EXHIBIT 10.18
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
WORLD ENERGY SOLUTIONS, INC.
AND
SPROTT SECURITIES LIMITED
DATED AS OF
[ ], 2006
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.......................................... 1
ARTICLE II REGISTRATION RIGHTS.................................. 4
ARTICLE III REPRESENTATIONS, WARRANTIES AND AGREEMENTS.......... 9
ARTICLE IV INDEMNIFICATION AND CONTRIBUTION.................... 10
ARTICLE V MISCELLANEOUS....................................... 00
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XXXXXXXXXXXX RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of [ ],
2006, is entered into by and between World Energy Solutions, Inc., a Delaware
corporation (the "Company") and Sprott Securities Limited, an Ontario
corporation (the "Holder").
RECITALS
WHEREAS, the Company is offering to sell 20,000,000 shares of common
stock, $0.0001 par value of the Company (the "Common Stock") in an initial
public offering ("IPO") registered under the Securities Act of 1933, as amended,
pursuant to a registration statement on Form S-1, File No. 333-136528 (the "IPO
Registration Statement") in the United States and pursuant to a long form
prospectus, including any amendments or supplements thereto, in the English and
French languages, in Canada (the "Canadian IPO Prospectus"); and
WHEREAS, concurrently with the closing of the IPO the Holder will
receive warrants to purchase 1,000,000 shares of Common Stock (the "Warrants");
and
WHEREAS, the parties desire to provide for the circumstances under
which the Company will register the resale of shares of Common Stock on behalf
of the Holder;
NOW, THEREFORE, in consideration of the premises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
The following terms, as used in this Agreement, shall have the
following meanings:
"Affiliate" shall mean, with respect to a specified Person, any other
Person, other than the Company or any of its Subsidiaries, that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with the specified Person. For purposes of this definition,
the term "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with") shall mean, with
respect to any Person, the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Common Stock" shall mean common stock of the Company, $0.0001 par
value.
"Company" shall have the meaning set forth in the preamble and shall
include any successor entity to the Company.
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended.
"Holder" shall have the meaning set forth in the preamble, provided,
the term "Holder" shall also include any Permitted Transferee of the Holder that
holds Registrable Securities.
"Indemnified Party" or "Indemnified Parties" shall have the meaning set
forth in Section 4.01(a) (for purposes of Section 4.01(a)) and Section 4.01(b)
(for purposes of Section 4.01(b)).
"IPO" shall have the meaning set forth in the recitals.
"IPO Date" shall mean the date of the first closing of the initial sale
of shares of Common Stock in an initial public offering.
"IPO Registration Statement" shall have the meaning set forth in the
recitals.
"Losses" shall have the meaning set forth in Section 4.01(a) (for
purposes of Section 4.01(a)) and Section 4.01(b) (for purposes of Section
4.01(b)). As used in Section 4.01(a) and Section 4.01(b), "Losses" shall refer
to Losses of the Indemnified Parties, as applicable.
"Maximum Number" shall have the meaning set forth in Section 2.01(a).
"Other Securities" shall have the meaning set forth in the definition
of Registrable Securities.
"Permitted Transferees" shall mean, with respect to the Holder, the
Holder's Affiliates.
"Person" shall mean any individual, corporation, partnership, joint
venture, limited liability company, unlimited liability company, joint-stock
company, association, unincorporated organization, trust or other entity,
including any government or any political subdivision, agency or instrumentality
thereof.
"Preliminary Prospectus" shall mean any preliminary prospectus that may
be included in any Registration Statement.
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"Prospectus" or "prospectus" shall mean the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
includes any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such registration statement, and by all other amendments
and supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"Public Offering" shall mean the offer of shares of Common Stock on a
broadly distributed basis in the United States, not limited to sophisticated
investors, pursuant to a firm-commitment or best-efforts underwriting
arrangement.
"Registrable Securities" shall mean all or any portion of the shares of
Common Stock issued or issuable to the Holder upon the exercise of Warrants from
time to time during the term of this Agreement. Shares of Common Stock shall
cease to be Registrable Securities when: (i) a Registration Statement with
respect to the sale of such shares of Common Stock shall have become effective
under the Securities Act and such shares of Common Stock shall have been
disposed of under such Registration Statement, (ii) such shares of Common Stock
shall have been sold pursuant to Rule 144, or are eligible for sale under Rule
144(k), as applicable, (iii) such securities shall have otherwise been
transferred or disposed of, and subsequent transfer or disposition of such
shares of Common Stock shall not require their registration or qualification
under the Securities Act or any state securities laws or similar laws then in
force or (iv) such shares of Common Stock shall have been repurchased by the
Company or otherwise shall cease to be outstanding. If as a result of any
reclassification, stock split, stock dividend, bonus issue, business
combination, exchange offer or other transaction or event, any capital stock,
evidences of indebtedness, warrants, options, rights or other securities
(collectively, "Other Securities") are issued or transferred to the Holder in
respect of Registrable Securities held by the Holder references herein to
Registrable Securities and shares of Common Stock shall, as the context
requires, be deemed to include such Other Securities.
"Registration Expenses" shall mean any and all expenses incident to the
performance of or compliance with any registration or marketing of securities
pursuant to Article II, including: (i) the fees, disbursements and expenses of
the Company's counsel and accountants in connection with this Agreement and the
performance of the Company's obligations hereunder (including the expenses of
any annual audit letters and "cold comfort" letters required or incidental to
the performance of such obligations); (ii) all expenses, including filing fees,
in connection with the preparation, printing and filing of a Registration
Statement, Preliminary Prospectus or final Prospectus any other offering
document and amendments and supplements thereto and the mailing and delivering
of copies thereof to any underwriters and dealers; (iii) the cost of
negotiating, printing and producing any agreements among underwriters,
underwriting agreements, selling agreements and any other documents in
connection with the offering, sale or delivery of the securities to be disposed
of; (iv) all expenses in connection with the
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qualification of the securities to be disposed of for offering and sale under
state securities laws, including the fees and disbursements of counsel for the
underwriters that the Company agrees to bear in connection with such
qualification and in connection with any blue sky and legal investment surveys,
including the cost of printing and producing any such blue sky or legal
investment surveys; (v) the filing and legal fees incident to securing any
required review by the National Association of Securities Dealers, Inc.; (vi)
transfer agents' and registrars' fees and expenses and the fees and expenses of
any other agent or trustee appointed in connection with such offering; (vii) all
security engraving and security printing expenses; (viii) all fees and expenses
payable in connection with the listing of the securities on any securities
exchange or automated inter-dealer quotation system; (ix) any other fees and
disbursements of underwriters customarily paid by the issuers of securities, but
excluding underwriting discounts and commissions and transfer taxes, if any; (x)
the costs and expenses of the Company and its officers relating to analyst or
investor presentations or any "road show" undertaken in connection with the
registration and/or marketing of any Registrable Securities; and (xi) other
reasonable out-of-pocket costs, fees and expenses of the Company, but not
including the fees and expenses of the Holder (including fees and expenses of
outside legal counsel retained by the Holder).
"register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement of the
Company under the Securities Act (a "Registration Statement") and the
effectiveness of such registration statement.
"Rule 144" shall mean Rule 144 (or any successor provisions) under the
Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) under the
Securities Act.
"Securities Act" shall mean the United States Securities Act of 1933,
as amended, including all rules and regulations thereunder.
"Holder" shall have the meaning set forth in the preamble, provided,
the term "Holder" shall also include any Permitted Transferee of the Holder that
holds Registrable Securities from time to time.
ARTICLE II
REGISTRATION RIGHTS
Section 2.01
(a) "Piggy-Back" Rights. If the Company proposes to register any of its
shares of Common Stock, under the Securities Act, whether or not for sale for
its own account (other than a registration statement on a Form S-8 or Form S-4
or their successors, or any other form for a similar limited purpose, or any
other registration covering only securities proposed to be issued in exchange
for securities or assets of
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another person), the Company shall give written notice of such proposal at least
ten (10) days before the anticipated effective date, to the Holder. In the event
that the Company elects to file a "universal shelf" registration statement which
registers Common Stock, the Company shall take such steps as would permit the
shelf registration statement to be used to permit secondary sales by the Holder
and shall give written notice of any proposal to make an offering off the shelf
registration statement of any Common Stock at least ten (10) days before the
anticipated offering date, to the Holder. Such notices, as applicable, shall
specify at a minimum the intended method of distribution of such shares of
Common Stock, the number of shares of Common Stock proposed to be registered or
offered, the proposed filing date of such registration statement or offering
date in the case of a shelf takedown, any proposed means of distribution of such
shares of Common Stock and the proposed managing underwriter, if any. Subject to
Section 2.03, upon the written request of the Holder (the "Piggyback Request"),
given within five (5) days after the transmittal of any such written notice by
email or facsimile confirmed by overnight mail (which request shall specify the
Registrable Securities intended to be disposed of by the holder), the Company
will include in the prospectus with respect to such Public Offering, or any
prospectus supplement in the case of a shelf takedown, the number of the
Registrable Securities referred to in the Holder's request; provided, that, any
participation in a Public Offering by the Holder shall be on substantially the
same terms as the Company's participation therein; and provided, further, that
the number of Registrable Securities to be included in any such Public Offering
shall not exceed the maximum number which the managing underwriter thereof
considers in good faith to be appropriate based on market conditions and other
relevant factors (the "Maximum Number").
(b) Withdrawal of Request. The Holder shall have the right to withdraw
a request to include Registrable Securities in any Public Offering pursuant to
Section 2.01(a), without any liability of the Holder by giving written notice to
the Company of its election to withdraw such request at any time prior to the
proposed effective date of such registration statement.
(c) Exception to Piggyback Rights. The Company shall not be required to
effect any registration of Registrable Securities under Section 2.01(a) in
connection with the IPO.
Section 2.02 (a) Allocation of Securities Included in a Public
Offering. If the registration referred to in Section 2.01(a) is to be a Public
Offering and the managing underwriter thereof advises the Company and the Holder
in writing that the number of shares of Common Stock sought to be included in
such Public Offering (including those sought to be offered by the Company and
those sought to be offered by the Holder) exceeds the Maximum Number, the shares
of Common Stock to be included in such Public Offering shall be allocated
pursuant to the procedures of this Section 2.02.
(b) Piggyback Allocation. If a registration or Public Offering is
effected pursuant to Section 2.01(a), the number of Registrable Securities
included in such registration shall be allocated: (i) first, to securities
sought to be included at the request of the Company ("Company Securities"), and
(ii) second, to the Holder and all
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other holders of securities of the Company who are or may become parties to
registration rights agreements with the Company, up to the nearest extent
possible pro rata based on the number of shares then held by all such persons.
Section 2.03 (a) Review and comment requirement. Subject to Section
2.04, if and whenever the Company is required by the provisions hereof to
register any Registrable Securities under the Securities Act, the Company shall
furnish to and afford the Holder a reasonable opportunity to review and comment
on copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be
filed, and the Company shall make any corrections reasonably requested by the
Holder with respect to information concerning the Holder before filing such
registration statement or any amendments or supplements thereto.
(b) Notification of Certain Events. The Company shall promptly notify
the Holder (A) when the registration statement or any amendment or supplement
thereto has been filed, and, with respect to the registration statement or any
post-effective amendment thereto, when the same has become effective or
receipted, as applicable, (B) of any request by the Commission or by any other
regulatory body or other body having jurisdiction relating to such offering for
amendments or supplements to the registration statement or the Prospectus or for
additional information, (C) of any order issued or threatened by the Commission
suspending the effectiveness of such registration statement or preventing or
suspending the use of a prospectus or (D) of the issuance of any notification or
order with respect to the suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any jurisdiction
or the initiation of any proceedings for such purpose. The Company shall use its
best efforts to prevent the issuance of any such order referred to in (C) or (D)
and, if any such order is issued, shall use its best efforts to obtain the
withdrawal of any such order at the earliest possible moment. The Company shall
promptly notify the Holder in writing at any time when a Prospectus is required
to be delivered under the Securities Act of the happening of any event as a
result of which the Prospectus included in such registration statement, as then
in effect, contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and the Company shall promptly prepare and furnish to the Holder a
reasonable number of copies of any supplement or amendment to such Prospectus as
may be necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading.
(c) Other Qualifications. The Company shall use its best efforts to
register the Registrable Securities covered by such registration statement under
the state securities or blue sky laws of such jurisdictions in the United States
as the Holder shall reasonably request, and do any and all other acts and things
that may be reasonably necessary or advisable to enable the Holder to consummate
the disposition of the
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Registrable Securities in such jurisdictions; provided, however, that in no
event shall the Company be required (A) to qualify to do business as a foreign
corporation in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, or (B) to execute or file any general consent
to service of process in any such jurisdiction. The Company shall use its best
efforts to cause all Registrable Securities covered by such registration
statement to be registered with or approved by such other governmental agencies
or authorities in the United States as may be necessary to enable the Holder to
consummate the disposition of such Registrable Securities pursuant to such
registration statement.
(d) Listing. The Company shall use its best efforts to cause all
Registrable Securities covered by such registration statement to be (A) listed
on the Toronto Stock Exchange provided the Company then has shares of its Common
Stock listed on such exchange, and (B) listed or qualified for trading on any
other stock exchange or quotation service on which the Company's outstanding
shares of Common Stock are listed or qualified for trading; provided that the
applicable listing requirements are satisfied no later than the effective date
of such registration statement.
(e) Documents to be Delivered. The Company shall furnish to the Holder
of the Registrable Securities covered by such registration statement such number
of copies of (A) such registration statement and each amendment and supplement
thereto (in each case including all exhibits), including conformed copies, (B)
the Prospectus included in such registration statement (including each
Preliminary Prospectus), in conformity with the requirements of the Securities
Act, (C) such documents incorporated by reference in such registration statement
or Prospectus, and (D) such other documents as the Holder may reasonably
request, and a copy of any and all transmittal letters or other correspondence
to or received from the Commission or any other governmental agency or
self-regulatory body or other body having jurisdiction (including any domestic
or foreign securities exchange) relating to such offering.
(f) Earnings Statement. The Company shall comply with all applicable
rules and regulations of the Commission and make generally available to security
holders earnings statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) not later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year), commencing on the first day of the fiscal quarter of the Company after
the effective date of a registration statement, which statements shall cover
said 12-month periods.
(g) Stock Certificates. The Company shall furnish for delivery in
connection with the closing of any offering of Registrable Securities pursuant
to a registration effected pursuant to Section 2.01(a) unlegended certificates
representing ownership of the Registrable Securities being sold in such
denominations as shall be requested by the Holder.
(h) Condition to Company's Obligation. It shall be a condition
precedent to the obligation of the Company to take any action with respect to
any
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Registrable Securities that the holder thereof shall furnish to the Company
such information regarding such holder and the Registrable Securities as the
Company shall reasonably request and as shall be required in connection with the
action taken by the Company.
(i) Actions Upon Notice of Certain Events. Each holder of Registrable
Securities agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.03(b), the Holder will
forthwith discontinue disposition of Registrable Securities until the Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 2.03(b), and, if so directed by the Company, the Holder will deliver to
the Company (at the Company's expense) all copies (including, without
limitation, any and all drafts), other than permanent file copies, then in the
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
Section 2.04 Transfers; Rights of Transferee of Registrable Securities.
The Holder agrees not to make any transfer of all or any portion of the
Registrable Securities unless:
(a) there is then in effect a registration statement under the
Securities Act covering such proposed transfer and such transfer is made in
accordance with such registration statement;
(b) such transfer is made in accordance with Rule 144; or
(c) such transfer shall not require any registration under the
Securities Act.
Subject to compliance with the foregoing, the Holder may transfer all
or a portion of the Registrable Securities to a Permitted Transferee, and such
Permitted Transferee shall be deemed to be the Holder hereunder. The Holder
shall provide notice to the Company of any such transfer stating the name and
address of such Permitted Transferee and identifying the number of Registrable
Securities transferred.
Section 2.05 Registration Expenses.
Except as otherwise provided herein, the Company shall pay all
Registration Expenses with respect to any particular offering (or proposed
offering).
(a) Access to Information. In connection with the preparation and
filing of each Registration Statement registering Registrable Securities under
the Securities Act pursuant to Section 2.01, upon reasonable notice, the Company
shall give the Holder and its counsel and accountants, such reasonable and
customary access to its books, records and properties and such opportunities to
discuss the business and affairs
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of the Company with its officers and the independent public accountants who have
certified the financial statements of the Company as shall be necessary, in the
opinion of the Holder to conduct a reasonable investigation within the meaning
of the Securities Act; provided that the Holder shall agree to keep any and all
of such information confidential.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 3.01 Company Representations, Warranties and Agreements.
The Company represents and warrants to, and agrees with, the Holder
that:
(a) The Company has all requisite corporate power and authority to
execute, deliver, and perform this Agreement. This Agreement has been duly
authorized, executed, and delivered by the Company. No consent, authorization,
approval, order, license, certificate, or permit of or from, or declaration or
filing with, any United States federal, state, local, or other governmental
authority or any court or other tribunal is required by the Company for the
execution, delivery or performance of this Agreement by the Company (except any
consents under state, local, securities or blue sky laws which will be
obtained).
(b) The execution and delivery of this Agreement by the Company does
not, and the consummation of the transactions contemplated hereby will not,
violate, conflict with, or result in a breach of any provision of, or constitute
a default (with or without notice or lapse of time or both) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination, cancellation, or acceleration of any obligation or the
loss of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
the Company or any of its subsidiaries pursuant to any provisions of (A) the
certificate of incorporation, by-laws or similar governing documents of the
Company or any of its subsidiaries, (B) any statute, law, ordinance, rule,
regulation, judgment, decree, order, injunction, writ, permit or license of any
governmental authority applicable to the Company or any of its subsidiaries or
any of their respective properties or assets or (C) any note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, concession, contract,
lease or other instrument, obligation or agreement of any kind to which the
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Company or any of its subsidiaries is a party or by which it or any of its
properties or assets may be bound or affected.
(c) The Company covenants that it will file any reports required to be
filed by it under the Securities Act, the Exchange Act, and will make available
adequate current public information concerning the Company within the meaning of
paragraph (c) of Rule 144. Upon the request of the Holder, the Company will
deliver to it a written statement as to whether it has complied with such
requirements.
Section 3.02 Representations, Warranties and Agreements of the Holder.
The Holder represents and warrants to, and agrees with, the Company,
that:
(a) It is duly organized, validly existing, and in good standing under
the laws of its jurisdiction of organization and has all requisite power and
authority to execute, deliver, and perform this Agreement. This Agreement has
been duly authorized by the Holder and has been duly executed and delivered by
it.
(b) The Holder shall promptly furnish to the Company upon the Company's
request any and all information as may be required by, or as may be necessary or
advisable to comply with the provisions of, the Securities Act, the Exchange Act
in connection with the preparation and filing of any Registration Statement
pursuant hereto, or any amendment or supplement thereto, or any Preliminary
Prospectus or Prospectus included therein.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
Section 4.01 Indemnification and Contribution.
(a) Indemnification by the Company. In the event of any registration of
any Registrable Securities under the Securities Act pursuant to this Agreement,
the Company will, and it hereby does, indemnify and hold harmless, to the full
extent permitted by law, the Holder, and each person, if any, who controls, is
controlled by or is under common control with the Holder within the meaning of
the Securities Act (for the purposes of this Section 4.01(a) only, collectively,
the "Indemnified Parties" and each, an "Indemnified Party"), against any and all
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof), joint or several, and expenses (including any amounts paid in any
settlement effected with the Company's consent) (collectively and for the
purposes of this Section 4.01(a) only, "Losses") to which such Indemnified Party
may become subject under the Securities Act state securities or blue sky laws,
common law or otherwise, insofar as such Losses arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which such Registrable Securities were registered under the Securities Act, any
Prospectus (including each Preliminary Prospectus) contained therein, or any
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amendment or supplement thereto or (ii) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of a Prospectus (including
each Preliminary Prospectus, in light of the circumstances under which they are
made), and the Company will reimburse each such Indemnified Party for any legal
or any other expenses reasonably incurred by them as such expenses are incurred
in connection with investigating or defending any claims in respect of such
Losses, provided that the Company shall not be liable in any such case to the
extent that any such Losses arise out of or are based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or amendment or supplement thereto or in any such
prospectus (including each preliminary prospectus) in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Holder or such Indemnified Party for use in the preparation thereof. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Holder or any other Indemnified Party person and
shall survive the transfer of such securities by the Holder.
(b) Indemnification by the Holder and Underwriters. The Holder will,
and it hereby does, indemnify and hold harmless the Company and its directors,
officers, employees, controlling persons and all other prospective sellers and
their respective directors, officers, general and limited partners, managing
directors, and their respective controlling persons (for the purposes of this
Section 4.01(b) only, collectively, the "Indemnified Parties" and each, an
"Indemnified Party"), against any and all losses, claims, damages or liabilities
(or actions or proceedings in respect thereof), joint or several, and expenses
(including any amounts paid in any settlement effected with the consent of the
Holder ) (collectively and for the purposes of this Section 4.01(b) only,
"Losses") to which any Indemnified Party may become subject under the Securities
Act, state securities or blue sky laws, common law or otherwise, insofar as such
Losses arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained, on the effective date thereof, in any
Registration Statement under which such Registrable Securities were registered
under the Securities Act, any Prospectus (including each Preliminary Prospectus)
contained therein, or any amendment or supplement thereto or (ii) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading (in the case
of a Prospectus (including each Preliminary Prospectus), in light of the
circumstances under which they are made), and the Holder will reimburse the
Indemnified Parties for any legal or any other expenses reasonably incurred by
them as such expenses are incurred in connection with investigating or defending
any claims in respect of such Losses; provided that the Holder shall only be
liable in any such case if any such Losses that arise out of or are based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement or amendment or supplement thereto or in any
such Prospectus (including each Preliminary Prospectus) in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Holder for use in the preparation thereof. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Parties. The Holder shall not be liable under any indemnity
provided pursuant to this Agreement
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for any amounts exceeding the product of the purchase price per Registrable
Security and the number of Registrable Securities being sold pursuant to such
Registration Statement or Prospectus by the Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Agreement, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, promptly give written
notice to the latter of the commencement of such action; provided that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Agreement, except
to the extent that the indemnifying party is actually materially prejudiced by
such failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party will be entitled to participate
in and, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party for
any legal or other expenses subsequently incurred by the latter in connection
with the defense thereof, unless in such indemnified party's reasonable judgment
a conflict of interest between such indemnified and indemnifying parties arises
in respect of such claim after the assumption of the defense thereof or a court
of competent jurisdiction determines that the indemnifying party is not
vigorously defending such action or proceeding. An indemnifying party will not
be subject to any liability for any settlement made without its consent (which
consent shall not be unreasonably withheld). No indemnifying party will consent
to entry of any judgment or enter into any settlement of any pending or
threatened proceeding which (i) does not include as an unconditional term
thereof the giving by the claimant or plaintiff to all indemnified parties of a
release from all liability in respect to such claim or litigation, (ii) involves
the imposition of equitable remedies or the imposition of any non-financial
obligations on such indemnified party or (iii) otherwise adversely affects such
indemnified party, other than as a result of the imposition of financial
obligations for which such indemnified party will be indemnified hereunder.
Notwithstanding anything to the contrary contained herein, an indemnifying party
will not be obligated to pay the fees and expenses of more than one counsel
(together with local counsel) for all parties indemnified by such indemnifying
party with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels (together with the fees of local
counsel).
(d) Contribution. If the indemnification provided for in this Article
IV shall for any reason be unavailable or insufficient to an indemnified party
in respect of any Losses, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party
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as a result of such Losses (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party or parties on the other hand from the offering or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
The relative benefits received by the indemnified party or parties on the one
hand and the indemnifying party or parties on the other hand in connection with
the offering shall be deemed to be in the same respective proportions as the net
proceeds from the offering (before deducting expenses) and the total
underwriting discounts and commissions received by the underwriters, in each
case as set forth in the table on the cover of a prospectus, bear to the
aggregate public offering price of the securities. The relative fault of the
indemnified and indemnifying parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnified or indemnifying parties and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Holder agree that it
would not be just and equitable if contribution pursuant to this Article IV were
determined by pro rata allocation (even if the underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this paragraph.
Notwithstanding any other provision of this Article 4, the Holder shall not be
required to contribute any amount in excess of the amount by which the net
proceeds of the offering received by the Holder exceed the amount of any damages
which the Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) The obligations of the parties under this Article IV shall be in
addition to any liability which any party may otherwise have to any other party.
ARTICLE V
MISCELLANEOUS
Section 5.01 Remedies.
In the event of breach by any party of any of its obligations under
this Agreement, the other parties, in addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The Company
and the Holder agree that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by the Company or the Holder, as the
case may be, of any of the provisions of
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this Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, the Company or the Holder, as
the case may be, shall waive the defense that a remedy at law would be adequate.
No failure or delay on the part of the Company or the Holder in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.
Section 5.02 Amendments; Waivers and Termination.
The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given without the written
consent of the Company and the Holder.
Section 5.03 Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, by electronic mail or facsimile
(in each case, receipt of which is confirmed) or mailed by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
if to the Company, to:
World Energy Solutions, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Chief Executive Officer
with a copy to:
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
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if to the Holder, to the address set forth on the first page of this
Agreement to the Attention of Xxxx Xxxxxxxxx, with a copy to:
Xxxxx XXX
Xxxxx 0000
00 Xxxxxxxxxx Xxxxxx West
Box 270, TD Centre
Toronto, Ontario
M5K 1N2 Canada
Attention: Xxxxxx Xxxxxxxx
Section 5.04 Interpretation.
When a reference is made in this Agreement to an Article, Section or
Annex, such reference shall be to an Article or Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
Section 5.05 Counterparts.
This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement and shall become effective
when two or more counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
Section 5.06 Entire Agreement; No Third Party Beneficiaries.
This Agreement (including the documents and the instruments referred to
herein) (a) constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) is not intended to confer upon any Person other
than the parties hereto and their respective successors and permitted assigns,
any rights or remedies hereunder.
Section 5.07 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts to be performed
entirely within State of New York.
Section 5.08 Severability.
Wherever possible, each provision hereof shall be interpreted in such a
manner as to be valid, legal and enforceable under applicable law, but in case
any one or more of the provisions contained herein shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such provision
shall be ineffective to the extent, but only to the extent, of such invalidity,
illegality or unenforceability without invalidating or
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rendering unenforceable the remainder of this Agreement, unless such a
construction would be unreasonable or materially impair the rights of any party
hereto.
Section 5.09 Successors and Assigns.
All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and permitted assigns of the parties hereto whether so
expressed or not. This Agreement shall not be assignable by the Company or by
the Holder except to a Permitted Transferee.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
WORLD ENERGY SOLUTIONS, INC.
By:
---------------------------------
Name:
Title:
SPROTT SECURITIES LIMITED
By:
---------------------------------
Name:
Title:
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