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Operation and Maintenance Agreement

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Operation and Maintenance Agreement Powered By Docstoc
					Operation and Maintenance Agreements are agreements made between two or more
parties for the purposes of maintenance and repair of real property, the operation of
utilities and any other provision of service. Operation and Maintenance Agreements are
sometimes referred to as O&M agreements. This document in its draft form contains
numerous of the standard clauses commonly used in these types of agreements;
however, additional language may be added to allow for customization to ensure the
specific terms of the parties' agreement are addressed. Use this agreement if one
wants to engage a person or entity for the purpose of maintenance and repair of real
property.
            OPERATION AND MAINTENANCE AGREEMENT

       This Operation and Maintenance Agreement (this “Agreement”) is hereby made and
entered into on this _____ day of ______________, _____ by and between ________________
(“Owner”) and _______________ (“Operator”).

      WHEREAS, Owner owns a ________________________________ [DESCRIPTION OF
PROJECT] (the “Project”) and desires to contract for the operation, maintenance, and the
management of the Project; and

       WHEREAS, Operator provides operation, maintenance, and management services for the
__________________ (hereinafter the “Facilities”) [OWNER’S FACILITIES] and Operator has
agreed to provide those services for the Project to Owner on the terms and conditions set forth in
this Agreement.

      NOW THEREFORE, in consideration of the promises, mutual covenants, and
agreements contained herein, Operator and Owner hereby agree as follows:

                                           ARTICLE 1

1.00   DEFINITIONS, ETC.

1.01 “Agreement” means this Agreement and any amendment, recital, instrument, exhibit, or
schedule supplemental or ancillary to this Agreement, and the expressions “hereof,” “hereto,”
“hereunder,” “hereby,” “herein,” and similar expressions refer to this Agreement and not to any
particular Section, Article, or other portion of this Agreement.

1.02 “Applicable Laws” means, with respect to any person, property, transaction, event, or
other matter, any law, rule, statute, regulation, order, judgment, decree, treaty, or other
requirement having the force of law in relation or applicable to such person, property,
transaction, event, or other matter.

1.03 “Business Day” means any day, other than Saturday, Sunday, or any statutory holiday
recognized by the State of _______________.

1.04 “Confidential Information” of a Party means all information (and all documents and other
tangible items that record information, whether on paper, in computer readable format or
otherwise) relating to a party or the Project which, at the time concerned is of a confidential
nature, and is learned by the other Party as a result of the relationship created by this Agreement,
but not including any information or documents or other tangible items which, at the time
concerned:

       A.      Have become generally available to the public in a manner other than as a result
               of a disclosure by a Party or any of its officers, employees, or agents (its
               “Representatives”); or
        B.      Were available to a Party or its Representatives on a non-confidential basis prior
                to the date of this Agreement.

1.05 “Operating Costs” with respect to the Project includes, without limitation, all utilities
(unless separately metered), custodial services in any of the common areas, repair of any
plumbing or electrical services, interior painting as required or repair of original millwork, if
any), maintenance services (such as minor repairs, maintenance of all heating, ventilation and
air-conditioning equipment), snow removal, waste disposal, fire and electrical inspections, and
insurance on common areas but does not include any expenses not related to the Project itself.

1.06 “City Areas” means those areas within ____________________ [CITY] municipally
known as _________________________ [ADDRESS].

1.07 “Parties” means both Parties to this Agreement so long as they remain Parties to this
Agreement.

1.08    “Party” means either one of the Parties to this Agreement.

1.09 “Person” or “Persons” includes an individual, a corporation, a joint venture, a
partnership, a trust or trustee, an unincorporated organization, the government of a country, or
any agency of any such government, and words importing Persons have a similar meaning.

1.10    Schedules

      The following are the Schedules attached hereto, incorporated herein by reference, and
deemed an integral part hereof: (delete if not applicable)

        Schedule A—
        Schedule B—
        Schedule D—
        Schedule E—
        Schedule F—

1.11    Sections and Headings

        The division of this Agreement into Articles and Sections and the insertion of headings
herein and are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.

1.12    Gender and Number

       Unless the context otherwise requires, words importing the singular include the plural
and vice-versa and words importing gender include all genders.




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1.13    Currency and Payment Obligations

        All dollar amounts referred to in this Agreement are stated in lawful money of the United
States of America.

1.14    Business Days

       If any payment is required to be made or other action is required to be taken pursuant to
this Agreement on a day that is not a Business Day, then such payment or action shall be made or
taken on the next Business Day thereafter.

                                          ARTICLE 2

2.00    OPERATING COSTS

2.01 The Parties agree to share the operating costs of the Project including custodial services
in the common areas only, maintenance services (such as minor repairs, maintenance of all
heating, ventilation, and air conditioning equipment, repair of any plumbing or electrical
services, interior painting as required, or repair of original millwork, if any), snow removal,
waste management, fire and safety inspections, Electrical Safety Authority inspections and
utilities, unless separately metered, proportionately according to the area of the Project used for
the purposes of each of the Parties to the total area of the Project, or as may otherwise be agreed
upon between the Parties following a periodic review.

2.02 Owner shall be responsible for carrying out custodial services in the common areas only,
maintenance services as described in Article 1.04 above, snow removal and grounds care, waste
management, fire and safety inspections and Electrical Safety Authority inspections, and for
paying all utilities (except those separately metered in the City area) and Operator agrees to
reimburse to Owner its proportionate share of the actual costs incurred by Owner for the
operation of the Project. Owner shall invoice Operator monthly and payments shall be remitted
by Operator to Owner within __________ [AMOUNT IN WORDS] (___ [AMOUNT IN
NUMERALS]) days of the date of such invoice.

2.03 Any additional custodial services required in respect of any special events held in the
Facilities or other areas shall be charged at Owner’s usual rates if carried out by Owner or shall
be the sole responsibility of the Party using the said space.

The Parties hereby agree to share the costs to repair and replace the roofing, serving both Owner
area and Operator area on the proportionate basis set out in Article 1.04 herein, and each of
Owner and Operator shall include their respective portions of such capital repairs in their
respective budgets. Owner and Operator shall be responsible for the costs of capital repair and
replacement of building envelope items within their respective areas (such as plumbing and
electrical systems, windows, doors) at their sole cost. Owner and Operator shall share the costs
to repair and will replace the parking areas surrounding the Project proportionately according to
the number of parking spaces. Owner and Operator shall meet not less than annually to review




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all capital repair requirements and to agree upon a schedule to carry out such capital repairs,
which may be used by each Party for their respective budgeting purchases.

                                      ARTICLE 4

3.00    STAFFING AND EQUIPMENT

3.01 Each Party acknowledges that it is solely responsible for providing staffing and all
necessary supervision while such Party’s patrons or invitees are in, on, or upon the Facilities or
common areas. Any damage to the Project caused by the negligence or willful misconduct of
Owner, its employees, agents, or assigns shall be repaired at the sole cost of Owner. Any
damage to the Project caused by the negligence or willful misconduct of Operator, its employees,
agents, or assigns shall be repaired at the sole cost of Operator.

3.02 Each of Owner and Operator shall provide their own equipment required to carry out
their respective programming. The Parties may agree from time to time to use each other’s
equipment in the common areas.

3.03 Notwithstanding anything contained herein, each Party shall be solely responsible for its
own staff in all aspects of their employment including without limitation, hiring, termination,
salary, benefits, scheduling, promoting, discipline, grievances, reprimands, reviews, etc., and no
employee, agent, contractor, or sub-contractor of one Party shall be seen or treated in any respect
as an employee, agent, contractor, sub-contractor of the other Party.

                                          ARTICLE 4

4.00    ACCESS

4.01 Operator shall have access to the Facilities for the permitted uses by the permitted users
during the dates and times scheduled and agreed upon by the Parties.

4.02 Owner shall provide Operator with __________ [AMOUNT IN WORDS] (___
[AMOUNT IN NUMERALS]) master keys for purposes of fire and emergency maintenance
access to the Facilities area.

4.03 Owner shall be responsible for maintaining an alarm system for the Project and for
monitoring such alarm system for response as required.

4.04 Operator shall maintain all emergency systems and emergency plans for the Facilities
area and any costs associated therewith shall be borne by Operator.

                                          ARTICLE 5

5.00    INSURANCE

5.01 Owner agrees to insure the Project under its main property insurance coverage policy and
costs of same shall be included in operating costs with each of the Parties paying such insurance


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costs on a proportionate basis. Both Parties agree to carry comprehensive general liability
insurance in an amount of not less than __________ [AMOUNT IN WORDS] dollars
($_________ [AMOUNT IN NUMERALS]) for the joint use of the Facilities and the other
common areas and their operations and responsibilities under this Agreement and each Party will
name the other as an additional insured on its respective insurance policy. Both Parties will
exchange appropriate documents annually confirming compliance with the above-noted
insurance provisions.
                                        ARTICLE 6

6.00    INDEMNIFICATION

6.01    Indemnity

         Each Party (the “Indemnifier”) agrees to indemnify, defend, and hold harmless, to the
fullest extent allowed by law, the other Party (the “Indemnified Party”) and its respective
officers, employees, agents, and representatives in respect of any claim, loss, cost, expense,
liability, fine, penalty, interest, payment, and/or damage (including attorney and other
professional fees and disbursements) (“Claim”) directly or indirectly incurred by or asserted
against the Indemnified Party relating to, arising out of, resulting from, or in any way connected
with:

        A.      Any breach of, or incorrectness in, any of the representations and warranties made
                by Indemnifier under this Agreement or under any other agreement, certificate, or
                instrument executed and delivered pursuant to this Agreement; or

        B.      Any breach of or any non-fulfillment of any agreement on the part of Indemnifier
                under this Agreement or under any other agreement, certificate, or instrument
                executed and delivered pursuant to this Agreement, including any construction
                contracts, including the failure on the part of the Indemnifier to make any
                payment when due hereunder or thereunder.

6.02 Owner agrees to indemnify, defend, and hold harmless, to the fullest extent allowed by
law, Operator and its respective officers, employees, agents and representatives in respect of any
claim, loss, cost, expense, liability, fine, penalty, interest, payment, and/or damage (including
attorney and other professional fees and disbursements) directly or indirectly incurred by or
asserted against Operator relating to, arising out of, resulting from, or in any way connected with
the use of the Facilities or its officers, directors, employees, agents, licensees, and invitees.

6.03    Interest on Claims

       The amount of any Claim submitted under Article 6.01, above, as damages or by way of
indemnification shall bear interest, including the date any Indemnifier is required to make
payment in respect thereof, at __________ [AMOUNT IN WORDS] percent (__% [AMOUNT
IN NUMERALS] per annum calculated from and including such date to but excluding the date
reimbursement of such Claim by Indemnifier is made, and the amount of such interest shall be
deemed to be part of such Claim.



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                                           ARTICLE 7

7.0     TERM AND EARLY TERMINATION

7.01 This Agreement, subject to the provisions set out below, shall be for a period of
__________ [AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS]) years commencing
on the __________ day of __________, _____ and terminating on the __________ day of
__________, _____ (the “Term”). The Parties agree to negotiate in good faith a renewal of this
Agreement in the event the Parties should desire to do so at the end of the Term.

7.02    Conditions for Termination

        A.      Any Party (the “Terminating Party”) may terminate its future obligations under
                this Agreement for any reason at any time (the “Termination Date”) provided (1)
                it delivers at least __________ [AMOUNT IN WORDS] (___ [AMOUNT IN
                NUMERALS]) months/years advance written notice (the “Termination Notice”)
                of the Termination Date to the other Party and (ii) the other Party consents to
                enter into negotiations and agrees upon the terms and conditions upon which this
                Agreement will terminate, or

        B.      Should one Party (the “Defaulting Party”) breach a material provision of this
                Agreement and have received written notice from the non-breaching Party of
                same, fails to remedy the breach within __________ [AMOUNT IN WORDS]
                (___ [AMOUNT IN NUMERALS]) days from receipt of such notice, the non-
                breaching Party shall have the right at any time (the “Termination Date”) to
                terminate this Agreement by delivering written notice (the “Termination Notice”)
                to the Defaulting Party, in which case, the Defaulting Party shall indemnify,
                defend, and hold harmless, to the fullest extent allowed by law, the non-breaching
                Party in respect of any and all losses, costs, expenses, liabilities, payments, or
                damages that the non-breaching Party suffers, for the period from the Termination
                Date until the end of the Term, which, but for the default by the Defaulting Party,
                it would not have suffered.

7.03 Upon termination of this Agreement for any reason, whether pursuant to Article 7.02,
upon the expiration of the Term, or any applicable renewal as set out in Article 7.04, the
following provisions apply:

        A.      Should the Agreement be terminated pursuant to Article 7.02.B, the
                indemnification provisions set out therein shall continue to apply and bind the
                Parties;

        B.      The indemnification provisions set out in Article 6.01 and the payment of
                operating costs (owing up to the date of termination) under Article 2 shall
                continue to apply to and bind the Parties; and

        C.      The confidentiality provisions of Article 9.05 shall continue to bind the Parties.



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7.04 This Agreement shall, subject to the provisions set forth below, terminate at the
expiration of the Term. Each Party shall deliver written notice to the other Party at least
__________ [AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS]) months/years prior
to the end of the Term indicating whether it is interested in continuing on with the Agreement
upon the expiration of the Term and the term and conditions, if any, as to its continued
involvement; provided, however, any renewal of this Agreement shall be on such terms and
conditions as the Parties may determine, in their absolute discretion.

                                           ARTICLE 8

8.00    DISPUTE RESOLUTION

8.01 The Parties hereby commit to good faith negotiations for a period of __________
[AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS]) Business Days from the date of
notice by one Party to another that there is a dispute between the Parties arising out of or relating
to the validity, construction, meaning, performance, or effect of this Agreement or the rights and
liabilities of the Parties hereto (the “Dispute”), prior to referring the dispute to arbitration. If
after the __________ [AMOUNT IN WORDS]-Business Days negotiation period, the Dispute
persists, the Dispute shall be determined by arbitration pursuant to the
_______________________ [INSERT NAME OF PROVINCE ACT RELEVANT AND
APPLICABLE TO ARBITRATION], by a panel of three (3) arbitrators, one to be appointed by
each disputing Party within __________ [AMOUNT IN WORDS] (___ [AMOUNT IN
NUMERALS]) Business Days after the end of such __________ [AMOUNT IN WORDS]-day
negotiation period, and a third to be appointed within __________ [AMOUNT IN WORDS]
(___ [AMOUNT IN NUMERALS]) Business Days thereafter by the two arbitrators appointed by
the Parties. If one of the Parties fails to appoint their arbitrator within such __________
[AMOUNT IN WORDS]-Business Day period, the arbitrator which has been appointed shall
conduct the arbitration with no right of the other Party to subsequently appoint its own arbitrator.
The award rendered by the arbitrator or arbitrators shall be final, binding, and not subject to
appeal. The arbitrator or arbitrators shall be empowered to determine all questions of law and
fact, shall have all powers of the _______________________ [INSERT NAME OF STATE
ACT RELEVANT AND APPLICABLE TO ARBITRATION], and may grant interim injunctive
relief. The prevailing Party shall be entitled, as part of the arbitration award, to recover the
reasonable costs and expenses (including legal fees and disbursements) of investigating,
preparing, and pursuing such claim or defense, and the Party enforcing an award shall be entitled
to reasonable costs and expenses (including legal fees and disbursements) incurred in connection
therewith.

                                               ARTICLE 9

9.00    GENERAL

9.01    Expenses




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       Except as otherwise set forth herein, the Parties shall be responsible for their own legal
and other expenses incurred in connection with the negotiation, preparation, execution, delivery,
and performance of this Agreement.

9.02    Notices

        A.      Any notice, certificate, consent, determination, or other communication required
                or permitted to be given or made under this Agreement shall be in writing and
                shall be effectively given and made if: (1) delivered personally, (2) sent by
                prepaid courier service or mail, or (3) sent prepaid by fax or other similar means
                of electronic communication, in each case to the following addresses:

                ________________________ [OWNER]
                ________________________ [OWNER’S ADDRESS]
                Fax: ________________________

                With a copy to:
                ________________________ [OWNER’S ATTORNEY]
                ________________________ [OWNER’S ATTORNEY’S ADDRESS]
                Fax: ________________________

                ________________________ [OPERATOR]
                ________________________ [OPERATOR’S ADDRESS]
                Fax: ________________________

                With a copy to:
                ________________________ [OPERATOR’S ATTORNEY]
                ________________________ [OPERATOR’S ATTORNEY’S ADDRESS]
                Fax: ________________________

        B.      Any such communication so given or made shall be deemed to have been given,
                made, and received on the day of delivery if delivered, or on the day of faxing or
                sending by other means of recorded electronic communication, provided that such
                day in either event is a Business Day and the communication is so delivered,
                faxed, or sent prior to 4:30 p.m. on such day. Otherwise, such communication
                shall be deemed to have been given, made, and received on the following
                Business Day. Any such communication sent by mail shall be deemed to have
                been given, made, and received on the fifth Business Day following the mailing
                thereof; provided, however, that no such communication shall be mailed during
                any actual or apprehended disruption of postal services.               Any such
                communication given or made in any other manner shall be deemed to have been
                given, made, and received only upon actual receipt.

        C.      Any Party may from time to time change its address under this Article 9.02 by
                notice to the other Parties given in the manner provided by this Article.




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9.03    Time is of the Essence

        Time shall be of the essence as to all respects of this Agreement.

9.04    Further Assurances
        Each Party shall promptly do, execute, deliver, or cause to be done, executed, and
delivered all further acts, documents, and things in connection with this Agreement that the other
Party may require, for the purposes of giving effect to this Agreement.

9.05    Confidentiality

         Each Party shall (and shall cause each of its officers, employees, and agents to) hold in
strictest confidence and not use in any manner whatsoever, other than as expressly contemplated
by this Agreement, any Confidential Information (as defined below) of the other Party or relating
to the Project. This Article shall not apply to the disclosure of any Confidential Information
where such disclosure is required by applicable law.

9.06    Successors and Assigns

        This Agreement shall enure to the benefit of, and be binding upon, the Parties and their
respective successors and permitted assigns. No Party may assign or transfer, whether
absolutely, by way of security, or otherwise, all or any part of its respective rights or obligations
under this Agreement without the prior written consent of all of the other Party.

9.07    Entire Agreement

        This Agreement (together with all other agreements and/.or documents executed by the
Parties contemplated by this Agreement) constitutes the entire integrated agreement between the
Parties pertaining to the subject matter of this Agreement and supersedes all prior agreements,
understandings, negotiations, and discussions, whether oral or written including, without
limitation, any confidentiality agreements that may have been entered into between the Parties
prior to the date hereof. There are no conditions, warranties, representations, or other
agreements between the Parties in connection with the subject matter of this Agreement (whether
oral or written, express or implied, statutory or otherwise) except as specifically set out in this
Agreement.

9.08    Waiver

        A waiver of any default, breach, or non-compliance under this Agreement is not effective
unless in writing and signed by the Party to be bound by the waiver. No waiver shall be implied
by or inferred from any failure to act or delay in acting by a Party in respect of any default,
breach, or non-observance or by anything done or omitted to be done by the other Party. The
waiver by a Party of any default, breach, or non-compliance under this Agreement shall not
operate as a waiver of that Party’s rights under this Agreement in respect of any continuing or
subsequent default, breach, or non-observance (whether of the same or any other nature).



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9.09    Severability

       Any provision of this Agreement which, as it may relate to a Party, is prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such
prohibition or unenforceability and shall be severed from the balance of this Agreement, all
without affecting the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

9.10    Counterparts

        This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which, taken together, shall be deemed to constitute one and
the same instrument. Counterparts may be executed either in original or faxed form and the
Parties adopt any signatures received by a receiving fax machine as original signatures of the
Parties; provided, however, that any Party providing its signature in such manner shall promptly
forward to the other Party an original of the signed copy of this Agreement so faxed.

9.11    Governing Law

       This Agreement shall be governed by and construed in accordance with the laws of the
State of ________________ and the laws of __________ [COUNTRY] (enter country)
applicable in that state and shall be treated, in all respects, as a valid agreement.

9.12    Procedure for Consent

        Any reference in this Agreement to the consent of a Party shall be deemed to also refer to
the prior written consent of a duly authorized representative of such Party.

        IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date
first above written.

                                                      OWNER
                                                      Per:


                                                      Name:
                                                      Title:
                                                      I have authority to bind Owner.

                                                      OPERATOR
                                                      Per:


                                                      Name:
                                                      Title:
                                                      I have      authority    to   bind   Operator.



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DOCUMENT INFO
Description: Operation and Maintenance Agreements are agreements made between two or more parties for the purposes of maintenance and repair of real property, the operation of utilities and any other provision of service. Operation and Maintenance Agreements are sometimes referred to as O&M agreements. This document in its draft form contains numerous of the standard clauses commonly used in these types of agreements; however, additional language may be added to allow for customization to ensure the specific terms of the parties' agreement are addressed. Use this agreement if one wants to engage a person or entity for the purpose of maintenance and repair of real property.
This document is also part of a package Real Estate Forms for your Business 46 Documents Included