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EXHIBIT 10.8
MEDICAL DEVICES RECYCLABLES AGREEMENT
This Agreement is made as of this 30th day of April, 1998, by and between BFI
WASTE SYSTEMS OF NORTH AMERICA, INC., a Delaware corporation, with an office at
757 N. Eldridge, Houston, TX 77071 (hereinafter referred to as "BFI") and
ALLIANCE MEDICAL CORPORATION a Delaware corporation, with an office at 3010 N.
2nd St., Suite 110, Phoenix, AZ 85012 (hereinafter referred to as "ALLIANCE").
ARTICLE I - DECON CENTER
A. ALLIANCE, at its expense, shall permit, construct and operate a Decon
Center (defined below) at the BFI Facility (defined below) at Apopka,
FL and at the BFI Facility at Vernon, CA. ALLIANCE shall apply for all
necessary permits to construct and operate each Decon Center within
thirty (30) days after the date of this Agreement (or, if later, within
thirty (30) days after BFI approves written plans and specifications
therefor as provided below) and shall thereafter diligently attempt to
obtain all such permits. ALLIANCE shall begin operations at each Decon
Center within sixty (60) days after receipt of all necessary permits to
construct and operate such Decon Center. BFI shall Lease each Decon
Center to ALLIANCE for a fair market rental pursuant to a form of lease
attached hereto as Exhibit "A". The lease shall be for a term of three
(3) years beginning on the date that operations begin, extendable for
such period as is mutually agreed in writing; provided, however, that,
notwithstanding any contrary provision herein, the lease shall provide
that BFI may terminate it at any time upon five (5) days written notice
if, in BFI's reasonable judgment, operation of the Decon Center
requires the BFI Facility to obtain additional permits or approvals or
materially interferes with or jeopardizes other operations at the BFI
Facility and such matter is not resolved to BFI's reasonable
satisfaction within such five (5) day period (in which event, ALLIANCE
shall
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have thirty (30) days after such termination to relocate the Decon Center
to within five (5) miles of the BFI Facility), or if, for any reason, BFI
ceases operations at the BFI Facility or sells the BFI Facility. Each
Decon Center may contain approximately 450 square feet; provided, however,
that ALLIANCE shall construct the Decon Center in accordance with Exhibit
"B", attached hereto, and to the extent not set forth in Exhibit "B", in
accordance with written plans and specifications approved in advance by
BFI ALLIANCE, at its expense, shall operate each Decon Center in
accordance with applicable laws, regulations and permits.
B. ALLIANCE, at its expense, shall permit, construct and operate other Decon
Centers at (if approved by BFI) or within five miles of such other BFI
Facilities as are mutually agreed in writing by the parties in their sole
discretion. Except as otherwise agreed in writing by the parties, any such
additional Decon Centers shall be constructed and leased (if at a BFI
Facility) in accordance with the provisions in Section I A. above.
C. The following terms used in this Agreement shall have the meanings
ascribed to them below:
(1) "Decon Center" means a facility for sorting and such decontamination
of Reusable Materials (defined below) to enable safe handling and
shipping to a facility for further processing necessary for reuse.
(2) "BFI Facility" means a biomedical waste autoclave, incinerator or
transfer station operated by BFI or its affiliates.
(3) "Reusable Materials" means used noncritical surgical instruments and
devices and related items which, in accordance with applicable
regulations and ALLIANCE's
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reasonable judgment, can be cleaned, sterilized, processed and
refurbished as necessary for reuse.
(4) "Biomedical Waste" means those wastes defined by the United States
Environmental Protection Agency (USEPA) as infectious wastes in its
Guide for Infectious Waste Management, #EPA/530-SW-86-014, May 1986,
or defined by the USEPA as medical wastes in 40 CFR 259.30, and any
other wastes identified as infectious or similar wastes in any other
applicable federal, state, county or municipal laws, regulations and
guidelines. "Biomedical Waste" specifically excludes (a) fetal
remains and human torsos and (b) corrosive, reactive, radioactive,
toxic and other hazardous wastes and substances as defined in any
applicable federal, state, county or municipal laws, regulations and
guidelines.
ARTICLE II - SERVICES
A. BFI, at its expense, shall (1) deliver to each Decon Center all
containers containing Reusable Materials located at the ground service
customers of each BFI Facility serviced by such Decon Center ("BFI
Customers"), and (2) collect from each Decon Center and process at the
BFI Facility all Biomedical Waste in Reusable Materials containers
which ALLIANCE, in its reasonable judgment, cannot process for reuse
("Biomedical Residuals"). ALLIANCE shall be the generator of
Biomedical Residuals and shall so execute manifests as required by BFI.
The ground service area of the Apopka and Vernon BFI Facilities are
described in Exhibit "B".
B. BFI may, at its sole option and at its expense, deliver to each Decon
Center all containers containing Reusable Materials located at the
customers of ALLIANCE within the ground service area of such Decon Center
("ALLIANCE Customers"), subject to mutual agreement between BFI and
ALLIANCE on the specific operating details and
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requirements and the amount payable to BFI by ALLIANCE for such service
and any necessary customer approval.
C. ALLIANCE, at its expense, shall (1) market services for processing and
resale of Reusable Materials to BFI Customers, and (2) sort,
decontaminate and recycle all Reusable Materials delivered by BFI to a
Decon Center. ALLIANCE shall not charge BFI or BFI Customers for such
services provided by ALLIANCE and BFI shall determine, in its sole
discretion, its charges (if any) to BFI Customers for such services;
provided, however, that ALLIANCE may sell its services for reprocessing
Reusable Materials (suitable for reuse) to BFI Customers for an amount
mutually agreed by ALLIANCE and such BFI Customer. BFI shall recommend
ALLIANCE's services for processing and resale of Reusable Materials to
BFI Customers and ALLIANCE shall recommend BFI's Biomedical Waste
disposal services to ALLIANCE Customers.
D. BFI may provide any of its services, equipment or materials pursuant to
this Agreement by or through its affiliates. Any specific operating
details and requirements for the performance of the services described
above in this Article II which the parties now desire to set forth are
provided in Exhibit "B".
E. BFI reserves the right to decline to accept for collection,
transportation, treatment and/or disposal any Reusable Materials or
Biomedical Waste which, in BFI's reasonable judgment, it cannot
transport, treat or dispose of in a lawful manner or without a risk of
harm to BFI's employees public health or the environment. Improperly
packaged, leaking, overweight or damaged containers are subject to
rejection or to off-specification charges for repackaging and/or
special handling. No containers will be picked up that are wet or
leaking.
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ARTICLE III - CONTAINERS AND PACKAGING
BFI, at its expense, shall supply all containers (reusable or disposable, as
determined by BFI) to BFI Customers (and ALLIANCE Customers serviced by BFI) for
deposit of Reusable Materials and manifest such materials; provided, however,
that ALLIANCE, at its expense, shall provide stickers or other markings
acceptable to BFI to designate such containers as being solely for the deposit
of Reusable Materials and all other packaging required by applicable regulation
(and separate containers for all sharps, which containers shall be disposable,
whether or not required by regulation), and shall provide all necessary customer
training for proper and lawful segregation of Reusable Materials and deposit
into such containers (and any other required packaging, labeling and storage of
Reusable Materials), provided, further, that if the use of BFI provided
containers with the aforesaid stickers or markings proves, in BFI's reasonable
judgment, to be inadequate for proper and lawful segregation and collection of
such Reusable Materials, ALLIANCE shall, at its expense, provide BFI Customers
(and ALLIANCE customers serviced by BFI) with containers and other materials
suitable and satisfactory to BFI for the segregation and collection of Reusable
Materials. BFI may provide any of its services, equipment or materials pursuant
to this Agreement by or through its affiliates. Any specific operating details
and requirements for the performance of the services described above in this
Article III which the parties now desire to set forth are provided in Exhibit
"B."
ARTICLE IV - TITLE
Title to Reusable Materials shall remain with the generator thereof. Title to
Biomedical Residuals shall be transferred to and vest in BFI when received by
BFI at the Decon Center; provided, that title to any materials furnished by
ALLIANCE to BFI at the Decon Center, other than Biomedical Waste, shall remain
with ALLIANCE.
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ARTICLE V - CONSIDERATION
A. For BFI's delivery of Reusable Materials from a BFI Customer to the Decon
Center, ALLIANCE shall pay BFI the then existing rate per pound charged by
BFI to such customer for collection and disposal of Biomedical Waste plus
three cents ($.03) per pound (based upon the greater of actual weight of
Reusable Materials per container - excluding the tare weight of the
container - or a minimum weight established by BFI), plus any applicable
taxes.
B. For BFI's collection of Biomedical Residuals from each Decon Center and
processing of same at a BFI Facility, ALLIANCE shall pay BFI, an amount
per pound or container for handling such material equal to BFI's
prevailing rate in such market for collection and processing of
Biomedical Waste for similarly sized customers with similar service
needs (based upon the greater of actual weight of Biomedical Residuals
per container - excluding the tare weight of the container - or a
minimum weight established by BFI), plus any applicable taxes.
C. BFI reserves the right to adjust the rates it charges in A. and B.
above to fully cover pro rata increases in fuel, insurance and disposal
costs, and increases in costs resulting from changes in regulatory
requirements or guidelines or the enforcement thereof. BFI may also
adjust such rates annually in an amount equal to the percentage
increase in the Consumer Price Index for Urban Consumers (all items)
published by the United States Department of Labor, Bureau of Labor
Statistics since the date of the last such adjustment (or since the
date of execution of this Agreement in the case of the first such
adjustment).
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ARTICLE VI - RIGHT OF FIRST REFUSAL; NONCOMPETITION
A. Each party ("Grantor") hereby grants the following right of first
refusal to the other party ("Grantee"): If Grantor receives an offer
from any person or entity, whether or not solicited by Grantor, during
the term of this Agreement, as it may be extended, for the
establishment of Reusable Materials services contemplated by this
Agreement within the continental United States (whether or not such
offer is solicited by Grantor or whether such proposal constitutes or
is in the form of Grantor's acceptance of an offer), Grantor shall give
written notice (the "Notice of Intended Biomedical Recyclables
Agreement") of the amount and terms and conditions of the offer, the
identity of the offerer, and its willingness to accept the offer.
Grantee (or its affiliates) shall have the option to perform such
service on substantially the same terms and conditions as those
contained in such offer, which option may be exercised by written
notice from Grantee to Grantor within thirty (30) days after Grantee's
receipt of the Notice of Intended Biomedical Recyclables Agreement
("Exercise Period"). If Grantee makes timely exercise of such option,
then Grantor and Grantee shall enter into a written service agreement
for Grantee to provide such service on substantially the same terms and
conditions set forth in such offer. If Grantee fails to make timely
exercise of such option as specified above, Grantor shall be free to
accept such noticed offer for such service within the thirty (30) days
next following the expiration of the Exercise Period on the same terms
and conditions as specified in the Notice of Biomedical Recyclables
Agreement, but not otherwise. If Grantor fails to accept such noticed
offer in writing within such thirty (30) day period, the provisions of
this Section shall again be applicable to any subsequent offer.
B. During the term of this Agreement and for two (2) years thereafter, BFI
shall not engage, directly or indirectly, as principal, owner, agent,
lender, advisor, or otherwise, within the
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ground service areas of each Decon Center established pursuant to this
Agreement, in the business of decontaminating, cleaning, sterilizing,
processing and refurbishing for reuse any surgical instruments and devices
and related items in the Biomedical Waste stream. During the term of this
Agreement and for two (2) years thereafter, ALLIANCE shall not engage,
directly or indirectly, as principal, owner, agent, lender, advisor, or
otherwise, within the ground service areas of each Decon Center
established pursuant to this Agreement, in the business of collecting,
processing and disposing of Biomedical Waste.
ARTICLE VII - PAYMENT OF CHARGES
ALLIANCE shall pay all charges on a monthly basis in arrears within thirty (30)
days of the date of BFI's invoice. ALLIANCE agrees to pay a charge for all past
due amounts in an amount equal to the lesser of one and one-half percent
(1-1/2%) of such past due amounts for each month or part thereof during which
such payments remain unpaid or the maximum rate allowed by applicable law.
Should any portion of any invoice remain unpaid for more than sixty (60) days
from date of the invoice, BFI shall have the option, notwithstanding any
contrary provision herein, upon written notice to ALLIANCE, to suspend service
under this Agreement unless and until payment has been made for all services
performed by BFI under this Agreement, including those payments not yet past
due. Upon such suspension, BFI may remove from any customer all Reusable
Materials containers or other containers belonging to BFI. Upon receipt of
payment, such containers will be redelivered and ALLIANCE will be charged a
recommencement charge equal to three times the average monthly charges to such
customer during the most recent twelve months of service or shorter period of
service.
ARTICLE VIII - FORCE MAJEURE
Except for the obligation to pay for services rendered, neither party hereto
shall be liable for its failure to perform hereunder, in whole or in part, due
to contingencies beyond its reasonable
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control, including, but not limited to, strikes, riots, war, fire, acts of God,
injunction, compliance with any law, regulation, guideline or order of any
governmental body or any instrumentality thereof, whether now existing or
hereafter created.
ARTICLE IX - ASSIGNMENT
This Agreement is assignable with the written consent of both parties and shall
be binding upon and inure to the bend it of the parties hereto and their
respective successors and assigns. Such consent shall not be unreasonably
withheld, nor required in the event of assignment by operation of law, nor
required in the event of an assignment by BFI to an affiliate of BFI.
ARTICLE X - SAVINGS CLAUSE
In case any one or more of the provisions contained in this Agreement shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement; this Agreement shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein.
ARTICLE XI - INSURANCE
BFI and ALLIANCE shall procure and maintain the following insurance coverages
and limits throughout the term of this Agreement:
Workers Compensation Statutory
Employers Liability $100,000 per occurrence
General Liability including $5,000,000 per occurrence
premises operations, blanket
contractual liability and
"xcu" exclusion deleted
Products Liability (ALLIANCE only) $25,000,000 per occurrence
Automobile Liability (BFI only) $5,000,000 combined single limit
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ALLIANCE shall procure and maintain Builders Risk insurance with limits equal to
cost of project during construction and All Risk Property insurance at
replacement value of the Decon Center when such facility becomes operational.
ALLIANCE shall name BFI, its affiliates, their officers and employees as
additional insureds on their General Liability, Builders Risk and All Risk
Property policies. ALLIANCE shall provide an endorsement stating that such
coverages will be primary to any other coverage available to them and that no
act or omission by them shall invalidate or limit such coverage. Each party
shall furnish the other certificates of insurance attesting to coverage and
limits and each certificate shall contain a statement requiring the insurer to
notify the certificate holder at least thirty (30) days in advance of
cancellation of any policy thereunder. All insurance shall be procured from
reputable insurers admitted to do business on a direct basis in each state where
Decon Centers are located. In no event shall construction or operations at a
Decon Center begin until the required evidence of insurance is furnished.
ARTICLE XII - TERM, SUSPENSION AND TERMINATION
A. The term of this Agreement shall be for a period of three (3) years
from and after the date that the last Decon Center to be established
pursuant to this Agreement commences operation; provided, however, that
each Decon Center lease at a BFI Facility and the parties service
obligations hereunder with respect to any Decon Center (whether at or
away from a BFI Facility) shall cease and terminate three (3) years
from and after the beginning of operations at such Decon Center or on
such earlier date as BFI, for any reason, ceases operations at or sells
the BFI Facility serving such Decon Center, or on such other date as is
agreed in writing by the parties in their sole discretion; and
provided, further, that this Agreement and all obligations hereunder
(except those that expressly survive termination of this Agreement)
shall in any event terminate six (6) years from and
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after the date of this Agreement upon any termination of this Agreement,
all Decon Center leases at BFI Facilities shall terminate and ALLIANCE
shall, if requested by BFI, promptly remove all improvements and repair
all damages to the BFI Facility in connection therewith, and otherwise
return the leased area to the condition initially received by ALLIANCE,
reasonable wear and tear excepted.
B. In the event either party hereto fails to perform in accordance with
any provision of this Agreement ("Breaching Party"), the other party
("Non-breaching Party") shall have, without limitation, all rights and
remedies provided at law or in equity; provided, however, the
Non-breaching party may not terminate this Agreement unless the failure
to perform is not cured within thirty (30) days after written notice of
such failure is given by the Non-breaching Party to the Breaching
Party; provided, further, that if such failure to perform (excluding
any obligation of payment) cannot reasonably be cured within such
thirty (30) day period and the Breaching Party promptly begins to cure
such failure after written notice of such failure is given, the
Non-breaching Party may not terminate this Agreement as long as the
Non-breaching Party diligently takes necessary action to effect such
cure, but the Non-breaching Party may nevertheless terminate this
Agreement if such failure is not cured within sixty (60) days after
written notice of such failure is given. In the event that the
Non-breaching Party refers any matter arising under this Agreement to
an attorney, the Breaching Party agrees to pay, in addition to other
amounts adjudged due, any and all costs incurred by the Non-breaching
Party as a result of such action, including costs of court and
reasonable attorneys' fees.
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C. The provisions of Articles IV and XIII shall survive the termination of
this Agreement without regard to the reason for termination. Such
termination shall not alter or affect the continuing rights and
obligations of the parties created by those Articles.
ARTICLE XIII - INDEMNITY
A. BFI will defend, indemnify and hold ALLIANCE harmless from any and all
loss, damages, suits, penalties, costs, liabilities and expenses
(including, but not limited to, reasonable investigation and legal
expenses) arising out of any claim for loss or damage to property,
including ALLIANCE's property and injuries to or death of persons,
including ALLIANCE's employees, caused by or resulting from (i) BFI's
negligence or willful misconduct, or (ii) BFI's breach of this Agreement.
The foregoing indemnity from BFI in favor of ALLIANCE under this Article
XIII shall be inapplicable to the extent that the loss, damages, suits,
penalties, costs, liabilities and/or expenses result from the ALLIANCE's
provision to BFI of waste other than Biomedical Residuals.
B. ALLIANCE hereby agrees to indemnify and hold BFI harmless from any and
all loss, damages, suits, penalties, costs, liabilities and expenses
(including, but not limited to, reasonable investigation and legal
expenses) arising out of any claim for loss of or damage to property,
including BFI's property, and injuries to or death of persons,
including BFI's employees, caused by or resulting from (i) ALLIANCE's
negligence or willful misconduct; (ii) ALLIANCE's providing to BFI of
waste other than Biomedical Residuals or any other breach of this
Agreement by ALLIANCE, or (iii) the recycling, refurbishing,
sterilizing, handling, distribution and use or reuse of Reusable
Materials from and after delivery thereof by BFI to the Decon Center
(including, without limitation, all claims and suits for strict
liability and products liability), or any violation of law, regulation
or permits in connection therewith.
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C. With respect to any claim for indemnification, the party claiming a
right to indemnity shall (i) give written notice thereof within a
reasonable period following the event or occurrence as to which the
right to indemnification is or may be asserted and (ii) allow the other
party (including its employees, agents and counsel) reasonable access
to any of its employees, property and records for the purpose of
conducting an investigation of such claim and for the purpose of
obtaining statements, photographs, and chemical analyses and taking
such other steps as may be necessary to preserve evidence of the
occurrence on which the claim is based. If the party claiming a right
to indemnity denies the other party reasonable access as set forth
above, the party claiming a right to indemnity shall assume sole
responsibility for the claim for which indemnification is sought and
shall not be entitled to indemnity.
ARTICLE XIV - COMPLIANCE WITH LAW AND RECORD KEEPING
A. In the performance of all their respective services hereunder, BFI and
ALLIANCE agree to comply with all applicable permits, all applicable
federal, state, county and municipal laws and ordinances and all lawful
orders, rules, regulations and guidelines of any duly constituted
authority, including but not limited to, social security and income tax
withholding laws, unemployment compensation laws, environment, safety
and health laws and manifesting requirements. Without limitation of the
foregoing, ALLIANCE and its employees shall observe all BFI's safety,
environmental and security requirements and practices at any BFI
Facility at which a Decon Center is located and shall, in connection
therewith cooperate fully with BFI's personnel thereat. BFI shall
instruct ALLIANCE employees with respect to such matters to the extent
reasonably deemed appropriate by BFI.
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B. BFI and ALLIANCE shall obtain and maintain all necessary permits,
licenses, zoning and other federal, state or local authorizations
required to perform all of their respective services hereunder and,
each party shall furnish copies thereof to the other upon request.
C. BFI and ALLIANCE shall keep and retain adequate books and records and
other documentation including personnel records, correspondence,
instructions, plans, receipts, vouchers, copies of all manifests and
tracking records and any other records or reports or memoranda,
consistent with and for the periods required by applicable regulatory
requirements and guidelines pertaining to performance of the services
required by this Agreement. ALLIANCE shall provide BFI with monthly
reports showing the amount of Reusable Materials recycled by ALLIANCE
pursuant to this Agreement.
ARTICLE XV - NOTICES
All notices and other communications required or desired to be given hereunder
shall be given in writing to the parties at their respective addresses shown
above, by personal delivery, express mail, or certified mail. Neither party
shall issue a press release regarding this Agreement without approval from the
other party, which approval shall not be unreasonably withheld.
ARTICLE XVI - INDEPENDENT CONTRACTOR
BFI's relationship with ALLIANCE under this Agreement shall be that of
independent contractor. Each party is to exercise its own discretion on the
method and manner of performing its duties, and neither party will not exercise
control over the other or its employees except insofar as may be reasonably
necessary to ensure performance and compliance with this Agreement. The
employees, methods, equipment and facilities used by each party shall at all
times be under its exclusive direction and control. Nothing in this Agreement
shall be construed to designate either party, or any of its employees, as
employees, agents, joint venturers or partners of the other party.
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ARTICLE XVII - AMENDMENT AND WAIVER
This Agreement may be amended from time to time only by an instrument in writing
signed by the parties to this Agreement at the time of such amendment. No
provision of this Agreement can be waived except by a written instrument signed
by the party waiving such provision, nor shall failure to object to any breach
of a provision of this Agreement waive the right to object to a subsequent
breach of the same or any other provision.
ARTICLE XVIII - GOVERNING LAW
This Agreement and all rights, obligations and liabilities arising hereunder
shall be governed, construed and enforced in accordance with the laws of the
State of Texas, other than with respect to conflicts of laws.
ARTICLE XIX - CONFIDENTIALITY
Each party recognizes and acknowledges that it may receive ("Recipient") from
the other ("Discloser") in the course of performance of this Agreement,
confidential information of the Discloser in the form of trade secrets of such
party or of its customers, of a special and unique value which may include,
without limitation, customer names, addresses and price lists, customer service
requirements, costs of providing service and equipment, operating and
maintenance costs and other information relating to operations, finance,
accounting, sales, personnel and management ("Confidential Information"). The
protection of Confidential Information against unauthorized disclosure and use
is of critical importance to Discloser, and Recipient therefor agrees that it
will not at any time, during the term of this Agreement, or within one (1) year
thereafter, make any independent use of, or disclose to any other person or
organization, other than its employees and agents in the performance of this
Agreement, except as authorized in writing by Discloser, any such Confidential
Information. In the event of a breach or threatened breach by Recipient of the
provisions of this Agreement, Discloser shall be entitled to an
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injunction restraining Recipient from disclosing, in whole or in part, such
Confidential Information. Nothing herein shall be construed as prohibiting
Discloser from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of damages from Recipient.
Notwithstanding the foregoing, Confidential Information does not include the
following:
(a) information known to Recipient prior to its disclosure by Discloser;
(b) information which is now in the public domain or hereafter comes into
the public domain without any fault of Recipient;
(c) information which is communicated to Recipient by a third party who has
the lawful right to make such communication; or
(d) information independently developed by employees or agents of Recipient
who have not had access to the Confidential Information disclosed by
Discloser hereunder.
Recipient may disclose Confidential Information to the extent required pursuant
to any summons or subpoena or in connection with any litigation or in order to
comply with any law, order, regulations or ruling applicable to Recipient,
provided, that Recipient provides written notice to Discloser at least fifteen
(15) days prior to such disclosure.
ARTICLE XX - ENTIRE AGREEMENT
This Agreement (including any exhibits, and amendments hereto) constitutes the
entire understanding between the parties hereto, and cancels and supersedes all
prior negotiations, representations, understandings and agreements, either
written or oral, with respect to the subject matter hereof.
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Executed as of the day and year first above written.
ALLIANCE MEDICAL CORPORATION
("ALLIANCE")
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
BFI WASTE SYSTEMS
OF NORTH AMERICA, INC.
("BFI")
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
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EXHIBIT A
LEASE
This Lease made and entered into by and between BFI WASTE SYSTEMS OF NORTH
AMERICA, INC., a Delaware corporation, (hereinafter called "Landlord"), and
ALLIANCE MEDICAL CORPORATION, a Delaware corporation, (hereinafter called
"Tenant"),
WITNESSETH:
1. PREMISES. In consideration of the rent and covenants herein reserved
and contained on the part of Tenant to be paid, performed and observed,
Landlord hereby leases and demises to Tenant, and Tenant does hereby
take, hire and lease from Landlord that certain area of the Landlord's
biomedical waste autoclave, incinerator or transfer station located at
254 W. Keene Road and consisting of 750 (sf) square feet, more or less,
as more particularly described in Exhibit "1" attached hereto and made
a part hereof (herein called the "Premises").
2. USE.
(a) Tenant may use the Premises only to operate a "Decon
Facility", as defined in that certain Medical Devices
Recyclables Agreement between Landlord and Tenant dated 11/16,
1998 (herein called the "Recyclables Agreement"), and for no
other purpose whatsoever.
(b) Landlord makes no representation or warranty whatsoever as to
the fitness or suitability of the Premises for use as a Decon
Center including, without limitation, whether the Premises or
the BFI Facility, has sufficient provision for water, HVAC,
light, power, telephone and other utilities and services as
shall be necessary for the operation of the Premises as herein
contemplated, or whether the Premises has or will be able to
obtain and maintain any or all permits and
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approvals for use as a Decon Center including, without
limitation, as to any required zoning or land use approval, or
whether any portion of the BFI Facility or Premises complies
with applicable building codes, ordinances, and regulations,
and Tenant accepts the Premises "AS IS."
3. TERM. Unless sooner terminated as provided herein, the term of this
lease shall be for three (3) years, commencing on 10/12/98.
Notwithstanding any contrary provision herein, Landlord may terminate
this Lease at any time upon five (5) days written notice to Tenant if,
in Landlord's reasonable judgment, operation the Decon Center requires
the BFI Facility (as defined in the Recyclables Agreement) to obtain
additional permits or approvals or materially interferes with or
jeopardizes other operations at the BFI Facility and such matter is not
resolved to Landlord's reasonable satisfaction within such five (5) day
period, or if, for any reason, Landlord ceases operations at the BFI
Facility or sells the BFI Facility. The parties hereto may extend the
term of this Lease upon mutual written agreement. Notwithstanding any
contrary provision herein, this shall in any event terminate upon
termination of the Recyclables Agreement.
4. RENT. Tenant shall pay to Landlord as monthly rent during the term of
this Lease, in advance and without demand on the first day of each
month throughout the term of this Lease, at the address for Landlord
set forth herein, the sum of Five Hundred and Six Dollars 25/100
Dollars ($506.25).
5. MAINTENANCE, UTILITIES, INSURANCE, AND TAXES.
(a) Tenant shall pay for all maintenance and repair costs for the
Premises which are necessary to maintain the Premises in as
good a condition as at the date of the commencement of the
Lease term, ordinary wear and tear excepted. Landlord
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shall pay for all repair and maintenance costs for the
foundation, roof and exterior walls, and plumbing and
electrical systems.
(b) Tenant shall reimburse Landlord, within thirty (30) days after
Landlord's invoice, for all charges for utility services
furnished to the premises during the term of this Lease,
allocated on a square footage basis between the Premises and
the BFI Facility. Excluding utility service costs to operate
on site autoclave and/or incineration system.
(c) Tenant, at its expense, shall obtain and maintain General
Liability and All Risk Property Insurance as required pursuant
to the Recyclables Agreement.
(d) Tenant shall reimburse Landlord, within thirty (30) days after
Landlord's invoice, for all the real property taxes applicable
to the Premises during the term of this Lease, allocated on a
square footage basis between the Premises and the BFI
Facility. Tenant shall also pay directly to the taxing
authority all property taxes levied upon any of Tenant's
equipment, furniture, or other property at the Premises.
6. TENANT'S IMPROVEMENTS. Tenant shall not make any alteration, addition
or improvement to the Premises except upon the prior express written
approval by Landlord given in its sole discretion. Any such authorized
alteration, addition or improvement shall be at Tenant's sole cost and
expense, and in compliance with all then applicable building codes and
ordinances. Any alteration, addition or improvement made by Tenant to
the Premises and any fixtures installed by Tenant shall become the
property of Landlord upon the expiration or other sooner termination of
this Lease unless Landlord elects for Tenant to remove such
improvements, whereupon, Tenant shall remove same from the
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Premises at Tenant's cost and expense; provided, that Tenant shall
repair any damage to the Premises caused by such removal.
7. SURRENDER UPON TERMINATION. At the expiration or sooner termination of
this Lease, Tenant shall surrender the Premises in as good condition as
it was at the beginning of the term hereof, ordinary wear and tear
excepted. Prior to the expiration or sooner termination of this Lease,
Tenant shall remove all of Tenant's fixtures and other personal
property, and repair all damage caused by such removal.
8. TENANT'S DEFAULT. If Tenant defaults in the payment of rent, or any
part thereof, for more than fifteen (15) days after Landlord gives
Tenant written notice of such default, or if Tenant defaults in the
performance of any other material covenant, agreement or condition
herein contained or provided for, for more than thirty (30) days after
Landlord gives Tenant written notice of such default, Landlord shall
have the right either (a) to terminate this Lease and Tenant's right to
possession of the Premises or (b) to terminate only Tenant's right to
possession of the Premises without terminating this Lease; and in
either such event, Landlord shall have the right to peacefully re-enter
and/or repossess the Premises, either by summary proceeding, surrender
or other legal manner, and dispose and remove therefrom Tenant, or
other occupants thereof, and their effects, and alter the locks and
other security devices at the Premises. In either event, Landlord shall
be entitled to recover from Tenant all expenses incurred in connection
with such default, including repossession costs, reasonable attorneys'
fees (if suit is filed), and all reasonable expenses incurred in
connection with efforts to relet the Premises, including cleaning,
altering, advertising and brokerage commissions; and all such expenses
shall be reimbursed by Tenant as additional rent, whether or not such
default is subsequently
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cured. If Landlord elects to terminate only Tenant's right to
possession, then Landlord may, at its option, accelerate the entire
amount then remaining unpaid under this Lease (discounted to present
value based upon a reasonable annual rate) and recover same forthwith
from Tenant, together with all other charges recoverable hereunder, and
thereafter Landlord shall pay over to Tenant the net proceeds of any
total or partial reletting of the Premises. Tenant shall be entitled to
a credit against the amounts owed by it hereunder of the net proceeds
from any reletting, or in the event Tenant has paid all such amounts,
such net proceeds shall be paid over to Tenant.
9. RIGHT OF ENTRY. Landlord and its representatives may enter the Premises
at any reasonable time, for the purpose of inspecting the Premises,
performing its obligations under this Lease, performing any work which
Landlord elects to undertake for the safety, preservation, benefit or
welfare of the Premises or its occupants, or for performing any work
which Landlord elects to undertake made necessary by reason of Tenant's
default.
10. FIRE OR OTHER CASUALTY.
(a) If at any time during this Lease term all or any portion of
the Premises shall be substantially damaged or destroyed by
fire or other casualty, then either party may elect to
terminate this Lease by giving thirty (30) days prior written
notice to the other party; provided, however, that either
party may elect by written notice to the other within fifteen
(15) days of such damage or destruction to repair and
reconstruct the Premises substantially to the condition in
which it existed immediately prior to such damage or
destruction in which case any notice of termination already
given shall be null and void, and provided that if such repair
and reconstruction proceeds as provided in subdivision (b)
below, then this Lease
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shall not so terminate. Insurance proceeds payable with
respect to such fire or other casualty, pursuant to the
insurance provided by Tenant hereunder, shall be payable to
Landlord and Tenant as their interests may appear and, in the
ordinary course of events, be used, in part for repairs and/or
replacements to the Premises as required.
(b) In any of the aforesaid circumstances, rental shall abate
proportionately or, if destroyed in its entirety, in whole,
during the period and to the extent that the Premises is unfit
for use by Tenant in the ordinary conduct of its business. If
Landlord or Tenant has elected to repair and restore the
Premises, this Lease shall continue in full force and effect
and such repairs will be made within a reasonable time
thereafter but in no event to exceed six months thereafter,
subject to delays arising from shortages of labor or material,
acts of God, war or other conditions beyond Landlord's
reasonable control, and rent shall not be increased after the
date of the completion of such repairs as a result of such
repairs.
11. CONDEMNATION. If all of the Premises is taken by condemnation, this
Lease shall terminate on the date when the Premises shall be so taken;
and the rent shall be apportioned as of that date. If part of the
Premises is taken by condemnation and the Premises is thereby rendered
not reasonably suitable for the continued conduct of Tenant's business,
taking into consideration the nature, size and scope of such business
immediately prior to the taking, then Tenant may elect by giving
written notice to Landlord, to terminate this Lease and in the event of
such termination, all charges and rentals shall be apportioned as of
the date of taking. If the taking involves a part of the Premises and
if Tenant does not elect to terminate this Lease, then with respect to
the part
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not taken, the rent shall be reduced by the value that the condemned
part bears to the total value of such Premises, in which event Landlord
shall restore such Premises to an architecturally-complete unit. Both
Landlord and Tenant shall have the right to assert a separate claim in
any condemnation proceedings, as their interests may appear; provided,
however, that Tenant shall only have the right to assert a claim for
any improvements, alterations or additions made to the Premises by
Tenant, and for moving expenses. Tenant and Landlord shall each bear
their own cost and expense in prosecuting their separate claims.
12. ASSIGNMENT AND SUBLETTING. Tenant shall not assign this Lease or sublet
the Premises or any part thereof without Landlord's approval, given in
Landlord's sole discretion. Upon any allowed assignment of this Lease
by Tenant, Tenant shall remain liable for all obligations of Tenant
hereunder.
13. TENANT'S INDEMNITY. Tenant agrees to indemnify and defend Landlord
against all claims, suits, orders, liabilities, costs and expenses
(including reasonable attorneys' fees) arising in any manner from
Tenant's breach of this Lease, or any warranty or representation of
Tenant herein, or Tenant's use of or any activities occurring at the
Premises during the term of this Lease, except to the extent resulting
from the active negligence or willful misconduct of landlord. All
representations, warranties and indemnities of Tenant in this Lease
shall survive termination or expiration of this Lease. Tenant agrees to
indemnify and defend Landlord from and against all claims, orders,
suits, liabilities, costs and expenses (including reasonable attorneys'
fees and study or investigation costs) for any contamination of the
Premises or release of pollutants into the
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environment in any manner arising out of use of or activities at the
Premises during the term of this Lease.
14. NOTICE. Any notice which may or shall be given under the terms of this
Lease shall be either delivered by hand or sent by express mail or
United States Registered or Certified Mail, postage prepaid, to the
parties at the following addresses.
If to Landlord:
757 N. Eldridge
Houston, TX 77079
Attention: Donna Kolar
with a copy to:
the BFI Facility
Attention: District Vice President
If to Tenant:
3010 N. 2nd St., Suite 110
Phoenix, AZ 85012
Attention: Tim Einwechter
Chief Operating Officer
With a copy to:
the Premises
Attention: Tim Einwechter
Chief Operating Officer
Such address may be changed from time to time by either party by giving notice
as provided above. Notice shall be deemed given when delivered (if delivered by
hand), one day after being sent by express mail, or three days after depositing
in the mails return receipt requested (if delivered by mail).
15. SEVERABILITY. This Lease shall be governed by and construed in
accordance with the laws of the State of the location of the Premises.
If any clause or provision of this Lease is illegal, invalid or
unenforceable, under present or future laws effective during the term
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hereof, then it is the intention of the parties hereto that the
remainder of this Lease shall not be affected thereby; and it is also
the intention of both parties that in lieu of each clause or provision
that is illegal, invalid or unenforceable, there be added, as a part of
this Lease, a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.
16. COMPLIANCE WITH LAWS. Tenant, at its sole expense, will comply with all
federal, state, municipal and other laws, ordinances, rules and
regulations applicable to the Premises and their respective activities
conducted thereon.
17. SUCCESSORS AND ASSIGNS. The covenants, conditions and agreements
contained in this Lease shall be binding upon and inure to the benefit
of the parties hereto and their successors and assigns; but this
provision shall in no way alter the restriction herein in connection
with assignment and subletting by Tenant.
18. WHOLE CONTRACT. This Lease and any attached addenda or exhibits signed
by the parties constitute the sole and entire contract between the
parties relative to the Premises, except as may be provided in the
Recycling Agreement; provided, however, that any conflict between the
provisions of the Recycling Agreement and this Lease shall be governed
by the Recycling Agreement. No prior written or contemporaneous oral
promises or representations shall be binding.
19. WAIVER. Neither acceptance of rent by Landlord nor failure by Landlord
to complain of any action, non-action or default of Tenant shall
constitute a waiver of any of Landlord's rights hereunder. Waiver by
Landlord of any right for any default of Tenant shall not constitute a
waiver of any right for either a subsequent default of the same
obligation or
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any other default. Receipt by Landlord of Tenant's keys to the Premises
shall not constitute an acceptance of surrender of the Premises.
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STATE OF FLORIDA
COUNTY OF POLK
BEFORE ME, the undersigned authority, on this day personally appeared November
16, 1998 known to me to be the person whose name is subscribed to the foregoing
instrument as and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in the capacity therein stated, and as the
act and deed of such corporation.
GIVEN under my hand and seal of office this 16th day of November, 1998.
__________________________________
Notary Public in and for
State of Florida County, Polk
STATE OF _______
COUNTY OF ____________
BEFORE ME, the undersigned authority, on this day personally appeared
_____________________________________, known to me to be the person whose name
is subscribed to the foregoing instrument as ___________________ of
___________________________________, a corporation, and acknowledged to me that
he executed the same for the purposes and consideration therein expressed, in
the capacity therein stated, and as the act and deed of said corporation.
GIVEN under my hand and seal of office this___ day of _______________, l998.
__________________________________
Notary Public in and for
____________ County, _____________
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IN WITNESS WHEREOF, Tenant and Landlord have caused these presents to be
executed as of the 16th day of November, 1998.
ALLIANCE MEDICAL CORPORATION
By:
-----------------------------------------
Title:
-----------------------------------------
("Tenant")
BFI WASTE SYSTEMS
OF NORTH AMERICA, INC.
By:
------------------------------------------
Title: DISTRICT VICE PRESIDENT
("Landlord")
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