DRAFT

SERVICE AGREEMENT

BETWEEN CITY OF SUNNYVALE AND SYNAGRO WEST, INC.

FOR THE OXIDATION POND SEDIMENT REMOVAL PILOT PROJECT

          THIS AGREEMENT, dated ______________________, is by and between the CITY OF SUNNYVALE, a municipal corporation ("CITY"), and SYNAGRO WEST, INC., a Delaware corporation ("CONTRACTOR").

          WHEREAS, on October 2, 2003, CITY issued Invitation for Bids No. F0308-08 for the Oxidation Pond Sediment Removal Pilot Project; and

          WHEREAS, CONTRACTOR has submitted a bid in response to the Invitation for Bids; and

          WHEREAS, CITY has determined that CONTRACTOR is the lowest responsive and responsible bidder;

          NOW, THEREFORE, THE PARTIES ENTER INTO THIS CONTRACT.

1.       Services

          (a)      There are attached and incorporated by this reference the following exhibits:

                   (1)      Exhibit "A", consisting of Pages 2 through 9, inclusive, of that certain document entitled "Invitation for Bids No. F0308-08 for Oxidation Pond Sediment Removal Project at the Water Pollution Control Plant".  The document consists of the Notice Inviting Bids; Instructions to Bidders; Specifications; Terms and Conditions, including Insurance and Bonding Requirements; and Instructions for Completion of Bid Form.  Exhibit "A" also includes Attachment C entitled "Detailed Project Specifications, " consisting of Pages 20 through 22, inclusive.   

                   (2)      Exhibit "B", consisting of Section 4.0 that certain document presenting the response to "Invitation for Bids #F0308-08", as submitted to CITY by CONTRACTOR with the pertinent information provided by CONTRACTOR in response to the Invitation for Bids.

          (b)      CONTRACTOR shall perform the services described in Page 6 and Pages 20 through 22, inclusive, of Exhibit "A" (III. Specifications and Attachment C). 

          (c)      The performance of such services shall be governed by Pages 6 through 8, inclusive, of Exhibit "A" (IV. Terms and Conditions) and this Agreement. 

2.       Time for Performance

          Time is of the essence in the performance of the Agreement.  If services cannot be performed at the specified time, CONTRACTOR shall promptly notify CITY of the earliest possible date for performance of the services.  Notwithstanding such notice, if CONTRACTOR, for any reason whatsoever, fails to perform the services within the time specified, CITY may terminate the Agreement or any part thereof without liability except for services previously performed and accepted.

3.       Duties of CITY

          CITY shall supply any documents or information available to CITY required by CONTRACTOR for performance of its duties.  Any materials provided shall be returned to CITY upon completion of the work. 

4.       Compensation

          CITY agrees to pay CONTRACTOR as full compensation for project mobilization and demobilization services a firm, fixed fee of Fifty Six Thousand and Fifty Six and no/100 Dollars ($56,056.00).  In addition, CITY agrees to pay CONTRACTOR for dredging and dewatering of pond solids at the rate of $349.71 per ton.  Total compensation under this Agreement shall not exceed Two Hundred Sixty Five Eight Hundred Eighty Two and no/100 Dollars ($265,882.00).

          CONTRACTOR shall submit invoices no more frequently than monthly.  Payment will be made within thirty (30) days of receipt of an accurate, itemized invoice by CITY's Accounts Payable Unit.

5.       Conflict of Interest

          No officer or employee of CITY shall have any interest, direct or indirect, in this Agreement or in the proceeds thereof.  During the term of this Agreement, CONTRACTOR shall not accept employment or an obligation which is inconsistent or incompatible with CONTRACTOR's obligations under this Agreement.

6.       Confidential Information

          CONTRACTOR shall maintain in confidence and at no time use, except to the extent required to perform its obligations hereunder, any and all proprietary or confidential information of CITY of which CONTRACTOR may become aware in the performance of its services.

7.       Compliance with Laws

(a)              CONTRACTOR shall strictly adhere to all state and federal laws with respect to discrimination in employment and shall not discriminate against any individual on the basis of race, color, religion, gender, sexual orientation, marital status, national origin, age or disability.

(b)      CONTRACTOR shall comply with all federal, state and city laws, statutes, ordinances, rules and regulations and the orders and decrees of any courts or administrative bodies or tribunals in any manner affecting the performance of the Agreement.

8.       Independent Contractor

          CONTRACTOR is acting as an independent contractor in performing the work required by this Contract and is not an agent, servant or employee of CITY.  Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between CITY and CONTRACTOR.  CONTRACTOR is responsible for paying all required state and federal taxes.

9.       CITY Representative

          Dan Hammons, Maintenance Manager, as City Manager's authorized representative, shall represent CITY in all matters pertaining to the services to be rendered under this Agreement.  All requirements of CITY pertaining to the services and materials to be rendered under this Agreement shall be coordinated through the CITY representative.

10.     CONTRACTOR Representative

          John Pugliarisi shall represent CONTRACTOR in all matters pertaining to the services and materials to be rendered under this Agreement.  All requirements of CONTRACTOR pertaining to the services to be rendered under this Agreement shall be coordinated through the CONTRACTOR representative.

11.     Notices

          All notices required by the Agreement shall be in writing, and shall be personally delivered or sent by first class mail, postage prepaid or by commercial courier, addressed as follows:

To CITY:                  Dan Hammons,

                               Maintenance Manager
                               Public Works/Environmental Services

                               CITY OF SUNNYVALE

                               P. O. Box 3707

                               Sunnyvale, CA 94088-3707

To CONTRACTOR:    Synagro West, Inc.

                               Attn: John Pugliarisi

                               1499 Bayshore Blvd., Suite 111

                               Burlingame, CA 94010

          Nothing in this provision shall be construed to prohibit communication by more expedient means, such as by telephone or facsimile transmission, to accomplish timely communication.  However, to constitute effective notice, written confirmation of a telephone conversation or an original of a facsimile transmission must be sent by first class mail or commercial carrier, or hand delivered.

          Each party may change the address by written notice in accordance with this paragraph.  Notices delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be deemed communicated as of three days after mailing, unless such date is a date on which there is no mail service.  In that event communication is deemed to occur on the next mail service day.

12.     Assignment

          Neither party shall assign or sublet any portion of this Contract without the prior written consent of the other party.

13.     Termination

          If CONTRACTOR defaults in the performance of this Agreement, or materially breaches any of its provisions, CITY at its option may terminate this Agreement by giving written notice to CONTRACTOR.  If CITY fails to pay CONTRACTOR, CONTRACTOR at its option may terminate this Agreement if the failure is not remedied by CITY within thirty (30) days from the date payment is due.

          Without limitation to such rights or remedies as CITY shall otherwise have by law, CITY also shall have the right to terminate this Agreement for any reason upon ten (10) days' written notice to CONTRACTOR.  In the event of such termination, CONTRACTOR shall be compensated in proportion to the percentage of services performed or materials furnished (in relation to the total which would have been performed or furnished) through the date of receipt of notification from CITY to terminate.  CONTRACTOR shall present CITY with any work product completed at that point in time.

14.     Entire Contract; Amendment

          This writing constitutes the entire agreement between the parties relating to the services to be performed or materials to be furnished hereunder.  No modification of this Agreement shall be effective unless and until such modification is evidenced by writing signed by all parties.

15.     Miscellaneous

          Time shall be of the essence in this Agreement.  Failure on the part of either party to enforce any provision of this Agreement shall not be construed as a waiver of the right to compel enforcement of such provision or any other provision.  This Agreement shall be governed and construed in accordance with the laws of the State of California.

          IN WITNESS WHEREOF, the parties have executed this Agreement.