BB&T EQUIPMENT FINANCE CORPORATION
Exhibit 10.4
BB&T EQUIPMENT FINANCE CORPORATION
RIDER NO. 1 TO EQUIPMENT SCHEDULE SERIES A NO. 1
To and
part of Equipment Schedule Series A No. 1 dated as of
the 27th day of
November, 2009
(the “Schedule”), executed pursuant to that certain Master
Lease Agreement dated as of the 25th day
of November, 2009 (the “Lease”), each between BB&T EQUIPMENT FINANCE CORPORATION, its
successors and assigns (“Lessor”), and POWERSECURE, INC., its successors and permitted assigns
(“Lessee”).
As used herein, “Equipment” shall mean the Equipment described on all Schedules of this
series.
A. OPTION TO RENEW. Provided that no Default or Event of Default has then occurred, Lessee
shall have the option to renew the Lease, at the expiration of the term of the Lease, with respect
to all but not less than all of the Equipment, on the terms and conditions of the Lease, for a
negotiated renewal term at a periodic rent equal to the Fair Market Rental Value of such Equipment
determined at the time of renewal. If Lessee desires to exercise this option it shall give Lessor
written notice of its intention to exercise this option to renew at least two hundred forty (240)
days before expiration of the term of the Lease with respect to the first Schedule of this series
to terminate in accordance with its terms. Thereafter, Lessor and Lessee shall determine the
periodic rent to be paid during the renewal term. Not less than one hundred eighty (180) days
before expiration of the term of the Lease with respect to the first Schedule of this series to
terminate in accordance with its terms, Lessee shall give Lessor irrevocable written notice of its
election to renew on the terms mutually agreed upon during negotiations. Such election shall be
effective with respect to all Equipment leased under all Schedules of this series.
For purposes of this Section, “Fair Market Rental Value” shall be deemed to be an amount equal
to the rental, as installed and in use, obtainable in an arms’ length transaction between a willing
and informed lessor and a willing and informed xxxxxx under no compulsion to lease (and assuming
that, as of the date of determination, the Equipment is in at least the condition required by
Section 13 of the Lease and Rider No. 2 of this Schedule). If the parties are unable to agree on
the Fair Market Rental Value of the Equipment, then Lessor and Lessee shall at Lessee’s expense
obtain appraisal values from three independent appraisers (one to be selected by Lessor, one by
Xxxxxx, and the other by the two selected by Lessor and Lessee; each of whom must be associated
with a professional organization of equipment or personal property appraisers, such as the American
Society of Appraisers) and the average Fair Market Rental Value as determined by such appraisers
shall be binding on the parties hereto. If the appraisers selected by Xxxxxx and Xxxxxx are unable
to agree on the third appraiser, then Lessor will select the appraiser to provide the third
appraisal value.
B. OPTION TO PURCHASE. (1) Upon the termination of a Services Agreement requiring the
deployment of one or more items of Equipment leased pursuant to this Lease (the “Subject
Equipment”), within sixty (60) days of the date of such termination, Lessee shall give Lessor
irrevocable written notice of its election either: (a) to redeploy the Subject Equipment pursuant
to a Services Agreement, in which case such redeployment shall be completed, and Lessee shall
comply with its obligations pursuant to Sections 5(a)(9) and (13) hereof, within ninety (90) days
after the date of termination of the Services Agreement; or (b) to purchase all but not less than
all of the Subject Equipment within ninety (90) days after the date on which such notice is
provided by Lessee (the “Special Termination Date”). If Lessee elects to purchase the Subject
Equipment, on the Special Termination Date Lessee shall pay to Lessor in cash any Rent due on that
date (if such date is a rent payment date, or if not a rent payment date then the pro-rated Rent
calculated as of such date), plus the purchase price for the Subject Equipment, determined as
hereinafter provided. The purchase price of the Subject Equipment shall be an amount equal to the
greater of: (x) the Stipulated Loss Value of the Equipment as of the Special Termination Date (if
such date is a rent payment date, or if not a rent payment date then the interpolated Stipulated
Loss Value as of such date), or (y) the Fair Market Value of the Equipment as of the Special
Termination Date, together with all taxes and charges upon sale.
(2) Provided that no Default or Event of Default has then occurred, Lessee shall have the
option to purchase, on June 1, 2016 (the “Early Termination Date”), all but not less than all of
the Equipment upon the following terms and conditions: If Lessee desires to exercise this option
it shall give Lessor irrevocable written notice of its election to purchase at least thirty (30)
days and not more than one hundred eighty (180) days before the Early Termination Date with respect
to the first Schedule of this series to terminate in accordance with its terms. Such election
shall be effective with respect to all Equipment leased under all Schedules of this series. On the
Early Termination Date with respect to
each Schedule, Lessee shall pay to Lessor in cash any Rent due on that date plus the purchase
price for the Equipment so purchased, determined as hereinafter provided. The purchase price of
the Equipment shall be an amount equal to 26.088% of the original Total Invoice Cost of the
Equipment (as specified on this Schedule), together with all taxes and charges upon sale. Lessor
and Xxxxxx agree that the purchase price represents a reasonable prediction of the Fair Market
Value of the Equipment at the time the option is exercisable.
(3) Provided that no Default or Event of Default has then occurred, Lessee shall have
the option to purchase, upon the expiration of the term of the Lease, or of any subsequent renewal
term, if applicable, all but not less than all of the Equipment upon the following terms and
conditions: If Lessee desires to exercise this option it shall give Lessor written notice of its
intention to exercise this option to purchase at least two hundred forty (240) days before
expiration of the term of the Lease with respect to the first Schedule of this series to terminate
in accordance with its terms. Thereafter, Lessor and Lessee shall determine the purchase price for
the Equipment. Not less than one hundred eighty (180) days before expiration of the term of the
Lease with respect to the first Schedule of this series to terminate in accordance with its terms,
Lessee shall give Lessor irrevocable written notice of its election to purchase on the terms
mutually agreed upon during negotiations. Such election shall be effective with respect to all
Equipment leased under all Schedules of this series. Thereupon, at the expiration of the term of
the Lease, Lessee shall pay to Lessor in cash any Rent due on that date plus the purchase price for
the Equipment so purchased, determined as hereinafter provided. The purchase price of the
Equipment shall be an amount equal to its then Fair Market Value, together with all taxes and
charges upon sale.
(4) For purposes of this Section, “Fair Market Value” shall be deemed to be an amount equal
to the sale price of the Equipment, as installed and in use, obtainable in an arms’ length
transaction between a willing and informed buyer and a willing and informed seller under no
compulsion to sell (and assuming that, as of the date of determination, the Equipment is in at
least the condition required by Section 13 of the Lease and Rider No. 2 of this Schedule). If the
parties are unable to agree on the Fair Market Value of the Equipment, then the appraisal procedure
set forth in Section A hereof shall be followed. Notwithstanding any election of Lessee to
purchase, the provisions of the Lease shall continue in full force and effect until the passage of
ownership of the Equipment upon the date of purchase. On the date of purchase, Lessor shall
deliver to Lessee a bill of sale transferring and assigning to Lessee without recourse or warranty,
except (with respect to the status of title conveyed) in respect of Xxxxxx’s acts, all of Lessor’s
right, title and interest in and to the Equipment. Lessor shall not be required to make and may
specifically disclaim any representation or warranty as to the condition of the Equipment or any
other matters.
| BB&T EQUIPMENT FINANCE CORPORATION | POWERSECURE, INC. | |||||||||||||||
| Lessor | Lessee | |||||||||||||||
By:
|
/s/ Xxxxxxx XxXxxxx | By: | /s/ Xxxxxxxxxxx X. Xxxxxx | |||||||||||||
| Name: | Xxxxxxx XxXxxxx | Name: | Xxxxxxxxxxx X. Xxxxxx | |||||||||||||
| Title: | Vice President | Title: | Chief Financial Officer | |||||||||||||
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