EXECUTION COPY

                           SECOND AMENDED AND RESTATED
                       CO-SALE AND FIRST REFUSAL AGREEMENT

      This SECOND AMENDED AND RESTATED Co-Sale and First Refusal Agreement (this
"Agreement"),  is made as of October 26, 2004,  by and among  Comverge,  Inc., a
Delaware  corporation  (the  "Company"),  each of the  individuals  and entities
listed  on  Schedule  A  attached  hereto  (the  "Investors")  and  each  of the
individuals  and  entities  listed on Schedule B attached  hereto  (the  "Common
Stockholders" and, together with the Investors, the "Stockholders"). Capitalized
terms not  defined  herein  shall  have the  meanings  given  such terms in that
certain Series B Preferred  Stock Purchase  Agreement of even date herewith (the
"Purchase Agreement").

                                 R E C I T A L S

      WHEREAS,  the Company and certain of its  stockholders are parties to that
certain  Amended and Restated  Co-Sale and First Refusal  Agreement  dated as of
September 12, 2003 (the "Prior Agreement");

      WHEREAS,  the Company  desires to sell shares of Series B Preferred  Stock
pursuant  to  the  terms  of  the  Purchase  Agreement  and  the  amendment  and
restatement  of the Prior  Agreement  as set forth  herein is a condition to the
Initial Closing (as defined in the Purchase Agreement);

      WHEREAS,  pursuant  to  Section  4.6 of the  Prior  Agreement,  the  Prior
Agreement  may be amended by a written  instrument  executed by the holders of a
majority of the shares of Common Stock  (determined  on an  as-converted  basis)
held by all the Investors under the Prior Agreement; and

      WHEREAS,  the  undersigned  represent  a majority  of the shares of Common
Stock (determined on an as-converted  basis) held by all the Investors under the
Prior Agreement and such stockholders desire to amend the Prior Agreement as set
forth below,  on behalf of themselves and the other Investors party to the Prior
Agreement.

                                A G R E E M E N T

      NOW, THEREFORE,  in consideration of the premises, and the mutual promises
and agreements contained herein, the parties hereby agree as follows:

1.       RESTRICTIONS ON TRANSFERS

            1.1 General Prohibition on Transfers; Permitted Transfers

                  (a) Except as otherwise permitted hereby, no Stockholder shall
directly or indirectly sell, assign, pledge or encumber or otherwise transfer to
any person or entity (a "Transferee") any shares of capital stock of the Company
the  Stockholder  now owns or may hereafter  acquire (the  "Stock")  unless such
Stockholder has complied with all of the terms of this Agreement.  Any purported
sale,  assignment,  pledge,  encumbrance  or other  transfer in violation of any
provision of this Agreement  shall be void and ineffectual and shall not operate
to transfer any interest or title to the purported Transferee.  No transfer that
is permitted under this Section 1 may be made by any Stockholder  without (i) an
opinion  of  counsel  satisfactory  to the  Company  that such  transfer  may be
lawfully  made  without  registration  under  the Act and all  applicable  state
securities laws, or (ii) registration under such securities laws.


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                  (b) The restrictions  contained in this Agreement with respect
to transfers by each  Stockholder of shares of Stock shall not apply to: (i) any
transfer of Stock by the Stockholder to any spouse, parents, siblings (by blood,
marriage or adoption) or lineal  descendants  (by blood,  marriage or adoption);
(ii)  any  transfer  of  Stock  by  the  Stockholder  to a  trust,  partnership,
corporation,  limited  liability company or other similar entity for the benefit
of the  Stockholder or the  Stockholder's  spouse,  parents,  siblings or lineal
descendants;   (iii)  any  transfer  of  Stock  by  the  Stockholder,  upon  the
Stockholder's death, to the executors,  administrators,  testamentary  trustees,
legatees or beneficiaries of the Stockholder;  (iv) any transfer of Stock by the
Stockholder  to any person who  controls,  is  controlled  by or is under common
control with the Stockholder  (within the meaning of the Securities Act of 1933,
as amended)  (an  "Affiliate");  (v) any  transfer to any (x) general or limited
partner of a Stockholder  that is a  partnership  or (y) member of a Stockholder
that is a  limited  liability  company  or (vi)  any  transfer  of  stock by the
Stockholder  (A)  pursuant to a merger or  consolidation  of the Company with or
into another  corporation  or  corporations,  (B)  pursuant to the  liquidation,
dissolution  or winding up of the Company,  (C) at, and pursuant to, a Qualified
Public  Offering  as  defined  in  the  Company's  then-current  Certificate  of
Incorporation,  or (D) in connection  with a  transaction  in which stock of the
Company  having  more than 50% of the voting  power of all the then  outstanding
stock  of the  Company  is  transferred;  provided,  that in  each of the  cases
referred to in clauses (i) through (v) above,  each transferee,  donee,  heir or
distributee shall, as a condition precedent to such transfer,  become a party to
this  Agreement  by executing an Adoption  Agreement  substantially  in the form
attached  as Annex A and shall  have all of the rights  and  obligations  of the
Stockholder hereunder;  and provided further, that in each of the cases referred
to in  subclauses  (A),  (B)  and  (D)  of  clause  (vi)  above,  the  Company's
stockholders  of record as  constituted  immediately  prior to such event  will,
immediately  after such event,  hold less than a majority of the voting power of
the surviving or acquiring entity.  If a Stockholder  intends to transfer any or
all of its Stock under  clauses (i) through  (v) above,  such  Stockholder  must
provide notice of such transfer to the Company.

                  (c) Notwithstanding anything to the contrary contained in this
Agreement,  no  Stockholder  may transfer any  securities  to a person or entity
primarily engaged in a line of business that is competitive with the Company, as
determined  in good faith by the Board of Directors,  except in connection  with
any consolidation or merger of the Company with or into any other corporation or
other  entity or person,  or any other  corporate  reorganization,  in which the
stockholders of the Company immediately prior to such  consolidation,  merger or
reorganization,  own less than fifty percent (50%) of the Company's voting power
immediately  after  such  consolidation,   merger  or  reorganization,   or  any
transaction or series of related  transactions  in which more than fifty percent
(50%) of the Company's voting power is transferred.

                  (d)  Notwithstanding  any  provision in this  Agreement to the
contrary, Data Systems & Software, Inc. ("DSSI") shall have the right to sell or
otherwise  transfer up to 480,000  shares (the "DSSI  Exception  Shares") of its
Series A Preferred Stock in accordance  with this Section  1.1(d).  In the event
DSSI desires to sell or otherwise  transfer  any of the DSSI  Exception  Shares,
DSSI shall provide  notice to the Company and the other  Investors of the number
of DSSI Exception Shares it desires to sell (the "DSSI Transfer Shares") and the
price per share and any other terms of such proposed transfer. The Company and


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the  other  Investors  shall  have 15 days  following  receipt  of notice by the
Company and all  Investors  (other than DSSI) to purchase all, but not less than
all, of the DSSI Transfer  Shares at the price and on the terms set forth in the
notice pertaining to such transfer. The Company and the Investors agree that the
Company shall have the first right to purchase DSSI Transfer Shares and any DSSI
Transfer  Shares not elected to be purchased  by the Company  shall be allocated
among the  Investors  (excluding  DSSI)  based on their  pro-rata  ownership  of
Preferred Stock (determined on an as-converted  basis). In the event the Company
and the Investors (excluding DSSI) do not collectively  purchase all of the DSSI
Transfer  Shares,  the  Company  and the  Investors  shall not have the right to
purchase  any DSSI  Transfer  Shares and DSSI shall be free,  for a period of 60
calendar days to sell the DSSI Transfer Shares to any purchaser at a price equal
to or greater than the sale price set forth in the notice  relating to such DSSI
Transfer  Shares and upon terms no more favorable  than those  specified in such
notice;  provided,  however, DSSI shall not transfer shares to any purchaser who
is not an Investor unless such purchaser  acquires at least 200,000 shares.  Any
transference of DSSI Exception  Shares shall,  as a condition  precedent to such
transfer,  become  a party  to (i)  this  Agreement  by  executing  an  Adoption
Agreement in the form attached as Annex A and (ii) each of the Investors' Rights
Agreement and Voting Agreement in the manner provided by such agreements.

            1.2 Right of First Refusal

                  (a) Except as otherwise  permitted in Section 1.1(b) or (d) of
this  Agreement  or as required by Section 1.6 of this  Agreement,  transfers of
shares  of the  Stock by each  Stockholder  shall not be  permitted  unless  the
Stockholder  has complied with this Section 1.2. If the  Stockholder  intends to
sell any of its shares of Stock (the "Proposed  Seller"),  it shall give written
notice (the "Seller's  Notice") to the Company and each of the Investors stating
that the Proposed  Seller  intends to make such a sale or transfer,  identifying
the party who made the offer (the "Proposed Transferee"),  specifying the number
of shares of Stock  proposed to be purchased  or acquired  pursuant to the offer
(the "First Refusal Shares"),  the nature of such sale or transfer, all material
terms of the proposed  sale,  including the per share  purchase  price which the
Proposed  Transferee  has offered to pay for the First Refusal Shares (the "Sale
Price")  and the name and  address of each  Proposed  Transferee.  A copy of the
offer, if available, and a statement of the number of shares held by each of the
Investors shall be attached to the Seller's Notice.

                  (b) (i) Upon receipt of the Seller's Notice, the Company shall
have the  irrevocable  and  exclusive  option to purchase,  upon delivery to the
Proposed Seller within fifteen (15) days of its receipt of the Seller's  Notice,
all or any portion of the First  Refusal  Shares.  The Company  shall  deliver a
notice (the "Company  Notice") to the Proposed  Seller and each of the Investors
of its election to purchase or not to purchase such First Refusal  Shares within
such fifteen (15) day period,  together  with payment to the Proposed  Seller of
the Sale  Price  therefor.  To the  extent  that the  Company  does not elect to
purchase  all  of the  First  Refusal  Shares,  each  Investor  shall  have  the
irrevocable and exclusive  option to purchase up to that number of the remaining
First  Refusal  Shares at the Sale Price as equals the product of (A) the number
of remaining First Refusal Shares multiplied by (B) a fraction, the numerator of
which  shall be the number of shares of Common  Stock  issued or  issuable  upon
conversion  of the  Preferred  Stock held by such  Investor and any Common Stock
issued as a dividend or other distribution with respect to or in exchange for or
in replacement of such Common Stock  (collectively,  the "Investor  Shares") and
the  denominator of which shall be the number of Investor Shares owned by all of
the  Investors  (the  "Proportionate  Share").  Within twenty (20) calendar days
after delivery of the Company Notice, each Investor shall deliver to the Company
and the Proposed  Seller a written notice stating  whether it elects to exercise
its option  under this Section  1.2(b) and the maximum  number of shares (not to
exceed  all of  such  Investor's  Proportionate  Share)  that it is  willing  to
purchase,  and such notice shall  constitute an  irrevocable  commitment by such
Investor to purchase such shares.


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            (ii)  If  an  Investor   does  not  elect  to   purchase   its  full
Proportionate Share, the Proposed Seller shall deliver another written notice to
the  Company  and  each   Investor   that  has  elected  to  purchase  its  full
Proportionate  Share (a  "Fully  Exercising  Investor")  stating  the  number of
unpurchased  shares.  Each  Fully  Exercising  Investor  shall be  entitled,  by
delivering  written  notice to the Company and the Proposed  Seller  within five
calendar days following such Investor's  receipt of such notice,  to purchase up
to all  of  the  remaining  shares  at  the  Sale  Price.  In  the  event  of an
oversubscription,  the oversubscribed amount shall be allocated among such Fully
Exercising  Investors  pro rata based on the number of Investor  Shares owned by
each of them. The delivery of the notice of election under this paragraph  shall
constitute an irrevocable commitment to purchase such shares.

            (iii) Each Investor shall be entitled to assign its rights  pursuant
to this Section 1.2 to any of its Affiliates.

            (iv)  If any of the  First  Refusal  Shares  are not  elected  to be
purchased pursuant to this Section 1.2, then, subject to Section 1.3 hereof, the
Proposed Seller shall be free, for a period of sixty (60) calendar days from the
date of the Seller's  Notice,  to sell the remaining First Refusal Shares to the
Proposed Transferee, at a price equal to or greater than the Sale Price and upon
terms no more favorable to the Proposed  Transferee  than those specified in the
Notice.  Any  transfer of the  remaining  First  Refusal  Shares by the Proposed
Seller after the end of such sixty (60) day period or any change in the terms of
the sale as set forth in the  Seller's  Notice  which are more  favorable to the
Proposed  Transferee  shall  require a new  notice of intent to  transfer  to be
delivered to the  Investors  and shall give rise anew to the rights  provided in
this Section 1.2.

                  (c) If the Company and/or the Investors  elect to purchase any
or all of the First Refusal Shares mentioned in the Seller's Notice, the Company
and/or  such  Investor(s)  shall have the right to  purchase  the First  Refusal
Shares for cash  consideration  whether or not part or all of the  consideration
specified  in the  Seller's  Notice is other  than  cash.  If part or all of the
consideration  to be paid for the First Refusal Shares as stated in the Seller's
Notice is other than cash,  the price  stated in such  Seller's  Notice shall be
deemed  to be the  sum of the  cash  consideration,  if any,  specified  in such
Seller's Notice, plus the fair market value of the non-cash  consideration.  The
fair market value of the non-cash consideration shall be determined by the Board
of Directors of the Company (without the participation of any member who has any
interest in the Proposed Transferee or the Proposed Seller), and its judgment as
to the fair market value of such  non-cash  consideration  shall be binding upon
the Proposed Seller and the other Investors.


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            1.3 Right of  Co-Sale.  In the event  that all of the First  Refusal
Shares are not  purchased by the Company or the Investors as provided in Section
1.2 hereof,  the Proposed  Seller shall deliver a notice to each Investor (other
than the Proposed  Seller,  if the Proposed  Seller is an Investor)  who did not
purchase  shares   pursuant  to  Section  1.2(b)  above  (a   "Non-Participating
Investor")  informing  it of the number of shares not elected to be purchased by
the other  Investors and the number of First Refusal  Shares it still holds (the
"Co-Sale  Shares")  and intends to sell to the  Proposed  Transferee.  Each such
Non-Participating Investor shall have the right, exercisable upon written notice
to the Company and the Proposed  Seller  within five (5) calendar days after the
giving of such notice by the Proposed  Seller,  to  participate  in the Proposed
Seller's sale of Co-Sale  Shares at the Sale Price and upon the terms  specified
in the Notice.  The delivery of the notice of election  under  Section 1.3 shall
constitute an irrevocable commitment by such Non-Participating  Investor to sell
the number of shares  specified in such notice  pursuant to this Section 1.3. To
the extent one or more of the Non-Participating Investors exercise such right of
participation  in accordance with the terms and conditions set forth below,  the
number of shares of Stock  which the  Proposed  Seller may sell to the  Proposed
Transferee shall be correspondingly  reduced. The right of participation of each
of the  Non-Participating  Investors shall be subject to the following terms and
conditions:

                  (a) Each  Non-Participating  Investor may elect to sell all or
any part of that number of shares of Common  Stock of the  Company  held by such
Non-Participating  Investor equal to the product obtained by multiplying (i) the
aggregate number of Co-Sale Shares by (ii) a fraction, the numerator of which is
the  number  of  Investor  Shares  at the time  owned by such  Non-Participating
Investor  and the  denominator  of which is the sum of the  number  of shares of
Common  Stock of the  Company  (assuming  full  conversion  and  exercise of all
convertible and  exercisable  securities into Common Stock) at the time owned by
the  Proposed  Seller  and the  number of  Investor  Shares  owned by all of the
Non-Participating Investors (the "Co-Sale Proportionate Share").

                  (b) If a Non-Participating Investor does not elect to sell his
full Co-Sale  Proportionate  Share,  the Proposed  Seller shall deliver  another
written  notice  to the  Company  and each  Non-Participating  Investor  who has
elected  to sell  its full  Co-Sale  Proportionate  Share  (a  "Fully-Exercising
Co-Sale  Investor") stating the number of unsold shares.  Each  Fully-Exercising
Co-Sale Investor shall be entitled,  by delivering written notice to the Company
and the Proposed Seller within five calendar days following such notice, to sell
up to all of the shares not sold by the  Non-Participating  Investors  above and
beyond its Co-Sale  Proportionate  Share.  Such  election  shall  constitute  an
irrevocable  commitment by such  Fully-Exercising  Co-Sale  Investor to sell the
number of shares  specified in such notice  pursuant to this Section 1.3. In the
event the number of shares requested to be sold by all Fully-Exercising  Co-Sale
Investors  exceeds the aggregate Co-Sale Shares available for sale by all of the
Fully-Exercising  Co-Sale  Investors,  the remaining  shares to be sold shall be
allocated pro rata among such Fully-Exercising  Co-Sale Investors (including the
Proposed Seller) based on the number of Investor Shares owned by each.


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                  (c) Each of the exercising  Non-Participating  Investors shall
effectuate the sale by promptly  delivering to the Proposed  Seller for transfer
to the  Proposed  Transferee  one or more  certificates,  properly  endorsed for
transfer (or  accompanied by duly executed stock  powers),  which  represent the
number of shares of Common Stock which the Non-Participating  Investor elects to
sell.

                  (d)   The   stock    certificates    which   the    exercising
Non-Participating  Investors deliver to the Proposed Seller shall be transferred
by the Proposed Seller to the Proposed Transferee in consummation of the sale of
the Stock pursuant to the terms and conditions specified in the Seller's Notice,
and the  Proposed  Seller shall  promptly  thereafter  remit to each  exercising
Non-Participating  Investor  that  portion  of the sale  proceeds  to which  the
exercising Non-Participating Investor is entitled by reason of its participation
in such  sale.  To the  extent  that any  prospective  purchaser  or  purchasers
prohibits  such  assignment  or  otherwise  refuses to purchase  shares or other
securities from any Non-Participating  Investor exercising its rights of co-sale
hereunder,  the Proposed Seller shall not sell to such prospective  purchaser or
purchasers  any Stock  unless and  until,  simultaneously  with such  sale,  the
Proposed  Seller  shall  purchase  such  shares  or other  securities  from such
Non-Participating  Investor for the same consideration and on the same terms and
conditions as the proposed transfer described in the Seller's Notice.

            1.4 Additional  Transactions.  The exercise or  non-exercise  of the
rights of an Investor  hereunder  to  participate  in one or more sales of Stock
made  by the  Proposed  Seller  shall  not  adversely  affect  their  rights  to
participate in subsequent sales by the Stockholder.

            1.5 Ownership.  The Stockholders  represent and warrant that each is
the sole legal and  beneficial  owner of those shares of Stock such  Stockholder
currently  holds  subject  to this  Agreement  and that no other  person has any
interest (other than community property interest) in such shares.

            1.6 Drag-Along Rights.

                  (a)  Applicability.  In the event the holders of a majority of
the  then   outstanding   Preferred   Stock  of  the  Company  (the   "Proposing
Stockholders")  approve a sale of the Company or a sale of all or  substantially
all of the Company's assets,  in a bona fide transaction,  whether by means of a
merger,  consolidation,  sale of stock or  assets  or  otherwise,  in a  single,
simultaneous or related series of transactions  (an "Approved  Sale"),  then the
Stockholders (collectively, the "Remaining Holders") shall each consent to, vote
for and raise no objections to the Approved Sale. If the proposed acquiror is an
Affiliate of any  stockholder of  then-outstanding  Preferred  Stock,  then this
Section  1.6(a)  shall only apply to the Approved  Sale if the Approved  Sale is
approved by the holders of a majority of the  then-outstanding  Preferred  Stock
held of record by holders that are not Affiliates of such proposed acquiror.  If
the Approved Sale will take the form of an asset sale,  merger or consolidation,
the Remaining  Holders shall vote in favor of such  transaction  and shall waive
any appraisal rights or dissenters'  rights in connection with such transaction.
If the Approved Sale is  structured as a sale of the stock of the Company,  each
Remaining  Holder shall agree to sell all capital stock in the Company then held
by such Remaining  Holder on the terms and conditions  approved by the Proposing
Stockholders.  A Remaining  Holder shall have no obligations  under this Section
1.6 to the  extent  that the  terms  of the  Approved  Sale  provide  that  such
Remaining Holder would receive less than the amount that would be distributed to
such  Remaining  Holder in the  event  that the  proceeds  were  distributed  in
accordance with the Company's  then-current  Certificate of  Incorporation.  All
capital stock  transferred by the Remaining Holders pursuant to this Section 1.6
shall be sold at the same  price  and  otherwise  treated  identically  with the
capital  stock  of the  same  class  and  series  being  sold  by the  Proposing
Stockholders in all respects. The Remaining Holders shall each take such actions
as may be  reasonably  required and  otherwise  cooperate in good faith with the
Proposing  Stockholders  in  connection  with  consummating  the Approved  Sale,
including  the  execution  of such  agreements  and such  instruments  and other
actions  reasonably  necessary  to (i) provide  reasonable  representations  and
warranties and other  provisions  and agreements  relating to such Approved Sale
and  (ii)   effectuate  the  allocation  and   distribution   of  the  aggregate
consideration upon the Approved Sale.


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                  (b) Notice of Sale. The Proposing  Stockholders shall give the
Remaining  Holders at least ten (10) days prior  written  notice of any Approved
Sale as to which the  Proposing  Stockholders  intend to exercise  their  rights
under this Section 1.6.

                  (c) Notwithstanding any other provision of this Agreement,  no
Stockholder or group of Stockholders  (the "Offering  Stockholders")  shall be a
party to any transaction or series of  transactions  that involves a transfer to
any person,  persons acting in concert or entity (a  "Prospective  Acquiror") of
shares of the  Company if such sale would  result in the  Prospective  Acquiror,
together  with  its  Affiliates,  holding  50% or more by  voting  power  of all
outstanding capital stock of the Company, unless the Prospective Acquiror offers
to purchase all of the capital  stock of the Company for the same  consideration
per share (with appropriate  adjustment to reflect the conversion of convertible
securities and the  preference  and priorities of any preferred  stock) and upon
the same terms and conditions for securities of the same type,  class and series
as are offered to the Offering Stockholder(s).

2.    LEGENDED CERTIFICATES

            2.1 Legend on the Stockholders' Stock. Each certificate representing
shares of the Stock now or hereafter owned by each  Stockholder or its permitted
Transferees  pursuant  to clauses (i)  through  (v) of Section  1.1(b)  shall be
endorsed with the following legend:

"THIS CERTIFICATE AND THE SHARES REPRESENTED  HEREBY MAY NOT BE SOLD,  ASSIGNED,
TRANSFERRED,  ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT IN CONFORMITY WITH
THE TERMS AND  CONDITIONS  OF A CO-SALE AND FIRST  REFUSAL  AGREEMENT  AMONG THE
HOLDER (OR THE  PREDECESSOR  IN INTEREST TO THE  SHARES),  THE  CORPORATION  AND
CERTAIN OTHER  STOCKHOLDERS OF THE CORPORATION.  ADDITIONALLY,  THIS CERTIFICATE
AND THE SHARES REPRESENTED  HEREBY ARE SUBJECT TO CERTAIN DRAG-ALONG  PROVISIONS
SET FORTH IN THE CO-SALE AND FIRST REFUSAL AGREEMENT.  THE CORPORATION WILL UPON
WRITTEN  REQUEST  FURNISH A COPY OF SUCH  AGREEMENT TO THE HOLDER HEREOF WITHOUT
CHARGE. THE CORPORATION WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE
BOOKS OF THE  CORPORATION  UNLESS  AND  UNTIL  THE  TRANSFER  HAS  BEEN  MADE IN
COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT."


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            2.2 The legend  required  under  Section 2.1 hereof shall be removed
upon  termination of this Agreement in accordance with the provisions of Section
4.1.

3.    PROHIBITED TRANSFERS

            3.1 Grant. In the event that any  Stockholder  should sell any Stock
in contravention of the participation rights of the Non-Participating  Investors
under   Section  1.3  of  this   Agreement  (a   "Prohibited   Transfer"),   the
Non-Participating Investors shall have the put option provided in Section 3.2.

            3.2  Put  Option.  In  the  event  of  a  Prohibited  Transfer,  the
Non-Participating Investors shall have the option to sell to the Proposed Seller
a number of shares of Common  Stock of the Company  (either  directly or through
conversion  and  delivery  of Series A Preferred  Stock)  equal to the number of
shares that the Non-Participating Investors would have been entitled to sell had
such Prohibited Transfer been effected in accordance with Section 1.3 hereof, on
the following terms and conditions:

                  (a) The price per share at which the  shares are to be sold to
the  Proposed  Seller shall be equal to the price per share paid to the Proposed
Seller by the third party  purchaser  or  purchasers  of the  Proposed  Seller's
Stock. The Proposed Seller shall also reimburse the Non-Participating  Investors
exercising  the  put  option  for  any  and all  fees  and  expenses,  including
reasonable  out-of-pocket  legal  fees and  expenses  incurred  pursuant  to the
exercise or attempted exercise of rights under this Section 3.

                  (b)  The  Non-Participating  Investors  shall  deliver  to the
Proposed  Seller,  within thirty (30) days after they have received  notice from
the Proposed Seller or otherwise  become aware of the Prohibited  Transfer,  the
certificate or certificates  representing shares to be sold, each certificate to
be properly  endorsed  for  transfer  (or  accompanied  by duly  executed  stock
powers).

                  (c)  The   Proposed   Seller   shall,   upon  receipt  of  the
certificates  for the  repurchased  shares,  pay the  aggregate  purchase  price
therefor  provided  for in this Article 3, by delivery of  consideration  in the
same form such  Proposed  Seller  received for the Stock sold in the  Prohibited
Transfer and shall reimburse the Non-Participating  Investors for any additional
expenses, including legal fees and expenses, incurred in effecting such purchase
and resale.

            3.3 Company  Expenses.  In the event of a Prohibited  Transfer,  the
Proposed  Seller in the Prohibited  Transfer shall reimburse the Company for any
and all fees and expenses,  including  reasonable  out-of-pocket  legal fees and
expenses, incurred by the Company in connection with such Prohibited Transfer.


                                       8
<PAGE>

4.    GENERAL

            4.1  Termination.  The rights and  obligations  of an Investor under
this Agreement  shall terminate at such time as that Investor shall no longer be
the  owner  of  at  least  1,000  shares,  or  rights  to  acquire  shares,  (as
appropriately  adjusted for any stock splits, stock dividends,  combinations and
recapitalizations)  of Common Stock (as  determined on an  as-converted  basis).
Unless  sooner  terminated  with respect to a particular  Investor in accordance
with the preceding sentence,  this Agreement shall terminate upon the occurrence
of any of the following events:

                  (a) the  liquidation,  dissolution or indefinite  cessation of
the business  operations of the Company,  or the  acquisition  of the Company by
another  entity (or group of  affiliated  entities  or entities  operating  as a
group) by means of any transaction or series of related transactions (including,
without  limitation,  any  reorganization,  merger or consolidation)  unless the
Company's  stockholders  of  record  as  constituted  immediately  prior to such
acquisition or sale will,  immediately after such acquisition or sale (by virtue
of securities issued as consideration  for the Company's  acquisition or sale or
otherwise)  hold at least 50% of the voting power of the  surviving or acquiring
entity  (except  that the sale by the Company of shares of its capital  stock to
investors  in bona  fide  financing  transactions  shall  not be deemed to be an
acquisition for this purpose);

                  (b)  the  consummation  of a  Qualified  Public  Offering  (as
defined  in the  Company's  Certificate  of  Incorporation,  as the  same may be
amended and restated from time to time); or

                  (c) upon the  execution  and  delivery of a written  agreement
signed by the holders of at least 60% of the Preferred  Stock,  voting or acting
together as a single class.

Notwithstanding  this Section 4.1,  Section 1.6 shall survive any termination of
this Agreement  pursuant to Section 4.1(a) until such transaction has closed and
all proceeds of such transaction  (including  without limitation any earn-out or
escrowed  proceeds)  have been  fully  distributed  to all  stockholders  of the
Company in accordance with the terms of such transaction.

            4.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered  personally  or by  commercial
delivery  service,  or mailed by  registered or certified  mail (return  receipt
requested) or sent via facsimile  (with  confirmation of receipt) to the parties
at the address for such party set forth  beneath such party's name on Schedule A
hereto  (or at such  other  address  for a party as shall be  specified  by like
notice) and, in the case of the Company:

                                    Comverge, Inc.
                                    120 Eagle Rock Avenue
                                    East Hanover, NJ  07936
                                    Fax:  (973) 884-3501
                                    Attn: Chief Executive Officer

                                    with a copy to

                                    Andrews Kurth LLP
                                    111 Congress Ave., Suite 1700
                                    Austin, Texas 78701
                                    Fax:  (512) 320-9292
                                    Attn: Carmelo M. Gordian


                                       9
<PAGE>

Notice given by facsimile  shall be  confirmed  by  appropriate  answer back and
shall be effective upon actual receipt if received during the recipient's normal
business hours,  or at the beginning of the recipient's  next business day after
receipt if not  received  during the  recipient's  normal  business  hours.  All
notices by facsimile shall be confirmed  promptly after  transmission in writing
by  certified  mail or  personal  delivery.  Any party may change any address to
which  notice is to be given to it by giving  notice as  provided  above of such
change of address.

            4.3  Assignments  and  Transfers.  This Agreement and the rights and
obligations  of the  parties  hereunder  shall  inure to the  benefit of, and be
binding upon, their respective  successors,  assigns and legal  representatives;
provided,  however, and other than as set forth in Section 1.1(b) hereunder, the
first refusal and co-sale  rights  hereunder may be assigned only by an Investor
to a transferee or assignee of such Investor's  shares of Preferred Stock of the
Company who, after such  assignment or transfer,  holds such number of shares of
Preferred  Stock that is convertible  into at least 250,000 shares of the Common
Stock of the Company (subject to appropriate adjustments for stock splits, stock
dividends,  combinations  and  other  recapitalizations)  and  who  executes  an
Adoption Agreement in the form attached as Annex A. By their execution hereof or
of an Adoption  Agreement,  each party hereto hereby appoints the Company as its
attorney-in-fact  for the sole purpose of executing Adoption Agreements with any
subsequent permitted transferees.

            4.4 Optional Escrow. At the request of any Investor, an escrow shall
be set up to effect the transfer of any certificates or funds  hereunder.  Costs
of such escrow shall be borne by all of the parties  participating therein based
on the  aggregate  value of the shares held by them which are to be purchased or
sold thereunder.

            4.5 Severability. In the event one or more of the provisions of this
Agreement should for any reason be held to be invalid, illegal or unenforceable,
such  provisions  shall be excluded from this  Agreement and the balance of this
Agreement  shall be  interpreted  as if such  provision had never been contained
herein.

            4.6 Amendments and Waivers. Other than with respect to amendments to
Schedule A or Schedule B hereto,  which may be amended by the Company to reflect
additional  Investors  or  Stockholders  or  their  permitted  transferees,  any
amendment or modification of this Agreement shall be effective only if evidenced
by a written instrument executed by the holders of at least 60% of the shares of
Common Stock  (determined  on an  as-converted  basis) held by all the Investors
hereunder;  provided,  however,  that any  amendment  or waiver that affects one
Investor in a  disproportionately  adverse manner as compared to other Investors
must  be  approved  by the  disproportionately  affected  Investor.  Any  waiver
hereunder shall be effective only if evidenced by a written instrument  executed
by the  holders  of a  majority  of the  shares of Common  Stock held by all the
Investors   (determined  on  an  as-converted  basis)  or  by  the  Stockholders
(determined  on an  as-converted  basis),  as the case may be,  whose rights are
being waived.


                                       10
<PAGE>

            4.7 Governing Law. This Agreement shall be governed by and construed
in  accordance  with  the laws of the  State  of  Delaware,  without  regard  to
conflicts of law principles.

            4.8  Counterparts.  This  Agreement  may be  executed in two or more
counterparts,  each of which shall be deemed an original but all of which,  when
taken together, shall constitute one and the same instrument.

            4.9 Remedies.  The parties hereto shall have all remedies for breach
of this  Agreement  available  to them as  provided  by law or  equity.  Without
limiting the generality of the foregoing,  the parties agree that in addition to
any other rights and remedies  available at law or in equity,  the parties shall
be entitled to obtain  specific  performance of the obligations of each party to
this Agreement and immediate injunctive relief and that, in the event any action
or  proceeding  is brought in equity or to enforce the same, no party will urge,
as a defense, that there is an adequate remedy at law.

            4.10  Conflict  with Other Rights of First  Refusal.  Certain of the
Stockholders  have entered  into a stock  purchase  agreement  with the Company,
which  agreement  contains a right of first  refusal  provision  in favor of the
Company.  The right of first refusal provision contained in this Agreement shall
supersede  and replace the right of first  refusal  provision  contained  in the
Stockholder's  stock  purchase  agreement;  provided,  however,  that the  other
provisions  contained in the Stockholder's stock purchase agreement shall remain
in full force and effect and, provided  further,  that this Agreement is subject
to,  and  shall in no  manner  limit  the  right  that the  Company  may have to
repurchase  securities  from any Stockholder  pursuant to any stock  restriction
agreement or other agreement between the Company and the Stockholder.

            4.11  Aggregation  of Stock.  All  shares of Common  Stock  owned or
acquired by an Investor or its Affiliates (assuming full conversion and exercise
of all  convertible  and  exercisable  securities  into Common  Stock)  shall be
aggregated  together  for the purpose of  determining  the  availability  of any
rights under this Agreement.

            4.12  Entire  Agreement.   This  Agreement  constitutes  the  entire
agreement among the parties hereto with respect to the subject matter hereof.

                            [Signature Pages Follow]


                                       11
<PAGE>

      IN WITNESS  WHEREOF,  the parties have  executed  this Second  Amended and
Restated  Co-Sale  and First  Refusal  Agreement  on the day and year  indicated
above.

                                       COMVERGE, INC.


                                       By:
                                          --------------------------------------
                                          Robert M. Chiste
                                          Chief Executive Officer


                        [Signature Page to Comverge, Inc.
        Second Amended and Restated Co-Sale and First Refusal Agreement]
<PAGE>

                                       INVESTORS:

                                       DATA SYSTEMS & SOFTWARE INC.


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       ENERTECH CAPITAL PARTNERS II L.P.

                                       By: ECP II Management L.P.,
                                           Its General Partner

                                       By: ECP II Management L.L.C.,
                                           Its General Partner


                                       By:
                                          --------------------------------------
                                          David F. Lincoln
                                          Managing Director

                                       ECP II INTERFUND L.P.

                                       By: ECP II Management L.L.C.,
                                           Its General Partner


                                       By:
                                          --------------------------------------
                                          David F. Lincoln
                                          Managing Director

                                       EASTON HUNT CAPITAL PARTNERS, L.P.
                                       By:  EHC GP, L.P.
                                       Its: General Partner
                                       By:  EHC, Inc.
                                       Its: General Partner


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                        [Signature Page to Comverge, Inc.
        Second Amended and Restated Co-Sale and First Refusal Agreement]
<PAGE>

                                       E.ON VENTURE PARTNERS


                                       By:
                                          --------------------------------------
                                          Peter Bachsleitner
                                          Managing Director


                                       By:
                                          --------------------------------------
                                          Steffen Hasselwander
                                          Managing Director

                                       NTH POWER TECHNOLOGIES FUND II, L.P.,
                                       NTH POWER TECHNOLOGIES FUND II-A, L.P.

                                       BY: NTH POWER MANAGEMENT II, L.P.
                                           AND
                                           NTH POWER MANAGEMENT II-A, L.L.C.

                                       BY: NTH POWER L.L.C.
                                           THEIR MANAGEMENT AGENT


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       RIDGEWOOD COMVERGE, LLC


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       SHELL INTERNET VENTURES B.V.


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       NORSK HYDRO TECHNOLOGY VENTURES AS


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                        [Signature Page to Comverge, Inc.
        Second Amended and Restated Co-Sale and First Refusal Agreement]
<PAGE>

                                       ROCKPORT CAPITAL PARTNERS, L.P.

                                       By: RockPort Capital I, LLC,
                                           its General Partner


                                       By:
                                          --------------------------------------
                                       Name:
                                       Title: Managing Member

                                       RP CO-INVESTMENT FUND I, L.P.

                                       By: RP Co-Investment Fund I GP, LLC,
                                           its General Partner


                                       By:
                                          --------------------------------------
                                       Name:
                                       Title: Managing Member


                                       EMERSON VENTURES INC.


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                                       -----------------------------------------
                                       Frank Magnotti


                                       -----------------------------------------
                                       Richard Preston


                                       -----------------------------------------
                                       John Rossi


                                       -----------------------------------------
                                       Robert M. Chiste


                        [Signature Page to Comverge, Inc.
        Second Amended and Restated Co-Sale and First Refusal Agreement]
<PAGE>


                                       -----------------------------------------
                                       Joseph Esteves


                                       -----------------------------------------
                                       T. Wayne Wren


                        [Signature Page to Comverge, Inc.
        Second Amended and Restated Co-Sale and First Refusal Agreement]
<PAGE>

                                       STOCKHOLDERS:

                                       DATA SYSTEMS & SOFTWARE INC.


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                                       -----------------------------------------
                                       Robert M. Chiste


                                       -----------------------------------------
                                       T. Wayne Wren


                                       -----------------------------------------
                                       Joseph Esteves


                                       -----------------------------------------
                                       Frank Magnotti


                                       -----------------------------------------
                                       Coral Almog


                                       -----------------------------------------
                                       Dick Preston


                                       -----------------------------------------
                                       John Rossi


                        [Signature Page to Comverge, Inc.
        Second Amended and Restated Co-Sale and First Refusal Agreement]
<PAGE>

                                   SCHEDULE A

                              SCHEDULE OF INVESTORS

Data Systems & Software Inc.
200 RT 17
Mahwah, New Jersey  07430
Attention: George Morgenstern
Fax: (201) 529-8330


Easton Hunt Capital Partners, L.P.
641 Lexington Avenue, 21st Floor
New York, New York  10022
Attention: Richard Schneider
Fax: (212) 702-0952


EnerTech Capital Partners II L.P.
700 Building
435 Devon Park Drive
Wayne, Pennsylvania 19087-1990
Attention: David Lincoln
Fax: (610) 254-4188


ECP II Interfund L.P.
700 Building
435 Devon Park Drive
Wayne, Pennsylvania 19087-1990
Attention: David Lincoln
Fax: (610) 254-4188


E.ON Venture Partners
Kaistr. 20
40221 Dusseldorf
Germany
Attention: Ramin Mokhtari
Fax: +49 211 385 49611


Nth Power
50 California Street
San Francisco, California  94111
Attention: Tim Woodward
Fax: (415) 983-9984


                                      A-1
<PAGE>

Shell Internet Ventures B.V.
c/o Shell Centre, SIS SIW
London, SE1 7NA, UK
Attention: Alex Betts and
Michael Salmon
Fax: +44 207 7934 7797


Ridgewood Comverge, LLC
c/o Ridgewood Capital
947 Linwood Avenue
Ridgewood, NJ 07450
Attention: Robert L. Gold
Fax: (201) 214-2046


Norsk Hydro Technology Ventures AS
Kjorbov 16, Sandvika
N-0246 Oslo
Norway
Attention: Alex Tham
Fax:


Frank Magnotti
c/o Comverge, Inc.
23 Vreeland Road, Suite 160
Florham Park, NJ  07932
Fax: (973) 360-2220


Richard Preston
c/o Comverge, Inc.
23 Vreeland Road, Suite 160
Florham Park, NJ  07932
Fax: (973) 360-2220


John Rossi
c/o Comverge, Inc.
23 Vreeland Road, Suite 160
Florham Park, NJ  07932
Fax: (973) 360-2220


T. Wayne Wren
c/o Comverge, Inc.
23 Vreeland Road, Suite 160
Florham Park, NJ  07932
Fax: (973) 360-2220


                                      A-2
<PAGE>

Robert M. Chiste
c/o Comverge, Inc.
23 Vreeland Road, Suite 160
Florham Park, NJ  07932
Fax: (973) 360-2220


Joseph Esteves
3 River Road
Riverdale, NY 10463


Emerson Ventures Inc.
8000 W. Florissant Avenue
St. Louis, MO 63136
Attention: H. M. Smith
Fax:  (314) 553-3713


RockPort Capital Partners, L.P.
160 Federal Street, 18th Floor
Boston, MA  02110


RP Co-Investment Fund I, L.P.
160 Federal Street, 18th Floor
Boston, MA  02110


                                      A-3
<PAGE>

                                   SCHEDULE B

                         SCHEDULE OF COMMON STOCKHOLDERS

Name and Address of Stockholder
-------------------------------

Data Systems & Software Inc.




Robert M. Chiste




T. Wayne Wren




Joseph Esteves




Frank Magnotti




Coral Almog




Dick Preston




John Rossi


                                      B-1
<PAGE>

                               ADOPTION AGREEMENT

            THIS ADOPTION  AGREEMENT (this "Adoption  Agreement") is executed by
the undersigned (the "Transferee")  pursuant to the terms of that certain Second
Amended and Restated Co-Sale and First Refusal Agreement dated as of October 25,
2004 (the  "Agreement")  by and among the Company and certain  Stockholders  and
Investors.  Capitalized  terms  used  but not  defined  herein  shall  have  the
respective meanings ascribed to such terms in the Agreement. By the execution of
this Adoption Agreement, the Transferee agrees as follows:

            1.  Acknowledgement.  Transferee  acknowledges  that  Transferee  is
acquiring  certain  shares of the capital  stock of the Company  (the  "Stock"),
subject to the terms and conditions, and entitled to benefits, of the Agreement.

            2. Agreement. As partial consideration for such transfer, Transferee
(a) agrees that the Stock  acquired by Transferee  shall be bound by and subject
to the terms,  and entitled to benefits,  of the Agreement and (b) hereby adopts
the Agreement with the same force and effect as if Transferee  were originally a
party thereto. Notwithstanding any other provision of this Adoption Agreement to
the contrary,  Transferee  shall be deemed an Investor if the  transferor of the
Stock was an  Investor or a  Stockholder  if the  transferor  of the Stock was a
Stockholder.

            3. Notice.  Any notice  required or permitted by the Agreement shall
be given to  Transferee  at the address  listed  beside  Transferee's  signature
below.

            4. Joinder. The spouse of the undersigned Transferee, if applicable,
executes  this  Adoption  to  acknowledge  its  fairness  and that it is in such
spouse's best  interests and to bind to the terms of the Agreement such spouse's
community interest, if any, in the Stock.

EXECUTED AND DATED this ______ day of _________________, ____.

                                       TRANSFEREE:


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------
                                       Address:
                                                 -------------------------------
                                                 -------------------------------
                                                 -------------------------------
                                       Facsimile:
                                                 -------------------------------

                                       Spouse (if applicable):

                                       Name:
                                            ------------------------------------

ACKNOWLEDGED AND ACCEPTED:

COMVERGE, INC.


By:
   ------------------------------------
Name:
     ----------------------------------
Title:
      ---------------------------------