Lease of computer hardware

Lease of computer hardware. Agreement made _________[date], between _________, a corporation incorporated under the laws of the State of _________, having its principal place of business at _________(the lessor), and _________, a corporation incorporated under the laws of the State of _________, having its principal place of business at _________(the lessee). Now therefore, in consideration of the mutual covenants contained in this agreement it is agreed between the parties: (1). Agreement to Lease. Lessor agrees to furnish to the lessee its equipment service compromising the use of the equipment listed below (the equipment) and equipment maintenance service upon the following terms and conditions: Model Number & Description Quantity Monthly Rental Charge Unit Purchase Price (2). Term of Agreement. This agreement is effective from the above date, and shall continue for _________ (_________) years (the initial term) from the date the first item of equipment specified in this agreement is installed and ready for use [or, from the date of written acceptance by lessee following installation of all items of equipment specified] (the commencement date), and shall remain in full force until terminated. This agreement may be terminated at the end of the initial term, or at any time thereafter, by either party, upon ninety (90) days' prior written notice. (3). Monthly Rental Charge. The monthly rental charge shall begin on the commencement date and be due and payable in advance on the first day of each month (except for the first payment which shall be a pro rata portion of the monthly rental charge calculated on a thirty (30) day basis and shall be due and payable on the commencement date). The monthly rental charges listed on the face of this agreement are those in effect on the commencement date and are subject to change by lessor, effective at the end of the initial term, or at any time thereafter, upon ninety (90) days' prior written notice. [Optional-limit monthly rental charge following initial term] After expiration of the initial term and so long as this agreement shall remain in force and effect, the monthly rental charge shall be an amount equal to _________ percent (_____%) of the then current monthly availability charge made by a comparable manufacturer of the equipment for identical machines on a month-to-month basis. [Optional-extension of initial term] The monthly rental charge under this agreement shall be reduced to the extent set forth below, at the option of the lessee, upon delivery by the lessee to lessor of its written authorization of the extension of the initial term of this agreement by a period of _________ (_________) months or any multiple thereof. From and after the anniversary of the commencement date under this agreement next following delivery, the monthly rental charges under this agreement shall be reduced to that percentage of the lessor's monthly availability charge in effect at the date of this agreement which is included in the lessor's rental schedule set forth in section (12) of this agreement with respect to a period equal to the initial term as so extended. [If five-year initial term] (4). Usage of Equipment. Lessor will make no extra charge for machine usage, lessee being entitled to unlimited and unobstructed use of equipment by payment of monthly rental charges. [If less than five-year initial term] (4). Usage of Equipment. The basic monthly rental charge shall entitle the lessee to a maximum of 176 [or 200] hours of metered use time for the equipment during each full calendar month, and for less than a full calendar month, one thirtieth (1/30th) of 176 [or 200] hours for each day the equipment was installed and ready for use. Any unused portion of the allowed maximum metered use time shall not be carried over into subsequent months. Each hour of usage in excess of the maximum metered use time will result in an additional charge at the rate of 1/176th [or 1/200th] of _________ percent (_____%) of the monthly rental charge and will be due and payable thirty (30) days from the date of invoice. (5). Payment of Taxes. There shall be added to the monthly rental charge an amount equal to all taxes (other than taxes based on lessor's net income) paid, payable or required to be collected by lessor however designated, which are levied or based on such charges, on this agreement, on the machines or their use or value for tax purposes, including but not limited to state and local personal property taxes or privilege or excise taxes based on gross revenue. (6). Maintenance. Lessor shall keep the equipment in good operating condition and will make all necessary adjustments and repairs. Lessee shall not permit persons other than authorized representatives of lessor to effect adjustments or repairs to the equipment and lessor shall be in no way responsible to lessee for loss of the use of the equipment occasioned by adjustments and repairs made by persons other than its own representatives or personnel approved by lessor. Maintenance service shall be provided by on-call service engineers at all times at no extra charge. Lessor's monthly maintenance charge during the initial term of this agreement will not exceed _________ dollars ($_____). Lessor's representatives shall have full and free access to the equipment in order to effect the necessary maintenance. All preventive maintenance shall be performed during normal working hours and at a time which is mutually acceptable to the lessee and lessor. Lessor shall specify the preventive maintenance time required for each system. All remedial maintenance shall be performed after notification that the equipment is inoperative and lessor shall always be responsive to the maintenance requirements of the lessee. If remedial maintenance is not provided within twenty-four (24) hours after notification that equipment is inoperative, lessor agrees to provide the backup and support services through a service bureau designated by mutual agreement and to forfeit onethirtieth (1/30th) of the monthly rental charge for each twenty-four (24) hour period of equipment downtime. The required suitable electric current to operate the machines and a suitable place of installation will be furnished by the lessee. Lessee will also provide all facilities specified in the installation manual and its facilities will meet at all times the minimum standards of the National Board of Fire Underwriters for the protection of electronic computer systems as recommended by the National Fire Protection Association. (7). Insurance and Indemnification. During the period the equipment ordered is in transit or in the possession of the lessor, lessor and its insurers relieve the lessee of all risk of loss or damage to the equipment. Lessee shall indemnify and hold lessor harmless from any loss, claim or damage to persons or property arising out of lessee's use or possession of the equipment, which indemnity shall survive the termination of this agreement, provided that the loss, claim or damage was not caused by the fault or negligence of lessor or the fault or negligence of its employees or representatives. [Lessor clause] (8). Alterations and Additions. Alterations and/or additions to the equipment may be made solely with the prior written consent of lessor. This written consent may be withdrawn by lessor if the equipment operation or maintenance is impaired. [Lessee clause] (8). Alterations and Additions. Alterations, attachments, field modifications to the equipment, and additional or replacement equipment may be obtained by lessee, at its option (i) from or through lessor with the concurrence of lessor or (ii) directly from an equipment manufacturer other than lessor. If the alterations, attachments, field modifications and additional or replacement equipment are obtained from or through lessor, all costs charged by the lessor in installing the alterations, attachments, field modifications and additional or replacement equipment will be paid by lessee. Replacement equipment may be obtained only after proper termination of this agreement as to the one or more items of equipment, originally subject to this agreement, to be replaced thereby. If at the date of installation of the alterations, attachments, field modifications and additional or replacement equipment the then remaining portion of the initial term is less than _________ (_________) months, and if the total list price of the lessor for the alterations, attachments, field modifications and additional or replacement equipment exceeds _________ percent (_____%) of the purchase price paid by lessor for equipment, then the initial term shall be extended by a period of _________ (_________) months from that date. The lessor will charge the lessee for the alterations, attachments, field modifications and additional or replacement equipment added at a rate equal to _________ percent (_____%) of the then current monthly availability charge for the alterations, attachments, field modifications of the lessor and additional or replacement equipment, and the charges will be added to and will be payable thereafter as part of the monthly rental charge. If the alterations, attachments, field modifications and additional or replacement equipment are obtained by lessee directly from an equipment manufacturer other than the lessor, lessee will be responsible for all initial and continuing costs incidental to the alterations, attachments, field modifications and additional or replacement equipment. Lessee will also be responsible for any costs of detaching the alterations, attachments, field modifications and additional or replacement equipment, if necessary, including in the case of replacement equipment, the detaching of the equipment to be replaced. Arrangements for alterations, attachments, field modifications and additional or replacement equipment, when obtained by lessee directly from the equipment manufacturer will not effect extension of the initial term, except as otherwise provided in this agreement. (9). Transportation; Moving Equipment. All transportation, rigging and drayage charges upon the equipment, both on delivery to lessee and redelivery to lessor, are to be paid by the lessee, provided, however, that the charges shall not exceed the amount lessee would normally pay a comparable equipment manufacturer. Any necessary packing cases for the return of the equipment and a representative to supervise the packing will be furnished to the lessee without charge. The lessee will furnish such labor as may be necessary for packing and unpacking the equipment when in the possession of lessee. Lessee may move all the equipment, at its own expense, upon 30 days' prior written notice to lessor, to any other location of lessee, or any location of any division or subsidiary or of the parent corporation, if any, of lessee, within the Continental United States (but in no event to any location outside the Continental United States); provided, however, that all costs resulting from such movements shall be borne by the lessee, including but not limited to any additional maintenance or setup charges as a consequence of the move. In the event of such movement, lessee shall cooperate with lessor in taking all necessary appropriate and reasonable measures to protect the title of lessor, and the interest of any assignee of lessor, to and in the equipment. (10). Operating Supplies. All supplies for use with the equipment are to be provided by lessee and are to meet the specifications set forth by lessor. [Optional provision] (11). Option To Purchase. Lessor, following the commencement date, shall make the items of equipment available to the lessee for purchase during the rental period at the purchase prices specified in section (1) of the agreement. Credits against the purchase price from all rentals previously paid on the equipment being purchased will be accrued on the basis of the following schedule in effect at the time this option is exercised: (a). _________ percent of total rentals paid to date if the option is exercised during the first _________ (_________) months following the commencement date. (b). _________ percent of total rentals paid to date if the option is exercised during the next _________ (_________) months following the commencement date. (c). _________ percent of total rentals paid to date if the option is exercised during the next _________ (_________) months following the commencement date. (d). In the event the lessee elects to exercise this option at any time during the rental period and subsequent to the above, the price for such item of equipment shall not exceed the price at the end of _________ (_________) months' period had the purchase option been exercised at that time. This agreement shall be terminated with respect to each item of equipment being purchased by lessee on the last day of the month during which lessee submits a written notice to lessor of an intent to exercise the option to purchase that item of equipment. The effective date of purchase shall be the first day of the month immediately following that during which written notice is given to lessor of the intent to exercise this option, and the purchase price shall be payable by lessee on such effective date. [Optional provision] (12). Early Termination Privilege. The lessee shall have the right to terminate this agreement, either (i) in its entirety or (ii) as to any one or more of the items of equipment originally subject to this agreement, at any time after the expiration of the first _________ (_________) months of the initial term and within _________ (_________) months prior to the expiration of the initial term (or, in the event the initial term has been extended pursuant to any provision of this agreement, then after expiration of the first _________ (_________) months plus that number of months by which the initial term has been extended and within _________ (_________) months of the expiration of such extended initial term), provided written notice of the termination is received by lessor at least ninety (90) days prior to the date of any termination; and provided, further, in the event lessee shall so elect to terminate at any time prior to expiration of the initial term, lessee shall reimburse lessor for the difference between the rental actually paid by it under this agreement and the amount lessee would have paid pursuant to the lessor rental schedule (set forth below) with respect to a period equal to the length of time the equipment was actually installed. There shall be added to the amount payable to lessor under the preceding sentence an interest fee calculated at the rate of _________ percent (_____%) per year above the then current _________(state) prime interest rate. There shall be excluded, for purposes of determining when the required number of months of initial term shall have expired under this agreement, each day during which the monthly rental charges abate under this agreement pursuant to section (6) of this agreement. The lessor rental schedule is set forth below: Initial Term Percentage of Rental Charged by Lessor Less than _________ months _________ months or more but less than _________months _________ months or more but less than _________months _________ months or more _____% _____% _____% _____% [Lessor clause] (13). Warranty. There are no warranties, express or implied including, but not limited to, the implied warranties of merchantability and fitness for a particular purpose, not specified in this agreement, respecting this agreement or the equipment leased under this agreement, or services furnished under this agreement. Lessor shall not be liable for any failure or delay in performance under this agreement if such failure or delay is due, in whole or in part, to any cause beyond its control. In no event will lessor be liable for any indirect, special or consequential damages, in connection with or arising out of the furnishing, performance, or use of any item of equipment or services provided for in this agreement. [Lessee clause] (13). Warranty. Lessor warrants that the equipment when installed will be in good working order and condition, free from defects in design, workmanship and material, that it conforms to the performance capabilities, characteristics, specifications, functions and other descriptions set forth in Appendix A hereto, and that it will make all necessary adjustments, repairs, and replacements without additional charge to maintain the equipment in this condition. Except as set forth in this agreement, it is expressly agreed that there is no warranty of merchantability, express, implied, or statutory, nor any affirmation of fact, or provision, by lessor with reference to the equipment or service which extends beyond the warranty set forth in this agreement. [Lessor clause] (14). Disclaimer of Liability. Lessee agrees that lessor shall not be liable to lessee for (i) any liability, claim, loss, damage (consequential or otherwise) or expense of any kind caused, directly or indirectly, by the inadequacy of the equipment for any purpose or by any deficiency or defect or by any delay in providing equipment or failure to provide the equipment, or (ii) any interruption or loss of service or use of the equipment or any of them, any loss of business or for other consequential damage, howsoever caused, and lessee agrees to indemnify and hold lessor harmless against any such liabilities, claims, losses, damages (consequential or otherwise) or expenses, or actions in respect thereof, asserted or brought against lessor by or in right of third persons. [Lessee clause] (14). Disclaimer of Liability. Lessor shall not be liable for special or consequential damages, including business interruption costs and profits. In the event the equipment, or any component of the equipment, becomes inoperative, and the lessor does not repair the equipment within 24 hours after notice by lessee, lessor agrees to provide the support services set forth in section (6) of this agreement and to forfeit a portion of the monthly rental charge as set forth above. (15). Performance by Lessor. Should lessor default in the performance of any of its obligations under this agreement for a continuous period of thirty (30) days after receipt by both lessor and its assignee if notice of assignment has been given to lessee of written notice from lessee, lessee may at its option terminate this agreement at the end of such default by lessor; provided, however, that lessor's assignee, if any, shall have the option during the 30-day period to perform any of lessor's obligations under this agreement, to the extent necessary to cure any such default by lessor. (16). Performance by Lessee. Should lessee default (a) in the payment of any sum of money due under this agreement beyond the thirtieth (30th) day after receipt by lessee of a bill or statement for money due or other written notice from lessor, or (b) in the performance of any other of its obligations under this agreement for a continuous period of thirty (30) days after receipt by lessee of written notice from lessor, then and in any such event lessor may at its option: (i) terminate this agreement, (ii) whether or not this agreement is terminated, take immediate possession of any or all of the equipment, wherever situated, and for such purpose, enter upon any premises without liability for so doing, and (iii) sell, dispose of, hold, use or lease any equipment as lessor in its sole discretion may decide, without any duty to account to lessee, and lessee shall remain liable for the remaining unpaid rent for the balance of the initial term of this agreement. (17). Rights of Third Parties. If notified promptly in writing of any action brought against lessee based on a claim that the equipment infringes or violates a third party's trade secrets, proprietary information, trademark, copyright or patent right, lessor, or its assignee will defend such action at its expense and will pay the costs and damages awarded in any such action, provided lessor, or its assignee, shall have sole control of the defense of any such action and all negotiations for its settlement or compromise. In the event that a final injunction shall be obtained against lessee's use of the equipment or any of the components of the equipment by reason of infringement or violation of a third party's proprietary rights, or if in lessor's opinion the equipment is likely to become the subject of a claim of infringement or violation of a third party's proprietary rights, lessor will, at its option and at its expense, either procure for lessee the right to continue using the equipment, replace or modify the equipment so they become noninfringing, or terminate this agreement as to the equipment. Lessor shall not have any liability to lessee under any provision of this clause if any third party claim is based upon the use of the equipment in combination with units or devices not made by the lessor and/or not the equipment leased in this agreement or in a manner for which the equipment was not designed. The above states the entire liability of lessor with respect to proprietary rights violations by the equipment or any component of the equipment. (18). Assignment. This agreement shall be binding upon and inure to the benefit of the parties and their respective successors and (to the extent specified in any assignment) assigns. Lessee, however, shall not assign this agreement or sublet any equipment without first obtaining the written consent of lessor. (19). General. (a). The terms and conditions of this agreement supersede those of all previous agreements between the parties with respect to the use of the equipment. (b). Lessee and lessor each warrant and represent that their respective signatures set forth below have been and are on the date of this agreement duly authorized by all necessary and appropriate corporate action to execute this agreement. (c). All equipment shall be removed by lessor within a reasonable time after termination of this agreement in accordance with its terms. (d). This agreement shall be governed by the laws of the State of _________. In witness of these things, the parties have set their hands and seals on the first day written above. _________ By _________, Lessee _________ By _________, Lessor [Seal] [Seal]