16, 2001 through December
8, 2005, or the period the second incinerator unit is operational, the Fixed
Facility Maintenance and Use Fee shall be adjusted on a pro rata basis and
Contractor shall receive a credit of $583 per day. In order for Contractor to
receive a credit, the following must occur: (1) the incinerator must be
inoperable for a period of greater than four and one half (4 1/2) operating
days in a single calendar month, and (2) Contractor must not be responsible for
causing the inoperable condition. The credit will be due for each day in excess
of the 4.5 inoperable days and will be applied as a credit to the following
month's Fixed Facility Maintenance and Use Fee. Should the period of
inoperability exceed a total of 30 days from the first day of inoperability,
the contractor shall receive an additional credit for the 4.5 days of two
thousand six hundred twenty three dollars and fifty cents ($2,623.50, or 4.5
days times $583 per day) thereby receiving credit for all 30 days of
inoperability.
The amount of the daily credit will increase annually in accordance with the
monthly Fixed Facility Maintenance and Use Fee, calculated as one-thirtieth
(1/30) of the monthly amount. An "operating day" is defined as being the
24-hour period from 12 midnight to 12 midnight during which the incinerator was
available to operate for any of the 24 hours during that period of time.
"Available to operate" is defined as the incinerator unit is fired and at
operating temperatures or in a stand-by (idle) mode and available to operate.
In light of the additional work effort and expense incurred by the Contractor
for processing waste during equipment downtime, for each 24-hour period beyond
the above referenced 4.5 days that the incinerator unit is not operational in a
single calendar month, provided Contractor was not responsible, the Contractor
shall have the right to charge UTMB an additional $275.00 per day for UTMB's
total amount of waste disposal during each of the additional days of
inoperability. This charge is in addition to the specified gate rate per pound
listed in Schedule C. This additional charge is not in effect during the first
six months of the contract.
1.2.3 CAPITAL RENEWAL FEE
1.2.3.1 CAPITAL RENEWAL FEE. It is the intent of this section to define the
mechanism by which UTMB will recover from the Contractor during the term of
this Third Amendment the capital expense required to bring the facility into
compliance with the new EPA / TNRCC air emission standards. The parties agree
that the needed capital expenditures are estimated to be $1,200,000, divided
into two phases of $650,000 and $550,000. It is expected that these capital
expenditures will be completed in Years 6 and 7 of this renewal term
respectively. The Contractor will pay to UTMB beginning on the eighth of each
month in the first year of this Third Amendment an amount equal to $10,833.00
monthly. Beginning in the second year of this Third Amendment, Contractor will
pay $22,291.66 monthly. This Capital Renewal Fee will be reviewed on the
eighth of December of each year in the Third Amendment. The parties agree to
adjust the estimated capital expenditures to the actual capital expenditures.
The parties agree that any new capital expenditures not contemplated will be
amortized over the remaining period of the Third Amendment.
(Example: Estimated first year expenditure = $650,000 / 60 months = $10,833.00
per month Capital Renewal Fee. Second Year Actual Capital expense in Year 2
=$550,000 plus the remaining un-amortized balance of year one of $520,000 =
total amount to be amortize = $1,070,000 / 48 months = Capital Renewal Fee of
$22,291.66)
Example Table
Capital Renewal Fee Annual Calculation
----------------------------------------------------------------------------------------------------------------
At start of: Year 6 Year 7 Year 8 Year 9 Year 10 Five Year Totals
----------------------------------------------------------------------------------------------------------------
Capital Year 6 650,000 - - - - $650,000
----------------------------------------------------------------------------------------------------------------
Capital Year 7 $550,000 - - - $550,000
----------------------------------------------------------------------------------------------------------------
Actual Expense Prior Year $0 $650,000 $450,000 $100,000 0 $1,200,000
----------------------------------------------------------------------------------------------------------------
Total Capital Expense TD $1,200,000 $1,100,000 $1,200,000 $1,200,000 $1,200,000
----------------------------------------------------------------------------------------------------------------
Less accumulated Capital
Renewal Fees Paid in
prior years $0 $130,000 $397,499.92 $631,666.66 $915,833.38 $1,200,000
----------------------------------------------------------------------------------------------------------------
Total Amount to be
Amortized $650,000.00 $1,070,000 $702,500.08 $568,333.40 $284,166.62 $0
----------------------------------------------------------------------------------------------------------------
Months Amortized 60 48 36 24 12 -
----------------------------------------------------------------------------------------------------------------
Monthly Capital Renewal
Fee for Year $ 10,833.33 $22,291.66 $ 19,513.89 $ 23,680.56 $23,680.56 -
----------------------------------------------------------------------------------------------------------------
1.2.4 VARIABLE USE FEE
1.2.4.1 Contractor shall pay UTMB a Variable Use Fee of Five Thousands of One
Dollar ($0.005) per pound for each pound of waste incinerated at the Facility
per month. The Variable Use Fee will be due only for non-UTMB waste brought
from off-site to be disposed at the Facility. This does include waste brought
from UTMB designated accounts that originate off-site.
1.2.5 The Contractor will use commercially reasonable good faith efforts to
actively market medical waste disposal services to non-UT System institution
entities to be disposed at UTMB's incinerator facility for efficient
utilization of the facility.
1.2.6 The Contractor will actively market to UT System institutions (UTMB's
Designated Accounts) medical waste collection, packaging and transportation
services for medical waste to be disposed at UTMB's incinerator facility.
1.2.7 The Contractor shall, at its own expense, be responsible for the
proper disposal of medical waste and the transport thereof to an alternate site
in the event UTMB's incinerator facility is not operable or the facilities
capacity is exceeded for any reason.
1.2.8 The Contractor agrees to pay any fines or penalties that may be
imposed for Contractor's failure to comply with the permit and to indemnify
UTMB against any and all costs in this regard. Contractor shall immediately
notify UTMB of any correspondence to or from any regulatory agency or a visit
by any regulatory inspector and to cooperate with UTMB in connection with any
permit amendment(s) UTMB, TNRCC, the EPA or any other regulatory agency may
require. Any communications with regulatory agencies regarding the operating
permit or the incineration facility shall originate from UTMB and be
coordinated with UTMB's Office of Health and Safety Services.
1.2.9 Contractor shall be responsible for all its parking arrangements and
expenses/costs thereof. UTMB will not provide any parking facilities to
Contractor or its personnel. UTMB will assist in providing free and clear
access to the facility for waste related commercial vehicles and maintenance
equipment.
1.2.10 Contractor shall reimburse UTMB for all utility costs incurred by UTMB
applicable to incinerator facility operations (excluding the Trans-Vac System
and municipal solid waste compactors). UTMB will ▇▇▇▇ Contractor for utilities
based on actual utilities consumed at the actual rate(s) in effect for each
utility, respectively. UTMB agrees to ▇▇▇▇ the Contractor at the utility rates
established for all UTMB entities by the Utility Service Account Business Plan
as approved by the UTMB Vice President for Business and Administration. The
Contractor shall receive a credit monthly for the value of the steam produced
by the incinerator plant. The dollar value of this steam credit will be based
on the current cost of the natural gas required in UTMB's Central Utility Plant
to produce an equal volume of steam.
1.2.11 Contractor will be responsible for, at its expense: ash removal;
testing and disposal; discharge water testing expenses, any damage caused by
any fluid discharged or released at an abnormal pH concentration as it enters
the drainage system; and compliance report fees; and on any cost associated
with environmental cleanup or disposal related to materials associated with the
incinerator facility operations (e.g., caustic solutions, process supply
chemicals, and ash spillage).
1.2.12 Monthly payments of the Fixed Facility Maintenance and Use Fee and the
Capital Renewal Fee are to be received by UTMB by the 10th day of the month
following the month for which they are due. Contractor may request that their
monthly payments to UTMB be applied as a credit against the Contractor's
invoiced amount for Services received by UTMB.
1.3 PERSONNEL
1.3.1 The Contractor shall maintain a staff of properly trained and
experienced personnel to ensure satisfactory performance under this Contract.
If specific professional licenses are required to perform the services
required, the Contractor will be responsible for ensuring personnel are in
compliance. UTMB reserves the right to request the Contractor to remove any
employee, not to be exercised unreasonably.
1.3.2 The Contractor shall designate a project coordinator who shall be
responsible for the coordination and administration of UTMB's account. The
project coordinator shall represent the Contractor in all matters pertaining to
the Contract and have the authority to resolve any and all problems / issues
which may arise.
1.3.3 It having been determined that the individuals named in the
Contractor's proposal and/or such other individuals who are to be assigned to
work under this Contract as a result of negotiations, are necessary for the
successful performance of this Contract, the Contractor agrees that whenever
for any reason, one or more of the aforementioned individuals are unavailable
for performance under this Contract, the Contractor agrees to replace such
individual(s) with an individual(s) of substantially equal abilities and
qualifications, in this regard, the Contractor shall submit to the UTMB
Coordinator in duplicate, a resume giving the full name, fide, qualifications,
and experience, for all such successor personnel prior to assignment of such
personnel to perform work under the Agreement, so that the UTMB Coordinator may
decide whether or not such successor personnel meet the qualifications of the
position, or whether or not they are qualified to perform work assigned, and
advise the Contractor accordingly. If UTMB objects to any individual proposed
to perform a particular service, then Contractor shall submit to the UTMB
Coordinator, in the manner described above, the name(s) of other individuals
for UTMB's consideration.
1.4 CONTRACT SECURITY
1.4.1 Contractor must continue to furnish to UTMB a bond of the type and in
the amount specified below. Such bond to be in such form and with such surety
as UTMB may approve. If any surety upon any bond furnished in connection with
this Contract becomes insolvent, or otherwise not authorized to do business in
this State, the Contractor shall promptly furnish equivalent security to
protect the interests of the State of Texas in the prosecution of the work
contemplated by this Contract.
1.4.1.1 Performance Bond: Contractor shall continue to provide a performance
bond in the amount of $70,000 as required in the original Agreement and within
30 days of the signing of this Third Amendment, the contractor shall replace
this performance bond with a performance bond in the amount of $200,000
conditioned upon the faithful performance of the Contract and must be in force
at all times during the term of this agreement and any extensions.
1.4.1.2 Such Bond shall be executed by a corporate surety duly authorized to
do business in the State of Texas, acceptable to UTMB, and on forms approved by
the Attorney General of Texas.
1.4.1.3 If any surety upon any bond furnished in connection with the Contract
becomes insolvent, or otherwise not authorized to do business in this State,
the Contractor shall promptly furnish equivalent security to protect the
interest of the State of Texas and of persons supplying labor, materials and/or
equipment in the prosecution of the work contemplated by the Contract.
1.4.1.4 Each bond shall be accompanied by a valid Power-of-Attorney (issued
by the surety company and attached, signed and sealed, with the corporate
embossed seal, to the bond) authorizing the agent who signs the bond to commit
company to the terms of the bond, and stating (on the face of the
Power-of-Attorney) the limit, if any, in the total amount for which he is
empowered to issue a single bond.
1.5 UTMB RESPONSIBILITIES
1.5.1 UTMB will maintain ownership of the incinerator facility and
equipment, as well as all rights and privileges associated with TNRCC Permit
No. MSW-2332.
1.5.2 UTMB's Facilities Operations and Management Department will be
responsible for maintenance and repair of the incinerator facility and all
equipment there in. This will include all cost for repairs of all incinerator
process related equipment including but not limited to the kilns, boilers,
water treatment system and collision scrubber systems, all electrical equipment
and switchgear including the switchgear breaker boxes, exhaust stacks and
flues, the caustic feed systems, the municipal water line including the
equipment shutoff valve, interior and exterior building lighting, storm water
drains from the roof, and boiler feed water line including the low water
cut-off systems. In addition, UTMB will provide maintenance/repair services on
building systems not associated with the incinerator equipment or associated
equipment (A/C, Heat, Plumbing associated with bathrooms, offices, etc.) and
building structure (wall, roof, floors - excluding painting of floors which
will remain a contractor responsibility.) unless such repairs are the result of
an act or omission (including negligence) of the Contractor. UTMB's Facilities
Operations and Management Department will be responsible for all Routine
Maintenance and/or Preventative Maintenance as required per the Site Operating
Plan or Manufacturer's Specifications and all other repairs and maintenance,
except as specified herein, will be performed by UTMB at its expense unless
such repairs are the result of Contractor's negligence or misconduct or failure
to properly operate the equipment, in which event Contractor will be
responsible for the cost and will be billed directly with supporting
documentation attached. All maintenance performed will be documented properly
and reported on monthly
1.5.3. Deleted
1.5.4. The University of Texas Facilities Operations and Management
Department ▇▇▇▇▇▇▇ has been designated as UTMB's Contract Manager and shall
represent UTMB in all matters pertaining to the contract and is responsible for
the overall administration of the Contract.
1.5.5 The UTMB Contract Manager shall decide all questions, which may arise
pertaining to the Contractor's performance of services and fulfillment of
Contractor's obligations and responsibilities under the Contract.
1.5.6. The UTMB Contract Manager may designate a project coordinator who
shall be responsible for coordinating with Contractor's personnel and address
day-to-day operational matters pertaining to the Contract and Incinerator
facility operations.
1.6 FACILITY MODIFICATIONS, ENHANCEMENTS OR UPGRADES
1.6.1 UTMB will be responsible for any modifications, upgrades or
enhancements to the facility as a result of a regulatory compliance requirement
or recommendation, at its own expense and discretion. Such expense shall be
added and included in the calculation of the Capital Renewal Fee in section
1.21 of this attachment and amortized over the remaining length of the
contract. UTMB agrees to work cooperatively with EMSI on the design, scope and
schedule of the work to be performed in the facility. It is mutually agreed
that UTMB will have the final authority on all decisions related to any
modifications, enhancements, or upgrades performed in and on the facility and
equipment.
1.6.2 Contractor may, from time to time, during the term of the Contract
recommend to UTMB enhancements or modifications to the incinerator facility,
which will improve the facility's operational efficiency. UTMB will consider
such recommendations on a case-by-case basis with payment thereof to be as
mutually agreed upon in writing by UTMB and Contractor.
1.7 TRANSPORTATION
Each of UTMB's Designated Accounts, may at its option, assume responsibility
for the packaging, handling and/or transport of the medical waste it generates
and may at its sole discretion, contract for such services to third parties or
perform such services itself. Contractor agrees to accept and dispose of the
Designated Accounts medical waste at the contracted gate rate set forth in
Attachment C or as negotiated individually with the Designated accounts. Such
amount shall not to exceed the gate rate established in Schedule C for
Designated Accounts.
1.8 DISPUTE RESOLUTION
If at any time there is a dispute between the parties regarding this Contract
and the performance hereunder, the parties agree that they will within ten (10)
days following mailing of written notice of a dispute, engage in good faith
face-to-face negotiations in an attempt to resolve the dispute and shall, upon
failing to negotiate resolution, choose a mutually agreeable third party
neutral, who shall mediate the dispute between the parties. The mediator shall
be a person qualified under the Texas Alternative Dispute Resolution Procedures
Act and shall be appointed by a state district judge or the American
Arbitration Association if the parties are unable to agree upon a qualified
person. Mediation shall be non-binding and shall be confidential. The parties
shall refrain from court proceedings during the mediation process insofar as it
can do so without prejudicing its legal rights. The parties shall participate
in good faith in accordance with the recommendations of the mediator and shall
follow the procedures for mediation as suggested by the mediator. All expenses
of mediation, except expenses of the individual parties, shall be shared
equally by the parties. Each party shall be represented 'in the mediation by a
person with authority to settle the dispute. If the parties are unable to
resolve the dispute in mediation, then the parties shall resort to litigation
in the District Court of Galveston County. In no case shall the provision of
this paragraph delay any other time periods set forth in the Contract except by
the written agreement of the parties
ATTACHMENT C
RATE SCHEDULE
DATED, DECEMBER 8, 2000
1.0 For waste disposal services furnished by contractor to UTMB, UTMB
agrees to pay contractor as follows:
1.1 Gate Rate for UTMB and designated accounts waste disposal shall be
based on a progressive rate schedule, outlined below, with the Gate Rate
adjusted annually:
Progressive Rate Schedule - UTMB
----------------------------------------------------------------
Contract Year Year 6 Year 7 Year 8 Year 9 Year 10
----------------------------------------------------------------
Cost of Waste .225/lbs .235 .245 .255 .265
Disposal per
Pound
----------------------------------------------------------------
Progressive Rate Schedule - Designated Accounts
Gate Rate for UTMB's Designated Accounts shall not exceed $0.265 per pound and
may be individually negotiated between Contractor and each Designated Account.
1.2 Transport rate for UTMB from Huntsville, Texas shall not be greater
than $2.00 per mile calculated on the round trip distance from the pickup site
location to the UTMB incinerator facility. Each Designated Account shall have a
transport rate not greater than $2.00 per mile calculated on the round trip
distance from the pickup site location to the UTMB incinerator facility except
in the event Contractor elects to negotiate lower rates with specific
Designated Accounts.
1.3 All round trip distances used in section 1.2 above shall be based on
the prevailing distance from the pick-up City to Galveston, Texas as published
in the State of Texas General Services Commission Travel Reimbursement
Guidelines. Any exceptions must be agreed to in writing by UTMB.
1.4 Supplies (boxes and bags) furnished by Contractor upon request of UTMB
or its designated accounts will be billed at $1.50 each.
1.5 Any waste furnished to Contractor for transport by Designated Accounts
in a damaged condition requiring repackaging to meet applicable regulation will
be charged at $30.00 per box plus appropriate gate rate and transportation
charges.
1.6 Contractor agrees to provide medical waste pick-up and disposal
services for any of the off-site UTMB owned and operated Clinics or facilities
at a rate not to exceed Eighteen and 50/100ths Dollars ($18.50) per box. Such
price is all-inclusive and includes all box and plastic liner costs and
transportation costs to the disposal facility.
NOTES:
A) The above rates shall apply to all UTMB Designated Accounts who have
contracted through UTMB.
B) Contractor to submit invoice by the tenth day of the month following
services and UTMB shall make payment, net thirty (30) days upon UTMB's receipt
of an acceptable and itemized invoice with appropriate supporting documentation
from Contractor. The invoice must reference UTMB's contract number.
C) No other price adjustments will be allowed other than the annual
increase in Gate Rate as listed above.