MAINTENANCE CONTRACT SAMPLE (FOR MAINTENANCE AND SPARES ON A HARDWARE SYSTEM)

THIS MAINTENANCE CONTRACT ("Agreement"), dated as of [_____________], is between [_____________], a [_____________] corporation with an address at [_____________] ("Customer") and [_____________], a [_____________] corporation with an address at [_____________] ("Contractor").

The parties agree as follows:

ARTICLE 1. This Agreement covers Contractor's performance of maintenance services.

ARTICLE 2. SYSTEM SERVICES

Section 2.1. Engagement of the Contractor.

(a) Engagement by Customer. On the terms and conditions set forth in this Agreement, Customer hereby engages the Contractor to perform the maintenance services ("System Services") on the following (collectively, the "System"):

[_____________]

(b) Acceptance by the Contractor. On the terms and conditions set forth in this Agreement, the Contractor hereby accepts the engagement referred to in subsection (a) and agrees to perform the System Services.

Section 2.2. System Services.

(a) In General. Throughout the Term, the Contractor shall provide the System Services to Customer.

(b) Title to Spares. Title to all items, parts, materials and equipment supplied under or pursuant to this Agreement to Customer shall transfer to Customer upon payment by Customer to Contractor for such items, parts, material and equipment ("Spares").

(c) Spares. Throughout the Term; the Contractor shall support the operation of the System by:

(i) Contractor shall use its commercially reasonable efforts to maintain in stock all Spares required for the operation, maintenance and overhaul of the System, or

(ii) Contractor shall procure the supply of all Spares required for the operation, maintenance and overhaul of the System from other reputable providers reasonably acceptable to Customer. All Spares required by the Systems will be supplied by Contractor at no additional cost.

(iii) To the extent that Customer holds title to any Spares in the possession of the Contractor at a location other than the Site, the Contractor shall clearly indicate Customer's title on the Spares themselves and any records relating to those Spares.

(iv) Upon termination of this Agreement for any reason, the Contractor shall, without prejudice to any other obligation in this subsection (d), make all necessary arrangements to enable Customer to collect any Spares held by or on behalf of the Contractor pursuant to this Agreement. The provisions of this clause (iv) shall survive termination of this Agreement.

Section 2.3. Standards of Performance. Contractor shall ensure that:

(a) The System Services shall be performed in accordance with good professional practices applicable to the [_____________] industry.

(b) All periodic maintenance and inspection services shall be performed at regular intervals and all maintenance and inspection services shall be performed by qualified technical personnel in accordance with the System manuals.

Section 2.4. Annual Reports; Meetings.

(a) Annual Reports. Throughout the Term, Contractor shall furnish to Customer, in the Contractor's then current standard format, annual maintenance/inspection reports for the System (the "Annual Reports") for the twelve-month period ending on December 31 of each calendar year on or before [_____________] of the subsequent calendar year. Each Annual Report shall include the following:

(i) Summary of operations;

(ii) The following data: [_____________];

(iii) System performance;

(iv) Reports of any environmental disturbances;

(v) Safety/accident reports;

(vi) Maintenance and inspection reporting;

(vii) Proposal of actions required; and

(ix) A list of all applicable permits and any expiration dates.

Section 2.5. Warranty Claims.

(a) To the extent that equipment warranties cover replacement and/or repair of any part of the System, it shall be Contractor's responsibility to use commercially reasonable efforts to submit, process and pursue, at Contractor's sole cost and expense, warranty coverage; provided, however, that, because it may be necessary that warranty claims are submitted in the name of Customer, Customer shall provide such full and complete cooperation as Contractor may reasonably require in connection with the submission, processing and pursuit of warranty coverage.

(b) Contractor agrees to act as agent on behalf of Customer for purposes of this Section 2.5. If, in the event the equipment manufacturer denies responsibility for warranty service and Contractor is instructed by Customer to pursue action against the equipment manufacturer, whether through litigation or otherwise, Customer shall reimburse Contractor for any of the costs, expenses, or repairs incurred by Contractor in this context (even if and for whatever reason such recovery from the equipment manufacturer finally fails). Such costs will be reimbursed by Customer to Contractor within thirty (30) days of receipt of invoice.

(c) Contractor shall ensure that it may assign, and shall assign, to Customer the all third party agreements regarding the System and Spares.

(d) Contractor agrees to provide Customer with a copy of manufacturers' warranty agreements regarding the System and Spares. Contractor agrees to confirm to Customer that: the manufacturers' warranties continue in full force and effect, should Customer so request.

Section 2.6. Recordkeeping Documentation.

(a) Contractor shall keep and maintain a separate "Maintenance Specification Log" for the System in a paper or electronic format, a copy of which will be submitted, in paper or electronic format, to Customer along with the corresponding Annual Reports, The Maintenance Specification Log shall be kept available at the Site for Customer's inspection.

(b) Any documentation prepared by Contractor for the purposes of this Agreement shall be directly prepared for Customer's benefit and immediately become Customer's property. Any such documentation shall be stored by Contractor on behalf of Customer until its final delivery to Customer. Contractor may retain a copy of all records related to the System for future analysis.

Section 2.7. Remote Monitoring. For purposes of determining when repair services are necessary, Contractor shall monitor and evaluate the information gathered through remote monitoring of the System.

Section 2.8. Costs and Expenses. Except as specifically provided to the contrary in this Agreement, the Contractor shall bear all costs and expenses of whatever nature for the performance of the System Services, including travel and personnel expenses, making repairs to the System as well as the costs of replacing materials, equipment, components, parts and supplies save to the extent that the cost of such materials, equipment, components, parts and supplies are recoverable under any manufacturer's warranties.


Section 2.9. General Obligations of Customer.

(a) Access. The Contractor, or its authorized agents, employees or subcontractors, shall have be able to access the System and all Spares in order to provide System Services, in all cases, to the extent that such activities and/or services are within the scope of this Agreement and are provided in accordance with the terms of this Agreement.

(b) Applicable Permits; Changes in Applicable Law.

(i) Subject to clause (ii), the Contractor shall be responsible for procuring, obtaining, maintaining and complying with all applicable permits required to own, maintain and operate the System, and perform the System Services under this Agreement.

(ii) Customer agrees to cooperate with and assist the Contractor in obtaining the applicable permits. Notwithstanding anything in this Agreement to the contrary (including but not limited to this subsection (b)), Contractor shall be required to comply with all applicable laws and regulations.

(c) Storage. The Contractor may use storage space at Customer's site holding the System (i) for storing parts and supplies necessary for the performance of the System Services, and (ii) for a small office with a desk and computer as required for the performance of the System Services.

(d) Duty to Cooperate. Customer shall cooperate with the Contractor in taking all actions reasonably requested by the Contractor to ensure that parties with whom Customer has agreements or relationships that are essential to the System Services are available and able to perform as contemplated in this Agreement. Customer shall be directly responsible for all utility costs of the System except to the extent that such costs arise as a result of the omission, neglect or default of the Contractor.

(e) Further Obligations of Customer. Throughout the Term, Customer shall agree to review and approve in a timely fashion all reasonably recommended repairs permitted under this Agreement in accordance with any schedule agreed in relation to such repairs.

Section 2.10. Party Representatives.

(a) Customer Representative. Customer designates the following individual as a representative with authority to act for Customer: [_____________].

(b) Contractor Representative. Contractor designates the following individual as a representative with authority to act for Contractor: [_____________].


Section 2.11. Service Fees. As compensation for provision of the System Services by Contractor, Customer shall pay Contractor an annual fee in an amount equal to [_____________], inflating at [_____________]% annually, for each year, which fee shall be paid in equal [_____________]ly installments on [_____________] (all such fees, collectively the "Service Fees").

ARTICLE 3. TERM

Section 3.1. Term. The term of this Agreement expires on [_____________].

Section 3.2. Termination on Default.

(a) By Customer. Customer may terminate this Agreement in the event of any of the following:

(i) the Contractor becomes Insolvent; or

(ii) any failure by the Contractor to perform any of its obligations under this Agreement, which failure is not remedied within thirty (30) days of written notice of such failure from Customer to Contractor; provided that (1) if such failure can be remedied, (A) such failure cannot reasonably be remedied within such thirty (30) day period and (B) Contractor commences cure of such failure within such thirty (30) day period and thereafter diligently seeks to remedy such failure, then Customer shall not be entitled to terminate this Agreement until such time as the Contractor ceases all reasonable endeavors to cure such failure unless such failure continues, for a period of a ninety (90) days from the original written notice from Customer, and (2) where such failure is incapable of remedy at the end of the thirty (30) day period, the Contractor has not taken all steps reasonably necessary so as to prevent any further failure by it to perform its obligations under this Agreement, or

(iii) a Force Majeure Event occurs which prevents the Contractor from providing a material part of the System Services for a continuous period of at least ninety (90) days and Customer reasonably concludes such prevention is not reasonably likely to be remedied within a further period of ninety (90) days.

(b) By Contractor. Contractor may terminate this Agreement in the event of any of the following:

(i) Customer fails to pay to the Contractor any amounts due under this Agreement (other than any amounts which are the subject of a bona fide dispute) within thirty (30) days of written notice of such failure from the Contractor to Customer; or

(ii) Breach by Customer of any of its obligations under this Agreement which materially impairs Contractor's ability to perform its obligations under this Agreement which breach is not remedied within thirty (30) days of written notice of such failure from the Contractor to Customer; provided that (1) if such failure can be remedied, (A) such failure cannot reasonably be remedied within such thirty (30) day period, and (B) Customer commences cure of such failure within such thirty (30) day period and thereafter diligently seeks to remedy such failure, then the Contractor shall not be entitled to terminate this Agreement until such time as Customer ceases reasonable efforts to cure such failure unless such failure continues for a period of ninety (90) days from the original written notice from the Contractor, and (2) where such failure is incapable of remedy at the end of the thirty (30) day period, Customer has not taken all steps reasonably necessary so as to prevent any further failure, by it to perform its obligations under this Agreement; or

(iii) Customer becomes Insolvent.

Section 3.3. Termination Generally.

(a) Without prejudice to its other rights under this Agreement, Customer shall be entitled to terminate this Agreement on giving [_____________] notice to the Contractor, for any reason or no reason, for its convenience, with or without cause.

(b) Termination of this Agreement shall not affect any rights or obligations as between the parties which may have accrued prior to such termination or which expressly or by implication are intended to survive termination whether resulting from the event giving rise to termination or otherwise.

Section 3.4. Indemnities.

(a) Contractor shall fully indemnify, save harmless and defend Customer from and against any and all costs, claims, and expenses incurred by Customer in connection with or arising from any claim by a third party for physical damage to or physical destruction of property, or death of or bodily injury to any person, but only to the extent howsoever caused or arising out of or related to Contractor's performance under this Agreement except in the event of (i) gross negligence or willful misconduct of Customer or its agents or employees or others under Customer's control or (ii) a breach by Customer of its obligations hereunder.

Section 3.5. Limitation of Liability.

(a) IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THE TERMS OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES OR BUSINESS INTERRUPTION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT FOR LOSS OR DAMAGE ARISING OUT OF SUCH PARTY'S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE. IN ADDITION, WHETHER AN ACTION OR CLAIM IS BASED ON WARRANTY, CONTRACT, TORT OR OTHERWISE, UNDER NO CIRCUMSTANCE SHALL SUCH PARTY'S TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED FIVE HUNDRED THOUSAND DOLLARS ($500,000), WHICH AMOUNT SHALL BE SEPARATE AND APART FROM THE PAYMENT OF THE PURCHASE PRICE.

(b) The exclusions of liability in subsection (a) above shall not limit the liability of either Party under any section where one Party is required to indemnify the other Party.

Section 3.6. Force Majeure Event.

(a) Neither Party shall be considered to be in default of its obligations under this Agreement when and to the extent that performance of such obligations is prevented by any cause beyond its reasonable control, such as an act of God or nature, strike or other cause (a "Force Majeure Event") which arises after the date of this Agreement.

(b) If either Party shall rely on the occurrence of a Force Majeure Event as a basis for being excused from the performance of its obligations under this Agreement, then the Party relying on the event or condition shall (i) provide prompt written notice, in any event within forty-eight (48) hours from the occurrence of the Force Majeure Event, to the other Party of the occurrence of the Force Majeure Event giving an estimation of its expected duration and the probable impact on the performance of its obligations hereunder; (ii) exercise all commercially reasonable efforts to continue to perform its obligations hereunder; (iii) expeditiously take any action within its reasonable control to correct or cure the Force Majeure Event excusing performance; (iv) exercise all commercially reasonable efforts to mitigate or limit damages to the other Party to the extent such action will not adversely affect its own interests; and (v) provide periodic notices tithe other Party with respect to its actions and plans for actions in accordance with (ii), (in) and (iv) above and promptly notify to the other party of the cessation of the event or condition giving rise to it being excused from performance.

(c) In the event that the Contractor is prevented from providing all or part of the System Services as a result of a Force Majeure Event for a continuous period of thirty (30) days and it is reasonably expected that the Contractor will not be able to resume full performance of the System Services within an additional thirty (30) days, Customer shall be entitled to require the Contractor to reduce the scope of the System Services commencing as from the date notified by Customer until such time as the Contractor can demonstrate to the reasonable satisfaction of Customer that the Contractor is able to resume full performance of the System Services.

ARTICLE 4. GENERAL. Entire Agreement and Amendments. This Agreement is the entire agreement between the parties and supersedes all earlier and simultaneous agreements regarding the subject matter. This Agreement may be amended only in a written document, signed by both parties. Independent Contractors, Third Party Beneficiaries, and Subcontractors.  The parties acknowledge that they are independent contractors under this Agreement, and except if expressly stated otherwise, none of the parties, nor any of their employees or agents, has the power or authority to bind or obligate another party.  Except if expressly stated, no third party is a beneficiary of this Agreement. Governing Law and Forum.  All claims regarding this Agreement are governed by and construed in accordance with the laws of [____________], applicable to contracts wholly made and performed in such jurisdiction, except for any choice or conflict of law principles, and must be litigated in [____________], regardless of the inconvenience of the forum, except that a party may seek temporary injunctive relief in any venue of its choosing.  Assignment.  This Agreement binds and inures to the benefit of the parties' successors and assigns. This Agreement is not assignable, delegable, sublicenseable or otherwise transferable by Contractor in whole or in part without the prior written consent of Customer. Any transfer, assignment, delegation or sublicense by Contractor without such consent is invalid. No Waivers, Cumulative Remedies.  A party's failure to insist upon strict performance of any provision of this Agreement is not a waiver of any of its rights under this Agreement. Except if expressly stated otherwise, all remedies under this Agreement, at law or in equity, are cumulative and nonexclusive.  Severability.  If any portion of this Agreement is held to be unenforceable, the unenforceable portion must be construed as nearly as possible to reflect the original intent of the parties, the remaining portions remain in full force and effect, and the unenforceable portion remains enforceable in all other contexts and jurisdictions.  Notices.  All notices, including notices of address changes, under this Agreement must be sent by registered or certified mail or by overnight commercial delivery to the address set forth in this Agreement by each party.  Captions and Plural Terms.  All captions are for purposes of convenience only and are not to be used in interpretation or enforcement of this Agreement.  Terms defined in the singular have the same meaning in the plural and vice versa.

IN WITNESS WHEREOF, the parties execute this Agreement. Each person who signs this Agreement below represents that such person is fully authorized to sign this Agreement on behalf of the applicable party

CUSTOMER

By: __________________________________
Print Name: ___________________________
Title: ________________________________

CONTRACTOR

By: __________________________________
Print Name: ___________________________
Title: ________________________________