EXHIBIT 10.25

WAIVER AND AMENDMENT

This WAIVER AND AMENDMENT (this “Amendment”), is entered into as of March 27,
2014 (subject to the satisfaction of the conditions set forth in Section 4
below, the “Effective Date”), by and between World Energy Solutions, Inc., a
Delaware corporation (the “Company”), and Massachusetts Capital Resource Company
(the “Purchaser”).  

W I T N E S S E T H:

WHEREAS, the Company and the Purchaser are parties to that certain Note Purchase
Agreement dated as of October 3, 2012 (as amended hereby and as may be further
amended, restated, supplemented or otherwise modified from time to time, the
“Purchase Agreement”);

WHEREAS, the Company is in default of a certain provision of the Purchase
Agreement and has requested the Lender to waive such default and to amend a
certain provision of the Purchase Agreement; and

WHEREAS, the Purchaser is willing to agree to grant such waiver and make such
amendment, all on the terms and subject to the conditions set forth herein;

NOW, THEREFORE, in consideration of the foregoing and for other good and valid
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

1.          Defined Terms. Capitalized terms used but not defined herein shall
have the respective meanings ascribed to such terms in the Purchase Agreement.

2.          Waiver. The following Events of Default exist under the Purchase
Agreement (the “Existing Default”): the Company’s breach for its fiscal quarter
ended December 31, 2013 of its Interest Coverage Ratio covenant under Section
4.01(j) of the Purchase Agreement.

The Company has requested that the Purchaser waive the Existing Default. Upon
satisfaction of the conditions to effectiveness set forth in Section 4 below the
Purchaser hereby waives the Existing Default. The waiver contained in this
Section 2 is specific in intent and valid only for the specific purpose for
which it is given. Nothing contained herein obligates the Purchaser to agree to
any additional waivers of any provisions of the Purchase Agreement. The waiver
contained in this Section 2 is a waiver of only the Existing Default, and shall
not operate as a waiver of the Purchaser’s right to exercise remedies resulting
from (i) any other existing and/or continuing Event of Default, or (ii) any
future Event of Default, whether or not of a similar nature and whether or not
known to the Purchaser.

3.          Amendment to Purchase Agreement. Upon satisfaction of the conditions
to effectiveness set forth in Section 4 below:

(a)         As of and from the Effective Date of this Amendment, Section 4.01(j)
of the Purchase Agreement is amended in its entirety as follows:

(j) Maintenance of Minimum Fixed Charge Coverage Ratio. The Company shall not
permit its Fixed Charge Coverage Ratio to be less than the ratio set forth
below, such Fixed Charge Coverage Ratio being measured quarterly, as of the
final day of each fiscal quarter of the Company, commencing on and with the
fiscal quarter ending March 31, 2014.

 

Ratio not less than:

For the Fiscal Quarter Ending

 

 .5 to 1.0

 

March 31, 2014, calculated for the fiscal quarter then ended.

 

 .75 to 1.0

 

June 30, 2014, calculated for the two fiscal quarters ended March 31, 2014 and
June 30, 2014.

 

 1.0 to 1

 

September 30, 2014, calculated for the three fiscal quarters ended March 31,
2014, June 30, 2014 and September 30, 2014.

 

 1.0 to 1.0

 

Each fiscal quarter thereafter, calculated for the four fiscal quarters then
ended.

 

 

 

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(b)         As of and from the Effective Date of this Amendment, Section 6.01 of
the Purchase Agreement is amended by adding thereto the following definitions:

 

“Capital Expenditures” means, for any period, the sum for the Company of the
aggregate amount of expenditures made or liabilities incurred during such period
(including the aggregate amount of Capital Lease Obligations incurred during
such period) to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
computed in accordance with GAAP; provided that such term shall not include any
expenditures in connection with any replacement or repair of property affected
by a casualty event.  

 

“Capital Lease Obligations” of any person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

 

“EBITDA” means the total of (i) Consolidated Net Income of the Company plus (ii)
all amounts deducted in computing such Consolidated Net Income in respect of (u)
interest expense on Indebtedness, (v) taxes based upon or measured by income,
(w) depreciation and amortization, each to the extent accrued or paid (without
double counting) in the applicable period and actually deducted in determining
Consolidated Net Income, (x) up to $500,000 for one-time, non-recurring expenses
relating to legal and financial costs actually incurred by the Company in
connection with a certain proxy dispute, (y) net changes in deferred revenue and
(z) non-cash charges for stock based compensation, minus extraordinary and
non-operating income, as each such item is determined in accordance with GAAP.

 

“Fixed Charge Coverage Ratio” means, as of any date of measurement thereof, the
ratio of (a) (i) EBITDA of the Company for the period of the number of
consecutive fiscal quarters set forth in Section 4.01(j) ending on or most
recently ended prior to such date minus (ii) the aggregate amount of all
Non-Financed Capital Expenditures of the Company during such period minus (iii)
the aggregate amount paid, or required to be paid by the Company (without
duplication), in cash in respect of the current portion of all income taxes for
such period to (b) the sum of (i) the aggregate amount of Interest Expense for
such period, (ii) the aggregate amount of regularly scheduled payments of
principal in respect of Indebtedness for borrowed money (including the principal
component of any payments in respect of Capital Lease Obligations but, for
avoidance of doubt, excluding any prepayment of any principal amount) paid or
required to be paid during such period, and (iii) the aggregate amount of
contingent or earn-out  cash payments made during such period.  

 

“Interest Expense” means, for any period, the sum, without duplication, for the
Company, of all interest in respect of Indebtedness accrued or paid during such
period (whether or not actually paid during such period), but excluding capital
debt acquisition costs.

 

“Non-Financed Capital Expenditures” means Capital Expenditures paid in cash and
not financed with Indebtedness for money borrowed.

4.          Conditions. The effectiveness of this Amendment is subject to the
following conditions:  

(a)          the execution and delivery of this Amendment by the Company and the
Purchaser;

(b)          all other documents and legal matters in connection with the
transactions between the Company and the Purchaser contemplated by this
Agreement shall have been delivered, executed, or recorded and shall be in form
and substance satisfactory to the Purchaser; and

(c)          the Company shall have paid the Purchaser all fees, costs and
expenses of the Purchaser in connection with this Amendment, including, without
limitation, reasonable fees, costs and expenses of counsel.

5.          Representations and Warranties. The Company hereby represents and
warrants, to the Purchaser as follows:

(a)          the Company is a corporation, duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation;

(b)          the Company has the power and authority to execute, deliver and
perform its obligations under this Amendment and the Purchase Agreement;

(c)          the execution, delivery and performance by the Company of this
Amendment and the Purchase Agreement have been duly authorized by all necessary
corporate action and does not and will not require any registration with,
consent or approval of, notice to or action by, any Person (including any
governmental agency);

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(d)          this Amendment, the Purchase Agreement and any other loan documents
executed in connection herewith and therewith (the “Loan Documents”) to which
the Company or any of its Subsidiaries is a party, as each Loan Document is
amended by this Amendment, constitute the legal, valid and binding obligation of
the Company and such Subsidiaries, enforceable against such Person in accordance
with its terms;

(e)          after giving effect to the waiver by the Purchaser in Section 2
above, no Event of Default exists or shall exist immediately following the
consummation of the transactions contemplated hereby;

(f)          after giving effect to this Amendment, all representations and
warranties by the Company contained in the Purchase Agreement are true and
correct in all material respects as of the date hereof, except to the extent
made as of a specific date, in which case each such representation and warranty
shall be true and correct as of such date; and

(g)          by its signature below, the Company agrees that it shall constitute
an Event of Default if any representation or warranty made herein is untrue or
incorrect in any material respect as of the date when made or deemed made.

6.          Agreement in Full Force and Effect as Amended. Except as
specifically amended, consented and/or waived hereby, the Purchase Agreement and
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed as so amended.  Except as expressly set forth herein,
this Amendment shall not be deemed to be a waiver, amendment or modification of
any provisions of the Purchase Agreement or any other Loan Document or any
right, power or remedy of the Purchaser, nor constitute a waiver of any
provision of the Purchase Agreement or any other Loan Document, or any other
document, instrument and/or agreement executed or delivered in connection
therewith or of any Event of Default under any of the foregoing, in each case,
whether arising before or after the date hereof or as a result of performance
hereunder or thereunder.  Except as to the specific waivers provided herein,
this Amendment also shall not preclude the future exercise of any right, remedy,
power, or privilege available to the Purchaser whether under the Purchase
Agreement, the other Loan Documents, at law or otherwise and nothing contained
herein shall constitute a course of conduct or dealing among the parties
hereto.  All references to the Purchase Agreement shall be deemed to mean the
Purchase Agreement as amended hereby.  This Amendment shall not constitute a
novation or satisfaction and accord of the Purchase Agreement and/or other Loan
Documents, but shall constitute an amendment thereof.  The parties hereto agree
to be bound by the terms and conditions of the Purchase Agreement and Loan
Documents as amended by this Amendment, as though such terms and conditions were
set forth herein.  Each reference in the Purchase Agreement to “this Agreement,”
“hereunder,” “hereof,” “herein” or words of similar import shall mean and be a
reference to the Purchase Agreement as amended by this Amendment, and each
reference herein or in any other Loan Document to the “Purchase Agreement” shall
mean and be a reference to the Purchase Agreement as amended and modified by
this Amendment.

7.          Counterparts. This Amendment may be executed by one or more of the
parties to this Amendment and any number of separate counterparts, each of which
when so executed, shall be deemed an original and all said counterparts when
taken together shall be deemed to constitute but one and the same instrument.

8.          Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the Company and its successors and assigns and the
Purchaser and its successors and assigns.

9.          Further Assurance. The Company hereby agrees from time to time, as
and when requested by the Purchaser, to execute and deliver or cause to be
executed and delivered, all such documents, instruments and agreements and to
take or cause to be taken such further or other action as the Purchaser may
reasonably deem necessary or desirable in order to carry out the intent and
purposes of this Amendment, the Purchase Agreement and the Loan Documents.

10.        GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

11.        Severability. Wherever possible, each provision of this Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Amendment shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Amendment.

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12.        Reaffirmation. The Company as debtor, grantor, pledgor, guarantor,
assignor, or in other any other similar capacity in which the Company grants
liens or security interests in its property or otherwise acts as accommodation
party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of
its payment and performance obligations, contingent or otherwise, under each of
the Loan Documents to which it is a party (after giving effect hereto) and (ii)
to the extent the Company granted liens on or security interests in any of its
property pursuant to any such Loan Document as security for or otherwise
guaranteed the Obligations under or with respect to the Loan Documents, ratifies
and reaffirms such guarantee and grant of security interests and liens and
confirms and agrees that such security interests and liens hereafter secure all
of the Obligations as amended hereby.  The Company hereby consents to this
Amendment and acknowledges that each of the Loan Documents remains in full force
and effect and is hereby ratified and reaffirmed.  Except as expressly set forth
herein, the execution of this Amendment shall not operate as a waiver of any
right, power or remedy of the Purchaser, constitute a waiver of any provision of
any of the Loan Documents or serve to effect a novation of the Obligations.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

 

 

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IN WITNESS WHEREOF, each of the undersigned has executed this Amendment as of
the date set forth above.

 

WORLD ENERGY SOLUTIONS, INC.

 

By:

 

/s/ James Parslow

Name:

James Parslow

Title:

CFO

 

MASSACHUSETTS CAPITAL RESOURCE COMPANY

 

By:

 

/s/ Daniel P. Corcoran, Jr.

Name:

Daniel P. Corcoran, Jr.

Title:

Vice President