EQUIPMENT LEASE AGREEMENT

EQUIPMENT LEASE AGREEMENT THIS AGREEMENT is made and entered into on, by and between Utility Energy Systems, Inc., a Minnesota Corporation, hereinafter referred to as Lessor, and, hereinafter referred to as Lessee. Date Company Name NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, the parties mutually agree as follows: 1. Lease. Lessor hereby leases to Lessee, and Lessee hereby leases and hires from Lessor, all equipment and other property described in Schedule A Description of Equipment executed by the parties and which is made a part hereof by reference. All said equipment and other property described hereinafter collectively referred to as Equipment. 2. Term. The term of this Agreement shall commence on (Date) and continue until terminated by either party giving to the other party at least twenty (20) days prior written notice to end the term. 3. Notices. All notices given pursuant to this Agreement shall be given in writing and shall be effective upon receipt. All such notices shall be delivered by hand, sent by facsimile transmission or sent by registered or certified mail, postage prepaid and return receipt requested, to the parties at the addresses as follows: Lessor: Utility Energy Systems, Inc. Attention: Boyden D. Kneen Lessee: (Company Name) (Address) 9901 Indigo Trail North (City, State, Zip) St. Paul, MN 55115 Telephone: 651-762-8886 Telephone: Facsimile: or such other addresses or facsimile numbers as may have been provided to the other party in accordance with the terms of this Paragraph. Notice given by hand shall be effective upon receipt; notice given by facsimile transmission shall be effective when given (unless not given during business hours, in which event such notice shall be deemed given on the next following business day); and notice sent by registered or certified mail shall be deemed given four (4) days after being mailed. 4. Lessor hereby leases to Lessee all equipment identified in Schedule A, for use at such location and at such rental rate for approximately such time as is therein stated. Lessor shall furnish such Equipment F.O.B. Elk River, MN. Leasee pays for round trip expenses to site up front. I understand there are Safety Considerations when working with propane equipment, and that the use and installation would follow NFPA-58 code guidelines. Initial I have read and agreed to the four pages and Schedule A following this first page IN WITNESS WHEREOF, the parties hereto have executed this Agreement. UTILITY ENERGY SYSTEMS, INC., a Minnesota corporation, Lessee: Lessor: By: Initial Title: Title

5. Rent. The rent for the Equipment shall be as set forth in Schedule A. Lessee shall pay Lessor said rent at the office of Lessor, or to such other person and/or at such other place as Lessor may designate in writing, on the first (1st) rental day of each month in advance for that month. Lessee shall pay Lessor interest at twelve percent (12%) or the highest lawful rate, whichever is less, on any delinquent payment from the date when such payment was due until paid and on any other sum for breach of this Agreement, from the date of the breach, and expenses of collection or suit, including actual attorneys fees. 6. Use. Lessee shall use the Equipment in a careful and proper manner and shall comply with and conform to all national, state, municipal and other laws, ordinances and regulations in anyway relating to the possession, transportation, use or maintenance of the Equipment. Lessee shall see that the Equipment is not subjected to careless, unusually or needlessly rough usage. 7. Lessee s Inspection: Conclusive Presumptions. Lessee shall inspect the Equipment upon receipt thereof. As to any Equipment Lessee takes possession of, Lessee agrees that it shall be conclusively presumed, as between Lessor and Lessee, that Lessee has fully inspected and acknowledged that the Equipment is in full compliance with the terms of this Agreement and in good condition and repair, and that Lessee is satisfied with and has accepted the Equipment in such good condition and repair. 8. Lessor s Inspection. Lessor shall at any and all times during business hours have the right to enter into and upon the premises where the Equipment may be located for the purpose of inspecting the same or observing its use. Lessee shall give Lessor immediate notice of any attachment or other judicial process affecting any item of Equipment and shall, whenever requested by Lessor, advise Lessor of the exact location of the Equipment. 9. Alterations. Without the prior written consent of the Lessor, Lessee shall not make any alterations, additions or improvements to the Equipment. All additions and improvements of whatsoever kind or nature made to the Equipment shall belong to and become the property of Lessor upon the expiration, or earlier termination, of this Agreement. 10. Maintenance and Repairs. Lessee, at Lessee s own cost and expense for labor and materials, shall maintain the Equipment in good repair, operative condition and proper working order and shall furnish any and all parts, mechanisms and devices required to keep the Equipment in good mechanical and working order. 11. Operators. Lessee shall supply and pay all operators of the Equipment during the term. All operators shall be competent to operate such Equipment. Lessee shall provide and pay for all workmen s compensation insurance and pay all payroll taxes required by law and applying to such operators and workman. 12. Personal Property. The Equipment is, and shall at all times be and remain, personal property notwithstanding that the Equipment or any part thereof may now be, or hereafter become, in any manner affixed or attached to, or imbedded in, or permanently resting upon, real property or any building thereon, or attached in any manner to what is permanent. 13. Loss and Damage. Lessee hereby assumes and shall bear the entire risk of loss and damage to the Equipment from any and every cause whatsoever. No loss or damage to the Equipment or any part thereof shall impair any obligation of Lessee under this Agreement which shall continue in full force and effect. In the event of loss or damage of any kind whatsoever to any item of Equipment, Lessee at the option of Lessor shall: a. Place the same in good repair, condition and working order; or b. Replace the same with a like item of Equipment in at least as good repair, condition and working order as the original item of Equipment; or c. If the Equipment is determined by Lessor to be lost, stolen, destroyed or damaged beyond repair, Lessee shall pay Lessor therefore in cash the market value of such Equipment. When such payment has been made by Lessee, this Agreement shall terminate with respect to such item of Equipment so paid for and Lessee thereupon shall become entitled to ownership of such item of Equipment AS IS without warranty, express or implied, with respect to any matter whatsoever. 2

14. Surrender. Upon termination of this Agreement, Lessee shall (unless Lessee has paid Lessor in cash the amount due for any item of Equipment pursuant to Paragraph 10 hereof) return the Equipment to Lessor in good repair, condition, and working order, ordinary wear and tear resulting from proper use thereof alone excepted, by delivering the Equipment at Lessee s cost and expense to such place as Lessor shall specify within the county in which the Equipment was delivered to Lessee or to which the Equipment was moved. 15. Insurance. Lessee shall keep the Equipment insured against all risks of loss or damage from every cause whatsoever for not less than the full replacement value thereof as determined by Lessor. Lessee shall also carry public liability and property damage insurance covering the Equipment and its operation and handling in an amount not less than Five Hundred Thousand Dollars ($500,000.00)/One Million Dollars ($1,000,000.00). The proceeds of such insurance, at the option of Lessor, shall be applied as follows: a. toward the replacement, restoration or repair of the Equipment; or b. toward payment of the obligations of Lessee hereunder. Lessee hereby appoints Lessor as Lessee s attorney-in-fact to make claim for, receive payment of, and execute and endorse all documents, checks or drafts for, loss or damage under any said insurance policy. 16. Fees, Assessments, and Taxes. Lessee shall keep the Equipment free and clear of all levies, liens and encumbrances and shall pay all license fees, registration fees, assessments, charges and taxes (municipal, state and federal) which may now or hereafter be imposed upon the ownership, leasing, renting, sale, possession or use of the Equipment, excluding, however, all taxes on or measured by Lessor s income. 17. Lessor s Payment. If Lessee fails to procure or maintain the insurance or to pay the fees, assessments, charges and taxes required under this Agreement, Lessor shall have the right, but shall not be obligated, to purchase such insurance or pay said fees, assessments, charges and taxes, as the case may be. If Lessor makes such payment, any unpaid balance shall carry with it the same consequence, including interest at eight percent (8%) per annum, as failure to pay rent. 18. DISCLAIMER OF WARRANTIES. LESSOR, BEING NEITHER THE MANUFACTURER, NOR A SUPPLIER, NOR A DEALER IN THE EQUIPMENT, MAKES NO WARRENTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY, ITS DESIGN, ITS CAPACITY, ITS PERFORMANCE, ITS MATERIAL, ITS WORKMANSHIP, ITS FITNESS FOR ANY PARTICULAR PURPOSE, OR THAT IT WILL MEET THE REQUIREMENTS OF ANY LAWS, RULES, SPECIFICATIONS, OR CONTRACTS WHICH PROVIDE FOR SPECIFIC APPARATUS OR SPECIAL METHODS. LESSOR FURTHER DISCLAIMS ANY LIABILITY WHATSOEVER FOR LOSS, DAMAGE, OR INJURY TO LESSEE OR THIRD PARTIES AS A RESULT OF ANY DEFECTS, LATENT OR OTHERWISE, IN THE EQUIPMENT. AS TO LESSOR, LESSEE LEASES THE EQUIPMENT AS IS. LESSOR SHALL NOT BE LIABLE IN ANY EVENT TO LESSEE FOR ANY LOSS, DELAY, OR DAMAGE OF ANY KIND OR CHARACTER RESULTING FROM DEFECTS IN, OR INEFFICIENCY OF, EQUIPMENT HEREBY LEASED OR ACCIDENTAL BREAKAGE THEREOF. 19. Indemnity. Lessee shall indemnify Lessor against, and hold Lessor harmless from, any and all claims, actions, suits, proceedings, costs, expenses, damages and liabilities, including attorney s fees, arising out of, connected with, or resulting from the Equipment or this Agreement, including without limitation the manufacture, selection, delivery, leasing, renting, control, possession, use, operation, maintenance, or return of the Equipment. Lessee shall further indemnify Lessor, and hold Lessor harmless from all loss and damage to the equipment during the term of this Agreement. Lessee recognizes and agrees that included in this indemnity clause, but not by way of limitation, is Lessee s assumption of any and all liability for injury: disability and death of workmen and other persons caused by the operation, use, control, handling, or transportation of the equipment during the term of this Agreement. 3

20. Default. If Lessee fails to pay any rent or other amount required under this Agreement within thirty (30) days after such amount is due and payable, or if Lessee fails to observe, keep or perform any other provision of this Agreement required to be observed, kept or performed by Lessee, Lessor shall have the right to exercise any one or more of the remedies as follows: a. To declare the entire amount of rent hereunder immediately due and payable without notice or demand to Lessee. b. To sue for and recover all rents and other payments then accrued or thereafter accruing. c. To take possession of the Equipment, without demand, notice, or any court order or other process of law wherever such Equipment may be located. Lessee hereby waives any and all damages occasioned by such taking of possession. Any said taking of possession shall not constitute a termination of this Agreement as to the Equipment unless Lessor expressly so notifies Lessee in writing. d. To terminate this Agreement. e. To pursue any other remedy at law or in equity. Notwithstanding any repossession or any other action which Lessor may take, Lessee shall be and remain liable for the full performance of all obligations on the part of Lessee to be performed under this Agreement. All such remedies are cumulative, and may be exercised concurrently or separately. Lessee shall pay Lessor all costs and expenses, including attorneys fees, incurred by Lessor in exercising any of its rights or remedies hereunder or enforcing any of the terms, conditions, or provisions hereof. 21. Bankruptcy. Neither this Agreement nor any interest therein is assignable or transferable by operation of law. If any proceeding under the Bankruptcy Act, as amended, is commenced by or against the Lessee, or if the Lessee is adjudged insolvent, or if the Lessee makes any assignment for the benefit of Lessee s creditors, or if a writ of attachment or execution is levied on the Equipment and is not released or satisfied within ten (10) days thereafter, or if a receiver is appointed in any proceeding or action to which the Lessee is a party with authority to take possession or control of the Equipment, Lessor shall have and may exercise any one or more of the remedies set forth in Paragraph 18 hereof; and this Agreement shall, at the option of Lessor, without notice, immediately terminate and shall not be treated as an asset of Lessee after the exercise of said option. 22. Concurrent Remedies. No right or remedy herein conferred upon or reserved to Lessor is exclusive of any other right or remedy provided herein or by law or equity. Each right or remedy shall be cumulative of every other right or remedy given hereunder or hereafter existing at law or in equity or given by statute or otherwise, and may be enforced concurrently therewith or from time to time. 23. Lessor s Expenses. Lessee shall pay Lessor all costs and expenses, including attorney s fees, incurred by Lessor in exercising any of Lessor s rights or remedies hereunder or enforcing any of the terms, conditions or provisions hereof. 24. Assignment. Without the prior written consent of Lessor, Lessee shall not assign, transfer, sublet, or pledge this agreement or any interest therein. Consent to any of the foregoing prohibited acts applies only in the given instance and is not a consent to any subsequent like act by Lessee or any other person. Lessor may assign this agreement without notice. Subject to the foregoing, this Agreement inures to the benefit of, and is binding upon, the heirs, successors, and assigns of the parties hereto. 25. Ownership. The Equipment is, and shall at all times be and remain, the sole and exclusive property of Lessor, and the Lessee shall have no right, title or interest therein or thereto except as expressly set forth in this Agreement. Lessee shall give Lessor immediate notice in the event that any of said equipment is levied upon or is about to become liable or is threatened with seizure, and Lessee shall indemnify Lessor against all loss and damages caused by such action. 26. Offset. Lessee hereby waives any and all existing and future claims and offsets against any rent or other payments due hereunder. Lessee agrees to pay the rent and other amounts due hereunder regardless of any offset or claim which may be asserted by Lessee or on Lessee s behalf. 4

27. Non Waiver. No covenant or condition of this Agreement can be waived except by the written consent of Lessor. Forbearance or indulgence by Lessor in any regard whatsoever shall not constitute a waiver of such covenant or condition to be performed by Lessee until complete performance by Lessee of said covenant or condition, Lessor shall be entitled to invoke any remedy available to Lessor under this Agreement or by law or in equity despite said forbearance or indulgence. 28. Time of Essence. Time is of the essence of this Agreement and each and all of its provisions. 29. Binding Agreement. This Agreement shall enure to the benefit of and be binding upon the parties and their respective successors and assigns. 30. Paragraph Headings. Paragraph headings contained in this Agreement are for convenience only and shall not be considered for any purpose in governing, limiting, modifying, construing or affecting the provisions of this Agreement and shall not otherwise be given any legal effect. 31. Severability. If for any reason whatsoever, any term or condition of this Agreement or the application thereof to any party or circumstance shall, to any extent be invalid or unenforceable, all other terms and conditions of this Agreement and/or the application of such terms and conditions to the parties or circumstances, other than those as to which it is held invalid or shall not be affected thereby and each term and condition of this Agreement shall be separately valid and enforceable to the fullest extent permitted by law. 32. Construction. This Agreement shall be construed and enforced in accordance with the laws of Minnesota. 33. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter, superseding all prior and contemporaneous written or oral promises, agreements and understandings. Neither this Agreement, nor any terms or conditions hereof, shall be modified, contradicted, explained or supplemented by any oral agreement or representation, by course of dealing or performance or by usage of trade, or amended except by a document in writing duly executed by the parties hereto. 34. Execution. This Agreement may be executed simultaneously in any number of counterparts, each copy of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 5

Schedule A Equipment to be used at or near: Approximate or anticipated Rental Period: Description of Equipment Rental Rate First Month Rental Rate Add l Months Delivery Charge Set-up Charge Return Charge 6