Preventive Maintenance Agreement: Definition & Sample

A preventive maintenance agreement is an agreement between a company and an individual or organization to provide preventative care for the company’s property. For example, a business owner can have a service contract for their owned commercial buildings to help them with all the necessary services from plumbing, electrical work, heating & cooling installation/repair/maintenance, carpentry repairs, and painting.

A preventive maintenance agreement can also provide them with 24-hour emergency repair services and insurance coverage. For residential properties, it offers homeowners protection against damages due to things like leaking roofs or windows that break under winter conditions.

Common Sections in Preventive Maintenance Agreements

Below is a list of common sections included in Preventive Maintenance Agreements. These sections are linked to the below sample agreement for you to explore.

Preventive Maintenance Agreement Sample

AMENDED AND RESTATED

WARRANTY AND MAINTENANCE AGREEMENT

This Amended and Restated Warranty and Maintenance Agreement (this “Agreement” ) is effective May 1, 2003, (the “Effective Date” ) and is between Duquesne Light Company, a Pennsylvania corporation ( “DLC” ), and Itron, Inc., a Washington corporation ( “Itron” ).

A. DLC and Itron had been parties to the Amended and Restated Utility Automated Meter Data Acquisition Equipment Lease and Services Agreement dated January 15, 1996, as amended (the “Duquesne Contract” ), pursuant to which Itron provided installed equipment and provided software and services for the operation and maintenance of the Fixed Network (as defined below).

B. DataCom Information Systems, LLC, a Delaware limited liability company, ( “DataCom” ) is an affiliate of DLC. On or about March 30, 2000, DataCom bought from Itron certain equipment, and licenses to software, that Itron had used to supply services to DLC. DataCom and Itron entered into a Warranty and Maintenance Agreement, dated as of March 30, 2000, (the “First Maintenance Agreement” ) pursuant to which Itron has provided certain maintenance and support services for the operation and maintenance of the Fixed Network.

C. Concurrently with the execution and delivery of the First Maintenance Agreement, DLC and Itron terminated the Duquesne Contract by mutual agreement.

D. As permitted by the terms of the First Maintenance Agreement, DataCom assigned the First Maintenance Agreement to DLC as of January 1, 2003.

E. The Parties now desire to amend and restate the First Maintenance Agreement as set forth herein, pursuant to which Itron will continue to provide certain maintenance and support services for the Fixed Network.

Section 1. Definitions

Where not defined elsewhere in this Agreement, the following capitalized terms have the following meanings whether used in this Agreement or any Schedule attached hereto:

“AAA” is defined in Section 11.11(b) .

“Agreement” is defined in the preamble to this Agreement.

“Applicable Laws” means any law, statute, rule, regulation, ordinance, order, code, interpretation, judgment, decree, directive, or decision in effect from time to time of any national, state or local government, any political subdivision thereof or any other governmental, judicial, public or statutory instrumentality, authority, body, agency, department, bureau, commission or other governmental entity, which is applicable to or affects this Agreement.

“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. Section 101-1330, as in effect on the date hereof.

“Business Day” means a day other than a day on which commercial banks in Pittsburgh, Pennsylvania, are required or authorized to be closed. Unless qualified by the term “Business,” references in this Agreement to “day” or “days” shall refer to a calendar day or calendar days, respectively.

“CCU” means cell control unit.

“Change in Control” means any of the following events: (i) any Person becomes the beneficial owner (as defined in Rule 13(d)(3) under the Securities Exchange Act of 1934), directly or indirectly, of securities of Itron representing 50% or more of the combined voting power of Itron’s then outstanding voting securities; (ii) the individuals who as of the date of this Agreement are members of the Board of Directors of Itron (the “Incumbent Board” ), cease for any reason to constitute at least a majority of the Board of Directors of Itron (provided, however, that if the election, or nomination for election by Itron’s shareholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, such new director will be considered to be a member of the Incumbent Board); (iii) an agreement by Itron to consolidate or merge with any other entity pursuant to which Itron will not be the continuing or surviving corporation or pursuant to which shares of the common stock of Itron would be converted into cash, securities or other property, other than a merger of Itron in which holders of the common stock of Itron immediately prior to the merger would have the same proportion of ownership of common stock of the surviving corporation immediately after the merger; (iv) an agreement of Itron to sell, lease, exchange or otherwise transfer in one transaction or a series of related transactions substantially all the assets of Itron; (v) the adoption of any plan or proposal for a complete or partial liquidation or dissolution of Itron; or (vi) an agreement to sell more than 50% of the outstanding voting securities of Itron in one or a series of related transactions.

“CCU Transition Date” is defined in Section 2.9(a) .

“Compliant System Components” means, collectively, the Itron Proprietary Components and the Third Party Components.

“Confidential Information” means all nonpublic information disclosed by a Disclosing Party to the Receiving Party that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, should reasonably be considered as confidential. Confidential Information includes, but is not limited to, security codes, computer passwords, customer information, trade secrets, documents, designs, drawings, manufacturing processes, research developments, business activities and operations, inventions and engineering concepts. The Parties acknowledge and agree that all information concerning DLC’s customers is highly confidential and is the Confidential Information of DLC. Confidential Information does not include any information that (i) has become publicly available without breach of this Agreement, (ii) can be shown by documentation to have been known to the Receiving Party at the time of its receipt from the Disclosing Party, (iii) is received from a third party who did not acquire or disclose such information by a wrongful act or (iv) can be shown by documentation to have been independently developed by the Receiving Party without reference to any Confidential Information.

“Configuration Change” means any change to the Fixed Network requested by DLC and approved via the Change Control procedures attached as Schedule A solely to optimize the Fixed Network within its designed functionality and wide area and local area infrastructures as they exist on the Effective Date.

“Critical Maintenance Release” means a revision to Software that corrects a Critical Nonconformity.

“Critical Nonconformity” means a Nonconformity resulting in a material degradation in (a) the operation, performance and reliability of the Fixed Network, or (b) the ability of DLC to (i) read, collect or pass daily or interval meter data, (ii) collect or pass customer billing data; (iii) operate the Fixed Network; or (iv) aggregate monthly CCU Nonconformities in excess of 4% of the deployed CCUs in the Fixed Network.

“Cure Period” is defined in Section 7.1(b) .

“Custom Release” means any revision to Software that (i) Itron may prepare or have prepared in response to a written request received from DLC and (ii) is not a Maintenance Release, Critical Maintenance Release or Configuration Change.

“DataCom” is defined in Recital B.

“DCU” means a data command unit.

“Disaster Recovery Equipment” means all equipment and software located in the Spokane Operations Center that is used for Disaster Recovery Services, as listed on the attached Schedule F .

“Disaster Recovery Services” is defined in Section 2.8(a) .

“Disaster Recovery Service Period” is defined in Section 2.8(a) .

“Disclosing Party” means a Party that discloses Confidential Information to the other Party under this Agreement.

“Dispute” is defined in Section 11.11(a) .

“DLC Default” means any failure by DLC to comply in any material respect with any covenant, obligation, responsibility, representation or warranty of DLC contained in this Agreement.

“DLC Disaster Recovery Center” is defined in Section 2.8(d) .

“DLC Operations Center” means the operations center for the Fixed Network, as operated by DLC, currently located at 2841 New Beaver Avenue, Bldg. #3, 2nd Floor, N3-DP, Pittsburgh, PA 15233, as the same may be moved from time to time.

“DLC Service Administrator” is defined in Section 5.2(a) .

“Duquesne Contract” is defined in Recital A.

“Effective Date” is defined in the preamble to this Agreement.

“Environmental Laws” is defined in Section 3.8(f)(ii) .

“Equipment” means the items of Compliant System Components which are not Software.

“ERT” means an Itron manufactured or branded encoder receiver transmitter device installed in a meter for the purpose of communicating meter data over the Fixed Network. ERTs include, without limitation, the 40ER model ERT, the 41ER-1 model ERT and the 50ESS model ERT.

“Escrow Agreement” shall mean the escrow agreement, dated as of March 30, 2000, by and among Itron, DLC, as assignee of DataCom, and Fort Knox Escrow Services, Inc., attached as Exhibit A hereto.

“Event of Default” is defined in Section 7.1 .

“Excluded Equipment” means equipment that is not a Compliant System Component.

“FCC” means the Federal Communications Commission.

“Final Cure Date” is defined in Section 3.8(a)(ii) .

“First Maintenance Agreement” is defined in Recital B.

“Fixed Network” means the Compliant System Components and communications system infrastructure consisting of fixed wireless and wired local area and wide area networks that communicate remotely with meters that measure electric power usage or other applications, as installed pursuant to the Duquesne Contract, and as modified, maintained and expanded from time to time pursuant to the First Maintenance Agreement and this Agreement.

“Force Majeure Event” means epidemics, major storms, floods, lightning, earthquakes, fires, riots, civil disturbances, labor strikes or unrest, vandalism, terrorist attack, or sabotage beyond the reasonable control of a Party, acts of God, or any cause or condition beyond a Party’s reasonable control, provided that a Party shall not be excused from liability or performance hereunder where its delay or failure to perform is due to its financial inability to perform.

“Genesis System” means the Itron communications network bearing the “Genesis” trademark name.

“Infringing Material” is defined in Section 9.3 .

“Initial Cure Period” is defined in Section 3.8(a)(i) .

“Itron Equipment” means the equipment and materials, as set forth in Schedule E , that are in Pittsburgh as of the Effective Date and used extensively for certain maintenance of the Compliant System Components and that will remain Itron assets and be used in performing the Services.

“Itron Commercial Replacement ERTs” is defined in Section 2.3(a) .

“Itron Commercial Replacement Meter” is defined in Section 2.3(b) .

“Itron Proprietary Components” means (a) the components of the Fixed Network identified in Schedule C hereto as “Itron Proprietary Components”; (b) all Critical Maintenance Releases, Maintenance Releases, Custom Releases; (c) any Itron-

manufactured hardware added to the Fixed Network pursuant to the Transition Plan; and (d) any other components added to Schedule C as “Itron Proprietary Components” as agreed upon by the Parties in writing from time to time.

“Itron Service Administrator” is defined in Section 5.2(a) .

“Itron Residential Replacement ERTs” is defined in Section 2.3(a) .

“Itron Residential Replacement Meter” is defined in Section 2.3(b) .

“Itron Removal Meters” is defined in Section 2.4(b) .

“Itron Servicing Location” means the warehouse located at 357 Flaugherty Run Road, Building 101, Moon Township, PA 15108, which location may not be moved outside of the Pittsburgh area without DLC’s prior written consent.

“JAMS” is defined in Section 11.11(b) .

“L/C Amount” means an amount equal to Four Million Dollars ($4,000,000.00) less all amounts drawn by DLC against the Letter of Credit.

“Letter of Credit” is defined in Section 6.5 .

“Losses” is defined in Section 9.1 .

“Maintenance Inventory” has the meaning set forth in Section 5.2(h) .

“Maintenance Release” means any revision to Software that Itron may prepare, or that Itron may have prepared by or may receive from any third party, from time to time after the Effective Date that maintains or enhances Software operability and functionality, including available fixes for reported or identified Software problems and Nonconformities which are not Critical Nonconformities, but not including Custom Releases.

“Mandatory Maintenance Release” means any Maintenance Release to Software listed as an Itron Proprietary Component on Schedule C that is designated as a Mandatory Maintenance Release by Itron.

“Materials of Environmental Concern” means chemicals, pollutants, contaminants, wastes, toxic or hazardous substances, petroleum and petroleum products and residual wastes.

“MV90” means a system component of the Fixed Network that processes meter reading data generally originating from commercial and industrial meters.

“Mobile Collector Units” means Itron’s portable “Mobile Data Collector” units.

“NCN” means network control node.

“Nonconforming” means having a Nonconformity.

“Nonconformity” means a deviation of an Itron Proprietary Component from normal functionality or a failure of an Itron Proprietary Component to conform to the requirements of this Agreement (including, without limitation, the warranties set forth herein), in each case that is not caused by a DLC Default.

“Optional Maintenance Release” means any Itron Maintenance Release to Software listed as an Itron Proprietary Component on Schedule C that is not designated by Itron as a Mandatory Maintenance Release.

“Outage Management System” means the system implemented by DLC for the purpose of processing ERT daily reads and CCU outage messages from the Fixed Network as of the Effective Date.

“Operations Process Clock” is defined in Section 3.2(c) .

“Party” or “Parties” means DLC and Itron, individually or collectively as the case may be.

“Person” means any individual, company, corporation, partnership or other legal entity.

“Preferred Price” means, with respect to any goods or services, the lowest of (i) the most favorable price or rate then offered by Itron to any Person for the same quantity of such goods or services, (ii) if such goods or services are the subject of a then current list price published by Itron, (a) for goods, a quantity discount based on the accumulated quantity of such goods purchased by DLC since the Effective Date and (b) for services, a 20% discount off the list price, (iii) the price determined by Itron as commercially reasonable for such goods or services, or (iv) if DLC is not satisfied with the price under (i), (ii) or (iii), then such price as the Parties may negotiate in good faith.

“Premium Standard Service” is defined in Section 3.5 .

“PUC” means the Pennsylvania Public Utility Commission.

“Qualifying Bank” means ABN AMRO Bank N.V. or a commercial bank reasonably acceptable to DLC with a minimum credit rating of at least two of the following ratings: (i) AA as determined by Standard & Poor’s Corporation, or (ii) Aa2 as determined by Moody’s Investors Service, Inc., or (iii) a comparable rating by another nationally recognized rating service reasonably acceptable to DLC.

“Radio Frequency Sharing Agreement” means the Radio Frequency Sharing Agreement dated as of March 30, 2000, between DLC, as assignee of DataCom, and Itron, attached as Exhibit B hereto.

“Receiving Party” means a Party that receives Confidential Information from the other Party under this Agreement.

“Replacement Target Date” means the later of (a) nine (9) months after the Effective Date, or (b) December 31, 2003.

“Reserve Inventory” is defined in Section 5.2(g) .

“RMA” is defined in Section 5.2(f) .

“Services” means Itron’s responsibilities identified in Sections 2 and 3 of this Agreement, as such may be expanded from time to time pursuant to this Agreement or by the agreement of the Parties in a writing signed by their respective authorized representatives.

“Siris Device” means the telephone based meter device used for reading residential and small commercial meters over the Fixed Network.

“Software” means (a) all licensed and unlicensed Genesis System network software, computer programming object code, DNI software, and other software for the Genesis System now or hereafter owned by Itron or licensed from third parties and necessary for effective system operation of the Fixed Network from time to time, as listed on Schedule C , as may be amended from time to time by written agreement of the Parties, and (b) all related documentation for the foregoing furnished by or through Itron.

“Software License” means the Software License Agreement, dated as of March 30, 2000, between Itron and DLC, as assignee of DataCom, attached as Exhibit C hereto.

“Software Releases” means Maintenance Releases, Critical Maintenance Releases and Custom Releases.

“Spokane Operations Center” means the Itron customer support center located in Spokane, Washington, which will be consolidated into the DLC Operations Center as provided herein.

“Standard Services” is defined in Section 3.1 .

“Supplemental Services” is defined in Section 3.7 .

“Term” is defined in Section 8.1 .

“Third Party Components” means (a) the components of the Fixed Network identified in Schedule C hereto as “Third Party Components”; and (b) any other components added to Schedule C as “Third Party Components” as agreed upon by the Parties in writing from time to time.

“Transition Plan” means the transition plan set forth in the attached Exhibit D .

Section 2. Transition Services

2.1 Transition Plan

The Parties will fulfill their respective obligations as set forth below and in the Transition Plan. The Parties will provide reasonable cooperation with each other in executing their respective obligations set forth below and under the Transition Plan. The Parties presently anticipate that they will complete and each party will sign the Transition Plan no later than thirty (30) days after the Effective Date.

2.2 Project Coordination

Within thirty (30) days after the Effective Date, each Party will identify to the other Party its respective project team and project manager that will be primarily responsible for coordinating the execution of such Party’s responsibilities and obligations under the Transition Plan. Each Party may add, remove or exchange members of its project team or its project manager from time to time upon notice to the other Party.

2.3 ERT and Meter Supply Obligations

(a) ERT Supply Obligations

(i) Itron Residential Replacement ERTs . Itron will furnish, at no additional cost to DLC, the number of 41ER-1 ERTs specified in the Transition Plan, not to exceed 24,000, for installation and deployment by Itron pursuant to Section 2.4(a) ( “Itron Residential Replacement ERTs” ).

(ii) Itron Commercial Replacement ERTs . Upon approval and acceptance by DLC, Itron will furnish, at no additional cost to DLC, the number of 50ESS ERTs specified in the Transition Plan, not to exceed 17,500, to ABB Electricity Metering, Inc. ( “ABB” ) for installation in new ABB A3 Alpha meters to be purchased by DLC and deployed by Itron pursuant to Section 2.4(b) ( “Itron Commercial Replacement ERTs” ).

(b) Meter Supply Obligations

(i) Itron Residential Replacement Meters . On the schedule specified in the Transition Plan or as otherwise agreed by the Parties, DLC will deliver to Itron the initial seed stock of meters specified as Itron Residential Replacement Meters in the Transition Plan ( “Itron Residential Replacement Meters” ). Such of these meters that Itron removes from service will be retrofitted by Itron with 41ER-1 ERTs and redeployed per the Transition Plan.

(ii) Itron Commercial Replacement Meters . DLC will purchase from ABB the ABB A3 Alpha meters containing the 50ESS ERTs supplied by Itron pursuant to Section 2.3(a)(ii) (each such ABB A3 Alpha meter containing a 50ESS ERT, an “Itron Commercial Replacement Meter” ), and will provide such Itron Commercial Replacement Meters to Itron in “field ready” condition for installation (e.g., not requiring any additional calibration prior to installation).

2.4 ERT and Meter Installation Obligations

(a) Itron Residential Replacement Meters . Itron will (i) remove the Siris Devices in each Itron Residential Replacement Meter, (ii) install a Itron Residential Replacement ERT (not to exceed 24,000) in each Itron Residential Replacement Meter, (iii) perform all necessary “as found” and “as left” testing in connection with the Itron Residential Replacement Meters after the Siris Device is replaced by an Itron Residential Replacement ERT, and (iv) on or before the Replacement Target Date, install the Itron Residential Replacement Meters containing the Itron Residential Replacement ERTs in the applicable field locations specified in the Transition Plan.

(b) I tron Commercial Replacement Meters . On or before the Replacement Target Date, Itron will (i) remove the meters designated as Itron Removal Meters in the Transition Plan ( “Itron Removal Meters” ), (ii) install the Itron Commercial Replacement Meters (not to exceed 17,500) to replace the Itron Removal Meters, and (iii) return the Itron Removal Meters to DLC.

2.5 Other ERT Obligations

(a) Necessary Permissions and Approvals . DLC hereby grants to Itron the right to perform the services set forth in Section 2.3 and 2.4 , and subject to the procedures mutually agreed upon in the Transition Plan, DLC will use its reasonable best efforts to ensure that Itron (including, without limitation, Itron’s employees and subcontractors) will have access to the meters specified in the Transition Plan at the times, in the manner, and upon the terms and conditions specified in the Transition Plan. The Transition Plan shall clearly define the obligations, responsibilities and actions required for non-access situations. If required, DLC, at its expense, will secure

and maintain any and all consents, approvals, licenses, permissions, agreements and other actions required of any third party (under any third party agreement, Applicable Law, regulatory approval or otherwise) for DLC and Itron to perform their respective obligations in accordance with Sections 2.3 and 2.4 .

(b) Ownership and Treatment of ERTs . Upon installation thereof in the field locations specified in the Transition Plan, DLC will own title to the Itron Residential Replacement ERTs and the Itron Commercial Replacement ERTs. Upon installation, calibration and testing in accordance with Itron-approved procedures (and, in the case of Itron Residential Replacement ERTs, generation of meter reads consistent with performance of the Fixed Network), the Itron Residential Replacement ERTs and the Itron Commercial Replacement ERTs will be deemed Itron Proprietary Components.

(c) Daily Reads . Notwithstanding anything to the contrary in this Agreement, any inability of the Itron Residential Replacement ERTs and/or Itron Commercial Replacement ERTs to deliver a particular level of daily reads due to circumstances beyond Itron’s reasonable control (such as no communication coverage for the Itron Residential Replacement ERTs and/or Itron Commercial Replacement ERTs) shall not be deemed a Nonconformity or a Critical Nonconformity hereunder. For avoidance of doubt, “reasonable control” will not be interpreted or construed to require Itron to erect any new communications tower, rent space on any existing communications tower, add to or modify the Genesis LAN/WAN infrastructure, or take any steps to enhance in any way the existing communications coverage to the location of any residential or commercial customer of DLC.

2.6 Disposition of Siris Devices

(a) Ownership and Treatment of Siris Devices . All Siris Devices shall become Itron property and shall no longer be deemed Compliant System Components upon the earlier of (i) replacement of a particular Siris Device with an ERT as provided in Section 2.4 , (ii) twenty four (24) months after the Effective Date, or (iii) for all Siris Devices referenced in Section 2.6(d) , upon the earlier of (A) return of such Siris Device to Itron, or (B) thirty (30) days after the Effective Date.

(b) Return of Removed Siris Devices . On or before thirty (30) days after the Replacement Target Date, DLC will remove all Siris Devices from the Itron Removal Meters and return them to Itron, or, at DLC’s option, certify destruction thereof in accordance with Section 2.6(c) .

(c) Certification of Destruction . DLC may, at its option, elect not to remove one or more Siris Devices from meters removed pursuant to Sections 2.4(b ); provided, that DLC will (i) destroy such removed meters (including the Siris Device contained therein) in accordance with all Applicable Laws (including, without limitation, all applicable guidelines of the Environmental Protection Agency), and (ii) DLC will furnish Itron with a signed, written record certifying such destruction.

(d) Return of All Other Siris Devices . On or before thirty (30) days after the Effective Date, DLC will at DLC’s sole cost and expense, (i) return to Itron all Siris Devices comprising part of the Reserve Inventory, (ii) return to Itron all Siris Devices comprising part of the Maintenance Inventory, and (iii) return to Itron any other Siris Devices in DLC’s possession (in inventory or otherwise).

2.7 Mobile Collector Units and DataPaks

Itron will deliver to DLC three (3) Mobile Collector Units upon the delivery schedule set forth in the Transition Plan. Upon delivery to DLC, such Mobile Collector Units shall be deemed Itron Proprietary Components. DLC will return to Itron, upon the schedule set forth in the Transition Plan, all DataPaks. Upon return to Itron, such DataPaks shall no longer be deemed Compliant System Components.

2.8 Disaster Recovery Services

(a) Disaster Recovery During the Disaster Recovery Service Period . Itron shall operate and maintain a disaster recovery program at its Spokane Operations Center for the DLC Operations Center from the Effective Date until such time as the Parties transition operational responsibility for such disaster recovery services to DLC as provided in the Transition Plan, in no event later than March 31, 2004 (the “Disaster Recovery Service Period” ). During the Disaster Recovery Service Period, Itron shall provide DLC with the disaster recovery services listed in Schedule F (the “Disaster Recovery Services” ) for the identified Compliant System Components , on a twenty-four (24) hour per day basis for a period of up to ninety-six (96) consecutive hours following commencement of Disaster Recovery Services. After the first ninety-six (96) hours of Disaster Recovery Services, (i) Itron will provide Disaster Recovery Services, including operations personnel for up to eight (8) hours per day, and (ii) DLC shall be responsible for providing operations personnel for the remaining hours per day, unless DLC’s requirement for Disaster Recovery Services was caused by Itron’s negligence, willful misconduct or failure to perform its obligations hereunder, in which case, Itron shall continue to provide, at its cost and expense, Disaster Recovery Services on a twenty-four (24) hour per day basis until completed. All Disaster Recovery Services after the first ninety-six (96) hours will be deemed Supplemental Services at the Preferred Price.

(b) Disaster Recovery After the Disaster Recovery Service Period . After the expiration of the Disaster Recovery Period through the remainder of the Term, DLC will be solely responsible for, and Itron will have no obligation to provide, (i) any Disaster Recovery Services, and (ii) any third party hardware or software licenses, support, maintenance, additions or upgrades to the Disaster Recovery Equipment

or otherwise related to the Disaster Recovery Services. Any changes required to the production system will, if applicable, be implemented with respect to the Disaster Recovery System at (a) Itron’s sole cost and expense in the case of a Critical Maintenance Release or a Mandatory Maintenance Release, and (b) DLC’s sole cost and expense in the case of an Optional Maintenance Release or a Custom Maintenance Release.

(c) Transfer of Disaster Recovery Equipment . Prior to the expiration of the Disaster Recovery Service Period, Itron will transfer to DLC at no additional cost to DLC all of Itron’s right, title and interest to the Disaster Recovery Equipment, to the extent that the same may be legally transferred. Such transfer shall include all applicable manufacturer’s specifications for such Disaster Recovery Equipment, to the extent available and not previously provided to DLC. The transfer of the Disaster Recovery Equipment shall be “AS IS, WHERE IS” and with no representation or warranty (express or implied) of any kind, including, without limitation, as to merchantability, fitness for a particular purpose, completeness, noninfringment or assignability. For avoidance of doubt, following such transfer, all Itron-manufactured hardware and Itron-owned Software comprising part of the Disaster Recovery Equipment shall be deemed an Itron Proprietary Component. Schedule C shall be updated by the Parties within thirty (30) days after the expiration of the Disaster Recovery Services Period to reflect the transfer of the Disaster Recovery Equipment as contemplated by this Section 2.8(c) .

(d) Disaster Recovery Transition Assistance . Itron will, at no cost to DLC, provide reasonable technical support and assistance to facilitate the establishment of a DLC-operated disaster recovery operations facility ( “DLC Disaster Recovery Center” ) and the transfer of the Disaster Recovery Equipment thereto, as such obligations are defined in the Transition Plan.

(e) Delay in Disaster Recovery Transition . In the event that DLC causes a delay beyond the transition date mutually agreed upon in the Transition Plan, in the transition of the Disaster Recovery Services and Disaster Recovery Equipment from Itron to DLC pursuant to this Section 2.8 , (i) Itron will continue to provide Disaster Recovery Services on the terms set forth in Section 2.8(a) until the actual date of such transition, (ii) any such Disaster Recovery Services provided by Itron after the transition date mutually agreed upon in the Transition Plan, will be deemed Supplemental Services for which DLC will pay Itron accordingly, and (iii) DLC will reimburse Itron for the additional costs reasonably incurred by Itron to accommodate such delay.

(f) Annual Disaster Recovery Test . After the expiration of the Disaster Recovery Services Period, DLC will conduct an annual test of Disaster Recovery Services and Disaster Recovery Equipment in accordance with the attached Schedule F . DLC will give Itron reasonable advanced written notice of such annual testing and allow Itron a reasonable opportunity to attend and participate in such test. DLC will furnish to Itron a report detailing the findings of each such annual test within thirty (30) days after the completion thereof.

2.9 CCU Maintenance

(a) CCU Field Repair and Maintenance . Not later than January 1, 2004 and for the remainder of the Term, (the “CCU Transition Date” ) DLC will assume from Itron all responsibility for installation and de-installation of CCUs comprising part of the Fixed Network, including replacement of batteries for the CCUs, as provided in Section 3.4(d) . In addition, DLC, as Itron’s subcontractor, will be responsible for field investigation and field de-install and re-install of CCUs comprising part of the Fixed Network pursuant to a mutually agreed upon process.

(b) CCU Shop Repair and Maintenance . Before and after the CCU Transition Date, Itron will provide corrective maintenance for Nonconforming CCUs as set forth in Section 3.4(b ) during regular hours at the Itron’s Servicing Location, except that after the CCU Transition Date (i) DLC will deliver any Nonconforming CCU to Itron’s Servicing Location at no cost to Itron; (ii) DLC will take delivery of the repaired or replaced CCU at Itron’s Servicing Location; and (iii) DLC will be responsible for all labor to replace batteries for the CCU units, as provided in Section 3.4(d) .

2.10 Support of 50ESS ERT Technology

Itron, at its sole cost and expense, will upgrade and modify the Software to support the 50ESS ERT technology as provided in the Transition Plan. DLC, at its sole cost and expense, will upgrade and modify its DISCUS customer information system to support the 50ESS ERT technology as provided in the Transition Plan. For avoidance of doubt, the Transition Plan will provide for the use of 50ESS technology implemented around a P+2, MVRS, or P+4 application architecture (as determined by Itron) and the existing Genesis System Software for monthly and daily reads. If Itron selects an MVRS or P+4 solution, Itron will at its sole cost provide up to 25 handhelds to DLC that are compatible with the selected platform. DLC may choose a solution different than what Itron selects, and in such case DLC will pay for any additional work required to develop the option chosen by DLC on a mutually agreed upon schedule.

Section 3 Itron Services