REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of October 28, 1997, by and among Onsite Energy Corporation, a
Delaware corporation (the "Company"), and Westar Capital, Inc. a Kansas
corporation (the "Investor").
This Agreement is made pursuant to the Stock Subscription Agreement
dated as of the date hereof by and between the Company and the Investor (the
"Stock Subscription Agreement") and pursuant to the Plan and Agreement of
Reorganization of even date herewith to which the Company and the Investor are
parties (the "Reorganization Agreement"). In order to induce the Investor to
enter into the Stock Subscription Agreement and the Reorganization Agreement,
the Company has agreed to provide the registration rights set forth in this
Agreement.
The parties hereby agree as follows:
1. Definitions
Capitalized terms used herein without definition shall have
their respective meanings set forth in the Stock Subscription Agreement. As used
in this Agreement, the following capitalized terms shall have the following
meanings:
Common Stock: The Common Stock issued by the Company to the
Investor pursuant to the Stock Subscription Agreement and pursuant to the
Reorganization Agreement.
Convertible Preferred Stock: The Series C Convertible
Preferred Stock issued by the Company to the Investor pursuant to the Stock
Subscription Agreement.
Demand Registration: See Section 3 hereof.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
Person: An individual, partnership, corporation, joint
venture, association, joint-stock company, trust, unincorporated organization,
or a government or agency or political subdivision thereof, including without
limitation, any "person" as defined in Section 13(d) of the Exchange Act.
Piggyback Registration: See Section 4 hereof.
Prospectus: The Prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A), 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
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.
1059(1).nks 1 November 10, 1997
Registrable Securities: All shares of Common Stock issued by
the Company to the Investor pursuant to the Stock Subscription Agreement and the
Reorganization Agreement, and all shares issued or issuable by the Company upon
the conversion of the Convertible Preferred Stock, including all shares of
Common Stock received in respect thereof, whether by reason of a stock split,
reclassification or stock dividend thereon, upon original issuance thereof and
at all times subsequent thereto until, in the case of any such security, (i) it
is effectively registered under the Securities Act and disposed of in accordance
with the Registration Statement covering it, or (ii) it is sold pursuant to Rule
144 (or any similar provisions then in force) under the Securities Act (unless
such sale is to an affiliate of the Investor).
Registration Expenses: See Section 7 hereof.
Registration Statement: Any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference or deemed to be
incorporated by reference in such Registration Statement.
Securities Act: The Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated by the SEC thereunder.
SEC: The Securities and Exchange Commission.
Underwritten registration or underwritten offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Securities Subject to this Agreement
(a) Registrable Securities. The securities entitled to
the benefits of this Agreement are the Investor's Registrable Securities.
(b) Restriction on Transfer. Each certificate representing any
Registrable Security shall be imprinted with a legend substantially in the
following form and a similar legend with respect to applicable state securities
law, if required:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO (i) A REGISTRATION
STATEMENT RELATING TO THE SECURITIES WHICH IS EFFECTIVE UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, (ii) RULE 144 UNDER SUCH ACT, OR (iii) AN OPINION OF
COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR ANY APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE.
Prior to any proposed transfer of any of such Registrable
Securities (other than under circumstances described in Sections 3 or 4 hereof),
and so long as such securities bear the restrictive legend required under this
paragraph (b), the holder thereof shall deliver to the Company (except in
transactions demonstrated to the Company's reasonable satisfaction to be in
compliance with Rule 144 or other available exemption under the Securities Act,
or any substantially similar successor rule of the
1059(1).nks 2 November 10, 1997
SEC either (i) a written opinion of legal counsel reasonably satisfactory to the
Company to the effect that the proposed transfer of such securities may be
effected without registration or qualification under the Securities Act and any
applicable state securities laws, or (ii) a "no action" letter from the SEC (and
any necessary state securities administrators) to the effect that the proposed
transfer of such securities without registration will not result in a
recommendation by the staff of the SEC (or such administrators) that action be
taken with respect thereto, whereupon the holder of such securities shall be
entitled to transfer such securities in accordance with the terms of such
opinion or "no action" letter.
The Company shall remove the legend or legends from a
certificate if it receives a written opinion of legal counsel reasonably
satisfactory to the Company to the effect that such legend or legends are not
required in order to establish compliance with any provision of the Securities
Act or applicable state securities law.
3. Demand Registration of Registrable Securities
(a) Requests for Registration. Subject to the provisions of
Section 3(b) hereof, the Investor may make a written request (the "Registration
Request") to the Company for registration under and in accordance with the
provisions of the Securities Act of all or part of their Registrable Securities
(the "Demand Registration"). The Company shall as promptly as practicable, and
in no event later than forty-five (45) days after the Registration Request is
made, prepare and file with the SEC a Registration Statement covering all of the
Registrable Securities requested to be included by the Investor. The
Registration Request made pursuant to this Section 3(a) shall specify the number
of shares of the Registrable Securities to be registered and shall also specify
the intended methods of disposition thereof.
(b) Number of Demand Registrations. The Company shall be
obligated to effect not more than three (3) Demand Registrations.
(c) Priority on Demand Registration. If any of the Registrable
Securities registered pursuant to Demand Registrations are to be sold in one or
more firm commitment underwritten offerings, and the managing underwriter or
underwriters advise the Company and the Investor in writing that in their
opinion the total number or dollar amount of Registrable Securities requested to
be included in such registration is sufficiently large to adversely affect the
success of such offering, the Company shall include, on behalf of the Investor,
in such firm commitment underwritten offering the number of shares of
Registrable Securities which, in the opinion of such managing underwriter or
underwriters, can be sold without any adverse affect on the offering.
(d) Withdrawal. The Investor may, before such Registration
Statement becomes effective, withdraw its Registrable Securities from sale,
should the terms of sale not be reasonably satisfactory to it; however, such
Demand Registration shall be deemed to have occurred for the purposes of Section
3(b) hereof, unless such withdrawal is more than 5 days prior to the effective
date of such Registration Statement. If there is no other seller after the
withdrawal of the Investor, the Investor shall pay all of the out-of-pocket
expenses of the Company incurred in connection with such registration within
thirty (30) days after receipt of a written itemization of such expenses.
(e) Selection of Underwriters. If any Demand Registration is
in the form of an underwritten offering, the Company will select and obtain the
investment banker or investment bankers and manager or managers that will
administer the offering.
1059(1).nks 3 November 10, 1997
4. Piggyback Registrations
(a) Right to Piggyback. Whenever the Company proposes (whether
or not for its own account) to register any of its equity securities under the
Securities Act except with respect to a registration statement (i) on Form S-8
or any successor form to such Form or (ii) filed in connection with an exchange
offer or relating to a transaction pursuant to Rule 145 of the Securities Act,
the Company shall give written notice to the Investor of its intention to effect
such a registration not later than thirty (30) days prior to the anticipated
date of filing with the SEC of a Registration Statement with respect to such
registration. Such notice shall offer the Investor the opportunity to include in
such Registration Statement such Registrable Securities as the Investor may
request (a "Piggyback Registration"). Subject to the provisions of Sections 4(b)
and 4(c) hereof, the Company shall include in each such Piggyback Registration
all Registrable Securities with respect to which the Company has received a
written request for inclusion therein within fifteen (15) days after the receipt
by the Investor of the Company's notice. No registration effected pursuant to a
request or requests referred to in this Section 4 shall be deemed Demand
Registrations pursuant to Section 3. Upon the giving of notice of a proposed
registration by the Company pursuant to this Section 4(a), the Investor may
exercise only its rights to Piggyback Registration and not Demand Registration
as to the Company's proposed registration.
(b) Priority on Primary Registration. If a Piggyback
Registration is being made with respect to an underwritten primary registration
on behalf of the Company and the managing underwriter or underwriters advise the
Company in writing that in their opinion the total number or dollar amount of
securities of any class requested to be included in such registration is
sufficiently large to adversely affect the success of such offering, the Company
shall include in such registration: (1) first, all securities the Company
proposes to sell to the public, the proceeds of which shall go to the Company,
(2) second, up to the full number of Registrable Securities requested to be
included in such registration in excess of the number or dollar amount of
securities the Company proposes to sell which, in the opinion of such managing
underwriter or underwriters, can be sold without adversely affecting the
offering.
(c) Priority on Secondary Registrations. If a Piggyback
Registration is being made with respect to an underwritten secondary
registration on behalf of holders of the securities of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
dollar amount or number of securities of any class requested to be included in
such registration is sufficiently large to adversely affect the success of such
offering, the Company shall include in such registration (1) first, up to the
full number of securities requested to be included therein by holders exercising
demand registration rights which in the opinion of such underwriter can be sold
without adversely affecting the offering and (2) second, up to the full number
of Registrable Securities requested to be included in such registration in
excess of the number or dollar amount of securities which holders exercising
demand registration rights propose to sell, which, in the opinion of such
managing underwriter or underwriters, can be sold without adversely affecting
the offering.
5. Hold-Back Agreements
(a) Restrictions on Public Sale by the Investor. The Investor
agrees, if requested by the managing underwriter or underwriters in any
underwritten offering (to the extent timely notified in writing by the Company
or the managing underwriter or underwriters) of the Company's securities covered
by a Registration Statement, not to effect any public sale or distribution of
any Registrable Securities not included in such Registration Statement,
including a sale pursuant to Rule 144 under the Securities Act (except as part
of such underwritten registration), during the ten (10) day period prior to,
1059(1).nks 4 November 10, 1997
and during the forty-five (45) day period beginning on, the effective date of
each underwritten offering made pursuant to such Registration Statement,
provided that Investor shall not be obligated to delay the public sale or
distribution of Registrable Securities for a period in excess of one hundred ten
(110) days in any twelve-month period. Such forty-five (45) day period shall be
extended with regard to the Registrable Securities to such longer period as may
be agreed to in writing by the Investor.
The foregoing provisions shall not apply to the Investor if it
is prevented by applicable statute or regulation from entering into any such
agreement; provided that the Investor shall undertake, in its request to
participate in any such underwritten offering, not to effect any public sale or
distribution of the applicable Registrable Securities commencing on the date of
sale of such applicable class of Registrable Securities pursuant to such a
Registration Statement unless it has provided forty-five (45) days prior written
notice of such sale or distribution to the managing underwriter or underwriters.
(b) Restrictions on Public Sale by the Company and Others. The
Company agrees, (i) without the written consent of the managing underwriter or
underwriters in an underwritten offering of Registrable Securities covered by a
Registration Statement filed by the Company pursuant to Section 3 or 4 hereof,
not to effect any public or private sale or distribution of its securities,
including a sale pursuant to Regulation D under the Securities Act, during the
ten (10) day period prior to, and during the one hundred fifty (150) day period
beginning on, the effective date of an underwritten offering made pursuant to a
Registration Statement (except as part of such underwritten registration or
pursuant to registrations on Form S-8 or any successor form or relating to a
transaction pursuant to Rule 145 of the Securities Act) and (ii) to use its best
efforts to obtain the written agreement of, and to cause each holder of more
than five percent (5%) of any class of its securities purchased from it at any
time (other than in a registered public offering) not to effect any
registration, public sale or distribution of any such securities during such
period, including a sale pursuant to Rule 144 under the Securities Act (except
as part of such underwritten registration, if otherwise permitted).
6. Registration Procedures
In connection with the Company's obligations to file a
Registration Statement pursuant to Section 3 hereof, the Company shall use its
reasonable best efforts to effect such registration to permit the sale of such
Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall as expeditiously as
practicable:
(a) Filing; Review - prepare and file with the SEC as soon as
practical, but in no event later than the time periods specified herein a
Registration Statement relating to the Demand Registration on any appropriate
form under the Securities Act, which form shall be available for the sale of the
Registrable Securities in accordance with the intended method or methods of
distribution thereof, and use its reasonable best efforts to cause such
Registration Statement to become effective and remain effective as provided
herein; provided that at least fifteen (15) days before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, including
documents incorporated or deemed to be incorporated by reference in the
Registration Statement after the initial filing of any Registration Statement,
the Investor, its counsel and the managing underwriters, if any, copies of all
such documents proposed to be filed (excluding exhibits unless otherwise
requested), which documents shall be subject to the review of the Investor, its
counsel and managing underwriters, and the Company shall not file any
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto (including such documents incorporated or deemed to be incorporated by
reference) to which the Investor or the managing underwriters, if any, shall
reasonably object on a timely basis;
1059(1).nks 5 November 10, 1997
(b) Amendments; Supplements - prepare and file with the SEC
such amendments and post-effective amendments to a Registration Statement as may
be necessary to keep such Registration Statement continuously effective for the
applicable period; cause the related Prospectus to be supplemented by any
required prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during the applicable
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement or supplement to such
Prospectus;
(c) Notice of Events - notify the Investor, its counsel and
the managing underwriters, if any, promptly, and (if requested by any such
Person) confirm such notice in writing, (1) when a Prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective, (2) of any request by the SEC for amendments or supplements to a
Registration Statement or related Prospectus or for additional information to be
included in any Registration Statement or Prospectus or otherwise, (3) of the
issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(4) if at any time the representations and warranties of the Company
contemplated by paragraph (m) below cease to be true and correct, (5) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (6) of the
happening of any event which makes any statement made in the Registration
Statement, the Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue or which requires the making of any
changes in the Registration Statement or Prospectus so that they shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
(with respect to a Prospectus, in light of the circumstances in which they were
made) not misleading, and (7) of the reasonable determination of the Company
that a post-effective amendment to a Registration Statement would be
appropriate;
(d) Suspension - make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a Registration Statement
or the lifting of any suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction,
as soon as practicable;
(e) Additional Information - if requested by the managing
underwriters, if any, or the Investor, to immediately incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, and the Investor agree should be included therein
as required by applicable law; and make all required filings of such prospectus
supplement or post-effective amendment as soon as practicable after the Company
has received notification of the matters to be incorporated therein; provided,
however, that the Company shall not be required to take any of the actions in
this Section 6(e) which are not, in the opinion of counsel for the Company, in
its sole discretion, in compliance with applicable law;
(f) Copies - furnish to the Investor's counsel and each
managing underwriter, without charge, a signed copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);
1059(1).nks 6 November 10, 1997
(g) Prospectuses - deliver to the Investor and to the
underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as may be reasonably requested; the Company consents to the use of such
Prospectus or any amendment or supplement thereto by the Investor and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto;
(h) Blue Sky - prior to any public offering of Registrable
Securities, register or qualify or cooperate with the Investor, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and sale
under the securities or blue sky laws of such jurisdictions within the United
States as the Investor or underwriter reasonably requests in writing, keep each
such registration or qualification effective during the period such Registration
Statement is required to be kept effective and do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the applicable Registration Statement;
provided that the Company shall not be required to qualify to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to general service of process in any such jurisdiction where it is
not then so subject;
(i) Certificates - cooperate with the Investor and the
managing underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold and not bearing
any restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two (2) business days prior to any sale of Registrable
Securities to the underwriters;
(j) Corrections - upon the occurrence of any event
contemplated by Section 6(c)(6) above, prepare a supplement or post-effective
amendment to the applicable Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, such Prospectus shall not contain an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading;
(k) Listing - if requested in writing by the Investor, use its
reasonable best efforts to cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed;
(l) CUSIP; Transfer Agent; Registrar - provide a CUSIP number,
transfer agent and registrar for all Registrable Securities being registered,
not later than the effective date of the applicable Registration Statement
covering such securities;
(m) Other Agreements; Opinions - enter into such agreements
(including an underwriting agreement in form, scope and substance as is
customary in underwritten offerings) and take all such other actions as the
Investor or the underwriters, if any, may reasonably request, or any and all
such other actions reasonably required in connection therewith in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration, (1) make such
representations and warranties, if any, to the Investor and to enter into any
indemnity arrangement with the underwriters in form, substance and scope as are
customarily made by issuers to underwriters
1059(1).nks 7 November 10, 1997
in underwritten offerings and confirm the same if and when reasonably requested;
(2) obtain opinions of counsel to the Company and updates thereof (which counsel
and opinions shall be reasonably satisfactory in form, scope and substance to
the managing underwriters, if any, or if the offering is not underwritten, then
to Investor's counsel) addressed to the Investor covering the matters
customarily covered in opinions requested in underwritten offerings; (3) use its
best efforts to obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to the
underwriters, if any, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters obtained by
underwriters in connection with underwritten offerings; and (4) the Company
shall deliver such documents and certificates as may be reasonably requested by
the Investor or the managing underwriters, if any, to evidence compliance with
clause (j) above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company. The above shall be
done at each closing under such underwriting or similar agreement or as to the
extent required thereunder;
(n) Access - make available for inspection by a representative
of the Investor, any underwriter, if any, and any attorney, accountant or other
agent retained by the Investor or underwriter, all pertinent financial and other
records, corporate documents and properties of the Company (collectively
"Records"), and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with such Registration Statement; provided
that any Records which the Company determines to be confidential and which it
notifies the representative, underwriter, attorney or accountant are
confidential, shall not be disclosed by such individuals unless (i) such Records
are in the public domain or (ii) disclosure of such Records is required by court
or administrative order or applicable law;
(o) Other Agencies - use its reasonable best efforts to cause
the Registrable Securities covered by each Registration Statement to be
registered with or approved by such other government agencies or authorities as
may be necessary to the Investor or the underwriters, if any, to consummate the
disposition of such Registrable Securities in the United States;
(p) Compliance - use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC and make generally
available to its security holders earning statements satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder, no later than
forty-five (45) days after the end of any twelve (12) month period (or ninety
(90) days after the end of any twelve (12) month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements shall
cover said twelve (12) month periods; and
(q) Certificates - on or before the effective date of a
registration, provide the transfer agent with printed certificates for the
Registrable Securities which are in a form eligible for deposit with The
Depositary Trust Company.
The Company may require the Investor to furnish to the Company
such information regarding the distribution of such securities and such other
information as the Company may from time to time reasonably request in writing,
and the Company may exclude from such registration the Registrable Securities of
the Investor for unreasonably failing to furnish such information within a
reasonable time after receiving such request.
1059(1).nks 8 November 10, 1997
The Investor agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 6(c)(2), 6(c)(3), 6(c)(5) or 6(c)(6),
the Investor will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus until receipt of
the copies of the supplemented or amended prospectus contemplated by Section
6(j), or until it is advised in writing (the "Advice") by the Company that the
use of the applicable Prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in such
Prospectus, and if so directed by the Company, the Investor shall deliver to the
Company all copies, other than permanent filed copies then in Investor's
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice.
7. Registration Expenses
All fees and expenses incident to the Company's performance of
or compliance with this Agreement, including without limitation (a) all
registration and filing fees, including all expenses incident to filings
required to be made with the National Association of Securities Dealers, Inc. or
listing on any securities exchange, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities and determination of the eligibility of any of the
Registrable Securities for investment under the laws of such jurisdictions as
the managing underwriters or the Investor may designate in accordance with
Section 6(h)), fees and expenses of compliance with state insurance or other
governmental regulations and rating agency fees, (b) printing expenses,
messenger, telephone and delivery expenses, and other internal expenses, (c) all
fees and disbursements of counsel for the Company and of all independent
certified public accountants of the Company (including the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance), (d) fees and expenses of underwriters (excluding discounts,
commissions or fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals relating to the distribution of the
Registrable Securities and legal expenses of selling holders and the
underwriters but including the fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering
pursuant to Section 3 of Schedule E to the By-Laws of the National Association
of Securities Dealers, Inc.), (e) securities acts liability insurance if the
Company so desires and (f) fees and expenses of other Persons retained by the
Company (all such included expenses being herein called "Registration Expenses")
shall be borne by the Company whether or not any of the Registration Statements
become effective. Notwithstanding any of the foregoing, the Investor upon sales
of Registrable Securities shall bear its own expenses for all underwriting
commissions applicable to such sales and any legal fees of counsel hired by the
Investor.
The Company shall pay its general expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any audit, and the fees and expenses
incurred in connection with the listing of the securities to be registered on
each securities exchange on which similar securities issued by the Company are
then listed.
8. Miscellaneous
(a) Successor and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties.
1059(1).nks 9 November 10, 1997
(b) Counterparts. This Agreement may be executed in two or
more counterparts and by the parties hereto in separate counterparts (including
by facsimile signatures), each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
Agreement.
(c) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
(e) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(f) Entire Agreement. This Agreement is intended by the
parties as a final expression of their Agreement and intended to be a complete
and exclusive statement of the Agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the securities issued pursuant to the Stock Subscription Agreement
and the Reorganization Agreement. This Agreement supersedes all prior Agreements
and understandings between the parties with respect to such subject matter.
(g) Notices. All notices or other communications required
hereunder shall be in writing and shall be sufficient in all respects and shall
be deemed delivered after 5 days if sent via registered or certified mail,
postage prepaid; the next day if sent by overnight courier service; or one
business day after transmission if sent by facsimile, to the following:
If to Company : Onsite Energy Corporation
000 Xxxxxxx Xxxxxxx Xx., #000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with copies to: Xxxxxx Eng Linn & Xxxxxxxx
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to Investor: Westar Capital, Inc.
XX Xxx 000
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Fax: (000) 000-0000
1059(1).nks 10 November 10, 1997
with copies to: Westar Capital, Inc.
XX Xxx 000
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn.: Xxxx X. Xxxxxxxxx
Fax: (000) 000-0000
Any party hereto may change its address for purposes hereof by notice to all
other parties hereto.
(h) Dispute Resolution. No party to this agreement shall be
entitled to take legal action with respect to any dispute relating hereto until
it has complied in good faith with the following alternative dispute resolution
procedures. This section shall not apply to the extent it is deemed necessary to
take legal action immediately to preserve a party's adequate remedy.
(i) Negotiation. The parties shall attempt
promptly and in good faith to resolve any dispute arising out of or
relating to this Contract, through negotiations between representatives
who have authority to settle the controversy. Any party may give the other
party(ies) written notice of any such dispute not resolved in the normal
course of business. Within 20 days after delivery of the notice,
representatives of both parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem necessary, to
exchange information and to attempt to resolve the dispute, until the parties
conclude that the dispute cannot be resolved through unassisted negotiation.
Negotiations extending sixty days after notice shall be deemed at an impasse,
unless otherwise agreed by the parties.
If a negotiator intends to be accompanied at a meeting by an attorney,
the other negotiator(s) shall be given at least three working days' notice of
such intention and may also be accompanied by an attorney. All negotiations
pursuant to this clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal and state Rules of Evidence.
(ii) ADR Procedure. If a dispute with more than
$20,000.00 at issue has
not been resolved within 60 days of the disputing party's notice, a party
wishing resolution of the dispute ("Claimant") shall initiate assisted
Alternative Dispute Resolution ("ADR") proceedings as described in this Section.
Once the Claimant has notified the other party ("Respondent") of a desire to
initiate ADR proceedings, the proceedings shall be governed as follows: By
mutual agreement, the parties shall select the ADR method they wish to use. That
ADR method may include arbitration, mediation, mini-trial, or any other method
which best suits the circumstances of the dispute. The parties shall agree in
writing to the chosen ADR method and the procedural rules to be followed within
30 days after receipt of notice of intent to initiate ADR proceedings. To the
extent the parties are unable to agree on procedural rules in whole or in part,
the current Center for Public Resources ("CPR") Model Procedure for Mediation of
Business Disputes, CPR Model Mini-trial Procedure, or CPR Commercial Arbitration
Rules--whichever applies to the chosen ADR method--shall control, to the extent
such rules are consistent with the provisions of this Section. If the parties
are unable to agree on an ADR method, the method shall be arbitration.
The parties shall select a single Neutral (as defined by CPR) third
party to preside over the ADR proceedings, by the following procedure: Within 15
days after an ADR method is established, the Claimant shall submit a list of 5
acceptable Neutrals to the Respondent. Each Neutral listed shall be sufficiently
qualified, including demonstrated neutrality, experience and competence
regarding the subject
1059(1).nks 11 November 10, 1997
matter of the dispute. A Neutral shall be deemed to have adequate experience if
an attorney or former judge. None of the Neutrals may be present or former
employees, attorneys, or agents of either party. The list shall supply
information about each Neutral, including address, and relevant background and
experience (including education, employment history and prior ADR assignments).
Within 15 days after receiving the Claimant's list of Neutrals, the Respondent
shall select one Neutral from the list, if at least one individual on the list
is acceptable to the Respondent. If none on the list are acceptable to the
Respondent, the Respondent shall submit a list of 5 Neutrals, together with the
above background information, to the Claimant. Each of the Neutrals shall meet
the conditions stated above regarding the Claimant's Neutrals. Within 15 days
after receiving the Respondent's list of Neutrals, the Claimant shall select one
Neutral, if at least one individual on the list is acceptable to the Respondent.
If none on the list are acceptable to the Claimant, then the parties shall
request assistance from CPR to select a Neutral.
The ADR proceeding shall take place within 30 days after the Neutral
has been selected. The Neutral shall issue a written decision within 30 days
after the ADR proceeding is complete. Each party shall be responsible for an
equal share of the costs of the ADR proceeding. The parties agree that any
applicable statute of limitations shall be tolled during the pendency of the ADR
proceedings, and no legal action may be brought in connection with this
agreement during the pendency of an ADR proceeding.
The Neutral's written decision shall become final and binding on the
parties, unless a party objects in writing within 30 days of receipt of the
decision. The objecting party may then file a lawsuit in any court allowed by
this Contract. The Neutral's written decision shall be admissible in the
objecting party's lawsuit.
(i) Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the parties. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon the
Investor, its successors or assigns, and each future holder of such securities
and the Company. A waiver by any party hereto of a default in the performance of
this Agreement shall not operate as a waiver of any future or other default,
whether of a like or different kind.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ONSITE ENERGY CORPORATION WESTAR CAPITAL, INC.
By: _________________________ By: ______________________
Xxxxxxx X. Xxxxxxxx,
President President
1059(1).nks 12 November 10, 1997
