Here's the Kmi lease. There is no try before you buy or modify for SCADA integration garbage. It's pretty cut and dry. If they accept delivery they must pay. Since they haven't sent a check or bought the device outright, the only conclusion you can arrive at is that Kmi like Tcp isn't moving forward and that Qsep management is suppressing that news. In my book that's not protected by forward looking statements.
"EXHIBIT 10.1
STWA, Inc.
735 State Street, Suite 500
Santa Barbara, CA 93101
Toll Free +1(877) USA-STWA
Main +1(805) 845-3581
Fax +1(805) 845-4377
Web www.stwa.com
Lease Agreement No. TBD
EQUIPMENT LEASE/OPTION TO PURCHASE AGREEMENT
THIS EQUIPMENT LEASE/OPTION TO PURCHASE AGREEMENT (the "Lease") is made effective the day of July 15 , 2014 (" Effective Date ")
BETWEEN:
Save The World Air, Inc.
(the " Lessor ")
- and -
Kinder Morgan Crude & Condensate LLC
(" Kinder Morgan ")
collectively, the "Parties" or individually, a "Party")
RECITALS
WHEREAS Kinder Morgan operates a high pressure oil pipeline and related facilities and the Lessor has developed certain technology known as "Applied Oil Technology™ (AOT™) ("Technology");
AND WHEREAS Kinder Morgan wishes to lease and test the effectiveness of Lessor's Technology and Equipment (as described below);
AND WHEREAS the Lessor is prepared to lease the Equipment to Kinder Morgan on the terms and conditions set forth in this Lease, which includes an option for Kinder Morgan to purchase the Equipment during or upon termination of the Initial Term or Extended Term, if any (defined below).
NOW, THEREFORE in consideration of the covenants set forth below and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the Parties, the Parties agree, as follows:
1. Equipment Leased .
The Lessor hereby leases, non-exclusively, to Kinder Morgan and Kinder Morgan leases from the Lessor the equipment, along with the equipment attached thereto or contained therein as specified in Schedule A attached to this Lease and made a part hereof (the " Equipment "), together with all parts, components, accessories, replacements, substitutions, additions and improvements now or in the future attached to or forming a part thereof.
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2. Delivery, Installation, Data Collection and Maintenance of the Equipment .
A. The Lessor, at Lessor's expense, shall deliver the Equipment to Kinder Morgan at a location designated by Kinder Morgan by a date no later than December 31, 2014. This date may be extended by mutual written consent of the Parties.
B. Installation shall be performed by and at the expense of Kinder Morgan in a professional and workmanlike manner in conformance with all recommendations of Lessor, and in compliance with good construction and engineering practices.
C. The Lessor shall provide Kinder Morgan with instructional service in the installation and operation of the Equipment.
D. Any alterations or modifications to the Equipment may be made only upon consultation with and written approval by the Lessor, which approval shall not be unreasonably withheld.
E. Kinder Morgan, at its expense, shall keep and maintain the Equipment in good working order and repair. In the event the Equipment, during the Term hereof, is lost, damaged, destroyed, in whole or in part, or stolen, Kinder Morgan shall pay to Lessor the replacement cost of the Equipment, and the obligations of this Lease shall end.
F. All repairs and maintenance of the Equipment shall be performed promptly by Kinder Morgan. Kinder Morgan shall supply labor, at Kinder Morgan's cost, and all materials shall be provided by Lessor, at Lessor's cost. Lessor shall provide Kinder Morgan with a designated person to assist in Kinder Morgan's repairs and maintenance of the Equipment.
G. Data acquisition will be collaborative and transparent between Lessor and Kinder Morgan, including, but is not limited to data described in Schedule C. All data collected will be subject to mutually binding confidentiality and nondisclosure agreements. Subject to Section 4 of that certain Mutual Confidentiality Agreement between the Parties of even date herewith data cannot be shared or released to any outside entity (other than Lessor or Kinder Morgan) or third party without the written consent of both Parties.
H. Lessor or Kinder Morgan may, from time to time, make changes, alterations, modifications or improvements to the Equipment ("Improvements"). Any such Improvements will be the sole intellectual property of Lessor. Kinder Morgan may not make any Improvements to the Equipment without the express written consent of Lessor.
3. Term and Lease Payment .
3.1 The term of this Lease of Equipment shall be for a period of four (4) months (the " Initial Term "), commencing on the date of successful completion of the Equipment's direct current power supply is successfully energized by Lessor following installation pre-startup safety review (PSSR) by Kinder Morgan, which shall be completed by Kinder Morgan no later than thirty (30) days following Lessor's delivery and Kinder Morgan's acceptance of the Equipment in accordance with Section 5.1 below. On sixty (60) days' written notice prior to the expiration of the Initial Term, Kinder Morgan shall have an option to extend the Lease for a minimum of twelve (12) and a maximum of eighty-four (84) additional months (" Extended Term "), subject to Kinder Morgan's exercise, if at all, of its option to purchase the Equipment in accordance with Section 12, below.
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3.2 During the Initial Term and Extended Term, if any, Kinder Morgan shall pay to the Lessor, a monthly lease fee in U.S. Dollars in the amount of Twenty Thousand Dollars ($20,000) (" Monthly Lease Payment "). In the event the Equipment is removed from service at its initial location and re-installed to a new location during the Initial Term of the Lease, the Monthly Lease Payment during the Initial Term of the Lease shall be reduced to $5,000 per month (" Standby Lease Payment ") until the Equipment is placed back in service at its new location, at which time the Monthly Lease Payments shall again be Twenty Thousand Dollars ($20,000). If the Equipment is in service for a partial month, the Monthly Lease Payment and Standby Lease Payment shall be calculated and paid on a pro rata per day basis.
3.3 Kinder Morgan shall pay each Monthly Lease Payment to the Lessor within 15 days of invoicing by Lessor during the Initial Term and Extended Term, if any, of this Lease.
3.4 Kinder Morgan shall pay each Monthly Lease Payment to a bank account designated by the Lessor.
3.5 Kinder Morgan shall be responsible for payment of all licensing and registration fees in respect of the Equipment.
4. Title .
The Parties agree that title and ownership to the Equipment shall remain at all times with the Lessor, unless purchased by Kinder Morgan in accordance with Section 12, below.
5. Acceptance of Delivery .
5.1 Upon receipt of Equipment delivery, Kinder Morgan shall inspect Equipment and either promptly report any deficiencies to Lessor or accept possession. By accepting possession of the Equipment under this Lease, Kinder Morgan accepts the condition of the Equipment.
5.2 Upon consultation with and written approval by Lessor, the Parties agree that Kinder Morgan is authorized, at its sole expense, to furnish or install on the Equipment new or renewed replacement parts and to make any additions or improvements which Kinder Morgan deems necessary for the proper maintenance and operation of the Equipment. All such parts, additions and Improvements shall be deemed a part of the Equipment, and subject to Section 4, above. Notwithstanding anything to the contrary, contained herein, installation materials and components such as hardware, pipe, flanges, fittings, valves, wiring, computers, controllers and electronics procured and installed by Kinder Morgan, as necessary to install the Equipment to Kinder Morgan's pipeline, shall remain property of Kinder Morgan. Installation materials and components as described above procured and installed by Lessor, shall remain property of Lessor.
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6. Operating Use .
Kinder Morgan shall operate the Equipment during the Initial Term and Extended Term, if any, for the purpose only as set forth in the Recitals, above.
7. Limitations of Liability .
7.1 Each Party shall be liable to the other Party, its agents and employees for all losses or damages arising out of or attributable to the acts or omissions, willful misconduct or breach of this Lease by such Party.
7.2 Kinder Morgan acknowledges that Kinder Morgan will obtain the Equipment on an "as is where is basis" without relying on the Lessor. The Lessor makes no warranty or representation, express or implied, statutory or otherwise, as to the design, quality, capacity or fitness of the Equipment for any particular purpose.
7.3 Kinder Morgan agrees that no defect or unfitness of the Equipment shall relieve Kinder Morgan of the obligation to pay the Monthly Lease Payments throughout the Initial Term and Extended Term, if any, hereof.
7.4 Kinder Morgan acknowledges and agrees that the Lessor shall not be liable or responsible for any non-compliance with any statute, law, ordinance, rule or regulation relating to the installation, operation, use or maintenance of the Equipment, it being expressly understood that all such liability shall be the responsibility of Kinder Morgan. Lessor shall be responsible to confirm the manufacturing of the Equipment is within compliance with all applicable state and federal regulations and codes.
7.5 IN NO EVENT SHALL EITHER PARTY HERETO BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT CONSEQUENTIAL OR PUNITIVE DAMAGE, WHETHER BASED ON TORT OF CONTRACT.
8. Indemnity.
8.1 Each Party ("Indemnitor") shall indemnify and hold harmless the other Party "(Indemnitee"), its affiliates and each of their representatives, directors, officers, employees and agents from and against all claims, demands, losses, costs (including attorneys' fees), damages, suits or proceedings by third parties (collectively referred to as "Claims") that arise out of or are attributable to:
(i) Kinder Morgan's installation, operation and maintenance of the Equipment;
(ii) any breach of this Lease by the Indemnitor, or its personnel, agents or subcontractors;
(iii) Kinder Morgan's obligations to pay taxes and fees as a result of this Lease, and any related penalties imposed by any governmental or other authority having jurisdiction.
(iv) in the case of Lessor, any claim or suit for alleged infringement of any patent, industrial design, license, copyright or trademark resulting from or arising in connection with the manufacture, sale, or use or other disposition of the Equipment. If the Equipment or any portion thereof constitutes an infringement, Lessor shall, in addition to its other obligations under this Agreement, at its own expense and as directed by Kinder Morgan, either procure for Kinder Morgan the right to continue using such Equipment without liability for such infringement, or modify or replace such Equipment with non-infringing Equipment accomplishing the same purpose as the replaced Equipment.
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8.2 The Indemnitor will assume on behalf of the Indemnitee, and conduct with due diligence and in good faith, the defense of any Claims with counsel reasonably satisfactory to the Indemnitee; provided that the Indemnitee and their insurer shall have the right to be represented therein by advisory counsel of their own selection and at their own expense; provided further that if the defendants in any such action include both the Indemnitor and the Indemnitee, and if the Indemnitee will have reasonably concluded that there may be legal defenses available to it which are different from, additional to, or inconsistent with those available to the Indemnitor, then the Indemnitee and their insurer shall have the right to select separate cousel to participate in the defense of such Claims on its own behalf and that the Indemnitor's expense. Without the prior consent of the Indemnitee, the Indemnitor will not enter into any settlement of any Claim which would lead to liability or create any financial or other obligation on the part of the Indemnitee.
9. Insurance .
Kinder Morgan shall bear the risk, responsibility and liability for the installation, operation and maintenance of the Equipment. Kinder Morgan shall maintain, at its cost, all such insurance on the Equipment with losses payable to Lessor against fire, theft, destruction, property damage, personal injury, general liability and other risks as are appropriate and specified by Lessor. Kinder Morgan shall provide Lessor proof of such insurance.
10. Default .
10.1 Kinder Morgan shall be in default hereunder if Kinder Morgan fails to pay the Monthly Lease Payment as required hereunder within fifteen (15) business days of the due date thereof.
10.2 Either Party will be in default under this Lease if the Party defaults in the performance of an obligation required from the Party under this Lease.
10.3 If either Party defaults in performance of any of its obligations under this Lease, the other Party shall provide a written notice of the default to the defaulting Party and if the defaulting Party does not remedy the default within ten (10) business days after the receipt of such notice, the other Party may rely on any legal or equitable remedy available in law or equity.
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11. Return Condition .
11.1 Subject to Kinder Morgan's option to purchase under Section 12, below, upon the expiration or termination of this Lease, Kinder Morgan shall, at Kinder Morgan's expense, disconnect and prepare the Equipment. The Equipment shall be free and clear of oil and in substantially the same condition as received except for ordinary wear and tear. Lessor will retrieve Equipment from the site at Lessor's expense.
12. Option to Purchase .
12.1 Provided Kinder Morgan is not in default with respect to any obligations or payments required to be made under this Lease, the Lessor grants to Kinder Morgan, during the Initial Term and Extended Term, if any, hereof, an option to purchase the Lessor's interest in the Equipment for the amounts set forth in the attached Schedule B.
12.2 This option may be exercised by Kinder Morgan giving the Lessor written notice (the "Notice") of its intention to exercise the option. The Notice shall set forth the time for the closing of the sale which shall be the date which is sixty (60) days after the date of the notice or in the event there are less than sixty (60) days remaining in the Initial Term or Extended Term, if any, at the end of such term (the "Closing date"). On the Closing Date, Kinder Morgan shall pay the purchase price set forth in Schedule B to the Lessor by way of certified check or money order and the Lessor shall transfer its interest in the Equipment to Kinder Morgan whereupon this Lease shall cease.
12.3 Kinder Morgan shall pay any and all taxes, license or registration fees, or other fees, costs, or charges payable in connection with any such sale and purchase of the Equipment. The bill of sale from the Lessor to Kinder Morgan shall contain warranties on the part of the Lessor that it has done not act nor created any security interest in the Equipment that would adversely affect the title to it.
13. Encumbrances, Taxes and Other Laws .
Kinder Morgan shall keep the Equipment free and clear of any liens or other encumbrances, and shall not permit any act where Lessor's title or rights may be negatively affected. Kinder Morgan shall be responsible for complying with and conforming to all laws, regulations, ordinances and statutes relating to the possession, use, operation or maintenance of the Equipment. Furthermore, Kinder Morgan shall promptly pay all taxes, fees, licenses and governmental charges, together with any penalties or interest thereon, relating to the possession, use, operation or maintenance of the Equipment.
14. Termination .
During the Initial Term, either Party may terminate this Agreement at any time for any reason on forty-five (45) days written notice to the other.
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15. Mutual Representations and Warranties . Each Party agrees, represents and warrants to the other Party that:
(a) This Lease constitutes a valid and legally binding obligation of the Party, enforceable against the Party in accordance with its terms and all applicable laws;
(b) Neither the entering into or the delivery of this Lease nor the completion of the transactions contemplated in this Lease by the Party will result in the violation of any agreement or other instrument to which the Party is a party or by which the Party is bound or in a violation of any laws applicable to the Party;
(c) Lessor owns all right, title and interest in and to the Equipment and any parts, additions and Improvements made thereon or thereto.
16. Address .
Any notice or documentation required under this Lease must be provided either by personal service to the address below, or e-mail to the address below, or delivery by registered mail to the Party's address below."
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