Document:

exhibit10_5.htm

    Exhibit
10.5

    

    COMVERGE,
INC.

    EXECUTIVE EMPLOYMENT
AGREEMENT

    

     

    THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into on July 1,
2010 (“Effective Date”), by and between Steve Moffitt, an individual
(“Executive”), and Comverge, Inc., a Delaware corporation (the
“Company”).   The Executive and Company are collectively referred
to as “Parties” and individually as “Party”.

     

    WHEREAS,
the Company wishes to employ Executive to
provide personal services to the Company and wishes to provide Executive with
certain compensation and benefits in return for such services;

     

    WHEREAS,
the Executive and Company now wish to enter the current Agreement;
and

     

    WHEREAS,
Executive wishes to be employed by the Company, and to provide personal services
to the Company in return for certain compensation and benefits.

     

    NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, the Executive and the Company hereby agree as follows:

     

    
      	
              SECTION
      1.  

            	
              EMPLOYMENT
      BY THE COMPANY.

            

    

     

    1.1 Employment
Agreement.  Upon the Effective
Date of this Agreement (the
“Employment Date”), Executive’s employment
with the Company shall be pursuant to the terms stated
herein.

     

    1.2 Position and
Duties.  Executive shall serve in the position of Executive
Vice-President of Engineering and Operations, with such powers, duties, and/or
responsibilities as are assigned to Executive by the President & Chief
Executive Officer, or his/her respective delegate.  Executive will
devote his best efforts, time, and attention exclusively to the business of the
Company, and shall faithfully and efficiently discharge all duties and
responsibilities assigned to him hereunder.  Executive shall comply with all Company
policies, procedures and practices as may now exist or which from time to time
be implemented.

    
      1.3 Location.  Executive’s
primary office location shall be Atlanta, Georgia, where for the first nine
months the Executive may live in Houston, Texas and commute to Atlanta, Georgia,
with the understanding that the Executive shall permanently relocate within the
next nine months of his start date to Atlanta, Georgia.  Executive acknowledges that the Company’s business
extends across the entire United States and elsewhere and that, from time
to time, however, Executive’s duties may require him to travel and to work at
other locations, including but not limited
to other Company office
locations.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.4 Term.  The
term of Executive’s employment hereunder shall commence as of the Employment
Date and shall continue through July 1, 2013, unless earlier terminated pursuant
to the provisions of this Agreement.  Unless, within ninety (90) days
prior to any then-scheduled expiration of the Term, either party notifies the
other in writing of its desire not to renew this Agreement, the Term shall
automatically be extended for an additional period of one (1) year from the
applicable succeeding anniversary of the Employment Date.

       

      1.5 No
Restrictions.  Executive acknowledges that the Company is
entering into this Agreement based on Executive’s representation that as of the
date of execution of this Agreement, Executive is not subject to any agreement,
including but not limited to a non-compete, restrictive covenant or
non-disclosure agreement, that would prevent or materially restrict Executive
from performing the job responsibilities as set forth herein or those which may,
commensurate with Executives position, be assigned from time to
time.  If it is determined by the Company that an agreement exists
that, in the Company’s sole discretion, would prevent or materially restrict
Executive’s ability to perform his duties under this Agreement, the Company
shall have the option to terminate this Agreement immediately and such
termination shall be considered for Good Cause as defined by Section 7(b) of
this Agreement.

      

      
        	
                SECTION
      2.  

              	
                COMPENSATION,
      BENEFITS AND OWNERSHIP.

              

      

       

      2.1 Compensation.  Executive
shall be paid a salary, and shall be eligible to receive incentive compensation,
as described in Exhibit A attached
hereto.  All compensation payable pursuant to any plan or program
described in Exhibit
A shall be governed by and subject to the applicable plan or program
documents, which may from time to time be amended, modified or terminated on
such terms and in such manner as is permitted in respect of the applicable plan
or program.

       

      2.2 Company
Benefits.  Subject to the satisfaction of the general rules for
eligibility and participation under the Company’s standard employee benefit
plans and practices, Executive shall be allowed to participate in the Company’s
standard employee benefit plans and practices which may be in effect from time
to time during the term of Executive’s employment and are provided by the
Company to its employees generally.  Such participation shall be
governed by the applicable plan documents, and the Company reserves the right,
in its discretion, to amend, modify, or discontinue any benefit plan or
practice.  You will have available up to four (4) weeks of annual
vacation, accruing as your employment continues throughout the
year.

       

      2.3 Section 280G
Limitation.  In the event that any payments to which Executive
becomes entitled in accordance with the provisions hereof, or in connection with
any plans or programs referred to in Exhibit A or Section
2.2 hereof, would otherwise be deemed to constitute “parachute payments” (each
one, a “Parachute Payment”) within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended and the regulations and administrative guidance
thereunder (the “Code”), then such Parachute Payments will be subject to
reduction to the extent necessary to assure that Executive receives only the
greater benefit of receiving (a) the amount of those payments which would
constitute such a Parachute Payment or (b) the amount which yields Executive the
greatest after-tax amount of benefits after taking into account any excise tax
imposed on the payments provided to Executive pursuant to this Agreement (or on
any other benefits to which Executive may be entitled in connection with the
Change in Control or the subsequent termination of service) under Section 4999
of the Code.

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                SECTION
      3.  

              	
                ASSIGNMENT
      OF INTELLECTUAL PROPERTY.

              

      

       

      3.1 Ownership and
Assignment of Intellectual Property.  All processes, products,
methods, improvements, discoveries, inventions, ideas, creations, trade secrets,
know-how, machines, programs, designs, routines, subroutines, techniques, ideas
for formulae, writings, books and other works of authorship, business concepts,
plans, projections and other similar items, as well as all business
opportunities discovered, conceived, designed, devised, developed, perfected or
made by Executive, whether alone or in conjunction with others and within the
course of Executive’s job responsibilities to the Company, and related in any
manner to the actual or anticipated business of the Company or to actual or
anticipated areas of research and development of the Company (all of the
foregoing collectively, the “Intellectual Property”), shall be promptly
disclosed to and are the property of the Company, and Executive hereby assigns,
transfers and conveys all of the Intellectual Property and all of Executive’s
rights therein to the Company.  The term “Intellectual Property” shall
be given the broadest interpretation possible and shall include any Intellectual
Property conceived, designed, devised, developed, perfected or made by Executive
during off-duty hours and away from the Company’s premises, as well as those
conceived, designed, devised, developed, perfected or made in the regular course
of Executive’s performance under this Agreement.

       

      3.2 Post-Employment
Assignment of
Intellectual Property.  In consideration of the benefits
provided pursuant to this Agreement, particularly those benefits conferred by
Section 7.5 and any stock option or similar rights pursuant to any Company plans
in which Executive was a participant, all Intellectual Property discovered,
conceived, designed, devised, developed, perfected or made by Executive
following the termination of this Agreement shall be Intellectual Property
covered by the scope of Section 3.1 if it was conceived, in whole or in part,
while this Agreement remains in effect.  All Intellectual Property
conceived, designed, devised, developed, perfected or made by Executive within
twelve (12) months after termination of this Agreement shall be disclosed to the
Company, and shall be presumed to have been conceived, designed, devised,
developed, perfected or made by Executive during the Term, and Executive shall
have the burden of proving otherwise in order to successfully rebut such
presumption.

       

      3.3 Written
Assignments.  Executive shall execute and deliver, both during
the Term and thereafter in connection with a severance agreement required under
Section 7.5(g) to and in favor of the Company such assignments (including
patent, trademark and copyright assignments), documents, instruments and
applications (including patent, trademark or copyright applications) as the
Company may deem appropriate or necessary to claim, secure, acquire, perfect,
defend, enforce and/or assign any and all rights and privileges in and to or
arising from the Intellectual Property.  Executive shall also, both
during the Term and thereafter, cooperate with the Company, and to render such
assistance as the Company may reasonably require, in connection with any process
(whether administrative, judicial or otherwise) associated with the Company’s
efforts to claim, secure, protect, perfect, defend, assign and/or enforce such
rights and privileges in favor of the Company and its successors, licensees and
assigns.  Executive shall also, both during the Term and thereafter,
promptly disclose to the Company fully and in writing any Intellectual Property
that Executive may conceive, make, or develop, in whole or in part, by himself
or jointly with others, (a) whether or not it is conceived, made, developed or
worked on by Executive during his Term with the Company; (b) whether or not the
Intellectual Property was created at the suggestion of the Company; (c) whether
or not the Intellectual Property was reduced to drawings, written description,
documentation, models or other tangible form; and (d) whether or not the
Intellectual Property is related to the business of the Company.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3.4 Work Made for
Hire.  Executive acknowledges and agrees that any work of
authorship comprising Intellectual Property shall be deemed to be a “Work Made
for Hire,” to the extent permitted by the United States Copyright Act (17 U.S.C.
§ 101 (2000)).  To the extent that any such work of authorship may not
be deemed to be a Work Made for Hire, Executive hereby irrevocably assigns all
ownership rights in and to such work to the Company.  If any such work
of authorship cannot be assigned, Executive hereby grants to the Company an
exclusive, assignable, irrevocable, perpetual, worldwide, sub-licensable
(through one or multiple tiers), royalty-free, unlimited license to use, copy,
reproduce, distribute, modify, adapt, alter, translate, improve, create
derivative works of, practice, publicly perform, publicly display and digitally
perform and display such work in any media now known or hereafter
known.  Outside the scope of his employment, Executive agrees not to
(a) practice, display, copy, reproduce, distribute, transfer, modify, adapt,
alter, translate, improve, or create derivative works from, or otherwise use,
any such work of authorship or (b) incorporate any such work of authorship into
any product or invention unrelated to the Company’s business.  To the
extent moral rights (as defined by applicable law) may not be assignable under
applicable law and to the extent the following is allowed by the laws in the
various countries where moral rights exist, Executive hereby irrevocably waives
such moral rights and consents to any action of the Company that would violate
such moral rights in the absence of such consent.

       

      3.5 No License
Granted.  Executive acknowledges and agrees that nothing in
this Agreement shall be deemed to grant, by implication, estoppel, certain rules
of construction, or otherwise, (a) a license from the Company to Executive to
make, develop, use, license, disclose, or transfer in any way Intellectual
Property or (b) a license from the Company to Executive regarding any of the
Company’s existing or future ownership rights.

       

      
        	
                SECTION
      4.  

              	
                CONFIDENTIALITY.

              

      

       

      4.1 Confidentiality
Obligation.  Executive acknowledges and agrees that he has and
will have access to Proprietary, Trade Secret and Confidential Information (as
those terms are defined below in Section 4.2) as a result of his employment with
the Company, and that such information constitutes valuable, special and unique
property of the Company.  Without limiting the generality of the
foregoing, Executive expressly acknowledges that, in the course of performing
his services pursuant to this Agreement, he will obtain or learn Confidential
and Proprietary Information regarding the Company including, without limitation
information regarding the Company’s operations, financial results, pricing,
customers, suppliers and other matters.  Accordingly, at all times
while employed by the Company, and continuing for a period of three (3) years
with respect to Proprietary and Confidential Information, and for whatever time
Trade Secrets remain a Trade Secret under applicable law, following the
termination of his employment with the Company for whatever reason, Executive
shall neither use nor disclose, nor permit any person or entity within his
reasonable control to use or disclose, any Proprietary, Trade Secret, and
Confidential Information, and shall maintain and protect the secrecy of the
Proprietary, Trade Secret, and Confidential Information, except to the extent
required in the ordinary course of Executive’s employment with the Company, and
then only subject to the direction and control of the
Company.  Additionally, Executive shall cause all persons and entities
within his reasonable control to use their respective best effort(s), to
maintain and protect the secrecy of the Proprietary, Trade Secret and
Confidential Information.  Executive further acknowledges that in the
performance of his job duties to this Agreement, he will have access to and be
informed of the Proprietary and Confidential Information (as described in
Section 4.2) belonging to customers of Company, and that he shall return to the
Company any such information within his actual or indirect possession and comply
with any restrictions concerning such information that have been imposed upon by
the Company’s customer with respect to the use, disclosure, or return
information.

       

      4.2 Definition
of
Proprietary, Trade Secret and Confidential
Information.  As used in this
Agreement the term “Proprietary, Trade Secret and Confidential Information”
means any non-public knowledge, information or property relating to, used or
possessed by the Company (or its customers, as the case may be), and includes,
without limitation, the following:  trade secrets, patents,
copyrights, software (including, without limitation, all programs,
specifications, applications, routines, subroutines, techniques, code and ideas
for formulae); ideas, information, concepts, data, drawings, designs and
documents; names of clients, customers, but not limited to employees, agents,
contractors and suppliers; business plans, marketing plans and marketing
information; financial, pricing, and cost information and other business
records; and all copies of any of the foregoing.   Trade Secrets
shall be such information defined by applicable law as a Trade
Secret.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.3 Return of
Confidential Information.  Executive agrees that he shall
immediately, upon the request of the Company, return to the Company all
Proprietary, Trade Secret, and  Confidential Information and any other
tangible material containing, prepared on the basis of or reflecting any
Proprietary, Trade Secret and  Confidential Information (whether
prepared by the Company, Executive or otherwise) and shall not retain any
copies, extracts or other reproductions, in whole or in part, of such
Proprietary, Trade Secret, and  Confidential Information.

       

      4.4 Return of Company
Property.  All products, records, designs, patents, trademarks,
copyrights, plans, manuals, memoranda, lists and other documents or other
property of the Company or any of its affiliates in the possession or control of
Executive and all records compiled by the Executive which pertain to the
business of the Company or its affiliates, shall be and remain the property of
the Company and shall be subject at all times to its discretion and
control.  Likewise, all correspondence with customers or affiliates of
the Company, all reports, records, charts, and advertising materials and any
data pertaining to the Company, its affiliates or the business of the Company or
its affiliates that are held by or on behalf of Executive shall be delivered
promptly to the Company without request on the date Executive’s employment with
the Company terminates or at any other time promptly upon request by the
Company.

       

      4.5 Nature of
Obligation.  The obligations of Executive set forth in this
Section 4 are in addition to, and not in lieu of, any of Executive’s duties or
the Company’s rights and remedies, at law or in equity, with respect to the
Company’s Proprietary, Trade Secret, and Confidential Information and
property.  The Company may pursue all such rights and remedies, as
well as remedies for the breach of the provisions set forth
herein.  The Proprietary, Trade Secret and  Confidential
Information and other property referenced in this Section 4 constitute valuable
property of the Company or its customers, the ownership of which is not
dependent upon the performance by the Company of any of its obligations under
this Agreement or the performance of any legal, statutory or other duty, if any,
to Executive.  Accordingly, Executive shall perform his obligations
under this Section 4 regardless of any alleged or actual breach or failure to
perform by the Company.

       

      4.6  Post Termination
Activities.  Executive
acknowledges and agrees that, during the course of his employment with the
Company, he had access to the Company’s Proprietary, Trade Secret and
Confidential Information and that disclosure to or use of such information by a
competitor of the Company would cause the Company irreparable
harm.  Executive agrees and acknowledges that should he engage in the
restricted activities as set forth in Section 5 hereof, he will inevitably
disclose the Company’s Proprietary, Trade Secret and Confidential
Information.

      

      
        	
                SECTION
      5.  

              	
                NONCOMPETITION
      AGREEMENT.

              

      

       

      In
consideration of the compensation paid or payable to Executive by the Company
pursuant to this Agreement (including, but not limited to, Section 2 hereof),
Executive hereby agrees as follows:

       

      5.1 Executive acknowledges that the Company’s business is
nationwide in scope, that its customers are not restricted to any single state
in the United States or geographic area of North America, and that in the
performance of his duties as set forth in this Agreement, Executive shall
perform services on behalf of the Company which require the use of Executive’s
unique and extraordinary skills.  During the term of this
Agreement, Executive will devote all of his working time and energies to the
Company, and will not, without the Company’s express written permission, own,
work for or provide services to any other entity, whether as an owner, partner,
agent, representative, consultant, officer, director, independent contractor or
employee.  This restriction, however, shall not apply to any
Executive’s ownership of, or investments in, business entities that do not
compete with Company during the term of this Agreement or afterward, so long as
such ownership does not impede or interfere with Executive’s requirement to
perform under this Agreement pursuant to Section 1.2.  Executive also
is permitted to own up to 1% of any class of securities of any corporation in
competition with the Company that is actively traded on a national securities
exchange or through NASDAQ.

       

      5.2           As
consideration granted herein, Executive hereby covenants that he will
not,  within the Territory and during the Noncompetition Period,
without the prior written consent of the Company, engage in any Restricted
Activities for or on behalf of any corporation, partnership, venture or other
business entity which is engaged in the Restricted Business in the same or
similar capacity as Executive performed for the Company. The term “Noncompetition Period” means
the period beginning on the date of this Agreement and ending one year after the
date Executive’s employment with the Company ends or is terminated for any
reason. The term “Restricted
Activities” means having ownership of or being employed by as an
employee, agent, or representative, or as an independent contractor or
otherwise, and providing services similar to the services Executive provides to
the Company.  The term “Restricted Business” means
the business of providing energy load control or demand response products and
services, energy capacity, energy efficiency, advanced metering solutions, or
any business in which the Company (a) is engaged or (b) can demonstrate, through
documentation that Executive reviewed, viewed, discussed, or was engaged in
during his employment, that Company contemplated being engaged in at the time of
termination, which Executive acknowledges and agrees is the business in which
the Company is engaged. The term “Territory” means North
America which Executive acknowledges is the geographic scope of the
Company’s business and is the territory for or in which Executive performs
services for the Company.  Employee acknowledges that in the
performance of his duties hereunder that he will have significant and extensive
knowledge of the Company’s markets and Customers or Prospective Customers (as
defined below) with whom the Company does business, regardless of any specific
geographic location, and will have received specialized training with respect to
the Company’s products and services offered by the Company within those markets
and with those Customers or Prospective Customers.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      SECTION
6.  NONSOLICITATION AGREEMENT

      

      6.1           During
the term of this Agreement and for a period of one (1) year after Executive’s
employment is terminated for any reason, Executive will not, directly or
indirectly, individually or on behalf of any other person, firm, partnership,
corporation, or business entity of any type, solicit, assist or in any way
encourage any current employee or consultant of the Company, whom Executive
supervised or had responsibility for during the twelve (12) months prior to the
termination of employment, to terminate his or her employment relationship or
consulting relationship with or for the Company, nor will Executive solicit the
services of any former employee or consultant of the Company whom Executive
supervised or had responsibility for during the twelve (12) months prior to the
termination of employment, whose service with the Company has been terminated
for less than six (6) months.

       

      6.2(a)
During the term of this Agreement and for a period of one (1) year after
Executive’s employment is terminated for any reason, Executive will not,
directly or indirectly, individually or on behalf of any other person, firm,
partnership, corporation, or business entity of any type, solicit, divert, or
take away, or attempt to solicit, divert, or take away, in whole or in part, any
Customer of the Company or otherwise interfere with the Company’s relationship
with any Customer, for the purpose of competing with the Company in the
Business.  For purposes of this Agreement, “Customer”
shall mean any person, company or business entity to which the Company sells,
sold, licenses or licensed goods or services at the time Executive’s employment
with the Company terminated and for the preceding twelve (12) months and with
whom Executive had material business contact and “Business”
shall mean providing energy related services, including without limitation
energy load control or demand response products and services, energy capacity,
energy efficiency, advanced metering solutions, or other alternative energy
solutions engaged in by the Company.

       

      (b)           During
the term of this Agreement, and for a period of twelve (12) months after
Executive’s employment ends or is terminated for any reason, Executive will not,
directly or indirectly, individually or on behalf of any person, firm,
partnership, corporation, or business entity  of any type, solicit,
divert or take away, or attempt to solicit, divert or take away, in whole or in
part, any Prospective Customer of the Company or otherwise interfere with the
Company’s relationship with any Prospective Customer, for the purpose of
competing with the Company in the Business.  For purposes of this
Agreement, “Prospective
Customer” shall mean those persons, companies or businesses to whom the
Company made a proposal in which Executive participated, prepared or otherwise
added knowledge, guidance or expertise for the purchase of the Company’s goods
or services on behalf of the Company for such Prospective Customer to within the
twelve (12) months  prior to the end or termination of Executive’s
employment with the Company.

      

      6.3           Enforcement.  The existence of
any claim or cause of action of Executive against the Company, whether
predicated on this Agreement or otherwise, shall not preclude the Company’s
enforcement of these covenants.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      6.4           Reasonable
Covenants.  Executive
acknowledges and agrees that the covenants set forth in this Section 6 are
necessary and reasonable to protect the Company and the conduct of its business
and are a fair and reasonable restraint on Executive in light of the activities
and business of the Company on the date of execution of this Agreement and the
future plans of the Company; and that such covenants also be construed and
enforced in light of the activities and business of the Company (including
business activities in the planning stage) on the date of termination of
Executive’s employment with the Company.  Executive acknowledges that
he will not suffer any undue hardship as a result of the covenants set forth in
Sections 4, 5 and 6, particularly in the event he is entitled to the benefits
set forth in Sections 7.5(b) and (c) and that he will be able to pursue his
occupation nothwithstanding his obligations under Sections 4, 5 and
6.

       

      6.5           Survival.  The provisions of
this Section 6 shall survive any termination of this Agreement and are subject
to paragraph 8 of this Agreement.

       

      SECTION 7.  TERMINATION OF
EMPLOYMENT.

      

      7.1Certain Definitions.  As
used herein, the following terms shall have the following
definitions:

       

      (a) Affiliate.  “Affiliate”
shall mean an affiliate of the Company, as defined in Rule 12b-2 promulgated
under Section 12 of the Securities Exchange Act of 1934, as amended from time to
time.

       

      (b) Cause.  A
termination by the Company with “Cause” shall include (without limitation) (i)
non-performance in the roles and duties, as assigned; (ii) Executive’s breach of
any material provision of this Agreement; (ii) Executive’s material breach of
any written Company policy contained in the Company’s manual of policies and
procedures; or material non-compliance with any lawful direction given by the
Company’s Chief Executive Officer or his/her delegate; (iii) Executive’s
Disability (subject to Company’s legal obligations); (iv) Executive’s fraud with
respect of the business or affairs of the Company; (v) the commission by
Executive, or entering of a plea of nolo contendere with regard
to, a felony or a crime involving moral turpitude; or (vi) alcohol abuse or
illegal drug use by Executive; provided however, that in the
event of  Executive’s breach as set forth in Sections 7(b)(i) and (ii)
above, no Cause for termination shall be deemed to exist for any such breach
that is curable and which in fact is cured by Executive within thirty (30) days
after notice of such termination has been delivered to Executive, and in the
event of Executive’s breach, as set for in Section 7(b)(vi) above, no Cause
shall be deemed to exist if the Executive and Company agree on a remedial
program for Executive and so long as Executive in all respects complies with the
requirements of such program.  During the time of Executive’s
participation in any remedial program as set forth above, Executive shall, if
directed by the Company, be on a paid leave of absence away from the Company’s
premises.

       

      (c) Change in
Control.  For purposes of this Agreement, “Change in Control”
means the occurrence of any of the following events if, following such
occurrence, a Board Change (as hereinafter defined) occurs:

       

      (i) any
person becomes the beneficial owner, directly or indirectly, of securities of
the Company (not including in the securities beneficially owned by such person
any securities acquired directly from the Company or its affiliates)
representing fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding voting securities; or

       

      (ii) a merger,
amalgamation, acquisition, or consolidation of the Company is consummated with
any other corporation, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or parent entity) more than
fifty percent (50%) of the combined voting power of the voting securities of the
Company or such surviving or parent equity outstanding immediately after such
merger or consolidation; or

       

      (iii) there is
consummated an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets (or any transaction having a similar
effect), other than a sale or disposition by the Company of all or substantially
all of the Company’s assets to an entity, at least fifty percent (50%) of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale, provided that such
transferee entity confirms in writing that it is bound by the terms of this
Agreement.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      In the
event that the foregoing definition of Change in Control does not comply with
the requirements of Section 409A of the Code, and an amount, benefit or item of
compensation hereunder would be subject to Section 409A of the Code, but would
not be so subject if the definition of Change in Control above complied with the
requirements of Section 409A of the Code, then with respect only to such amount,
benefit or item of compensation, the term “Change in Control” shall mean a
“change in control event” within the meaning of Treas. Reg.
§1.409A-3(i)(5).

       

      (d) Board
Change.  “Board Change” means any change in directors after
giving effect to any of the transactions described above as a result of which
the individuals serving on the Board prior to such transaction no longer
comprise at least a majority of the directors on the Board immediately after
giving effect to such transaction.

       

      (e) Good Reason.  A
termination by the Executive for “Good Reason” means termination by Executive
following (i) a reduction in Executive’s Annual Salary or other material
component of compensation (excluding stock options or similar grants) required
to be paid pursuant hereto without Executive’s prior written consent; (ii) the
Company’s relocation of the Executive, without the Executive’s consent, to a
permanent location more than seventy-five (75) miles from the location specified
in Section 1.3 of this Agreement or
(iii) substantial dimunition in Executive's responsibilities which is defined as
removal of Executive from any recognized executive or management team
responsible for overall management of the Company and removal of Executive's
budgetary and managerial responsibility for a specific department of
departmental subdivision of the Company.; provided however, that no
Good Reason for Executive’s termination shall be deemed to exist unless (i)
Executive gives notice to the Company of the action or condition which would
constitute Good Reason within sixty (60) days of the initial existence of such
action or condition, (ii) the action or condition which would constitute Good
Reason is not cured by the Company within the 30-day period after the timely
provision of the notice required herein, and (iii) Executive effects the
termination for Good Reason within thirty (30) days after the expiration of the
30-day cure period.  After such thirty
(30) day period, Executive shall be deemed to have waived any right to terminate
this Agreement pursuant to this Section 7.1(e).

       

             (f) Non-Renewal.A non-renewal of
this Agreement as provided in Section 1.4 shall not be considered a termination
under any provision of this Section 7 and, upon such non-renewal by either party
and the termination of this Agreement, and Company shall be required to pay to
Executive only the amounts specified in Section 7.5 (a).

       

      7.2         Death by
Executive.  This Agreement shall
terminate upon Executive’s death.

       

      7.3         By the
Company.  The Company shall have the right to terminate
Executive’s employment with the Company, at any time, with or without
Cause.  For avoidance of doubt, the parties agree that Executive has
no right to continue at any time in any office of the Company after being
removed from such office in the manner provided in the Company’s bylaws or other
applicable provisions of the Company’s governing law and
instruments.

       

          7.4  By
Executive.  Executive may terminate his employment with the
Company at any time, upon providing thirty (30) days advance notice, either with
or without Good Reason.  In the event Executive terminates his
employment with the Company with Good Reason, such notice shall specify the
grounds for such termination, and the Company shall have the opportunity to cure
such grounds for termination in accordance with the provisions of Section
7.1(e).

       

      7.5
Severance Pay, Other Post-Employment Payments and Acceleration of Benefits Upon
Certain Terminations.  

       

      (a) Termination by the Company
for Cause or by Executive
without Good Reason.  If the Company terminates Executive’s
employment for Cause, or Executive terminates his employment without Good
Reason, then in either such event, Executive shall not be entitled to any
severance pay, and shall only be entitled to (i) any unpaid, but earned, salary,
and any vested restricted stock and vested stock options (ii) any unpaid but
earned vacation in accordance with Company policy then in effect and (iii) any
incurred but unpaid ordinary and necessary business expenses properly documented
by Executive in accordance with the Company’s then effective expense
reimbursement policy.

       

      (b) Termination by the Company Without
Cause, or by Executive for Good Reason.  Subject to subsection
7.5(c) below, if the Company terminates Executive’s employment without Cause, or
Executive terminates his employment with Good Reason, then in such event
Executive shall be entitled to all payments allowed pursuant to subsection
7.5(a) above and severance pay in the amount of the sum of (i) twelve (12)
months’ annual base salary as specified in Exhibit A, plus (ii)
an amount equal to the amount of Executive’s bonus payment for the last complete
year of service prior to termination, times a fraction, the numerator of which
is the number of days in the year of Executive’s termination through the date of
such termination, and the denominator of which is 365 (or in the case of leap
years, 366). The benefits provided pursuant to
this Section 7.5(b) shall not include any stock option or similar grants and
Executive’s rights concerning any stock option or similar grants shall be
exclusively determined by applicable Company policies or plans concerning such
grants.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (c) Certain Terminations Following a
Change in Control.  Notwithstanding the provisions of Section
7.5(b) above, in the event the Company terminates Executive’s employment without
Cause, or Executive terminates his employment with Good Reason, concurrently
with or within twelve (12) months following a Change in Control, then, in lieu
of the payments specified in Section 7.5(b), Executive shall be entitled to all
payments allowed pursuant to subsection 7.5(a) above and severance pay in the
amount of (i) eighteen (18) months’ annual base salary as specified in Exhibit
A,  plus (ii) one and one.half times (1.5x) the amount of
Executive’s bonus payment for the last complete calendar year prior to
Executive’s termination of employment,.  In such event, all unvested
options to purchase Company stock held by Executive shall immediately vest and
become exercisable and all restricted stock granted to Executive shall
immediately vest and the legend providing restrictions on the sale or transfer
of such stock related to such vesting shall be removed at the request of the
Executive.

       

      (d) Continuation of
Benefits.  In the event the Company terminates Executive’s
employment without cause or Executive terminates his employment with good
reason, the Company shall continue to provide medical benefits as noted in
Section 2.2 and continue to pay on behalf of Employee the Company’s portion of
the premium for such medical benefits for the applicable severance
period.    The above payments are subject to and in
accordance with Executive’s COBRA rights and the provisions of the applicable
plan documents, and the Company reserves the right, in its discretion, to amend,
modify, or discontinue any benefit plan or practice.  If the Executive
elects to participate in COBRA coverage for which he and/or his family is
eligible under the Company’s then-effective health plans, the Executive shall
pay to the Company on a monthly or quarterly basis, as the case may be, an
amount equal to the co-payment amount for which the Executive would have been
responsible had he remained an employee during the COBRA coverage period and the
Company shall pay to the plan administrator on behalf of Executive the entire
cost of the COBRA coverage.  Executive agrees to a netting of payments
where applicable.

       

      

       

      (e) Death or
Disability.  Any termination of this Agreement by reason of
Executive’s death or disability shall not give rise to any severance payment
hereunder, but shall be without prejudice to any benefits payable to Executive
or his estate under applicable company benefits relating to such
event.  For purposes of this Agreement, the term “Disability” shall
mean the Executive’s inability to perform his duties, in all material respects,
because of illness, physical or mental disability, or other incapacity that
continues for an uninterrupted period of one hundred eighty (180)
days.  Executive’s unvested stock options and restricted stock not
otherwise vested shall vest upon the death or disability of Executive as
provided in, and subject to the provisions of, applicable Company policies or
plans concerning the grants to Executive of unvested stock options and
restricted stock.

       

      (f) Timing of
Payments.  All severance payments provided pursuant to Section
7.5(b) above, as applicable, that are measured by Executive’s annual base salary
shall begin as provided by Section 7.5(g) (except as otherwise required by
Section 10.11), with twenty-five percent of the total base salary amount paid
within thirty (30) days and the remaining seventy-five percent of the total base
salary amount shall thereafter be paid at such times and in accordance with the
Company’s payroll policies and procedures as if Executive were still employed by
the Company; and all amounts of severance pay with respect to bonus payments
shall be pro rated over the period of such payment, and payments of a
proportional amount of such bonus payments shall begin as provided by Section
7.5(g) (except as otherwise required by Section 10.121) and shall thereafter be
paid at such times as base salary payments are made.   All
severance payments provided pursuant to Section 7.5 (c) above, as applicable,
that are measured by Executive’s annual base salary t shall be paid in one lump
sum amount as provided by Section 7.5(g) (except as otherwise required by
Section 10.12).

       

      (g) Requirements Regarding Eligibility
to Receive Severance Payments.  Notwithstanding any of the
other provisions hereof, the Company shall not be obligated to make and shall
not make the severance payments provided under Section 7.5(b) or (c) above
unless Executive executes and delivers to the Company within thirty (30) days
from the date on which the Executive’s employment is terminated, and does not at
any time after execution and delivery withdraw or revoke, a Severance Agreement containing a general
release in a form reasonably acceptable to the Company and the assignment as set forth in Section 3.3.
Furthermore, in the event Executive initially qualifies to receive the payments
and benefits provided under this Section 7.5, but then fails to comply with his
obligations under this Agreement (including without limitation Sections 3, 4,5
and 6 hereof), the Company’s obligations under this Section 7.5 shall
terminate.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (h) Termination of other Compensation
and Benefits.  Except as otherwise required by applicable law
or as provided above in this Section 7.5, Executive’s eligibility for or
entitlement to any other compensation or benefits shall cease immediately upon
termination of this Agreement and Executive’s employment with the
Company.

       

      (i) Characterization of Payments under
Section 409A.  For purposes of Section 409A of the Code
(including, but not limited to, to application of the exceptions for short-term
deferrals and for “separation pay only upon an involuntary separation from
service”): (i) each payment provided for under this Section 7.5 is hereby
designated as a separate payment, rather than a part of a larger single payment
or one of a series of payments; and (ii) with respect to the severance payments
and benefits to which Executive may become entitled under Section 7.5 of this
Agreement and which are not in substitution or replacement of “nonqualified
deferred compensation” (within the meaning of Section 409A of the Code), a
termination of Executive’s employment by the Company without Cause or by
Executive for Good Reason is intended to constitute an “involuntary separation
from service” and, in turn, a “substantial risk of forfeiture” (within the
meanings of Section 409A of the Code).

       

      7.6           Effect of
Termination.  Termination of Executive’s employment with the
Company shall not limit, affect, or discharge Executive’s obligations under
Sections 3, 4 5 and 6 of this Agreement and shall not release the Company from
its obligations to make payments or provide benefits required by Sections 2.2
and 7.5 of this Agreement following such termination (subject to the limitations
provided in Section 7.3).  All other obligations as to periods after
the date of termination shall cease, without prejudice to the rights and
remedies for events or breaches prior to the date of termination.

       

      7.7           Waiver.  The Company may
waive or defer exercising its power to terminate this Agreement, but such waiver
or deferral shall not thereby (a) establish a policy, interpretation, or course
of performance that may be used to construe, limit or affect the express terms
of this Agreement, (b) preclude the Company from exercising its rights or
remedies hereunder or otherwise on any other occasion or from using the breach
as support for the exercise of its power to terminate on any future occasion or
(c) limit the ability of the Company to revoke such waiver or deferral and
exercise its power to terminate this Agreement if it determines that the
condition giving rise to a power to terminate has continued, or if the Company
determines in good faith that it was not fully aware of all facts and
circumstances of such condition, or if such waiver or deferral may be retracted
at common law.

       

       SECTION
8.  CERTAIN REMEDIES.

       

      With
respect to each and every breach or violation or threatened breach or violation
by Executive of Sections 3, 4, 5 and 6 of this Agreement, the Company, in
addition to all other remedies available at law or in equity, including, but not
limited to, specific performance of the provisions hereof, shall be entitled to
enjoin the commencement or continuance thereof and may, without notice to
Executive, apply to any court of competent jurisdiction for entry of an
immediate restraining order or injunction, without the necessity of proving
either inadequacy of legal remedies or irreparable harm and without the
necessity of posting a bond.   To the extent the Executive is not
successful in court, the Company shall also be entitled to the recovery of
reasonable attorney’s fees and expenses incurred in conjunction with any such
proceeding.

       

      
        	
                 
      

              	
                SECTION 9.  SEVERABILITY AND
    REFORMATION.

              

      

       

      The
provisions of this Agreement are severable, and any judicial determination that
one or more of such provisions, or any portion thereof, is invalid or
unenforceable shall not affect the validity or enforceability of any other
provisions, or portions thereof, but rather shall cause this Agreement to first
be construed in all respect as if such invalid or unenforceable provisions, or
portions thereof, were modified to terms that are valid and enforceable and
provide the greatest protection to the Company’s business and interests; provided, however, that if
necessary to render this Agreement enforceable, it shall be construed as if such
invalid or unenforceable provisions, or portions thereof, were
omitted.

       

      
        	
                 
      

              	
                SECTION
      10.  GENERAL PROVISIONS.

              

      

       

      10.1  Notices.  Any
notices provided hereunder must be in writing and shall be deemed effective upon
the earlier of personal delivery (including personal delivery by fax) or the
third day after mailing by first class mail, to the Company at its primary
office location and to Executive at Executive’s address as listed on the Company
payroll.

       

      10.2  Waiver.  If
either party should waive any breach of any provision of this Agreement, he or
it shall not thereby be deemed to have waived any preceding or succeeding breach
of the same or any other provision of this Agreement.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      10.3  Complete
Agreement.  This Agreement constitutes the complete, final and
exclusive embodiment of the agreement of the Company and Executive with regard
to the subject matter hereof, and supersedes and replaces in all respects any
previous offers, agreements solely regarding Executive’s employment by the
Company or the terms thereof.  This Agreement is entered into without
reliance on any promise or representation other than those expressly contained
herein, and this Agreement cannot be modified or amended except in a writing
signed by Executive and an authorized officer of the Company.

       

      10.4  Counterparts.  This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.

       

      10.5  Headings.  The
headings of the sections hereof are inserted for convenience of reference only
and shall not be deemed to constitute a part hereof or affect the meaning or
interpretation of any of the provisions hereof.

       

      10.6  Successors and
Assigns.  This Agreement is intended to bind, inure to the
benefit of, and be binding upon, the successors and assigns of the Company,
including the surviving entity of any merger, consolidation, share exchange or
combination of the Company with any other entity.  Notwithstanding the
foregoing, Executive may not assign, transfer or delegate any of Executive’s
duties or obligations hereunder, and Executive may not assign or transfer any of
Executive’s rights hereunder without the written consent of the
Company.

       

      10.7  Choice of Law and
Venue.  All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by the law of the State of
Texas

       

      10.8  Representations.  Each
party represents and warrants to the other that he or it has full power and
authority to enter into and perform this Agreement and that his or its execution
and performance of this Agreement shall not constitute a default under or breach
of any of the terms of any agreement to which he or it is a party or under which
he or it is bound.  Each party represents that no consent or approval
of any third party is required for his or its execution, delivery and
performance of this Agreement or that all consents or approvals of any third
party required for his or its execution, delivery and performance of this
Agreement have been obtained.

       

      10.9  Withholding.  Any
and all amounts payable under this Agreement, including without limitation,
amounts payable under Section 2.1 or Section 7.1(c) hereof, are subject to
withholding for such federal, state, and local taxes as the Company, in its
reasonable judgment, determines to be required pursuant to any applicable law,
rule or regulation.

       

      10.10  Survival.  The
provisions of Sections 3, 4, 5, 7, 8, 9 and 10 of this Agreement shall survive
the termination of this Agreement for whatever reason.

       

      10.11  Section
409A.   If the Executive is a “key employee,” as defined
in Section 416(i) of the Code (without regard to paragraph 5 thereof), except to
the extent permitted under Section 409A of the Code, no benefit or payment that
is subject to Section 409A of the Code (after taking into account all applicable
exceptions to Section 409A of the Code, including but not limited to the
exceptions for short-term deferrals and for “separation pay only upon an
involuntary separation from service”) shall be made under this Agreement on
account of the Executive’s “separation from service,” as defined in Section 409A
of the Code, with the Company until the later of the date prescribed for payment
in this Agreement and the first day of the seventh calendar month that begins
after the date of the Executive’s separation from service (or, if earlier, the
date of death of the Executive).

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      IN
WITNESS WHEREOF, the Company and Executive have executed this Agreement to be
effective as of the day and year first above written.

      

      THE
“COMPANY”

      

      COMVERGE,
INC.

      

      

      By:                    /s/ R. Blake
Young

      Name:               Blake
Young

      Title:                 President &
CEO

      

      “EXECUTIVE”

      

      

      By:                     /s/ Steve
Moffitt

      Name:               Steve
Moffitt

      Title:                 EVP of Engineering and
Operations

       

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Exhibit
A

       

      
        	
                Annual
      Salary

                 

              	
                Executive
      shall be paid at the rate of $300,000 per annum.

              
	
                Annual
      Cash Incentive1*

              	
                Executive
      will have the opportunity to earn an annual bonus equal to 25%
      (threshold), 50% (target) or 100% (maximum) of his annual salary based on
      the achievement of performance criteria established by the Compensation
      Committee, where such payment shall be pro-rated from the start date for
      2010.

                 

              
	
                Annual
      Equity Incentive1

              	
                Beginning
      in calendar year 2011 and thereafter, Executive will have the opportunity
      to earn an annual equity award comprised of a combination of restricted
      stock and options valued at 1.13 times salary (threshold), 1.50 times
      salary (target) or 1.88 times salary (maximum) based on the achievement of
      performance criteria established by the Compensation
      Committee.  Executive shall be eligible for payment of this
      Annual Equity Incentive, if earned, no earlier than mid-March 2012 for the
      2011 calendar year.

                 

              
	
                Initial
      Equity/Stock Option Grants

              	
                Upon
      approval of the Company’s Compensation Committee, which shall be at or
      around  the execution of the Agreement, and in consideration of
      Executive’s obligations contained therein, including but not limited to
      the discontinuance of any business or business activities in which
      Executive was engaged prior to the execution of this Agreement, Executive
      shall be granted 20,000 shares of restricted stock and 120,000 stock
      options.

                 

                All
      restricted stock shall vest on  July 1, 2013, which is the third
      year after the date this Agreement is executed.

                 

                 

                The
      stock options granted under this Agreement shall be at a strike price
      equal to the closing price of the Company’s common stock as of the date
      that the Board consents to the appointment of Executive as EVP of
      Development and Operations, and shall vest quarterly on a pro rata basis over the
      next four years.

                 

                 

                 

              
	
                Living
      & Relocation Expenses

              	
                Company
      shall pay to Executive a relocation stipend as follows:

                 

                Company
      will pay all reasonable direct household moving expenses (i.e. moving
      company) on behalf of Executive and his family for their relocation to
      Atlanta, Georgia.  These household moving expenses will be
      direct-billed to the Company.

                 

                In
      addition, in consideration of other relocation expenses that Executive and
      his family will incur, $87,500,000 will be paid upon the Effective Date of
      the Agreement and $87,500000 will be paid upon final relocation to
      Atlanta, Georgia.  This relocation stipend includes without
      limitation expenses required for selling Executive’s residence(s) in
      Houston, Texas, to purchasing his Atlanta, Georgia house, and all living
      and travel and other expenses during the
  process.

              

      

      

      

        

      

        
        1   The
compensation committee will set Target, Threshold, and Maximum performance
levels for Annual Cash and Equity incentives.  The Threshold
performance level is the minimum level of performance required as a condition of
earning any incentive.  The Target performance level is the level of
performance at which the executive, operating division or company is expected to
perform.  The Maximum performance level is the highest level of
payout.  The committee has discretion to grant or not grant such
Annual Cash or Annual Equity Incentives, if in its reasonable discretion, is in
the best interests of the Company.

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
B

       

      SEPARATION
AGREEMENT AND GENERAL RELEASE

       

      COMPANY
CONFIDENTIAL

       

      This Separation Agreement and General
Release (“Agreement”) is made and entered into on this ___ day of _________,
______ by and between Comverge, Inc., a Delaware corporation (hereinafter
referred to as “the Company”), and Steve Moffitt (hereinafter referred to as
“Employee”).

      

      W
I T N E S S E T H

      WHEREAS, Employee has been
employed by the Company in the position of President and Chief Executive Officer
pursuant to an Executive Employment Agreement (“Employment Agreement”) dated
________________, 2010; and

      

      WHEREAS, the Company has
decided not to renew the Employment Agreement and to terminate the Employment
Agreement and Employee’s employment with the Company
effective_____________________, subject to the terms of this Agreement;
and

      

      WHEREAS, the parties have
decided to settle all rights, claims, and demands which either party has against
or may have against the other arising from the non-renewal and termination of
the Employment Agreement, Employee’s employment or termination of his employment
with the Company; and

      

      WHEREAS, the Company and
Employee desire to set forth their respective rights, duties and obligations and
desire complete accord and satisfaction of all claims arising
therefrom;

      

      NOW THEREFORE, for and in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee hereby agree as follows:

      

      1.           Company’s
Agreements.

      (a) The
Employment Agreement will terminate and Employee’s employment with the Company
will end on _________________________. Upon Employee’s execution and
non-revocation of this Agreement, Employee shall be entitled to the benefits set
forth in Section _________ of the Employment Agreement, which is incorporated
hereby by reference.  Employee’s entitlement to the benefits or
payments from the Company, except as expressly stated herein, is subject to
Employee’s acceptance of this Agreement and his compliance with the conditions
set forth herein.  At all times preceding and including his
termination date, Employee shall be responsible for cooperating with the Company
and its directors, officers, employees, agents and
representatives.  Employee agrees to exercise his best efforts to
perform all job duties and responsibilities, and any task to which he is
assigned to perform, in a competent and satisfactory manner, to comply with all
policies, procedures and work directives, and to assist and facilitate in the
transition of his job responsibilities and functions.  Upon
termination of his employment, the Company agrees to pay Employee the severance
pay as set forth in Section _____ of the Employment Agreement, less any
withholdings that are required under federal and state law.  Except as
specifically set forth in this Agreement, Employee shall be entitled to no other
payments under this Agreement or the Employment Agreement.

      

      (b) Whether
or not Employee signs this Agreement, (i) the Company will pay to Employee an
amount constituting Employee’s accrued, unused vacation days and reimburse
Employee for business expenses in accordance with Company policies, and (ii)
Employee’s Group Medical and Dental benefits may be continued for up to eighteen
(18) months at Employee’s expense by completion and submittal of the form
provided by COBRA Administration Services.  Pursuant to Section
_______, the Company will continue to provide certain benefits assuming Employee
continues to pay his required payment amounts.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      2.           Employee’s
Agreements.

      

      (a)           As
a material inducement to the Company to enter into this Agreement, Employee
hereby irrevocably and forever releases the Company and its parent and/or
related companies, subsidiaries, or affiliates, and their past, present and
future officers, directors, employees, agents and attorneys (collectively
“Releasees”) from any and all charges, claims, complaints, demands, liabilities,
rights, obligations, promises, causes of action, costs, damages at law, expenses
(including attorneys’ fees and costs actually incurred), and suits hidden, of
any nature whatsoever, known or unknown, which Employee ever had, may have, or
now has arising from or related to, directly or indirectly, Employee’s
Employment Agreement, his employment by the Company or any other events which
have occurred as of the date of this Agreement, including but not limited to any
claims arising under Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991, the Americans with Disabilities Act, the Family
Medical Leave Act, the Age Discrimination in Employment Act and any and all
other federal and state laws or statutes.  Notwithstanding the
foregoing, Employee does not release (i) any claims under this Agreement or
under the Age Discrimination in Employment Act that may arise after the
execution of this Agreement, or (ii) any rights that Employee may have to
indemnification under applicable law or the Company’s articles of incorporation
and by-laws, or benefits under any directors and officers insurance that is or
may have been in existence at or prior to the date hereof, or (iii) any vested
benefits under any Company benefit plans or programs.

      

      (b)           Employee
agrees not to commence any legal proceeding or lawsuit against the Company or
any Company Affiliate arising out of or based upon Employee’s employment with
the Company or the end of Employee’s employment with the Company; provided,
however, this provision does not apply to any claims or causes of action not
released pursuant to Section 2(a) above, including without limitation any claims
or causes of action accruing and based upon conduct occurring after the
Effective Date of this Agreement, including, without limitation, any claims or
causes with respect to Executive’s rights to payments or benefits under this
Agreement.

      

      (c)  Employee represents and
agrees that he will keep the terms, the amount, and the fact of this Agreement
completely confidential and he will not hereafter disclose such information to
anyone except members of his family, his professional advisers (who have agreed
to confidentiality obligations), or otherwise as he may be required to do so by
law.  Employee further agrees that, with the exception of allegations,
representations, or statements made in formal legal or arbitration proceedings,
he will not engage in any conduct which is designed to disparage or has the
effect of disparaging the Company or any of its officers, parent, subsidiary,
affiliate, or related companies or their agents, employees or
representatives.  Company agrees that it will not engage in any
conduct which is designed to disparage or has the effect of disparaging
Employee.

      

        (d)           In
the event that the Company becomes involved in any civil or criminal litigation,
administrative proceeding or governmental investigation, Employee shall, upon
request during the twelve-month period following the End Date, provide
reasonable cooperation and assistance to the Company, including without
limitation, furnishing relevant information that he remembers or is in his
possession, attending meetings and providing statements and testimony; provided,
however, that such cooperation and assistance does not unreasonably interfere in
any subsequent employment of Employee.  The Company will reimburse
Employee for all reasonable and necessary costs and expenses Executive incurs in
complying with this Section.

      

      (e)  Employee
represents and warrants that he has been encouraged to seek advice from anyone
of his choosing, including his attorney, accountant or tax advisor prior to his
signing it; that this Agreement represents written notice that he do so; that he
has been given the opportunity and sufficient time to seek such advice; that he
has carefully read and fully understands all of the provisions of this
Agreement; and that he is voluntarily entering into this
Agreement.  Employee
understands that he may take up to twenty-one (21) days to consider whether or
not he desires to enter into this Agreement.  Employee further
represents and warrants that he was not coerced, threatened or otherwise forced
to sign this Agreement, and that his signature appearing hereinafter is
genuine.

      

      (f)           Employee
represents and acknowledges that, in executing this Agreement, he does not rely
and has not relied upon any representation or statement made by any of the
Releasees or by any of the Releasees’ agents, representatives, or attorneys with
regard to the subject matter, basis, or effect of this Agreement.

      

      (g)           Employee
hereby acknowledges, that during his employment, he agreed to certain
post-termination obligations restrictive covenants which are contained in the
Employment Agreement at Sections 3, 4, 5, and 6 and which are incorporated
herein by reference.  Employee further acknowledges and agrees that
Sections 3, 4, 5, and 6 shall remain in full force and effect after the
termination of the Employment Agreement and Employee’s employment with the
Company and that he will comply with his obligations as set forth in Sections 3,
4, 5, and 6.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

                  (h)
For a period of one year from the date hereof, unless specifically invited in
writing by the Company, neither you nor any of your representatives acting on
your behalf or on behalf of other persons acting in concert with you will in any
manner, directly or indirectly effect or seek, offer or propose (whether
publicly or otherwise) to effect, or announce any intention to effect or cause
or participate in or in any way assist, facilitate or encourage any other person
to effect or seek, offer or propose (whether publicly or otherwise) to effect or
participate in any “proxy” “solicitation” (as such terms are used in the proxy
rules of the Securities and Exchange Commission) or consents to vote any voting
securities of the Company, or make any communication exempted from the
definition of “solicitation” by Rule 14a-1(1)(2)(iv) under the Exchange
Act.

      

      3.           Other Agreements.

      (a)           Employee
understands and acknowledges that he has seven (7) days after his acceptance and
execution of this Agreement to revoke this Agreement.  Should Employee
choose to revoke his acceptance and execution of this Agreement within that
seven (7) day period, he must submit such revocation in writing to the General
Counsel of the Company prior to the expiration of the seven (7) day
period.  After such seven (7) day period, this Agreement will be
irrevocable.

      

      (b)           This
Agreement supercedes and terminates any prior agreements, whether written or
otherwise, between Employee and the Company or any predecessor of the
Company.

      

      (c)           Employee
warrants that he will deliver to the Company all property belonging to the
Company no later than his date of termination.  Employee acknowledges
and agrees that payment from the Company under this Agreement is contingent upon
the return of all Company property.

      

      (d)           The
Company and Employee agree that the failure of the Company to insist upon any
one or more instances relating to the performance of any of the terms,
covenants, or conditions of this Agreement shall not be construed as a waiver or
relinquishment of any right granted hereunder or of the future performance of
any such term, covenant, or condition.

      

      (e)           The
Company and Employee agree that this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, heirs,
executors, administrators, and representatives.  Neither this
Agreement nor any right hereunder may be assigned by Employee.

      

      (f)           The
Company and Employee agree that this Agreement sets forth the full and complete
understanding of the parties with respect to the matters addressed herein and
that the validity of this Agreement and any of the provision hereof shall be
interpreted, construed, and determined under and according to the laws of the
State of Texas.

      

      4.           Employee
Statement.

      I have read and understand this entire
Agreement.  I understand that I have twenty-one (21) days to consider
whether or not I desire to enter into this Agreement.  I understand
that I have seven (7) days to revoke this Agreement even after I provide a
signed copy to the Company.  After the expiration of such seven (7)
day period, this Agreement will be binding upon me and will be
irrevocable.

      I understand that by signing this
Agreement, I am giving up rights I may have.  I understand I do not
have to sign this Agreement.

      

      

      ________________________________

      Steve
Moffitt

      

      Date:                                                                        

      

      COMVERGE,
INC.

      By:                                                                        

      Date:exh10-1.htm

EXHIBIT 10.1

MASTER LEASE AGREEMENT

This MASTER LEASE AGREEMENT (the “Master Lease”) is entered into as of July 26, 2010, between EUROMIN INC., a Delaware corporation (together with its successors and assigns, “Lessor”) and BKEP OPERATING, L.L.C., a Delaware limited liability company (together with its successors and permitted assigns, “Lessee”).  (The attached Annex A, which is incorporated herein by this reference, contains definitions and rules of construction for certain terms used in this Master Lease.)

1.  AGREEMENT TO LEASE; LEASE TERM.  This Master Lease is effective as of the date specified above.  Lessor may enter into one or more Lease Schedules with Lessee, however, Lessor shall have no obligation to do so unless such obligation is expressly set forth in writing and executed and delivered by Lessor (a “Commitment”).  By entering into a Lease Schedule, Lessor leases the Equipment covered by the Lease Schedule to Lessee, and Lessee leases such Equipment from Lessor, in each case, for the Lease Term with respect to such Equipment and subject to the terms and conditions in this Master Lease, the Lease Schedule and, to the extent, and only to the extent, related to the Lease Schedule and/or such Equipment, all of the other Lease Documents.

2.  RENT.  Lessee shall pay Lessor, without demand (a) Interim Rent for the Interim Term, as defined in the respective Lease Schedule, (b) Base Rent for the Base Term, as defined in the respective Lease Schedule, (c) Renewal Rent for each Renewal Term, if any, as defined in the Lease Schedule, and (d) all Other Payments payable in accordance with the respective Lease.  EACH LEASE IS NONCANCELABLE BY LESSEE FOR ITS ENTIRE LEASE TERM, and Lessee's obligation to pay Rent, and otherwise to perform its obligations under or with respect to each Lease, are and shall be absolute and unconditional and shall not be affected by any circumstances whatsoever, including any right of setoff, counterclaim, recoupment, deduction, defense or other right which Lessee may have against Lessor, any Suppliers, or any other person, for any reason whatsoever (each, an “Abatement”).  Lessee agrees that all Rent shall be paid in accordance with Lessor’s or Assignee’s written direction.  Time is of the essence with respect to all of Lessee’s obligations under each Lease.  If any Rent is not paid within 10 days of the due date thereof, Lessee shall pay to Lessor, in addition to such past-due Rent, immediately on demand, the Late Charge.

3.  CONDITIONS PRECEDENT.  Lessor's obligation to purchase and lease any Equipment under each Lease Schedule is conditioned upon Lessor's determination that all of the following have been satisfied:

    (a)    Document Deliveries.  Lessor having received the following, in form and substance reasonably satisfactory to Lessor: (1) evidence as to due compliance with the insurance provisions of Section 9 below; (2) if requested, lien searches in the jurisdiction of Lessee’s organization, and wherever else Lessor deems appropriate; (3) UCC’s, Lien waivers and subordinations, real property waivers and all other filings required by Lessor; (4) Lease Documents executed by Lessee; (5) the Supply Contract; and (6) such other documents, agreements, instruments, certificates, opinions, and assurances, as Lessor reasonably may require.

    (b)    Representations.  All representations and warranties provided by Lessee in favor of Lessor in each of the Lease Documents shall be true and correct on the Acceptance Date set forth in the Lease Schedule (and Lessee's execution and delivery of the Lease Schedule shall constitute Lessee’s acknowledgment of same).

    (c)    Defaults; Equipment Acceptance.  No Default or Event of Default under the Lease Schedule or any other Lease Documents shall exist.  Except to the extent expressly provided otherwise in the Lease Schedule, the Equipment covered by the Lease Schedule shall have been delivered to and accepted by Lessee, as evidenced by the Lease Schedule, and shall be in the condition and repair required by the subject Lease; and on the effective date of such Lease Schedule, Lessor shall have received good and marketable title to the Equipment described therein, free and clear of all Liens, other than Permitted Liens.

4.  REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE.  Lessee represents, warrants and agrees that, as of the effective date of this Master Lease and of each Lease Schedule:

    (a)    Organization.  Lessee has the form of business organization indicated, and is and will remain duly organized and existing in good standing under the laws of the state specified, under Lessee’s signature hereto and is duly qualified to do business wherever necessary to perform its obligations under the Lease Documents, including (if necessary) each jurisdiction in which Equipment is or will be located.  Lessee’s exact legal name is as shown in the preamble of this Master Lease.

 

  

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    (b)   Authorization; Non-Contravention.  The Lease Documents and the transactions contemplated thereunder (1) have been duly authorized by all necessary action consistent with Lessee’s form of organization, (2) do not require the approval of, or giving notice to, any governmental authority, (3) do not contravene or constitute a default under any applicable law, Lessee’s organizational documents, or any agreement, indenture, or other instrument to which Lessee is a party or by which it may be bound, and (4) constitute legal, valid and binding obligations of Lessee enforceable against Lessee, in accordance with the terms thereof.

    (c)   Proceedings.  Except as set forth on Schedule 4c attached hereto, there are no pending actions or proceedings to which Lessee is a party, and there are no other pending or threatened actions or proceedings of which Lessee has knowledge, before any court, arbitrator or administrative agency, which, either individually or in the aggregate, would have a Material Adverse Effect.  Further, except as set forth on Schedule 4c, Lessee is not in default under any financial or other material agreement that, either individually or in the aggregate, would have the same such effect.

    (d)   Location.  All of the Equipment covered by such Lease Schedule is currently located (or, if the Equipment is mobile goods, the location of the principal garage or storage site of such Equipment is currently located) in the jurisdiction(s) specified in such Lease Schedule.

    (e)   Personal Property.  Under the applicable laws of each such jurisdiction, such Equipment consists (and shall continue to consist) solely of personal property and not fixtures.  Such Equipment is removable from and is not essential to the premises at which it is located.

    (f)   Financial Condition.  The financial statements of Lessee (copies of which have been furnished to Lessor) have been prepared in accordance with GAAP, and fairly present the financial condition and the results of its operations of such person, respectively, as of the date of and for the period covered by such statements, and since the date of such statements no event or circumstance has occurred or exists that has resulted, or would be reasonably likely to result, in a Material Adverse Effect.

    (g)   Title to Collateral.  Lessee has rights in and/or power to transfer all of the Collateral and the security interest granted to Lessor under Section 12(b) below constitutes a valid, first priority Lien in and to all of the Collateral, subject only to Permitted Liens.

    (h)   Supply Contract.  The Supply Contract represents an arms’ length transaction and the purchase price for the Equipment specified therein is the amount obtainable in an arms’ length transaction between a willing and informed buyer and a willing and informed seller under no compulsion to sell.

5.  FURTHER ASSURANCES AND OTHER COVENANTS.  Lessee agrees as follows:

    (a)   Financial Statement Deliveries.  Lessee shall with respect to itself deliver to Lessor, (1) upon Lessor’s request, complete financial statements of such person, prepared in accordance with GAAP and certified by nationally recognized independent certified public accountants, and (2) upon Lessor’s request, copies of such person’s quarterly financial report prepared in accordance with GAAP.

    (b)   Waivers, Releases and Filings.  Lessee shall obtain and deliver to Lessor and/or promptly execute or otherwise authenticate any documents, filings, waivers (including any landlord and mortgagee waivers), releases and other records, and will take such further action as Lessor may reasonably request in furtherance of Lessor’s rights under any of the Lease Documents.  Lessee irrevocably authorizes Lessor to file UCCs and other similar filings and recordings with respect to the Equipment or any Collateral.  Without Lessor’s prior written consent, Lessee agrees not to file any corrective or termination statements or partial releases with respect to any UCCs or other similar filings or recordings filed by Lessor in connection with any Lease. 

    (c)   Notices.  Lessee shall provide written notice to Lessor: (1) at least thirty (30) days prior to any change in Lessee’s name or jurisdiction of organization or form of organization; (2) promptly upon the occurrence of any Event of Default or Default; and (3) promptly upon Lessee becoming aware of any alleged violation of applicable law relating to the Equipment or any Lease Document.

 

    (c)    Compliance with Laws.  Lessee is and will remain in material compliance with all applicable laws.

 

    (d)   Location of Equipment.  Upon request of Lessor from time to time, Lessee shall deliver to Lessor a listing of the Equipment then currently subject to this Lease (and/or any Lease Schedule) and the location of that Equipment.

 

  

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6.  ACCEPTANCE UNDER LEASE.  Except to the extent expressly provided otherwise in the Lease Schedule, (a) upon delivery of Equipment to be covered by a Lease Schedule, Lessee shall inspect and, if conforming to the condition required by the applicable Supply Contract, accept the Equipment and execute and deliver to Lessor the Lease Schedule covering such Equipment, and (b) the Lease Schedule will evidence Lessee's unconditional and irrevocable acceptance of such Equipment for purposes of the subject Lease.  However, if Lessee fails to accept delivery of any item of the Equipment, or accepts such Equipment but fails to satisfy any of the other conditions set forth in Section 3 above, Lessor shall have no obligation to lease such Equipment.  In such event, Lessor’s rights shall include the right to demand that Lessee (a) fully assume all obligations as purchaser of such Equipment, with the effect of causing Lessor to be released from any liability relating thereto, (b) immediately remit to Lessor an amount sufficient to reimburse Lessor for all advance payments, costs, taxes or other charges paid or incurred by Lessor with respect to the Equipment (including any of such amounts paid by Lessor under the Supply Contract or as a reimbursement to Lessee), together with interest at the Default Rate accruing from the date of Default or dates such amounts were paid by Lessor until indefeasibly repaid by Lessee in full, and (c) take all other actions necessary to accomplish such assumption.

7.  DISCLAIMER; QUIET ENJOYMENT.

    (a)   Disclaimer.  THE EQUIPMENT IS LEASED UNDER THE SUBJECT LEASE AS IS, WHERE IS.  LESSOR SHALL NOT BE DEEMED TO HAVE MADE, AND HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE EQUIPMENT, INCLUDING ANY PART, OR ANY MATTER WHATSOEVER, INCLUDING, AS TO EACH ITEM OF EQUIPMENT, ITS DESIGN, CONDITION, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, TITLE, ABSENCE OF ANY PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR LATENT DEFECT (WHETHER OR NOT DISCOVERABLE BY LESSEE), COMPLIANCE OF SUCH ITEM WITH ANY APPLICABLE LAW, CONFORMITY OF SUCH ITEM TO THE PROVISIONS AND SPECIFICATIONS OF ANY SUPPLY CONTRACT OR TO THE DESCRIPTION SET FORTH IN THE RELATED LEASE SCHEDULE OR ANY OTHER LEASE DOCUMENT, OR ANY INTERFERENCE OR INFRINGEMENT, OR ARISING FROM ANY COURSE OF DEALING OR USAGE OF TRADE, NOR SHALL LESSOR BE LIABLE, FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR ABSOLUTE LIABILITY IN TORT; AND LESSEE HEREBY WAIVES ANY CLAIMS ARISING OUT OF ANY OF THE FOREGOING.  Without limiting the foregoing, Lessor will not be responsible to Lessee or any other person with respect to, and Lessee agrees to bear sole responsibility for, any risk or other matter that is the subject of Lessor’s disclaimer; and Lessor's agreement to enter into this Master Lease, each Lease Schedule and other Lease Document is in reliance upon the freedom from and complete negation of liability or responsibility for the matters so waived or disclaimed herein or covered by the indemnity in this Master Lease.  So long as no Event of Default has occurred, Lessee may exercise Lessor’s rights, if any, under any warranty from any Supplier with respect to Equipment.  Lessee’s exercise of such rights shall be at its sole risk, shall not result in any prejudice to Lessor, and may be exercised only during the Lease Term with respect to the subject Equipment.

    (b)   Quiet Enjoyment.  Lessor covenants and agrees that so long as no Event of Default has occurred, Lessor shall not disturb or otherwise interfere with Lessee's possession of the Equipment.  The preceding covenant is in lieu of all warranties by Lessor, whether written, oral or implied, with respect to this Master Lease, any Lease Schedule, the Equipment and any Lease.  Any actual or purported breach of this covenant shall not give rise to any Abatement, but Lessee may bring a direct cause of action against Lessor for any actual damages directly resulting from any such breach.

8.  USE AND MAINTENANCE.

    (a)    The vehicles leased hereunder are leased principally for use in the United States.  Lessee agrees to permit each vehicle leased hereunder to be operated only by Lessee, its agents, servants or employees; to take all steps necessary to preserve each vehicle leased hereunder in as good condition as when delivered to Lessee, ordinary wear and tear excepted; and that no driver of any vehicle shall have any authority to act for or on behalf of Lessor.  Lessee agrees not to permit any vehicle leased hereunder to be used in violation of any federal, state or municipal statute, law, ordinance, rule or regulation applicable to the operation of such vehicle, and will hold Lessor harmless from any and all fines, forfeitures or penalties assessed against such vehicle or Lessor for, and from any and all damage suffered by Lessor from violations of any such statute law, ordinance, rule, or regulation.  Lessor may terminate this Agreement if at any time any vehicle is used in violation of this paragraph or in the opinion of Lessor, is abused.  Excessive wear and use includes, among other things, (i) glass breakage or discoloration; (ii) damage or deterioration of body, fenders, metal work, trim or paint; (iii) missing wheel covers, jack or wheel wrench; (iv) torn dash, floor covers, seats, headliners, upholstery or interior work or trunkliners; (v) any wheels or tires (including spare) that are missing or not in safe condition; (vi) damage from flood water, hail or sand; or (vii) any damage that makes the vehicle either unsafe or unlawful to operate.

 

  

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    (b)    With respect to each vehicle leased herein, Lessee shall pay for all maintenance and repairs to keep vehicle in good working order and condition.  If the vehicle is new, it is subject to the warranty issued by the manufacturer of the vehicle, and Lessee will maintain the vehicle as required to keep the manufacturer’s warranty in force.  Lessee will also pay for all operation expenses including but not limited to gasoline, oils, lubricants, anti-freeze and tire repair or replacement.  Lessee assumes full responsibility for the performance of the above obligations.  Upon request by Lessor, Lessee shall permit inspection of each vehicle at reasonable times, places and intervals.

    (c)    Inspections.  Upon forty-eight (48) hours' notice, Lessee shall afford Lessor and/or its designated representatives access to the premises where the Equipment is located for the purpose of inspecting such Equipment and all applicable maintenance or other records relating thereto at any reasonable time during normal business hours; provided, however, if a Default or Event of Default shall exist, no prior notice or other limitation shall apply to Lessor’s inspection rights.  Lessee shall, whenever reasonably requested by Lessor, advise Lessor of the exact location of any and all items of Equipment.

9.  INSURANCE.  During the entire Lease Term with respect to Equipment and until such Equipment is returned to or purchased from Lessor in accordance with this Master Lease and the other Lease Documents, Lessee shall procure and maintain: (a) liability insurance written on an “occurrence” basis covering all sums Lessee and/or Lessor shall become legally obligated to pay as damages for bodily injury, including bodily injury, sickness, disease or death, or property damage, including loss of use, arising, directly or indirectly, in connection with the Equipment, with a combined single limit of not less than $15,000,000.00 per occurrence; and (b) any other coverage required pursuant to the terms of the respective Lease Schedule.  Lessee shall be solely liable and responsible for any self insured retention, coinsurance or deductible, each of which shall be in form and amount as is acceptable to Lessor in its reasonable discretion, and shall pay to Lessor an amount equal to the shortfall to the extent Lessor’s recovery is nullified, reduced or effected by the existence of the same.  Lessee shall be solely responsible for all premiums, including any retrospective premiums, under all required policies.  To the extent Lessee fails to maintain the required coverages, Lessor may procure, but is not required to procure, insurance to cover its interest in the Equipment or liability relating to the Equipment at Lessee’s expense; however, under no circumstances shall such replacement coverages cover or protect Lessee.  No action or inaction by Lessor with respect to replacement coverage shall affect Lessor’s obligation’s under this Section 9 or any of the Lease Documents.

The insurance policies required under this Section 9 (including all endorsements) shall: (i) be in a form and amount reasonably satisfactory to Lessor, and written by insurers of recognized reputation and responsibility reasonably satisfactory to Lessor, (ii) with respect to the liability insurance described in clauses (a) and, if applicable, (b) of this Section 9, name Lessor, and any other party required in the Lease Schedule, as an additional insured, (iii) provide that the insurance provided under the required property and liability policies is primary and noncontributory with respect to any insurance maintained separately by Lessor, (iv) require the insurer to provide Lessor at least thirty (30) days’ prior written notice of cancellation, material change, or non-renewal of the required policy; (v) contain a waiver of subrogation in favor of Lessor; (vi) contain a severability of interests provision; and (vii) state that the insurance coverage afforded Lessor shall not be invalidated by any action or inaction of Lessee, including, but not limited to, the breach of any policy warranty, declaration or condition.  Lessee agrees that it shall obtain and maintain such other coverages, or cause adjustments to be made to the scope, amount or other aspects of the existing coverages, promptly upon Lessor’s request, as and when Lessor reasonably deems such additional coverages or modifications to be appropriate in light of any changes in applicable law, prudent industry practices, Lessee’s anticipated use of the Equipment or other pertinent circumstances.  Lessee shall provide evidence reasonably acceptable to Lessor of its compliance with the insurance requirements set forth herein prior to the inception of the Lease Term and not less than one business day prior to the renewal of each required policy.

10.  LOSS AND DAMAGE.

    (a)   Risk of Loss.  During the entire Lease Term with respect to the Equipment covered by a Lease Schedule and until all of such Equipment is returned to Lessor in accordance with the subject Lease, Lessee shall bear the risk of the occurrence of a Casualty to Equipment and LESSEE SHALL NOT BE RELEASED FROM ITS OBLIGATIONS UNDER THE SUBJECT LEASE IF A CASUALTY OCCURS.

    (b)    Casualty Notice.  Lessee shall provide prompt written notice to Lessor of any Casualty to any Equipment where the repairs or replacement costs are likely to exceed $100,000.  Each such notice must be provided together with any damage reports provided to any governmental authority, the insurer or Supplier, and any documents pertaining to the repair of such Casualty, including copies of work orders, and all invoices for related charges.

 

  

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    (c)   Casualty Cure.  In the event a Casualty occurs with respect to any Equipment, at Lessor’s option, Lessee shall promptly (1) place the Casualty Equipment in the condition and repair required by the subject Lease, (2) replace the Casualty Equipment with Replacement Parts in accordance with Section 8(b) above, whereupon such Replacement Parts shall be deemed to be Equipment for all purposes of the subject Lease, or (3) if Lessor determines the Casualty constitutes a Total Loss, on the Loss Payment Date, pay to Lessor (A) the Basic Rent (or Renewal Rent, if the Total Loss occurs during a Renewal Term) due on the Loss Payment Date, plus (B) the Stipulated Loss Value of the Casualty Equipment as of the Loss Payment Date, plus (C) all Other Payments then due.  Upon (i) Lessee’s full satisfaction of its obligations under clause (2) of the preceding sentence or (ii) full and indefeasible payment to Lessor of the sum described in clause (3) of the preceding sentence, as applicable, (x) Lessee’s obligation to pay future Basic Rent (or Renewal Rent, as applicable) shall terminate solely with respect to the Casualty Equipment so paid for, but Lessee shall remain liable for, and pay, all Other Payments, if any, whenever arising connected with the Casualty Equipment and all Rent related to the remainder of the Equipment as and when due, and (y) Lessor, without further action, shall be deemed to have conveyed to Lessee all of Lessor’s right, title and interest in the Casualty Equipment AS IS, WHERE IS, but subject to the requirements of any third party insurance carrier in order to settle an insurance claim.

    (e)   No Lessor Duty.  Lessor shall be under no duty to Lessee to pursue any claim against any person in connection with a Total Loss or other Casualty to any Equipment.

    (f)   Insurance Proceeds Credit.  If Lessor receives a payment under an insurance policy required under any Lease Document in connection with any Total Loss or other Casualty to Equipment, and such payment is both unconditional and indefeasible, then provided Lessee shall have complied with the applicable provisions of this Section 10, Lessor shall either (1) if received pursuant to a Total Loss, remit such proceeds to Lessee up to an amount equal to the amount paid by Lessee to Lessor as the Stipulated Loss Value of the Casualty Equipment, or credit such proceeds against any amounts owed by Lessee pursuant to Section 10(c)(3), or (2) if received with respect to repairs or replacements made pursuant to Section 10(c)(1) or (2), remit such proceeds to Lessee up to an amount equal to the out-of-pocket costs of repair or replacement actually incurred by Lessee, as established to Lessor’s reasonable satisfaction.

11.  REDELIVERY.

    (a)   Return Election.  Not less than thirty (30) days and not more than one two hundred seventy (270) days prior to the expiration of the Lease Term with respect to Equipment, Lessee shall provide written notice to Lessor of Lessee’s intent to return such Equipment to Lessor upon the expiration of such Lease Term.  IF LESSEE FAILS TO PROVIDE THE FOREGOING NOTICE IN A TIMELY MANNER, THE LEASE TERM WITH RESPECT TO SUCH EQUIPMENT AUTOMATICALLY SHALL BE DEEMED TO HAVE BEEN EXTENDED, WHICH EXTENSION SHALL CONTINUE UNTIL THIRTY (30) DAYS AFTER THE DATE ON WHICH LESSEE PROVIDES THE REQUIRED NOTICE, DURING WHICH EXTENSION PERIOD LESSEE SHALL CONTINUE TO PAY TO LESSOR PER DIEM RENT AT THE LAST PREVAILING BASIC OR RENEWAL RENT (AS APPLICABLE) UNDER THE APPLICABLE LEASE SCHEDULE; provided, however that Lessor may elect to terminate such extension at any time upon ten (10) days written notice to Lessee.  During such extension period, the terms and conditions of the subject Lease shall continue to apply; provided, however, that, for the avoidance of doubt, during such extended period of the Lease Term, the Stipulated Loss Value of such Equipment shall be deemed to be equal to the Stipulated Loss Value of the Equipment determined as of the last Payment Date during the applicable Lease Term (not taking into consideration the extension described in this Section), and the applicable percentage factor shall be the last percentage factor set forth in the Lease Schedule covering such Equipment.

    (b)   Return Conditions.  Upon the expiration or earlier cancellation or termination of the Lease Term with respect to Equipment, Lessee shall (1) return such Equipment to Lessor or Lessor’s designee free and clear of all Liens whatsoever, other than Permitted Liens, to such place(s) within the continental United States as Lessor shall designate, (2) provide, at Lessee’s expense, transit insurance for the redelivery period in an amount equal to the replacement value of such Equipment and Lessor shall be named as the loss payee on all such policies of insurance, (3) cause such Equipment to be substantially in the same condition as when delivered to Lessee under the related Lease Schedule, ordinary wear and tear excepted and otherwise in the condition (and to comply with) the terms of the subject Lease.  Lessee shall be responsible for the cost of all repairs, alterations, inspections, appraisals, storage charges, insurance costs, demonstration costs and other related costs necessary to cause such Equipment to be in compliance with the terms of the subject Lease.

    (c)   Delivery of Records.  If requested by Lessor, Lessee shall also promptly deliver to Lessor all Records related to such Equipment.  All manuals or other documents delivered to Lessor that are subject to periodic revision shall be fully up-to-date and current to the latest revision standard of any particular manual or document.  In the event any such Records are missing or incomplete, Lessor shall have the right to cause the same to be reconstructed at Lessee’s expense.

 

  

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    (d)   Rent Accrual.  In addition to Lessor's other rights and remedies hereunder, if such Equipment and the related Records are not returned in a timely fashion, or if repairs are necessary to place any Equipment in the condition required in this Section, Lessee shall (1) continue to pay to Lessor per diem Rent at the last prevailing Basic Rent or the Renewal Rent (as applicable) under the applicable Lease Schedule for the period of delay in redelivery, and/or for the period of time reasonably necessary to accomplish such repairs, and (2) pay to Lessor an amount equal to the aggregate cost of any such repairs, plus interest thereon at the Default Rate.  Lessor's acceptance of such Rent on account of such delay and/or repair does not constitute an extension or renewal of the Lease Term with respect to such Equipment or a waiver of Lessor's right to prompt return of the Equipment in proper condition.  Such amount shall be payable upon the earlier of Lessor’s demand or the return of such Equipment in accordance with the subject Lease.

    (e)   Specific Performance.  Without limiting any other terms or conditions of this Master Lease, the provisions of this Section are of the essence of each Lease, and upon application to any court of equity having jurisdiction, Lessor shall be entitled to a decree against Lessee requiring Lessee’s specific performance of its agreements in this Section.

12.  TITLE; GRANTING CLAUSE.

    (a)   Parties’ Intent.  Lessee and Lessor intend that, except to the extent expressly provided otherwise in the Lease Documents: (1) each Lease constitutes a true "lease" and a "finance lease" as such terms are defined in Article 2A of the UCC and not a sale or retention of a security interest; and (2) Lessor is and shall remain the owner of each item of Equipment (unless sold by Lessor pursuant to any Lease Document), and Lessee shall not acquire any right, title or interest in or to such Equipment except the right to possess and use it in accordance with the terms of the related Lease.  Lessor shall be the registered (titled) owner of all of the Equipment, and Lessee shall reasonably cooperate with Lessor (at Lessor’s expense) to effect that registration.

    (b)   Collateral Grant.  To secure the prompt payment and performance when due of all of Lessee’s obligations under a subject Lease, including its obligation to pay Rent when due, Lessee hereby collaterally assigns, grants, and conveys to Lessor, a first priority security interest in and Lien on all of Lessee’s right, title and interest in and to all of the Collateral related to the subject Lease.

    (c)   Secured Party Remedies.  If contrary to the parties’ intentions a court determines that any Lease is not a “true lease,” Lessee agrees that: (1) with respect to the Equipment covered by such Lease, in addition to all of the other rights and remedies available to Lessor under the subject Lease upon the occurrence of an Event of Default, Lessor shall have all of the rights and remedies of a first priority secured party under the UCC; and (2) any obligation to pay Interim Rent, Basic Rent, Renewal Rent or any Other Payment, to the extent constituting the payment of interest, shall be at an interest rate that is equal to the lesser of the maximum lawful rate permitted by applicable law or the effective interest rate used by Lessor in calculating such amounts.

 

13.  GENERAL INDEMNITY.  Lessee shall indemnify, defend and keep harmless Lessor and each Assignee, and their respective affiliates, and each of the directors, officers, employees and agents of the foregoing (each, an "Indemnitee"), from and against any and all Claims, by paying, on a net after-tax basis, or otherwise discharging such Claims, when and as such Claims shall become due; provided, however, that, notwithstanding the foregoing, Lessee shall have no obligation hereunder to indemnify, defend or keep harmless any Indemnitee for any Claim to the extent the Claim directly and proximately results from the actual, but not imputed, gross negligence or willful misconduct of such Indemnitee.  If any Claim is made against Lessee or an Indemnitee, the party receiving notice of such Claim shall promptly notify the other, but the failure of the party receiving notice to so notify the other shall not relieve Lessee of any obligation hereunder.

14.  FEES AND TAXES.  Lessee agrees to:

 

    (a)   Filings, Payments.  (1) (A) Promptly notify Lessor and provide it with all information required in order for Lessor to timely file all declarations, returns, inventories, or other documentation with respect to any personal property taxes (or any other taxes in the nature of or imposed in lieu of property taxes) due or to become due with respect to Equipment, or, (B) if requested by Lessor in writing and permitted by applicable law, timely file in Lessee’s own name or on Lessor’s behalf, directly with all appropriate taxing authorities all such declarations, returns, inventories and other documentation and concurrently provide to Lessor copies of all such filings, and (2) (A) pay to Lessor, immediately upon receipt of invoice, an amount equal to all such taxes assessed, billed or otherwise payable with respect to the Equipment, or, (B) if requested by Lessor in writing and permitted by applicable law, pay on or before the date when due all such taxes assessed, billed or otherwise payable with respect to the Equipment directly to the appropriate taxing authorities and concurrently provide to Lessor evidence of such payment;

 

  

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    (b)   Indemnity for Non-income Taxes.  (1) Pay when due as requested by Lessor, and (2) defend and indemnify Lessor on a net after-tax basis against liability for all license and/or registration fees, assessments, and sales, use, property, excise, privilege, value added and other taxes or other charges or fees, including any electronic waste or recycling taxes, fees or other charges, now or hereafter imposed by a governmental authority with respect to any Equipment or with respect to the manufacture, shipment, purchase, ownership, delivery, installation, leasing, operation, possession, use, return, or other disposition thereof or the Rent under any Lease (other than taxes on or measured solely by the net income or gross receipts of Lessor); and

    (c)   Indemnity for Penalties and Similar Charges.  Indemnify Lessor against any penalties, charges, interest or costs imposed with respect to any items referred to in clauses (a) and (b) above (each of the items referred to in clauses (a), (b), and (c) of this sentence is referred to herein as an “Imposition”).  Any Imposition that is not paid when due and which is paid by Lessor shall, at Lessor's option, become immediately due from Lessee to Lessor and, until paid, shall accrue interest at the Default Rate.

 

15.  INCOME TAX INDEMNITY.

    (a)   Representations.  Lessee represents and warrants that:  (1) it believes that it is reasonable to estimate that the useful life of the Equipment covered by a Lease Schedule exceeds the Lease Term for such Equipment plus all Renewal Terms for which the Renewal Rent is fixed in the Lease Schedule by the greater of one year or 20% of such estimated useful life, and that said Equipment will have a value at the end of the Lease Term, including any Renewal Terms for which the Renewal Rent is fixed in the Lease Schedule, of at least 20% of the Acquisition Cost of the Equipment, without including in such value any increase or decrease for inflation or deflation during the Lease Term; and (2) all of the Equipment is, and will be used by Lessee so as to remain, property eligible for the MACRS Deductions.

    (b)   Indemnity.  If (1) by reason of (A) any act or failure to act of Lessee (including a breach of any covenant or agreement of Lessee set forth in this Master Lease or any other Lease Document), or (B) the misrepresentation of or breach by Lessee of any of the warranties and representations set forth in Section 15(a) above, Lessor in computing its taxable income or liability for tax, shall lose, or shall not have, or shall lose the right to claim or there shall be disallowed or recaptured for Federal and/or state income tax purposes, in whole or in part, the benefit of MACRS Deductions, or (2) Lessor shall become liable for additional tax as a result of Lessee having added an attachment or made an alteration to the Equipment, including (without limitation) any such attachment or alteration which would increase the productivity or capability of the Equipment so as to violate the provisions of Rev. Proc. 2001-28, 2001-1 C.B. 1156 (as it may hereafter be modified or superseded) (each case described in clauses (1) and (2), a "Loss"), then Lessee shall pay Lessor the Tax Indemnification Payment as additional Rent and Lessor shall revise the Lease Schedule (and any other Lease Documents, as appropriate) to reflect the Loss.  As used in this Section 15, "Lessor" shall be deemed to include the consolidated Federal taxpayer group of which Lessor is a member.

    (c)   Date of Loss.  Lessee shall pay to Lessor the Tax Indemnification Payment within thirty (30) days following Lessor’s notice to Lessee of the occurrence of a Loss.  For these purposes, a Loss shall occur upon the earliest of:  (1) the happening of any event (such as disposition or change in use of any item of the Equipment) that will cause such Loss, (2) the payment by Lessor to the Internal Revenue Service or state taxing authority of the tax increase (including an increase in estimated taxes) resulting from such Loss; (3) the date on which the Loss is realized by Lessor; or (4) the adjustment of the tax return of Lessor to reflect such Loss.

16.  DEFAULT.  Each of the following events or occurrences shall constitute an “Event of Default” under the respective Lease:

 

    (a)   Rental Failure.  Lessee shall fail to pay any Rent under the Lease when due and payable and such failure continues for a period of 10 calendar days;

    (b)   Insurance Failure.  Lessee shall fail to obtain, maintain and comply with all of the insurance coverages required under such Lease;

    (c)   Unpermitted Transfers.  Lessee shall make or permit any assignment, sublease or other transfer of, such Lease, the related Lease Documents, the related Equipment or any interest in any of the foregoing; that is not permitted by the terms hereof;

    (d)   Other Indebtedness Defaults.  With respect to Lessee any event of default (however defined) shall have occurred under any other loan or lease from, or guaranty or other financing obligation to, any person not affiliated with Lessor, and in such case the applicable grace period for curing such default or event of default shall have expired;

 

  

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    (e)   Misrepresentations.  Any representation or warranty of Lessee made in any Lease Document related to such Lease or any other writing or certificate furnished by or on behalf of Lessee pursuant to any such Lease Document is or shall be incorrect or incomplete when made in any material respect;

    (f)   Insolvency.  The commencement of any bankruptcy, insolvency, receivership or similar proceeding by or against Lessee or any of its or their properties or business or the rejection of the Lease or any related Lease Document in any such proceeding;

    (g)    Dissolution.  Lessee (1) ceases to do business as a going concern, liquidates, dissolves or otherwise terminates its existence or (2) sells, transfers or otherwise disposes of all or substantially all of its assets or property; and

    (h)   Breach of Other Covenants.  Lessee fails to perform or observe any other covenant, condition or agreement to be performed or observed by it under any Lease Document related to the Lease that is not otherwise addressed in this Section 16, and such failure continues unremedied for a period of 30 days after Lessee first becomes aware of such failure (but such cure period shall not be applicable unless the breach is curable by practical means within the cure period, or such cure period may be extended for a period not to exceed 90 days if Lessee is diligently pursuing a remedy).

17.  REMEDIES.

    (a)   Non-Exclusive Remedies.  If an Event of Default occurs with respect to any Lease, Lessor (or Assignee, if applicable) may (in its sole discretion) exercise any one or more of the following remedies with respect to such Lease and any or all Lease Schedules, other Lease Documents and Equipment related thereto: (1) proceed at law or in equity, to enforce specifically Lessee’s performance or to recover damages; (2) declare the Lease in default, and cancel any or all related Lease Schedules or otherwise terminate Lessee’s right to possess and use the related Equipment and Lessee’s other rights, but not its obligations, connected therewith and Lessee shall immediately assemble, make available and, if Lessor requests, return the Equipment, or so much thereof as is requested by Lessor, to Lessor in accordance with the terms of the related Lease Documents; (3) enter any premises where any item of such Equipment is located and take immediate possession of and remove (or disable in place) such item (and/or any unattached parts) by self-help, summary proceedings or otherwise, all without liability; (4) use Lessee’s premises for a period not to exceed 180 days for storage of, and to show for sale or re-lease, such Equipment without charge therefor or liability in connection therewith; (5) sell, re-lease or otherwise dispose of any or all of the Equipment, whether or not in Lessor's possession, at public or private sale, with or without notice to Lessee, and apply or retain the net proceeds of such disposition, with Lessee remaining liable for any deficiency and with any excess being retained by Lessor; (6) enforce any or all of the preceding remedies with respect to any related Collateral, and apply any deposit or other cash collateral, or any proceeds of any such Collateral, at any time to reduce any amounts due Lessor; (7) demand and recover from Lessee (A) all accrued and unpaid Rent as of the date of the Event of Default, plus (B) as liquidated damages for loss of a bargain and not as a penalty, and in lieu of any further payments of Basic Rent or Renewal Rent (as applicable), the Stipulated Loss Value of the Equipment as of the date of the Event of Default (as if all of the Equipment constituted Casualty Equipment on such date and, subject to the following proviso, such date constituted the Loss Payment Date in connection therewith, provided, however, that if the Event of Default does not occur on a Payment Date, the Stipulated Loss Value of the Equipment shall be pro rated on a per diem basis between the Stipulated Loss Value of the Equipment as of the two Payment Dates closest in time to the date of the Event of Default if the Event of Default does not occur on a Payment Date), plus (C) all Enforcement Costs incurred by or on behalf of Lessor, if any, plus (D) interest at the Default Rate on the total of the foregoing for the period from the date of the Event of Default until fully and indefeasibly paid to Lessor (collectively, “Liquidated Damages”); and (8) exercise any and all other remedies allowed by applicable law, including the UCC.

    (b)   Title Transfer to Lessee.  If Lessor demands Liquidated Damages from Lessee, upon full and indefeasible payment thereof to Lessor, all of Lessor’s right, title and interest in and to the subject Equipment shall, without further action, be deemed to have been conveyed to Lessee on an AS IS, WHERE IS basis, and Lessee thereafter shall be liable as the owner of such Equipment for any costs of dismantling and removing the Equipment and any claims, including under applicable environmental laws, with respect to the Equipment.  Further, if any Lease Schedule is cancelled or otherwise terminated upon the occurrence of an Event of Default, Lessor, in its sole discretion based on then existing circumstances, may elect to abandon all or any of the related Equipment in place whereupon all of Lessor’s right, title and interest in and to such Equipment shall, without further action, be deemed to have been conveyed to Lessee on an AS IS, WHERE IS basis, and Lessee thereafter shall be liable as the owner of the Equipment for any costs of dismantling and removing the Equipment and any claims, including under applicable environmental laws, with respect to the Equipment.

    (c)   Enforcement Costs.  If an Event of Default occurs with respect to a Lease, Lessee shall also be liable to Lessor for all Enforcement Costs.

 

  

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    (d)   Cumulative Remedies.  No right or remedy is exclusive and each may be used successively and cumulatively.  Any failure to exercise the rights granted hereunder upon any Default or Event of Default shall not constitute a waiver of any such right.  The execution of a Lease Schedule or any other Lease Document shall not constitute a waiver by Lessor of any pre-existing Default or Event of Default.  A cancellation or termination of any Lease or any Lease Schedule shall occur only upon written notice by Lessor to Lessee.  Interest at the Default Rate shall accrue on all amounts payable under this Section for as long as such amounts remain outstanding, and shall be paid by Lessee upon demand.  With respect to any disposition of any Equipment or Collateral pursuant to this Section, (1) Lessor shall have no obligation, subject to the requirements of commercial reasonableness, to clean-up or otherwise prepare the same for disposition, (2) Lessor may comply with any applicable law in connection with any such disposition, and any actions taken in connection therewith shall not be deemed to have adversely affected the commercial reasonableness of any disposition thereof, (3) Lessor may disclaim any title or other warranties in connection with any such disposition, and (4) Lessee shall remain responsible for any deficiency remaining after Lessor’s exercise of its remedies and application of any funds or credits against Lessee’s obligations under any Lease, and Lessor shall retain any excess after such application.

 

18.  ASSIGNMENT.

    (a)   Lessee.  LESSEE SHALL NOT ASSIGN, DELEGATE, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER OR UNDER ANY LEASE OR ANY LEASE SCHEDULE OR OTHER LEASE DOCUMENT, OR ITS INTEREST IN ANY EQUIPMENT OR ANY COLLATERAL, SUBLET ANY EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE OR A SUBSIDIARY OF LESSEE OR A PERSON CONTROLLED BY, CONTROLLING OR UNDER COMMON CONTROL WITH LESSEE (each of which, a “Permitted Assignee”).  For purposes hereof, “control” shall mean the ownership of a majority of the issued shares (or other applicable equity securities) or voting power or control in fact of the subject entity. Without limiting the foregoing, (1) Lessee may not attempt to dispose of any of the Equipment, except to a Permitted Assignee, and (2) Lessee shall (A) maintain the Equipment free from all Liens, other than Permitted Liens, (B) notify Lessor immediately upon receipt of notice of any Lien affecting the Equipment, other than any Permitted Lien and of any assignment by Lessee of its rights and obligations hereunder, and (C) defend Lessor's title to the Equipment.  No disposition referred to in this Section other than an assignment to a Permitted Assignee shall relieve Lessee of its obligations (Lessee shall remain primarily liable under each Lease, each Lease Schedule and all of the other Lease Documents).  Any permitted sublease shall be (a) subject and subordinate to the terms contained in the applicable Lease, (b) for a term not to exceed the Lease Term of the Lease and (c) assigned to Lessor as additional collateral hereunder.  Upon the request of Lessor, Lessee shall deliver to Lessor the original of each permitted sublease agreement which constitutes chattel paper.  No sublease shall relieve Lessee of any of its obligations hereunder.

    (b)   Lessor.  Lessor may at any time with or without notice to Lessee grant a security interest in, sell, assign, delegate or otherwise transfer (any of the foregoing, an “Assignment”) all or any part of its interest in the Equipment, any Lease or any Lease Schedule and any related Lease Documents or any Rent thereunder, or the right to enter into any Lease Schedule, and Lessee shall perform all of its obligations thereunder, to the extent so transferred, for the benefit of the Assignee.  Lessee agrees not to assert against any Assignee any Abatement (without limiting the provisions of Section 2) or Claim that Lessee may have against Lessor, and Assignee shall not be bound by, or otherwise required to perform any of Lessor’s obligations, unless expressly assumed by such Assignee.  Lessor shall be relieved of any such assumed obligations.  If so directed in writing, Lessee shall pay all Rent and all other sums that become due under an assigned Lease, Lease Schedule and/or other Lease Document, directly to the Assignee or any other party designated in writing by Lessor or such Assignee.  Lessee acknowledges that Lessor’s right to enter into an Assignment is essential to Lessor and, accordingly, waives any restrictions under applicable law, if any, with respect to an Assignment and any related remedies.  Upon the request of Lessor or any Assignee, Lessee also agrees (1) to promptly execute and deliver to Lessor or to such Assignee an acknowledgment of the Assignment in form and substance satisfactory to the requesting party, an insurance certificate and such other documents and assurances reasonably requested by Lessor or Assignee, and (2) to comply with all other reasonable requirements of any such Assignee in connection with any such Assignment.

    (c)    Subject always to the foregoing, this Master Lease and each Lease Schedule and other Lease Document shall inure to the benefit of, and are binding upon, Lessee’s and Lessor’s respective successors and assigns.

19.  MISCELLANEOUS.

    (a)   Integration; Amendments.  This Master Lease, each Lease Schedule, and all other Lease Documents constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and shall not be amended or modified in any manner except by a document in writing executed by the parties to the primary Lease Document.

 

  

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    (b)   Unenforceable Provisions.  Any provision of this Master Lease or any other Lease Document that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

    (c)   Survival.  The representations, warranties and agreements of Lessee under the Lease Documents shall be deemed to be continuing and to survive the execution and delivery of this Master Lease, each Lease Schedule and each other Lease Document.  With respect to each Lease Schedule, the obligations of Lessee under Sections 13, 14 and 15 hereof, together with any of Lessee's obligations under the other provisions of this Master Lease (as incorporated therein) which have accrued but not been fully satisfied, performed or complied with prior to the expiration or earlier cancellation or termination of such Lease Schedule, shall survive the expiration or earlier cancellation or termination thereof.

    (d)   Expenses; Substitute Performance.  All of Lessee’s obligations hereunder and under each Lease shall be performed at Lessee’s sole expense.  Lessee shall reimburse Lessor promptly upon demand for all expenses incurred by Lessor in connection with the enforcement of each Lease and the related Lease Documents including (1) any action taken by Lessor at Lessee’s request, or in connection with any option exercised by Lessee under the Lease Documents, (2) the filing of UCCs, recording of documents and instruments in real property records and other filings and recordings in connection with Lessor’s rights and interests in and to Equipment and Collateral, (3) any Enforcement Costs not recovered pursuant to Section 17, (4) all inspections after the occurrence of an Event of Default, and (5) all lien search reports (and copies of filings) requested by Lessor.  If Lessee fails to perform any of its obligations under any Lease Document, Lessor shall have the right, but shall not be obligated, to effect such performance, and Lessee shall reimburse Lessor, upon demand, for all expenses incurred by Lessor in connection with such performance.  Lessor's effecting such compliance shall not be a waiver of Lessee's breach.  All amounts payable under this Section, if not paid when due, shall be paid to Lessor together with interest thereon at the Default Rate.  In addition to the foregoing, each time Lessee and Lessor enter into a Lease Schedule, Lessee shall pay to Lessor a fee (in each case, the “Documentation Fee” in the amount of (i) $500 if the Acquisition Cost for the Equipment covered by the Lease Schedule is $2,500,000 or more or (ii) $250 if the Acquisition Cost for the Equipment covered by the Lease Schedule is less than $2,500,000.

    (e)   Power of Attorney.  Lessee irrevocably appoints Lessor as Lessee's attorney-in-fact (which power shall be deemed coupled with an interest) to execute, endorse and deliver any documents and checks or drafts relating to or received in payment for any loss or damage under the policies of insurance required by the Lease Documents, but only to the extent that the same relates to the subject Equipment.

    (f)   Jury Trial Waiver.  LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH LESSEE AND/OR LESSOR MAY BE PARTIES ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS MASTER LEASE, ANY LEASE SCHEDULE, ANY OTHER LEASE DOCUMENTS, ANY LEASE OR ANY EQUIPMENT.

 

    (g)   Notices.  All notices (excluding billings and communications in the ordinary course of business) hereunder shall be in writing, personally delivered, delivered by overnight courier service, sent by facsimile transmission (with confirmation of receipt), or sent by certified mail, return receipt requested, addressed to the party to which it is directed at its respective address stated below the signature of such party or at such other address as such party shall from time to time designate in writing to the other party; and shall be effective from the date of receipt.

    (h)   Governing Law; Jurisdiction.  No Lease Schedule shall be effective unless and until accepted by execution by an officer of Lessor at the address set forth below the signature of Lessor hereto.  THIS MASTER LEASE AND ALL OF THE OTHER LEASE DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER, SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT.  The parties agree that any action or proceeding arising out of or relating to each Lease may be commenced in any state or Federal court located in Harris County, Texas, and agree that a summons and complaint commencing an action or proceeding in any such court shall be properly served and shall confer personal jurisdiction if served personally or by certified mail to it at the mailing address below Lessee’s signature, or as it may provide in writing from time to time, or as otherwise provided under the laws of the State of Texas.

 

  

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    (i)   Counterpart Originals.  This Master Lease and all of the other Lease Documents may be executed in counterparts.  Photocopies or facsimile transmissions of signatures shall be deemed original signatures and shall be fully binding on the parties to the same extent as original signatures.  The transfer or possession of the “Original” of this Master Lease shall be irrelevant to the full or collateral assignment of, or grant of security interest in, any Lease or any Lease Schedule; provided, however, no security interest in any Lease Schedule may be created through the transfer, possession or control, as applicable, of any counterpart of such Lease Schedule other than the original thereof, which shall be identified as the document or record (as applicable) marked "Original" and all other counterparts shall be marked "Duplicate."

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS.]

  

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The parties hereto have caused this Master Lease Agreement to be duly executed as of the day and year first above set forth.

 

	
LESSOR:

	  	
LESSEE:

	  	  	  
	
EUROMIN INC.

	  	
BKEP OPERATING, L.L.C.

	  	  	  
	
By: /s/ John D. Zimmerman

	  	
By: /s/ Alex Stallings

	
Name: John D. Zimmerman

	  	
Name: Alex Stallings

	
Title: Attorney in Fact

	  	
Title: Chief Financial Officer

	  	  	  
	
1100 Louisiana Street, Suite 5500

	  	
6120 South Yale Avenue, Suite 500

	
Houston, Texas 77002

	  	
Tulsa, Oklahoma 74136

	
Attn: Mr. James C. Dyer, IV

	  	
Attn: Chief Financial Officer

	
Fax: 713-230-1111

	  	
Fax:  918-237-4001

 

 

 

 

 

 

 

 

[EXECUTION PAGE OF MASTER LEASE AGREEMENT]

  

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Annex A

to

Master Lease Agreement

Definitions and Rules of Construction

1.  DEFINITIONS.  Unless expressly provided otherwise in any Lease Document, the following terms shall have the meaning ascribed thereto as follows when used in each of the Lease Documents (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Abatement” is defined in Section 2 of this Master Lease.

“Acceptance Date” is defined in each respective Lease Schedule.

“Acquisition Cost” means, with respect to Equipment covered by a Lease Schedule, the amount defined as such in the Lease Schedule.

“Addendum” means an amendment, modification or other supplement to this Master Lease from time to time executed and delivered by Lessee and Lessor.

“Assignee” means the beneficiary of any Assignment, together with its successors and assigns.

“Assignment” is defined in Section 18(b) of this Master Lease.

“Base Term” is defined in each respective Lease Schedule.

“Basic Rent” means the scheduled rental installments for Equipment that are due for the Base Term of the related Lease Schedule.

“Casualty” means any loss, theft, confiscation, taking, unavailability, damage or total or partial destruction of Equipment.

“Casualty Equipment” means any Equipment that suffers a Casualty.

“Claim” means all claims, losses, liabilities (including negligence, tort and strict liability), damages, demands, judgments, settlements, suits, and all legal proceedings and any and all costs and expenses in connection therewith (including attorneys’ fees and expenses) that in any way relate to or arise out of any Lease, this Master Lease, any Lease Document, the transactions contemplated thereby or any of the Equipment, including (a) the selection, manufacture, condition, purchase, financing, acceptance or rejection of Equipment, (b) the ownership of Equipment, (c) the delivery, nondelivery, installation, lease, possession, maintenance, use, condition, repair, return, operation or disposition of any of the Equipment, (d) any patent, copyright or trademark infringement, (e) any claim, loss, cost or expense involving alleged damage to the environment relating to the Equipment, including investigation, removal, cleanup and remedial costs, (f) any personal injury, wrongful death or property damage arising under any statutory or common law or tort law theory whatsoever, (g) any administrative process or proceeding or judicial or other similar proceeding (including any alternative dispute resolution process and any bankruptcy proceeding) in any way connected with any matter addressed in any of the Lease Documents and (h) any latent or other defects in any of the Equipment whether or not discoverable by Lessor.

“Collateral” means, with respect to each Lease, all of the following (whether now or hereafter created or existing and including any other collateral described in the Lease): (a) the Equipment covered by such Lease (including all inventory, fixtures or other property comprising the Equipment), together with all related software (embedded therein or otherwise) and all additions, attachments, accessories and accessions thereto whether or not furnished by the Supplier; (b) all subleases, chattel paper, accounts, security deposits, and general intangibles relating to any of that Equipment, and any and all substitutions, replacements or exchanges for any item of such Equipment or other collateral described in the Lease; and (c) any and all insurance and/or other proceeds of the Equipment and/or other collateral described in the Lease.

“Commitment” is defined in Section 1 of this Master Lease.

“Default” means any event which, with the lapse of time or the giving of notice, or both, would constitute an Event of Default.

“Default Rate” means interest at a rate equal to the lesser of (a) 12% per annum and (b) the highest rate permitted by applicable law under the circumstances.

  

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“Enforcement Costs” means all reasonable legal fees (including for instituting, prosecuting or defending litigation and/or alternative dispute resolution proceedings) and other enforcement costs and expenses incurred by reason of any Default or Event of Default or the exercise of Lessor's rights or remedies, including all expenses incurred in connection with the return or other recovery of any Equipment in accordance with the terms of the subject Lease or in placing Equipment in the condition required thereby, or the sale, re-lease or other disposition of Equipment (including but not limited to costs of transportation, possession, storage, insurance, taxes, lien removal, repair, refurbishing, advertising and brokers’ fees), and all other pre-judgment and post-judgment enforcement related actions taken by Lessor or any actions taken by Lessor in any bankruptcy case involving Lessee, the Equipment, or any other person.

“Equipment” means the equipment and other property described in each Lease Schedule.

“Event of Default” is defined in Section 16 of this Master Lease.

“GAAP” means generally accepted accounting principles consistently applied with past periods.

“Imposition” is defined in Section 14(c) of this Master Lease.

“Improvement” means any addition, alteration, modification or improvement to Equipment.

“Indemnitee” is defined in Section 13 of this Master Lease.

“Interim Rent” means the rental installments for Equipment that are due for the period from the Acceptance Date to the Lease Term Commencement Date for the Equipment.

“Interim Term” is defined in each respective Lease Schedule.

“Late Charge” means an amount equal to five percent 5% of the unpaid Rent.

“Lease” means each separate, integrated leasing agreement formed under the Lease Documents.

“Lease Documents” means this Master Lease, each Lease Schedule, each Commitment (if any) and all other agreements, documents, certificates, authorizations and instruments executed in connection with this Master Lease and/or any one or more Lease Schedules.

“Lease Schedule” means each Lease Schedule executed pursuant to this Master Lease and incorporating by reference the terms and conditions of this Master Lease.

“Lease Term” means the term of lease with respect to each respective item of Equipment pursuant to the provisions of the related Lease Schedule, which shall commence, in each case, on the Acceptance Date specified in the related Lease Schedule and continue for the period described in that Lease Schedule.

“Lease Term Commencement Date” is defined in each respective Lease Schedule.

 “Lien” means any claim, lien, encumbrance, attachment or rights of others.

“Liquidated Damages” is defined in Section 17(a)(7) of this Master Lease.

“Loss” is defined in Section 15(b) of this Master Lease.

“Loss Payment Date” means the next Payment Date immediately following the occurrence of a Total Loss of Equipment.

“MACRS Deductions” shall mean the deductions under Section 167 of the Internal Revenue Code of 1986, as now or hereafter amended (the “Code”), determined in accordance with the Modified Accelerated Cost Recovery System with respect to the Acquisition Cost of each item of the Equipment using the accelerated method set forth in Section 168(b)(1) or 168(b)(2) of the Code as in effect on the date of the related Lease Schedule for property assigned to the class of property specified in such Lease Schedule.

“Material Adverse Effect” means (a) a materially adverse effect on the business, condition (financial or otherwise), operations, performance or properties of Lessee taken as a whole, (b) a material impairment of the ability of Lessee to perform its obligations under or remain in compliance with each Lease Schedule or any of the other Lease Documents, or (c) a materially adverse effect on the validity or enforceability of any Lease Document or the rights and remedies available to Lessor thereunder.

 

  

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“Other Payment” means any amount payable in accordance with the terms of a Lease that does not constitute Interim Rent, Basic Rent or Renewal Rent.

“Permitted Lien” means (a) any Lien for taxes, assessments or other governmental charges not yet due and payable, (b) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and other similar Liens imposed by law, which are incurred in the ordinary course of Lessee’s business for sums that are not delinquent, (c) Liens in favor of Lessor, and (d) Liens explicitly identified in any Lease Document as a “permitted lien.”

“Payment Date” is defined in each respective Lease Schedule.

“Records” means, with respect to the Equipment, all records of maintenance, modifications, additions and major repairs, computerized maintenance history, maintenance and repair manuals and all similar items.

“Renewal Rent” means the scheduled rental installments for Equipment that are due for each Renewal Term (as defined in the related Lease Schedule), if any, of the related Lease Schedule.

“Rent” means, collectively, Interim Rent, Basic Rent, Renewal Rent and Other Payments.

“Replacement Part” means a new or reconditioned replacement part that is free and clear of all Liens and has a value, utility and remaining useful life at least equal to the part (or parts) being replaced (assuming the part (or parts) was in the condition required by the subject Lease).

“Rider” means an amendment, modification or other supplement to a Lease Schedule from time to time executed and delivered by Lessee and Lessor.

"Stipulated Loss Value” has, for any item of Equipment, the meaning provided in the applicable Lease Schedule.

“Supplier” means each manufacturer and/or vendor of Equipment.

“Supply Contract” means each purchase agreement, invoice, document and/or instrument pertaining to the acquisition of Equipment.

“Tax Indemnification Payment” shall mean such amount as, after consideration of (a) all taxes required to be paid by Lessor in respect of the receipt thereof under the laws of any governmental or taxing authority in the United States, and (b) the amount of any interest or penalty which may be payable by Lessor in connection with the related Loss, shall be required to cause Lessor's after-tax net return (the “Net Return”) to be equal to, but no greater than, the Net Return, computed consistently with current tax laws (and with the assumption that Lessor is taxed at the highest marginal Federal and state tax rates) as of the date of the respective Lease Schedule, that would have been available to Lessor had the Loss not occurred.

“Total Loss” means, with respect to Casualty Equipment, (a) the actual or constructive total loss of the Casualty Equipment, (b) the loss, disappearance, theft or destruction of the Casualty Equipment, or damage thereto that is uneconomical to repair or renders it unfit for normal use, or (c) the condemnation, confiscation, requisition, seizure, forfeiture or other taking of title to or use of the Casualty Equipment or the imposition of any Lien thereon by any governmental authority.

“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in effect in the State of Texas or in any other applicable jurisdiction; and any reference to an article (including Article 2A) or section thereof shall mean the corresponding article or section (however termed) of any such applicable version of the Uniform Commercial Code.

“UCCs” means UCC financing statements.

  

15

 

  

2.  FURTHER DEFINITIONS; RULES OF CONSTRUCTION.  (a) Further Definitions.  Unless expressly provided otherwise in any Lease Document, the following terms shall have the meaning ascribed thereto as follows when used in each of the Lease Documents: (1) “affiliate” means, with respect to any given person, (A) each person that directly or indirectly owns or controls, whether beneficially or as a trustee, guardian or other fiduciary, 25% or more of the voting stock, membership interests or similar equity interests having ordinary voting power in the election of directors or managers of such person, (B) each person that controls, is controlled by, or is under common control with, such person, and (C) each of such person’s officers, directors, members, joint venturers and partners (and, for the purposes of this definition, “control” of a person means the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise); (2) "applicable law" or "law" means any Federal, state and local law, rule, regulation, ordinance, order, code, common law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, award, permit or similar norm or decision of any governmental authority as the same may be amended, superseded or replaced from time to time; (3) “AS IS, WHERE IS” means as is, where is, without warranty, express or implied, with respect to any matter whatsoever; (4) "business day" means any day, other than a Saturday, Sunday, or legal holiday for commercial banks under the laws of the State of Texas; (5) "governmental authority" means any federal, state, county, municipal, regional or other governmental authority, agency, board, body, instrumentality or court, in each case, whether domestic or foreign; and (6) "person" means any individual, corporation, limited liability entity, partnership, joint venture, or other legal entity or a governmental authority.

(b) Rules of Construction.  The following terms when used herein or in any other Lease Document shall be construed as follows: (1) "herein," "hereof," "hereunder," etc., means in, of, under, etc. this Master Lease or such other Lease Document in which such term appears (and not merely in, of, under, etc., the section or provision where the reference occurs); (2) "including" means including without limitation unless such term is followed by the words "and limited to," or similar words; and (3) "or" means at least one, but not necessarily only one, of the alternatives enumerated.  Any defined term used in the singular preceded by "any" indicates any number of the members of the relevant class.  Any Lease Document or other agreement or instrument referred to herein or in any other Lease Document means such agreement or instrument as amended, modified and supplemented from time to time.  Captions and headings in the Lease Documents are for convenience of reference only and shall not affect the interpretation of the Lease Documents.

 

  

16

 

  

[FOR TRACTORS, USE A SEPARATE SCHEDULE FROM THE SCHEDULE USED FOR TRUCKS AND CARS]

LEASE SCHEDULE NO. ______

   (True Lease)

This LEASE SCHEDULE NO.     (the “Lease Schedule”) dated as of                               , 20__ (the “Acceptance Date”), between BKEP OPERATING, L.L.C., a Delaware limited liability company (together with its successors and permitted assigns, “Lessee”), and EUROMIN INC., a Delaware corporation (together with its successors and permitted assigns, “Lessor”), is executed pursuant to the Master Lease Agreement dated as of July 26, 2010 (the “Master Lease”), between Lessee and Lessor.  All of the provisions of the Master Lease are incorporated herein by reference and capitalized terms used herein and not defined herein shall have the meanings set forth in the Master Lease.  To the extent the provisions of the Master Lease conflict with the provisions of this Lease Schedule, the provisions of this Lease Schedule shall control.

 

1.  EQUIPMENT; LOCATION; ACQUISITION COST.  The Equipment covered by this Lease Schedule is described in the Schedule of Equipment attached hereto as Exhibit A (the “Schedule of Equipment”), which is incorporated herein by this reference.  Lessee hereby certifies that, as of the Acceptance Date, Lessee has unconditionally and irrevocably accepted such Equipment for all purposes of this Lease Schedule and the related Lease and the description of the Equipment set forth in the attached Schedule of Equipment is accurate, complete and reasonably identifies the Equipment covered by this Lease Schedule for purposes of the UCC.  Such Equipment is currently located at (or, if the Equipment is mobile goods, the location of the principal garage or storage site of such Equipment is currently at) the location specified in the attached Schedule of Equipment.  The aggregate invoice cost (the “Acquisition Cost”) for all of such Equipment is $______.

 

2.  LEASE TERM.  The Lease Term with respect to the Equipment covered by this Lease Schedule shall commence on the Acceptance Date and continue uninterrupted to the first day of the first calendar immediately following the Acceptance Date (the “Lease Term Commencement Date”), and thereafter for a continuous period through to and including the last Payment Date specified in Section 3(b) below (the “Base Term”), unless sooner terminated pursuant to the terms of this Lease Schedule and/or any other Lease Documents.  If a Rider contemplates that the Lease Term with respect to the Equipment covered by this Lease Schedule may be extended immediately upon expiration of the Base Term (or a Renewal Term as defined below), such Lease Term shall, unless sooner terminated pursuant to the terms of this Lease Schedule and/or any other Lease Documents, include the period(s) specified in the Rider (each, a “Renewal Term”) if the Lease Term is, in fact, extended in accordance with the terms of the Rider.

3.  RENTAL PAYMENTS.  (a) Interim Rent.  For the period from the Acceptance Date to the Lease Term Commencement Date (the “Interim Term”), Lessee shall pay as Rent (“Interim Rent”) for the Equipment covered by this Lease Schedule, an amount equal to $      for each day during the Interim Term.  Interim Rent shall be due in arrears, on the Lease Term Commencement Date.

(b) Basic Rent.  Commencing on the Lease Term Commencement Date and on the first day of each consecutive month thereafter during the Base Term (each, a “Payment Date”), Lessee shall pay to Lessor in arrears, as Rent (“Basic Rent”) for the Equipment the applicable amount as set forth in Exhibit A.

(c) Sales, Use and Property Taxes.  Lessor will invoice Lessee for all sales, use and/or personal property taxes as and when due and payable (either in reimbursement for amounts paid in connection with such taxes by Lessor or for payments otherwise due taxing authorities in accordance with applicable law), unless Lessee has delivered to Lessor a valid exemption certificate with respect to such taxes.  Delivery of such certificate shall constitute Lessee's representation and warranty that no such tax shall be or become due and payable at any time with respect to the Equipment covered by this Lease Schedule and, without in any way limiting the terms of Section 14 of the Master Lease, Lessee shall indemnify and hold harmless Lessor from and against any and all liability or damages, including late charges and interest, which Lessor may incur by reason of the assessment of any such tax.

4. REPRESENTATIONS AND WARRANTIES.  By its execution and delivery of this Lease Schedule, Lessee hereby represents, warrants and agrees as follows:  (a) All representations and warranties of Lessee contained in the Master Lease are hereby restated as of the Acceptance Date and are true and correct as of such date; (b) No event or circumstance has occurred since the date of the most recent financial statement provided by Lessee to the Lessor that has had, or would be reasonably likely to have, a Material Adverse Effect; (c) No Default or Event of Default exists as of the date hereof; and (d) Lessee has selected the Equipment and the Supplier of the Equipment and prior to the execution of this Lease Schedule, has received and approved the Supply Contract under which the Equipment will be acquired by Lessor for purposes of this Lease.

 

  

  

 

  

5.  STIPULATED LOSS VALUE.  This Stipulated Loss Value of the Equipment covered by this Lease Schedule shall be an amount equal to the Estimated Residual Value of the Equipment as of the Loss Payment Date on which the Stipulated Loss Value is due plus all remaining Basic Rent payable in respect of that Equipment (discounted to present value at an interest rate equal to the implied interest rate included in the Basic Rent.

6.  ESTIMATED RESIDUAL VALUE.  The “Estimated Residual Value” for each item on the Schedule of Equipment is shown on that Schedule.

7.  DEPRECIABLE LIFE OF EQUIPMENT.  Lessee hereby represents and warrants that the depreciable life of the Equipment covered by this Lease Schedule for purposes of Section 168 of the Code is years.

8.  INTEREST IN EQUIPMENT.  The Equipment covered by this Lease Schedule is and shall at all times be and remain the sole and exclusive personal property of Lessor, and notwithstanding any trade-in or down payment by or on behalf of Lessee with respect to such Equipment, Lessee shall have no right, title or interest therein or thereto except as to the use thereof subject to the terms or conditions of this Lease Schedule.

9.  RIDERS.  Riders executed in connection with this Lease Schedule are checked below:

        o   Split TRAC Rider                   o Return Rider

                

10.  ARTICLE 2A NOTICE.  IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE FOLLOWING DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A) THE SUPPLIERS ARE LISTED IN THE ATTACHED SCHEDULE OF EQUIPMENT, (B) LESSEE IS ENTITLED TO THE PROMISES AND WARRANTIES, INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO LESSOR BY SUPPLIERS WHO ARE SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS PART OF THE CONTRACT BY WHICH LESSOR ACQUIRED THE EQUIPMENT OR THE RIGHT TO POSSESSION AND USE OF THE EQUIPMENT AND (C) WITH RESPECT TO SUCH EQUIPMENT, LESSEE MAY COMMUNICATE WITH THE SUPPLIERS AND RECEIVE AN ACCURATE AND COMPLETE STATEMENT OF SUCH PROMISES AND WARRANTIES, INCLUDING ANY DISCLAIMERS AND LIMITATIONS OF THEM OR OF REMEDIES. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY LIMIT OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES UNDER THE DEFAULT AND REMEDIES SECTION OF THE MASTER LEASE.

11.  LEASE.  Unless expressly provided otherwise in a Lease Schedule denominated as a “True Lease” held by Lessor or in a Leasing Record denominated as a “True Lease” held by Lessor, this Lease Schedule, together with all other Lease Schedules and Leasing Records denominated as a “True Lease” and held by Lessor at the time of determination, together with the other Lease Documents to the extent, and only to the extent, relating thereto or to the Equipment covered thereby, shall collectively constitute a separate, integrated leasing agreement with respect to the Equipment and other matters covered thereby (and a “Lease” for purposes of the Lease Documents).  Unless expressly provided otherwise in a Lease Schedule denominated as a “True Lease” held by the Assignee or in a Leasing Record denominated as a “True Lease” held by the Assignee, all Lease Schedules and Leasing Records denominated as a “True Lease” and held by each respective Assignee at the time of determination, together with the other Lease Documents to the extent, and only to the extent, relating thereto or to the Equipment covered thereby, shall collectively constitute a different, separate and integrated leasing agreement with respect to the Equipment and other matters covered by such Lease Schedules and Leasing Records held by the Assignee (and also a “Lease” for purposes of the Lease Documents). Notwithstanding the foregoing, if at any time the terms of any (a) Lease Schedule denominated as a “True Lease” held by Lessor  or any Assignee at the time of determination or in a Leasing Record denominated as a “True Lease” held by Lessor or any Assignee at the time of determination, or (b) other Lease Document connected therewith, would cause any Lease to be characterized as other than a “finance lease” as defined in Article 2A of the UCC, such Lease Schedule or Leasing Record, together with the other Lease Documents to the extent, and only to the extent, relating thereto or to the Equipment covered thereby, shall be deemed to be (i) a part of the Lease, if any, comprised of Lease Schedules or Leasing Records denominated as a “Security Lease” held by Lessor or the Assignee, respectively, if any, or (ii) if there is no other such Lease held by Lessor or the Assignee, respectively, at the time of determination, a separate, integrated leasing agreement with respect to the Equipment and other matters covered thereby (and also a “Lease” for purposes of the Lease Documents).

 

  

  

 

  

12.  PAYMENT AUTHORIZATION.  Lessor is hereby irrevocably authorized and directed by Lessee to pay the Acquisition Cost specified above by check, wire transfer or otherwise according to the following instructions:

 

Company Name                                                      Address/Account Information                                                                Amount

 

                                                                                                                                     

 

                                                                                                                                     

 

                                                                                                                                     

13.  REMITTANCES.  All amounts due under this Lease Schedule, including but not limited to Interim Rent and Basic Rent, shall be paid in lawful money of the United States of America in immediately available funds to the following account, or to such other account as designated by Lessor to Lessee in writing:

 

If by Mail:

 

EUROMIN INC.

1100 Louisiana Street

Suite 5500

Houston, Texas 77002

If by Wire Transfer:

 

Clearing Bank: JPMorgan Chase Bank

       New York, NY

ABA No.:          021-000-021

Account No.:    9102739183

In favor of:        Euromin Inc.

Lessee:              BKEP Operating, L.L.C.

14.  AMENDMENTS.  All amendments or modifications hereto must be in writing and signed by the person against whom the amendment is sought to be enforced or claimed to be binding.

 

15.  ACH AUTHORIZATION.  Lessee has the option to pay the obligations due hereunder by Automatic Debit to their checking account.  By checking the “Accept” box below and completing the required information, Lessee hereby authorizes Lessor to initiate debit and/or credit entries to the checking account described below, for the purpose of satisfying the obligations due hereunder, inclusive of rent, sales taxes, property taxes, and any types of fees.

 

   o    Accept this option (complete the information below)

 

	
Name of Financial Institution:

	  
	
Address of Financial Institution:

	  
	  	  
	  	  
	
Account Title:

	  
	
ABA/Routing Number:

	  
	
Account Number:

	  

 

 o  Decline this option

This authorization shall be a continuing authorization and shall remain in full force and effect until such time as Lessor receives written notification from the undersigned (sent to Lessor in the manner and at the address as set forth in the Master Lease) that this authorization has been terminated.

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS.]

  

  

 

  

The parties hereto have caused this Lease Schedule to be duly executed as of the date first set forth above.

 

	
LESSOR:

	  	
LESSEE:

	  	  	  	  	  
	
EUROMIN INC.

	  	
BKEP OPERATING, L.L.C.

	  	  	  	  	  
	
By:

	  	  	
By:

	  
	
Name:

	  	  	
Name:

	  
	
Title:

	  	  	
Title:

	  

 

ORIGINAL No. ____OF ____

[EXECUTION PAGE OF LEASE SCHEDULE NO. ____]

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