Document:

exv10w3

Exhibit 10.3

BB&T EQUIPMENT FINANCE CORPORATION

 

EQUIPMENT SCHEDULE SERIES A NO. 1

executed pursuant to that certain Master Lease Agreement dated as of
November 25, 2009 (the
“Lease”; which is incorporated herein by reference). This Equipment Schedule, incorporating by
reference the terms and conditions of the Lease, constitutes a separate instrument of lease.

     1. EQUIPMENT. The Equipment leased hereunder shall be as set forth in the schedule attached
hereto.

TOTAL INVOICE COST: $604,540.00

     2. TERM. Upon and after the date of execution hereof, the Equipment shall be subject to the
terms and conditions provided herein and in the Lease.

          A full term of lease with respect to said Equipment shall commence on the date hereof and
shall extend for eighty-four (84) months after the first day of December, 2009 (the “Base Lease
Commencement Date”).

     3. RENT.

          (a) During the period from the date hereof to the Base Lease Commencement Date (the “Interim
Term”), the pro-rated daily rent for said Equipment shall be computed as the product of the Total
Invoice Cost specified above and the Prime Rate, divided by three hundred sixty (360) days. As
used herein, “Prime Rate” shall mean the rate of interest announced by Branch Banking & Trust
Company, from time to time as its prime lending rate, whether or not such rate is offered to other
commercial borrowers/lessees of Branch Banking & Trust Company (or if such rate is not announced by
Branch Banking & Trust Company, the highest rate of interest published in The Wall Street Journal
as the prime rate of interest), in effect on the date of execution hereof; provided, however, that
on the first day of each month during the Interim Term, the Prime Rate shall be changed to the
Prime Rate in effect on such date. This pro-rated payment shall be made on the last day of the
month for each month during the Interim Term.

          (b) From and after the Base Lease Commencement Date, the monthly rent for said Equipment
during the term of this Lease shall be computed as 1.198650% of the Total Invoice Cost specified
above. Rent payments shall be made, in advance, on the first day of the month for each month during
the term of this Lease.

     4. LESSEE’S CONFIRMATION. Lessee hereby confirms and warrants to Lessor that the Equipment:
(a) was duly delivered to Lessee at the location specified in Section 5 hereof; (b) has been
received, inspected and determined to be in compliance with all applicable specifications and that
the Equipment is hereby accepted for all purposes of the Lease; and (c) is a part of the
“Equipment” referred to in the Lease and is taken subject to all terms and conditions therein and
herein provided.

     5. LOCATION OF EQUIPMENT. The location of the Equipment is specified on the Schedule of
Equipment attached hereto.

     6. TAX ATTRIBUTES. The class of property to which the Equipment is assigned (as referenced in
Section 14(b)(2) of the Lease) is 7-year property.

     7. COMMERCIAL LIABILITY INSURANCE. The amount of commercial liability insurance referenced in
Section 11 of the Lease is $10,000,000.00.

     8. PERSONAL PROPERTY TAXES.

Lessee agrees that it will not list any of such Equipment for property tax purposes or report any
property tax assessed against such Equipment until otherwise directed in writing by Lessor. Upon
receipt of any property tax bill pertaining to such Equipment from the appropriate taxing
authority, Lessor will pay such tax and will invoice Lessee for the expense. Upon receipt of such
invoice, Lessee will promptly reimburse Lessor for such expense;

 

 

     9. SCHEDULE OF STIPULATED LOSS VALUES. This Schedule of Stipulated Loss Values shall be
applicable solely to the Equipment described in this Equipment Schedule.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Percent	 	 	 	 	 	Percent	 	 	 	 	 	Percent
	Rent	 	of Total	 	Rent	 	of Total	 	Rent	 	of Total
	Payment	 	Invoice	 	Payment	 	Invoice	 	Payment	 	Invoice
	Number	 	Cost	 	Number	 	Cost	 	Number	 	Cost
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1
	 	 	103.40135	 	 	 	29	 	 	 	79.93655	 	 	 	57	 	 	 	52.60421	 
	2
	 	 	102.69249	 	 	 	30	 	 	 	79.02178	 	 	 	58	 	 	 	51.56094	 
	3
	 	 	101.91972	 	 	 	31	 	 	 	78.10268	 	 	 	59	 	 	 	50.51429	 
	4
	 	 	101.14136	 	 	 	32	 	 	 	77.18015	 	 	 	60	 	 	 	49.46348	 
	5
	 	 	100.35738	 	 	 	33	 	 	 	76.25326	 	 	 	61	 	 	 	48.40604	 
	6
	 	 	99.56847	 	 	 	34	 	 	 	75.32019	 	 	 	62	 	 	 	47.34515	 
	7
	 	 	98.77372	 	 	 	35	 	 	 	74.38363	 	 	 	63	 	 	 	46.28006	 
	8
	 	 	97.97398	 	 	 	36	 	 	 	73.44267	 	 	 	64	 	 	 	45.20828	 
	9
	 	 	97.16837	 	 	 	37	 	 	 	72.49549	 	 	 	65	 	 	 	44.12978	 
	10
	 	 	96.35704	 	 	 	38	 	 	 	71.54474	 	 	 	66	 	 	 	43.04774	 
	11
	 	 	95.54065	 	 	 	39	 	 	 	70.58955	 	 	 	67	 	 	 	41.96144	 
	12
	 	 	94.71833	 	 	 	40	 	 	 	69.62809	 	 	 	68	 	 	 	40.87156	 
	13
	 	 	93.89023	 	 	 	41	 	 	 	68.66031	 	 	 	69	 	 	 	39.77741	 
	14
	 	 	93.05700	 	 	 	42	 	 	 	67.68952	 	 	 	70	 	 	 	38.67645	 
	15
	 	 	92.21779	 	 	 	43	 	 	 	66.71478	 	 	 	71	 	 	 	37.57184	 
	16
	 	 	91.37274	 	 	 	44	 	 	 	65.73699	 	 	 	72	 	 	 	36.46292	 
	17
	 	 	90.52182	 	 	 	45	 	 	 	64.75524	 	 	 	73	 	 	 	35.34714	 
	18
	 	 	89.66690	 	 	 	46	 	 	 	63.76711	 	 	 	74	 	 	 	34.22763	 
	19
	 	 	88.80704	 	 	 	47	 	 	 	62.77586	 	 	 	75	 	 	 	33.10377	 
	20
	 	 	87.94313	 	 	 	48	 	 	 	61.78061	 	 	 	76	 	 	 	31.97299	 
	21
	 	 	87.07426	 	 	 	49	 	 	 	60.77893	 	 	 	77	 	 	 	30.83527	 
	22
	 	 	86.19943	 	 	 	50	 	 	 	59.77407	 	 	 	78	 	 	 	29.70154	 
	23
	 	 	85.32048	 	 	 	51	 	 	 	58.76517	 	 	 	79	 	 	 	28.57025	 
	24
	 	 	84.43653	 	 	 	52	 	 	 	57.74979	 	 	 	80	 	 	 	27.44299	 
	25
	 	 	83.54656	 	 	 	53	 	 	 	56.72790	 	 	 	81	 	 	 	26.31818	 
	26
	 	 	82.65241	 	 	 	54	 	 	 	55.70273	 	 	 	82	 	 	 	25.18646	 
	27
	 	 	81.75320	 	 	 	55	 	 	 	54.67347	 	 	 	83	 	 	 	24.05876	 
	28
	 	 	80.84792	 	 	 	56	 	 	 	53.64090	 	 	 	84	 	 	 	23.00000	 

Stipulated Loss Values are due in addition to any advance or arrears rental due on the same date.

     10. RIDERS. Riders Nos. 1 and 2 attached hereto are incorporated in this Equipment Schedule.

2

 

     11. PAYMENT AUTHORIZATION. Lessor is hereby irrevocably authorized and directed to pay the
Total Invoice Cost specified above as follows:

	 	 	 	 	 	 	 
	Company Name	 	Wire Instructions	 	Amount
	PowerSecure, Inc.
	 	Citibank, N.A.	 	$	604,540.00	 
	 
	 	201 S. Texas Ave.	 	 	 	 
	 
	 	Bryan, TX  77803	 	 	 	 
	 
	 	ABA #: 113193532	 	 	 	 
	 
	 	Account #: 9773271468	 	 	 	 

     12. BILL OF SALE. In consideration of the payment by Lessor of the amount specified herein
as the Total Invoice Cost of the items of Equipment listed on the Schedule of Equipment attached
hereto, the receipt and sufficiency of which are hereby acknowledged, Lessee does hereby bargain,
sell, assign, transfer and set over to Lessor such Equipment, together with whatever claims and
rights Lessee may have against the manufacturer and/or supplier of such Equipment, including (but
not limited to) all warranties with respect thereto.

          Lessee represents and warrants that: (a) Lessee has good and marketable title to such
Equipment conveyed hereunder and does hereby transfer an interest therein free and clear of any and
all encumbrances, liens, charges or defects; (b) the transfer of an interest in such Equipment (1)
has been duly authorized by all necessary action on the part of Lessee, (2) does not require the
consent of any stockholder, member, trustee or holders of any indebtedness of Lessee, except such
as have been duly obtained, and (3) does not and will not contravene any law, governmental rule,
regulation or order now binding on Lessee, or the organizational documents of Lessee, or contravene
the provisions of, or constitute a default under, or result in the creation of any lien or
encumbrance upon the property of Lessee under, any indenture, mortgage, contract or other agreement
to which Lessee is a party or by which it or its property is bound; and (c) no filing or
recordation must be made, no notice must be given, and no other action must be taken with respect
to any state or local jurisdiction, or any person, in order to preserve to Lessor all the rights
transferred hereby.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	DATE OF EXECUTION: November 27, 2009.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BB&T EQUIPMENT FINANCE CORPORATION

Lessor	 	POWERSECURE, INC.

Lessee
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jeannie McManus	 	 
	 	By:	 	/s/ Christopher T. Hutter	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Jeannie McManus	 	 	 	 	 	Name:	 	Christopher T. Hutter	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	Vice President	 	 	 	 	 	Title:	 	Chief Financial Officer	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

3exv10w4

Exhibit 10.4

BB&T EQUIPMENT FINANCE CORPORATION

 

RIDER NO. 1 TO EQUIPMENT SCHEDULE SERIES A NO. 1

To and
part of Equipment Schedule Series A No. 1 dated as of
the 27th day of
November, 2009
(the “Schedule”), executed pursuant to that certain Master
Lease Agreement dated as of the 25th day
of November, 2009 (the “Lease”), each between BB&T EQUIPMENT FINANCE CORPORATION, its
successors and assigns (“Lessor”), and POWERSECURE, INC., its successors and permitted assigns
(“Lessee”).

     As used herein, “Equipment” shall mean the Equipment described on all Schedules of this
series.

     A. OPTION TO RENEW. Provided that no Default or Event of Default has then occurred, Lessee
shall have the option to renew the Lease, at the expiration of the term of the Lease, with respect
to all but not less than all of the Equipment, on the terms and conditions of the Lease, for a
negotiated renewal term at a periodic rent equal to the Fair Market Rental Value of such Equipment
determined at the time of renewal. If Lessee desires to exercise this option it shall give Lessor
written notice of its intention to exercise this option to renew at least two hundred forty (240)
days before expiration of the term of the Lease with respect to the first Schedule of this series
to terminate in accordance with its terms. Thereafter, Lessor and Lessee shall determine the
periodic rent to be paid during the renewal term. Not less than one hundred eighty (180) days
before expiration of the term of the Lease with respect to the first Schedule of this series to
terminate in accordance with its terms, Lessee shall give Lessor irrevocable written notice of its
election to renew on the terms mutually agreed upon during negotiations. Such election shall be
effective with respect to all Equipment leased under all Schedules of this series.

          For purposes of this Section, “Fair Market Rental Value” shall be deemed to be an amount equal
to the rental, as installed and in use, obtainable in an arms’ length transaction between a willing
and informed lessor and a willing and informed lessee under no compulsion to lease (and assuming
that, as of the date of determination, the Equipment is in at least the condition required by
Section 13 of the Lease and Rider No. 2 of this Schedule). If the parties are unable to agree on
the Fair Market Rental Value of the Equipment, then Lessor and Lessee shall at Lessee’s expense
obtain appraisal values from three independent appraisers (one to be selected by Lessor, one by
Lessee, and the other by the two selected by Lessor and Lessee; each of whom must be associated
with a professional organization of equipment or personal property appraisers, such as the American
Society of Appraisers) and the average Fair Market Rental Value as determined by such appraisers
shall be binding on the parties hereto. If the appraisers selected by Lessor and Lessee are unable
to agree on the third appraiser, then Lessor will select the appraiser to provide the third
appraisal value.

     B. OPTION TO PURCHASE. (1) Upon the termination of a Services Agreement requiring the
deployment of one or more items of Equipment leased pursuant to this Lease (the “Subject
Equipment”), within sixty (60) days of the date of such termination, Lessee shall give Lessor
irrevocable written notice of its election either: (a) to redeploy the Subject Equipment pursuant
to a Services Agreement, in which case such redeployment shall be completed, and Lessee shall
comply with its obligations pursuant to Sections 5(a)(9) and (13) hereof, within ninety (90) days
after the date of termination of the Services Agreement; or (b) to purchase all but not less than
all of the Subject Equipment within ninety (90) days after the date on which such notice is
provided by Lessee (the “Special Termination Date”). If Lessee elects to purchase the Subject
Equipment, on the Special Termination Date Lessee shall pay to Lessor in cash any Rent due on that
date (if such date is a rent payment date, or if not a rent payment date then the pro-rated Rent
calculated as of such date), plus the purchase price for the Subject Equipment, determined as
hereinafter provided. The purchase price of the Subject Equipment shall be an amount equal to the
greater of: (x) the Stipulated Loss Value of the Equipment as of the Special Termination Date (if
such date is a rent payment date, or if not a rent payment date then the interpolated Stipulated
Loss Value as of such date), or (y) the Fair Market Value of the Equipment as of the Special
Termination Date, together with all taxes and charges upon sale.

          (2) Provided that no Default or Event of Default has then occurred, Lessee shall have the
option to purchase, on June 1, 2016 (the “Early Termination Date”), all but not less than all of
the Equipment upon the following terms and conditions: If Lessee desires to exercise this option
it shall give Lessor irrevocable written notice of its election to purchase at least thirty (30)
days and not more than one hundred eighty (180) days before the Early Termination Date with respect
to the first Schedule of this series to terminate in accordance with its terms. Such election
shall be effective with respect to all Equipment leased under all Schedules of this series. On the
Early Termination Date with respect to

 

 

each Schedule, Lessee shall pay to Lessor in cash any Rent due on that date plus the purchase
price for the Equipment so purchased, determined as hereinafter provided. The purchase price of
the Equipment shall be an amount equal to 26.088% of the original Total Invoice Cost of the
Equipment (as specified on this Schedule), together with all taxes and charges upon sale. Lessor
and Lessee agree that the purchase price represents a reasonable prediction of the Fair Market
Value of the Equipment at the time the option is exercisable.

          (3) Provided that no Default or Event of Default has then occurred, Lessee shall have
the option to purchase, upon the expiration of the term of the Lease, or of any subsequent renewal
term, if applicable, all but not less than all of the Equipment upon the following terms and
conditions: If Lessee desires to exercise this option it shall give Lessor written notice of its
intention to exercise this option to purchase at least two hundred forty (240) days before
expiration of the term of the Lease with respect to the first Schedule of this series to terminate
in accordance with its terms. Thereafter, Lessor and Lessee shall determine the purchase price for
the Equipment. Not less than one hundred eighty (180) days before expiration of the term of the
Lease with respect to the first Schedule of this series to terminate in accordance with its terms,
Lessee shall give Lessor irrevocable written notice of its election to purchase on the terms
mutually agreed upon during negotiations. Such election shall be effective with respect to all
Equipment leased under all Schedules of this series. Thereupon, at the expiration of the term of
the Lease, Lessee shall pay to Lessor in cash any Rent due on that date plus the purchase price for
the Equipment so purchased, determined as hereinafter provided. The purchase price of the
Equipment shall be an amount equal to its then Fair Market Value, together with all taxes and
charges upon sale.

          (4) For purposes of this Section, “Fair Market Value” shall be deemed to be an amount equal
to the sale price of the Equipment, as installed and in use, obtainable in an arms’ length
transaction between a willing and informed buyer and a willing and informed seller under no
compulsion to sell (and assuming that, as of the date of determination, the Equipment is in at
least the condition required by Section 13 of the Lease and Rider No. 2 of this Schedule). If the
parties are unable to agree on the Fair Market Value of the Equipment, then the appraisal procedure
set forth in Section A hereof shall be followed. Notwithstanding any election of Lessee to
purchase, the provisions of the Lease shall continue in full force and effect until the passage of
ownership of the Equipment upon the date of purchase. On the date of purchase, Lessor shall
deliver to Lessee a bill of sale transferring and assigning to Lessee without recourse or warranty,
except (with respect to the status of title conveyed) in respect of Lessor’s acts, all of Lessor’s
right, title and interest in and to the Equipment. Lessor shall not be required to make and may
specifically disclaim any representation or warranty as to the condition of the Equipment or any
other matters.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BB&T EQUIPMENT FINANCE CORPORATION	 	 	 	POWERSECURE, INC.	 	 
	Lessor	 	 	 	Lessee	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jeannie McManus	 	 	 	By:	 	/s/ Christopher T. Hutter	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Jeannie McManus	 	 	 	 	 	Name:	 	Christopher T. Hutter	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	Vice President	 	 	 	 	 	Title:	 	Chief Financial Officer	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

2

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